Long v. Delarosa

2002 MT 110N

• Court: Montana Supreme Court
• Decided: May 23, 2002
• Docket: 01-293
• Status: Published

Opinion

No. 01-293

IN THE SUPREME COURT OF THE STATE OF MONTANA

2002 MT 110N

DEBRA L. LONG,

Plaintiff and Respondent,

v.

MELINDA A. DELAROSA, a/k/a MELINDA DELAROSA FONTAINE, a/k/a MELINDA DELAROSA TANNER, a/k/a MELINDA DELAROSA DAMASCUS; JESSE FONTAINE; et al.,

Defendants and Appellants.

APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable John W. Larson, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Quentin M. Rhoades, Sullivan, Tabaracci & Rhoades, P.C., Missoula, Montana

For Respondent:

P. Mars Scott, Patrick G. Sandefur, Law Offices of P. Mars Scott, Missoula, Montana

Submitted on Briefs: October 4, 2001

Decided: May 23, 2002 Filed:

__________________________________________ Clerk Justice Jim Regnier delivered the Opinion of the Court.

¶1 Pursuant to Section I, Paragraph 3(c) Montana Supreme Court

1996 Internal Operating Rules, the following decision shall not be

cited as precedent but shall be filed as a public document with the

Clerk of the Supreme Court and shall be reported by case title,

Supreme Court cause number and result to the State Reporter

Publishing Company and to West Group in the quarterly table of

noncitable cases issued by this Court.

¶2 Debra L. Long filed a complaint against Melinda Fontaine and

Jesse Fontaine claiming constructive trust, resulting trust, quiet

title, rescission of the promissory note, breach of contract,

damages and punitive damages. During discovery in this matter, the

Fourth Judicial District Court, Missoula County, issued an order

requiring the Fontaines to deposit a lump sum of $12,960 plus

$1,050 per month from and after December 2000. Appellants Melinda

Fontaine and Jesse Fontaine filed an interlocutory appeal. We

affirm.

¶3 The following issue is presented on appeal: ¶4 Did the District Court exceed its statutory authority by

requiring the Fontaines to deposit money with the clerk of court?

BACKGROUND

¶5 In 1998, Melinda Fontaine and Jesse Fontaine hoped to buy a

home on Zaugg Drive in Missoula, Montana, but were unable to secure

financing. They then asked Debra L. Long to help. She agreed to

assist them by securing a mortgage in the amount $118,000 so that

the Fontaines could acquire the property. The Fontaines, in turn,

2 agreed to make the monthly mortgage payments of $1,080.

Unbeknownst to Long, however, the loan was actually secured by a

mortgage on her own home instead of the one on Zaugg Drive.

Because of this, the Fontaines obtained title to the Zaugg Drive

property free and clear of any encumbrances.

¶6 According to Long, the Fontaines never made any of the

promised mortgage payments. On February 25, 2000, Long sued the

Fontaines alleging constructive trust, resulting trust, quiet

title, rescission of the promissory note, breach of contract,

damages and punitive damages. The parties entered an Agreed

Scheduling Order on August 9, 2000. In that order, the parties

agreed to finish all discovery by January 2, 2001. Long scheduled

a deposition of Melinda Fontaine for October 13, 2000. On the

afternoon before the scheduled deposition, Melinda’s attorney

advised Long’s attorney that Melinda would not be available for her

deposition because she had been called out of town on urgent

business. Long contends that she and several third parties

notified her attorney that they had seen Melinda Fontaine in

Missoula while she was purportedly out of town on business. ¶7 Long requested, and the court granted, a hearing to discuss

the difficulties in scheduling the deposition. At the hearing on

October 13, 2000, Melinda’s lawyer acknowledged that they had

canceled three of Melinda’s depositions in three months. The court

ordered Melinda to be available for a deposition on October 20,

2000. On the afternoon before the deposition, Melinda’s attorney

again called Long’s counsel to advise them that Melinda would not

3 attend. Melinda’s attorney stated that a psychiatrist had written

a letter suggesting that she may commit suicide if she had to

undergo a deposition.

¶8 On October 30, 2000, Long filed a motion for contempt and an

imposition of sanctions for Melinda’s failure to attend her

depositions. Long’s attorney also deposed Melinda’s psychiatrist,

Dr. Noel L. Hoell, M.D., to ascertain the nature of Melinda’s

illness and why it prevented her from giving a deposition. During

the deposition, Dr. Hoell continued to express concerns that a

deposition could exacerbate Melinda’s emotional condition and that

judging what safeguards might effectively protect her was

difficult. ¶9 On November 15, 2000, Long filed a Motion and Brief for Order

of Deposit or Delivery, pursuant to § 25-8-101, MCA, asking that

the court order the Fontaines to place a deposit of $12,960 with

the court and make monthly payments of $1,080 beginning after

December 1999. On January 23, 2001, the District Court denied this

motion. In denying her motion, the court held that Long did not

meet the statutory requirements set forth in § 25-8-101, MCA.

¶10 On February 14, 2001, during a hearing regarding discovery,

the District Court ordered the Fontaines to provide information on

the insurance they were carrying on the Zaugg Drive property, the

name of the property manager caring for the house and the dates

Melinda Fontaine would be available for deposition. Melinda never

complied with the court’s order. Therefore, on March 6, 2001, the

District Court found that Melinda had violated the court’s

4 discovery orders and, pursuant to Rule 37(b), M.R.Civ.P., withdrew

its January 23, 2001, Order and directed the Fontaines to deposit

with the Clerk of Court $12,960 plus $1,050 per month from and

after December 2000. The Fontaines appeal.

STANDARD OF REVIEW

¶11 The Fontaines ask us to review the District Court’s

conclusions of law de novo, citing Carbon County v. Union Reserve

Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686. We agree

that we review a trial court’s conclusions of law de novo to see

whether they are correct. See Mularoni v. Bing, 2001 MT 215, ¶ 22,

306 Mont. 405, ¶ 22, 34 P.3d 497, ¶ 22. This matter, however,

implicates the District Court’s imposition of sanctions for

discovery abuse. When considering whether a district court imposed

proper sanctions for discovery abuse, we determine whether the

district court abused its discretion. See Bulen v. Navajo Ref.

Co., 2000 MT 222, ¶ 18, 301 Mont. 195, ¶ 18, 9 P.3d 607, ¶ 18. In

these situations, we defer to the trial court because it is in the

best position to tell whether a party has disregarded another

party’s rights and to determine which sanction is most appropriate.

Bulen, ¶ 18. DISCUSSION

¶12 Did the District Court exceed its statutory authority by

requiring the Fontaines to deposit money with the clerk of court?

¶13 The Fontaines argue that the District Court exceeded its

statutory authority by ordering the Fontaines to deposit funds

pursuant to § 25-8-101, MCA. They argue that the facts presented

5 to the court did not meet the requirements of this statutory

provision. Section 25-8-101, MCA, requires, in part, that, for a

court to order a deposit or delivery, a party must admit “by the

pleading or shown upon the examination of a party that he has in

his possession or under his control any money . . . which belongs

or is due to another party.” The Fontaines contend that the court

did not meet this requirement because they raised an affirmative

defense that Long rejected the Fontaines’ offer of full

performance. This, they claim, eviscerates Long’s contention that

they possess money that belongs to Long. On January 23, 2001, the

District Court agreed with the Fontaines and denied Long’s request

for a deposit of money. Long counters that the District Court’s

later order of March 6, 2001, effectively struck the Fontaines’

affirmative defense as a sanction under Rule 37(b), M.R.Civ.P. ¶14 Long initially asked for a deposit pursuant to § 25-8-101,

MCA, and the District Court denied this request. The court

subsequently ordered the Fontaines to disclose certain information

concerning the disputed property and arrange for Melinda’s

deposition. The Fontaines did not comply with these requests.

Long then filed a motion for a sanction of $1,000 plus contempt of

court against the Fontaines’ for their failure to comply with the

court’s order.

¶15 The day after Long submitted her motion, the court issued the

Order that the Fontaines now appeal. In the Court's order, it

stated that:

6 Pursuant to Rule 37(b), M.R.Civ.P., the Court finds Defendant Melinda [S. Fontaine] has violated this Court’s discovery orders of February 14, 2001, and accordingly,

IT IS HEREBY ORDERED that Defendants’ failure to provide

insurance information as requested and ordered by this

court is a sufficient basis for the Court to withdraw its

earlier order of January 23, 2001. Defendants are hereby

directed and ordered to deposit with the Clerk of the

above-entitled Court the sum requested by Plaintiff of

$12,960 plus $1,050 per month from and after December

2000. ¶16 Although the District Court did not issue Long’s requested

sanction, a court may issue sanctions that the opposing party does

not specifically request. See McKenzie v. Scheeler (1997), 285

Mont. 500, 512, 949 P.2d 1168, 1175. The court effectively

reversed its order of January 23, 2001, and implicitly dismissed

the Fontaines’ affirmative defense. Rule 37(b)(2)(C), M.R.Civ.P.,

allows a court to do this by issuing “[a]n order striking out

pleadings or parts thereof . . . or rendering a judgment by default

against the disobedient party.”

¶17 The purpose of imposing sanctions is to stop a party’s

dilatory tactics regarding discovery. See Maloney v. Home & Inv.

Center, Inc., 2000 MT 34, ¶ 19, 298 Mont. 213, ¶ 19, 994 P.2d

1124, ¶ 19. Here, the Fontaines have frustrated Long’s repeated

attempts to develop the facts surrounding this case. In an effort

to facilitate discovery, the District Court ordered the Fontaines

to provide certain information by a certain time. They did not do

7 this. Meanwhile, they possessed the Zaugg Drive property with

little financial obligation. Long, on the other hand, remained

responsible for mortgage payments on a mortgage on her own home.

The Fontaines thus enjoyed a free ride that provided them with no

incentive to speed along the litigation process.

¶18 A court should punish, rather than encourage, a party’s abuse

of discovery. See Mularoni, ¶ 45; Delaware v. K-Decorators, Inc.,

1999 MT 13, ¶ 87, 293 Mont. 97, ¶ 87, 973 P.2d 818, ¶ 87. Ordering

the Fontaines to begin making monthly payments was a sure way for

the court to motivate them to quicken the discovery process. The

Fontaines offer no argument why the court could not strike out

their affirmative defense from the pleadings in this case. In

fact, they fail to address the issue of sanctions at all. ¶19 A court should not deal leniently with a party’s abuse of

discovery that results in unnecessary delay. See Delaware, ¶ 87.

The policy behind this judicial intolerance is the concern over

crowded dockets and the need to maintain fair and efficient

judicial administration of pending cases. See Delaware, ¶ 87.

Given our policy on issuing sanctions for discovery abuses; the

fact that the Fontaines fail to give any reason that sanctions are

not appropriate in this case; and the Fontaines’ lack of incentive

to speed along the process, we conclude that the District Court did

not abuse its discretion by sanctioning the Fontaines through its

order to make a monetary deposit with the clerk of court.

¶20 We note, in passing, that the Fontaines also contend that the

court’s order to pay money to the clerk of court was subject to the

8 statutory requirements of an affirmative injunction. The Fontaines

cite no authority, however, that suggests how either sanctions or

an order for deposit or delivery under § 25-8-101, MCA, implicates

the statutory requirements for an injunction. They simply cite

Grosfield v. Johnson (1935), 98 Mont. 412, 422, 39 P.2d 660, 664,

for the proposition that a court may grant a mandatory injunction

to return the matter to the status quo although a party had already

completed the act causing the injury before the suit was brought.

Because the requirements for an injunction are part of a different

chapter of the Montana Code than the requirements of either

sanctions or an order for deposit, we conclude that the

requirements of an injunction are inapplicable to the District

Court’s order. ¶21 Therefore, we conclude that the District Court did not exceed

its statutory authority by requiring the Fontaines to deposit money

with the clerk of court.

¶22 Affirmed.

/S/ JIM REGNIER

We Concur:

/S/ JIM RICE

/S/ PATRICIA COTTER

/S/ W. WILLIAM LEAPHART

9 Justice Patricia O. Cotter concurs.

¶23 I agree with the merits of the majority’s legal analysis. I

write separately to state that I do not believe the District

Court’s order was an appealable order in the first place. As the

majority notes, the court’s order was issued as a sanction,

pursuant to Rule 37(b), M.R.Civ.P. Rule 1, M.R.App.P., does not

permit an appeal from an interlocutory order of sanctions.

Therefore, I would have dismissed the appeal for lack of

jurisdiction. However, because in either instance the ultimate

result would be the same (the court’s order of sanctions would

stand), I concur.

10 Justice Terry N. Trieweiler dissents.

¶23 I dissent from the majority opinion.

¶24 I cannot tell from the record exactly what the District Court

did in this case, but I know it did not do what the majority gives

it credit for doing. Specifically, there is no indication in the

District Court order that it struck the Defendants' affirmative

defenses as a sanction for failure to comply with discovery. In

fact, the language from the District Court's order suggests just

the opposite. ¶25 What the District Court did do is reverse its prior decision

to deny Plaintiff's motion for an order requiring deposit or

delivery pursuant to § 25-8-101, MCA. However, since the prior

decision was correct, I conclude the District Court was without

authority to do so.

¶26 On October 30, 2000, the Plaintiff moved the Court, pursuant

to § 25-8-101, MCA, for an order requiring the Defendants to

deposit in court $1,080 per month which Plaintiff contended was

admittedly owed based on Defendants' answer to the complaint. On

November 15, 2000, the Plaintiff enlarged her motion to request a

lump sum deposit of $12,960 plus interest in addition to the

previously requested monthly payment. However, after the issue was

briefed by the parties, the District Court correctly concluded that

it had no authority to order a deposit or delivery pursuant to §

25-8-101, MCA. In an order dated January 23, 2001, the Court noted

that that statute authorizes the district court to order deposit or

11 delivery when a party admits that he or she owes another party

money but that:

Turning to the pleadings filed in this case, Fontaines have not admitted, and indeed have disputed Long's allegation that Fontaines owe Long funds . . . . In support of their argument Fontaines cite to their First Amended Answer and Counterclaims, specifically paragraphs 111 and 115, which dispute the validity of the contract upon which Long bases her claim. Essentially Fontaines claim that they owe Long nothing because Fontaines offered to fully perform under the contract and Long refused that offer of performance . . . . Under MCA § 25-8-101 a party must either admit that he or she is holding funds belonging to another, or examination of the party must show that the party is holding funds belonging to another. While it is true that Fontaines have admitted they have made no payments to Long since December of 1999, Fontaines have not admitted that they owed any payments to Long after December of 1999 . . . . Therefore the requirements of MCA § 25-8-101 have not been satisfied. It would therefore be inappropriate for this Court to order delivery or deposit of funds. ¶27 Nothing changed regarding the respective claims of the parties

from January 23, 2001, when the District Court initially denied the

motion for deposit or delivery, and March 6, 2001, when the

District Court reversed itself. Nor, in reversing itself, did the

District Court strike those affirmative defenses which were the

bases for its previous denial of the Plaintiff's motion. In fact,

doing so would have been the equivalent of default judgment and

default judgment is something that Defendant Delarosa was

threatened with by the District Court order if she did not comply

with discovery efforts in the future.

¶28 In the order appealed from, the District Court stated:

IT IS HEREBY ORDERED that Defendants' failure to provide insurance information as requested and ordered by this Court is a sufficient basis for the Court to withdraw its earlier order of January 23, 2001. Defendants are hereby directed and ordered to deposit with the Clerk of the above-entitled Court the sum

12 requested by Plaintiff of $12,960 plus $1,050 per month from and after December 2000.

IT IS FURTHER ORDERED that Defendant Melinda A. Delarosa shall advise this Court and opposing counsel of her next visit to Missoula, Montana. If none is currently scheduled, she is directed to pick a business day after March 30, 2001, and before May 31, 2001, when she will be in Montana for her deposition and the deposition of Plaintiff. Such disclosure shall be made before FRIDAY, MARCH 16, 2001, AT 5:00 P.M. If defense counsel does not provide the above information to Plaintiff's counsel on or before the above date, the Court will enter sanctions which may include surrender of the property to Plaintiff, her default in this action together with dismissal of her counterclaim. Rule 37(b), M.R.Civ.P. [Italics added.]

¶29 There is no mention made of affirmative defenses in the

District Court's order. However, it seems to me the District Court

had no intention of striking affirmative defenses. If it had

intended to do so, it would have had no basis for threatening entry

of default against the Defendant in the future. As pointed out in

the District Court's previous order, Defendants' affirmative

defenses were their only bases for concluding that the amount

claimed was disputed in the first place.

¶30 For these reasons, I dissent from the majority opinion which,

in order to affirm an arguably equitable result, gives the District

Court credit for doing something it did not do and ignores the

legally incorrect and statutorily unauthorized decision that it

actually made.

/S/ TERRY N. TRIEWEILER