STATE EX REL PALMER v DISTRICT CO

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No. 80-293 I N THE SUPREME COURT O F THE STATE OF MONTANA 1980 THE STATE O F MONTANA ex re1 JOANN PALMER, P l a i n t i f f i n I n t e r v e n t i o n and Relator, THE D I S T R I C T COURT O F THE NINTH J U D I C I A L D I S T R I C T e t a l . , D e f e n d a n t and R e s p o n d e n t . O R I G I N A L PROCEEDING: C o u n s e l of R e c o r d : For P l a i n t i f f : R. V. Bottomly, G r e a t Falls, M o n t a n a For R e s p o n d e n t : P o o r e , R o t h , R o b i s c h o n and R o b i n s o n , B u t t e , M o n t a n a N e l s o n and Werner, C u t B a n k , M o n t a n a - - - -- - - - Submitted: Decided: September 4, 1980 DEC - 4 M r . C h i e f J u s t i c e F r a n k I. H a s w e l l d e l i v e r e d t h e O p i n i o n o f t h e Court. R e l a t o r J o A n n P a l m e r a p p l i e d t o t h i s C o u r t on S e p t e m b e r 4 , 1980, f o r a w r i t of supervisory control, D i s t r i c t Court's denial of seeking review of the her motion f o r intervention. t h a t t h i s i s s u e i s p r o p e r l y b e f o r e t h i s Court by ' w r i t , We f i n d b u t we deny a l l re1i e f t o r e l a t o r . R e l a t o r and h e r s i s t e r M a r g a r e t Simonson a r e t h e p r i m a r y h e i r s o f t h e i r deceased mother, death, Emma's c o n s e r v a t o r , Emma S a u t e r . Dwaine I v e r s o n , i n i t i a t e d proceedings a g a i n s t M a r g a r e t S i m o n s o n and h e r h u s b a n d , Sauter. He a l l e g e d o p p r e s s i o n , l e a s i n g o f f a r m l a n d f r o m Emma. fraud, P r i o r t o Emma's o n b e h a l f o f Emma and m a l i c e i n t h e i r The S i m o n s o n s r e t a i n e d t h e l a w f i r m o f W e r n e r & N e l s o n t o d e f e n d t h e a c t i o n , b u t Emma d i e d t e s t a t e p r i o r t o f u r t h e r proceedings i n the lawsuit. Emma's w i l l named W i l b u r W e r n e r o f t h e W e r n e r & N e l s o n l a w f i r m as p e r s o n a l r e p r e s e n t a t i v e o f h e r e s t a t e . thereafter, Shortly B a r n e y R e a g a n was s u b s t i t u t e d as c o u n s e l d a n t s Simonsons i n t h e p r e v i o u s l y - f i l ed l a w s u i t . f o r defen- JoAnn Palmer t h e n p e t i t i o n e d t h e c o u r t f o r t h e appointment o f Dwaine I v e r s o n as personal r e p r e s e n t a t i v e o f t h e e s t a t e , or i n the alternative f o r h i s a p p o i n t m e n t as a s p e c i a l a d m i n i s t r a t o r f o r t h e p u r p o s e o f h a n d l i n g t h e l a w s u i t a g a i n s t t h e Simonsons. Palmer a l l e g e d t h a t W e r n e r s h o u l d be d i s q u a l i f i e d f r o m a c t i n g a s p e r s o n a l r e p r e s e n t a t i v e because o f h i s c o n f l i c t o f i n t e r e s t i n p r e v i o u s l y r e p r e s e n t i n g t h e defendants. the petition, I n November 1979, t h e t r i a l c o u r t denied f i n d i n g t h a t p e t i t i o n e r d i d n o t a d e q u a t e l y show t h a t W e r n e r was b i a s e d and f u r t h e r t h a t P a l m e r h a d a n a d e q u a t e r e m e d y a g a i n s t W e r n e r i f he f a i l e d t o p r o s e c u t e t h e c l a i m . Palmer appealed t h a t r u l i n g t o t h i s Court. d a t e d August 13, 1980, (1980) , Mont. , I n an o p i n i o n I n the Matter of the Estate of Sauter 6 1 5 P.2d 8 7 5 , 3 7 St.Rep. m i n e d t h a t W e r n e r s h o u l d r e m a i n as p e r s o n a l 1 4 2 5 , we d e t e r - representative, but t h a t a s p e c i a l a d m i n i s t r a t o r s h o u l d be a p p o i n t e d b y t h e D i s t r i c t C o u r t s o l e l y f o r h a n d l i n g t h e c l a i m a g a i n s t t h e Simonsons. The d i s t r i c t judge appointed Dwaine I v e r s o n , P a l m e r ' s personal choice. I n F e b r u a r y , 1 9 8 0 , w h i l e t h e a p p e a l was p e n d i n g , P a l m e r f i l e d a motion t o intervene i n the law s u i t , a l l e g i n g t h a t Werner was n o t e f f e c t i v e l y p u r s u i n g t h e c l a i m a g a i n s t t h e S i m o n s o n s , t h a t i n o r d e r t o p r o t e c t h e r i n t e r e s t as b e n e f i c i a r y , become a p a r t y . 1980. and she s h o u l d The d i s t r i c t j u d g e d e n i e d h e r m o t i o n on J u n e 20, P a l m e r f i l e d a n o t i c e o f a p p e a l f r o m t h a t r u l i n g on J u l y 17, 1980. P r i o r t o t h e hearing o f the appeal, but subsequent t o t h i s C o u r t ' s r u l i n g o f August 13 on t h e m a t t e r o f t h e p e r s o n a l r e p r e s e n t a t i v e , Palmer p e t i t i o n e d t h i s Court f o r a w r i t o f supervisory control t o review the denial of the motion t o intervene. R u l e 1, M.R.App.Civ.P, sets out those judgments o r orders f r o m w h i c h an a p p e a l c a n be t a k e n . A denial of a motion t o i n t e r v e n e i s n o t one o f t h o s e o r d e r s . Thus, r u l i n g by t h e t r i a l c o u r t i s not appealable, i s p r o p e r l y b e f o r e u s on a w r i t . decision immediately, t h e J u n e 20, 1980, b u t we f i n d t h a t i t I f we w e r e n o t t o r e v i e w t h i s and t h e p e n d i n g l a w s u i t went t o c o m p l e t i o n without the joinder of a proper intervenor, t h e i n t e r v e n o r would b e l e f t a t t h e end o f t h e s u i t w i t h o u t a p r o p e r r e m e d y a t l a w . we f i n d t h a t J o A n n P a l m e r i s n o t a p r o p e r i n t e r v e n o r i n However, t h e s u i t because h e r i n t e r e s t i s a d e q u a t e l y r e p r e s e n t e d by t h e special admini s t r a t o r , Dwaine I v e r s o n . Relator p e t i t i o n e d t o intervene pursuant t o Rule 24(a) (2), M.R.Civ.P.: "Intervention o f right. Upon t i m e l y a p p l i c a t i o n a n y o n e s h a l l b e p e r m i t t e d t o i n t e r v e n e i n an ( 2 ) when t h e a p p l i c a n t c l a i m s a n action: interest relating t o the property or transaction w h i c h i s t h e s u b j e c t o f t h e a c t i o n a n d he i s so s i t u a t e d t h a t t h e d i s p o s i t i o n o f t h e a c t i o n may as a p r a c t i c a l m a t t e r i m p a i r o r impede h i s a b i l i t y t o protect t h a t interest, unless the a p p l i c a n t ' s i n t e r e s t i s adequately represented by existing parties." . .. She a r g u e d t h a t t h e p e r s o n a l r e p r e s e n t a t i v e ( t h e n W e r n e r ) could not adequately represent her i n t e r e s t s i n the lawsuit b e c a u s e o f h i s c o n f l i c t i n h a v i n g h a d an a t t o r n e y - c l i e n t r e l a t i o n s h i p w i t h defendants. She a l l e g e d t h a t s h e was t h e o n l y p e r s o n i n t e r e s t e d i n t h e o u t c o m e of t h i s l a w s u i t , making h e r t h e s o l e person i n t e r e s t e d i n prosecuting i t t o completion. We f i n d t h i s p o s i t i o n t o be u n t e n a b l e . At the outset, we n o t e t h a t t h r o u g h o u t t h i s l i t i g a t i o n , J o A n n P a l m e r h a s a r g u e d t h a t W e r n e r as p e r s o n a l r e p r e s e n t a t i v e and t h a t i t s h o u l d was an i m p r o p e r p e r s o n t o h a n d l e t h e l a w s u i t , b e h a n d l e d i n s t e a d b y I v e r s o n , who f i l e d t h e s u i t i n i t i a l l y a s conservator. Yet a t t h i s p o i n t i n t h e l i t i g a t i o n , she a r g u e s t h a t she s h o u l d i n t e r v e n e because t h e n o w - a p p o i n t e d special admi- n i s t r a t o r Iverson cannot adequately represent her i n t e r e s t s . It w o u l d a p p e a r t h a t r e l a t o r i s h a r d l y i n a p o s i t i o n t o a r g u e now against Iverson's a b i l i t y t o represent her. Additionally, the prosecution of claims f o r the benefit of t h e estate i s a task delegated t o the personal representative of an e s t a t e , s e c t i o n 72-3-613(22), Administrators §loo, MCA, 3 3 C.J.S., Executors & a n d an h e i r d o e s n o t h a v e t h e r i g h t t o p u r - sue t h e a c t i o n h i m s e l f u n l e s s t h e p e r s o n a l r e p r e s e n t a t i v e f a i l s to P. a c t on t h e c l a i m . 421. H o l l a n d v. K e l l y (1917), 177 C a l . 507, 171 T h e r e i s c e r t a i n l y no e v i d e n c e b e f o r e t h i s C o u r t t h a t I v e r s o n has f a i l e d i n h i s d u t y t o p r o s e c u t e . At t h i s point, interest o f the heirs, the lawsuit i s being brought t o protect the and R u l e 1 7 ( a ) , M.R.Civ.P, demands t h a t a l l a c t i o n s be p r o s e c u t e d i n t h e name o f t h e r e a l p a r t y i n interest. B u t i t f u r t h e r p r o v i d e s t h a t "[an] administrator ... may s u e i n h i s own name w i t h o u t j o i n i n g w i t h h i m t h e p a r t y f o r whose b e n e f i t t h e a c t i o n i s b r o u g h t . " discussed t h e purpose o f t h i s r u l e , T h i s C o u r t has p r e v i o u s l y n o t i n g t h a t any o t h e r r u l e would promote a m u l t i t u d e o f s u i t s by h e i r s , r e s u l t i n g i n hope- l e s s c o n f u s i o n w i t h r e s p e c t t o t h e p r o s e c u t i o n o f an a c t i o n . S t a t e ex r e l . 371-72, C a r r o l l v. 3 6 4 P.2d 739, D i s t r i c t Court (1961), 139 Mont. 367, 741. T h i s same p r o b l e m was a d d r e s s e d i n t h e r e c e n t C o l o r a d o c a s e o f I n t h e M a t t e r o f t h e E s t a t e of S c o t t ( 1 9 7 8 ) 40 Colo.App. 3 4 3 , 5 7 7 P.2d intervene, 311. There, h e i r s o f t h e decedent attempted t o i n o r d e r t o appeal f r o m an a d v e r s e r u l i n g on a c l a i m defended by t h e a d m i n i s t r a t o r . I n denying intervention, the Colorado Court said: ... t h a t there are substantial "We n o t e d p r o b l e m s w i t h b a s i n g t h e r i g h t t o i n t e r v e n e upon v a r i o u s q u e s t i o n s a s t o how o r i n w h a t m a n n e r a l a w s u i t s h o u l d be p r o s e c u t e d . When t h e l a w c r e a t e d a mechanism w h e r e b y one p e r s o n as a r e p r e s e n t a t i v e of a g r o u p c o u l d c o n d u c t l i t i g a t i o n , t h e p u r p o s e was t h e e f f i c i e n t , s p e e d y , and o r d e r l y d e t e r m i n a t i o n o f r i g h t s w h i c h w e r e h e l d i n common. For the courts t o g r a n t i n t e r v e n t i o n t o a n y member o f a r e p r e s e n t e d c l a s s who d i s a g r e e s w i t h t h e d e c i s i o n s o f t h e r e p r e s e n t a t i v e , s o l e l y on t h a t b a s i s , w o u l d i n our view d e f e a t t h e e n t i r e purpose o f representative litigation. A personal representat i v e , u n d e r s u c h a r u l e , w o u l d a l w a y s be i n d a n g e r o f l o s i n g t h e a b i l i t y t o r e p r e s e n t and a c t f o r t h e e s t a t e and m i g h t we1 1 f i n d h i m s e l f r e l e g a t e d t o a p o s i t i o n o f l o o k i n g on as t h e a f f a i r s o f t h e e s t a t e became h o p e l e s s l y entangled. I t seems h a r d l y l i k e l y t h a t t h e G e n e r a l A s s e m b l y when i t c l o t h e d t h e p e r s o n a l representative w i t h f a r reaching a f f i r m a t i v e powers, c o u l d have i n t e n d e d f o r h i s p o s i t i o n t o b e so f r a g i l e . " E s t a t e o f S c o t t , s u p r a , 5 7 7 P.2d 313. at T h a t c o u r t w e n t on t o s a y t h a t i n d e t e r m i n i n g a d e q u a c y o f r e p r e s e n t a t i o n under Rule 24(a), the court w i l l l o o k t o see i f " t h e r e i s a p a r t y charged by law w i t h representing [ t h e absent party's] interest. [ I f so,] t h e n a c o m p e l l i n g showing w o u l d be r e q u i r e d t o show why t h i s r e p r e s e n t a t i o n i s n o t a d e q u a t e . " Estate of Scott, supra. T h e r e i s no q u e s t i o n a b o u t t h e d u t y o f I v e r s o n ( s p e c i a l a d m i n i s t r a t o r ) t o r e p r e s e n t t h e i n t e r e s t s o f JoAnn Palmer. statute, he i s deemed a f i d u c i a r y , and i s c h a r g e d w i t h a c t i n g i n t h e best i n t e r e s t s o f t h e successors t o t h e estate. 72-3-610, 72-3-701-704, MCA. I f he d o e s n o t so a c t , t o i n t e r e s t e d p e r s o n s f o r damages. See a l s o E s t a t e o f G r a f ( 1 9 6 8 ) , By Sect i o n 72-3-616, 150 Mont. 577, 580, Sections he i s l i a b l e MCA. 4 3 7 P.2d 371, 373. Based on t h e f o r e g o i n g , we f i n d t h a t J o A n n P a l m e r ' s i n t e r e s t s are being adequately represented by p a r t i e s t o t h e 1a w s u i t. Therefore, we d e t e r m i n e t h a t t h e t r i a1 j u d g e c o r r e c t l y denied her p e t i t i o n t o intervene. Chief Justice Me c o n c u r : .............................. Justices Mr. Justice John C. Sheehy dissenting: The majority has reached the illogical result of saying to JoAnn Palmer: "This is your fight, but we won't let you fight it." The true protagonists in cause no. 9346, now entitled "Dwaine J. Iverson, as special administrator of the Estate of Emma Sauter, deceased, versus Margaret and Wayne Simonson" are JoAnn Palmer on the one hand and the Simonsons on the other. While Dwaine J. Iverson is the nominal plaintiff suing the Simonsons on behalf of the estate, the only beneficiary if he wins, and the only loser if he loses, is JoAnn Palmer. The suit exists because JoAnn Palmer, one of Emma Sauter's heirs, argues that Margaret Simonson, the only other of Emma Sauter's heirs, and Wayne Simonson, took advantage of Emma Sauter during her lifetime to their advantage and the disadvantage of JoAnn Palmer. Dwaine J. Iverson, as special administrator, is thus suing one heir for the benefit of the other. Margaret Simonson, one of the heirs, can personally defend herself to the fullest extent. JoAnn Palmer, says this Court, may not personally prosecute her action to her fullest extent, but must rely on the efforts of the special administrator, even though JoAnn is now the vested one-half owner of the subject matter of the suit. Simply to state the situation is to demonstrate the error of the majority, for it is precluding the one person vitally interested in the success of the suit from personally litigating the issues. While granting that JoAnn Palmer's petition to intervene was denied while Wilbur Werner was the sole personal representative of the Sauter estate, and also granting that Dwaine J. Iverson was JoAnn Palmer's choice both as conservator and as -7- special administrator, I would nevertheless hold her right to intervene is mandated by the intent and spirit of Rule 24 (a)(2), M. R. Civ.P. The applicable rule reads: "(a) Intervention of Right. Upon timely application anyone shall be permitted to intervene in an action: "(2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties." The foregoing rule is identical to its federal counterpart a£ter the federal amendment of 1966. Fed.R.Civ.P. Rule 24 (a)(2), In a case prior to the 1966 amendment, the United States Supreme Court held that federal Rule 24(a) was not a complete inventory of interventions allowable of right. Missouri-Kansas Pipe Line Co. v. U.S. (1941), 312 U.S. 502, 61 S.Ct. 666, 85 L.Ed. 975. The U.S. Supreme Court hewed to the same line after the 1966 amendment in Cascade Nat. .Gas Corp. v. El Paso Nat. Gas Co. (1967), 386 U.S. 129, 87 S.Ct. 932, 17 L.Ed.2d 814. In the latter case, instead of a rigid rule, the Supreme Court found "elasticity" in its provisions. It is beyond cavil that JoAnn Palmer's ability to protect her interest in cause no. 9346 will be impaired or impeded by the disposition eventually to be made in that cause. The decision will be final as to her. The only remaining consideration is how this Court should treat the language of 24(a)(2), M.R.Civ.P., "unless the applicant's interest is adequately represented by existing parties." The federal Rule 24 (a)(2) pre-1966 granted the right to intervene if the applicant's interest "is or may be inadequate." After 1966, the federal Rule, and now our Rule, omit the phrase "or may be." Professor Moore states: "In making the language conversion from an affirmative requirement that the representation 'is or may be inadequate' to the exception clause 'unless the interest is adequately represented,' the words 'may be' have been dropped. The resulting meaning should, nevertheless, remain the same. That is, if the applicant shows that the representation 'may be inadequate' then this showing should preclude the court from finding that 'the interest is adequately represented.' See Note, 1968 Duke L.J. 117, 129." 3B Moore's Federal Practice 24-316, 524.09-1[4]. ... The decision of the Colorado Appellate Court in Matter of Estate of Scott (1978), 40 Colo.App. 343, 577 P.2d 311, cited by the majority, requires a closer examination in the light of an earlier case. In Scott, the intestate mother was survived by three children, and several grandchildren who were all the descendant of a deceased daughter of the intestate mother. One of the sons filed a claim for $100,000 against the mother's estate, for work he allegedly performed in her cattle-ranching operation prior to her death. His brother, as administrator, disallowed the claim and suit was brought by the claimant. At the conclusion of the hearing, the court allowed the claim to the extent of $60,000. administrator did not appeal the decision. The The grandchildren sought to intervene for the purpose of making an appeal. It appears that none of the children of the decedent were interested in appeal. The Colorado court decided not to allow the intervention on the basis that the "identity of interest" approach showed that the administrator as defendant, had an identical interest with all the other heirs in the suit brought by one of them, stood to suffer the same gain or loss from the result of the suit as all the other heirs, including the grandchildren, and therefore, the estate was adequately represented, which meant that the grandchildren were adequately represented. - 9- In an earlier case, Howlett v. Greenberg (1974), 34 Colo.App. 356, 530 P.2d 1285, the Colorado court allowed an heir to intervene in a wrongful death case where a mother, granted an exclusive right by statute to sue, refused to appeal an adverse decision. The Colorado court in Scott used the decision in Howlett as authority for its decision in the Scott case. Apparently then, the Colorado court did not move away from its position stated in Howlett, as follows: "Colorado follows the rule that an applicant for intervention of right under C.R.C.P. 24(a) (2) must show both, that the representation of his interest by existing is or might be inadequate and that the applicant is or mightbe bound by the judgment in action." (Emphasis in original. ) Therefore, whatever else may be derived from the Scott decision, it appears that Colorado is in agreement with the United States Supreme Court and the better authorities that Rule 24(a) (2) is not a complete inventory of interventions as of right; and further, that in considering whether the intervenor-applicant is adequately represented in the pending suit, his petition will be granted if his representation "is or may be" inadequate. Moreover, in Scott, the Colorado Court of Appeals had before it an heir who was suing the estate, not another heir. There cannot be an identity of interest between JoAnn Palmer and the special administrator. The special administrator represents the estate of Emma Sauter, and in effect, he is representing the only heirs, JoAnn Palmer and Margaret Simonson. If he has a fiduciary responsibility to protect JoAnn Palmer, as the majority implies, he likewise has a fiduciary responsibility not to injure Margaret Simonson. He has a conflicting duty and because of that, it cannot be said that JoAnn Palmer is adequately represented by him. -10- In Atlantis Development Corporation v. United States (5th Cir. 1967), 379 F.2d 818, it was held that the amended federal Rule 24(a)(2), should be given retroactive application to the maximum extent possible, so as to incorporate the pre-1966 interpretation, and the Court further noted that federal Rule 24(a)(2) ties into the related situations of joinder of parties and class actions, particularly in Rule 19, Fed.R.Civ.P. Rule 19, M.R.Civ.P., is identical to Rule 19, Fed.R.Civ.P. Those rules contain language which is identical to Rule 24(a)(2), in that the Court under Rule 19 will make a finding as to whether "as a practical matter [refusal of joinder will] impair or impede his ability to protect that interest." In an earlier case, State ex rel. Drum v. District Ct. of Thirteenth J. D. (1976), 169 Mont. 494, 548 P.2d 1377, this Court refused to dismiss an action where an out-of-state defendant could not be joined, though the out-of-state defendant was a usurer that had done business in this state. The holding in the Drum case was contra to the spirit of Rule 19, as expressed in Atlantis, that the real parties in interest should litigate the issues. To the extent that the majority is rigidly applying Rule 24 in JoAnn Palmer's case, it is at least consistent with its holding in Drum. It is useful to repeat what the United States Supreme Court and other authorities hold in connection with Rule 24(a)(2), that it is not a complete inventory of interventions allowable of right. Justice is better served when the true adversaries are allowed to wage the war. I recall the story of the woman who showed her young son Michaelangelo's statue of David. When she explained to the boy that the artist had carved the magnificent figure out of a great block of stone, the incredulous boy asked how the artist knew that David was -11- in there. The time is in the future when this Court will cut through its granitic view of the Montana Rules, and release the soul imprisoned therein. I would grant the writ to permit the intervention of JoAnn Palmer.

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