Summary of a Recent
Judicial Development in
Estate Planning & Taxation

Dismissal Without Prejudice is Not a Final Appealable Order

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Farmers Union Mutual Insurance Co. v. Bodell, 197 P.3d 913, 2008 WL 4724850 (Mont. 2008), the Montana Supreme Court held that an order dismissing an action without prejudice is not a final appealable order.

Background

Bodell, a defendant in a wrongful death suit stemming from an automobile accident, sued his insurance agent and insurance company, alleging that the agent had agreed to procure an umbrella policy over and above his farm, ranch and auto policies but had failed to do so. Id. at *1. Farmers Union Mutual Insurance Company (Farmers) claimed that it had no duty to defend or indemnify Bodell because his policies specifically excluded coverage for "bodily injuries caused by the use, ownership, entrustment or maintenance of a motor vehicle." Id. Meanwhile, Bodell reached a settlement with the estate of the deceased, pursuant to which he assigned his claims against his insurance agent and Farmers, and the estate intervened in the case. Id. at *2. While that case was pending, Farmers brought an action in another county seeking declaratory judgment that there was no liability coverage for motor vehicle accidents under Bodell's policies. Id. Bodell and the estate moved to dismiss the action or to change the venue to the county where the original action was pending. Id. The court dismissed the complaint without prejudice on the basis that the factual and legal issues therein were already pending in the other case. Id. Farmers moved for relief from the order of dismissal, which was not ruled upon with 60 days, and was therefore deemed denied pursuant to M.R. Civ. P. 60(c). Id. Farmers appealed the denial of its motion and dismissal of its complaint, and Bodell and the estate moved to dismiss the appeal. Id.

Arguments

Bodell and the estate argued that Farmers had sought to appeal an interlocutory order in violation of M.R.App. P. 6. Id. They also argued that merely filing a subsequent motion does not make an interlocutory order appealable. Id. at *4.

Farmers argued that a dismissal without prejudice is a final order because it ends the pending litigation, and thus could be the subject of an M.R. Civ. P. 60(b) motion. Id.

Analysis and Holdings

The court explained that a final judgment "conclusively determines the rights of the parties and settles all claims in controversy in an action or proceeding," while an interlocutory judgment "is an order or decree that determines a preliminary or subordinate question or issue and which enables the court to render a final judgment but does not finally decide the cause." Id. at *3. The court recognized that several other jurisdictions had held that, absent special circumstances such as a statute of limitations problem, an order of dismissal without prejudice is not an appealable final judgment, and after consideration the court was persuaded to adopt the same rule. Id. at *3-4. The court stated that it "discourages premature and piecemeal interlocutory appeals . . . to support judicial economy and efficiency and uphold the integrity of the trial court's process." Id. at *5. The court therefore dismissed Farmers' appeal. Id. at *6.

The case was decided on October 29, 2008.