RESERVATION OPERATIONS CENTER LLC v. State of Montana, Commissioner of Securities and Insurance, Defendant, Appellee, and Cross-Appellant. (2024)

¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court's quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.

¶2 Reservation Operations Center, LLC, a Montana Limited Liability Company, d/b/a National Parks Reservations (NPR) appeals from the January 30, 2024 Order on Motion for Trial Setting and Status Conference issued by the Eleventh Judicial District Court, Flathead County, dismissing NPR's case for failure to prosecute. We affirm.

¶3 This case commenced almost a decade ago when NPR filed its lawsuit on November 6, 2015, against Scottsdale Insurance Company, Payne Financial Group and PayneWest Insurance, Inc.,¹ for NPR's lack of insurance to defend and indemnify itself for a sexual discrimination claim brought by a former NPR employee in 2015. As the case proceeded, NPR obtained a default judgment against Scottsdale in the amount of $515,758.02 in compensatory damages and $4,641,822.18 in punitive damages. Upon appeal, this Court reversed and remanded the case for further proceedings. Rsrv. Operations Ctr., LLC, v. Scottsdale Ins. Co., 2018 MT 128, ¶ 24, 391 Mont. 383, 419 P.3d 121. After remittitur, NPR amended its complaint to add a single cause of action against the State of Montana Commissioner of Securities and Insurance (State) for negligent violation of its statutory duty to serve Scottsdale and later amended its complaint again to add two additional causes against the State for breach of contract and breach of the implied covenant of good faith and fair dealing. Scottsdale eventually settled with NPR and the remaining case against the State plodded along with the court issuing scheduling orders and the parties seeking several amendments thereto. On December 21, 2020, the District Court issued its Order Setting Motions Deadline and Trial Setting, explicitly stating:

Given that the parties and counsel have again requested a new trial setting, and given their ongoing struggles to get the case ready for trial, the [c]ourt is not inclined to give further trial dates. The [c]ourt is not a case-management device. When counsel advise, in writing and accompanied by a completed and signed pretrial order, that they have completed discovery, that all pending motions have been addressed and resolved, and that nothing remains to be done other than to have a trial, the [c]ourt will then, and only then, schedule same at the [c]ourt's convenience.

¶4 Nearly a year and a half later, in response to motions filed, the District Court issued rulings with regard to experts and summary judgment in May 2021. A year after that, the parties participated in a mediation on May 11, 2022. On October 20, 2023, the District Court issued its Notice of Failure to Prosecute and Intent to Dismiss in which it stated, “[a] review of the record shows that there has been no substantive activity in this action for a period of more than two (2) years and no stay has been issued or approved by the [c]ourt. The inactivity in the case is not attributable to the [c]ourt. Plaintiff has failed to prosecute this action.” The court advised the parties that, absent a substantive pleading or other activity on or before December 20, 2023, the case would be dismissed without prejudice. NPR did not contest the District Court's finding of inactivity or its conclusion that NPR had failed to prosecute the case. Nor did NPR comply with the December 21, 2020 Order, which required written advisement, accompanied by a completed and signed pretrial order, certifying the completion of discovery and the resolution of all pending motions. Instead, NPR waited until December 19, 2023, 59 days after the District Court's Notice of Failure to Prosecute, to file a Motion for Trial Setting and Status Conference. On January 3, 2024, the District Court denied the motion and dismissed the cause, proclaiming, “[n]ine years of madness ends today.” NPR now appeals from this dismissal. The Payne defendants settled following the mandatory appellate mediation, leaving only NPR and the State in this cause.

¶5 NPR argues the District Court erred in dismissing its case under § 25-1-104, MCA, asserting that the dismissal occurred before the expiration of two years of inactivity and that its pleading was filed within the court's 60-day deadline.

¶6 The parties present conflicting standards of review. NPR contends that the District Court's interpretation of § 25-1-104, MCA, should be reviewed for correctness, citing Bluebird Energy LLC v. Dep't of Revenue, 2024 MT 10, ¶ 7, 415 Mont. 48, 542 P.3d 376. The State, however, asserts that the proper standard for review of a district court's decision to dismiss for failure to prosecute is abuse of discretion, relying on McKenzie v. Scheeler, 285 Mont. 500, 507, 949 P.2d 1168, 1174 (1997). Prior to determining the appropriate standard of review, we first consider whether NPR has preserved its issue for appeal.

¶7 It is a well-settled principle of appellate review that we do not entertain arguments or legal theories raised for the first time on appeal. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 20, 373 Mont. 1, 313 P.3d 839 (collecting cases). To properly preserve an issue for appellate review, a party must first timely present the issue to the trial court. Two Leggins v. Gatrell, 2023 MT 160, ¶ 11, 413 Mont. 172, 534 P.3d 668. From our review of the record, NPR did not preserve its claim that the District Court erred by dismissing the case under § 25-1-104, MCA, prior to the expiration of two years of inactivity. The District Court's Notice of Failure to Prosecute specifically found that there had been no substantive activity in the case for a period exceeding two years. NPR failed to contest this factual finding. Additionally, the District Court concluded that NPR had failed to prosecute the case. Once again, NPR did not challenge this conclusion. By failing to raise these issues in the District Court, NPR forfeited its right to assert them on appeal.

¶8 The question then becomes whether NPR's filing of a motion for a trial setting and status conference, submitted 59 days after the District Court's issuance of the Notice of Failure to Prosecute, was sufficient to comply with the court's prior orders and thereby preclude dismissal. We review a district court's decision to dismiss a case for failure to prosecute or for failure to comply with a court order under an abuse of discretion standard. See McKenzie, 285 Mont. at 507, 949 P.2d at 1174. The District Court dismissed NPR's case after it filed the motion for a trial setting, implicitly concluding that NPR's filing did not satisfy the requirements necessary to avoid dismissal. This conclusion was consistent with the District Court's December 21, 2020 order which expressly required the parties to submit written advisement, along with a completed and signed pretrial order, certifying that discovery had been completed, all motions had been resolved, and the case was ready for trial. NPR's response to the Notice of Failure to Prosecute did not contest its failure to prosecute, nor did it fulfill the specific conditions outlined in the court's prior order. Given these circumstances, the District Court acted within its discretion in dismissing the case.

¶9 As the dismissal is dispositive, we need not address any additional issues raised by NPR on appeal. We also need not address the State's cross-appeal.

¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review.

¶11 Affirmed.

FOOTNOTES

1.   The State was not added as a party until later reversal and remand of the case on appeal.

Justice Ingrid Gustafson delivered the Opinion of the Court.

We concur: LAURIE McKINNON, J. JAMES JEREMIAH SHEA, J. BETH BAKER, J. JIM RICE, J.