                                          No.   90-209

                        IN THE SUPREME COURT OF THE STATE OF MONTANA




GREG D. and NANCY COURCHANE,
        Plaintiffs and Appellants,


RONALD L. and SUSAN K. KUNTZ,
and FLYNN REALTY, INC., a
Montana Corporation,
        Defendants and Respondents.



APPEAL FROM:                District Court of the Eighteenth Judicial District,
                            In and For the County of Hill,
                            The Honorable John Warner, Judge presiding.



COUNSEL OF RECORD:
                        For Appellants:
                            Robert D. Morrison, Morrison, Young, Melcher,
                            Brown & Richardson, Havre, Montana
                   *or     Respondents:
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           o                William Conklin, Great Falls,           Montana;   James
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              :             OIBrien,Missoula, Montana
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L   4     L';<                             Submitted on Briefs:     August 16, 1990
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                                                         Decided:   October 15, 1990
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                                            'Clerk
Justice John C. Sheehy delivered the Opinion of the Court.


        Greg and Nancy Courchane appeal from the judgment of the
District Court, Twelfth Judicial District, Hill County, dismissing
their claims against Flynn Realty, Inc. pursuant to Rule 41 (e),
M.R.Civ.P.      We affirm the District Court.
        The sole issue raised by appellants is whether the District
Court properly interpreted Rule 41(e) to prohibit the addition of
a new defendant to an action more than three years after its
commencement.
        On February 1, 1985, Ronald and Susan Kuntz conveyed their
Havre home to Greg and Nancy Courchane by warranty deed. Sometime
after the sale, Courchanes discovered the sewer system of the home
to be defective.       Courchanes instituted an action against the
Kuntzes    on    October   17, 1986, alleging        fraud   and   negligent
misrepresentation as to the condition of the sewer system.            In the
original     complaint, Courchanes asserted          that    Itprior to   the
conveyance of said real property the [Kuntzes], through their
agent, represented to the [Courchanes] that the plumbing in the
house was in good working condition      ...    II


     In the original complaint, Flynn Realty, Inc., and                   its
employee, Kim Cripps, were not named as party defendants.                 Not
until    December   28,    1989, when   Courchanes     filed    an   amended
complaint, was Flynn Realty joined as a party defendant.             In the
amended complaint, Courchanes asserted that Flynn Realty, through
its salesperson, made fraudulent and negligent representations as
to the sewer condition, after failing to make any prior inquiry of
the Kuntzes or other previous owners as to any sewer problems.
     Flynn Realty thereupon filed its motion to dismiss pursuant
to Rule 41(e), M.R.Civ.P.,    asserting that it was not served with
summons within three years of the commencement of the action. The
District Court, stating the rule to be clear and mandatory, granted
Flynn Realty's motion.   This appeal ensued.
     Courchanes contend that Rule 41(e) should not apply as a basis
for dismissal of their action against Flynn Realty            in this
instance. Courchanes assert they did not realize a cause of action
against Flynn Realty existed until January 29, 1988, when Kuntzes
answered the first of plaintiff's interrogatories.           In those
answers, Kuntzes admitted that no representations or instructions
as to the sewer system had ever been made by Kuntzes to Flynn
Realty or its employees.
     Courchanes assert that until discovery revealed Flynn Realty's
culpability, Courchanes could not have reasonably known that the
representations were made by Flynn Realty without having made any
independent investigation as to the sewer system.
     Courchanes contend that Rule 41(e) applies only to parties
known, and should not be applied in a situation such as this, where
a party defendant was not known.      Courchanes cite Livingston v.
Treasure County (1989), 239 Mont. 511, 781 P.2d 1129, 1131, for
the premise that "Rules of Civil Procedure are to be construed in
a   manner   that   secures   the   just,   speedy   and   inexpensive
determination of lawsuits on their merits." Courchanes assert that
it was error for the District Court to dismiss Flynn Realty on a
technical point rather than to allow the action to proceed and be
settled on its merits.
     We do not agree with the Courchanes' reasoning.             In the
original complaint, Courchanes allege that the representations
regarding the sewer system were made by the Kuntzes ''through their
agent. "   By this statement, it is clear that Courchanes knew the
origin of the misrepresentations on October 17, 1986, the date the
original complaint was filed.   As soon as the sewer problems were
manifested, Courchanes were put on notice that Flynn Realty,
through the statements of its employee, was responsible for the
misrepresentation that the plumbing was up to par.              Nothing
prevented Courchanes from setting forth an alternative hypothetical
claim as allowed by Rule 8(e)(2), M.R.Civ.P.,       against Flynn Realty
in the original complaint of October 17, 1986.          When Courchanes
became aware of their injury, they had the burden of pursuing their
remedies against the person or persons responsible in a timely
manner.    By waiting until December 28, 1989, Courchanes were
prohibited from joining an obvious party defendant in the action.
Rule 41 (e) reads in part:
     No action heretofore or hereafter commenced shall be
     further prosecuted as to any defendant who has not
     appeared in the action or been served in the action as
     herein provided within 3 years after the action has been
     commenced, and no further proceedings shall be had
     therein, and all actions heretofore or hereafter
     commenced shall be dismissed by the court in which the
     same shall have been commenced, on its own motion, or on
     the motion of any party interested therein, whether named
     in the complaint as a party or not         .
                                                . . (Emphasis
     added. )
     Flynn Realty was not served nor did it appear within 3 years
of the action's commencement. To allow Flynn Realty to be joined
after three years had elapsed would not have been timely, and
Courchanes have not stated or alleged any legal excuse or reason
to invoke the equity of a court for their failure to join Flynn
Realty in the time frame required.        By their own testimony,
Courchanes   had   from   the   January   29,   1988   answers   to
interrogatories, when they claim they first discovered Flynn
Realty's misrepresentations until October 17, 1989 to properly join
Flynn Realty as a defendant.    The District Court properly granted
Flynn Realty's motion to dismiss.
     Affirmed.




We Concur:         A'
