                               NO.    93-197
             IN THE SUPREME COURT OF THE STATE OF MONTANA
                                     1993

C. HAYDON LIMITED and
DR. K. M. CLEWS,
          Plaintiffs and Respondents,
     -vs-
MONTANA MINING PROPERTIES, INC.,
a Montana corporation: et al.,
          Defendants, Third-Party           Plaintiffs
              and Appellants,
     -vs-
FRANK CROWLEY,
          Third-Party    Defendant,
     and
W. D. MURRAY, JR.,
          Third-Party Defendant and Respondent.

APPEAL FROM:      District Court of the Second Judicial District,
                  In and for the County of Silver Bow,
                  The Honorable James E. Purcell, Judge presiding.

COUNSEL OF RECORD:
            For Appellants:
                  Joan E. Cook: Miller & Cook, Great Falls,
                  Montana
            For Respondents:
                  Greg J. Skakles; Johnson, Skakles & Kebe, Anaconda
                  Montana
                  W. D. Murray, Jr., Attorney at Law, Butte, Montana
                  David M. McLean; Knight, Dahood, McLean, Everett
                  & Dayton, Anaconda, Montana


                                Submitted on Briefs:         August 26, 1993

Filed:      c 07 1993                             Decided:   Dec~efiber 7, 1993

         c,k ~~p;~~~
Justice John Conway Harrison delivered the Opinion of the Court.

        This is an appeal from the District Court of the Second
Judicial District, Silver Bow County.           Appellant     Montana   Mining
Properties, Inc.     (MMPI) appeals from a motion granted in favor of
W. D. Murray, Jr.     (Murray) to dismiss for failure to comply with
Rule 9(b), M.R.Civ.P., and from an order granting Murray summary
judgment pursuant to Rule 56(c), M.R.Civ.P.          We affirm.
        The issues are:
        1.   Did the District Court err by granting Murray's motion to
dismiss for failure to state a        claim,   pursuant to Rule 12(b)(6),
M.R.Civ.P.?
        2.    Did MMPI have a reasonable opportunity to amend its
pleading?
        Murray was a director and an attorney for MMPI, a corporation
of twelve Montana entities holding real property in Butte, Montana.
He resigned in the fall of 1990.          In February 1991, a corporate
merger took place in British Columbia, Canada.
        Shortly thereafter, MMPI President Malcolm Clews (Clews) began
billing MMPI directly for services and expenses owed him.                     The
bills resulted from a consulting agreement between Clews and then
general manager of MMPI,      Frank   Crowley    (Crowley).      An April 4,
1991,    letter from Crowley to Clews acknowledged the debt and the
agreement.
        Crowley was also owed monies by MMPI, as acknowledged by a
letter from Clews to Crowley dated April 2, 1991.             The   letters    of
April 2nd and 4th were not found in MMPI's corporate records; but
                                      2
rather, in the personal records of Clews and Crowley.                 In the fall
of 1991, following the corporate merger and a change in management,
Clews and Crowley terminated their association with MMPI.
          Two additional letters, "telefaxed"           from Clews to Murray on
October 3 and 4, 1991, are present in the record.                    According    to
MMPI, these letters--combined with the debt acknowledgement letters
of April 2nd and 4th--are evidence of conspiracy, fraud and breach
of fiduciary duties by Clews, Crowley and Murray.
          On April 7, 1992,        Clews brought an action against MMPI to
recover damages for breach of contract, breach of the implied
covenant       of     good     faith     and     fair     dealing,        fraudulent
misrepresentations,          and    willful    and   negligent      infliction of
emotional      distress.      On MMPI's motion,         the court dismissed all
counts except breach of contract.
          MMPI filed a third-party complaint on October 26,                    1992,
against Crowley and Murray.             The complaint alleged conspiracy to
commit fraud,        common law fraud, and breach of a fiduciary duty
based on fraud.
          On November 25, 1992, Murray filed a motion to dismiss for
failure to comply with Rule 9(b), M.R.Civ.P. Specifically, Murray
argued that MMPI did not plead the nine elements of fraud with
sufficient particularity. At the February 24, 1993, hearing on the
motion to dismiss,           MMPI asked the District Court to consider
matters   outside of the pleadings--the letters of April 2 and 4,
1991--which         were     attached   to     MMPI'S     answers    to     Murray's
interrogatories.           MMPI also asked for additional discovery and

                                          3
twenty days to amend its complaint.

          On March 17, 1993, the District Court granted Murray's motion

to dismiss with prejudice and granted Murray summary judgment.              The

court found that MMPI failed to plead with particularity its theory

of fraud against Murray.          The basis for the court's decision was

that MMPI's allegations were contradictory and lacked specificity,

and that the allegations were based on "information and belief"

unsupported by fact.          MMPI appeals.

                                         I
          Did the District Court err by granting Murray's motion to

dismiss for failure to state a claim, pursuant to Rule 12(b)(6),

M.R.Civ.P.?
          We will not dismiss a complaint for failure to state a claim

"unless it appears beyond doubt that the plaintiff can prove no set

of facts in support of his             claim which would entitle him to

relief."       Proto v. Missoula County (1988),       230 Mont. 351, 352-53,

749 P.2d 1094, 1095-96.         In considering Murray's motion to dismiss,

we construe the complaint in the light most favorable to MMPI, and

all allegations of fact are taken as true.             See Willson v. Taylor

(1981) I 194 Mont. 123, 126, 634 P.2d 1180, 1182.
          The District Court granted Murray's motion to dismiss for

failure to state a claim because it found that MMPI failed to

allege      fraud   against   Murray   with   sufficient   particularity.   See

Rules 12(b)(6) and 9(b), M.R.Civ.P.             In order to comply with Rule

9 (b) r    a complainant must allege, with particularity,             facts to

support the following nine elements of fraud:


                                         4
     1) a representation:
     2)  the falsity of the representation:
     3) its materiality:
     4 ) the speaker's knowledge of its falsity or ignorance of
          its truth:
     5)  the speaker's intent that it should be relied on;
     6) the hearer's ignorance of the falsity of the
          representation:
     7 ) the hearer's reliance on the representation;
     8) the hearer's right to rely on the representation; and
          consequent and proximate injury caused by reliance on
     9) L.~~          . .
        tne representation.

Pipinich v. Battershell (1988), 232 Mont. 507, 511, 759         P.2d 148,
151 (citation omitted).

     The District Court found, and we agree, that MMPI failed to

meet the requirements of Rule 9(b), M.R.Civ.P., in three respects.

First, allegations in paragraphs III and XI of      MMPI's third-party

complaint   contradicted    allegations   in paragraphs VIII and X.
Specifically, paragraphs III and XI stated that MMPI "knew no facts

with regard to the existence of the alleged consulting agreement"

until the Clews suit was filed, while paragraphs VIII and X alleged

that Murray made false representations to MMPI that Clews was due

monies pursuant to an agreement.       Moreover, although MMPI alleged

that a representation was made,     it failed to allege the time and

place of the representation, or to whom it was made.

     Second,   allegations in paragraphs IV, V, VII and VIII were

made "upon information and belief" of MMPI's counsel, Joan Cook,

who signed the complaint for MMPI.        Allegations   of   fraud    cannot
ordinarily be based    "on information and belief"           except as to

matters peculiarly within the opposing party's knowledge.            Schlick
v. Penn-Dixie Cement Corp. (2d Cir. 1974),     507 F.2d 374, 379, cert.

denied,   421 U.S. 976 (1975).    To satisfy Rule 9(b) in the latter

                                   5
instance, the allegations must be accompanied by a statement of
facts upon which the belief is founded.      Segal v. Gordon (2d Cir.
1972),     461 F.2d 602, 608.
         In this case, MMPI based its allegations on information and
belief.      MMPI failed to demonstrate that the falsity of Murray's
representation to MMPI--that Clews was due monies pursuant to an
agreement--was peculiarly within Murray's knowledge.      Furthermore,
the record is void of any facts upon which the alleged beliefs were
founded.      As the District Court noted:
         The employment of such extravagant terms as "fraud,"
         "conspiracy," and other words of like malign import,
         unaccompanied by a statement of fact upon which the
         charges of wrongdoing rest, is a useless waste of words.
Brandt, et al. v. McIntosh, et al. (1913), 47 Mont. 70, 72, 130 P.
413, 414 (citation omitted).
         Third,   MMPI offered no factual support for its allegations
and, thus, did not meet the requirements of Rule 9(b), M.R.Civ.P.
Although MMPI alleged a representation and its falsity, it did not
present facts in support of those allegations.         MMPI failed to
address the third through ninth elements of fraud, as set out
above.      Put simply, MMPI failed to allege fraud with sufficient
particularity.
         MMPI argues that Rule 9(b), M.R.Civ.P., must be read in
conjunction with Rule 8(a), M.R.Civ.P., which requires that the
pleadings contain only a "short and plain statement of the claim."
See Fraunhoffer v. Price (1979), 182 Mont. 7, 14-15, 594 P.2d 324,
328-29.      While MMPI's contention is generally true, the statement
cannot be so "short" or so "plain" as to defeat the purposes of
                                     6
Rule 9(b).     As the District Court correctly determined, Rules 9(b)

and 8(a),     M.R.Civ.P.,     should    be    harmonized.   See 2A James Wm.

Moore, Moore's Federal Practice, 5 9.03(2). One of the purposes of

Rule 9(b) is to protect reputations from unwarranted charges of

fraud,    "especially professionals whose reputations in their fields

of expertise are most sensitive to slander . . . . "               Semegen    v.

Weidner (9th Cir. 1985), 780 F.2d 727, 731.

        Viewing the record in the light most favorable to MMPI, we

find no evidence in the record to support MMPI's allegation of
fraud     against   Murray.       See Willson,    634 P.2d at 1182.    MMPI'S

allegations         against   Murray     were     contradictory,   were      not

sufficiently        particular,     and were unsupported by fact.            The

District Court correctly:           a) concluded that MMPI's complaint did

not sufficiently plead the nine elements of fraud; and b) denied

MMPI's motion to dismiss.

        Because the District Court properly granted Murray's motion to

dismiss for failure to state a claim, we need not address whether

MMPI had a reasonable opportunity to present sufficient facts to

preclude summary judgment.

                                         II

         Did MMPI have a reasonable opportunity to amend its pleading?

         MMPI contends that the District Court denied its request to

amend its complaint against Murray at the February 24,                    1993,

hearing.      At that hearing,         MMPI argued that it had discovered

additional facts which would cure its complaint, if deficient.

MMPI argues that the District Court abused its discretion by

                                         7
depriving MMPI the opportunity to amend its complaint.
      However, a fair reading of the transcript indicates that the
court invited MMPI to amend its complaint.                  Joan Cook, MMPI's
attorney, stated:
      Your Honor, I do have facts that I have gained since the
      time that I filed this complaint, that I can show,
      factual, about this complaint.   If you feel that it is
      deficient, I feel that I can, with the opportunity to
      amend, add facts that would satisfy it.
The District Court responded:                  "Okay."   However,   MMPI never
requested leave to amend its complaint after the February 24th
hearing.      MMPI had a reasonable opportunity to amend, but simply
failed to do so.       MMPI's assertion that the District Court abused
its discretion by depriving MMPI of an opportunity to amend its
complaint     is   without   merit.

      The record also reveals that MMPI had ample opportunity to
amend its pleading before the February 24th hearing.                 On October

26,   1992,   MMPI   filed   its      third-party   complaint   against   Murray.
Murray filed a motion to dismiss on November 25, 1992.                   Because a
motion to dismiss is not a responsive pleading, MMPI could have
amended its complaint without leave of court within twenty days of
Murray's motion to dismiss.            See Rule 15(a), M.R.Civ.P.         Clearly,
MMPI had a reasonable opportunity to amend its pleading, but failed
to do so.
      Affirmed.




                                                                Just&e

                                           8
We concur:




             9
