PSC REDISTRICTING: Preliminary injunction granted enjoining SOS from certifying candidates for Districts 1 & 5 pending final disposition of malapportionment claim… Molloy, Watford, Morris.

Bob Brown, Hailey Sinoff, and Donald Seifert bring this action against SOS Jacobsen alleging that the Montana Public Service Commission’s 5 districts are malapportioned in violation of the 14th Amendment in that they do not reflect the realities of Montana’s population distributions and these distortions run afoul of the 1 person 1 vote principle. They sought appointment of a 3-judge panel pursuant to 28 USC 2284(a). The 9th Circuit Chief Judge appointed a panel composed of District Judges Molloy and Morris and 9th Circuit Judge Watford. Plaintiffs then moved for a TRO and/or preliminary injunction to enjoin the candidate certification process in Districts 1 & 5 which are scheduled to hold elections in 2022. The TRO was granted and a preliminary injunction hearing was set for 1/7/22. Between issuance of the TRO and the 1/7 hearing Jacobsen responded in opposition to a preliminary injunction. Plaintiffs noted that she did not file an answer or other responsive pleading as required by Rule 12. At the hearing the parties acknowledged that they had agreed to construe Jacobsen’s response in opposition as a free-standing motion to dismiss or stay. Following oral argument the Court entered an order clarifying that the TRO would continue to 1/18 or until an order issued on the request for a preliminary injunction. Plaintiffs’ request for a preliminary injunction is granted. A final determination on the merits and any remedy is yet to be resolved.

Jacobsen argues that Plaintiffs’ claim is unripe because the Legislature has not had an opportunity to respond to the 2020 Census data as it was only released in 8/21. She points to “ample evidence that current legislators and holdover legislators will address this issue through the 2021-22 interim and in the 2023 regular session. This evidence consists of a letter from Rep. Zolnikov and an email from Sen. Hertz submitted after this case was filed, appearing to demonstrate interest in addressing reapportionment of the districts in the 2023 session.

“In determining whether a dispute is ripe, the court looks to the situation as of the time suit was filed. Watada (D.Haw. 2002). Events that occur after a suit is filed may moot the action, but the doctrine of ripeness is not affected by such subsequent events. Id. While the communications from Zolnikov and Hertz — or any like action from other legislators — may be the impetus for future events that have the potential to render Plaintiffs’ action moot, those communications and the Legislators’ purported intent have no effect on ripeness of this action. Moreover, ripeness is contingent on whether the facts demonstrate that there is yet any need for the court to act. Narouz (9th Cir. 2010). The communications from legislators support the proposition that some action is necessary to redistrict the PSC’s map, and the essential issue is whether the redrawn 5-district map should derive from the Legislature or the Federal Judiciary in advance of the 2022 election cycle. That question goes beyond the ripeness inquiry and strikes at the merits of the case. This case is ripe for adjudication.

Plaintiffs “must establish that they are likely to succeed on the merits, that they are likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in their favor, and that an injunction is in the public interest.” Winter (US 2008).

Plaintiffs make the case that the districts are unconstitutional because they deny every voter his “constitutional right to have his vote counted with substantially the same weight as that of any other voter.” Hadley (US 1970). The Supreme Court’s emphasis that “states must draw congressional districts with populations as close to perfect equality as possible,” Evenwel (US 2016), means that when a state

decides to select persons by popular election to perform governmental functions, the Equal Protection Clause of the Fourteenth Amendment requires that each qualified voter must be given an equal opportunity to participate in that election, and when members of an elected body are chosen from separate districts, each district must be established on a basis that will insure, as far as is practicable, that equal numbers of voters can vote for proportionally equal numbers of officials. Hadley.

“Where the maximum population deviation between the largest and smallest district is less than 10% a state or local legislative map presumptively complies with the one-person, one-vote rule.” Evenwel. Where the difference exceeds 10% the map may only be constitutional if the state shows that the districts accommodate for some type of “traditional districting objective” such as “preserving the integrity of political subdivisions, maintaining communities of interest, and creating geographic compactness.” Id.

Considering the 2020 Census, the ideal population for each district would be 216,845. The population of the smallest district, District 1, deviates downwardly 14% from the ideal population while that of the largest, District 3, deviates upwardly 10%. Under the Evenwel formula, the maximum deviation is 24%. Jacobsen concedes that the 2020 Census indicates a shift in Montana’s population that “results in large deviations across representative political districts.” However, she argued at the hearing that the 2020 Census data is inapposite to the current challenge because, despite the 2022 election cycle, the Legislature will not have an opportunity to respond to the 2020 data until 2023, and thus Plaintiffs’ claims are essentially time-barred by Benisek (US 2018), which emphasized that “a party requesting a preliminary injunction must generally show reasonable diligence.” Accordingly, she argues that any viable challenge to the 2022 election cycle must be premised on the 2010 Census and such a challenge would fail because of the time lapse to the present action. She also argues that Plaintiffs are unlikely to succeed on the merits because the law requires that the Legislature take the first run at redistricting. Neither argument is persuasive at this point.

The argument that Plaintiffs’ challenge is time-barred is unpersuasive for several reasons. First, it is measured by data from the 2020 Census and seeks to compel redistricting of all districts. Thus assuming arguendo that Jacobsen’s time bar argument holds water it would be inapplicable to Plaintiffs’ challenge. They protest the boundaries of all districts, and 3 of the 5 will be subject to the 2024 election cycle in which the parties agree that the 2020 Census will be relevant. Notably, they agree that the current districts exhibit significant deviations based on the 2020 Census. Thus the breadth of Plaintiffs’ challenge and the parties’ agreement that the current district do not reflect the realities of Montana’s population distributions means they are likely to succeed on the merits. While the parties disagree about the remedy, that dispute is independent of any time-bar argument.

Second, the emphasis on diligence in Benisek does not preclude Plaintiffs’ challenge. The Benisek plaintiffs challenged an allegedly politically gerrymandered map and sought a preliminary injunction 6 years — 3 general election cycles — after it was adopted. The Supreme Court characterized this as an “unnecessary, years-long delay” that weighed against the preliminary injunction. Such a characterization does not give rise to an in essentia statute of limitations. Even if it did, the difference between alleged constitutional injuries between Benisek and this case casts doubt on the applicability of the Benisek reasoning. Unlike in Benisek, Plaintiffs’ challenge is not rooted in the release of a map that created unconstitutional districts based on malapportioned political groupings; they challenge a stale map on the basis that new data demonstrates that the districts which were once presumptively constitutional are no longer so.

Additionally, there is no statutory or constitutional requirement that the Legislature act at certain intervals to redistrict the PSC’s districts. (The Montana Constitution requires that legislative districts be reapportioned in the 3rd year after a decennial census but there is no authority stating an analogous timeline for reapportionment of the PSC districts.) Consequently, it is difficult to reconcile how, under Jacobsen’s theory, Plaintiffs have acted both prematurely and belatedly in bringing this challenge because there is no requirement that the Legislature consider or change the PSC’s districts on a specific timeline. At this stage, Plaintiffs have shown a likelihood of success on the merits.

According to Plaintiffs, the 2020 Census indicates that the 5 districts are constitutionally malapportioned, which will necessarily result in a violation of 1 person 1 vote if not corrected before the 2022 election cycle. Jacobsen argues that there is at least a colorable dispute of fact as to whether the deviations based on 2010 data are unconstitutional. At this stage Plaintiffs have the more persuasive argument. Viewing the issue as they frame it, there is a presumption of unconstitutionality because the maximum deviation is above 10%. If the 2022 election cycle proceeds on the current districts the 2020 Census shows that the voters will be precluded from exercising their 14th Amendment right to have their votes counted with substantially the same degree of weight as other votes. That such a violation might be limited to the districts up for election in 2022 does not eliminate the presently occurring harm because even temporally limited constitutional deprivations represent irreparable harm. Otter (9th Cir. 2012).

Jacobsen may yet show that the deviations of the current map based on the 2020 Census accommodate a recognized interest such as maintaining integrity of political subdivisions. Mahan (US 1973). But at this stage the presumption of unconstitutionality that attaches at this point gives rise to the likelihood of irreparable harm because the malapportionment appears to improperly distribute the weight carried by each vote in the districts. The concern is Jacobsen’s timing argument regarding the challenge, but Plaintiffs note that it is the stale mapping when measured by the 2020 Census that proves the point.

Even if the issue is viewed as Jacobsen frames it, Plaintiffs still show a likelihood of irreparable harm. At the hearing she noted that there may be fact issues as to whether the current districts under the 2010 Census are unconstitutional because the deviation hews somewhat closely to the 16% maximum that was found permissible in Mahan. However, in Mahan the State succeeded in rebutting the presumption of unconstitutionality by pointing to permissible legislative intent in preserving political subdivisions. Plaintiffs show that the State could have drawn a map in 2010 that preserved county boundaries while reducing the maximum deviation below 3%. Therefore at this juncture the presumption of unconstitutionality exists as to the existing map, even based on the 2010 Census.

In balancing the equities, both parties invoke confusion by voters and candidates and comity. As a threshold matter, the concern that any change to the maps will significantly disrupt and add confusion to the 2022 election cycle may be somewhat mitigated by expeditious resolution of this case. Thus the case will be set on an expedited trial or summary judgment briefing schedule so the merits may be resolved prior to the 3/14/22 filing deadline.

Jacobsen also argues that Plaintiffs’ requested relief is “unprecedented” and would likely exacerbate voter confusion. While the remedy if Plaintiffs succeed on the merits is reasonably subject to dispute, Jacobsen’s concerns about the appropriateness of the requested remedy do not tip the scales in her favor. The preliminary injunction is narrower than the relief Plaintiffs request on their overall challenge, and Jacobsen’s concerns that some voters might be shuffled throughout districts is speculative and does not diminish the reality that at this stage they have established a likelihood that a constitutional injury is occurring. Highlighting the possibility that confusion or other challenges may arise in connection with remedying the presumed injury does not obviate the injury.

As to comity, Jacobsen’s argument that the Legislature should have the opportunity to respond to the 2020 Census has merit. But at the same time the limited record shows that it has consistently failed to remedy malapportioned districts. Importantly, there is no timeline governing redistricting of the PSC districts. Left unresolved, there are likely significant violations of 1 person 1 vote. Plaintiffs’ showing of a likelihood of irreparable harm, which falls in the shadow of the Legislature’s inaction, and the lack of a constitutional impetus to guarantee a legislative remedy diminishes the persuasiveness of Jacobsen’s argument that deference to the Legislature is appropriate at the preliminary injunction stage. This factor tips in Plaintiffs’ favor.

The public has an interest in “fair and effective representation,” Evenwel; the public has an interest in “orderly elections” that may be furthered by temporarily restraining the candidate certification process while the PSC’s districts are under review, Benisek; and the public has an interest in “equal voting strength for each voter,” Hadley. Jacobsen does not dispute that the public possesses these interests but emphasizes that “the public interest inquiry primarily addresses impact on non-parties rather than parties.” (Bernhardt (9th Cir. 2003). Consequently, she argues that the Legislature’s interest in maintaining control over the redistricting process is owed deference until the “Legislature fails to timely act after having an adequate opportunity to do so.” Id. However, the Legislature has had opportunities to act and has failed to do so. Although the 2020 Census data was released in 8/21 it has not acted since 2003 to redistrict the PSC despite legislative bills to address the concern. The current data confirms what the 2010 data seems to show: the current districts are malapportioned. Thus, the public’s interest in effective representation and equal voting strength outweighs the Legislature’s interest in involvement in the process right now. And it is not precluded from acting in advance of the 2024 elections — or even the 2022 elections if a special session is called.

Jacobsen’s focus on the Legislature as a harmed non-party also emphasizes the need for public input and comment in the process during the next session. However, to allow the candidate certification to proceed based on a presumptively unconstitutional map and despite Plaintiffs’ showing that irreparable harm is likely occurring for the sake of legislative public comment without assured action would teeter close to elevating form over substance. The opportunity for public input is a mechanism that helps advance public interests in fair & effective representation; asking the public to endure a present injury to those interests so that it may have an opportunity to weigh in during a prospective legislative undertaking ignores the ubiquitous nature of 1 person 1 vote under the 14th Amendment.

Plaintiffs’ motion for a preliminary injunction is granted. Jacobsen is preliminarily enjoined from certifying candidates for PSC in Districts 1 & 5 pending a final disposition on the merits.

 

 

– – – 

 

Candidate filing in Districts 1 & 5 would ordinarily begin 1/13/22 and close 3/14/22. An expedited scheduling order with requirements for pretrial proceedings, with the final pretrial conference and bench trial or hearing on dispositive motions set for 3/4/21, is issued so that this action is resolved prior to the 3/14/22 filing deadline.

Brown, Sinoff, and Seifert v. SOS Jacobsen, 44 MFR 266, 1/13/22.

Constance Van Kley & Rylee Sommers-Flanagan (Upper Seven Law), Helena, and Joel Krautter (Netzer Law Office), Sidney, for Plaintiffs; Brent Mead (AG’s Office).

INSURANCE: Third Amended Complaint fails to save previously rejected challenges to GEICO’s subrogation practices, no further amendment allowed… Molloy.

While the facts & claims of this case become less clear with each amended pleading, they are reconstructed from prior pleadings:

James Lee was in an MVA caused by another driver 8/5/19. He was injured and his and his wife Tracy’s vehicle was totaled. They were personally insured by GEICO and James Lee Construction had a commercial policy with Government Employees Ins. Lees received $25,000 policy limits from the at-fault driver’s bodily injury coverage and $5,798.64 from the at-fault driver’s property coverage. GEICO and GEICO General subrogated $14,194 from the at-fault driver’s insurer, which Lees claimed would prevent them from fully recovering. GEICO paid Lees $13,567 for their property damage prior to seeking subrogation and, following its subrogation recovery, reimbursed their $500 deductible.

On 4/3/20 Lees sued in State Court on behalf of themselves and a putative class challenging subrogation practices of GEICO, GEICO General, and other GEICO entities with which they do not hold policies. The case was removed to this Court 5/12/20. There have been 3 previous rounds of significant briefing.

In 6/20 GEICO sought to dismiss the original complaint for lack of standing, lack of personal jurisdiction, and failure to state a claim. The Court dismissed the non-contracting entities for lack of personal jurisdiction and dismissed Plaintiffs’ conversion claim as preempted by Montana’s UTPA. On 12/18/20 Plaintiffs filed their Second Amended Complaint which reintroduced the non-contracting entities on the basis that they, along with GEICO and GEICO General, jointly operate a subrogation unit in Montana, the “Property Recovery Unit.”

In 1/21 GEICO again sought dismissal. Based on Plaintiffs’ slightly altered theory and an intervening US Supreme Court decision, the Court found that it had personal jurisdiction over the non-contracting entities that operate the PRU, and that Plaintiffs had standing and adequately pled their claims.

GEICO subsequently sought judgment on the pleadings as to Plaintiffs’ claim for declaratory relief on the grounds that it was preempted by the UTPA. Following argument its motion was granted. Because Plaintiffs’ subrogation claim — the basis of their class action — sounded in claims handling, it was barred by the UTPA. §33-18-242(3). However, the UTPA does not preempt claims for breach of contract and Plaintiffs were given an additional opportunity to amend.

On 9/23/21 Plaintiffs filed the Third Amended Complaint in which they pursue their claims for breach of contract and conversion on behalf of themselves and a putative class. They attempt to avoid the UTPA bar on the ground that this action “arises out of the intersection between a contractual subrogation right, a made whole rule to such contractual right, and the timing of the made whole determination and any attendant duties.”

GEICO seeks to dismiss the Third Amended Complaint on the grounds that it alleges the same preempted claims for conversion and for declaratory and injunctive relief and fails to plead a breach of contract claim. Both arguments have merit.

GEICO is correct that the Third Amended Complaint “consists mostly of Plaintiffs’ argument” and “alleges few facts and relies on past pleadings and filings to establish the predicate factual background for Plaintiffs’ claims.” For example, it does not identify the parties or contain a jurisdictional statement. While incorporation by reference across pleadings can be acceptable, Rule 10(c), “the general rule is that an amended complaint supercedes the original complaint and renders it without legal effect,” Lacey (9th Cir. 2012). Plaintiffs make no attempt to incorporate any previously alleged facts as they do not reference the relevant parts of their previous pleading. But even assuming that their Third Amended Complaint meets this basic standard — which it does not — their claims fail as a matter of law.

§33-18-242(3) states:

An insured who has suffered damages as a result of the handling of an insurance claim may bring an action against the insurer for breach of the insurance contract, for fraud, or pursuant to this section, but not under any other theory or cause of action.

Accordingly, the Court previously determined that Plaintiffs’ claims for conversion and declaratory relief were preempted by the UTPA. Plaintiffs claim to have overcome that bar in their Third Amended Complaint which alleges:

This action eliminates any claim based on the adjustment of the insureds’ insurance claim and, instead, seeks relief in routes recognized as available by the Montana Supreme Court:

A-1. declaration of the meaning of the contractual right to subrogate as constrained by the “made-whole” rule, and declaration that the contract has been breached and corresponding supplemental relief for the contract breach (a Ferguson-type claim); or, alternatively

A-2 judgment for damages for breach of the contract in the amount of the wrongful subrogation (without prejudice to any proper, timely and equitable assertion of subrogation by GEICO);

AND

B-1 A declaration of the meaning and application of the equitable made-whole rule to conduct wholly apart from the adjustment of the settled insured’s first party claim (a Thomas-type action); or, alternatively,

B-2 A declaration of when the made-whole determination duty attaches (a Safeco of Ill.-type action);

ALTERNATIVELY, in the event that, declaratory and equitable enforcement of the equitable made whole rule is denied,

C. An adjudication of the Lee’s and class members’ exclusive legal rights to their automobile tort claims and proceeds of those claims, and damages for wrongful conversion of those claims and the proceeds thereof.

But, as argued by GEICO, “the substance and nature of Plaintiffs’ claims, and the relief sought for such claims, has not changed.” Dressing up Plaintiffs’ unsuccessful arguments as pleadings does not make them tenable claims under Montana law. While Plaintiffs disagree, this Court determined that subrogation was preempted claims handling activity. That determination stands.

Ultimately, as summarized by GEICO:

Plaintiffs cannot “draft” their way out of this fundamental problem with their claims. No matter how many words Plaintiffs bold, underline, or italicize, or what new, perplexing word salad Plaintiffs use to argue the point, the fact remains that the wrongful subrogation at issue “qualifies as claims handling.”

For this reason and those previously stated, Plaintiffs’ claims for declaratory relief and conversion are dismissed anew.

Consistent with the Court’s previous order, Plaintiffs’ Third Amended Complaint alleges breach of contract on the premise that GEICO breached the implied covenant of good faith by subrogating prior to Plaintiffs being made whole. That claim also fails.

First, GEICO argues that Plaintiffs’ breach of contract claim based on its subrogation conduct — to the extent there is one — is limited to the policy between James Lee Construction and Government Employees Ins. That argument is persuasive. There is no contract between Plaintiffs and GEICO Indemnity or GEICO Casualty Ins. Moreover, the subrogation dispute is based on the commercial policy between James Lee Construction & Government Employees, not Lees’ personal policy with GEICO General. Plaintiffs’ breach of contract claim is dismissed as to all defendants but Government Employees for lack of privity.

Second, GEICO argues that Plaintiffs fail to cite any specific provision of the commercial policy that GEICO breached, emphasizing that they stipulated that it specifically authorizes subrogation. Plaintiffs respond that the Third Amended Complaint

clearly identifies (a) GEICO’s exercise of contractual provisions addressed to subrogation, (b) the law which constrains the meaning of those contract provisions, and (c) the implied covenants and equitable rules that require GEICO to follow the law of Montana when exercising those contract rights.

GEICO is correct that a plaintiff must identify “the violation of a specific contractual provision” to pursue a breach of contract claim. Tin Cup (Mont. 2008). However, Plaintiffs are also correct that “breach of the implied covenant of good faith does not require or depend on the breach of an express contract term.” House (Mont. 2021). Rather, “proof of an alleged breach of the implied covenant of good faith and fair dealing requires proof that the offending party acted under the contract terms in a manner that was a dishonest or unreasonable deviation from prevailing commercial standards of reasonableness in trade, thereby denying the non-breaching party the benefit of the bargain.” Id. Plaintiffs allege that GEICO failed to comply with Montana law in execution of the policy’s subrogation provision, denying them “the benefit of their contract bargain.” Thus their claim is sufficiently specific. Nonetheless, it fails for 2 reasons.

First, a breach of the implied covenant claim cannot be based on “prohibiting a party from doing that which is expressly permitted by an agreement.” Tvedt (Mont. 2004). The policy expressly allows subrogation, as does Montana law. Van Orden (Mont. 2014). Second, a claim for breach of the implied covenant is “generally compensable only in contract by contract damages.” House. It is undisputed that Plaintiffs were fully compensated for damages “covered” by the GEICO policy — what was owed under the contract. Absent contract damages, Plaintiffs have failed to plead a viable breach of contract claim.

Finally, GEICO argues that Plaintiffs were in fact “made whole.” Although the Court need not reach this argument in light of the above, it is another nail in the coffin. Plaintiffs’ made whole claim is premised on the allegation that they were not paid for losses not covered by their GEICO policy before GEICO pursued subrogation. GEICO persuasively disagrees on legal grounds pursuant to Van Orden, which held that when “damages are discrete, readily-ascertainable, and completely covered under a separate policy or portion of the policy for which a separate premium has been paid, subrogation may proceed as to that element of the loss only.” But even assuming that Plaintiffs’ conceptualization of covered and non-covered losses is correct, they received $20,000 in property damages, which exceeds their alleged property damage. And even if that were not the case, they fail to allege facts that plausibly show that GEICO’s subrogation conduct reduced the amount by which they would or could ultimately recover from the tortfeasor. Plaintiffs themselves argue that they could not recover attorney fees from the tortfeasor and therefore GEICO did not “take any money out of [Plaintiffs’] pockets. Van Orden. The facts simply do not support Plaintiffs’ subrogation challenge.

Plaintiffs fail to state a plausible claim, making dismissal appropriate. While leave to amend should generally be granted, the complaint “could not be saved by any amendment.” Mueller (9th Cir. 2012). Plaintiffs have been given multiple opportunities to amend and the most recent complaint shows that recovery is not possible based on the facts. Dismissed with prejudice.

James Lee Const. and James & Tracy Lee v. Government Employees Ins. et al, 44 MFR 265, 1/3/22.

Alan Lerner (Lerner Law Firm), Kalispell, Allan McGarvey & Jinnifer Mariman (McGarvey Law), Kalispell, Brian Joos & Judah Gersh (Viscomi, Gersh, Simpson & Joos), Whitefish, and Evan Danno (Danno Law Firm), Kalispell, for Plaintiffs; Ian McIntosh & William Morris (Crowley Fleck), Bozeman, Courtney Henson (Snell & Wilmer – Tucson), and Sheila Carmody (Snell & Wilmer – Phoenix), for Defendants.

SSI/SSD: ALJ failed to comply with new regulations for evaluating medical opinions in denying benefits… Hallie Larsen reversed… Johnston.

Wayne Wells, 63, Great Falls, has a high school education and experience as a construction worker. He applied for SSD and SSI 1/22/18 alleging that he became disabled 9/1/17 due to a torn ACL in his left knee, a torn rotator cuff in his right shoulder, chronic low back pain, and DDD.

ALJ Hallie Larsen determined following a hearing that Wells had the following severe impairments: osteoarthritis and degenerative joint disease of the shoulders, hands, and right knee, and DDD of the cervical and lumbar spine. She determined that he was not disabled because he had the RFC to perform jobs that existed in significant numbers such as press operator, hand packager, and production assembler. The Appeals Council denied review. He seeks judicial review, arguing that Larsen failed to provide sufficient reasons for discounting the opinions of treating physician Charles Marler MD and consultative examiner Jamal Balouch DO.

Wells filed his applications after 3/27/17. Larsen was therefore required to apply the new regulations when evaluating medical opinion evidence. They eliminate the hierarchy that gave opinions of treating sources more weight than non-treating sources, and gave the opinions of examining sources more weight than non-examining sources. Under the new regulations the ALJ must consider and evaluate the persuasiveness of all medical opinions based on some or all of the following factors:

1. Supportability of the opinion;

2. consistency of the opinion;

3. the medical source’s relationship with the claimant including length of treatment, frequency of examinations, purpose of the treatment, extent of the treatment, and existence of examinations;

4. the medical source’s specialization;

5. the medical source’s familiarity with other evidence in the record;

6. the medical source’s familiarity with SSD program requirements.

20 CFR 404.1520c(c)(1)-(5), 416.920c(a), (b)(2).

The factors that an ALJ must address depends on whether the medical opinion is contradicted or uncontradicted. §404.1520c(a)-(b). If it is uncontradicted the ALJ need only address the supportability and consistency factors. §§ 404.1520c(b)(2), 416.920c(b)(2).

The supportability factor looks inward at the medical evidence presented in support of the medical opinion. A medical opinion that is supported by significant relevant medical evidence is more persuasive. A medical opinion that is not supported by relevant medical evidence is less persuasive. §404.1520c(c)(1).

The consistency factor looks outward. It compares the medical opinion to other medical and non-medical evidence in the record. A medical opinion that is consistent with the other medical and non-medical evidence is more persuasive. §404.1520c(c)(2). A medical opinion that is not consistent with the other medical and non-medical evidence is less persuasive. Id.

If the ALJ must decide between differing but equally persuasive medical opinions on the same issue, the ALJ must consider all of the referenced factors including the medical source’s relationship with the claimant, the medical source’s specialization, the medical source’s familiarity with other evidence in the record, and the medical source’s familiarity with SSD program requirements. §§ 404.1520c(b)(2)-(3), 416.920c(b)(2)-(3).

Under current 9th Circuit law an ALJ must provide “clear and convincing” reasons to reject an uncontradicted opinion from a treating or examining doctor and provide “specific and legitimate” reasons to reject a contradicted opinion from a treating or examining doctor. Lester (9th Cir. 1995). The 9th Circuit has not addressed whether the new regulations alter these standards. Nevertheless, they require the ALJ to explain her reasoning for discounting a medical opinion from a treating or examining physician. §§ 404.1520c(a), 416.920c(a). She must explain “how persuasive” she found the medical opinion based on the applicable factors and her reasoning must be supported by substantial evidence. Machelle (D.Idaho 2021).

Balouch is an examining physician. He examined Wells 5/13/18. He took a history and reviewed Wells’s medical records. Wells reported a torn left ACL, a torn right rotator cuff, knee pain, chronic low back pain, and hand pain. Balouch had x-rays taken of his lower spine, left knee, and hands. They showed multilevel severe disk space narrowing in the lumbar spine, severe left osteoarthritis in the left knee and moderate osteoarthritis in the right knee, and mild diffuse osteoarthritis in the hands. Balouch conducted a physical examination which revealed knee swelling and arthritic changes in the joints of Wells’s hands. He opined that Wells’s medical conditions would limit his ability to:

1. push, pull, and lift over 10 lbs;

2. ambulate over 1,000 feet without rest breaks;

3. stand for prolonged periods;

4. bend forward and kneel;

5. engage in activities with high falls risks;

6. climb ladders and stairs.

Balouch further opined that Wells “would only be able to tolerate light duties given the extent of his arthritis and work duties in the seated position a majority of the time.”

Larsen found that Balouch’s opinions were “not persuasive” because:

1. Dr. Balouch’s opinions were “inconsistent” with Wells’s “work activities;” and

2. Dr. Balouch’s “own exam findings were normal (e.g., normal strength, full ranges of motion) except for arthritic changes in his hands and bilateral knee swelling.”

Charles Marler was one of Wells’s treating physicians. He first saw Wells 9/5/18. Wells complained of shoulder, knee, neck, and back pain. He was tender to palpation of the neck. Marler noted that his cervical range of motion was severely reduced. He had tenderness and mild pain with motion of the lumbar spine. He had severely reduced range of motion and tenderness in both shoulders. He had tenderness and mild pain with motion of both knees. Marler ordered x-rays and referred Wells for PT.

Marler saw Wells again 9/25/18. He evaluated him for COPD. Wells reported shortness of breath on exertion. He had mild pain with motion of his arms and legs and edema in his extremities.

Marler saw Wells 1/30/19 for a disability evaluation. He noted that Wells had a history of degenerative joint disease in both shoulders and knees and rotator cuff problems and could not lift above his shoulders. Wells reported that he could only work 60% of the day, could not lift much above 10-15 lbs, and usually had to rest at lunch hours. Marler conducted a physical exam. Well’s lumbar and cervical spine were tender. He experienced mild pain with motion. His left shoulder was tender and he experienced moderate pain with motion. His right shoulder was tender and had severely reduced range of motion. He had edema in the extremities.

Marler completed a Medical Source Statement that described Wells’s physical impairments and limitations. His impairments included a rotator cuff injury, osteoarthritis of the knees, COPD, coronary artery disease, and osteoarthritis of the lumbar and cervical spine. As to his limitations, Marler checked boxes indicating:

1. Wells would miss work 4 times/mo due to his medical conditions;

2. he could sit frequently, stand occasionally, walk & stoop infrequently, and never climb;

3. he could lift 5 lbs frequently, 10 lbs occasionally, and 20 lbs or more infrequently;

4. he could perform fine & gross manipulation with his hands frequently and raise his arms over his shoulders infrequently;

5. his pain level was “moderately severe;”

6. he would be off task 60% of an 8-hr workday due to pain;

7. he would not need to lie down due to pain;

8. he would need to take breaks during an 8-hr workday beyond the normal 15-minute breaks and normal lunch break;

9. he would not need an assistive device to ambulate.

Larsen found that Marler’s opinions in the MSS were “not persuasive” because:

1. It appears that Marler simply restated what Wells told him rather than relying on the objective medical findings;

2. Marler did not explain and the treatment notes do not demonstrate why Wells would need to be off-task 60% of a normal workday;

3. Marler’s opinion that Wells could only walk “infrequently” was inconsistent with his other findings that Wells did not need an assistive device to ambulate, that he had only mid-level pain, and that he did not need to lie down due to his symptoms.

Larsen did not comply with the new regulations when she addressed persuasiveness of Balouch’s and Marler’s opinions. She was required to “clearly articulate how she applied the consistency and supportability factors” and support her reasoning with substantial evidence. Eric JG (D.Mont. 2021); Carmen Claudia S. (CDCal. 2021). She did not support her reasoning with substantial evidence. She did not explain why Balouch’s opinions were inconsistent with Wells’s work activities. She did not explain why Balouch’s exam findings did not support his opinions as to Wells’s limitations. She did not explain why Marler’s treatment notes did not support his opinion that Wells would be off-task 60% of a normal workday. She did not explain why Marler’s opinion that Wells could only walk infrequently was inconsistent with his other findings that Wells did not need an assistive device to ambulate, that he had only mid-level pain, and that he did not need to lie down due to his symptoms. Her failure to support her reasoning with substantial evidence was legal error.

SSA’s decision to deny Wells’s claim is reversed and remanded for further proceedings consistent with this memorandum and order.

Wells v. SSA, 44 MFR 264, 12/28/21.

Eric Rasmusson (Rasmusson Law Offices), Missoula, and Olinsky Law Group for Wells; Special AUSA Michael Mullen.

RURAL ELECTRIC SERVICE: Cooperative and member not required under 1956 and 2008 easements to extend service from member’s ranch buildings to new neighbor a section away… Cavan.

Michael Short of Texas purchased 2 sections in Meagher Co. in 2015 intending to build a recreational/vacation residence. Arthun Ranch operates on 2 sections south of Short’s property. Park Electric Cooperative which provides service to members in Meagher, Park, Gallatin, and Sweet Grass Counties. The Short and Arthun properties are separated by a section of State land — the Short property on its northern border and the Arthun property on its southern border. At the time Short purchased his property there was no electrical service to it and he did not explore availability of electrical access before the purchase. After purchasing it he sought to establish service.

Short has an easement over the State section which would allow placement of lines from the Arthun/State border to his property. The Arthun property is also encumbered by easements in favor of PEC and the Short property. In 1956 Arthun’s predecessor granted a right-of-way easement across the Arthun property to PEC. The 1956 Easement gave PEC “the right to enter [the Arthun property] to place, construct, operate, repair, maintain, relocate and replace an electric transmission or distribution line or system.” PEC constructed a distribution line on the Arthun property which provides electricity to the residence and outbuildings. It runs in a northerly direction the length of the Arthun property and terminates near the Arthun residence.

For years Arthun had permitted Short’s predecessors Brights to access their property via a road which runs north through the Arthun property to the State section. In 1989 Brights obtained an easement from Arthun in contemplation of sale of their property for ingress & egress “limited to agricultural endeavors only” which was expanded to allow “for purposes ordinarily and reasonably associated with the ownership and use of lands including the installation of utility lines and cables.” The 1989 easement erroneously referred to the Short property as the “servient” lands. This scrivener’s error was corrected to “dominant” in a 2008 easement which was otherwise unchanged and explicitly superseded the 1989 easement.

The 2008 easement runs north and south across the Arthun property along an existing road, at least part of which was a county road known as Anderson Road. It has a Y-fork south of the Arthun/State border, one branch of which continues north for 175 yards to the State section. This is the branch used by Brights to access the State section and their property. The other branch diverts to the west and proceeds to the Arthun residence and outbuildings. The 2008 easement along Anderson Road is east of and parallels the distribution line on the Arthun property.

After purchasing the property Short requested that Arthun allow him to connect to the line on the Arthun property. Arthun denied the request. Short then requested that PEC extend the line which services the Arthun property to the border of the Arthun/State section. PEC was advised by Arthun that Arthun would not grant an easement to connect to the line on the Arthun property. PEC thus informed Short of 2 options: obtain an easement from Arthun to connect to the line on Arthun’s property or construct a line along the Anderson road to the State section via the 2008 easement. Short has declined the latter option and asserts that he already has the right to establish electrical service via the 1956 and 2008 easements on the Arthun property.

Short sued PEC and Arthun in 3/19. Following this Court’s 3/16/20 order on Defendants’ motions to dismiss, Short’s remaining claims are for declaratory judgment on easement rights (Counts 1 & 2); obstruction of, interference with, and breach of easement (Count 3); and violation of the Montana CPA as to PEC (Count 7). PEC and Arthun request summary judgment as to all of Short’s claims. Short requests summary judgment as to Counts 1 & 2. (While PEC contends that it is entitled to summary judgment on Count 1 because the claim was pled against Arthun alone, it shares Arthun’s interpretation of the 2008 easement.)

Count 1 — Declaratory judgment as to the 2008 easement.

The 2008 easement grants “a perpetual non-exclusive roadway easement for ingress and egress, 30 feet in width.”

This easement shall extend 15 feet on either side of the centerline of the existing roadway which commences at the point of termination of the Anderson Road #45B in Park County, Montana, in the N1/2N1/2 of Section 21, Township 5 North, Range 9 East, M.P.M.; then northerly a distance of approximately 175 yards to the North section line of said Section 21 at which point this easement will connect with the road right-of-way being granted by the Montana Department of State Lands through Section 16, Township 5 North, Range 9 East.

The easement further describes the grant to be “for purposes ordinarily and reasonably associated with ownership and use” such as traffic due to transportation of livestock, timber, or machinery; agricultural or recreational activities; and existence of a residence. It also allows for “installation of utility lines and cables (it being understood and agreed that any utility line or cable installed outside the above easement description must have the written approval of the Arthun Ranch, Inc.).” Therefore the plain language of the 2008 easement unambiguously allows for installation of utility lines and cables within the easement description. The only dispute is the location of the easement.

Anderson Road runs north and south across Arthun’s property and reaches a Y-shaped intersection south of the State section. One branch continues north on Arthun’s property for 175 yards where it connects with the State section; the other branch diverts west to the Arthun residence and outbuildings. Arthun and PEC maintain that the easement describes the northerly branch which was the roadway that Brights used to access their property. Short maintains that the easement contains “two distinct portions,” the first referencing the “existing roadway” refers to Arthun’s driveway or the westward branch of the Y, and the second, after the semicolon, referencing the northerly branch. Thus the existing power pole near the Arthun residence is within the scope of the “first portion” and grants Short the right to connect to the line on Arthun’s property. He argues that Arthun’s interpretation is plausible only by removing “existing roadway,” the semicolon, and “then” from the easement description and “merging the two portions” of the easement. Citing Merriam-Webster, he asserts that the easement cannot refer to a single segment because “then” means “being next in a series.” He repeatedly cites Les Arthun’s deposition in which he described the end of Anderson Road as at the fork of the “Y” or at a point on the westward branch where the road enters the Arthun compound. But he also consistently contends that the exact location of the end of Anderson Road is immaterial — that what is determinative is “the existing roadway” refers to the westward branch leading to the Arthun residence.

The Court rejects Short’s strained interpretation of the 2008 easement and agrees with Arthun’s interpretation. Arthun asserts that the 2008 easement unambiguously describes the “Y’s” north branch, which leads to the State section. The grant describes a 30-foot wide roadway easement at the “existing roadway which commences at the point of termination of the Anderson Road … then northerly a distance of approximately 175 yards to the North section line … at which point this easement will connect with the road right-of-way being granted by the Montana Department of State Lands.” The easement’s description is unambiguous. It begins at the “existing roadway” where Anderson Road terminates. The grant provides that the easement is 30 feet wide, extending 15 feet on either side of the center of the road, and runs approximately 175 yards until it connects with the State section. Contrary to Short’s assertion, this reading does not ignore any of the easement language. The language describes the easement from its point of origin (the terminus of Anderson Road) to its end (the State section), and further defines the scope of the easement in width and length. Thus the 2008 easement unambiguously describes the north branch of the “Y” that runs 175 yards from the Y intersection at the end of Anderson Road to the State section and onward to Short’s property.

While the location of the easement is unambiguously described by the writing alone, Arthun’s interpretation is also consistent with the circumstances under which it was made and the purpose for which it was granted. Brights requested an easement to establish legal access to their property in anticipation of its sale. They did not require an easement to access the Arthun residence and ranch buildings. Therefore, the surrounding circumstances and purpose of the easement supports the conclusion that it refers to the existing roadway used by Brights to access their property, the north branch, not the westward branch that leads to Arthun’s residence.

In sum, the 2008 easement does not allow Short access to the utility line on Arthun’s property and therefore Arthun is entitled to summary judgment as to Count 1. To the extent that Count 1 is also asserted against PEC, it is entitled to summary judgment on the same grounds.

Count 2 — declaratory judgment as to the 1956 easement.

Short also contends that the 1956 easement grants PEC the right to access the Arthun property to install lines from the existing distribution line. Arthun and PEC argue that the 1956 easement is fixed to the existing line which supplies Arthun, and that PEC does not have the right to extend it beyond its historical location & scope.

Arthun’s predecessor granted PEC the right to enter Arthun’s property “to place, construct, operate, repair, maintain, relocate and replace an electric transmission or distribution line or system” Thus the grant refers generally to Arthun’s lands and does not provide a more specific location. Nevertheless, Short argues that it is specific in nature, explicitly allows PEC access to the entirety of the Arthun property, and so allows PEC to extend service to his property. PEC and Arthun maintain that because the easement was described in general terms it has become fixed by its existing use and location and does not allow PEC to extend service to Short.

The Court agrees with PEC’s and Arthun’s interpretation, which draws support from Montana Supreme Court decisions. In Anderson (Mont. 2007), an easement was granted to the owner of a radio station in 1949 for “the perpetual right and easement to construct, erect, operate and maintain radio towers, guy wires and ground and feed wires and conduits in, upon, over and through” a 160-acre parcel in Flathead Co. 2 towers with ground antennas were built and maintained on the property. A new owner purchased the station in 2000 and informed the landowner that it intended to enlarge or relocate the towers. The landowner objected that the easement only covered the land selected in the early 50s for the towers; the station owner maintained that it covered the entire 160 acres. Although the easement described the entire 160 acres, the Supreme Court determined that because it provided that the towers would be built on “certain portions” of the land it was clear that the grant did not encumber the entire property. Then in determining the extent of the easement it quoted Strahan (Mont. 1989) and explained:

If the easement is not specifically defined, it need only be such as is reasonably necessary and convenient for the purpose for which it was created. It is sometimes held where the grant or reservation of an easement is general in its terms, that an exercise of the right, with the acquiescence and consent of both parties, in a particular course or manner, fixes the right and limits it to that particular course or manner.

Further, where granting terms are ambiguous or described generally, what is reasonable is “determined in light of the situation of the property and the surrounding circumstances.” Id. Applying these principles, Anderson found that the easement was limited in size to the historical location of the 2 towers originally placed on the property. It pointed to several factors which established its historical use including that the original grantee of the easement selected the area to construct the towers and then built them at that location, the grantors acquiesced in or consented to the location, the towers remained at that location for over 50 years, and the location selected was all that was necessary for the purpose for which the easement was created.

The same is true here. PEC selected the location of the utility line and associated improvements and constructed the line at that location; Arthun’s predecessor consented to the selection and placement of the line; the line has existed at that location for over 60 years; and the location selected was all that was “reasonably necessary and convenient for the purpose for which [the easement] was created.” Strahan.

Short argues that the easement in Anderson is distinguishable because it did not contain any language granting the right of relocation while the 1956 easement contains the granting language “construct, relocate and replace.” But whether it grants PEC the right to relocate the Arthun line is immaterial. It was relevant in Anderson because that is what the radio station proposed to do — enlarge or relocate the towers. Short is not asking PEC to relocate the existing line, but is demanding a new line to run from the Arthun residence north to the State section.

More importantly, these terms cannot be considered in isolation. Anderson (“Mere isolated tracts, clauses and words will not be allowed to prevail over the general language utilized in the instrument.”) (quoting Rumph (Mont. 1979); MCA 28-3-202 (“The whole of a contract is to be taken together so as to give effect to every part if reasonably practicable, each clause helping to interpret the other.”).

Contrary to Short’s assertion, there is no express language in the 1956 easement that can be construed as granting PEC the right to extend service from Arthun’s property to neighboring properties. When read in its entirety the easement contemplates the effect of electrical service to the Arthun property and the placement of “an electric transmission or distribution line or system” and limits the installation “at pole location, to only a single pole and appurtenances and that the location of the poles will be such as to form the least possible interference to farm operations.” The parties plainly contemplated a single line or system to supply electricity to the Arthun property in a manner least intrusive to Arthun’s farming operation. There is no evidence that they contemplated the Arthun property to become a conduit for electrical services to other properties. Therefore the 1956 easement is limited in size to its historic location.

As to the scope of the grant, the 1956 easement is also written in general terms. In Jerde (Mont. 2018), several landowners granted access to each other on an existing trail or roadway “for the purpose of conducting farming and ranching operations and activities.” Jerde, as a successor to one of the landowners, moved a 5th-wheel trailer onto the property for a residence. An action was filed seeking declaratory relief as to his use of the easement including whether his use for residential purposes was contemplated. Judge Jones found that the easement was specific in nature and “clear and unambiguous as to its scope” and included residential use. The Montana Supreme Court disagreed, emphasizing that “‘in the absence of clear specifications defining scope, no use may be made of a right-of-way different from the use established at the time of the creation of the easement so as to burden the servient estate to a greater extent than was contemplated at the time the easement was created.’” Id. (quoting Guthrie (Mont. 2001). It found that the easement did not contain language expressly indicating that the parties intended the existing road to support residential use and therefore its use “for residential purposes is not strictly determined by the actual terms of the grant and thus the easement is not ‘specific’ for purposes of this particular question.”

Similarly, the language granting PEC the right “to place, construct, relocate and replace an electric transmission or distribution line or system” is not further expanded to include or exclude extension of electrical service to neighboring properties. The easement is general in nature and requires the Court to look beyond its plain language and consider “the situation of the property, surrounding circumstances, and historical use to define the breadth and scope” of the 1956 easement. Ganoung (Mont. 2017).

Analysis of these factors does not support Short’s interpretation. Leffingwell Ranch (Mont. 1996), for example, looked to the historical use of roadway easements granted in 1927 for “ingress and egress” to determine their scope. At the time they were granted the roadway was used only to access 2-3 homesteads for ag purposes. In 1993 the dominant estate holder sought to divide the property into 174 parcels for development. The Court held that this “was not contemplated by the original parties to the easements, would be inconsistent with the historical use of the easements, and would constitute an improper burdening of those easements” because it was clear that they did not contemplate or intend this enlargement or increase in traffic. While the proposed expansion of use of the 1956 easement is not as great, the same analysis is applicable. There is no evidence that the parties contemplated extending electrical service to neighboring properties. The property was south of the undeveloped State section and — before Short purchased his property in 2015 — undeveloped ag lands. The easement was granted to provide electricity to Arthun. From 1956 to 2015 the scope remained unchanged and was limited to providing electricity to Arthun. There is no evidence that the Arthun line has ever moved or that other changes have been made other than routine maintenance.

Therefore, reading the 1956 easement to allow for extension of an additional electrical line would add language to it, be inconsistent with its historical use, and burden Arthun “to a greater extent than was contemplated at the time” it was created. Leffingwell (quoting Lindley (Mont. 1982). Short’s assertion that PEC can extend the line on the Arthun property is not supported by the easement’s express terms or historic use.

However, Short also argues that PEC can extend the line to him pursuant to Arthun’s “membership agreement” with PEC because it allows PEC to access easements “when necessary to provide service to neighboring properties owned by third parties.” Short has not shown that the membership agreement has any relevance to the 1956 easement. It was entered in 2013 for service at 122 Queen Lane, a different property owned by Arthun that is 23 miles south of the property at issue. Short provides no support for his assertion that this agreement “relates to all of Arthun’s property without limitation to any particular parcel or service location” and the Court finds it misleading and unavailing.

Last, Short asserts that PEC is obligated to extend service from the Arthun property to him because of its status as a cooperative. It is true that a cooperative “holds a favored position in the law” and must deal with its members in a reasonable manner.” Howe (Mont. 1983). Howe determined that it was unreasonable to require a prospective member to pay a delinquent member’s bill or face termination of service. Granbois (Mont. 1999) held that it was unreasonable to make transfer of membership contingent on the new member paying a delinquent bill in full. Unlike in those cases, PEC is not conditioning its services unreasonably. Instead, Short has demanded that it extend service from the Arthun property, a right that PEC does not have. Because the Court found that the 1956 easement does not allow PEC to extend service to Short, it cannot find that service was unreasonably denied. PEC and Arthun are entitled to summary judgment as to Count 2.

Count 3 — Obstruction of, interference with, and breach of easement.

Short contends that PEC and Arthun have “wrongfully prevented him from exercising his right to install or connect to utility lines running from” Arthun’s property under the 1956 and 2008 easements. However, to establish interference with an easement right, the alleged rights must actually exist. Stokes (Mont. 2007); Grenfell (Mont. 2002) (a prima facie case of tortious interference with a contract was not established where the contract had been terminated prior to the alleged interference). The Court determined that Short does not have the right to install or connect to the line on Arthun’s property and thus he has failed to establish interference with rights under either the 1956 or the 2008 easement. PEC and Arthun are entitled to summary judgment as to Count 3.

Count 7 – Violation of the Montana CPA.

The MCPA makes unlawful unfair or deceptive acts or practices in the conduct of any trade or commerce and creates a private cause for violations. MCA 30-14-103-133; Plath (Mont. 2003). Actions against electric coops are not exempt from the CPA. Granbois. Short alleges that PEC falsely represented that it does not have an easement to extend service to him from the Arthun property and these statements were made to deceive him and coerce him into constructing a new line at his expense to benefit PEC and Arthun. Later, in briefing, he contends that he is “not claiming that PEC’s false statements are actionable on their own,” but that its “coercive conduct in requiring Short to construct an unnecessary, expensive and redundant electrical line” is actionable under the MCPA.

PEC employee Matt Grose spoke with Short or his representative regarding service to the Short property. Grose said he believed there were 2 options by which PEC could provide service: obtaining an easement from Arthun to connect to the line on the Arthun property or installing lines along Anderson Road pursuant to the 2008 easement. Grose also had 2 discussions with Les Arthun in which Les said he would not provide an easement to extend the line on his property. PEC simply explained its understanding of its rights under the 1956 easement. As determined above, it has not “refused to exercise its rights” under the 1956 easement because it does not have the right to extend service to Short under the easement.

Nor is there evidence that PEC has attempted to coerce Short into building a new line for its benefit. “An unfair act or practice is one which offends established public policy and which is either immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” Rohrer (Mont. 2009). Short has alleged that PEC is motivated to require him to build a line along Anderson Road to “reduce PEC’s maintenance costs and benefit Arthun by removing the lines from Arthun’s field.” Other than his own speculation he has failed to provide any evidence to create a fact issue to support this assertion. PEC is therefore entitled to summary judgment as to Count 7.

PEC’s and Arthun’s motions for summary judgment are granted. Short’s motion for partial summary judgment is denied.

Short v. Park Electric Cooperative and Arthun Ranch, 44 MFR 263, 12/29/21.

Neil Westesen, David Wagner, and Griffin Stevens (Crowley Fleck), Bozeman, for Short; Randall Nelson & Thomas Bancroft (Nelson Law Firm), Billings, for PEC; Michael Kauffman & Patricia Klanke (Drake Law Firm), Helena, for Arthun.

WORK COMP EXCLUSIVITY: Negligence/intentional tort claims by convenience store employee assaulted by customer and claiming physical and mental injuries survive judgment on pleadings in part, fail in part… Molloy.

On 6/14/20 at 2:30 a.m. Savanna Everett was assaulted by customer Tonnisha Triplett while working at Holiday Stationstores’ 605 S. Higgins location in Missoula. She was the sole employee on the premises. Triplett hit & punched her in the head, slammed her head on the counter, bit her finger, struck her repeatedly with a metal stool, and stabbed her in the head and face multiple times with the jagged end of a broken broom handle. She initially attempted to defend herself but eventually curled up on the floor to try and protect herself. Police arrived and arrested Triplett, who was charged with felony assault with a weapon and criminal mischief.

Everett suffered a concussion, lacerations, and bruising. Mentally, during the attack she feared for her life. After her hospital release she experienced confusion, could not tolerate loud noises, became isolated, depressed, and anxious, and had trouble sleeping. She quit Holiday in 8/20 because she was afraid to continue working the graveyard shift.

Everett filed a comp claim and received benefits. On 9/9/21 she sued Holiday in State Court alleging negligence, NIED, IIED, and punitives. Holiday removed to this Court and seeks judgment on the pleadings on the ground that her negligence claims are barred by work comp exclusivity and her intentional tort claims are inadequately pled. Argument was heard 12/20/21.

The Montana Constitution Art. II §16 sets forth the basis for comp exclusivity:

The administration of justice. Courts of justice shall be open to every person, and speedy remedy afforded for every injury of person, property, or character. No person shall be deprived of this full legal redress for injury incurred in employment for which another person may be liable except as to fellow employees and his immediate employer who hired him if such immediate employer provides coverage under the Workmen’s Compensation Laws of this state. Right and justice shall be administered without sale, denial, or delay.

This provision is implemented through MCA 39-71-411: “An employer is not subject to any liability whatever for the death of or personal injury to an employee covered by the Workers’ Compensation Act.”

In simple terms, this means that when an employee is injured in the work place due to negligence or accident, his remedy is exclusive to the Workers’ Compensation Act. Common law damages are not available under Section 39-71-411 for injuries negligently or accidentally inflicted by an employer. Negligence claims should be dismissed on this ground. Walters (Mont. 2011).

However, the Act does not apply in all circumstances. For example, Everett argues that it does not bar her claims because she suffered mental injury and Holiday acted intentionally.

Holiday argues that Everett’s negligence and NIED claims are barred because her injuries — both mental and physical — arose from the physical assault. While it may be able to prove that later, the pleadings, construed in Everett’s favor, cannot be read so narrowly.

The WCA defines “injury” as “internal or external physical harm to the body that is established by objective medical findings.” §119(1)(a). It explicitly states that “injury does not mean a physical or mental condition arising from emotional or mental stress.” §119(3)(a). Maney (Mont. 2000) held that “because an emotional injury resulting from work-related mental or emotional stress — known as a ‘mental-mental’ injury — is not an ‘injury’ as defined in §39-71-119 and is not compensable under the Act, the exclusive remedy provision does not apply.” See also Stratemeyer (Mont. 1996).

But matters get truly complicated where the employee suffers both mental and physical injury. “Mental-mental” injuries do not fall under the Act because they fall outside its definition of injury. “Mental-physical” injuries, which also result from work-related emotional or mental stress, do not fall within the Act’s exclusive remedy provision. Maney; Kleinhesselink (Mont. 1996). But if an employee suffers a compensable physical injury that results in mental injury — a “physical-mental” injury — such injury generally falls within the purview of the Act. Stratemeyer; Onstad (Mont. 2000). Accordingly, the question is whether the mental injuries alleged by Everett “arise from,” Yarborough (Mont. 1997), or have “some rational nexus” to, Maney, a compensable physical injury.

Holiday argues that comp exclusivity applies here because the factual allegations in Everett’s complaint give rise to both physical and mental injuries and “but for Everett’s assault and the covered injuries she sustained, her emotional distress damages would not have arisen.” Put simply, it argues that her injuries are “physical-mental.”

As a preliminary matter, the presence of both physical and mental injuries does not, by itself, doom Everett’s claims. In Yarborough a firefighter suffered 1st and 2nd degree burns when a home exploded and was also diagnosed with PTSD “as a result of the accident.” His comp claim based on PTSD was denied because Judge McCarter determined that it arose from “emotional or mental stress.” The Supreme Court agreed, concluding that “although Yarborough did suffer burns to his face and hands, no medical expert testified that Yarborough’s PTSD directly resulted from those physical injuries. Rather, the medical testimony linked Yarborough’s PTSD only to the house-fire explosion itself.” His injury was therefore “mental-mental,” placing his claim outside the comp regime. And, as made clear at oral argument, Holiday recognizes that Yarborough poses a challenge.

Similarly, in Onstad an employee was sexually assaulted by a shoe store customer. She alleged PTSD as a result. Although she was thrown to the floor and ejaculated upon, her only physical injury was “a visibly reddened neck where Luplow grabbed her.” Comparing to Yarborough, the Court noted that while there was testimony that Onstad’s trauma would not have been as bad had she not been physically touched, “none of the evidence in the record connects Onstad’s posttraumatic stress to the post-assault red marks on her neck. Instead, the evidence clearly indicated that Onstad’s trauma arose from the mental stress of contending with the attack.”

Pursuant to Yarborough and Onstad, the evidence connects Everett’s mental state to the physical assault. While this argument does find some support in the record, it is not the only reasonable reading of the evidence at this stage.

Everett received mental health evaluations from LCSW Ronald Barker and PhD Jackie Day. Barker concluded that she suffered from severe anxiety, depression, and PTSD and that “the assault exacerbated” her existing trauma. Day generally concluded that she “endured significant and severe trauma from the assault” that exacerbated her existing condition. While Holiday is correct that Day’s report also addresses whether the physical trauma to her head impacted her cognitive ability, neither evaluation addresses whether she would have experienced mental or emotional trauma had Triplett not actually touched her. And both use the words “assault” and “trauma” imprecisely, referencing both mental and physical harm, as does Everett herself. For example, her complaint alleges that she “has struggled significantly since the attack” and has suffered confusion, isolation, depression, anxiety, insomnia, headaches, panic attacks, irritability, decreased focus, and poor judgment. She further alleges that the “assault has made it difficult for her to work in a customer service environment and to maintain employment at subsequent jobs” or positions that expose her to loud noises. While a reasonable inference is that she suffered these injures because of the physical assault, equally reasonable is that she, like Onstad, also experienced purely mental trauma based on the “mental stress of contending with the attack.” Such a claim would not be barred by the Act.

Moreover, Onstad specifically noted the “absence of any factual dispute.” It is disputed whether Everett’s injuries are “mental-mental,” “mental-physical,” “physical-mental,” or a mix of all three. While she may fail to carry her burden of showing a factual dispute later, her pleadings are sufficient to maintain her negligence claim at this point.

Holiday argues that Everett’s intentional tort claims fail to alleges sufficient facts for recovery. As intimated above, comp exclusivity does not apply to intentional torts. Nevertheless, to succeed on such a claim a plaintiff must show “(1) an intentional and deliberate act specifically and actually intended to cause injury; and (2) actual knowledge of the injury’s certainty.” Alexander (Mont. 2010); §39-71-413(3). Allegations of “ordinary negligence” — such as failure to provide safe work conditions or to comply with state laws and federal relations — are insufficient. Wise (Mont. 2006).

As argued by Holiday, the facts of Alexander provide useful guidance. 2 employees were injured when a gas stove leaked propane into a prefab building and caused a buildup of CO. Burt Ostermiller lost consciousness while working in the building in 11/03 despite having previously warned his employer of the issue. Michael Alexander subsequently began working in the building, and while he complained about headaches and upset stomach to his employer, “nothing was done about the stove.” Ostermiller never returned to work after losing consciousness and Alexander’s condition deteriorated to where he could no longer return to work. They sued. The Supreme Court concluded that while Ostermiller failed to show that his employer had the “actual knowledge of “certain injury” required by the statute, there were sufficient facts to raised a genuine dispute as to that knowledge and Alexander’s injury:

When Bozeman Motors sent Alexander to work in the Four Corners office, it had actual knowledge of Ostermiller’s injury. Moreover, it is alleged that Bozeman Motors did not disclose Ostermiller’s injury to Alexander, nor did it take any measures to investigate the cause of his injuries. Furthermore, the Employees allege that Alexander complained to Bozeman Motors about the contaminated air in the office, and told them he was becoming sickened by it. The fact that Ostermiller had previously raised these same complaints to Bozeman Motors, and then lost consciousness in the Four Corners office, when viewed in a light most favorable to the Employees, does raise a genuine issue of material fact as to whether Bozeman Motors had actual knowledge that requiring Alexander to work in the same office, without investigating or addressing the alleged contamination from the stove, was “certain” to cause him injury.

The Court went on to “hold that deliberate and intentional conduct may be inferred from factual allegations indicating that an employer knew an employee was being harmed, failed to warn the employee of the harm, and intentionally continued to expose the employee to the harm.”

Everett alleges numerous complaints about how Holiday handled safety issues prior to and after her 6/20 assault. Prior to the assault Holiday received numerous complaints from employees at the Higgins location regarding “safety threats.” In 2018, for example, one employee assaulted another and an assistant manager was “regularly harassed by a transient customer.” Everett reported multiple instances of sexual harassment from customers and also reported potential drug use and discomfort related to a co-worker. In 2020 an employee was using meth and attacked a co-worker. Even though the attacker was terminated he continued to come to the store and the other employees were told not to discuss the incident.

Following the assault Everett was placed back on the graveyard shift and told the manager that she was “too afraid to continue working the graveyard shift alone.” Holiday added a second employee but only 12 a.m. to 2 a.m. Fridays and Saturdays and that employee refused to help Everett with agitated customers. Everett was too afraid to keep working and quit. Neither before nor after the assault did employees receive training on how to deal with hostile customers or what to do in the event of a physical attack. Holiday also failed to maintain proper alarm buttons and inform employees of the status of alarms.

Everett seems to fall between Ostermiller and Alexander. Like Ostermiller, the concerns underlying her earlier complaints were unrealized insofar as neither the pleadings nor the attachments specifically state that any employees were physically injured by a transient customer prior to the 6/20 assault. Nor do they indicate that she was unable to work or experienced mental distress as a result of prior incidents. Thus the “harm” during that time was at best speculative. Accordingly, her claim of intentional conduct is not supported insofar as it is based on an injury that occurred on or before 6/20.

However, like Alexander, the prospects of that harm arguably became concrete considering the above evidence once Everett was physically assaulted. While Holiday argues that she pled no injury after that point, she alleges mental distress that manifested specifically because she was not given proper support or training after the assault. Thus resolution of her intentional tort claims turns on the definition of “harm.” If “harm” is limited to physical assault by a customer, such a “harm” was not “certain” at any point in this record. Consistent with Holiday’s position, “a risk or possibility of injury does not establish actual knowledge of the injury’s certainty as required by the statute.” Harris (Mont. 2013). While its decision to keep Everett on the graveyard shift undeniably exposed her to a risk of physical harm, it apparently did not expose her to certain physical harm.Id. (distinguishing between “a high degree of risk” and “a high degree of harm”). Thus under that conceptualization her claim would fail.

But construing “harm” to include her mental distress, she has pled a viable claim. Following the 6/20 assault Holiday knew that she was experiencing fear & anxiety in having to work alone during the graveyard shift, failed to provide any support or training to aid her, and continued to schedule her for those shifts despite the certainty that they were causing mental distress. Construing all the facts in the complaint as true, she has presented a prima facie case that Holiday deliberately & intentionally caused an injury in the form of emotional distress. This part of her claim may proceed.

Holiday’s motion to dismissed as to Everett’s intentional tort claims to the extent that she seeks to recover for injuries sustained on or before 6/14/20. It is denied in all other respects and the remainder of Everett’s claims survive.

Everett v. Holiday Stationstores, 44 MFR 262, 12/21/21.

Kathleen Molsberry & Matthew Lowy (Lowy Law), Missoula, for Everett; Bryan Spoon (Spoon Law Firm), Missoula, for Holiday.