WRONGFUL OCCUPATION: MCA 27-1-318 does not prevent pursuit of other claims, but Plaintiffs may not double-recover loss-of-use damages from alleged pollution under wrongful occupation and some other theory such as trespass or nuisance… Molloy.

Plaintiffs, alleging zinc and creosote pollution of groundwater from a tie-treating plant, claim that BNSF violated MCA 27-1-318:

The detriment caused by the wrongful occupation of real property in cases not otherwise provided for in this code is deemed to be the value of the use of the property for the time of such occupation, not exceeding 5 years next preceding the commencement of the action or proceeding to enforce the right to damages, and the costs, if any, of recovering the possession.

BN moves to dismiss Plaintiffs’ wrongful occupation claims, arguing that “in cases not otherwise provided for in this code” means a plaintiff cannot bring a wrongful occupation claim if he has a different, potential cause that addresses the same conduct. Plaintiffs argue that the statute merely defines how damages are calculated when they are not otherwise specified by statute. The MSC has not addressed the phrase; thus it is necessary to attempt to ferret out how it would interpret it.

The plain language of 27-1-318 is clear. When a plaintiff claims wrongful occupation, the measure of damages is governed by 27-1-318 and not some other statute. Martin (Mont. 1981) (27-1-318 governs the measure of damages in wrongful occupations and therefore 27-1-317 (breach of obligation other than contract) is not applicable). The MSC has never employed 27-1-318 to preclude other claims. Nothing in 27-1-318 prevents a plaintiff from making a wrongful occupation claim in addition to other claims that might involve the same conduct. Corporate Air (Mont. 2008) (possible to allege several individual causes based on same injury). Plaintiffs commonly make a wrongful occupation claim alongside nuisance, trespass, and unlawful detainer. Sunburst (Mont. 2007);Kuck (Mont. 2009); GPC (Mont. 1997). For example, a plaintiff may allege nuisance or trespass and, if successful, recover restoration damages or diminution, depending on the circumstances. Sunburst. These damages are designed to redress injury to the property itself. 27-1-318 permits recovery for an additional type of injury — the owner’s inability to use the property on account of the wrongful occupation. However, a plaintiff cannot recover loss-of-use damages under a wrongful occupation theory in addition to the same loss-of-use damages under a different theory, such as trespass or nuisance. French (Mont. 1983) (plaintiffs may recover loss-of-use damages under a trespass claim). To award the same loss-of-use damages under both theories would be impermissible double recovery. Waffle House (US 2002) (“It goes without saying that the courts can and should preclude double recovery by an individual.”); Burk (Mont. 1990).

BN cites cases from the 1st and 6th Judicial Districts which summarily concluded that the plaintiffs could not bring a wrongful occupation claim because they had other claims available. Neither provided any reasoning other than that the plain language of the statute precluded the wrongful occupation claims. That view seems incorrect in light of the principles reflected in MSC decisions. The MSC would likely disagree, too. The plain language of the statute does not bar a wrongful occupation claim if another statutory claim and remedy are available. It simply states that when one makes a wrongful occupation claim the measure of damages is the lost rental value, unless a different statute provides the measure of damages. Again, though, the plaintiffs cannot recover twice for loss of use of their property.

California, SD, ND, and Oklahoma have adopted a similar wrongful-occupation statute, and none of those courts adopted the interpretation BN advances. California, for example, permits a wrongful occupation claim in addition to other claims covering the same conduct, such as trespass or nuisance. Those states apply their wrongful occupation statutes merely as a measure of damages for other claims like trespass or nuisance.

BN’s motion to dismiss Plaintiffs’ wrongful occupation claim is denied. BN also moves to dismiss their unjust enrichment claim; Plaintiffs do not object; the motion is granted.

Graham et al v. BNSF, 40 MFR 153, 1/24/13.

David Slovak, Mark Kovacich, and Tom Lewis (Lewis, Slovak, Kovacich & Marr), Great Falls, for Plaintiffs; Daniel Hoven, William Tietz, and Christy McCann (Browning, Kaleczyc, Berry & Hoven), Helena, for BN.

EXPERTS: Plaintiffs’ expert’s report does not adequately explain “basis & reasons,” but Defendants failed to give opportunity to cure before moving to exclude per LR… motion to exclude denied, Plaintiffs may renew motion if they comply with LR… Molloy.

Plaintiffs move to exclude testimony of Gregory Moore on the basis that his report does not adequately explain the “basis and reasons” for his opinions. Rule 26(a)(2)(B)(i). The Court agrees, but the motion is denied.

An expert report should be sufficiently complete as to include the substance of what the expert is expected to give in direct testimony, and the reasons for such testimony. The report should offer the “how and why” of the results, not mere conclusions. Wilderness Dev. (D. Mont. 2009) (quoting Allgood (SD Ind. 2006); citing Salgado (7th Cir. 1998).

The rationale is “the elimination of unfair surprise to the opposing party and conservation of resources.” Wilderness (quoting Reed (D.NJ 1996); see also Rule 1 (The rules “should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.”)

Moore’s report contains a statement of facts, 5 sentences of opinion, and a complete void of reasoning in between. Contrary to Defendants’ argument, stating the facts is not the same as stating the reasoning; there is no “how and why” connecting the facts to the opinions.

Many of the LR are also designed to eliminate unfair surprise and conserve resources. LR 7.1(c)(1) states:

The text of the motion must state that other parties have been contacted and state whether any party objects to the motion. Parties that have not yet appeared in the action or whose default has been entered need not be contacted.

When this is followed, a party who believes that the opposing party’s expert report is inadequate must first contact the opposing party and express that concern before filing a motion to exclude. The parties can work out the dispute without having to involve the Court. Plaintiffs’ counsel filed the motion without contacting opposing counsel, thus failing to abide by the very principles he now advances. The bench trial was still several months away. Had Plaintiffs informed Defendants of their concern, Defendants might have supplemented without prejudice to Plaintiffs.

Plaintiffs may renew their motion if they comply with the LR. If they renew it and Defendants have offered to supplement, they must explain why supplementation would be prejudicial, particularly in light of the delay caused by this unsuccessful motion.

Templin et al v. US, Sibbitt, and Montana Interventional & Diagnostic Radiology Specialists, 40 MFR 149, 1/17/13.

Daniel Buckley (Buckley Law Office), Bozeman, for Plaintiffs; AUSA George Darragh; Carlo Canty, Evan Thompson, and Daniel Hoven (Browning, Kaleczyc, Berry & Hoven), Helena, for Sibbitt and MIDRS.

INSURANCE/JURISDICTION: Insurer’s dec action retained in Federal Court rather than returning to State Court where case stayed by stipulation and insurer only intervenor… coverage of claims against road contractor barred by failure of contractor to give timely notice, showing of prejudice not required…. Molloy.

GTL contracted with Tanglewood Investors and John Greytak in 7/09 to improve property in Granite Co. including construction of a road. GTL sued in 3/10 to foreclose its construction lien. Greytak/Tanglewood hired a lawyer and sent a demand letter to GTL contesting the lien and alleging construction defects. Greytak/Tanglewood pled the claims from their demand as counterclaims. That case settled 4/13/11. GTL’s CGL insurer Atlantic Casualty was first notified of the claims in the underlying suit 5/23/11 and hired an adjuster to investigate. While it was investigating, Greytak/Tanglewood moved for entry of judgment in the state suit pursuant to the settlement agreement. Judgment was entered 6/21/12, and Atlantic moved to intervene and set it aside 8/6/12. Judge Dayton granted its motion to intervene and set aside judgment 9/18. Pursuant to stipulation he ordered the suit stayed. Atlantic claims that notice of Greytak/Tanglewood’s claims against GTL was insufficient and thus there is no coverage of their claims. It filed this declaratory action 1/23/12. Greytak/Tanglewood counterclaimed. GTL was served but did not appear and default was entered against it 7/9/12. The parties filed summary judgment motions in 8/12. Atlantic unsuccessfully sought cooperation of GTL and its counsel for production of files related to the counterclaims. A protective order sought by GTL asserting attorney-client relationship in response to a subpoena by Defendants was denied 10/17/12.

The procedural posture is the most significant consideration for keeping this action in Federal Court. While there is generally no presumption in favor of abstention, Dizol (9th Cir. 1998), “gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided,”Brillhart (US 1942). If a declaratory case in federal court is reactive — filed after institution of state proceedings involving the same issues and parties — a presumption arises in favor of abstention. Chamberlain (9th Cir. 1991). This action comes on the heels of a state suit based on the same subject, but the configuration of the parties here differs in important respects. Atlantic was not an original party to the state suit, and GTL, the insured plaintiff in the underlying suit, defaulted. These differences skew the parallelism of the proceedings, disturbing a condition precedent to the presumption for abstention. The imperfect parallelism also affects the Brillhart factors. While notions of federalism and comity are of special importance in areas traditionally governed by state administrative structures like insurance regulation, Dizol, where a state court proceeding is inadequate to adjudicate the rights of all parties these concerns must yield to considerations of justice, practicality, and sound administration which motivate the other Brillhart factors. The interest of avoiding prejudice counsels in favor of entertaining Atlantic’s dec action. Its interests were not represented until its intervention. If this action were stayed or dismissed, lacking complete diversity, its only recourse would be in the state forum selected by its insured for adjudication of the underlying dispute. The outcome would bind it to the forum selected by its insured despite the fact that the insured failed to appear in this dec action and, after settlement, the interests of both parties in the underlying suit are now aligned against Atlantic. There is no risk of gratuitous interference with the orderly & comprehensive disposition in the state case, as Dayton stayed it based on the stipulation. Keeping the case and entering judgment on the merits serves the interest of judicial economy. The parties have exhaustively briefed the central legal questions, and the Court heard argument on their summary judgment motions. A decision on the claims is appropriate at this time and in this forum, rather than forcing the parties to return to a state proceeding where Atlantic appears only as an intervenor.

The dispositive substantive issue is sufficiency of GTL’s notice to Atlantic of Greytak/Tanglewood’s claims. The CGL policy requires the insured to provide notice as soon as practicable in the event of an occurrence, offense, claim, or suit. It defines “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” “Suit” is defined as “a civil proceeding in which damages … to which the insurance applies are alleged.” “Claim” and “offense” are not defined, but their plain meaning in the context of an insurance contract is easy to discern. A reasonable insured would understand “claim” to mean “a demand for compensation, benefits, or payment.” Webster’s. A reasonable insured could not help but understand “offense” to mean “a breach of moral or social conduct.” Id. Steadle (Mont. 2011) found an identical provision “simple, clear, unambiguous and easy to understand,” intended to allow the insurer “opportunity to defend its interests and to prevent or mitigate adverse judgments,” and explained that a notice requirement is a condition precedent to coverage. The bar of deficient notice includes injured 3rd-party claimants. Id.

GTL first received notice of pendency of a claim against it 4/30/10 when Greytak/Tanglewood dispatched a written demand to its counsel asserting claims for compensation for faults in construction of the road. The plain language as would be understood by a reasonable insured presents a “claim” and raises the possibility of a “suit.” Therefore it triggered the notice condition. Greytak/Tanglewood stated the claims in the demand letter as counterclaims in the state case 11/5/10. This definitively constitutes a “suit.” The counterclaims could also be considered an event which triggered the notice condition. GTL did not notify Atlantic as soon as practicable after these triggering events. Atlantic first heard about the claims and suit from a letter mailed 5/23/11, over a year after the demand letter and over 6 months after the filing of the counterclaims. In Steadle, with an identical notice condition, a 5-month delay was deficient. GTL’s notice to Atlantic was deficient and Atlantic has no duty to defend or indemnify it. Greytak/Tanglewood’s claims are not covered.

Greytak/Tanglewood argue that Atlantic must show prejudice as a result of the deficient notice, relying on XL (D.Mont. 2009, not reported in F.Supp). XL was decided before Steadle, and is predicated on Montana Supreme Court authority applying a prejudice rule to UM and UIM claims because of public policy. The more recent and pertinent binding authority is contrary to Defendants’ prejudice claims.

Greytak/Tanglewood claim Francis Nugent’s affidavit, which Atlantic cites for the proposition that notice was not provided until 5/11, does not meet the personal knowledge requirement of Rule 56(c)(4) and relates inadmissible hearsay. Her position as a litigation examiner for Atlantic is sufficient to infer personal knowledge. Kaypro (9th Cir. 2000). She stated that she knows the facts to be true, and her position places her in direct responsibility for handling complex claims involving coverage, liability, and damages. She has been employed in this capacity for over 5 years and was the primary adjuster for the Greytak/Tanglewood claims. The alleged hearsay relates to Defendants’ degree of cooperation with Atlantic’s investigation of the claims. Resolution of this is not required to reach the conclusion that GTL provided inadequate notice.

Atlantic Casualty Ins. v. GTL, Greytak, and Tanglewood Investors, 40 MFR 130, 1/14/13.

Matthew Hutchison (Kaufman, Vidal, Hileman & Ramlow), Kalispell, for Atlantic; Liesel Shoquist & Quentin Rhoades (Sullivan, Tabaracci & Rhoades), Missoula, for Defendants.

DISABILITY DISCRIMINATION: TRO granted staying MHRB proceeding on airline passenger’s complaint pending decision on airline’s motion for preliminary injunction and question of federal preemption…. Lovell.

Dustin Hankinson was stopped by a flight attendant as he was preparing to board a Compass Airlines Delta Connection flight from Missoula to Minneapolis/St. Paul because she thought he was carrying a prohibited Portable Oxygen Concentrator. She was twice wrong: a POC is permitted and the device was a ventilator, not a POC. She also stated that he was required to present a medical release for the flight; there too she was wrong. Because the aircraft had left the jet bridge, a Delta Complaint Resolution Officer arrived at the gate (as required by federal regulations whenever a disabled passenger is to be denied boarding), and was able to correct the attendant’s misunderstandings. Hankinson was told he could board the flight, but he declined to do so, and instead filed a complaint with DOT alleging violation of the Air Carrier Access Act. Compass apologized by phone and in writing and issued him and his companion vouchers for a free flight, and suspended all the crew members pending its investigation. At the conclusion of the investigation it terminated both flight attendants and temporarily suspended the pilot without pay for failing to intervene. It created a training video, quiz, and questionnaire to teach its employees how to recognize medical devices and interact respectfully with passengers with disabilities. All attendants have completed this training and it is being presented at annual pilot training. DOT issued a warning letter to Compass. Hankinson then filed a complaint with MHRB. Of some concern to Compass, he is an MHRC member. Compass requests a TRO and preliminary injunction.

Compass clearly demonstrates likelihood of success on the merits, the 1st prong of the Winter (US 2008) test for a TRO. DOC’s substantial regulations as to electronic respiratory devices by passengers is detailed, unambiguous, and expansive. Such pervasive regulation of a subject may well give rise to field preemption and federal jurisdiction to the exclusion of state law claims. Although the ACCA contains no express preemption, Congress may express its intent to preempt state law by implication through structure & purpose of its law. Montalvo (9th Cir. 2007). Implied preemption may be the result of a direct conflict with a state law that stands as an obstacle to a federal law, or of a field preemption. Compass asserts that regulations relating to electronic respiratory devices constitute a pervasive regulation of a very narrow field, tending to the conclusion that Congress left no room for supplementation by state law.

The next prong is somewhat less convincing. Compass argues that it is at risk of immediate and irreparable harm if the MHRB is permitted to proceed with Hankinson’s complaint. It is facing discovery requests and a deposition in the HRB proceeding, Hankinson has filed for a default judgment for its failure to file a prehearing statement, and HRB has stated that it intends to go forward absent an agreement to stay pending outcome of this federal case. However, given the strength of the likelihood of Compass’s success and the fact that it is currently facing a potential default judgment in the MHRB proceeding, it has met the prong requiring it to show likelihood of irreparable injury if the MHRB proceedings are not enjoined. The threat is thus likely and immediate, and the harm of being forced to defend in a proceeding by an administrative agency lacking jurisdiction may not be remedied by monetary damages.

The 3rd prong, balance of hardships, favors Compass. If a preliminary injunction is subsequently denied Hankinson’s position will be unchanged (despite a minor delay), while a default judgment against Compass might present a serious hardship and loss of the right not to have to defend. Morales (US 1992) (noting Hobson’s choice of violating the state law or obeying the state law during pendency of state proceedings).

The 4th prong, public interest, causes the Court to focus on the public interest that federal law not be violated and the Supremacy Clause be preserved in a case of conflicting state and federal jurisdiction. ATA (9th Cir. 2009) (finding preemption of local regulations by federal motor carrier regulations and considering the public interest to be represented by “the Constitution’s declaration that federal law is to be supreme”). Essentially, it is in the public interest to avoid constitutional violation and to uphold Congress’ decisions. Id.

The MHRB is restrained from exercising jurisdiction in Hankinson’s complaint and proceeding pending this Court’s decision on Compass’s motion for preliminary injunction and the question of federal preemption.

Compass Airlines v. MHRB, 40 MFR 92, 12/13/12.

Christopher Mangen & Daniela Pavuk (Crowley Fleck), Billings, for Compass; Brian Miller (Morrison, Motl & Sherwood), Helena, for Intervenor Dustin Hankinson; no appearance by MHRB.

STIPULATIONS: Parties not participating in good faith in proposed stipulations, given one more chance to avoid sanctions… Molloy.

The Court noted at the preliminary pretrial conference 12/21/12 that BNSF had failed to file any proposed stipulations of fact as required by LR 16.2(b)(1)(G). In its preliminary pretrial statement it stated only that “stipulations may be appropriate as discovery progresses.” That might be true, but the LR require more — proposed stipulations are appropriate (and required) at the preliminary pretrial conference. Plaintiffs filed 17 proposed stipulations. BN agreed to 3, with some revision. Rule 16(f)(1)(B) permits a court to sanction a party that “is substantially unprepared to participate — or does not participate in good faith — in the conference.” Rather than sanction BN at the conference, the Court ordered the parties to confer and file additional stipulations within 10 days. BN filed 17 proposed stipulations — 4 pages worth — 12/28/12. The parties then filed 4 joint stipulations 1/4/13, which are almost identical to the 3 stipulations to which the parties agreed at the conference. While BN is at fault for not initially proposing any stipulations, Plaintiffs now appear to be at fault. The fact that they could not agree to even one of BN’s proposed additional stipulations suggests that they are not participating in good faith.

The parties have now filed a combined 9 pages of proposed stipulations, some of which overlap, but they can agree to only a few basic facts: BN’s corporate structure, BN’s ownership of a tie-treating plant, and the fact that zinc and creosote entered the groundwater under the plant and migrated off the plant. These are thin stipulations in light of what both parties have proposed, as well as the record before the Court.

The Court will not force a party to agree to the other’s proposed facts, but the record certainly suggests that there are additional facts to which both parties can agree. The rules require the parties to make an effort to work together. The Court will give the parties one more chance to show that they can do so. They shall file additional joint stipulations by 1/14. If a party has proposed stipulations to which the opposing party cannot agree, the opposing party shall file a detailed explanation of why it cannot agree to that proposed stipulation. If the parties fail to act in good faith in complying with this order, the Court may impose sanctions under 16(f)(1) (B). The Court will not issue a scheduling order until the parties have demonstrated good faith compliance with this order.

Graham et al v. BNSF, 40 MFR 126, 1/7/13.

David Slovak, Mark Kovacich, and Tom Lewis (Lewis, Slovak, Kovacich & Marr), Great Falls, for Plaintiffs; Daniel Hoven, William Tietz, and Christy McCann (Browning, Kaleczyc, Berry & Hoven), Helena, for BN.