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 This scrivener’s error was corrected to “dominant” in a 2008 easement which was otherwise unchanged and explicitly superseded the 1989 easement.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.

RULE 59 motions by both sides following rejection of $62,750 emotional damages stemming from theft of vehicle from tire shop untimely, Plaintiffs’ motion for new trial to resurrect tactically dismissed NIED claim denied… Defendant’s motion converted to 60(b)(6) to allow amendment of judgment to only $2,278.43 bailment damages… Molloy.

On 9/23/16 Randall & Claudia Childress gave their car keys to an employee in the Missoula Costco Tire Center to get their tires rotated. Before they went to pick it up their keys had been mistakenly given to a thief who drove away in their vehicle. Although it was recovered a short time later, several items were stolen including a gun, ammunition, documents containing their home address, and house keys. They sued Costco alleging (1) negligence, (2) bailment, (3) NIED, and (4) negligent training & supervision. Count 4 was disposed of before trial and Count 3 was withdrawn during settlement of instructions.

Childresses presented evidence at trial that Randall suffered from PTSD that was exacerbated by the theft and that both suffered stress, sleeplessness, fear, and nightmares. Even though the NIED claim had been withdrawn, the jury was instructed that if it found for Childresses on their negligence claim it “must determine the amount of damages” to compensate them for any parasitic damages caused, including “the mental, physical, and emotional pain and suffering experienced and that with reasonable probability will be experienced in the future.” The Missoula jury awarded Childresses $2,278.43 on their bailment claim and $62,750 on their negligence claim.

Costco appealed, primarily arguing that the negligence award should be set aside on the ground that Montana does not allow parasitic emotional distress damages for negligence causing personal property damage or loss. The 9th Circuit certified the issue to the Montana Supreme Court, which concluded that “Childresses did not establish the basis for parasitic emotional damages” by showing “a subjective relationship with the [stolen] property on a ‘personal identity’ level.” Costco (Mont. 2021) (quoting Maloney (Mont. 2000)). It concluded that “Childresses are not entitled to parasitic emotional distress damages for their underlying negligence claim” and vacated “the award of $62,750 in ‘unspecified, non-property damages.’” All other issues were considered moot. Mandate issued 11/17/21.

On remand, Childresses seek a new trial on Randall’s tactical decision at trial to withdraw his NIED claim under Rule 59(a) and Costco seeks to amend the judgment to vacate and remove the $62,750 negligence award under Rule 59(e). A hearing was held 12/20/21.

To be timely, both motions had to be filed “no later than 28 days after entry of judgment.” Rules 59(b), 59(e). That time limit is jurisdictional and cannot be extended even for good cause. Tillman (9th Cir. 2000); Rule 6(b)(2) (“A court must not extend the time to act under Rule 59(b)”); Ramos (E.D.Cal. 2021) (collecting cases). Although the parties appeared to argue at the hearing that a Rule 59 motion can be filed before judgment has been entered, they ignore the fact that the original judgment based on the jury verdict was entered 4/25/19 and that judgment remains in place. While the 9th Circuit vacated part of that judgment, it did not vacate it in its entirety and thus neither motion is timely under Rule 59. And even if Childresses’ motion were timely the Court is unlikely to grant a new trial based on counsel’s strategic decision at trial to pursue a claim with a lower burden of proof. PETA (DC Cir. 2018) (Rule 60(b)(6) “should not be employed simply to rescue a litigant from strategic choices that later turn out to be improvident”).

Nevertheless, as to Costco’s motion, an untimely 59(e) motion can be treated as a Rule 60(b) motion “if the grounds asserted in support of the Rule 59(e) motion would also support Rule 60(b) relief.” Frew (5th Cir. 2021); Lora (2d Cir. 2010); AI&E (9th Cir. 2011). Rule 60(b)(6) allows a party to seek relief from a final judgment for “any other reason that justifies relief.” “60(b)(6) is a grand reservoir of equitable power that allows courts to grant relief from a final judgment.” Henson (9th Cir. 2019). This clause should be “liberally applied, giving due regard to the sound interest underlying the finality of judgments, the district court has the power to grant relief from a judgment whenever, under all the surrounding circumstances, such action is appropriate in the furtherance of justice.” Id. The movant must show “extraordinary circumstances.” Id.

The unique procedural posture of this case and the ambiguity in the 9th Circuit’s disposition provide such circumstances. Its disposition declared that “the award of $62,750 in ‘unspecified, non-property damages” on the Childresses’ negligence claim is VACATED.” But it also “remanded for further proceedings.” It clearly vacated part of the judgment but left the rest of the judgment in place, intimating that some further action was required by this Court. As made clear at oral argument, both parties would agree that the judgment must be amended. Therefore an amended judgment will be entered consistent with the 9th Circuit’s order to vacate that part of the judgment awarding parasitic damages. But Childresses prevail on the verdict awarding bailment damages.

Childresses’ motion is denied without prejudice as untimely.

Costco’s motion, treated as a motion under Rule 60(b), is granted. The 4/25/19 judgment is vacated. The Clerk is directed to enter an amended judgment awarding $2,278.43 bailment damages.

Childress v. Costco, 44 MFR 261, 12/21/21.

Quentin Rhoades (Rhoades, Siefert & Erickson), Missoula, for Childresses; Susan Miltko & Tyler Smith (Williams Law Firm), Missoula, for Costco.

INSURANCE: CGL policy purchased for premises containing office, warehouse, and shop space does not cover a subsequently constructed tank wash building that was destroyed by fire… Watters.

PSC Custom dba Polar Service Center filed this suit against Hanover American Ins., Sector Corp., and St. Johns Corp. following Hanover’s denial of PSC’s claim for a fire that destroyed a Tank Wash Center building constructed after the original policy was purchased. Hanover denied the claim on grounds that the policy only covered the building described in the Declarations and not the TWC.

Sector is a property management company based in Portland and authorized to conduct business in Montana. It owns 5 acres at 1635 N. Frontage Road, Billings (the “Premises”), with a 27,525 sq ft building containing office, warehouse, and shop space. St. Johns is a Portland-based corporation that procures and manages insurance on Sector’s behalf for the Premises. PSC operates in the tank trailer and tank truck industry with commercial parts & repair services throughout the US.

In 2013 PSC entered into an agreement with Sector to lease the Premises. The lease required Sector, as landlord, to acquire fire & casualty insurance on the entirety of the Premises and any improvements thereon. Sector was to be listed as primary with PSC as an additional insured as tenant. Sector purchased CGL policies, including the policy at issue here, for the Premises beginning in 2013 and continuing through 2019.

In 2014 PSC erected the TWC on the Premises 135 feet from the office building, consisting of a metal structure with concrete floors and roll-up doors at each end. The 6,100 sq ft structure was used as a truck wash and truck tank draining/cleaning facility.

On 5/9/19 a fire & explosion occurred in the TWC resulting in its complete destruction and $412,040.05 repair costs. PSC and St. Johns submitted claims to Hanover for the loss of the structure. Hanover denied both claims, asserting that because the policy did not expressly list the TWC as a covered property on the Premises it was not covered. The Declarations list several properties owned by Sector with the Premises described as “Location 4” and further state that blanket building coverage exists for “Location 4 – Building 1.” Hanover argued that this restricted coverage to the 27,525 sq ft office/warehouse building on the Premises and did not include the TWC built after the first policy was purchased. PSC filed this action in State Court and it was removed to this Court. The parties request summary judgment.

Hanover’s fundamental argument is that the TWC is not covered because it is not listed in the Declarations. The policy lists blanket building coverage for Location 4 as “Building 1.” Hanover asserts that this applies only to the 27,525 sq ft office space/warehouse that existed on the Premises at the time coverage was purchased and because coverage did not extend to the TWC which was built a year after coverage was obtained and without its knowledge, coverage was properly denied. It argues alternatively that Sector/St. Johns did not have an insurable interest in the TWC because they did not construct or own it and that coverage does not exist for PSC under the Building & Personal Property Coverage Form because they are not a named insured.

PSC responds that the policy language includes coverage of the TWC because it states that it will cover loss or damage to “Covered Property at the premises described in the Declarations,” which it argues includes the entire 5 acres described as Location 4 including any and all buildings on that land. It primarily relies on Park Place Apartments (Mont. 2010). Alternatively it asserts that if the Court determines that the policy language does not provide coverage for the TWC it should find that the lack of a specific definition of “Building 1” and the inclusion of additions, fixtures, and installed equipment under the definition of Covered Property creates an ambiguity that must be resolved in favor of coverage.

Sector/St. Johns join in PSC’s argument that the policy language includes coverage for the TWC because the policy describes its coverage of Location 4 – Building 1 as blanket coverage and nothing in the policy expressly limits this language. They also rely on Park Place.

Park Place determined that a policy was ambiguous and ruled in favor of the insured that it covered damage to a carport despite that it was not listed as covered property in the Declarations. William Hileman (PPA) purchased an apartment building complex and hired Wilhelm to obtain insurance. The complex included the apartment building, a separate laundry/storage building, and a detached carport. Wilhelm obtained a policy from FUMI for the complex that listed the apartment building and laundry/storage building in the Declarations. The carport was not listed but both PPA and Wilhelm believed this listing unnecessary and that coverage had been obtained for the entire complex. The policy provided: “Covered property includes Buildings as described under Paragraph a. below … a. Buildings, meaning the buildings and structures at the premises described in the Declarations.” 7 years later a heavy snowfall caused the carport to collapse resulting in damage to numerous vehicles. PPA submitted a claim but FUMI denied it because the carport was not considered covered property. Judge Stadler agreed and ruled for FUMI. Park Place reversed, finding the policy language ambiguous at best:

Our initial inquiry concerns whether the carport is logically included in the definition of the insured premises. The definition of “covered property” in the Businessowners’ Coverage Form includes “buildings, meaning the buildings and structures at the premises described in the Declarations.” The logic behind FUMIC’s interpretation of this phrase does not stand up to scrutiny. FUMIC contends, in essence, that the phrase means that coverage is limited to the buildings and structures described in the Declarations, as opposed to buildings and structures at the premises described in the Declarations. FUMIC’s interpretation skips over the words “at the premises” in the definition of covered property, and would render them meaningless. It is a basic rule of construction that we must, if at all possible, interpret a contract so as to give effect to every part of the contract. FUMIC’s interpretation requires that the words “described in the Declarations” refer only to the “buildings and structures,” and not “the premises.” PPA’s interpretation of the phrase — that coverage extends to all buildings and structures which are at the premises described in the Declarations — strikes us as the more reasonable interpretation. If FUMIC’s interpretation is correct, it is certainly not unambiguously so.

While we need only conclude that the policy is ambiguous to decide the resolution of the present case, we note that the most reasonable interpretation, in our view, is that the portion of the policy attributable to the apartment building is meant to include the carport. Thus, the carport is “listed” on the Declarations page by virtue of the listing of the apartment building. As an initial matter, it is doubtful that a carport is considered a “building” at all. The Businessowners’ coverage form states that “although the words ‘building’ and ‘structure’ are not defined in the coverage form, a structure may be thought of as property erected on and attached to land that is not walled and roofed and a building is generally thought of as a walled, roofed structure.” The “insured premises” section of the Declarations page on which FUMIC places so much weight asks only for buildings, not structures, and thus the carport’s omission from the section is not as important as it is in FUMIC’s analysis. Furthermore, Wilhelm testified that attached structures such as the carport are often accounted for by simply stating the buildings to which they are attached on the Declarations page. While the carport here was not physically attached, it was located very close to the building and it seems logical that it was considered an add-on to the apartment building.

Based on this review and evidence such as inclusion of the carport’s value in the insurance appraisal, the parties’ intent when purchasing coverage, and FUMI’s internal guidelines requiring coverage on all buildings on a commercial property, the Supreme Court held that the policy was ambiguous and interpreted it in favor of the insured.

The policy language here does not contain the same ambiguities. The Court agrees with Hanover that Park Place is distinguishable. Its policy states: “We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.” The policy defines “Covered Property” as “Building, meaning the building or structure described in the Declarations, including; (1) Completed additions; (2) Fixtures, including outdoor fixtures; (3) Permanently installed: (a) Machinery; and (b) Equipment.” (emphasis added). The policy references coverage for only a single described building or structure at the covered property whereas the language in the Park Place policy provided coverage for multiple buildings and structures at the specific premises.

The Declarations describe the Property as “Location: 4 … 1635 N Frontage Rd Billings MT 59101” and further clarify that “Insurance at the Described Premises applies only for the coverage shown below: Blanket Building For Premises … Location 4 – Building 1.” At the time that PSC purchased the policy there was only 1 building on the premises at 1635 N Frontage RD: the 27,525 sq ft office space/warehouse. The Declarations do not specifically describe Building 1 as the office space/warehouse in the policy, but it is unreasonable to interpret the description as referencing anything other than the sole building on the insured premises. Therefore, the Court finds that the policy unambiguously provides coverage to the office space/warehouse building as the only building that could be associated with the “Building 1” description in the Declarations. The remaining question is whether the policy expanded that coverage to include the later-built TWC.

As in Park Place, the policy provides coverage for more than just the described building, but that additional coverage does not extend to the TWC. Sector/St. Johns argue that the TWC qualifies as a fixture under MCA 70-15-103: “A thing is deemed to be affixed to land when it is: (1) attached to it by roots, as in the case of trees, vines, or shrubs; (2) imbedded in it, as in the case of walls; (3) permanently resting upon it, as in the case of buildings; or (4) permanently attached to what is thus permanent as by means of cement, plaster, nails, bolts, or screws.” However, they provide no support for their claim other than a general reference to the statute. The TWC was a 6,100 sq ft full metal structure with roll-up doors at each end, contained dangerous chemicals, and was used as a truck wash and truck tank cleaning facility. It was not simply a piece of personal property affixed to the premises or attached to the office space/warehouse. To classify it as a fixture connected with the existing warehouse for purposes of insurance coverage is a stretch too far.

External evidence also does not support a reasonable inference that coverage would extend to the TWC. First, unlike in Park Place, it did not exist at the time PSC purchased the policy. Second, also unlike in Park Place, no one has presented evidence that its value was included in Hanover’s appraisal of he premises. Hanover asserts without contradiction that the value of the TWC — $348,822.79 based on PSC’s requested repair costs — was never included in the appraisal of the Premises. Third, neither PSC nor Sector/St. Johns notified Hanover of the TWC’s construction or requested a change to the policy to include coverage.

The policy is unambiguous and does not include a reasonable inference of coverage for the TWC. Summary judgment for Hanover.

PSC Custom dba Polar Service Center v. Hanover American Ins., Sector Corp., and St. Johns Corp., 44 MFR 260, 12/6/21.

Adam Warren & Jordan FitzGerald (Moulton Bellingham), Billings, for PSC; Jared Dahle & Raven Venegas (Garlington, Lohn & Robinson), Missoula, for Hanover; Martin King (Worden Thane), Missoula, and Joshua Stadtler (Dunn Carney), Portland, for Sector and St. Johns.

ATTORNEY PRACTICE: Motion to dismiss because pleadings were incomplete or illegible dismissed as moot following updated service but counsel admonished that there are simpler ways to deal with problems in a collegial bar than filing snide briefing or unnecessary although technically correct motions… Molloy.

The Montana Democratic Party, Montanans for Tester, and Macee Patritti sued SOS Jacobsen and MCPP Mangan 10/12/21. Summons were issued and proof of service was provided to the Court 10/31. Defendants filed notice of limited appearance 11/3 and moved to dismiss for insufficient process and insufficient service of process under Rules 12(b)(4) & (5) premised on the fact that the pleading served on the Montana AG was incomplete and the pleadings served on Jacobsen and Mangan were illegible. Apparently the photocopier or printer must have been low on ink which caused multiple pages of the complaint to be unreadable.

While Defendants are technically correct that the summons must contain a readable copy of the complaint, Rule 4(c)(1), in a collegial bar more is expected than what is set forth in the pleadings filed by the AG’s Office. Rule 1 directs courts and litigants to construe the Rules “to secure the just, speedy, and inexpensive determination of every action.” There are occasions, such as here, where the telephone can accomplish as much or more than a diatribe focused on an easily correctable technical problem. Moreover, there is a “strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.” Eitel (9th Cir. 1986). While technically correct, the flavor of Defendants’ motion is a dark harbinger of the unwelcome idea that litigation is a zero-sum “game.” The people of Montana and the parties in this litigation are entitled to a resolution of the claims consistent with the purpose of the FRCivP and on the merits.

Plaintiffs’ updated service has mooted Defendants’ motion to dismiss. But this case is far from over and in a collegial bar there are simpler ways to deal with problems in litigation than filing snide briefing or unnecessary although technically correct motions. The parties are directed to focus on the legal issues and avoid subsidizing their arguments with vexatious rhetoric. Some of the lawyers on both sides may be new to the practice of law in Montana, but getting off on the wrong foot is not a good way to begin a case. Counsel should keep in mind that this case will be tried on the merits and in the courtroom, not in the newspapers.

Defendants’ motion to dismiss is denied as moot.

Montana Democratic Party, Montanans for Tester, and Patritti v. SOS Jacobsen and MCPP Mangan, 44 MFR 259, 11/16/21.

Abha Khanna (Elias Law Group), Seattle, and Mike Meloy (Meloy Law Firm), Helena, for Plaintiffs; Brent Mead (AG’s Office).