Justia Montana Supreme Court Opinion Summaries

In this case, the Supreme Court of Montana reversed and remanded a decision of the Thirteenth Judicial District Court, Yellowstone County. The case involved Saddlebrook Investments (Saddlebrook), assignee of Stuart Simonsen, and Krohne Fund, L.P. (Krohne Fund). Saddlebrook appealed against the district court’s order granting summary judgment in favor of Krohne Fund on Saddlebrook’s claims of malicious prosecution and abuse of process.The Supreme Court found that the district court had erred in applying the doctrine of judicial estoppel to bar Saddlebrook from pursuing its claims. The court noted that a party is not judicially estopped from asserting a cause of action not raised in a reorganization plan or otherwise mentioned in the debtor’s schedules or disclosure statements. However, this does not apply when the bankruptcy trustee is pursuing the action for the benefit of creditors. Once substituted, a bankruptcy trustee is free to pursue the debtor’s nondisclosed claim.In this case, the Trustee had knowledge of Simonsen’s claims and authorized the state court suit. The Supreme Court concluded that because the Trustee had control of Simonsen’s abuse of process claim through the bankruptcy estate, the District Court erred when it estopped Saddlebrook from pursuing that claim. Therefore, Saddlebrook is not judicially estopped from pursuing its malicious prosecution and abuse of process claims against Krohne Fund. View "Saddlebrook Investments v. Krohne Fund" on Justia Law

The Supreme Court of the State of Montana affirmed a lower court decision that granted Dr. Gregory S. Tierney's motion to dismiss a medical malpractice lawsuit filed by Janice M. Dodds for insufficient service of process. Dodds initially filed the suit against Dr. Tierney and Benefis Health System in 2013, alleging medical malpractice related to a knee replacement surgery. She failed to serve the defendants in time. Dr. Tierney later filed for bankruptcy, which invoked an automatic stay, halting the lawsuit. After his bankruptcy discharge, Dodds attempted to serve Dr. Tierney but failed to do so within the required 30-day timeframe following the discharge.Dodds further sought to join Dr. Tierney's malpractice insurance company as the real party in interest, but the court denied the motion. Upon review, the Supreme Court found that Dodds had not proven Dr. Tierney's liability, thus the insurer had no duty to indemnify him. The court also rejected Dodds' argument that Dr. Tierney lacked standing after his Chapter 7 discharge. The court held that Dr. Tierney maintained a personal stake in demonstrating he was not liable for medical malpractice and that his insurer would only have a duty to indemnify him once Dodds proved her malpractice claims. View "Dodds v. Tierney" on Justia Law

The Supreme Court reversed the order of the district court granting Burlington Northern and Santa Fe Railway Company’s (BNSF) motion for summary judgment on Kelly Watson’s asbestos-related disease claim, brought under the Federal Employers’ Liability Act, holding that the bankruptcy court’s order enjoining claims against W.R. Grace and other “affiliated entities,” including BNSF, tolled the statute of limitations on Watson’s claim. Thus, the district court erred in concluding that the bankruptcy court’s order expanding a previous injunction barring the commencement or filing of new claims to include BNSF as a nondebtor affiliate did not bar the commencement of new actions against BNSF. View "Watson v. BNSF Railway Co." on Justia Law

Under Montana law, a debtor may claim an exemption for a health savings account (HSA) within the constraints imposed by Mont. Code Ann. 25-13-608(1)(d) or (f).Debtor in this case filed a Chapter 11 bankruptcy petition. Debtor claimed his HSA exempt in the amount of $14,319.61 pursuant to section 25-13-608(1)(d) or (f). Debtor’s withdrawal of funds from the HSA was applied exclusively to qualified medical expenses. The trustee filed an objection to the claim of exemption. The bankruptcy court certified a question on the issue to the Supreme Court. The Supreme Court held that a debtor may claim an exemption for an HSA to the extent that it is “used or will be used to pay for the care” described in section 25-13-608(1)(f). View "In re John Charles Giacometto" on Justia Law

Debtor filed for Chapter 7 Bankruptcy. Debtor claimed an Individual Retirement Account (IRA) he inherited from his mother upon her death as exempt property from the bankruptcy estate. The Trustee of the case objected to Debtor’s claim of exemption. The United States Bankruptcy Court for the District of Montana certified a question to the Supreme Court regarding whether a Debtor may claim an exemption in an IRA pursuant to Mont. Code Ann. 25-13-608(1)(e). The Supreme Court answered the question in the negative, holding that, under Montana’s liberal construction of exemptions, a debtor may not claim an exemption to an inherited IRA under section 25-13-608(1)(e). View "In re Golz" on Justia Law

John Stokes appealed the judgment against him in a defamation case and retained attorney Greg Duncan to advise him on how to maintain his appeal while discharging his obligation in bankruptcy. After Duncan filed a bankruptcy petition on Stokes’ behalf, the bankruptcy court granted Duncan’s motion to withdraw. While the bankruptcy action was pending, Stokes filed the present action in state court against Duncan and his paralegal (collectively, Duncan) seeking damages for legal malpractice. The bankruptcy trustee intervened in the malpractice action, arguing that the action was an asset of the bankruptcy estate. The district court stayed all proceedings in the malpractice action. The bankruptcy court concluded that the malpractice action was an asset of the bankruptcy estate and subsequently sold the action to Duncan. After Stokes’ bankruptcy proceeding was discharged, the bankruptcy court entered an order concluding that Stokes’ claims against Duncan were property of the bankruptcy estate that had been purchased by Duncan. The state district court subsequently lifted the stay and granted Duncan’s motion for summary judgment, concluding that Stokes’ malpractice claims were property of the bankruptcy estate and had been purchased by Duncan. The Supreme Court affirmed, holding that Stokes’ claims were part of the bankruptcy estate. View "Stokes v. Duncan" on Justia Law

In 2008, Allen Ginn was injured while delivering a truck load of logs to a mill owned by Smurfit Stone Container Enterprises, Inc. In 2009, Smurfit filed voluntary petitions for bankruptcy relief under Chapter 11. In 2011, Ginn and his wife (the Ginns) and Smurfit stipulated an agreement in which Smurfit agreed not to enforce the claim bar date set by the bankruptcy court. The Ginns subsequently served Smurfit with a complaint, summons, and related document. When the Ginns received no reply or acknowledgement of service, they requested entry of default from the district court. The district court entered default against Smurfit. Smurfit filed a motion to vacate the entry of default. The court concluded that the default would stand with regard to Smurfit’s liability but that a jury would be allowed to consider the issues of causation and damages. Thereafter, a jury awarded Allen Ginn $3,470,899 in damages plus an additional $500,000 to his wife. The Supreme Court affirmed, holding that the district court did not abuse its discretion, even slightly, in denying Smurfit’s motion to vacate the entry of default, as good cause did not exist to vacate the entry of default. View "Ginn v. Smurfit Stone Container Enters., Inc." on Justia Law

Tamara Lucas and her husband James brought a legal malpractice claim against attorney Mat Stevenson after they hired Stevenson to defend James against criminal charges and to represent them in a civil suit against the city police department, the city, and individual police officers that arrested James for disturbing the peace and felony assault on a peace officer. However, Stevenson later learned that the Lucases had previously filed for bankruptcy. The civil suit was determined to an asset of the bankruptcy estate, and Stevenson was reassigned to pursue the case on behalf of the bankruptcy estate. After a settlement agreement was reached, the Lucases brought this action against Stevenson. The district court granted summary judgment in favor of Stevenson. The Supreme Court affirmed, holding that the district court correctly determined (1) the Lucases' civil claims were properly determined to be an asset of the bankruptcy estate; and (2) Stevenson did not represent the Lucases at the time the claims were settled, and therefore, the Lucases had no standing to bring a legal malpractice claim against him. View "Lucas v. Stevenson" on Justia Law

Marjorie Ward established a trust that devised $100,000 to her stepdaughter, Joan, and provided that the trust residue be distributed in equal shares to Ward's sons, Jack and James. Ward also instructed that before Jack would receive any distributions from the trust, his share would be decreased, and Joan's increased, by any amount he owed Joan. After Ward died, the district court concluded Jack's share would be reduced by $298,356, the amount he owed Joan on the date of Ward's death. The Supreme Court affirmed, holding (1) the district court complied with the requirements of Mont. R. Civ. P. 52(a) by orally stating its findings of fact and conclusions of law; and (2) the district court did not err in ordering that Jack's share of the trust be reduced by the amount he owed his stepsister, pursuant to Ward's instructions contained in the trust, even though that debt was previously discharged in bankruptcy proceedings. View "Ward v. Ward" on Justia Law

Husband and Wife entered into a property settlement agreement (PSA) pursuant to their divorce in which Wife transferred all of her interest in two corporations the parties owned to Husband in exchange for Husband's payment to Wife of $250,000. The parties subsequently agreed that Wife would assume managerial and operational control of the businesses. The district court ordered Husband to provide Wife with access to the businesses' accounts and financial information and to return possession of the business records. Because of Husband's noncompliance with the court order, Wife ultimately was forced to file for Chapter 13 bankruptcy. The district court subsequently (1) found Husband to be in contempt, (2) awarded Wife sole possession of one of the businesses, (3) ordered Husband to pay Wife the receiver fees he had accumulated during his operation of the business, and (4) ordered Husband to pay Wife's attorney's fees and costs. The Supreme Court affirmed, holding that the district court did not (1) err by refusing to send the dispute to arbitration and by holding Husband in contempt; (2) deny Husband due process; and (3) err in awarding attorney's fees to Wife. Remanded for a determination of Wife's attorney's fees and costs on appeal. View "In re Marriage of Cini" on Justia Law