Justia Montana Supreme Court Opinion Summaries

D.A. Davidson & Co. initiated an interpleader action to resolve a dispute over funds held in an investment account for Whitefish Masonic Lodge 64. The Grand Lodge of Ancient Free and Accepted Masons of Montana revoked Whitefish Lodge's charter and claimed the funds. Donald Slaybaugh, a member of Whitefish Lodge, contested the revocation and the transfer of funds, arguing that the Grand Lodge did not follow proper procedures.The Eleventh Judicial District Court, Flathead County, granted summary judgment in favor of the Grand Lodge, dismissing Slaybaugh's cross claims. The court determined that Slaybaugh lacked standing to bring claims against the Grand Lodge on behalf of Whitefish Lodge or in his individual capacity. The court found that Whitefish Lodge, having had its charter revoked, no longer existed as a legal entity capable of bringing claims. Additionally, the court concluded that Slaybaugh did not have the authority to act on behalf of the Lodge, as he was not an elected officer and his previous authority to oversee the investment account had been revoked.The Supreme Court of the State of Montana affirmed the District Court's decision. The court held that Slaybaugh did not have standing to bring claims on behalf of Whitefish Lodge because the Lodge was dissolved and could not appear in litigation. The court also rejected Slaybaugh's argument that he had standing as a fiduciary or under a derivative action, noting that he did not meet the pleading requirements for a derivative action and that his fiduciary authority had been revoked. Finally, the court found no evidence to support claims of fraud or arbitrary action by the Grand Lodge in revoking the Lodge's charter. View "D.A. Davidson v. Slaybaugh" on Justia Law

Wilfred L. Doll and Cheri L. Doll (Dolls) were members of Little Big Warm Ranch, LLC (LBWR), a business formed to manage water rights in Phillips County. Dolls negotiated a settlement with Finch/Dements for senior water rights, which devalued LBWR’s property. LBWR members consented to the settlement on the day they closed on the Finch/Dement property. Dolls later filed a complaint seeking dissolution of LBWR or a buy-out of their shares. LBWR amended its operating agreement to expel adverse members and seek attorney fees and costs, excluding Dolls from the meeting where these amendments were ratified.The Seventeenth Judicial District Court, Phillips County, ruled that Dolls dissociated from LBWR on February 2, 2018, when they filed their complaint. The court also granted LBWR summary judgment on its counterclaims for breach of fiduciary duties and the obligation of good faith and fair dealing, applying the eight-year statute of limitation for contracts. A jury awarded LBWR $2.5 million in compensatory and punitive damages. The District Court ordered Dolls to pay LBWR with 11.25% interest and LBWR to pay Dolls $434,000 per share with 7.5% interest.The Supreme Court of the State of Montana affirmed the District Court’s ruling that Dolls dissociated on February 2, 2018, and upheld the calculation of Dolls’ distributional interest. The court determined that the eight-year statute of limitation for contracts applied to LBWR’s counterclaims, as the fiduciary duties arose from the operating agreement. However, the court found that punitive damages were improper because they are not allowed in breach of contract actions under Montana law. The case was remanded to the District Court to modify its judgment to exclude punitive damages. View "Doll v. Little Big Warm Ranch, LLC" on Justia Law

In this case, the plaintiff, Shandor S. Badaruddin, was sanctioned by the Nineteenth Judicial District Court, Lincoln County, for his conduct as defense counsel in a criminal trial involving his client, Kip Hartman, who faced multiple felony charges related to securities and insurance fraud. The trial was conducted under strict time constraints due to the COVID-19 pandemic, and the court allocated equal time for both the prosecution and defense. Badaruddin was accused of mismanaging his allotted time, leading to a mistrial declaration by the District Court.The District Court found that Badaruddin had deliberately delayed the trial, which led to the mistrial. Consequently, the court imposed monetary sanctions amounting to $51,923.61 against Badaruddin for the costs associated with the trial. Badaruddin appealed the sanctions, arguing that he was not given adequate notice of the court's concerns and that his actions were not deliberate but rather a result of the challenging circumstances.The Supreme Court of the State of Montana reviewed the case and noted that the U.S. District Court had previously ruled that the mistrial declaration was erroneous. The U.S. District Court found that Badaruddin's actions did not constitute deliberate delay and that his efforts to manage the trial time were competent. The U.S. District Court's ruling was affirmed by the U.S. Court of Appeals for the Ninth Circuit, which held that Hartman could not be retried due to double jeopardy protections.Given the federal court's findings, the Supreme Court of Montana concluded that there was no basis for the sanctions under § 37-61-421, MCA, as there was no multiplication of proceedings. The court reversed the District Court's sanction order, determining that the costs incurred were not "excess costs" as defined by the statute. View "Badaruddin v. 19th Judicial District" on Justia Law

The case involves Creative Games Studio LLC and Ricardo Bach Cater, who sued Daniel Alves for alleged breach of contract, breach of the implied covenant of good faith and fair dealing, constructive fraud, and deceit. The plaintiffs, who are co-founders of Creative Games Studio, a company that develops board games for online sale, accused Alves of collaborating with a competitor and using the company's funds and intellectual property for the competitor's benefit. Alves, a Brazilian citizen, was also a co-founder of the company. The plaintiffs filed the lawsuit in Montana, where the company is based.The District Court of the Thirteenth Judicial District, Yellowstone County, dismissed the case due to lack of personal jurisdiction over Alves. The court determined that exercising jurisdiction over Alves would not comply with constitutional requirements. Alves had moved to dismiss the complaint under M. R. Civ. P. 12(b)(2) for lack of personal jurisdiction or under the doctrine of forum non-conveniens.The Supreme Court of the State of Montana affirmed the lower court's decision. The court found that Alves did not consent to jurisdiction and that subjecting him to the jurisdiction of Montana courts would not comply with due process. The court noted that Alves' only connection to Montana was the fact that one of the plaintiffs resided there and established the company in the state. The court concluded that the plaintiffs failed to show that Alves either availed himself of the privileges of Montana law or that their claims arose out of Alves's actions in Montana. View "Creative Games v Alves" on Justia Law

This case involves a dispute between members of Black Gold Enterprises, LLC, a company formed in 2013, including plaintiff Adam Pummill, plaintiff Kurtis Robertson, and defendant Joshua T. Patterson. The source of the dispute was the payment of rent from Patterson's businesses to Black Gold for the use of a property. Patterson eventually stopped paying rent, leading to the involvement of a receiver, James Galipeau, to manage the property.The Supreme Court of the State of Montana considered the appeal by Patterson against the award of fees to the receiver and his attorney from interplead funds held by the Clerk of Court, arguing that the District Court abused its discretion. Patterson also contested the District Court's decision that the lien on the property, arising from a loan agreement between Patterson's business and Black Gold, was invalid.The Supreme Court, applying the Hickey factors to assess the reasonableness of the receiver's fees, found no abuse of discretion by the District Court. The court concluded that the receiver's work in the complex, time-consuming case was essential, and the sale of the property (Black Gold's only asset) was reasonably executed. The court also found that the District Court had the inherent power to distribute interplead funds for services related to the receivership, rejecting Patterson's claim that the dispersal should have waited until a final disposition.Thus, the Supreme Court affirmed the District Court's decisions regarding the award of the receiver and attorney fees and the method of their payment. The court did not address the issue of the validity of the lien on the property. View "Pummill v. Patterson" on Justia Law

In the case before the Supreme Court of the State of Montana, the plaintiff, Billy Ann Merila, sought the expulsion of her business partner, Daniel Brian Burke, from their partnership, MBC. MBC is a business entity that owns a single piece of real property and rents it out for income. Merila alleged that Burke engaged in conduct that made it not reasonably practicable for her to carry on the business in partnership with him. Burke, a certified public accountant, was convicted on six charges of aiding and assisting tax fraud, unrelated to MBC, and sentenced to prison. He also unilaterally changed the partnership's depository without Merila's consent, limited her authority over MBC funds, refused to communicate with her directly, and appointed a third-party agent to act on his behalf. He also attempted to amend the partnership's tax returns and capital accounts without Merila's consent or knowledge.The District Court granted summary judgment in favor of Merila, finding that Burke's conduct made it not reasonably practicable for her to carry on the business in partnership with him. The court also ordered the parties to negotiate a purchase price for Burke's interest in MBC. Burke appealed the decision.Upon review, the Supreme Court of the State of Montana affirmed the District Court's decision. The Supreme Court noted that the relevant standard for expelling a partner is whether the partner's conduct has made it not reasonably practicable for the other to carry on the business in partnership, not whether the partnership suffered damages or harm. The Court found that Burke's refusal to interact with Merila, his unilateral decisions affecting the partnership, and his conviction of tax fraud constituted conduct that made it not reasonably practicable for Merila to carry on the business with him as a partner. It affirmed the lower court's decision to expel Burke from the partnership and order him to negotiate a purchase price for his interest in MBC. View "Merila v. Burke" on Justia Law

The Supreme Court accepted supervisory control in the underlying action, holding that Montana had specific personal jurisdiction over Melissa Groo regarding Triple D Game Farm, Inc.'s intentional tort claims when the tortious activity allegedly accrued in Montana despite Groo interacting only with the forum via social media.At issue was Groo's purposeful and substantial use of social media to affect Triple D's business operations. Triple D brought this lawsuit alleging tortious interference with contractual relations and tortious interference with prospective economic advantage claims. Groo moved to dismiss the claims for lack of personal jurisdiction, arguing that her statements did not create the necessary minimum contacts with Montana as a forum. The district court denied the motion to dismiss, condoling that Groo had the requisite minimum contacts with the state and that the court's exercise of personal jurisdiction over her did not violate due process principles. The Supreme Court affirmed, holding that the district court was not proceeding under a mistake of law, and the court had personal jurisdiction to resolve this dispute. View "Groo v. Eleventh Judicial District Court" on Justia Law

The Supreme Court affirmed the judgment of the district court holding that J.C. O'Brien & Sons, Inc. (JCO) was entitled to purchase Michael O'Brien's (Mike) shares in JCO at the value set pursuant to a 1973 shareholder agreement, holding that the district court did not err.Plaintiffs initiated this litigation alleging, among other claims, that Defendants breached the 1973 agreement in its efforts to purchase Mike's shares and seeking valuation of his shares by current appraisal. The district court ruled against Plaintiffs after a bench trial and ordered that JCO was entitled to purchase Mike's shares at the price designated by directors in 2017 pursuant to paragraph two of the 1973 agreement. The Supreme Court affirmed, holding that the district court did not err. View "O'Brien v. O'Brien" on Justia Law

The Supreme Court affirmed in part and reversed in part the special master's determination in the district court that resolved a dispute between PF2 Leasing, LLC and Jim Galipeau, the receiver for Black Gold Enterprises, LLC, holding that the special master exceeded the scope of his authority when he granted Galipeau immunity for actions Galipeau took regarding PF2's personal property.Specifically, the Supreme Court held that the special master (1) correctly concluded that a court-appointed receiver is protected by judicial immunity from liability; (2) properly determined that it was not necessary for Galipeau to require a release or indemnification agreement to return PF2's personal property; but (3) exceeded the scope of his authority in further granting Galipeau immunity for the actions Galipeau took regarding PF2's personal property. View "PF2 Leasing, LLC v. Galipeau" on Justia Law

The Supreme Court affirmed the order of the district court providing for the dissolution of the Johns Brothers Farms partnership, accounting of the partners' capital accounts, and settlement and distribution of partnership assets, holding that the district court did not err.Brothers Jerry Johns and Jule Nathan "Butch" Johns began farming together as a partnership in 1980. In 1994, the brothers each formed a corporation to hold their individual interests, and the corporations became the partners in Johns Brothers Farms. In 2013, the brothers agreed to dissolve the partnership and distribute the assets between the partners. The next year, Jerry commenced this action to dissolve Johns Brothers Farms, for settlement of capital accounts, and for distribution of partnership assets. In 2020, the district court issued its findings of fact, conclusions of law, and judgment. Butch appealed. The Supreme Court affirmed, holding that the district court (1) did not err by concluding that Jerry did not breach his fiduciary duty to Butch and the partnership; (2) did not err in its calculation of the capital account balances for Jerry and Butch; and (3) did not err by awarding Jerry the forty-acre parcel in its distribution of partnership assets. View "Jackpot Farms, Inc. v. Johns Farms, Inc." on Justia Law