Justia Contracts Opinion Summaries

Laura Marie Obert, a former Broadwater County Commissioner, was investigated by the Montana Department of Justice Division of Criminal Investigation (DCI) in 2015 for allegedly receiving unlawful overtime pay and potential ethics violations. In 2016, Obert entered a deferred prosecution agreement with the Assistant Attorney General, agreeing to repay the excess wages and abstain from voting on matters where she had a conflict of interest. In 2019, based on new allegations of violating the agreement, Obert was charged with felony theft and misdemeanor official misconduct. The district court dismissed these charges in 2021, finding Obert had complied with the agreement and there was insufficient evidence for the misconduct charge.Obert then sued the State of Montana and Broadwater County Attorney Cory Swanson, alleging breach of contract, bad faith, due process violations, and malicious prosecution. The First Judicial District Court dismissed her claims, leading to this appeal.The Montana Supreme Court reviewed the case and made several determinations. It reversed the lower court's dismissal of Obert's breach of contract and good faith and fair dealing claims, holding that these claims were not time-barred and did not accrue until the criminal charges were dismissed. However, the court affirmed the dismissal of Obert's bad faith claim, finding no special relationship existed between Obert and the State that would support such a claim. The court also upheld the dismissal of the malicious prosecution claim, ruling that Swanson was protected by prosecutorial immunity as he acted within his statutory duties. Lastly, the court affirmed the dismissal of the due process claim, concluding that Obert's procedural due process rights were not violated as the State followed proper procedures in charging her and the district court provided an appropriate forum to address the alleged breach of the agreement. View "Obert v State" on Justia Law

In 2019, Jesse Hubbell was hired to film a scuba-diving campaign advertisement. He and John Mues rented scuba gear from Gull Scuba Center. Gull’s instructor, Chris Hanson, asked for their diving certification cards. Mues provided his “Advanced Diver” certification, but Jesse did not have his card. Jesse claimed he was PADI certified, and Hanson either did not verify this or did not recall doing so. Jesse drowned three days later while using the rented gear.Ellen Hubbell, Jesse’s widow, sued several defendants, including Gull, alleging negligence for renting the equipment without verifying Jesse’s certification. The District Court of the Fourth Judicial District, Missoula County, granted summary judgment in favor of Gull, finding no dispute of material fact regarding Gull’s liability.The Supreme Court of the State of Montana reviewed the case. The court held that the District Court did not abuse its discretion by relying on the PRA Membership Standards to establish Gull’s duty to Jesse, as both parties’ experts indicated these standards were generally accepted in the scuba rental industry. The court also upheld the exclusion of Ellen’s expert, Thomas Maddox’s, opinion on industry standards, as it differed substantively from the prior expert’s report, which was beyond the scope allowed by the District Court’s amended scheduling order.Finally, the court agreed with the District Court’s determination that Hanson’s failure to check Jesse’s certification did not cause his death. The court found that even if Hanson had checked Jesse’s certification, Mues, who was of legal age and held an Advanced Diver certification, could have rented the equipment for Jesse. Therefore, the failure to check the certification was not the cause-in-fact of Jesse’s death. The Supreme Court affirmed the District Court’s summary judgment in favor of Gull. View "Hubbell v Gull Scuba Center" on Justia Law

Vernon K. Stensvad, the plaintiff, owns a small cattle herd and entered into a Grazing Lease Contract with Newman Ayers Ranch, Inc. in July 2022. The contract stipulated that Stensvad would graze his cattle on Ayers Ranch's property for a fee, with higher winter rates to be determined. Stensvad paid the fees for July and August but later agreed orally to perform labor in exchange for reduced fees. Disputes arose over the quality of Stensvad's work and the amount owed. In October 2023, Ayers Ranch issued an agister’s lien for $78,662.50, seizing Stensvad’s herd. Stensvad sought a preliminary injunction to prevent the sale of his cattle under the lien.The Seventh Judicial District Court in Prairie County granted Stensvad’s application for a preliminary injunction, ordering the cattle to be moved to a third-party feed lot. Ayers Ranch appealed, arguing that the District Court failed to consider all four factors required for a preliminary injunction under Montana law and that a preliminary injunction was not an appropriate remedy for challenging an agister’s lien.The Montana Supreme Court reviewed the case and held that the District Court manifestly abused its discretion by not addressing all four factors of the preliminary injunction standard. The Supreme Court clarified that under the revised standard, a party must satisfy all four factors: likelihood of success on the merits, likelihood of irreparable harm, balance of equities, and public interest. The Court adopted the "serious questions" test from the Ninth Circuit, allowing for flexibility in evaluating these factors. The case was remanded for the District Court to make supplemental findings consistent with this standard. The Supreme Court also held that a preliminary injunction is an appropriate remedy to challenge an agister’s lien and that Stensvad did not have an adequate remedy at law. View "Stensvad v. Newman Ayers Ranch" on Justia Law

A group of residents in the Whitehorse Estates Minor Subdivision filed a complaint against their neighbors, Joseph and Amanda Kleinhans, alleging that the Kleinhans violated the subdivision’s restrictive covenants by converting their garage into an accessory dwelling unit (ADU) and renting it out as an Airbnb. The covenants in question required properties to be used only for single-family dwellings and prohibited the operation of commercial businesses.The District Court of the Twenty-Second Judicial District, Carbon County, granted summary judgment in favor of the Kleinhans. The court interpreted the single-family dwelling covenant as a structural restriction, not a use restriction, meaning it only limited the type and number of buildings but did not restrict the use of the property to single families. The court also found the commercial business covenant to be ambiguous and concluded it did not prohibit short-term rentals like Airbnb. Consequently, the court awarded the Kleinhans their Bill of Costs amounting to $4,594.35.The Supreme Court of the State of Montana reviewed the case and reversed the District Court’s decision. The Supreme Court held that the term "commercial business" was not ambiguous and should be given its plain and ordinary meaning, which includes activities conducted for profit. Therefore, the Kleinhans' operation of an Airbnb constituted a commercial business, violating the subdivision’s covenants. The Supreme Court also reversed the award of the Bill of Costs to the Kleinhans and remanded the case to the District Court to enter summary judgment in favor of the neighbors. View "Myers v. Kleinhans" on Justia Law

In August 2020, Kimberly Strable, who was under 18, inquired about a managerial position at Arby’s in Great Falls but was told she could not apply due to her age. Strable filed an age discrimination claim with the Montana Human Rights Bureau (HRB), which issued a reasonable cause determination. The parties entered into a conciliation process, and Strable’s attorney and Arby’s attorney reached an agreement in principle for a $25,000 settlement, subject to a mutually agreeable settlement agreement. However, the parties did not finalize or sign the draft conciliation agreement, which included affirmative relief provisions required by the HRB.The First Judicial District Court, Lewis and Clark County, granted summary judgment in favor of Arby’s, finding that no enforceable contract existed between the parties. The court noted that the negotiations were part of an ongoing HRB case and that Arby’s had not consented to the affirmative relief provisions, which were essential terms of the conciliation agreement.The Supreme Court of the State of Montana reviewed the case and affirmed the District Court’s decision. The court held that the essential element of consent was lacking because the parties had not agreed on all essential terms, including the HRB’s affirmative relief provisions. The court emphasized that a binding contract requires mutual consent on all essential terms, and in this case, Arby’s could not consent to terms it was unaware of. Therefore, the court concluded that no enforceable contract existed, and summary judgment in favor of Arby’s was appropriate. View "Strable v. Carisch" 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

Anthony Cordero, a student at Montana State University (MSU) during the Spring 2020 semester, sued MSU for prorated reimbursement of his tuition and fees after the university transitioned to online learning due to the COVID-19 pandemic. Cordero claimed that MSU breached an express contract to provide in-person education and services. He also asserted claims for breach of implied contract, unjust enrichment, due process violation, violation of the takings clause, and inverse condemnation.The First Judicial District Court of Lewis and Clark County dismissed four of Cordero’s six claims, including the implied contract and unjust enrichment claims, under M. R. Civ. P. 12(b)(6). The court granted summary judgment in favor of MSU on the remaining claims, including the express contract claim, and denied Cordero’s motion to certify the case as a class action. The court found that Cordero did not identify a specific, bargained-for promise by MSU to provide in-person education and that he had no compensable property interest in the tuition and fees paid.The Supreme Court of the State of Montana reviewed the case and affirmed the lower court's decisions. The court held that there was an express contract between Cordero and MSU, but it did not include a specific promise to provide in-person education. The court found that MSU had the right to change its regulations and policies, including transitioning to online learning during emergencies. The court also affirmed the dismissal of the implied contract and unjust enrichment claims, noting that an implied contract cannot exist when an express contract is present. The court concluded that MSU did not breach its contractual duties regarding tuition and fees, as it maintained campus facilities and services to the extent possible during the pandemic. View "Cordero v. Montana State University" on Justia Law

Robert Frisk owns property at 1196 Swan Hill Drive, Bigfork, Montana, and John and Lori Thomas own the neighboring property at 1194 Swan Hill Drive. The properties share a common driveway and a water well located on Frisk’s property. Disputes arose over the width of the easement for the driveway and access to the water well, leading Frisk to file a lawsuit seeking a declaration of an easement and an injunction against Thomas. Thomas counterclaimed for breach of contract regarding the water well agreement and trespass due to Frisk’s fence and house encroaching on their property.The Montana Eleventh Judicial District Court granted Frisk a prescriptive easement over 15 feet of the existing roadway and an equitable easement for the encroaching portion of Thomas’s property. The court dismissed Thomas’s breach of contract claims but affirmed his right to access the water well, imposing additional restrictions on this access due to the parties' animosity. Thomas appealed the decision.The Supreme Court of the State of Montana reviewed the case and found that Montana law does not recognize the creation of an equitable easement. The court held that Frisk must remove his fence and gate from Thomas’s property but allowed the house to remain due to its de minimis encroachment. The court affirmed the additional restrictions on the water well agreement, finding them reasonable and consistent with the agreement’s terms. The decision was affirmed in part and reversed in part. View "Frisk v. Thomas" on Justia Law

The North Central Montana Regional Water Authority (the Authority) was created in 2000 through an interlocal agreement among several municipalities and county water and sewer districts. The Town of Kevin, a small municipality with fewer than 175 residents, did not sign the original agreement but signed several later documents attempting to join the Authority. The Town later sought to sever ties with the Authority, which resisted these attempts. On May 29, 2020, the Town sued the Authority, seeking a declaratory judgment under the Uniform Declaratory Judgment Act (UDJA) that it was not, and never had been, a member of the Authority, and also sought attorney fees.The Twelfth Judicial District Court held a bench trial and issued an order on November 10, 2022, declaring that the Town was not a member of the Authority and granting other relief. Subsequently, the Town filed a motion for attorney fees under the UDJA. On March 30, 2023, the District Court found that equitable factors supported awarding attorney fees to the Town, noting the significant disparity in resources between the Town and the Authority. The Authority appealed this order.The Supreme Court of the State of Montana reviewed the case. The court affirmed the District Court's decision, holding that the UDJA provides a legal basis for awarding attorney fees between governmental entities when appropriate. The court found that the parties were not similarly situated, as the Town had significantly fewer resources compared to the Authority. The court also applied the "tangible parameters test" and concluded that the Authority possessed what the Town sought, it was necessary for the Town to seek a declaration, and the declaratory relief was necessary to change the status quo. Therefore, the District Court did not abuse its discretion in awarding attorney fees to the Town. The Supreme Court affirmed the award of attorney fees to the Town. View "Town of Kevin v. North Central Montana Regional Water Authority" on Justia Law

This case involves a dispute between the City of Great Falls and the Board of Commissioners of Cascade County, Montana, over the interpretation of a 1975 interlocal agreement that established a consolidated City-County Health Board. The disagreement arose after the Montana Legislature enacted new laws in 2021 that changed the governance of local health boards. The County argued that the new laws required the County Commission to be the governing body of the Health Board, while the City maintained that the 1975 agreement allowed the City mayor to be a full voting member of the Health Board.The District Court of the Eighth Judicial District ruled in favor of the City, finding that the 1975 agreement allowed the City mayor to be a full voting member of the Health Board and that the Health Board was the "local governing body" referenced in the new laws. The County appealed this decision to the Supreme Court of the State of Montana.The Supreme Court affirmed the District Court's decision. It held that the District Court did not adjudicate a non-justiciable political question and correctly interpreted the 1975 agreement and the new laws. The Supreme Court found that the 1975 agreement allowed the City mayor to be a full voting member of the Health Board and that the Health Board was the "local governing body" referenced in the new laws. The Court also held that the new laws did not moot the issues at stake in the case. View "City of Great Falls v. Cascade County Commissioners" on Justia Law