B BAR J RANCH, LLC, Plаintiff and Appellant, v. CARLISLE WIDE PLANK FLOORS, INC., Defendant and Appellee.
No. DA 12-0080
Supreme Court of Montana
October 30, 2012
2012 MT 246 | 366 Mont. 506 | 288 P.3d 228
Submitted on Briefs August 29, 2012.
For Appellee: David B. Cotner, Joslin E. Monahan; Datsopoulos, MacDonald & Lind, Missoula.
CHIEF JUSTICE McGRATH delivered the Opinion of the Court.
¶1 B Bar J Ranch, LLC (B Bar J) appeals from the judgment against it in favor of Carlisle Wide Plank Floors, Inc., (Carlisle) from the District Court for the Fourth Judicial District, Mineral County. We affirm.
¶2 B Bar J presents the following issues for review:
¶3 Issue One: Whether the District Court erred by allowing Carlisle to disclose an expert witness after the scheduling order deadline.
¶4 Issue Two: Whether the District Court erred by awarding Carlisle attorney fees under the Montana Consumer Protection Act.
PROCEDURAL AND FACTUAL BACKGROUND
¶5 B Bar J owns and operates a 680-acre ranch located in the Lolo National Forest near Tarkio, Montana. The ranch‘s defining feature is its 18,000 square-foot lodge that boasts ten bedrooms, a full commercial kitchen, a conference room, a massage room, and a saloon. Carlisle is a custom manufacturer of high-end wide-plank wood flooring. While building the lodge in 2005, B Bar J bought roughly 6,000 square feet of wood floоring from Carlisle. After being installed, approximately 2,000 square-feet of the Carlisle flooring in the basement started buckling and had to be replaced with an alternative product.
¶6 B Bar J sued Carlisle in May of 2008, alleging negligent misrepresentation, breach of an implied warranty of suitability for a particular purpose, and violation of the Montana Unfair Trade Practices and Consumer Protection Act,
¶7 One of the issues at trial was whether B Bar J mеt the statutory definition of a consumer under the MCPA. For B Bar J to be a consumer under the MCPA, the lodge had to be used primarily for personal, family, or household purposes. If, instead, the jury found that B Bar J had used the lodge for business purposes, then it would not be a сonsumer under the MCPA and its claim would fail.
¶8 B Bar J presented four witnesses who testified that B Bar J‘s sole owner and member, Michael Borden, had used the lodge primarily as a second residence. In response, Carlisle introduced B Bar J‘s tax returns and accounting rеcords into evidence, and had Craig Langel, its tax expert, explain how the records indicated that B Bar J treated the lodge as a business asset for tax purposes and not as a personal residence. Among other things, Langel explained tо the jury how B Bar J had reported income from use of the lodge, had reported the lodge as a depreciable asset, and had taken specific business deductions on the lodge that are not allowed for personal residences. He then explained how B Bar J‘s tax returns should have been completed had the lodge been used as either a full-time or part-time personal residence.
¶9 The jury returned a verdict in Carlisle‘s favor on all of B Bar J‘s claims on March 28, 2011, including a 12-0 verdict on thе MCPA claim. After successfully defending against all of B Bar J‘s claims, Carlisle moved the District Court for an award of attorney fees as the prevailing party under the MCPA, which the court granted. B Bar J now appeals the District Court‘s order that allowed Carlisle to disclоse Langel as an expert witness after the scheduling order deadline and the order awarding Carlisle attorney fees.
STANDARD OF REVIEW
¶10 We review both a district court‘s evidentiary rulings and award of attorney fees for an abuse of discretion. Mason v. Ditzel, 255 Mont. 364, 370-371, 842 P.2d 707, 712 (1992); Tripp v. Jeld-Wen, Inc., 2005 MT 121, ¶ 12, 327 Mont. 146, 112 P.3d 1018. A district court abuses its discretion when it acts arbitrarily without employment of conscientious judgment or exceeds the bounds of reason resulting in substantial injustice. Tripp, ¶ 12.
DISCUSSION
¶11 Issue One: Whether the District Court erred by allowing Carlisle to disclose an expert witness after the scheduling order deadline.
¶12 B Bar J arguеs on appeal that the District Court abused its discretion by allowing Carlisle to disclose Langel as an expert witness
¶13 The court‘s decision to permit the late disclosure is an evidentiary ruling that we review for an abuse of discretion. Mason, 255 Mont. at 371, 842 P.2d at 712. District courts have the authority to control trial administration and inherent discretionary power to control discovery. Anderson v. Werner Enters., Inc., 1998 MT 333, ¶ 13, 292 Mont. 284, 972 P.2d 806.
¶14 As the District Court recognized, Carlisle undoubtedly needed the tax records before it could have determined whethеr a tax expert would be necessary at trial. Although the tax returns supported Carlisle‘s theory that B Bar J was not a consumer, they could have also disproved that theory. It was only after reviewing the returns that Carlisle knew for sure that it needed a tax exрert to testify at trial. B Bar J argues, however, that it was Carlisle‘s own fault that it did not receive the tax records in a timely fashion. Our review of the record reveals otherwise. Carlisle first sought production of the tax records in October of 2010. At that time, B Bar J refused tо produce the records and claimed that they were irrelevant. The next time Carlisle requested the records was in a letter that it sent to B Bar J‘s counsel on November 18, 2010. In that letter, sent nearly a month before the deadline to disclose experts, Carlisle‘s counsel explained that the tax records were directly relevant to its MCPA claim defense. But B Bar J again refused to produce the records and continued to insist that
¶15 B Bar J now asks us to penalize Carlisle for its own delay producing the tax returns. Although Carlisle could have been more diligent in its attempt to obtain the records, B Bar J knew what the records revealed and still claimed that they were irrelevant. Moreover, B Bar J continued to insist that the records were irrelevаnt even after Carlisle‘s counsel explicitly explained how they pertained to its defense, and it was B Bar J that forced Carlisle to obtain a court order compelling production. We will not now allow B Bar J to benefit from a situation that it had no small role in creating. Carlisle would have had plenty of time to meet the court‘s scheduling order deadline if B Bar J had produced the records following either of Carlisle‘s requests. Because B Bar J did not disclose the clearly relevant tax records until аfter the deadline to disclose expert witnesses, the District Court did not abuse its discretion when it found good cause to amend the scheduling order to allow Carlisle‘s late disclosure of Langel as an expert witness.
¶16 Issue Two: Whether the District Court erred by awаrding Carlisle attorney fees under the Montana Consumer Protection Act.
¶17 B Bar J argues that the District Court erred by disregarding the heightened standard for awarding defendants attorney fees under the MCPA.
¶18 B Bar J is incorrect, however, to the extent that it argues that the policy of protecting consumers’ monetary interests imposes an additional burden on prevailing defendants seeking attorney fees. The policy of prоtecting consumers’ monetary interests is embodied in the heightened standard that we have adopted; it is not an additional burden in and of itself. Here, the District Court found that B Bar J‘s MCPA claim was “in the very least, unreasonable, without foundation, and perhaps frivolous ....” It properly applied the Tripp standard and
¶19 Lastly, B Bar J argues that the District Court applied hindsight reasoning to justify Carlisle‘s attorney fee award. In Harmon v. Fiscus Realty, Inc., 2011 MT 232, 362 Mont. 135, 261 P.3d 1031, we noted that the Tripp standard requires more than the plaintiff simply losing its casе, and that “a district court must not engage in hindsight reasoning as to the merits of a case that would ‘discourage all but the most airtight claims.‘” Harmon, ¶ 9 (citing Christianburg Garment Co. v. EEOC, 434 U.S. 412, 422, 98 S. Ct. 694, 700 (1978)). B Bar J contends that the District Court engaged in such hindsight reasoning because it denied Carlisle‘s motion for partial summary judgment on the MCPA сlaim before trial, and also denied its motion for a directed verdict on the MCPA claim after B Bar J rested its case-in-chief. B Bar J points to comments that the District Court judge made when denying Carlisle‘s motion for a directed verdict that the question of whether the lodge was used primarily for personal or business purposes was a “fairly tough question” to show that the judge improperly based his decision to award Carlisle attorney fees on hindsight reasoning.
¶20 B Bar J‘s argument fails to acknowledge, however, that the District Court did not have the benefit of hearing Langel‘s testimony that explained the tax returns and accounting records, nor had it seen the accounting records before it denied Carlisle‘s motion for partial summary judgment or its motion for a directed verdict. As the District Court noted in its order awarding attorney fees, Langel‘s testimony along with the accounting records and tax returns, abolished B Bar J‘s claims that it was a consumer under the MCPA. Our prohibition against hindsight reasoning does not mean that a case is not frivolous, unreasonable, or without foundation simply because there is a question of fact. The District Court did not engage in hindsight reasoning just because it relied on evidence that Carlisle produced in its case-in-chief to justify awarding it attorney fees.
¶21 The District Court properly dеtermined that B Bar J had presented some evidence that the lodge was primarily a personal residence which created a question of fact for the jury to decide. At all times during the course of litigation, however, B Bar J knew of and had in its possession the evidence that ultimately doomed its MCPA claim. B Bar J ignored the tax returns and accounting records at its own peril. The MCPA‘s provision permitting attorney fees can be a double-edged sword. Although rare, there are times when it is appropriate for a district court to award successful defendants attorney fees to ensure that the MCPA is not abused. Given the facts of this
¶22 Carlisle asks us to award it additional attorney fees on appeal under
¶23 For the reasons state above, the decisions of the District Court are affirmed.
JUSTICES MORRIS, NELSON, RICE and BAKER concur.