*1 76 OF INC.,
CIRCLE S SEEDS MONTANA, Respondent, Plaintiff and v.
T M TRANSPORTING,
INC.,
&
PATRICIA TASH,
L. TASH and
RONALD
Appellants.
Defendants
04-810.
No.
July
Briefs
2005.
Submitted on
February 6,
Decided
2006.
MT
Mont.
For Gregory Morgan, O. Attorney Law, at Bozeman.
JUSTICE COTTER delivered Opinion of the Court. T & M Inc., Transporting, ¶1 and Ronald and Patricia Tash (hereinafter collectively “Tash” except where necessary clarity) for appeal a jury verdict finding them in breach of their partnership agreement (hereinafter “Circle”) and their contract with Circle S Seeds and in breach of their duties as agents sales Circle. The also concluded that Tash fraud, committed negligent misrepresentation and against constructive fraud Circle. We reverse and remand for a new trial.
ISSUES appeal ¶2 issues on are: Did the District Court abuse its discretion in excluding Tash’s
expert testimony while Circle to present its non-complying expert testimony and other evidence at trial? Did the District Court abuse its discretion in denying
motion to compel discovery responses? Did the District Court abuse its failing grant discretion in a
new trial?
FACTUAL AND PROCEDURAL BACKGROUND Circle and T & M Transporting are corporations both Montana and, transportation seed respectively, brokerage have been in the president, T M’s many years. Ronald Tash is & is businesses wife, Tash, Patricia is vice a director and shareholder. Ronald’s Patricia and a director and shareholder. Ronald and president, T majority sole of & M. are the shareholders and directors August 1998, into Circle and Tash entered an oral contract package specialty under which Circle would clean and food purchase, brokering grains responsible marketing, and Tash would be agreement, Under the transportation, billing the customers. expense sharing parties developed profit arrangement. a arrangement partnership. Circle claims that the was a business parties did not enter into a written Tash maintains any normally agreement, or take actions associated with they forming recognize nor did existence partnership, Tash, however, filing tax in written partnership when their returns. Circle, relationship referred to the between the correspondence with Tash, signed as a the letter with her partnership. Patricia who husband, they using the term explained later were legal meaning “working as in its sense but rather “partnership” together” relationship. *3 1999, parties began disagreements In late the to have business
¶9 However, negotiations T attempted purchase Circle & M. when and failed, May T a party the Tashes sold & M to third 2001. August 27, complaint against Judge Circle a Tash on 2001. filed ¶10 filed the case. Circle originally presided Mark Guenther over 3, 2002, Tash filed its answer amended on and complaint 4, scheduling and counterclaim on October A conference 21, 2002, during scheduling order was held on which November ill seriously and Judge issued. Guenther became Subsequently, jurisdiction of the case Judge recused Loren Tucker assumed himself. in April 2003. July 2,2004. jury The through A the case from June jury heard
¶11 and parties the arrangement found that a existed between partnership agreement, its contract with that Tash breached jury Circle. The also found agents as sales and duties fraud, and constructive negligent misrepresentation had committed 2, 2004, July By verdict on against special fraud Circle. $656,179.50 damages. Subsequently, compensatory awarded Circle 7,2004, adding jury5s award judgment July the court entered for a award of damages costs total exemplary punitive $674,661.12. judgment or, Tash moved to alter or amend the alternatively,
a new trial. Circle responded that Tash’s motion did not comply with 59, M.R.Civ.P., Rule and moved to dismiss it. The District Court noted motion, that Circle’s post-trial granted, effectively if would have precluded Tash from presenting position the merits of its for a new dismiss, trial. The District Court denied Circle’s motion to reviewed the merits of request for amendment or retrial. The court ultimately denied Tash’s timely appeal. motion. Tash filed a We will introduce further they facts as become relevant to our discussion of the issues appeal. Tash raises on
STANDARD OF REVIEW For each of the issues presents, we review the District Court’s rulings for an of abuse discretion. The test for abuse of discretion is whether the trial court acted arbitrarily without employment judgment of conscientious or exceeded the bounds of reason resulting in injustice. substantial Leppek, VonLutzow v. 214, 14, MT 782, ¶ ¶
DISCUSSION Did the District Court abuse its discretion in excluding Tash’s expert testimony while allowing present Circle to non-complying expert testimony and other evidence at trial? The District Court held scheduling conference on November
2002, and issued its scheduling order on the day. same The order January 6,2003, established a deadline for the exchange simultaneous 26(b)(4) filing of witness lists and Rule expert disclosure reports, as as exchange well and filing lay witness and exhibit lists. The deadline set for identifying rebuttal expert witnesses was January 2003. The order further specified that it “shall not be modified except by leave of the upon showing court good cause.” During parties, December without notice to or leave court, from informally agreed to extend certain deadlines established the scheduling order. maintain that modify decision to the schedule informally, rather than through court, Judge occurred because diagnosed Guenther had been a with *4 parties serious illness. The felt that this informal modification certain discovery and witness disclosure deadlines would allow the case to move forward but would not affect deadlines that involved the court, deadlines, such as motion the scheduled settlement conference and pretrial hearing. parties’ signed counsel agreement written expert reports and exhibit lists and disclosure
under which witness 1, 2003, February experts due on and rebuttal would be due would be 14, February on January 31, on expert report Circle served its disclosure Tash on 4, February and its witness and lists on 2003. Tash exhibit February 25, its 2003. Due its
served witness and exhibit lists on to locating arranging expert witness difficulty continued testimony, kept of which Tash served apprised, expert Tash 12,2003. 13,2003, On report disclosure on March March Tash witness scheduling to the court’s order and enter an original moved vacate amended limited expert extending schedule depositions, by sixty days, pretrial the motions and settlement conference dates scheduling pretrial conference at the court’s earliest a new objection amending On March Circle filed its to the convenience. grounds scheduling order and a motion strike Tash’s on the expert to inadmissibility. of untimeliness and 18, 2003, August Judge On after Tucker had assumed control case, granted the to strike
the District Court Circle’s motion Tash’s to file based decision on failure the expert witness. The court in in accordance with the deadline established the expert disclosure order, i.e., January the original scheduling by Significantly, provided: 18 Order farther August to [Tash’s] has be struck failure requested
[Circle] not immune comply scheduling [Circle] with the Court order. is scheduling either. To the from the order requirements rely presented [Circle] extent that wishes to on evidence to be order, scheduling such compliance is with which should not be received. evidence scheduling sides adhere order. To extent
Both should by it, parties have failed to abide both should be prohibited presenting from evidence. object September gave through The court compliance offered Circle which was not proposed
evidence August 29, requested original scheduling order. On with objections, 16 to file its September of time until extension 4. The indicates that motion on record granted September court on counsel. extending the time was served the order objections to Circle’s 11,2003, Tash filed its On It disclosure, and exhibit list. based its lay witness list witness timeliness, on District Court’s relying objections exclusively asserting failed to file its disclosure 18 Order and that Circle August
81 6, 12, January September lists 2003. On Circle responded to objection arguing objections by Tash’s that Tash had failed to file its 5, therefore, September 2003; argued, objections Circle Tash’s were untimely and replied objection should be denied. Tash that its was timely accordance with the court’s 4 September Order extending objections the deadline for September to 16. 2, 2003, On October objection the court denied Tash’s to Circle’s disclosure,
expert witness witness grounds and exhibit lists on the that it had by September not been filed promptly requested Tash reconsideration, providing copies requesting of its motion an extension of time and the court’s order granting request. 31, said On October 2003, the court issued an agreeing order that Tash had complied with deadline, court’s 16 apologizing for the court’s Nonetheless, error. the court summarily denied request Tash’s result, reconsideration. As a Circle present expert was allowed to trial, witness at and Tash was not. While Circle presents justifications numerous for the District
Court’s decision witness, to exclude Tash’s expert we are concerned here not exclusion, with stand-alone discretionary expert rather but with an order of exclusion that conflicted previous with two orders of the court. The court’s decision to exclude Tash’s expert allowing while expert testify directly Circle’s to contradicted both court’s Order of August declaring that both precluded would be from offering expert testimony, late-disclosed and the court’s September Order giving Moreover, extension of time objections. to file its end result of this significant, decision was expert as Circle’s unrebutted at trial. recognize While we that district courts have broad determining
discretion is trial, what evidence will be allowed at discretion nonetheless is not unlimited and must exercised in such State, a maimer as to afford a fair trial to all parties. Dept. Hulse v. Justice, 108, 1, 15, 1998 MT ¶ ¶ light orders, previous court’s we conclude District Court abused its discretion in excluding untimely Tash’s disclosure, while testify. Circle’s to Under these circumstances, experts testified, either both should have or neither should have been allowed to do so. We therefore reverse the District Court’s refusal to allow Tash’s expert testify, denying while Tash’s expert, motion to strike Circle’s and the court’s denial of Tash’s motion for reconsideration of this issue. Did the District Court denying abuse its discretion in compel discovery responses?
motion requested production corporate In October of various Circle, including documents from but not limited to Articles of bylaws; minutes of directors’ and shareholders’ Incorporation; meetings; copies profit-sharing and other retirement pension, plans; compensation other employment detailing paid, and various records security, taxes, income withholdings social state and federal paid unemployment compensation and worker’s insurance. amounts Incorporation produced On Articles of November producing remaining grounds on the objected but documents requested was not relevant and would not lead to information *6 Additionally, objected production it of relevant information. records as burdensome. employee compel production, arguing In Tash moved to corporate provide
that documents could information which would a partnership refute Circle’s claim that existed between Circle motion, 21, 2003, the Court Tash. On October District denied possession corporate it no or citing Circle’s concession that had in its of the of a records that contained evidence existence employee court concluded that partnership parties. between the discovery. eliminated the need for admission a trial, At the found that conclusion Circle and existed between Tash. argues appeal Tash that the District Court abused compel. in It maintains that under denying
discretion its motion to law, 26, M.R.Civ.P., and related case the court should have Rule discovery granted that assumption request its motion under the information Circle counters some of appropriate. was burdensome, was being private in irrelevant and requested, addition fleeting a confidential. note that while Circle made reference We confidential District employment records” before “private Court, any not of documents on argue against production it did only passing Additionally, order made grounds. the court’s these issues,” importantly’ as that “more “privacy it concluded reference considerations, need there no demonstrated for than was privacy that there no discovery already represented Circle had were because relevant documents. M.R.Civ.P., states, that: 26(b)(1), part, in relevant Rule matter, may discovery regarding any
Parties obtain subject involved in the relevant to the matter which is privileged, it to the claim or defense of the action, relates pending whether party seeking discovery any or to the claim or defense of other existence, party, including nature, description, custody, books, documents, condition and any location of or tangible other things identity and the and location persons having knowledge of any ground objection discoverable matter. It is not that the sought information will be at inadmissible the trial if the sought appears reasonably information calculated to lead to the discovery of admissible evidence. expressly accordance with Rule we stated Preston v. MT Court, (1997),
18th Judicial Dist.
282 Mont.
819, that “discovery requests are to
broadly
be construed
favor
disclosing any information tending to lead to admissible evidence.
Whether that evidence is admissible is for the court to decide at trial
Here,
....”
complains
trial,
that at
Circle relied upon documents
encompassed within its denied discovery requests
to support
contention that a partnership existed. Circle offered details of its
profit- and expense-sharing arrangements, as well as other business
purporting
records
to establish the existence of partnership.
Because
these
Tash,
records had been denied to
unprepared
was
at trial
to either challenge Circle’s interpretations
records,
of these
or
adequately examine or cross-examine
relying
witnesses
on them.
We have held that
may
information that
be
by party
used
either direct or cross-examination of witnesses must
supplied prior
upon
to trial
a proper request
discovery.
Hobbs v.
Hide and
Pacific
Depot (1989),
Fur
503, 512, 771
125, 130-31.
P.2d
In the case
us,
before
Tash was denied access to requested corporate information
ultimately
used or could have lead
to information used
*7
during
Circle
the
Hobbs,
trial. As we stated in
objective
“[t]he
of the
District Court in controlling and regulating discovery is to insure a fair
concerned,
trial to all
neither according
party
one
an
advantage
unfair
nor placing
Hobbs,
the other at a disadvantage.”
¶33 we conclude it an abuse of discretion for the deny District Court to compel. Tash’s motion to Did the District Court failing grant ¶34 abuse its discretion in to a new trial? light In of our
¶35 conclusion that the District Court abused its discretion both with to the respect expert testimony and the denial of discovery, Therefore, we conclude that Tash is entitled ato new trial. we need not reach final this issue.
CONCLUSION reasons, judgment against the the foregoing For we vacate retrial. reverse and remand this matter for and GRAY, NELSON, RICE CHIEF JUSTICE JUSTICES and MORRIS concur.
JUSTICE concurs and dissents. WARNER opinion I concur in that it was an of discretion the Court’s abuse deny motion to and that compel, for the District Court to Tash’s this against judgment of discretion that the Tash be vacated requires abuse agree this matter and remanded for retrial. I do not with reversed discretion in Court’s conclusion that the District Court abused its disclosure, excluding expert untimely while testify. expert issue, notes in discussing In this the Court 21 that based disclosure, list objections expert lay to Circle’s witness witness
his exclusively list in reliance on the District Court’s exhibit timeliness However, in moving expert, to strike Tash’s August order. objections in terms of both timeliness and substance. based opine partnership that a Tash desired to call witness August order, the District Court did not refer did not exist. In its timeliness, explained: only but
Moreover, persuaded position is not that Defendants’ is the Court case, in the determination sound substance. this essentially of law to existence is conclusion partnership [Heltborg v. Modern example drawn from facts. The noted 954, 956-57] Machinery (1990), 244 Mont. is timely, perhaps made instructive. If a disclosure had been testify as to of the businesses with which comparison could case, However, in this expert may have been familiar. of the ultimate partnership of a is one existence or non-existence Further, have to determine. it jury conclusions would which on the attributes jury properly can be instructed appears that whether a Then the can determine partnership. of a no doubt can exists. The Court has suggest purpose. instructions for that proper concerning trial, single only who testified expert, At Circle called opinion as to whether the This did state an damages. witness partnership, Circle and Tash constituted a relationship between during cross-examination. he declined do so have broad correctly district courts As the Court notes in ¶ trial, at determining what will be allowed discretion evidence *8 that such discretion must exercised in such a manner as to afford Hulse, parties. a fair trial to all 15.1 agree cannot with the Court’s ¶ decision that either experts both should have testified or neither should have objections been allowed to. Given the difference in made by the parties, expertise witnesses, and the difference in I would conclude that the District Court’s decision to allow Circle’s testify while not testify falls within its broad Boettiger, 20, 8, 101 discretion. State v. 2004 MT ¶ ¶ P.3d 8.1 dissent from the Court’s conclusion to the contrary.