*1 AMMONDSON, LESTER E. CATHERINE (as surviving spouse COUTURE of James W. Couture), SHERWOOD CHRISTENSEN, W. STEPHEN CHARLES DEE, GUILDER, JOHN A. EDMOND LAHR, MAGONE, ELMER JOHN
MELDAHL, MILLER, S. ROGER L. RAWLS, REGAN, C. DANIEL ALLEN T. SMITH, A. THORSON, GEORGE JOHN B. VAN GELDER, and WILHELMUS C. VERBAEL, Appellees,
Plaintiffs and v.
NORTHWESTERN CORPORATION, and GARY DROOK, G. MICHAEL J. HANSON, ROGER P. KEITH SCHRUM, KOVASH, KENDALL KLIEWER, G. all as individuals corporate
and as
officers of
Corporation,
Appellants.
Defendants
No. DA 07-0243.
July 15,
Submitted on Briefs
2009.
Decided October
2009.
Rehearing
Denied December
For A. Clifford Triel D. Frickle, Culver, & Anner-Hughes Billings.
JUSTICE COTTER the Opinion delivered of the Court. (Northwestern), Defendants Northwestern Corporation Gary G. (Drook), (Hanson), Drook Michael J. Hanson Roger P. Schrum (Kliewer) (Schrum), (Kovash), Keith Kovash and Kendall G. Kliewer (collectively Defendants), appeal from a verdict rendered them in Court, the Second Judicial District County. Silver Bow plaintiffs approximately awarded the million dollars in $17.5 *3 compensatory damages, and million punitive damages $4 dollars in contract, based on a claim for breach and the torts of breach of the good dealing, covenant of faith and fair process, abuse of and malicious prosecution. jury’s We affirm the verdict.
PROCEDURAL AND FACTUAL BACKGROUD (Ammondson), Lester E. Ammondson Sherwood Christensen (Christensen), (Dee), Stephen (Gilder), W. Dee Charles Gilder John A. (Lahr), Lahr Magone (Magone), (Meldahl), Edmond Elmer Meldahl (Miller), John S. Miller Roger (Rawls), L. Rawls Regan C. Daniel (Regan), (Smith), (Thorson), Allen T. Smith George A. Thorson John (Van Gelder), B. Van Gelder (Verbael), Wilhelmus C. Verbael (Couture)1 (collectively Retirees), James Couture were all former employees (MPC), of the Montana Company Power a Montana-based public utility company. These individuals had employed been with periods ranging MPC for years. from 3 to 40 Each of these plaintiffs 1 Couture, surviving Couture, spouse represented Catherine of James him in this suit. MPC which with separate agreements into entering MPC after left regular their supplement monthly payments them provided Contracts,” Hat ‘Top were known agreements plans. retirement Security Act. Income Retirement Employee from the a term derived Top Hat Contracts these individual value of The combined million dollars. approximately $2.9 currently operates corporation a Delaware is Northwestern 2002, purchased In Northwestern utility in Montana.
as a public hired assets. Northwestern and distribution MPC’s transmission (Paul Walker, Hastings) LLP Paul, Janofsky & Hastings, firm law MPC, purchase of its In the course purchase. facilitate the in a Top Hat Contracts for responsibility assumed Northwestern (UPA), stated specifically which agreement purchase unit for all current responsible and be would maintain Northwestern pension they supplemental MPC as related to obligations future or individual plan, program, restoration replacement or benefit benefit by MPC. maintained agreement which had been 2003, Chapter filed for Northwestern September In Court in the Federal Bankruptcy States reorganization in United provide firm continued to Hastings The Paul law District of Delaware. it filed during this time. When legal representation with Northwestern potential had several thousand bankruptcy, Northwestern Northwestern reviewed bankruptcy proceedings, creditors. In or determine if it would assume contracts held these creditors to assumed, terms would be If the contracts were reject them. the holders of those contracts honored; rejected, if then likely general, receive general would become unsecured creditors did reorganized in the Northwestern. Northwestern unsecured stock Top Hat Contracts that it would provide not notice to the holders of them as during bankruptcy and seek to treat reject their contracts Instead, to pay creditors. Northwestern continued general, unsecured throughout under the terms of the Hat Contracts the Retirees bankruptcy in Delaware. proceedings bankruptcy court confirmed On October (Plan). The reorganization plan Chapter bankruptcy
Northwestern’s 1, 2004, at which time date of the Plan was November effective reorganized officially emerged from as a *4 30, 2004, Northwestern filed a notice of entity. On December Court in of the Plan in Federal District substantial confirmation Delaware. 2005, Northwestern, giving any prior without January On any Retirees,
notice to making payments ceased to them under Top Although Hat Contracts.2 some immediately of the Retirees contacted attempt why Northwestern in an to discover their payments stopped, had provide failed to them with answers. January 2005, Kovash, On who was Northwestern’s director of benefits, informed the Retirees in writing that it had discontinued payment under their Top Hat Contracts in plan connection with its reorganization. Furthermore, Northwestern advised the that Retirees it anticipated filing a in bankruptcy motion court to Top terminate the Hat upon receipt motion, Contracts that of the the Retirees should legal contact a advisor. 31, 2005, On January Northwestern filed a motion to terminate Hat Top Contracts in bankruptcy court in the Federal District of filing
Delaware. After the court, motion in bankruptcy Retirees were able to counsel, obtain Montana the Edwards Law Firm of Billings, represent them in this matter. The Edwards Law Firm in turn hired local counsel Delaware to represent Retirees federal bankruptcy 31, 2005, court. On March the Retirees filed an objection response to Northwestern’s motion to terminate Top Hat Contracts. sought The Retirees to have Northwestern’s motion grounds dismissed on the the bankruptcy court did not have jurisdiction to entertain the motion since none of the Retirees had been listed as secured or unsecured prior creditors to Northwestern’s reorganization during bankruptcy proceedings. Additionally, Retirees counterclaimed contract, Northwestern for breach of breach of the covenant good faith and fair dealing, and abuse of process. On March the Retirees also filed a claim for
compensatory and punitive damages against Northwestern, Drook, Hanson, Schrum, Kovash, and Kliewer in the Second Judicial District Court, County. Silver Bow This state complaint was later amended to add Paul Hastings as a defendant based on its advising actions in Northwestern in federal bankruptcy court proceedings against Retirees. In the state complaint, alleged these defendants had contract, committed breach of breach of the covenant good faith and fair dealing, contracts, tortious interference with plaintiffs case, only Of all the in this Van Gelder was listed in proceedings plaintiffs, party executory However, Gelder, to an contract. Van like all the other given any was never notice that Northwestern intended to terminate his Hat Contract. *5 conduct, in by and fraudulent virtue of their actions process, abuse of notice, and Top under the Hat Contracts without stopping payment court filing bankruptcy then a motion to terminate those contracts in already reorganization after Northwestern had finalized its under the Chapter day prior filing complaint, 11. The to the state counsel for in the contents writing Retirees notified Northwestern’s counsel as to Montana, intent to file suit in also stated complaint and its but until serving complaint that he would hold off on the on Northwestern opportunity the court in Delaware had an to rule on the bankruptcy response Retirees’ to Northwestern’s motion to terminate. 25, 2005, complaint against On Northwestern filed a the April bankruptcy complaint,
Retirees in federal court in Delaware. In the plaintiff, named itself as a and each of the Retirees as Northwestern Contemporaneously, defendants. Northwestern also filed a motion for Retirees, sought an and a against preliminary order to show cause injunction against their action in state court in Montana. Pursuant motion, court, bankruptcy Northwestern’s the Delaware federal Hon. presiding, John L. Peterson issued order to show cause Retirees, stayed proceedings bankruptcy and all state court until the court could rule on the matter. 3, 2005, May Judge hearing pending On Peterson held a on the complaint bankruptcy
motions before court. Both counsel, represented by Northwestern and the Retirees were with flying some from Montana attend the proceedings. day, Judge The next Peterson his ruling, dismissing issued concluding Northwestern’s motion to terminate bankruptcy jurisdiction court without entertain Northwestern’s order, Judge motion. In his written Peterson noted that on December had filed bankruptcy Northwestern a notice with the court Plan, meaning “substantial consummation of all matters Plan, Plan, required pursuant to be done under had accomplished. [Retirees] been Nowhere are the claims of the recognized affecting implementation consummation or of the Plan.” Judge Peterson further observed that specific language contemplated relating confirmed Plan to issues disputes concerning fiduciary contractual and duties owed Northwestern to (such Hat parties corresponding other as the Contracts and duties Northwestern) owed to the Retirees would be resolved in a forum Third, bankruptcy Judge outside of federal court. Peterson noted that required appropriate filings under the Plan Northwestern was to make if reject any executory court it wished to contracts during bankruptcy proceedings-a provision with which give any did not notice to the obviously comply failed to since it emerged Chapter reorganized from 11 as a Retirees until after it fact, then held as follows: entity. Reflecting Judge on this Peterson single quite significant. fact of the matter is None of the process, were afforded due in that none were served [Retirees] rejection executory of their contracts in accordance with notices Plan, though, alarmingly, [Northwestern’s] with even [Northwestern], benefits, terminate pension in Motion to its agreement... pension the MPC as to the acknowledged purchase binding agreement, agreements legal, “constitutes valid enforceable in accordance with its terms of MPC” that “shall maintain and shall be for... all responsible [Northwestern] *6 obligations any under supplemental current and future of MPC... pension replacement plan, benefit or benefit or restoration program agreement or individual maintained MPC ....” The correctly party Motion then asserts that ‘ho individual who is a agreement proof against to an MPC has filed a of claim the Yet, reject [Northwestern] Debtor.” now wants to each individual agreement pay, that it assumed and became liable to at this late date, beyond Plan, the bar date [Northwestern] established in the contract, where, executory absolutely pleading as an no notice or any was ever served upon prior [Retirees] of the to confirmation.... stated, Simply [Retirees] these have not been afforded due notice, or other form in the process, [Northwestern] Plan reorganization upon [Retirees] effort. To now cast each of the a jurisdictional premise light before this Court in of the above is beyond any notice, simply timely standard of fairness and which this Court cannot tolerate or condone. Taking notice of the fact that the Retirees had complaint filed a Court, Judge
in state District jurisdiction Peterson held there was no Top court, over the Hat Contracts in federal bankruptcy and deemed justice that in the bankruptcy interests of court would abstain favor of the state court action in Montana. subsequently filed an appeal Judge rxxling, voluntarily from Peterson’s but then appeal dismissed that at a later date. Once the matter was returned to the Second Judicial District
Court, sought jury the Retirees a trial on their claims and the parties through went practice prior extensive motion to trial. In November paying Northwestern resumed the Retirees pursuant to their Contracts, Top paid payments Hat them back due with interest. trial, Hastings Paul settled with the Retirees for an Prior to subsequently amount and dismissed from the suit. undisclosed was trial, rulings the District Court issued related during Prior to Northwestern, certain availability defenses admissibility evidence, motions for as a Northwestern’s claims, jury and the matter of law on some Retirees’ necessary, rulings Court’s instructions. As we will discuss District jury began February these The trial on on issues below. jury February
concluded with a verdict in the Retirees’ favor on trial, Retirees, During jury the course of heard from Couture, testifying as well as Catherine about their involvement in emotionally mentally impacted by these events and how heard, the actions ofthe Defendants. The through also either live testimony deposition, individually defendants, or from the named Paul Hastings’ attorneys, (Elsaesser), Ford Elsaesser a qualified expert on law, (Dahood), bankruptcy attorney Wade Dahood a Montana who was qualified expert to render an opinion on the Defendants’ and Paul conduct, Hastings’ presented by and an economist Retirees support damages. of their claims for Through testimony of these various witnesses and numerous (including many
documents of the internal among communications Northwestern, Hastings, agents, Paul and their employees, and officers), presented with two different versions of the events surrounding the termination of the Hat Contracts and the against initiation of proceedings the Retirees in federal portrayed court. the Defendants’ actions as course of illegal They and malicious conduct directed them. asserted counsel, general that Northwestern’s Knapp (Knapp), Thomas ordered filings the termination of the contracts and in bankruptcy court *7 against legal advice of Paul Hastings, attorneys opined whose had that this course of action was not The legally supportable. Retirees claimed that Northwestern and its counsel knew that the Hat Top binding, yet Contracts were valid and on represent went to to the Furthermore, bankruptcy opposite. federal court the the Retirees argued that the Top economic cost of the Hat Contracts was to be by borne the rate payers, directly, not Northwestern and that it disingenuous represent bankruptcy Northwestern to to the terminating court that the contracts was in the best interests of the corporation; yet, evidence, Northwestern, in the face of Knapp, agents, Top and its officers and moved to terminate the Hat Contracts proceedings against bankruptcy and initiate the Retirees in federal court. connection, testimony presented In this the Retirees from Dahood support argument bankruptcy to their
and Elsaesser legal and related actions were without basis. Dahood also proceedings by defending against the Retirees in testified about costs incurred opined signed by Elsaesser that an affidavit the Defendants’ claims. Kovash, court that the represented bankruptcy Top wherein he to the valid, legal, binding agreements, Hat Contracts were not or was false Additionally, misleading bankruptcy statement made to the court. Kliewer, by that a filed Elsaesser testified sworn declaration controller, wherein he claimed that the Retirees were Northwestern’s creditors, absolutely unsecured was an false statement and another misrepresentation bankruptcy court. As Hat corporate Top decision to terminate Contracts court, litigation
and commence bankruptcy presented Retirees argument support evidence and their claims that these actions were They in nature argued bankruptcy tortious as well. that the court Retirees, filings and other actions taken Northwestern accept were done with the intent to make them a settlement more argued favorable to The Retirees Northwestern. Northwestern sought leverage giving legitimate them into up claims under their contracts and accept newly instead shares of stock in the reorganized corporation-an action which none of the connection, Retirees wished to take. In this the Retirees presented Drook, evidence concerning participation Hanson and Schrum in the corporate Top decisions to terminate the Hat Contracts and initiate what the term Retirees Northwestern’s “maliciouslawsuit”in bankruptcy decisions, court. The claim that these and the acts them, performing individual defendants in constituted tortious Northwestern, defendants, conduct for which both and the individual could be held liable. Defendants, contrast, painted these events as actions
taken in the best interests of Northwestern without malice or tortious intent towards the Retirees. Northwestern claimed that the Top Hat among many Contracts were other non-qualified plans benefit that its financial legal during advisors reviewed bankruptcy order to evaluate their administrative costs and value to the corporation. Northwestern admits that it terminated the Hat Retirees, timely Contracts without notice to the but asserted that this action, court, and the subsequent proceedings related in Instead, did not amount to tortious conduct against the Retirees. it *8 decision to timing of its mistake was in the basically argued that its notice. contracts, provide proper and its failure the terminate to the payments that it resumed out pointed further Northwestern with payments them back paid and Retirees in November Peterson, for Paul Judge counsel testimony of Through the interest. Kovash, Kliewer, presented the Defendants Hastings, Knapp, Retirees’ claims. defense the found February jury the on In its verdict rendered
¶18 contract, faith breach of the tort of bad liable for breach Northwestern It also found prosecution. malicious contract, process, abuse to the damages. respect With punitive for Northwestern liable Kliewer, Hanson, Schrum, Kovash, Drook, individual defendants and malicious only process for abuse of jury the found them liable damages. jury further punitive not liable for prosecution, and interference collectively not hable on the tortious the Defendants found verdict, jury the awarded the As a result of the of contract claims. million dollars approximately $17.5 as a whole to each damages, apportioned with individual amounts compensatory day damages phase the following punitive Retiree. The individual million held, same returned a verdict of $4 the trial was and the punitive damages against dollars in Northwestern. the Court on March Judgment by was entered District
¶19 motions judgment, post-trial the Defendants filed various After entered damages against pre-trial settlement seeking to offset judgment by the by Hastings, seeking Paul and also to reduce the into making was still ongoing payments amount of the by motions were denied the District Court. Retirees. These verdict, as well as various appeal jury’s The Defendants now ¶20 before, trial. We state during, the District Court and after rulings of by appeal as follows: presented the issues completely preempted the Retirees’ claims Issue One: Were ¶21 subject matter bankruptcy law and did the District Court lack federal jurisdiction to consider those claims? by denying the District Court err Issue Two: Did ¶22 Defendants the Retirees’ -counsel present opportunity advice-of defense claims? denying Court err Issue Three: Did District matter law on the Retirees’ judgment as a motion
Defendants’ for process claim? abuse of claim on the Retirees’ bad Four: Should the Issue faith be reversed? Issue Five: Did the District Court commit reversible error in allowing to consider the Retirees’ claims emotional distress instructing them on those claims? jury’s Issue Six: Was the verdict awarding damages tort
supported substantial credible evidence? *9 Issue Seven: Did the denying District Court err in ¶27 motions judgment dismissal and as a matter law as Defendants’ of Drook, Hanson, Schrum, Kovash, to and Kliewer? defendants Eight: Issue Did the District Court err in denying ¶28 the Defendants’ post-trial motion to judgment against the amount offset pre-trial Retirees’ Hastings? settlement with Paul
STANDARD OF REVIEW
We review a
¶29
district court’s conclusions on questions of law to
determine if those conclusions are correct. Sunburst Sch. Dist. No. 2
Texaco,Inc.,
183,
v.
28,
259,
2007 MT
338 Mont.
¶
¶31 review decision to determine if substantial credible evidence in the supports Mountain, record it. Upky LLC, v. Marshall 90, 22, 2008 MT 273, 180 342 ¶ Mont. P.3d 651. ‘Substantial evidence is ‘evidence that a reasonable mind might accept adequate to support a may conclusion’ and preponderance be less than a ” evidence but must be more than a ‘mere scintilla.’ Upky, 22¶ (quoting Campbell Canty, 278, 18, v. 1998 MT 398, 291 ¶ Mont. 969 268). P.2d We review de novo a district court’s decision deny a motion for aas matter oflaw. Inc., Vader v.Fleetwood Enterprises, 344,
MT
348 Mont.
¶
DISCUSSION Issue One: Were the Retirees’ completely claims preempted by bankruptcy law and did the subject District Court lack matter federal claims? to consider those jurisdiction appeal, time on issue for the first raise a novel The Defendants in this case proceedings the District Court
arguing that Court law, the District by federal completely preempted Although this them. jurisdiction to entertain subject matter lacked defense as an affirmative pled raised or previously has not been issue nonetheless the Defendants proceedings, of these during the course matter challenges subject because it merits consideration argue that time on time, including for the first may be raised jurisdiction appeal. subject challenges with the Defendants agree While we see appeal, the first time on may be considered for jurisdiction
matter 489, 29-32, 148 P.3d Lemire, MT Stanley v. ¶¶ rulings previous case and the posture of this given procedural court, wholly devoid argument find this bankruptcy the federal we bankruptcy found that the federal Judge specifically merit. Peterson over bankruptcy under federal laws jurisdiction court lacked bankruptcy since Northwestern’s motion to terminate Northwestern’s fact, Judge In Peterson went so already had been consummated. plan the federal attempt to invoke far as to characterize Northwestern’s beyond any standard of “simply court as jurisdiction *10 notice, or which this Court cannot tolerate timely fairness and condone.” ruling, apparently this then initially appealed but Northwestern
¶36 Now, later, years several the appeal dismissed its of its own accord. jurisdiction very to the federal Defendants ask this Court to return determined thus already jurisdiction, that it lacked court which has federal and state leaving legal the Retirees’ claims in a limbo with over these claims. The refusing jurisdiction courts both to exercise argument defy logic, common sense and and are implications of this nothing Kafkaesque. short of that Northwestern is Additionally, patently it is obvious
¶37 at collaterally asserting jurisdiction argument from a federal estopped jurisdiction of federal was stage proceedings this in the since issue Peterson, party to already by Judge decided and Northwestern Bozeman v. adjudication. final See Auto Parts prior, this Fund, MT Employers’ Employment Relations Div. Underinsured Thus, 29-30, 305 40, 23 reject argument. Mont. P.3d 193. we ¶¶ by denying err Issue Two: Did the District Court ¶38 Defendants to the Retirees’ opportunity present defense advice-of-counsel claims? Throughout bankruptcy proceedings and the decision-making
process on whether to file a motion to terminate the Hat Contracts court, in bankruptcy Northwestern was represented by the law firm of Paul In Hastings. the Retirees’ complaint, they alleged that Defendants’ actions were done with the assent and assistance of agent Hastings, Northwestern’s Paul and resulted in the commission against of various torts the Retirees. In response claims, its to these the Defendants presented a denial,
general did plead but not advice of counsel as an affirmative trial, defense. Prior to proposed following Defendants instruction: provides
Montana law upon counsel, reliance the advice of provided good faith and upon based a full and fair statement of client, facts is a complete affirmative defense to an action for prosecution. malicious morning trial, On the orally presented
District Court a motion in limine seeking preclude from presenting the affirmative defense ofreliance on advice ofcounsel at trial.3 The Retirees argued that the Defendants could not present such a they defense since did not affirmatively plead it in their responsive pleadings. The argued against Defendants the Retirees’ motion. The District Court did not make a ruling definitive on the motion at that time. On February 2007, during case-in-chief, Retirees’ but
before the presented defense, Defendants the District Court entertained further argument on the Retirees’ motion. The Retirees argued that the present Defendants could not this defense due to their plead it, failure to and because already had conceded that they would not be able to “empty assert an chair” defense Paul Hastings. The Retirees noted that the Defendants had never filed a cross-claim against Paul Hastings point the proceedings. In response, the Defendants asserted that they had not waived the previous summary In judgment, motion for sought preclude the Retirees had raising any the Defendants from propriety affirmative defenses based on the of Paul Hastings’ Peterson had conduct in federal Judge court. The Retirees asserted that *11 essentially propriety Hastings’ ruled on the of Paul conduct in the jurisdiction action when it dismissed that action and returned over the Retirees’ claims state court in Montana. The District Court denied the motion at the time, holding genuine that there Hastings’ remained issues of material fact on Paul bankruptcy proceedings conduct in However, as it related to the Retirees’ claims. previously District Court had not ruled on the extent to which the Defendants could rely upon Hastings’ Paul conduct as an affirmative defense to the claims them. authority defense ofadvice ofcounsel under the ofMcGuire affirmative (1979). They P.2d asserted that Armitage, v. McGuire, under the affirmative defense of advice of counsel does not affirmatively pleaded, general need to but instead can be raised in a be denial. The Defendants further asserted that that their reliance on the Hastings advice of Paul was relevant to the issue of causation and intent. ruling day, denying part The District Court issued a that same order, granting part the Retirees’ motion. In its written argue
District Court held that the Defendants could not to the that their reliance on the advice of counsel constituted a valid defense action, to the Retirees’ causes of the Defendants to present but allowed Hastings’ legal evidence as to the substance of Paul advice. The First, grounds District Court advanced two for its decision. it the Defendants had concluded that failed to raise advice counsel as in their response complaint required affirmative defense Second, by the Montana Rules of Civil Procedure. it concluded that Northwestern, entity, corporate vicariously through as a is held liable directors, officers, agents, the acts of that it employees its not, law, rely could as a matter of on advice of counsel as an simply defense, given ultimately responsible affirmative it is for the actions agent corporation. of its counsel as an presentation The District Court did conclude that the of evidence Hastings’ as to the substance ofPaul communication and advice would permitted go be as it would to the heart and intent causation in the by elements involved tort claims raised the Retirees. As an example, punitive damages the District Court noted that claims for prosecution require showing and malicious from the plaintiff (in defendant acted with either actual malice or actual fraud the case claims), punitive damages or that the defendant was motivated (in prosecution). malice the case ofmalicious The substance and advice Hastings’ legal helping of Paul counsel would be relevant in agents to assess whether Northwestern or its met these mental state Court, requirements. As stated the District The Court concludes that the substance of counsel’s communications and advice to the Northwestern Defendants concerning legal relationship with the Plaintiffs is relevant to the issue of whether the Defendants acted with actual malice causing or actual fraud in harm to the Plaintiffs. Court also bankruptcy expert [Elsaesser] notes that the Plaintiffs’ witness already has testified that he could not find evidence in the *12 attorneys where ofthe
corporate communications stop supplemental Defendants to advised the Northwestern or the Plaintiffs. Should communications payments to benefit contrary exist, go evidence would to the such advice credibility of witnesses. Furthermore, ultimately it the District Court noted that would
¶45
through,
responsible
acts
and is
jury
corporation
instruct the
that a
officers,
and
and that
for,
employees,
agents,
the conduct of its
advice of counsel under these circumstances would
evidence as to the
in the
go
evaluating
engaging
Defendants’ intent in
conduct
towards
they
against
acted
the Retirees.
issue when
instructions,
settling jury
the District Court refused
During
¶46
an
the Defendants’ instruction on advice of counsel as
affirmative
grounds
ruling
defense on the
in its
on the Retirees’ motion in limine.
argue
rulings
The Defendants now
that these
from the District
Relying primarily upon
Court
in error and should be reversed.
McGuire,
Conley,
(1914),
Stephens
v.
waived the this affirmative defense. argue also hearing trial, that at the during on motion in limine as well as basically that, conceded to the Northwestern District Court under law, principles agency responsible it would be for the actions ofPaul order, Hastings. pretrial In the final fact conceded it “empty against could not assert an chair” defense Paul Hastings, and Hastings’ that Paul actions would be probative on the issue damages. causation for the Retirees’ The Retirees also maintain that object failure Northwestern’s to the District Court’s instruction officers, directors, employees for the actions ofits “responsible that it is arguing advice of Northwestern from agents” precludes further Finally, of this case. defense under the facts counsel as affirmative defense was assert that Northwestern’s advice-of-counsel the Retirees record, and the supported by the and that Northwestern simply not Hastings’ legal Paul advice disregarded defendants in fact individual the Retirees. took action when separate presents of this issue two appeal The Defendants’ first, its discretion in its whether the District Court abused questions: limine; second, whether the order on the Retirees’ motion denying proposed jury its discretion in District Court abused on the defense. instruction advice-of-counsel Defendants, McGuire, upon by In the case relied we stated the *13 following concerning the advice-of-counsel defense: counsel, upon provided given
Reliance
the advice of
it is
in
good
upon
faith and is
a full and fair statement of the facts
based
client,
may
afford the latter a
defense to an action
complete
may
malicious
But it is an
It
prosecution.
affirmative defense.
answer,
general
under a
denial in the
the burden
be shown
but
establishing
upon
it is
the defendant.
McGuire,
412-13,
original,
184 Mont.
603 P.2d at
in
(emphasis
at
256
omitted). Contrary
quotation
alterations
Defendants’
McGuire,
unequivocally
characterization of
case did not
that
state
advice of counsel is an
defense to a claim of malicious
absolute
Instead,
prosecution.
recognized
may
McGuire
that advice of counsel
defense,
the defendant
complete
provided
afford a
satisfies its burden
establishing
it.
limine,
ruling
In its
on the motion in
the District Court held that
present
Northwestern was
advice of counsel as an
unable
affirmative defense due to its failure to raise it as such in its
8(c).
responsive pleadings
required
e.g.
under M. R. Civ. P.
See
Link, Inc.,
MT
Winslow v. Mont. Rail
¶
simply
question
upon
in its ruling jury on the motion in limine. The denial of this instruction discretion, did not light analysis constitute an abuse of both in of the jury above and because the fairly instructions as a whole and full apprised applicable English, law.
instructed that in prove prosecution, order to malicious the Retirees *14 show, among had to other that things, the Defendants acted with malice, and that there was no probable cause for their actions. The jury heard argument the Defendants’ evidence and that in acted good faith, apparently but did not find argument this evidence and credible, and concluded that the Retirees had in fact established prosecution.4 claims for malicious regard, noting prohibited In this it is worth that the Defendants were not from seeking jury expressly showing good by a instruction to inform the that a faith prosecution.
the Defendants would defeat a claim for malicious The Defendants faith, presented argument good evidence that their conduct was in but did not seek corresponding jury Instead, they sought only a on advice-of-counsel as a instruction. a blanket instruction complete, apply equally affirmative defense that would both that the we conclude presented, the circumstances here Given denying the Defendants’ not its discretion in District Court did abuse defense, pre-trial or in its on its advice-of-counsel proposed instruction in the context of the Retirees’ rulings and trial related to this defense claims. declare Additionally, prospectively take this opportunity we trial, at advice-of-counsel, used as an affirmative defense when 8(c). In under the of M. R. Civ. P. pled requirements
must be
as such
Ehlert,
140,
order,
Court, citing to Brown v.
255 Mont.
its
the District
(1992), noted that the essence of an affirmative defense
Brown,
514; accord,
46 origin Levy ultimate in the 1870 case of v. in Masterson finds its (Cal. 1870) Brannan, Stephens, 485 as well as which was 39 Cal. 8(c), affirmatively requirement plead Rule and the decided 1914.5 necessity, in Montana in 1964. Of M. adopted defenses were avoidance 8(c) an any previous practice rule of from supersede R. Civ. P. would a era would allow a defendant to invoke matter of earlier which avoidance such as advice-of-counsel as an affirmative defense without it such. pleading advice-of-counsel, when used as an We therefore hold 8(c). defense, M. R. P pled
affirmative must be in accordance with Civ. to the extent it can read expressly We therefore overrule McGuire be rule to all situations in contrary. apply prospectively This will party rely upon which a wishes to this defense. denying Issue Three: Did the District Court err the judgment motion as a matter law on the Retirees’
Defendants’
for
of
process
abuse
claim?
trial,
During
judgment
the Defendants moved for
as a matter of
claims,
process
arguing
law on the Retirees’
that the Retirees
abuse
satisfy
they presented
failed to
the elements of this tort insofar as
no
that the
used legal process
accomplish
evidence
Defendants
some
observe,
goal.
correctly
process
collateral
As the Defendants
abuse of
“(1)
(2)
requires
plaintiff
purpose
show both
an ulterior
process
proper
regular
willful act in the use of
not
in the
conduct of the
proceeding.” Hughes Lynch,
214, 164
v.
2007 MT
¶
omitted).
(quotation
Furthermore,
P.3d 913
in order
support
claim,
process
plaintiff
abuse
must show that
there was “an
attempt
plaintiff
process
to use
to coerce the defendant
to do
thing
some collateral
he could
legally
regularly
which
not be
omitted).
compelled
Lynch,
(quotation
Here,
to do.”
wholly
Defendants claim that such
lacking,
evidence was
and that
there
presented showing
was no evidence
the bankruptcy
proceedings
used for
purpose
adjudicate
other than to
resolution of the
Retirees’
Hat Contracts in
court.
Accordingly,
argue
the Defendants
there was insufficient evidence to
submit this claim to the
and that their motion
as a
granted.
matter of law on this claim should have been
Additionally,
the Defendants maintain that
the District
Court
(Cal.
Jensen,
upon
1949),
App.
Masterson relies
Walker v.
¶61 claim. denying giving jury motion or in its instruction on this With instruction, maintain that it was jury to the the Retirees respect Discovery Corp., Ski 235 Mont. adopted Leasing, verbatim from Inc. v. (1988), 133, and that it has not been disturbed 765 P.2d in respect decisions. to the evidence on this claim subsequent With they provided the Retirees maintain that sufficient evidence general, First, they presented it. to evidence at trial that Paul support point to Hastings bankruptcy had advised Northwestern that the motions were weak,” ‘legally and that Hat Contracts should have been Second, they honored. assert that Northwestern did in fact use the bankruptcy proceedings advantage in an effort to obtain a collateral In internal against point them. this connection to communications among Northwestern, agents, Hastings during its and Paul obtained discovery indicating motions were devised Retirees, gain advantage to a tactical over the compelling willing give up them to be more their claims point Judge Northwestern. The Retirees also out that Peterson found filings wholly merit, Northwestern’s various be without questioned legitimacy. In prevail judgment order to on a motion for as a matter of on law claim, process
the abuse of the Defendants must “a complete show any justify submitting absence of evidence which would an issue to a jury.” Vader, The carry Defendants have failed to this burden. jury evidence, presented including was with more than sufficient communications, internal corporate emails and as well as the testimony Hastings’ attorneys, corporate of Paul Northwestern’s himself, agents, Judge executive Peterson which to decide upon process jury certainly required the abuse of claims. While the was not testimony, quantum quality to believe such evidence and such more than sufficient a motion for evidence was survive a judgment as matter of law. instruction, Turning challenged jury conclude that the we First, agree in giving
District Court did not abuse its discretion
it.
we
that this instruction was an accurate statement of
with
Inc.,
Leasing,
filing complaint
the law under
wherein we held that
in
an
party
improper
a forum which a
knows to be
constitutes
abuse of
136, 765
Inc., 235 Mont. at
P.2d at 177-78. In that
process.
Leasing,
See
case,
in
party
dispute
County
one
to a contract
filed suit Granite
which
clearly improper
plain
was
under the
terms of the contract which
required
disputes
contract
be handled in Lewis and Clark
Inc.,
135-36,
County. Leasing,
be reversed?
jury
found that Northwestern
¶66
breached the Retirees’
contracts in bad faith. As
stated in Story City Bozeman,
we
v.
242
436,
(1990),
Mont.
(1)the contract must be such that the parties inherently are in (2) unequal bargaining positions; [and] the motivation for entering motivation, i.e., the contract must a non-profit be to (3) mind, peace security, secure future protection; [and] (a) ordinary contract damages adequate are not they because do require not party superior position to account for its (b) actions, do not make party “whole”; the inferior [and] (4) party especially one is type vulnerable because of the of harm may it necessity places suffer trust in the party other to (5) perform; and party vulnerability. other is aware of this Story, 451, 719 omitted, 242 Mont. at P.2d at (quotation alterations in original). trial, Prior to Northwestern filed a claim, motion to dismiss this
arguing that the Retirees had failed to establish a “special relationship” between themselves and Northwestern. The District motion, Court denied the and ultimately instructed jury on the required elements Story. under Northwestern did object not to this jury instruction, move for as a claim, matter of law on this or otherwise seek a new trial based on a failure of evidence to support Nonetheless, this claim. on appeal Northwestern upon relies Federated Mut. Anderson, Ins. Co. v. 288, 1999 MT 33, 297 Mont. 915, 991 P.2d and asks this Court to exercise de novo review and conclude that Retirees presented insufficient support evidence to the finding of a special relationship in this case. [4] The urge us not to argument, consider this since other filing
than
pretrial
claim,
motion to dismiss this
Northwestern failed
preserve
to
this issue in the
Court,
District
during
either
or after trial.
generally
We
refuse to address issues raised for the first time on
appeal because it is fundamentally unfair to fault the trial court for
failing to rule correctly on an issue it was
given
never
an opportunity
to
A.C.,
consider. See In re
320, 16,
2004 MT
58, 101
324 Mont.
¶
P.3d
Moreover,
we
repeatedly
have
held that
object
failure to
jury
instructions or a verdict form results in a waiver of the right
challenge them on appeal. Vader,
(citing
Turk,
Turk v.
¶
2008 MT
1013).
341 Mont.
177 P.3d
Since Northwestern failed to
object
instructions
claim,
on the bad faith
and did not challenge
the sufficiency of the evidence for this claim at the trial level or in post-
trial proceedings, we decline to consider this issue now on appeal.
Issue Five:
Did the District Court commit reversible error in
allowing
to consider the Retirees’ claims
emotional distress
and instructing them on those claims?
In their complaint,
the Retirees
sought damages based on
emotional
distress caused
the Defendants’ actions. The Defendants
responded by moving for summary judgment on those claims. The
argued
Defendants
under Sacco v. High Country
Press,
Independent
Inc.,
(1995),
emotional Sacco, upon Court relied the District relying on instead of Accordingly, Markets, Inc., 465, 686 P.2d Supersave v. Johnson Jury Instructions (1984) Montana Pattern edition of the and the 2003 emotional distress (MPJI) for the proper standard to hold that resulted in a substantial conduct Northwestern’s claims was whether impact significant and caused a interest legally protected invasion of therefore denied The District Court plaintiffs. person upon on the emotional summary judgment motion for Northwestern’s claims. distress judgment as a matter trial, also moved for During claims, advancing arguments emotional distress
oflawonthe Retirees’ motion. summary judgment set forth in its nearly identical to those this motion as well. Court denied The District instructions, rejected Court the District Duringthe settling jury required which would have jury instructions proposed several pursuant distress or “severe”emotional Retirees to show “serious” distress. Instead their claims for emotional prevail in order to on Sacco following instruction: gave the the District Court any compensation for include reasonable Your award should suffering experienced and distress mental and emotional in the future. experienced to be reasonably probable plaintiff suffering passes and distress under and emotional Mental shock, anguish, nervous or names, as mental various such reactions, such as highly unpleasant all mental like. It includes embarrassment, anger, horror, shame, humiliation, grief, fright, worry, and nausea. chagrin, disappointment, standard which to calculate The does not set a definite law suffering and emotional and distress. for mental compensation express witness any requirement is there Neither appropriate that is compensation the amount opinion about however, that when require, does kind of loss. The law distress, suffering and emotional making an award for mental judgment. calm and reasonable you exercise shall just and reasonable. compensation must be denying its Court erred in argue the District The Defendants claims for instructing on the Retirees’ motions and various under assert that suffering. The Defendants mental and emotional prove their emotional Sacco, required the Retirees these claims to present in order to “serious”or “severe” distress was
51 argues that under First jury. the Northwestern further Bank 195, (1989), , 84 (N.A.)-Billings v. Clark 236 Mont. 771 P.2d even severe, distress must be and that the derivative emotional claims argues failed this Northwestern that Retirees to meet threshold. relevant, standard articulated in First Bank remains “severe” Ctr., Maloney Inc., Inv. recently affirmed in v. Home and has been 34, 298 213, 994 MT Mont. P.2d 1124. The Defendants then recite 2000 trial, to each at the evidence relative of the Retirees adduced to that evidence did not meet this With demonstrate the threshold. the Gelder, argue of Christensen and Van the Defendants that exception remaining mainly presented the Retirees evidence of transient and in typical transactions, trivial distress the world of business a claim support insufficient to for mental or emotional distress. that in argue they evidentiary Retirees did fact meet their ¶74 First, to present jury. they argue burden these claims to the that the only independent Sacco standard to applies negligent/intentional claims, of infliction emotional distress and not to the derivative claims in their presented complaint, gave and that the District Court the MPJI on Additionally, argue correct this issue. the that Retirees under Seltzer, this Court addressed the held identical issue and that applies Sacco standard to only independent claims negligent/intentional distress, infliction of emotional and not to the Further, they presented. derivative claims have the Retirees maintain they present that did evidence of emotional distress suffered each of them sufficient support their claims. reply, In argues
¶75 Retirees’ reliance on misplaced, Seltzer is that the law, MPJIs are not themselves proper legal authority compels jury the conclusion that the (cid:127)wrongly instructed. We recently addressed this in very issue Jacobsen v. Allstate Ins.
Co, 649, MT P.3d in which we held that the MPJI properly required state the threshold for derivative or (as stand-alone) parasitic opposed emotional distress claims. Jacobsen, 66. We stated that “the ¶ ‘serious or severe’ standard in applies only independent announced Sacco of negligent claims or Jacobsen, intentional infliction emotional distress.” 66. ¶ Furthermore, explicitly adopted we forth in standards set MPJIs issue in the instant case emotional distress claims as an damage (i.e., element of an underlying tort claim emotional parasitic Jacobsen, damages). distress Jacobsen,6 conclude that we holding to our Pursuant their emotional evidence to send sufficient present did
Retirees not err in Court did and that the District distress claims it is true that the claims. While on these giving its instruction as a result of emotional distress varying degrees of suffered the MPJI as set forth under actions, proof quantum Defendants’ Therefore, presented. the evidence satisfied on this claim was on this issue. we affirm damages awarding tort jury’s verdict Six: Was the Issue evidence?’ by substantial credible
supported approximately the Retirees above, awarded As noted Defendants’ damages for the compensatory million dollars $17.5 *20 deliberations, given it was jury retired for When the tortious conduct. form plaintiff. Each verdict forms for each individual separate verdict Question if breached 1 asked Northwestern questions. had seven Question 2 whether inquired retiree’s contract. particular Question in faith. 3 asked that contract bad breached tortiously interfered with defendants any of the individual whether Question any of inquired whether retiree’s contract. particular that against particular process an abuse of the Defendants committed committed any of the Defendants Question 5 asked whether retiree. jury retiree. If the against particular prosecution malicious 1, 2, 3, 4, it was to determine or yes questions answered caused damages retiree for money particular to award that amount of Question if Question 6. 7 then asked Defendants in damages particular to that retiree. punitive liable for Defendants were damages based on words, segregate form did not In other verdict and defendants individual claims individual each of the Northwestern. form, nor did object to the verdict Notably, the Defendants did not on each jury based damages apportioned to have seek claims for presented claim. Given that the Retirees
cause of action or contract, tortious contract, faith breach of of the tort of bad breach contract, prosecution, malicious process, and interference with abuse how or for the Court to determine impossible retrospect simply it is claims. damages among those various jury apportioned if the note, nearly identical situation we faced a As the Retirees case, brought claims for the torts plaintiff In that a Seltzer. regarding this issue. Bank and Johnson overruled both First Jacobson prosecution malicious and process against abuse of an out-of-state law Seltzer, trial, firm and other individuals. During 1. the plaintiff ¶ presented distress, evidence of emotional harm personal to his professional reputation, damages for the expenses he incurred in defending Seltzer, jury ultimately himself. 97. The ¶ rendered a multi- million dollar award in here, his favor. Like the Defendants defendants in request Seltzer did not specifically verdict form which apportioned damages Nonetheless, based on the various claims. on appeal the challenged Seltzer defendants jury’s whether the award of compensatory damages supported by substantial credible evidence, urged the Court to conclude that the s simply award represented compensation Seltzer, for emotional distress. In considering claim, this we stated the following: jury’s verdict did designate not a separate amount of
compensation awarded for each of these three elements of damage; it merely listed one amount rendered for all compensatory Thus, damages. it impossible is to know how the jury apportioned compensatory award with respect to the three elements damage, certainly we will not speculate in regard. Accordingly, reject we the Defendants’ assertion that the compensatory represents award compensation solely for emotional distress. (footnote omitted).
Seltzer, 97¶ bar, In the case at we similarly engage refuse to in speculation concerning how the apportioned damages, and conclude that the jury s award compensatory damages was supported by substantial credible evidence. Issue Seven: Did the District Court err in denying the *21 motions dismissal and judgment as a matter law as
Defendants’ for of Drook, Hanson, Schrum, Kovash, and Kliewer? defendants trial, Prior to the Drook, ¶84 Defendants moved Schrum, to dismiss Hanson, Kovash, Kliewer, and arguing that the defendants, individual acting as employees Northwestern, and officers of could not be held personally liable for the acts of Corporation. Northwestern Citing to § 28-10-702(3), MCA,the Defendants personal asserted that liability for these only defendants would lie if they were found personally negligent or the concluded that their actions were in tortious nature. The Defendants asserted that the produce any Retirees failed to evidence the actions of the individual defendants met this standard. Furthermore, the argued Defendants that the employees individual acting within the course and scope employment oftheir and could District Court denied the motion. liable. The personally
not be held judgment as a matter of trial, Defendants moved for During argued The Defendants that the to these defendants. respect law with any or Hanson took any evidence that Drook produce Retirees failed to filing any in the the Retirees or was involved respect action with Additionally, the Defendants asserted that against them. motions Kliewer, in Schrum, corporate and Kovash were involved while Hat and respect Top with Contracts decision-making process scope did outside the course and litigation, they nothing nothing and did malicious or untoward to employment their Retirees. summary of the from the hearing response After evidence
Retirees,
Viewing the evidence
the District Court denied the motion.
Retirees, the District Court concluded
light
in a
most favorable to the
improper
matter of
would be
because the
judgment
as a
law
concerning
presence
hear evidence
of three of
District Court did
meetings
at
where issues related to the
the defendants
board
discussed, and
heard
termination of the
Hat Contracts were
also
respect
evidence with
to declarations that were filed
the two other
individually-named
Opinion,
defendants. See
appeal
The Defendants now
the denial of their motion for
Scott,
judgment
Relying upon
as a matter of law.
Kuhns v.
259 Mont.
(1993),
Bank,
against Drook, that the them three of meeting attended a March 2004 when Northwestern’s board of rejection directors voted to recommend of all one but non-qualified plans. benefit Northwestern asserts that the District presence meeting denying Court relied on their However, Defendants’ motion for as a matter of law. meeting individual defendants assert that their attendance at this given liability, could not rise to personal have because participation meeting in that was done in the best interest of the Additionally, tortious in nature. the Defendants company was not actively argue that Drook and Hanson both testified that were not *22 terminating in the Hat Top Similarly, involved Contracts. the acting assert Schrum Defendants that was consistent with the interests of the when he concurred in the decision not to corporation the the notify Top Retirees about board’s decision to terminate the Hat court, Contracts until the Plan had filed in bankruptcy after been and legal Hastings agreeing that he relied on the advice Paul of in to this decision. only The Defendants also assert that Kovash and Kliewer were in the because on of they signed
named lawsuit of documents behalf bankruptcy Northwestern in the proceedings. argue The Defendants give that this level of participation alone insufficient rise to personal liability they acting upon legal since were advice consistent the best of the Accordingly, with interests Northwestern. Defendants argue showing there was no evidence that these of individual benefit, defendants acted for their own at odds with Northwestern’s interests, or with an intent to harm the Retirees. that Retirees assert the motion for as a matter of properly Citing
law was
denied
the District Court.
to Poulsen v.
Industries, Inc.,
69, 626
State
(1981),
Treasure
192 Mont.
P.2d
Springs
Crystal
Trout Co. v. First
Bank of Froid,
State
225 Mont.
(1987),
Retirees assert
personally
and Schrum all
illegally
oversaw
efforts to
Top
terminate the
Hat
Contracts
pursue litigation
in
bankruptcy
Retirees
court. The
argue
malicious intent of these individuals was
established based on their
in
participation Northwestern’s decision to
Hat
terminate
without
giving
Contracts
them notice.
Additionally,
argue
the Retirees
that Kliewer and Kovash committed
perjury by
court,
signing false
in bankruptcy
declarations
with Kliewer
specifically
verifying
Finally,
court complaint.
Retirees maintain that these defendants received ‘bonuses”for their
misconduct from
Northwestern. The Defendants reply
disputing the
Poulsen,
applicability
arguing
that under Phillips v. Mont.
Assn.,
(1980),
Educ.
Corporate *23 or business contracts corporation’s of the induce breach or faith and good are in long as their actions with others relations an officer or Where corporation. interests of the for the best acts for corporation, of the the best interests against director acts benefit, plaintiff, bis to harm the or with the intent pecuniary own liable. personally he is (citations omitted); accord 425, at 158 at 610 P.2d
Phillips, 187 Mont. Similarly, Crystal 25, P.2d at 708-09. Bottrell, at 773 held Co., agents could be corporate held that Trout we Springs or their actions were personally negligent liable if were personally Co., 129, Mont. at 732 Crystal Trout Springs in nature. tortious agent’s actions forms the nature of the personal at 823. ‘The P.2d a agents that officers and general policy to the exception narrow liability for acts taken on personal shielded from corporation must be Mont, Co., Crystal Springs Trout corporation.” ofthe behalf Grizzly Mfg., 195 Mont. 636 P.2d (citing at 823 Little v. 732 P.2d (1981)). 839, 842 District Court’s denial of appeal this is an from the Because law, is whether there was a inquiry as a matter of our
judgment submitting this justify which would evidence complete absence Vader, pass judgment role is not to on which jury. to a 20. Our issue persuasive, place more or to otherwise ourselves side’s evidence was finder, jury. Here, our province as that is the the role of the fact that there was sufficient evidence review of the record demonstrates contract, abuse of the Retirees’ tortious interference with to submit against the individual prosecution and malicious claims process, testimony with and jury. jury presented defendants to the was acts of the the Retirees’ claims that the arguably supporting evidence faith tortious in nature. The defendants were in bad or individual individually-named that the defendants argued jury Retirees to the Hat Contracts Top in the termination of the personally were involved (1) the fact the tortious based on: argued this conduct was bankruptcy ratified a decision to wait until after individual defendants Retirees oftheir intention had initiated to inform the proceedings been (2) Contracts; the assertions that this Top terminate the Hat analysis respect with not based on a cost-benefit decision was (3) Northwestern; proceedings manner in which those (4) court; allegations initiated in that contrary clearly Hat Contracts was termination these just negotiated of the UPA therefore terms Furthermore, contrary probable to law and without cause.
argued individually-named that the defendants were “rewarded” for by receiving large reorganization, their actions bonuses after while the Top Hat Contracts were terminated. We conclude that the evidence before the court was sufficient defendants, individually-named
to sustain the claims denying that District Court did not err in the Defendants’ motion evidence, jury as a matter of law. From this could have concluded individual defendants conduct was tortious in Retirees, nature and directed at the or it could have concluded that this evidence a support any event, did not such conclusion. In evidence sufficient survive a motion for judgment as matter Moreover, of law. the fact found these individual defendants not liable for tortious interference with contracts or punitive damages, did prosecution but find them liable for malicious process, and abuse of demonstrates that the did not simply lump these individual defendants in with the acts of the corporate defendant *24 Northwestern, individually but instead considered their actions in relation to each claim based on the evidence before it. dissent, In his Justice Rice is critical of our resolution of this
issue, which he argues “extensively broadens our regarding law the personal liability corporate of employees in order to affirm the imposition personal liability Dissent, of here.” 105. Justice Rice’s ¶ dissent raises valid concerns on agent the issue when an is shielded personal liability from for acts done in an official and capacity taken behalf corporation. on of a Our a bright caselaw does not line draw by between conduct corporate agent tortious committed a which subjects him to personal liability, may and conduct which cause damage, party another but is in personal nonetheless not a actionable sense due to corporate presence. the It is not our intent broaden the any Instead, law this area in regard. our here is holding simply quantum based on the presented jury evidence and whether was jury it sufficient for the to infer tortious conduct on behalf of the individual In regard, defendants. we note that the Defendants requested jury clarify never a instruction for the the jury difference between conduct is in nature gives personal which tortious and rise to liability, which corporation is taken on behalf of a exempted liability. from such any We leave final pronouncements fully and are these issues case in which to a this issue
regarding court. the district before squarely denying Court err Did the District Eight: Issue Defendants’ amount against judgment motion to
post-trial
offset
Hastings ?
Paul
with
settlement
pre-trial
Retirees’
moved
case, the Defendants
in this
entered
After
Hastings’
Paul
on
damages based
compensatory
the award of
to offset
denied both
The District Court
Retirees.
with the
settlement
pre-trial
grant the offset.
and to
settlement
the confidential
motion to reveal
a
an offset was
explained
Court
order,
the District
In its
law because
under Montana
unavailable
torts, and
intentional
liable for
were found
defendants
individual
comparative
only in cases
Montana law
under
are available
offsets
that the Defendants
Moreover,
Court noted
the District
negligence.
precise
itself to a
did not lend
form which
agreed to a verdict
had
among the
apportioned
injuries
found
comparison
whether
leaving
thus
unanswered
Hastings,
Paul
Defendants
single,
caused a
Hastings
Paul
Defendants and
action of the
concerted
the Retirees.
harm to each of
indivisible
motion
post-trial
of their
the denial
appeal
now
The Defendants
they are
They argue that
damages.
compensatory
the award of
to offset
pre-trial
the amount of
tanto offset
pro
to a
entitled
As
disagree.
law. We
Hastings under Montana
Paul
settlement with
this Court to determine
matter,
virtually impossible for
it is
practical
the tortious
any liability for
Hastings
Paul
bears
to which
the extent
the Defendants. As
committed
found was
conduct which
apportion
not
Court,
the verdict form does
the District
noted
any
Hastings,
provide
or
and Paul
liability among the Defendants
Hastings resulted in
of Paul
the conduct
guidance as to whether
Yet,
harm.
as the
Retirees,
single, indivisible
much less a
harm to the
they are now
note,
such as
proa
tanto offset
Defendants themselves
Hastings, as a
if
can show that Paul
only
seeking
permitted
is
tortfeasor,
single
Retirees a
‘indivisible
caused the
joint
or
concurrent
A.T. Klemens &
Defendants. See
with the
harm”in concert
Schuffv.
59
damages
theoretically
of
should
attributed to the actions of
those
be
short,
and
Hastings.
untangle
Paul
In
the Defendants ask this Court to
jury’s
so.
upon
dissect the
verdict without
factual basis
which to do
objection,
verdict
used
Because the
form was
without
we cannot
jury’s
damages.
second
of
guess
will not now
allocation
Finally,
Equitable
in Cartwright
we note that
v.
Assur.
Life
States,
1,
(1996),
Soc.
the United
CONCLUSION jury’s We affirm the verdict and various rulings before, during However, grant District Court and after trial. we request made judgment Defendants to remand the case this to the District Court it can so that be reduced the amount payments making been has to the Retirees under terms of Hat Contracts since the this matter Affirmed originally entered. and remanded. IRIGOIN, DISTRICT JUDGE CHIEF sitting for JUSTICE McGRATH, JUSTICES LEAPHART and NELSON DISTRICT MACEK sitting JUDGE for JUSTICE concur. MORRIS RICE, dissenting. JUSTICE I dissent from the Court’s resolution Issues 2 and
would remand for a new trial. Under Issue the Court a new announces rule-that “advice-
of-counsel, when used trial, as an affirmative pled defense must be 8(c).” as such under the requirements of M. R. P. Opinion, Civ. Thus, the Court holding has overruled McGuire’s that the advice-of- "may counsel defense be under a denial in general shown the answer.” McGuire, 413, 603 184 Mont. at P.2d at (quoting Pig’n Materson v. (Cal. 1958)). Corp., 918, 929 Whistle 326 P.2d App. While I concur with conclusion, I believe is unfair to change it Northwestern to clear previously upon rule which was in effect and which it relied litigation. McGuire, during incorrectly Under the District Court ruled that Northwestern waived had the defense was not entitled jury. thereby. to so instruct the I prejudiced believe Northwestern was The Court reasons that Northwestern was not harmed because the District present concerning Court allowed Northwestern to evidence upon its reliance its counsel’s advice to defend the allegation *26 60 in admitted However, must be such evidence faith. acted in bad
it
The definition of
claim.
denial of the
general
a
support
of
event
(Second)
Restatement
from the
adopted
have
cause we
probable
of
a
(1977)
is satisfied when
cases
prosecution
malicious
for
Torts §675
he
was valid
pursued
the claim
that
reasonably believes
defendant
Hughes
of counsel.”
upon the advice
“inreliance
law
applicable
under
Thus, such
16,
214,
believe
broadens
imposition
personal
to affirm the
employees
order
corporate
Ttjhe
instructed,
illustrate,
and we have
liability here. Our cases
exception
the narrow
agent’s
actions forms
nature of
personal
must be
agents
corporation
of a
general
that officers
policy
liability for acts taken on behalf
personal
from
shielded
Bank,
v. First St.
225 Mont.
Crystal Springs Trout Co.
corporation.”
added)
(1987)
(citing Little v.
819,
(emphasis
732 P.2d
(1981)).
419,
corporate
Mont.
[T]he actions of officers Beaton and were not on behalf of benefit, pecuniary themselves as individuals or for their own nor corporation were actions the best interests ofthe they employed. They which acted within the of their scope such, employment, and in furtherance of interest. As corporate protection are entitled to the of the corporate shield from personal liability.
Bottrell,
25,
1204
the
contended the CEO of First Interstate
(FIBM)
Bancsystem Montana, Inc.,
maliciously
caused FIBM to
purchase agreement
breach its duties under the stock
the
between
parties.
rejected plaintiffs’
We
assertions that the CEO had failed to
capital
increase FIBM’s
and
the FIBM
approval
obtain
Board’s
purchase
personal
stock
for the reason that his
interest
the bank’s
Kuhns,
ownership
by doing
would have been diluted
so.
had
made false and misleading statements or taken
notes,
fraudulent actions. As the Court
it is the “personal nature” of
agents’
agents
these
actions that
permitted
personally
to be held
liable for the actions
corporation. Opinion,
took on behalf of the
Co.,
128,
822,
In Crystal Springs
Trout
The conduct
defendant
at all times as
agent
acquiescence
of the First State Bank of Froid and with the
bank,
approval
and tacit
of the directors of the
constituted willful
consisting
and wanton misconduct
of conscious breach of trust
fiduciary duty,
deception, flagrant
intentional
breach of the
legal
banking profession,
[sic]
ethical cannons
of both the
studied and extended course offraudulent
misrepresentation
knowing betrayal of a lifetime
all
friendship,
with reckless
herein,
disregard
rights
plaintiffs
for the
and interest of the
unjustified by any
“oppressive”
circumstance and “malicious”and
meaning
terms
applied
within
those
the law of torts.
Crystal
Co.,
Springs Trout
tortiously a participated in the termination of the Top Hat Contracts
during the bankruptcy
process
court
are
clearly
directed to actions
within the scope of the defendant’s employment. There is no
*28
evidence,
Crystal
Poulsen,
substantial
in
Springs
as
that these
corporate
statements,
officers made
fraudulently,
false
acted
or acted
pursuit
in
personal gain.
found that the officers were not
Further,
liable for tortious interference with the contracts.
there is no
bonuses,
evidence that the
which the
proof
Retirees assert is
personal
gain,
officers’
pecuniary
were linked to the decision to
terminate the contracts. The bonuses
provided
to the officers for
guidiñg
their role in
through
reorganization
its
emergence
entity,
as a
in
new
accordance with common business
practices. Perhaps in the times we now live such common corporate
practices
popularly thought
Nonetheless,
are
inappropriate.
be
more,
without
these bonuses do not constitute a
personal
basis for
liability
precedent.
under our
The evidence is that these rewards were
given
Thus,
for the officers’ actions
company.
on behalf of the
Retirees’
theory
directly
benefitted
from the
Hat
personally
officers
speculation
rejected
the same sort of
we
requires
situation
in Kuhns. The evidence does not demonstrate
insufficient
general
fit
rule
exception”
Retirees’ claims within
‘harrow
Co.,
liability. Crystal Springs Trout
225 Mont. at
against personal
length
close to
condemned at
Nothing
on the claim of joins the dissent of JUSTICE RICE. JUSTICE WARNER