Justia Business Law Opinion SummariesArticles Posted in Montana Supreme Court
Jackpot Farms, Inc. v. Johns Farms, Inc.
The Supreme Court affirmed the order of the district court providing for the dissolution of the Johns Brothers Farms partnership, accounting of the partners' capital accounts, and settlement and distribution of partnership assets, holding that the district court did not err.Brothers Jerry Johns and Jule Nathan "Butch" Johns began farming together as a partnership in 1980. In 1994, the brothers each formed a corporation to hold their individual interests, and the corporations became the partners in Johns Brothers Farms. In 2013, the brothers agreed to dissolve the partnership and distribute the assets between the partners. The next year, Jerry commenced this action to dissolve Johns Brothers Farms, for settlement of capital accounts, and for distribution of partnership assets. In 2020, the district court issued its findings of fact, conclusions of law, and judgment. Butch appealed. The Supreme Court affirmed, holding that the district court (1) did not err by concluding that Jerry did not breach his fiduciary duty to Butch and the partnership; (2) did not err in its calculation of the capital account balances for Jerry and Butch; and (3) did not err by awarding Jerry the forty-acre parcel in its distribution of partnership assets. View "Jackpot Farms, Inc. v. Johns Farms, Inc." on Justia Law
Needham v. Kluver
The Supreme Court affirmed the order of the district court granting summary judgment in favor of Barbara Needham in her capacity as the personal representative of the Estate of Charles Kelly Kluver (Estate) and denying the cross-motion for summary judgment filed by Karson Kluver and Genie Land Company (collectively, Kluver), holding that the district court did not err in granting summary judgment.The Estate filed a complaint for declaratory judgment and for dissolution of Genie against Kluver, alleging declaratory judgment, breach of contract, promissory estoppel, and judicial dissolution of corporation. The Estate filed a petition for partial summary judgment. The district court granted partial summary judgment in favor of the Estate in Counts I and II and denied Kluver's cross-motion for summary judgment in its entirety. The Supreme Court affirmed, holding that the district court did not err in granting partial summary judgment in favor of the Estate. View "Needham v. Kluver" on Justia Law
In re Estate of Cote
The Supreme Court affirmed the order of the district court awarding punitive damages against Farmers State Financial Corporation for fraudulent stock conversion, holding that there was no error.Specifically, the Court held (1) the district court order restoring John Cote, Jr.’s converted stock constituted an award of compensatory damages, which enabled the district court to consider punitive damages against Farmers; (2) the district court did not err in awarding punitive damages against Farmers and did not abuse its discretion in determining the amount of the award; and (3) the award of punitive damages was not excessive and fell within acceptable constitutional and statutory parameters. View "In re Estate of Cote" on Justia Law
DeTienne v. Sandrock
The Supreme Court affirmed in part, reversed in part, and remanded in part the order of the district court that awarded Kevin DeTienne $1,291,635 in lost profits, prejudgment interest accruing from September 11, 2015, $150,000 in punitive damages, and $42,009 in attorney fees and costs, holding that remand was necessary on a portion of the judgment and reversal was required on another portion.DeTienne filed suit against Bryan Sandrock seeking a declaratory judgment that Sandrock’s transfer of certain property was unlawful. A default judgment was entered awarding damages. The Supreme Court remanded to the district court for an order setting forth evidence supporting its determination of damages. After the district court entered its judgment, Sandrock appealed. The Supreme Court held (1) remand was necessary to clarify the compensatory damages award; (2) the district court did not err in awarding punitive damages; (3) remand was necessary to recalculate the prejudgment interest on a portion of the damages award, and reversal was required on a portion of the prejudgment interest award; and (4) the district court properly awarded attorney fees to DeTienne, and DeTienne was entitled to an award of reasonable costs and attorney fees incurrent during the litigation on remand, as well as attorney fees on appeal. View "DeTienne v. Sandrock" on Justia Law
McCann v. McCann
The Supreme Court affirmed the district court’s entry of judgment as a matter of law in favor of Defendants, corporate entities and individuals, at the close of Plaintiff’s case-in-chief in the bench trial held on her claims, holding that there was no prejudicial error in the proceedings below.On the scheduled day for trial, the district court noted that Plaintiff’s claims were “not entirely clear” but understood them to constitute a derivative action seeking forced dissolution of the corporations. Plaintiff’s evidence in support of her case focused primarily on allegations of corporate records mismanagement. At the close of Plaintiff’s case-in-chief, the district court granted judgment as a matter of law for Defendants. The court then granted an individual defendant attorney fees pursuant to the equity exception to the American Rule. The Supreme Court affirmed and granted Defendants’ request to declare Plaintiff a vexatious litigant, holding (1) the district court did not err in granting judgment in favor of Defendants; (2) the district court did not err in granting attorney fees; (3) Plaintiff was not denied a fair trial; and (4) the district court did not abuse its discretion in the administration of the trial. View "McCann v. McCann" on Justia Law
Lenz v. FSC Securities Corp.
The Supreme Court affirmed the order of the district court staying proceedings and compelling Investors to submit all asserted claims against FSC Securities Corp. (FSC) and Rocky Mountain Financial Advisors, LLC and Eric Roshoven (collectively, RMF) to arbitration.On the recommendation of RMF brokers and advisors, Investors purchased securities in Invizeon Corporation through FSC. After Invizeon failed, Investors sued FSC and RMF, alleging that FSC failed adequately to supervise its registered RMF representatives and that RMF wrongfully induced Investors to invest in Invizeon on various grounds. FSC and RMF moved to stay proceedings and compel arbitration before the Financial Industry Regulatory Authority (FINRA). After a hearing, the district court issued an order compelling Investors to submit their claims to arbitration as provided in FSC customer agreement forms. The Supreme Court affirmed, holding that the district court (1) did not err in concluding that Investors knowingly, voluntarily, and intelligently assented to the terms of the standard-form arbitration agreements and validly waived their Montana constitutional rights to full legal redress and jury trial; (2) correctly concluded that the standard-form FSC arbitration agreements were not unconscionable; and (3) correctly compelled Investors to submit their claims against FSC and RMF to arbitration. View "Lenz v. FSC Securities Corp." on Justia Law
Ballou v. Walker
The Supreme Court affirmed in part and reversed and remanded in part the judgment of the district court that thwarted Plaintiff’s attempt to expel her brother, Defendant, from the family’s limited liability partnership and that dissolved the partnership between them. Defendant counterclaimed on the issue of attorneys fees, arguing that the district court erred in awarding fees to Plaintiff. The Supreme Court held (1) the district court erred by concluding that Defendant was not subject to the buy-out provisions of the partnership agreement and that judicial dissolution of the partnership was necessary; and (2) the district court was divested of its authority to award attorneys’ fees more than sixty days after the motion for fees was filed. View "Ballou v. Walker" on Justia Law
Henry v. Sullivan
Thomas Cherewick and Ronald Henry and Landowners all owned property in Remington Ranch, a real estate development comprising several subdivisions. Landowners filed a complaint against Cherewick, Henry, and the development’s property owner’s association, alleging, as relevant to this appeal, that Henry and Cherewick took actions that were either unauthorized or exceeded their authority as directors and officers of the association. Henry and his company, Western Investments, Inc., brought several counterclaims against Landowners, including defamation and tortious interference with business relations and prospective economic opportunity. The district court granted summary judgment against all parties on their respective claims. The Supreme Court affirmed, holding that the district court (1) did not err in granting Landowners summary judgment on Henry’s and Western Investment’s counterclaims for conspiracy and other alleged tortious conduct; and (2) did not abuse its discretion in denying Henry’s and Cherewick’s motion for attorney fees after they prevailed on Plaintiff’s claims against them. View "Henry v. Sullivan" on Justia Law
Junkermier, Clark, Campanella, Stevens, P.C. v. Alborn, Uithoven, Riekenberg, P.C.
Junkermeir, Clark, Campanella, Stevens, P.C. (Junkermeir) was a Montana accounting firm with offices in several Montana cities. Junkermeir lost its Bozeman branch office after the majority of its Bozeman shareholders decided to start their own firm, taking a significant number of Junkermier’s clients with them. Junkermeir filed a complaint against the former shareholders, claiming breach of contract and breach of fiduciary duty. The district court dismissed the breach of contract claim on summary judgment, concluding that the contractual covenant restricting competition that Junkermeir sought to enforce was unenforceable. After a trial, the district court ruled that most of the former shareholders owed no legal duty to Junkermeir and that while the remaining former shareholder breached his fiduciary duty to Junkermeir, Junkermeir failed to prove awardable damages from that breach. The Supreme Court reversed in part and affirmed in part, holding that the district court (1) erred in ruling that the agreement was not an enforceable contract; and (2) did not err in concluding that only one former shareholder breached a fiduciary duty but erred in concluding that Junkermeir was not entitled to collect any damages stemming from that breach. View "Junkermier, Clark, Campanella, Stevens, P.C. v. Alborn, Uithoven, Riekenberg, P.C." on Justia Law
Kulko v. Davail
David Kulko, Ilsa Kaye, and Michael Horn were the sole shareholders, directors, and officers of Davail, Inc. Kulko sued Kaye, Horn, and Davail for dissolution of Davail, shareholder oppression, fraudulent conduct, and breach of fiduciary duties. Eventually, the parties agreed to dissolution of Davail. The district court entered an order granting dissolution and appointed a receiver. The court then dismissed Kulko’s claims for lack of subject matter jurisdiction, concluding that dissolution is an exclusive remedy and that dissolution of Davail eliminated the case or controversy. The Supreme Court reversed and remanded for reinstatement of the case, holding that the district court (1) erred when it concluded that Kulko could not pursue punitive or compensatory damage claims against Davail’s other shareholders because he already sought and obtained dissolution of Davail; and (2) erred in dismissing Kulko’s claim because the court did not lose subject matter jurisdiction over the case upon entering the dissolution order. View "Kulko v. Davail" on Justia Law