Justia Business Law Opinion Summaries

Appellants, three licensed clinic psychologists, were former partners of Great Falls Clinic, LLP, a general limited liability partnership comprised of medical professionals. The Clinic partners, including Appellants, signed a partnership agreement stating that a partner who separates from the partnership in compliance with the agreement's terms will receive a partnership interest subject to reduction for competing after withdrawal or retirement. Appellants subsequently separated from the Clinic and filed a declaratory judgment action when the Clinic refused to pay them their full partnership interest payments. At issue was whether the agreement's restriction, which applied to those engaged in the "practice of medicine," included partners who practiced psychology after separating from the Clinic. The district court granted summary judgment for the Clinic. The Supreme Court affirmed, holding that the district court did not err by (1) holding that the Appellants engage in the "practice of medicine" as used in the partnership agreement; and (2) concluding that the parties' intention regarding the term "practice of medicine" in the language of the agreement was to include the psychologists.

Lila Clavin (Lila) and Robert Gilbert founded Pastimes and executed an operating agreement (Agreement) that provided that Pastimes would terminate upon the death of a member unless at least two members remained who agreed to continue the business. After Lila died in 2000, Gilbert and Tim Clavin, Lila's son, could not agree on the value of Lila's share of Pastimes at the time of her death. This disagreement led Tim and Gilbert to conclude that Gilbert should continue to operate Pastimes. Gilbert filed a complaint for declaratory relief on behalf of Pastimes in 2005, requesting a date-of-death valuation for Lila's interest in 2005. The district court valued the Estate's interest at the date of trial rather than at the time of Lila's death. The Supreme Court affirmed in relevant part, holding that the district court properly valued the Estate's interest at the date of trial rather than at the time of Lila's death because Gilbert's and Tim's agreement and Gilbert's continued operation of Pastimes constituted a fully executed oral agreement that modified the dissolution provision of the Agreement.

Burglington Northern & Sante Fe Railway Company (BNSF) contaminated the environment surrounding the Livingston Rail Yard (Yard). Plaintiffs, individuals who owned property adjacent to the Yard, sued BNSF in federal court for damages to their property based on claims of, inter alia, nuisance, negligence, and trespass. The magistrate judge granted summary judgment in favor of BNSF, finding that the applicable statute of limitations barred Plaintiffs' claims. The federal district court certified to the Supreme Court the question of whether the continuing tort doctrine should apply to the claims presented by Plaintiffs. The Supreme Court held (1) the continuing tort doctrine in Montana tolls the statute of limitations for property damage claims of nuisance and/or trespass resulting from contamination that has stabilized, continues to migrate, and is not readily or easily abatable; and (2) the limitations period begins to run when abatement is not reasonable or complete abatement cannot be achieved, and a permanent injury exists.

Plaintiffs, Western Tradition Partnership (WTP), Champion Painting, and Montana Shooting Sports Foundation (MSSF), sued the Montana Attorney General and the Commissioner of Political Practices, seeking a declaration that Mont. Code Ann. 13-35-227(1) violated their freedom of speech protected by the state and federal Constitutions by prohibiting political expenditures by corporations on behalf of or opposing candidates for public office. The district court declared the statute unconstitutional, granted summary judgment for Plaintiffs, enjoined enforcement of the statute, and denied the motion of Champion and MSSF for an award of attorney fees. The Supreme Court reversed and entered summary judgment in favor of Defendants after applying the principles enunciated in Citizens United v. F.E.C., holding that Montana has a compelling interest to impose the challenged rationally-tailored statutory restrictions.

Campbell Farming Corporation had its shares controlled by three shareholders: Stephanie Gately controlled fifty-one percent of the shares, and H. Robert Warren and Joan Crocker controlled the remaining forty-nine percent. Stephanie awarded her son, Robert Gately, who was president of the company, a bonus after a vote by the shareholders. Warren and Crocker filed a derivative and direct action against the company and the Gatelys in federal district court seeking to void the bonus. The district court entered judgment in favor of Defendants. The Supreme Court accepted certification from the Tenth Circuit to answer several questions and held (1) the safe harbor provision of Mont. Code Ann. 35-1-462(2)(c) can be extended to cover a conflict-of-interest transaction involving a bonus that lacks consideration and would be void under Montana common law; (2) the business judgment rule does not apply to situations involving a director's conflict-of-interest transaction; and (3) the holding in Daniels v. Thomas, Dean & Hoskins does not apply to the claim challenging Stephanie's role in the director conflict of interest transaction, but the Daniels test does apply to the claim of breach of fiduciary duties alleged by the minority shareholders against Stephanie in her capacity as majority shareholder.

Husband and Wife entered into a property settlement agreement (PSA) pursuant to their divorce in which Wife transferred all of her interest in two corporations the parties owned to Husband in exchange for Husband's payment to Wife of $250,000. The parties subsequently agreed that Wife would assume managerial and operational control of the businesses. The district court ordered Husband to provide Wife with access to the businesses' accounts and financial information and to return possession of the business records. Because of Husband's noncompliance with the court order, Wife ultimately was forced to file for Chapter 13 bankruptcy. The district court subsequently (1) found Husband to be in contempt, (2) awarded Wife sole possession of one of the businesses, (3) ordered Husband to pay Wife the receiver fees he had accumulated during his operation of the business, and (4) ordered Husband to pay Wife's attorney's fees and costs. The Supreme Court affirmed, holding that the district court did not (1) err by refusing to send the dispute to arbitration and by holding Husband in contempt; (2) deny Husband due process; and (3) err in awarding attorney's fees to Wife. Remanded for a determination of Wife's attorney's fees and costs on appeal.

In 2003, Joshua Micone applied for Medicaid benefits for himself and his family. In his applications, Joshua did not report his wife Jennifer's interest in a family limited partnership. The Department of Public Health and Human Services approved Joshua's application, and the Micone family received Medicaid benefits from 2003 to 2006. Subsequently, the Department notified Joshua that his household was ineligible for benefits paid over the past three years because of Jennifer's interest in the partnership and demanded repayment. Joshua contested the demand of benefits paid. The State Board of Public Assistance upheld a hearing officer's findings that Jennifer's interest in the partnership was a countable and available resource. The district court affirmed. On appeal, the Supreme Court affirmed, holding (1) the district court correctly concluded that that the hearing officer did not violate Mont. Code Ann. 2-4-623 when he did not issue a decision within ninety days after the case was deemed submitted; and (2) the district court correctly determined that substantial credible evidence supported the Department's finding that Jennifer's interest in the partnership was an available resource.

C.R. Weaver ordered a coffee urn from defendant Advanced Restaurant Supply for use by Glacier Kitchens, a corporation in which Weaver owns the majority of the shares. Advanced Restaurant sent a coffee urn it ordered from defendant Wilbur Curtis Manufacturing. Glacier Kitchens used the urn to provide drink for forest firefighters under its food service contract with the United States Forest Service (USFS). The coffee urn ultimately malfunctioned, and, later, Glacier Kitchens' contract with the USFS was terminated by USFS. Weaver sued defendants for breach of contract, alleging that a contract attached when he ordered the coffee urn. The district court granted summary judgment to defendants, finding that Weaver, as a shareholder in Glacier Kitchens, lacked standing to bring a claim that belonged to the corporation. The Supreme Court affirmed, holding (1) the district court properly granted summary judgment to defendants; and (2) the district court properly awarded costs to defendants.

The Montana Department of Revenue ("Department") appealed a judgment reversing the State Tax Appeal Board's ("STAB") conclusion that the Department had applied a "commonly accepted" method to assess the value of PacificCorp's Montana properties. At issue was whether substantial evidence demonstrated common acceptance of the Department's direct capitalization method that derived earnings-to-price ratios from an industry-wide analysis. Also at issue was whether substantial evidence supported STAB's conclusion that additional obsolescence did not exist to warrant consideration of further adjustments to PacifiCorp's taxable value. The court held that substantial evidence supported the Department's use of earnings-to-price ratios in its direct capitalization approach; that additional depreciation deductions were not warranted; and that the Department did not overvalue PacifiCorp's property. The court also held that MCA 15-8-111(2)(b) did not require the Department to conduct a separate, additional obsolescence study when no evidence suggested that obsolescence existed that has not been accounted for in the taxpayer's Federal Energy Regulatory Commission ("FERC") Form 1 filing. The court further held that STAB correctly determined that the actual $9.4 billion sales price of PacifiCorp verified that the Department's $7.1 billion assessment had not overvalued PacifiCorp's properties.