Winslow v. Montana Rail Link, Inc. , 328 Mont. 260 ( 2005 )

No. 03-743
IN THE SUPREME COURT OF THE STATE OF MONTANA
2005 MT 217GARY WINSLOW,
Plaintiff and Appellant,
v.
MONTANA RAIL LINK, INC., a Montana corporation,
Defendant, Respondent and Cross-Appellant.
APPEAL FROM: The District Court of the First Judicial District,
In and For the County of Lewis and Clark, Cause No. CDV 97-552,
Honorable Thomas C. Honzel, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Erik B. Thueson, Thueson Law Office, Helena, Montana
Dennis Patrick Conner, Conner & Shannon, Great Falls, Montana
James T. Towe, Towe Law Office, Missoula, Montana
For Respondent:
Randy Cox and Natasha Prinzing Jones, Boone & Karlberg,
Missoula, Montana
David Potter and Jennifer Eggers, Oppenheimer, Wolff & Donnelly,
Minneapolis, Minnesota
Submitted on Briefs: June 8, 2004
Decided: September 6, 2005
Filed:
__________________________________________
Clerk
Justice Jim Rice delivered the Opinion of the Court.
¶1 This case involves claims of negligent management resulting in discharge from
employment brought by Gary Winslow (Winslow) against Montana Rail Link, Inc. (MRL),
in the First Judicial District Court, Lewis and Clark County. The District Court initially
dismissed Winslow’s claim for lack of jurisdiction, which was reversed by this Court in
Winslow v. Montana Rail Link, Inc., 2000 MT 292, ¶ 27, 302 Mont. 289, ¶ 27, 16 P.3d 992,
¶ 27 (Winslow I). After remand, the case went to trial and the jury concluded that MRL had
acted negligently and awarded Winslow compensatory damages. The jury further
determined that punitive damages should be assessed, but specifically found that MRL had
not acted with malice regarding its termination of Winslow’s employment, an apparent
inconsistency. The District Court then ruled that, pursuant to § 27-1-221, MCA, a finding
of malice is a prerequisite for imposition of punitive damages, and dismissed the jury without
allowing deliberation on punitive damages. Winslow appeals from the rulings of the District
Court, but does not challenge the jury’s verdict on his negligence claim and the damages
awarded thereunder. He seeks only “a new trial limited to a determination of the amount of
punitive damages.” Additionally, Winslow asks this Court to grant attorney fees and
sanctions.
¶2 Given this posture of the case, we conclude it is unnecessary to address a number of
issues Winslow has raised on appeal, as they are directed to the trial and the unchallenged
verdict on Winslow’s negligence claim, including whether MRL: (1) made misrepresenta-
tions to the jury; (2) interjected collateral sources; (3) presented an unlawful defense that its
2
compliance with the grievance procedure under the collective bargaining agreement absolved
it of liability; and whether the District Court: (4) deprived Winslow of his right to present
evidence that MRL had an ongoing hidden business plan designed to discourage the reporting
of work-related injuries; and (5) failed to instruct the jury that an award of interest could be
awarded pursuant to § 27-1-212, MCA.1
¶3 MRL cross-appeals from the District Court’s denial of its summary judgment and
Rule 50(b), M.R.Civ.P., motions. We affirm all issues.
¶4 The following issues are dispositive on appeal:
¶5 Did the District Court err in denying MRL’s summary judgment and Rule 50(b)
motions by incorrectly concluding that § 39-2-703, MCA, provides Winslow with a statutory
cause of action?
¶6 Did the District Court err in denying MRL’s motion for summary judgment and its
subsequent Rule 50(b) motion on the merits of Winslow’s negligent management claim?
¶7 Did the District Court err by not allowing the jury to deliberate on the amount of
punitive damages?
1
Within his extensive briefing, Winslow also offers a very brief request that the
Court strike the jury’s determination that he was contributorily negligent on the grounds
that the jury’s determination that punitive damages should be assessed makes
contributory negligence irrelevant, and that contributory negligence is not mentioned by
the mismanagement statute. We conclude that our resolution of the punitive damage
issue herein resolves this request and that contributory negligence was a proper
consideration herein. However, we reserve further judgment on these issues in some case
when they have been fully briefed.
3
¶8 Did the District Court abuse its discretion in concluding that MRL properly responded
to discovery and should not be subject to sanctions?
FACTUAL AND PROCEDURAL BACKGROUND
¶9 Winslow, who is a member of the Brotherhood of Locomotive Engineers (BLE) labor
union, obtained employment at MRL as a switchman in 1988. The terms of Winslow’s
employment agreement were governed by a Collective Bargaining Agreement (CBA)
between BLE and MRL. The CBA provided that Winslow, after completing the
probationary period, could not be dismissed absent just cause and without an impartial fact-
finding hearing, which included mandatory procedures concerning the assessment of
discipline and subsequent internal appeals. In addition, MRL required its employees to be
honest, and to report all information related to on-duty and off-duty injuries affecting job
performance.
¶10 On March 13, 1992, Winslow’s treating physician, Dr. Earl Book (Dr. Book),
diagnosed Winslow with a left femoral hernia. On March 24, 1992, Winslow filed an injury
report with MRL claiming that he “strained something,” but did not disclose that a hernia had
been diagnosed two weeks earlier. Winslow claimed that he did not think he had to inform
MRL about the hernia diagnosis because it did not interfere with his ability to work. Even
though Dr. Book recommended hernia-repair surgery, Winslow opted to not seek further
treatment at that time because the pain dissipated. However, between 1992 and 1995
Winslow experienced increasing pain in his groin area.
4
¶11 On September 7, 1995, Winslow attempted to “throw” a railroad switch, and as a
result felt a hot, burning pain in his groin, inhibiting his ability to walk. Winslow filed an
MRL injury report describing the pain, and signed a written authorization allowing MRL to
obtain medical information from “any physician . . . who has examined or treated [Winslow]
in regard to the injury.” The following day, Dr. Book examined Winslow and concluded that
the groin pain was related to the hernia he had originally diagnosed in 1992. Upon the
advice of Dr. Book, Winslow decided to have hernia-repair surgery.
¶12 On September 8, 1995, Winslow informed his supervisor, Tim VanOrden
(VanOrden), that he had a hernia and was making arrangements to have it repaired. MRL’s
claims manager, Mark Bjorlie, commenced an investigation and obtained Winslow’s medical
records which disclosed that his hernia was first diagnosed in 1992. Although Winslow
would claim that he never represented to anyone that the hernia was caused by the throwing
of the switch on September 7, 1995, MRL asserted in later proceedings that Winslow led
VanOrden to believe that his hernia initially appeared on September 7, 1995, and that the
hernia-repair surgery was first recommended by Dr. Book the following day.
¶13 After Winslow’s hernia-repair surgery, he submitted his medical bills to MRL for
payment. In October Winslow was briefly re-hospitalized to be tested for possible blood
clots, which further increased medical costs. Thereafter, Winslow attempted to pay the
medical expenses through Blue Cross/Blue Shield (Blue Cross), which administers MRL’s
self-insured medical plan.
5
¶14 Winslow returned to work in October 1995 and began to receive notices from Blue
Cross that indicated it was not paying Winslow’s medical bills. Winslow gave the notices
to VanOrden. MRL subsequently sent Winslow a written order requiring him to attend a
fact-finding hearing to address his “failure to provide factual information regarding [his]
injury.”
¶15 The MRL fact-finding hearing commenced on January 10, 1996, the purpose and
effect of which were contested at trial. Winslow attended, but was not represented by
counsel. At the hearing, VanOrden stated that Winslow led him to believe that the hernia
first appeared on September 7, 1995, and that surgery was first recommended at that time.
MRL noted that Winslow initially denied having knowledge of the hernia in 1992, but finally
admitted that he was aware of it when confronted with his medical records, and argued that
Winslow’s failure to report that he had a hernia three years earlier rendered his claim
fraudulent. Winslow countered by arguing that MRL presented no evidence at the hearing
that he had represented that his hernia was as a direct result of the switch incident, that he
had not been dishonest with VanOrden, and that his injury report was accurate.
¶16 On January 19, 1996, MRL notified Winslow that he was being terminated from
employment because Winslow had been repeatedly dishonest, and had failed to report all of
the facts to MRL surrounding his hernia in violation of MRL rules. MRL further concluded
that Winslow’s hernia was not work-related, and informed Winslow’s medical providers to
this effect.
6
¶17 Following the termination of his employment, and after MRL denied Winslow’s
internal appeal, Winslow submitted his case to arbitration before the Special Board of
Adjustment (SBA) as provided in the CBA. The SBA met on December 20, 1996, affirmed
Winslow’s termination, and concluded that Winslow received a fair and impartial fact-
finding hearing.
¶18 On August 29, 1997, Winslow filed a complaint in the First Judicial District Court,
Lewis and Clark County, claiming that MRL “negligently mismanaged its investigation” and
that he was wrongfully discharged. Winslow argued that, pursuant to § 39-2-703(1), MCA,
MRL’s termination constituted “mismanagement and neglect.” Section 39-2-703(1), MCA,
provides in pertinent part:
Every person or corporation operating a railway or railroad in this state is
liable for all damages sustained by any employee of such person or
corporation in consequence of the neglect of any other employee thereof or by
the mismanagement of any other employee thereof and in consequence of the
willful wrongs, whether of commission or omission, of any other employee
thereof when such neglect, mismanagement, or wrongs are in any manner
connected with the use and operation of any railway or railroad on or about
which he is employed.
¶19 The District Court initially dismissed Winslow’s complaint for lack of jurisdiction on
MRL’s Rule 12(h), M.R.Civ.P., motion, concluding that Winslow’s claim “requires
interpretation of the CBA and is therefore preempted” by the Railroad Labor Act (RLA), 45
U.S.C. §§ 151-188. Winslow I, ¶ 26. However, this Court reversed, concluding that the
plain language of Winslow’s complaint properly invoked the mismanagement provisions of
7
§ 39-2-703, MCA, made no reference to the CBA, and therefore was not preempted by the
RLA. Winslow I, ¶ 27.
¶20 After remand, the case proceeded to jury trial on Winslow’s claims that MRL was
liable for negligent mismanagement and retaliatory discharge. On June 11, 2003, the jury
returned a verdict concluding that each party was negligent, allocating 61.25 percent liability
to MRL, and 38.75 percent liability to Winslow. Applying this determination to the damage
award, the District Court entered a judgment against MRL in the amount of $384,328.43.
After the jurors were polled about the verdict, one of the jurors was excused to fulfill a
commitment he had explained during jury selection. The next day, the parties met in camera
to discuss the apparent inconsistency in the jury’s special verdict, on punitive damages–that
MRL had not acted with malice with respect to its termination of Winslow, but that punitive
damages should nonetheless be assessed. After taking arguments, the District Court
concluded that punitive damages could not be assessed under the verdict pursuant to § 27-1-
221, MCA, which requires a finding of actual malice or actual fraud. Consequently, the
District Court accepted the jury’s verdict and released the eleven remaining jurors.
¶21 Throughout the proceeding, Winslow asserted that MRL engaged in discovery abuses
which delayed and multiplied the proceedings and prevented him from receiving a fair and
speedy trial. However, the District Court declined to impose sanctions.
¶22 On July 7, 2003, Winslow filed a notice of appeal. On July 29, 2003, MRL filed a
notice of cross-appeal.
STANDARD OF REVIEW
8
¶23 This Court reviews a district court’s ruling on summary judgment de novo. Wombold
v. Assocs. Fin. Servs. Co. of Mont. Inc., 2004 MT 397, ¶ 29, 325 Mont. 290, ¶ 29, 104 P.3d
1080, ¶ 29. Thus, we apply the same Rule 56, M.R.Civ.P., criteria as applied by the district
court. Peyatt v. Moore, 2004 MT 341, ¶ 13, 324 Mont. 249, ¶ 13, 102 P.3d 535, ¶ 13.
Summary judgment is proper only when no genuine issues of material fact exist and the
moving party is entitled to judgment as a matter of law. Watkins Trust v. Lacosta, 2004 MT
144, ¶ 16, 321 Mont. 432, ¶ 16, 92 P.3d 620, ¶ 16 (citing Rule 56(c), M.R.Civ.P.).
¶24 A judgment as a matter of law entered pursuant to Rule 50(b), M.R.Civ.P., may be
granted only when it appears, as a matter of law, that a party could not prevail upon any view
of the evidence. Massee v. Thompson, 2004 MT 121, ¶ 25, 321 Mont. 210, ¶ 25, 90 P.3d
394, ¶ 25. Motions for judgment as a matter of law are proper only when there is a complete
absence of evidence to warrant submission to a jury. Kneeland v. Luzenac Am. Inc., 1998
MT 136, ¶ 53, 289 Mont. 201, ¶ 53, 961 P.2d 725, ¶ 53.
¶25 Prejudice is never presumed on appeal, and a judgment will not be reversed merely
because the lower court erred. In order to reverse, it must affirmatively appear that the error
has affected substantial rights of the defendant regarding the merits of the case. State v.
DeTienne (1985), 218 Mont. 249, 257, 707 P.2d 534, 539.
¶26 This Court generally will defer to the decision of a trial court regarding sanctions for
failure to comply with discovery procedures because the trial court is in the best position to
know whether parties are disregarding the rights of opposing parties in the course of
litigation. Lewistown Propane Co., v. Moncur, 2002 MT 349, ¶ 22, 313 Mont. 368, ¶ 22, 61
9
P.3d 780, ¶ 22. We review discretionary district court rulings for abuse of discretion.
Anderson v. Werner Enter., Inc., 1998 MT 333, ¶ 13, 292 Mont. 284, ¶ 13, 972 P.2d 806,
¶ 13. Moreover, the party assigning error to the trial court’s discovery rulings must show
prejudice. Anderson, ¶ 13.
DISCUSSION
¶27 Did the District Court err in denying MRL’s summary judgment and Rule 50(b)
motions by incorrectly concluding that § 39-2-703, MCA, provides Winslow with a
statutory cause of action?
¶28 On cross-appeal, MRL argues that § 39-2-703, MCA, does not provide Winslow with
a statutory “mismanagement” cause of action. MRL explains that this Court concluded, upon
rehearing in Dillon v. Great N. Ry. (1909), 38 Mont. 485, 100 P. 960, that:
Upon further consideration . . . we think there is not any room for doubt that
in enacting sections 5251 and 5252, Rev. Codes [later codified as § 39-2-703,
MCA], the Legislature did not intend to create any new right of action, but
merely recognized a right of action existing at common law and sought to
make that right available, notwithstanding the negligence of a fellow servant.
Dillon, 38 Mont. at 504, 100 P. at 966. MRL explains that the Legislature did not recognize,
let alone codify, a common-law action for mismanagement of employee terminations. MRL
argues that Winslow I did not precisely consider whether § 39-2-703(1), MCA, provides
plaintiffs with a statutory cause of action, but merely “assumed” that it did, and,
consequently, Winslow I, in contrast to Dillon, cannot be considered stare decisis on this
issue.
10
¶29 We reasoned in Winslow I that § 39-2-703, MCA, “in very broad language,” provides
that railways are “‘liable for all damages sustained by any employee’ as a consequence of
the ‘mismanagement’ of any other employee when such mismanagement is ‘connected with
the use and operation’ of any railway.” Winslow I, ¶ 19 (citations omitted). We concluded
that § 39-2-703, MCA, is not limited to personal injuries caused by co-workers to the
exclusion of mismanagement in the handling of an employee termination. Winslow I, ¶¶ 19-
20. We explained that “[a]lthough personal injury resulting from the neglect of a co-worker
would be included within the ambit of the statute, so are damages which result from
mismanagement connected with the operation of the railroad.” Winslow I, ¶ 19.
¶30 When this Court, in deciding a case presented, states a principle or rule of law
necessary to the decision, such pronouncement becomes the law of the case and must be
adhered to throughout its subsequent progress, both in the trial court and upon subsequent
appeal. Marie Deonier v. Paul Revere Life Ins. Co., 2004 MT 297, ¶ 75, 323 Mont. 387,
¶ 75, 101 P.3d 742, ¶ 75. The issue of whether § 39-2-703, MCA, provides Winslow with
a statutory cause of action was sufficiently addressed in Winslow I to serve the purposes of
law of the case and will not be revisited here. Therefore, we conclude that the District Court
did not err in denying MRL’s summary judgment and Rule 50(b), M.R.Civ.P., motions based
upon the law of the case established in Winslow I.2
2
We further clarified the statutory interpretation of § 39-2-703, MCA, in Haux v.
Mont. Rail Link., Inc., 2004 MT 233, ¶ 14, 322 Mont. 456, ¶ 14, 97 P.3d 540, ¶ 14
(“Although MRL argues, quoting Dillon . . . that the ‘legislature did not intend to create
any new right of action, but merely recognized a right of action existing at common
law’. . . the language of the statutory section clearly provides for a right of action for
11
¶31 Did the District Court err in denying MRL’s motion for summary judgment and
its subsequent Rule 50(b) motion on the merits of Winslow’s negligent management
claim?
¶32 Alternatively, MRL argues that the District Court erred when it denied its motion for
summary judgment and its subsequent Rule 50(b) motion for judgment as a matter of law on
Winslow’s negligent mismanagement claim. MRL explains that the holding in Winslow I
was based upon a motion to dismiss and was determined solely upon the allegations of the
pleadings. MRL therefore contends that the Winslow I Court did not substantively determine
whether Winslow’s claims were preempted by the RLA or the Employee Retirement Income
Security Act (ERISA). In light of the evidentiary record, which was not reviewed in Winslow
I, MRL contends that the issue of preemption must be reconsidered.
¶33 Regarding preemption under the RLA, MRL argues that Winslow’s claim of negligent
mismanagement is based directly on rights created by Winslow’s CBA and therefore
constitutes a “major dispute” as defined under the RLA, and therefore subject to the RLA’s
mandatory arbitral mechanism for settlement. MRL explains that a major dispute under the
RLA relates to the formation or modification of the contractual rights provided for by a CBA,
whereas minor disputes involve interpretation or application of agreements covering rates of
pay, rules, or working conditions. MRL argues that Winslow challenged the grievance
process and work rules thereby attempting to alter existing contractual rights which
constitutes a “major dispute.” MRL contends that Winslow presented his state-law claim of
mismanagement.” (emphasis omitted)).
12
negligent mismanagement in a manner that necessarily required the court or jury to interpret
existing provisions of his CBA, and that this fact alone mandates preemption since claims
“founded directly on rights created by [CBAs]” are preempted by the RLA.3 Cramer v.
Consol. Freightways, Inc. (9th Cir. 2001), 255 F.3d 683, 689. Thus, in consideration of the
evidence adduced, MRL argues that this Court must reverse the District Court’s denial of
MRL’s motion for judgment as a matter of law because Winslow’s negligent mismanagement
claim is preempted by the RLA.
¶34 Winslow responds that the RLA does not preempt his negligent mismanagement claim
because the law of the case doctrine applies per Winslow I, and therefore the issue may not
be re-litigated. Winslow also explains that other jurisdictions have recognized state law
claims that are not preempted by the RLA. Moreover, Winslow argues that he continually
objected to the relevancy and admissibility of evidence of the CBA’s grievance process and
decision that MRL offered, and that he therefore had a right to attack the validity and fairness
of the grievance process, the decision against Winslow arising therefrom, and whether MRL
had properly complied with the process. Consequently, Winslow asserts that MRL
misrepresents that the CBA’s presence in the case was due solely to Winslow’s own claims.
3
MRL explains that Winslow made numerous claims founded upon the terms of
the CBA including: (1) that MRL acted unreasonably by failing to follow CBA
procedures; (2) that MRL failed to provide Winslow rights that he was entitled to under
the CBA; (3) that the arbitration process created in the CBA did not adequately protect
Winslow during MRL’s fact-finding process; and (4) that the termination process
established in the CBA, was unreasonable.
13
¶35 The United States Supreme Court has held that a state claim is independent of a CBA
for preemption purposes so long as the state claim can be resolved without interpreting the
CBA itself. Lingle v. Norge Div. of Magic Chef (1988), 486 U.S. 399, 410, 108 S. Ct. 1877,
1883, 100 L. Ed. 2d 410, 421. In Hawaiian Airlines, Inc. v. Norris (1994), 512 U.S. 246, 257,
114 S. Ct. 2239, 2249, 129 L. Ed. 2d 203, 214, the United States Supreme Court explained that
“substantive protections provided by state law, independent of whatever labor agreement
might govern, are not pre-empted under the RLA.” See also Missouri Pac. R. Co. v.
Norwood (1931), 283 U.S. 249, 51 S. Ct. 458, 75 L. Ed. 1010. The United States Supreme
Court also held in Terminal R.R. Assn. of St. Louis v. Trainmen (1943), 318 U.S. 1, 6-7, 63
S. Ct. 420, 423, 87 L. Ed. 571, 578, that “the enactment by Congress of the [RLA] was not
a preemption of the field of regulating working conditions themselves . . . .” The United
States Supreme Court further limited the scope of RLA preemption in Andrews v. Louisville
& Nashville R. Co. (1972), 406 U.S. 320, 324, 92 S. Ct. 1562, 1565, 32 L. Ed. 2d 95, 97, when
it held that a state law claim of wrongful termination was preempted, not because the RLA
broadly preempts state law claims based on discharge or discipline, but because the
employee’s claim was firmly rooted in a breach of the CBA itself.
¶36 Winslow has consistently argued that his theory did not involve the CBA, but instead
pertained to allegations that MRL used a false pretext to fire him in order to further a scheme
designed to intimidate railroad workers so that they would not file injury reports. After
review of the record, we conclude that Winslow’s claims are not “firmly rooted” in a breach
of the CBA itself, but instead are premised upon the provisions of § 39-2-703, MCA, which
14
is a state law claim. See Winslow I, ¶ 27. Thus, we conclude that the District Court properly
denied MRL’s motion for summary judgment and its subsequent Rule 50(b), M.R.Civ.P.,
motion as to RLA preemption.
¶37 As to ERISA, MRL argues that Winslow’s state law claims about improper handling
of medical benefits and negligent management of employee benefit plans are preempted by
ERISA, which is a “comprehensive statute designed to promote the interests of employees
and their beneficiaries in employee benefits plans.” Shaw v. Delta Air Lines, Inc. (1983),
463 U.S. 85, 90, 103 S. Ct. 2890, 2896, 77 L. Ed. 2d 490, 497. Winslow responds that MRL
did not properly raise its ERISA preemption argument on appeal and waived it as an
affirmative defense under Rule 8(c), M.R.Civ.P.
¶38 Other jurisdictions have held that ERISA preemption in benefits-due actions “must
be pleaded timely as an affirmative defense.” Wolf v. Reliance Std. Life Ins. Co. (1st Cir.
1995), 71 F.3d 444, 449-50. This Court has previously held that “an affirmative defense is
waived if not set forth affirmatively.” Nitzel v. Wickman (1997), 283 Mont. 284, 312, 940
P.2d 451, 456. Moreover, “an affirmative defense . . . is waived if it is not raised in the
answer to a claim.” Marias Healthcare Services, Inc. v. Turenne, 2001 MT 127, ¶ 9, 305
Mont. 419, ¶ 9, 28 P.3d 491, ¶ 9. Because MRL failed to raise its ERISA argument until
years after the commencement of the litigation, we conclude the District Court properly
denied MRL’s ERISA defense on the basis of waiver.
¶39 Did the District Court err in disallowing the jury to deliberate on the amount of
punitive damages?
15
¶40 The jury returned a verdict regarding punitive damages which determined that MRL
did not act with malice with respect to its termination of Winslow, but that punitive damages
should be assessed. Immediately after the verdict was entered, one of the twelve jurors was
excused by the District Court, precluding further deliberations unless undertaken by “less
than twelve” jurors pursuant to § 3-15-106, MCA, which permits such deliberations only
upon agreement between the parties and approval of the court. Subsequent to the dismissal
of the juror, the following conversation occurred in camera:
THE COURT: The other issue is that I did release [the juror]. [The juror] told
us when he started this three weeks ago that he had to be out of town . . . on
the 12th and I believe I said at that time we were going to be done by the 12th.
We are still not done, although it may be that the jury will not be asked to do
anything tomorrow. That remains to be seen as to what happens. But in any
event, I did excuse him because he said he would not be available from the
12th on. I understand that could possibly cause a problem, but that’s what I
did. Go ahead, Mr. Conner, you wanted to make a record of that–Mr.
Thueson.
MR. THUESON: No, Your Honor, we’re okay with it.4
MR. CONNER: Just what is the defense position though? Did they consent to
this?
MR. POTTER: We’re going to take the Court’s invitation and appear
tomorrow morning and put our position on the –
MR. CONNER: Are they going to consent?
MR. COX: We don’t have to state that right now and we’re not going to.
....
4
Mr. Thueson and Mr. Conner are counsel for Winslow. Mr. Cox and Mr. Potter
are counsel for MRL.
16
MR. POTTER: We were not consulted, and we don’t take a position. We’ll
let you know in the morning.
THE COURT: Okay.
Although Winslow’s counsel did not object to the dismissal of the juror, MRL took the
position the following morning that it would not consent to a jury of eleven members and
noted that it was not consulted in the matter prior to the juror’s dismissal.
¶41 Winslow argues that MRL used “offensive trial tactics” by sitting on its hands when
the District Court informed the parties that it had dismissed one of the twelve jurors and
objecting to the dismissal only after the juror was no longer available, and therefore, the loss
of a juror should not bar his claim to a new trial on punitive damages. MRL contends that
it lost the benefit of a full jury through no fault of its own, and that an eleven-person jury
could not validly consider punitive damages because the requirements of § 3-15-106(1),
MCA, including MRL’s consent in open court to deliberation by less than twelve jurors, had
not been established.5
¶42 On appeal, Winslow does not take issue with the District Court’s dismissal of the
juror for the juror’s pre-announced commitment. Although that position is consistent with
his comments at trial, it would appear that Winslow had no timely opportunity to object
because he learned of the dismissal only after it had occurred. That notwithstanding, we
5
“A trial jury consists of 12 persons or, with the approval of the court, it may
consist of any number less than 12 upon which the parties agree in open court.” Section
3-15-106(1), MCA.
17
cannot accept Winslow’s argument that MRL somehow waived its objection to the juror’s
dismissal by accepting the District Court’s invitation to place its position on the record the
next morning, when it objected. Under these circumstances, we cannot conclude that MRL
either consented or acquiesced to the juror’s dismissal.
¶43 Consequently, given the District Court’s unchallenged dismissal of the juror, however
troubling, the only way the trial could have continued was with less than twelve jurors
pursuant to § 3-15-106(1), MCA. That provision requires the parties to agree in open court
to deliberation by a lesser number of jurors. Such an agreement did not exist here, as MRL
did not consent in open court to a jury of less than twelve persons.
¶44 We must conclude that the District Court did not err by not allowing the jury to
deliberate regarding punitive damages. Because, for this reason, deliberations on punitive
damages could not have occurred in any event, we need not reach the District Court’s
interpretation of the verdict pursuant to § 27-1-221, MCA, or the other issues Winslow raises
relative to punitive damages, including challenges to the punitive damage instructions, the
verdict form and the jury’s determination of contributory negligence by Winslow.
¶45 Did the District Court abuse its discretion in concluding that MRL properly
responded to discovery and should not be subject to sanctions?
¶46 Winslow argues that MRL persistently engaged in discovery abuses that delayed the
proceedings, prevented a fair trial, and precluded the admission of relevant evidence.
Winslow contends that MRL should be sanctioned for obstructing witnesses, concealing
information, and for improper use of boilerplate objections. MRL responds by arguing that
18
the District Court, after thorough review, concluded that MRL properly responded to
discovery, did not obstruct witnesses, did not conceal information, and did not improperly
state objections.
¶47 This Court has previously held that when litigants and their attorneys abuse the
Montana Rules of Civil Procedure, they are subject to sanctions. Bulen v. Navajo Ref. Co.,
Inc., 2000 MT 222, ¶ 19, 301 Mont. 195, ¶ 19, 9 P.3d 607, ¶ 19. Furthermore, when litigants
use willful delay, respond evasively, or disregard court directions as part and parcel of their
trial strategy, they must suffer the consequences. Bulen, ¶ 19.
¶48 The lengthy litigation which marked this matter involved numerous unique questions
of law leading to the first appeal in Winslow I, which addressed the legal validity of
Winslow’s claims after they had been dismissed by the District Court. On remand, the
prosecution of Winslow’s claims involved difficult issues of proof. Plaintiff’s counsel
skillfully established Winslow’s claims in the face of resolute advocacy by defense counsel.
It is in the context of this long and difficult litigation that the sanctions issues arise.
¶49 We review a district court’s sanction orders under the deferential abuse of discretion
standard “because the trial court is in the best position to know whether the parties are
disregarding the rights of opposing parties in the course of litigation and which sanctions for
such conduct are most appropriate.” Lewistown Propane, ¶ 22 (quoting McKenzie v.
Scheeler (1997), 285 Mont. 500, 506, 949 P.2d 1168, 1172). Even so, we have reviewed
each of the numerous motions to compel, for protective orders, and for sanctions and the
orders issued by the District Court in response thereto. After that careful review, and in the
19
context of this complex and groundbreaking litigation, we cannot conclude that the District
Court abused its discretion, nor that Winslow has established that the trial court’s discovery
rulings caused “prejudice” or “materially affected [his] substantial rights.” Anderson, ¶ 13.
We therefore affirm the District Court on these issues.
¶50 Affirmed.
/S/ JIM RICE
We concur:
/S/ KARLA M. GRAY
/S/ W. WILLIAM LEAPHART
Justice Patricia O. Cotter concurs.
¶51 I concur in the ultimate result reached by the Court, but I disagree with the Court’s
analysis of the issue of the dismissed juror and the denial of further deliberations on punitive
damages.
¶52 At ¶ 42, the Court correctly notes that Winslow had no opportunity to object to the
dismissal of the juror because he did not learn of it until after it had occurred. The Court,
20
however, declines to conclude that the District Court erred by dismissing the juror sua
sponte, because Winslow failed to specify on appeal that such action was error. So, the
Court calls the court’s dismissal of the juror “troubling,” and leaves it at that. I do not share
the Court’s reluctance to address whether error occurred, as I think an important component
of our job is to identify error when we see it, so that the same error might be avoided in the
future.
¶53 I would conclude that, in dismissing the juror without the advance consent of the
parties, the District Court erred. By doing so, the court handed the party with the most to
lose--in this case, MRL--a fait accompli. With the juror already excused and gone, all MRL
had to do to escape consideration of the punitive damages conundrum was refuse to agree
to a jury of eleven, which it did. This was both unfair to Winslow and inconsonant with the
intent of § 3-15-106, MCA, which contemplates both approval of the court and agreement
of the parties before a jury of fewer than twelve may proceed. I would hold that it is error
for a district court to excuse a juror while questions remain as to the meaning and intent of
a jury verdict, without first giving the parties a meaningful opportunity to consent or object.
¶54 However, though I believe the District Court erred, I would nonetheless conclude that
we can give Winslow no affirmative relief on appeal because Winslow does not seek or
appear willing to accept a complete retrial on both liability and punitive damages. Winslow
makes it clear that he wants to retain the benefits of the compensatory verdict (albeit
unreduced for comparative fault), with remand for trial on punitive damages only. The
statutes allowing for an award of punitive damages do not contemplate such relief.
21
¶55 Section 27-1-220(1), MCA, provides, in pertinent part, that “a judge or jury may
award, in addition to compensatory damages, punitive damages for the sake of example and
for the purpose of punishing a defendant.” (Emphasis added.) In addition, § 27-1-221(6),
MCA, provides that liability for punitive damages must be determined by the trier of fact.
Thus, a fact-finder cannot assess punitive damages until it has first decided to give
compensatory damages, and has decided that the proof supporting those damages also
justifies, by clear and convincing evidence, an award of punitive damages. A punitive case
cannot be heard in a vacuum, nor can one fact-finder assess compensatory damages and then
leave to a wholly different fact-finder the question of whether the plaintiff’s proof from the
first case entitles him to punitive damages. The case cannot be split. Because Winslow has
chosen to retain the benefits of the compensatory award--a logical decision in light of the
difficulty of the case--I would conclude we cannot remand for trial on punitive damages
alone. Therefore, I concur in the result reached by the Court.
/S/ PATRICIA O. COTTER
Justice James C. Nelson joins in the concurrence of Justice Patricia O. Cotter.
/S/ JAMES C. NELSON
22
23