Kaestner v. Masten and Amber

2012 MT 286N

• Court: Montana Supreme Court
• Decided: December 11, 2012
• Docket: 12-0088
• Status: Published

Opinion

December 11 2012

DA 12-0088

IN THE SUPREME COURT OF THE STATE OF MONTANA

2012 MT 286N

DAVID KAESTNER, CESAR HERNANDEZ, and COLLEEN HINDS-HERNANDEZ,

Plaintiffs and Appellants,

v.

MIKE and NANCY MASTEN, and AMBER BEAR FARM, LLC,

Defendants and Appellees ___________________________________

and

Third-Party Plaintiffs and Appellees,

HANNAH HERNANDEZ,

Third-Party Defendant and Appellant.

APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Sanders, Cause No. DV-10-95 Honorable C.B. McNeil, Presiding Judge

COUNSEL OF RECORD:

For Appellants and Third-Party Appellant Hernandez, Hinds-Hernandez, and Hernandez:

David K.W. Wilson, Jr., Jonathan R. Motl, Morrison, Motl & Sherwood, PLLP, Helena, Montana

Elizabeth A. Brennan, Attorney at Law, Missoula, Montana For Appellant David Kaestner:

Christopher W. Froines, Geiszler & Froines, Missoula, Montana

For Appellees and Cross-Appellants:

Quentin M. Rhoades, Liesel Shoquist, Sullivan, Tabaracci & Rhoades, P.C., Missoula, Montana

Submitted on Briefs: October 24, 2012

Decided: December 11, 2012

Filed:

__________________________________________ Clerk

2 Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating

Rules, this case is decided by memorandum opinion and shall not be cited and does not

serve as precedent. Its case title, cause number, and disposition shall be included in this

Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana

Reports.

¶2 This dispute arises over water distribution and use rights. The parties to this case

are owners of contiguous real property located in Heron, Montana. Nancy and Mike

Masten currently own the land from which the water source originates. David Kaestner

and Cesar, Colleen, and their adult daughter Hannah Hernandez (Hernandez) own

adjacent properties. In litigation dating back to the 1970s, the predecessors in interest of

the parties litigated a water dispute, and the court issued a decree in which the water was

essentially divided between the parcels, with Kaestner’s predecessor being given a

perpetual easement for construction and maintenance of a pipeline to his property. The

court ordered that the water rights would run with the land. Kaestner and Cesar and

Colleen Hernandez sued the Mastens over use and distribution of the water and the

Mastens counterclaimed. A jury ruled in favor of the Mastens. Kaestner and Hernandez

moved to have the verdict set aside but the District Court denied their motion. They

appeal. We affirm in part and reverse and remand in part.

FACTUAL AND PROCEDURAL BACKGROUND

3 ¶3 After the various parties acquired their parcels of property, their relationship went

from cordial to contentious. Mastens were unsure whether Kaestner and Hernandez had

legitimate water rights and Mastens claim the men would not provide proof of such

rights. In fact, Mastens’ attorney subsequently concluded Kaestner and Hernandez did

not have water rights and deemed them trespassers. The relationship worsened and

ultimately became dangerous in April 2010 when Mike Masten accused Kaestner and

Cesar of unlawful trespassing. Masten aimed and discharged a rifle near the men and

told them to get off his land.

¶4 In June 2010, Kaestner and Hernandez filed a complaint against Mastens which

included two counts: negligence and punitive damages. The Mastens answered the

Complaint, denied the charge of negligence, asserted affirmative defenses and set forth a

third-party complaint against Hannah. Mastens also counterclaimed against Kaestner and

Hernandez for intentional and negligent infliction of emotional distress, trespass,

nuisance, interference with business opportunity,1 punitive damages and conversion.

They asserted the same claims, with the exception of conversion, against Hannah, whose

name is also on the land deed with her mother. Kaestner and Hernandez subsequently

filed an amended complaint in May 2011. In it they again asserted negligence and

requested punitive damages, but added charges of civil assault and intentional infliction

of emotional distress.

¶5 A jury trial was conducted in October 2011. Over the course of the five-day trial,

the jury heard copious and conflicting testimony pertaining to water rights and trespass,

1 Mastens built and operate the Amber Bear Bed & Breakfast on their property.

4 as well as allegations of racial slurs, threats of murder and mayhem, and repeated

incidents of general rude, boorish behavior on the part of all parties. At the close of

testimony, the jury was presented with a Special Verdict Form. The jury determined that

the Mastens: (1) assaulted Kaestner and Cesar and committed intentional acts that caused

emotional distress to the two men but that such acts had not caused injury warranting

payment of damages; (2) had not acted negligently toward Kaestner or Cesar; (3) had

neither caused emotional distress nor acted negligently toward Colleen Hernandez; and

(4) were justified in the use of force or the threat to use force in the protection of their

property. The jury also found that Kaestner and Hernandez: (1) had committed

intentional acts causing compensable emotional distress to the Mastens; and (2) acted

intentionally and willfully with calculation to damage the Mastens’ bed and breakfast

business. The jury awarded Mastens $141,000 in business-related damages, and Nancy

and Mike Masten were each awarded $25,000 for emotional distress. Lastly, the jury

determined that Kaestner and Hernandez acted with actual malice toward the Mastens

and awarded the Mastens $50,000 in punitive damages. Kaestner and Hernandez moved

to have the verdict set aside but the District Court denied their motion. They appeal.

ISSUES

¶6 Kaestner and Hernandez raise the following issues on appeal:

¶7 Did the District Court err in denying their M. R. Civ. P. 50(b) (Rule 50(b)) motion

on:

a. Mastens’ intentional interference with business claim;

b. the jury’s verdict awarding Mastens punitive damages;

5 c. Mastens’ claim that Cesar acted as an agent of Hannah and Colleen

Hernandez;

d. the jury’s verdict that Kaestner and Hernandez are jointly and severally

liable to the Mastens;

e. Mastens’ affirmative defense of justified use of force; and

f. Mastens’ intentional infliction of emotional distress claim?

¶8 Did the District Court err in denying Kaestner and Hernandez’s Rule 59 motion on

the grounds that the jury’s verdict evidenced such confusion and misunderstanding as to

require a new trial?

¶9 Mastens cross-appeal on the following issue:

¶10 Did the District Court err in denying their motion for attorney fees on the issue of

justifiable use of force?

DISCUSSION

¶11 Did the District Court err in denying Kaestner and Hernandez’s Rule 50(b) motions for judgment as a matter of law?

¶12 As we have established previously, “Unless there is a complete absence of any

credible evidence in support of the verdict, a [judgment as a matter of law] motion is not

properly granted.” Massee v. Thompson, 2004 MT 121, ¶ 26, 321 Mont. 210, 90 P.3d

394. “A judgment as a matter of law entered pursuant to Rule 50(b), M.R.Civ.P., may be

granted only where it appears as a matter of law that a party could not prevail upon any

view of the evidence including the legitimate inferences to be drawn therefrom.”

Massee, ¶ 25 (citations omitted).

6 ¶13 Rule 50 provides generally that if the court does not grant a motion for judgment

as a matter of law made under Rule 50(a), the movant may, following trial, file a renewed

motion for judgment as a matter of law and may include an alternative or joint request for

a new trial under Rule 59.

¶14 At the close of Mastens’ case, Kaestner and Hernandez moved to dismiss most of

Mastens’ causes of action under Rule 50(a). The District Court granted the motion as it

pertained to trespass, conversion and nuisance. On October 28, 2011, the fifth day of

trial, after the jury returned its verdict in favor of Mastens, Kaestner and Hernandez

moved for judgment as a matter of law. They primarily claimed that the evidence

presented was insufficient to justify the verdict. The District Court denied the motion.

¶15 On December 22, 2011, Kaestner and Hernandez renewed their motion for

judgment as a matter of law and also moved to set aside the jury verdict, or in the

alternative, for a Rule 59 order for a new trial. They claimed the verdicts against Hannah

and Colleen based upon agency principles should be set aside as should the verdict

against Kaestner and Hernandez that was based upon joint and several liability. They

also moved to set aside the entire verdict, arguing that the Verdict Form was confusing

and inconsistent. The District Court denied the motion to set aside the verdict and

refused to order a new trial.

Kaestner and Hernandez claims: Intentional Interference with Mastens’ Business

¶16 There are four elements to an intentional interference with a business claim, also

known as “intentional interference with prospective economic advantage.” In this case,

the jury was required to determine whether Kaestner and the Hernandez’s acts were: (1)

7 intentional and willful; (2) calculated to cause damage to Mastens’ business; and (3) were

done with the unlawful purpose of causing damage or loss, without right or justifiable

cause on the part of Kaestner and Hernandez. And lastly, the tortious acts had to result in

actual damage or loss. Maloney v. Home & Inv. Ctr., Inc., 2000 MT 34, ¶ 41, 298 Mont.

213, 994 P.2d 1124.

¶17 Mastens claimed that Kaestner and Hernandez: (1) repeatedly vandalized the

Amber Bear Inn signage; (2) posted other signage on the driveway to their bed and

breakfast that was intended to discourage or dissuade potential guests; (3) put up a locked

gate that blocked the entrance to the inn; (4) vandalized Mastens’ rental house by putting

a dead animal in it; (5) distributed handbills in the community implying that the Amber

Bear Inn was a “sex club”; and (6) disrupted Mastens’ duties to their guests by coming

onto the property causing trouble, thereby pulling Mastens away from attending to their

business. Kaestner and Hernandez denied these claims but the jury ruled in favor of the

Mastens.

¶18 This Court gives deference to a jury’s verdict if it is supported by evidence.

Additionally, as we stated in Sandman v. Farmers Ins. Exch., 1998 MT 286, 291 Mont.

456, 969 P.2d 277, our review of jury verdicts is very limited and we will not reverse

such a verdict if it supported by “substantial credible evidence.” We have defined

“substantial credible evidence” as evidence—even weak and conflicting evidence—that a

“reasonable mind might accept as adequate to support a conclusion.” Moreover, upon

reviewing a jury verdict to determine if substantial credible evidence exists to support the

8 verdict, this Court must view the evidence in the light most favorable to the prevailing

party. Sandman, ¶ 40 (citations omitted).

¶19 In this case, the jury’s verdict was supported by Mastens’ evidence which the jury

chose to believe over Kaestner and Hernandez’s testimony. Based upon the standards set

forth in Sandman, the District Court did not err in denying judgment as a matter of law

and declining to order a new trial.

Punitive Damages

¶20 Section 27-1-221, MCA, allows reasonable punitive damages to be awarded when

a defendant has been found guilty of actual malice. Kaestner and Hernandez claim the

evidence presented to the jury did not establish “actual malice” and therefore cannot

support an award of punitive damages. However, the jury was presented with evidence

that Kaestner and Hernandez intentionally committed numerous torts against Mastens

with intent to inflict emotional distress and to interfere with their business. The

intentional nature of these acts justified the finding that Kaestner and Hernandez had

acted with “actual malice.” For this reason, the District Court did not err in denying their

Rule 50(b) motion. However, that is not the end of our analysis.

¶21 Section 27-1-221(7)(c), MCA, requires a judge to review a jury award of punitive

damages, giving consideration to each of the matters listed in § 27-1-221(7)(b), MCA.

After such a review, the judge must clearly state the reasons for increasing, decreasing, or

not increasing or decreasing the punitive damages award of the jury in findings of fact

and conclusions of law, demonstrating consideration of each of the factors listed in

subsection (7)(b). The District Court did not comply with this statutory obligation.

9 ¶22 While we affirm the determination that a punitive damage award was justified in

this case, we remand this matter to the District Court for consideration of the statutory

factors and the issuance of amended Findings of Fact, Conclusions of Law, and Order.

Cesar Hernandez as agent for Hannah and Colleen Hernandez

¶23 Kaestner and Hernandez moved for dismissal of all claims against Hannah and

Colleen, arguing that Cesar was not Hannah or Colleen’s agent; therefore, they could not

be held liable for his actions. Kaestner and Hernandez argue that the jury was not

presented with evidence of an agency relationship nor did the Jury Verdict Form address

liability based upon agency. However, the jury was presented with evidence of tortious

acts and wrong doing on the part of Kaestner, Cesar, Hannah and Colleen Hernandez, and

the Jury Verdict Form specifically inquired, for each claimed tort, whether Kaestner,

Cesar, Hannah and Colleen engaged in the tortious conduct. The jury concluded that

each plaintiff and the third-party defendant had committed the acts and were therefore

liable. As a result, Kaestner and Hernandez’s agency argument is moot and we affirm the

District Court’s denial of their Rule 50(b) motion as it pertains to agency liability.

Joint and Several Liability

¶24 Kaestner and Hernandez argue that the District Court erred in denying their Rule

50(b) motion on the issue of joint and several liability. Again, the jury found each of the

individual plaintiffs and the third-party defendant were “liable for having caused

damages” to Mastens. As such, individual liability has been established. Because each

of these parties is liable for the full amount of damages due to Mastens, a holding by the

10 District Court that the tortfeasors are joint and severally liable for the damages to

Mastens need not be further addressed.

Justified Use of Force

¶25 During the trial, Mastens claimed Mike’s use of a rifle to fire shots in the general

direction of Kaestner and Cesar was a justified use of force. The jury agreed and

concluded Masten was justified in his use of force. Kaestner and Hernandez claim there

was a lack of evidence to support the jury’s finding.

¶26 Section 45-3-101(1)(a), MCA, defines “force likely to cause death or serious

bodily harm” as “the firing of a firearm in the direction of a person, even though no

purpose exists to kill or inflict serious bodily harm.” “Forcible felony” is defined as “any

felony which involves the use or threat of physical force or violence against any

individual.” Section 45-3-101(2), MCA. Section 45-3-104, MCA, states that

A person is justified in the use of force or threat to use force against another when and to the extent that the person reasonably believes that the conduct is necessary to prevent or terminate the other person’s trespass on or other tortious or criminal interference with either real property, other than an occupied structure, or personal property lawfully in the person’s possession or in the possession of another who is a member of the person’s immediate family or household or of a person whose property the person has a legal duty to protect. However, the person is justified in the use of force likely to cause death or serious bodily harm only if the person reasonably believes that the force is necessary to prevent the commission of a forcible felony. (Emphasis added.)

¶27 Mastens testified that, on the day Mike Masten took his gun and followed

Kaestner and Cesar to the water site, they reasonably believed Kaestner and Cesar were

trespassers intent on carrying out their threats to destroy the water source. While

destruction of the water supply for several families is a serious matter, under the

11 applicable statutes, it does not warrant the use of lethal force in an attempt to protect it.

Section 45-3-104, MCA, would allow Mike Masten to fire a weapon, i.e., use “force

likely to cause death or serious bodily harm,” only if he reasonably believed he had to

prevent Kaestner and Cesar from using or threatening physical force or violence against a

person. As a result, the defense of “justified use of force” should never have reached the

jury as the elements were not satisfied. Accordingly, we reverse the jury’s determination

that Mike Masten was justified in his use of force.

¶28 The jury determined that Kaestner and Hernandez suffered no compensable

damages for emotional distress or as a result of other intentional acts committed by

Mastens; thus, reversal on this issue does not otherwise alter the jury’s determination. It

does, however, affect Mastens’ counterclaim as addressed below.

Intentional Infliction of Emotional Distress

¶29 The jury unanimously concluded that Kaestner and Hernandez committed

intentional acts against Mastens that caused emotional distress. The jury was presented

with considerable evidence of emotional distress purported to be caused by Kaestner and

Hernandez’s actions. As there was evidence to support the jury’s determination, we

affirm the District Court’s denial of Kaestner and Hernandez’s Rule 50(b) motion to set

aside the ruling.

Rule 59 Motion for a New Trial

¶30 Kaestner and Hernandez base their Rule 59 request for a new trial on their claim

that “the jury evidenced such confusion in its verdict that a new trial is required.”

Kaestner and Hernandez point out specific flaws with the Verdict Form and maintain that

12 the District Court should have granted their motion for a new trial. We disagree. The

record unequivocally reflects that all counsel agreed to the Special Verdict Form after

lengthy discussion with the District Court. We will not put a district court in error for an

action in which the appealing party acquiesced. Horn v. Bull River Country Store Props.,

2012 MT 245, ¶ 25, 366 Mont. 491, ___ P.3d ___.

¶31 Mastens’ Counterclaim: Did the District Court err in denying their motion for attorney fees on the issue of justifiable use of force?

¶32 As we have reversed the jury’s determination that Mike Masten was justified in

his use of force, the Mastens are not entitled to attorney fees under § 27-1-722, MCA.

Accordingly, we need not address their argument of District Court error as it pertains to

this issue.

¶33 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of

our Internal Operating Rules, which provides for noncitable memorandum opinions. The

District Court’s denial of Kaestner and Hernandez’s motions for judgment

notwithstanding the verdict is supported by substantial evidence and the legal issues are

controlled by settled Montana law, which the District Court correctly interpreted.

¶34 We reverse the jury’s verdict that Mike Masten was justified in his use or threat of

use of lethal force and we remand for amended Findings of Fact, Conclusions of Law,

and Order as it pertains to the value of the punitive damages award under

§ 27-1-221(7)(c), MCA. We affirm on all remaining issues.

/S/ PATRICIA COTTER

13 We concur:

/S/ MIKE McGRATH /S/ JAMES C. NELSON /S/ MICHAEL E WHEAT /S/ BRIAN MORRIS