Ammondson v. Northwestern Corp.

Summary

The Montana Supreme Court affirmed a jury verdict awarding approximately $17.5 million in compensatory damages and $4 million in punitive damages to former Montana Power Company employees whose supplemental retirement benefit payments were discontinued by Northwestern Corporation after its bankruptcy reorganization. The Court rejected Northwestern’s subject-matter jurisdiction and federal preemption arguments, upheld limitations on its advice-of-counsel defense, and addressed claims involving breach of contract, bad-faith breach of contract, abuse of process, and malicious prosecution. The provided text ends during the Court’s discussion of the advice-of-counsel issue.

Holdings

1. The Montana District Court had jurisdiction to adjudicate the Retirees' claims; the defendants' federal-jurisdiction argument was meritless and Northwestern was collaterally estopped from asserting jurisdiction in the Delaware bankruptcy court after that court had already determined it lacked jurisdiction.
2. Advice of counsel, when asserted as an affirmative defense, must be pleaded under Montana Rule of Civil Procedure 8(c); the District Court did not abuse its discretion by excluding the unpleaded defense and refusing the proposed jury instruction, while allowing evidence concerning counsel's advice as relevant to intent and causation.
3. The evidence was sufficient to submit the abuse-of-process claim to the jury, and the instruction stating that filing suit in a forum the party knows to be improper constitutes abuse of process was not reversible error.
4. The Court declined to review the sufficiency of the evidence supporting the bad-faith breach-of-contract claim because Northwestern failed to preserve the issue through an objection, motion for judgment as a matter of law, or post-trial motion.
5. The Retirees could recover emotional-distress damages as an element of damages for their underlying tort claims without proving the serious-or-severe distress standard applicable to stand-alone negligent- or intentional-infliction claims.
6. The compensatory-damages award was supported by substantial credible evidence, and the Court would not speculate about how the jury apportioned damages among multiple claims because the defendants did not request an apportioned verdict form.
7. The individual defendants could be held personally liable because sufficient evidence supported a finding that they personally participated in tortious conduct; acting within the scope of corporate employment does not shield an agent from liability for personal tortious conduct.
8. The defendants were not entitled to offset the judgment by the Retirees' settlement with Paul Hastings because the verdict did not establish that Paul Hastings was a concurrent or joint tortfeasor causing a single indivisible harm, and Montana law provides no offset for intentional tort damages.

Questions Presented

1. Whether the Retirees' claims were completely preempted by federal bankruptcy law and whether the Montana District Court lacked subject matter jurisdiction.
2. Whether the District Court erred by excluding advice of counsel as an affirmative defense.
3. Whether the District Court erred in denying judgment as a matter of law on the abuse-of-process claim.
4. Whether the judgment on the bad-faith breach-of-contract claim should be reversed for insufficient evidence of a special relationship.
5. Whether the District Court improperly allowed emotional-distress damages and instructed the jury on those damages.
6. Whether substantial credible evidence supported the jury's tort-damages award.
7. Whether the individual corporate officers and employees could be held personally liable for abuse of process and malicious prosecution.
8. Whether the judgment should have been offset by the Retirees' settlement with Paul Hastings.

Disposition

affirmed_and_remanded