No. 02-736

IN THE SUPREME COURT OF THE STATE OF MONTANA

2003 MT 372

ALAN and STEPHANIE SHAMMEL, MAURICE and 

BETTY MAE SHAMMEL, JACK and IDA RUCKMAN,

BOB and VICKY RUCKMAN, LEWIS and MONA

HARRELL, and DANIEL and LORI HARRELL, individually,

Plaintiffs and Respondents, 

v. 

CANYON RESOURCES CORPORATION, a Delaware 

Corporation, and CR KENDALL CORPORATION,

a Colorado Corporation, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Tenth Judicial District, 

In and For the County of Fergus, Cause No. DV 2001-116,

Honorable E. Wayne Phillips, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

Thomas Hattersley III and Alan Joscelyn, Gough, Shanahan, Johnson

& Waterman, Helena, Montana 

For Respondents:

A. Clifford Edwards, Roger W. Frickle, and Roberta Anner-Hughes, 

Edwards, Frickle, Halverson & Anner-Hughes, Billings, Montana 

Submitted on Briefs: July 10, 2003

 Decided: December 24, 2003 

Filed:

__________________________________________

Clerk
1

According to Montana Environmental Information Center (MEIC), the pump-back

system Canyon installed at the mine site “intercepts contaminated water in four drainages

emanating from the mine, and pumps the water back on to the mine site. A number of

snowmaking machines are then used to spray the contaminated water into the air to

evaporate the water and concentrate the pollutants onto the leach pad.” 

2

Justice W. William Leaphart delivered the Opinion of the Court. 

¶1 Canyon Resources Corporation and CR Kendall (collectively referred to as Canyon)

appeal from the Tenth Judicial District Court’s grant of a preliminary injunction and the

denial of a motion for an undertaking for security in Fergus County. 

¶2 We restate the issues on appeal as follows:

¶3 1. Did the District Court err when it granted the preliminary injunction?

¶4 2. Did the District Court err when it denied Canyon’s motion for a written undertaking

as provided for under § 27-19-306, MCA?

Factual and Procedural Background

¶5 From the late 1980s to the mid-1990s, CR Kendall, a Colorado Corporation and a

wholly-owned subsidiary of Canyon Resources Corporation, a Delaware Corporation

licensed to do business in the State of Montana, mined its property situated in the North

Moccasin Mountain Range. The Respondents in this action, who will be collectively

referred to as the Shammels, all own property downstream and downslope from the property

that CR Kendall mined.

¶6 In 1996, Alan and Stephanie Shammel were notified that their water was contaminated

with nitrates, selenium, thallium, and sulfate. That same year, Canyon installed a pump-back

system on the mine site.1

 Thereafter, in 1998, Alan and Stephanie began to experience water

quantity problems. 
3

¶7 The Shammels brought a civil action against Canyon on October 10, 2001, alleging

theories of trespass, nuisance, and negligence, and seeking compensatory and punitive

damages. The Shammels alleged that Canyon had tortiously affected the quantity and quality

of water in several drainages–Dog Creek, Little Dog Creek, and the South Fork of Last

Chance Creek–resulting in damage to their properties.

¶8 Canyon decided to sell many of its Montana properties and mineral rights at an

auction, through the Sheldon Good Auction Company, on August 6, 2002. Canyon

advertised the sale in several newspapers in Montana and around the country. The Shammels

learned about the auction and filed an application for temporary restraining order and

preliminary injunction on July 30, 2002, to restrain Canyon from dissipating the proceeds

of the sale of any Montana assets. On August 5, 2002, the District Court granted the TRO

and ordered Canyon to deposit any funds received from the auction, up to and including

$12,359,141, with the Clerk of the Tenth Judicial District Court. The amount realized from

the auction was $616,305. The TRO, as per § 27-19-316, MCA, expired in ten days time

and a hearing on the application for preliminary injunction was held on August 14, 2002.

The court granted the preliminary injunction but, recognizing that Canyon’s harm may

outweigh the Shammels’, the court set another hearing date for October 1, 2002, to allow

Canyon to present any evidence that further addressed the balancing of the equities and to

consider Canyon’s motion for undertaking for security pursuant to § 27-19-306, MCA. 

¶9 After the October 1 hearing, the District Court issued a supplemental order to the

preliminary injunction and an order on undertaking. The court found that the scale of
4

equities tipped in the Shammels’ favor and so continued the preliminary injunction. In the

supplemental order, the court authorized the release of $133,000, which Canyon was

contractually obligated to pay. Of the $616,000 sequestered funds, this left a balance of

$483,000. The court ordered Canyon to deposit $45,000 from corporate cash on hand with

the court to bring the total to $528,000. The $528,000 figure represented, according to the

court, the value of Canyon’s fee lands that would have been available, but were under

contract for sale, to the Shammels were they to prevail at trial. 

¶10 The court also denied Canyon’s motion for undertaking for security because Canyon

had nearly $1 million in cash on hand to use for payroll purposes, and because the court

deemed it to be in the “interests of justice.” Canyon now appeals the order granting the

Shammels’ application for preliminary injunction and the court’s subsequent denial of the

motion for an undertaking for security.

Standard of Review

¶11 It has come to our attention that there is confusion in our case law regarding the

standard of review where an injunction has been granted or denied. The standard first used

was an abuse of discretion standard. Nelson v. O'Neal (1871), 1 Mont. 284, 187 Mont.

LEXIS 4. “The granting or refusing an injunction was discretionary with the court below .

. . it was [not] an abuse of discretion in refusing an injunction.” Nelson, 1 Mont. at 286. 

Later, a manifest abuse of discretion standard was introduced. Craver v. Stapp (1902), 26

Mont. 314, 67 P. 937. “The granting or dissolving of an injunction is so largely within the

discretion of the lower court, that the supreme court will never disturb its action, unless there
2

Nelson, 1 Mont. 284, 187 Mont. LEXIS 4; Anaconda Copper-Min. Co., 17 Mont.

591, 43 P. 924; Rea Bros. Sheep Co. v. Rudi (1912), 46 Mont. 149, 127 P. 85; Stalcup v.

Cameron Ditch Company (1956), 130 Mont. 294, 300 P.2d 511; Boyer v. Karagacin

(1978), 178 Mont. 26, 582 P.2d 1173; Madison Fork Ranch, 189 Mont. 292, 615 P.2d

900; Sampson v. Grooms (1988), 230 Mont. 190, 748 P.2d 960; Butler v. Germann

5

has been a manifest abuse of discretion.” Craver, 26 Mont. at 314, 67 P. at 937. These two

different standards have been used interchangeably over the last hundred years. Hagener

v. Wallace, 2002 MT 109, ¶ 12, 309 Mont. 473, ¶ 12, 47 P.3d 847, ¶ 12; M.H. v. Montana

High School Ass’n (1996), 280 Mont. 123, 130, 929 P.2d 239, 243; Mont. Tavern Ass’n

v. State, Dept. of Revenue (1986), 224 Mont. 258, 263, 729 P.2d 1310, 1314; Madison Fork

Ranch v. L & B Lodge, Etc. (1980), 189 Mont. 292, 302, 615 P.2d 900, 906; Hansen v.

Galiger (1949), 123 Mont. 101, 113, 208 P.2d 1049, 1056; Colusa Parrot Mining &

Smelting Company v. Barnard (1903), 28 Mont. 11, 15, 72 P. 45, 45; Anaconda CopperMin. Co. v. Butte Min. Co. (1896), 17 Mont. 519, 521, 43 P. 924, 925. 

¶12 It is incumbent upon us to rectify this century-old confusion and provide consistency

to the law and guidance to the bar by adopting one standard of review. Unfortunately, none

of our prior decisions discuss the difference between the two standards nor state a reason for

adopting one over the other. In light of the high degree of discretion vested in district courts

to maintain the status quo through injunctive relief, we determine that the more deferential

“manifest abuse of discretion” is the appropriate standard for reviewing the granting of a

preliminary or permanent injunction. A “manifest” abuse of discretion is one that is obvious,

evident or unmistakable. Black’s Law Dictionary, 6th Ed. To the extent that the cases listed

below are inconsistent with this holding, they are overruled.2
(1991), 251 Mont. 107, 822 P.2d 1067; Curran v. Dept. of Highways (1993), 258 Mont.

105, 852 P.2d 544; Gabriel v. Wood (1993), 261 Mont. 170, 862 P.2d 42; Sebena v. State

(1994), 267 Mont. 359, 883 P.2d 1263; Ducham v. Tuma (1994), 265 Mont. 436, 877

P.2d 1002; Jarrett v. Valley Park, Inc. (1996), 277 Mont. 333, 922 P.2d 485; In re

Marriage of Snow, 1998 MT 146N; Engel v. Gampp, 2000 MT 17, 298 Mont. 116, 993

P.2d 701; Tungsten Holdings, Inc. v. Kimberlin, 2000 MT 24, 298 Mont. 176, 994 P.2d

1114; Bell v. Ygnatowiz, 2000 MT 284N; Wells v. Young, 2002 MT 102, 309 Mont. 419,

47 P.3d 809; Hagener, 2002 MT 109, 309 Mont. 473, 47 P.3d 847. To the extent that

any other cases, not included here, cite the same standard, they are also overruled. 

6

Discussion

Issue 1

¶13 Did the District Court err when it granted the preliminary injunction?

¶14 Canyon argues that the preliminary injunction should not have been granted for

several reasons. The first, and most relevant for purposes of this opinion, is that the

Shammels failed to meet the requirements under the Van Loan test. Van Loan v. Van Loan

(1995), 271 Mont. 176, 181-82, 895 P.2d 614, 617. Second, the District Court did not set

forth its reasoning for issuing the injunction with sufficient clarity to allow informed

appellate review. Third, the lower court’s sequestration of Canyon’s assets is an improper

prejudgment attachment. Fourth, the District Court took judicial notice of numerous pages

of newspaper articles, editorials, letters, and excerpts from an MEIC report without first

granting Canyon a hearing under Rule 201(e), M.R.Evid. 

¶15 Section 27-19-201, MCA, provides for issuance of a preliminary injunction 

(1) when it appears that the applicant is entitled to the relief demanded and the

relief or any part of the relief consists in restraining the commission or

continuance of the act complained of, either for a limited period or perpetually;
7

 (2) when it appears that the commission or continuance of some act during the

litigation would produce a great or irreparable injury to the applicant; 

(3) when it appears during the litigation that the adverse party is doing or

threatens or is about to do or is procuring or suffering to be done some act in

violation of the applicant's rights, respecting the subject of the action, and

tending to render the judgment ineffectual;

(4) when it appears that the adverse party, during the pendency of the action,

threatens or is about to remove or to dispose of the adverse party's property

with intent to defraud the applicant, an injunction order may be granted to

restrain the removal or disposition; 

(5) when it appears that the applicant has applied for an order under the

provisions of 40-4-121 or an order of protection under Title 40, chapter 15.

This Court has held that only one of these subsections need be met for an injunction to be

issued. Sweet Grass Farms v. Board of County Com’rs, 2000 MT 147, ¶ 27, 300 Mont. 66,

¶ 27, 2 P.3d 825, ¶ 27 (citing Stark v. Borner (1987), 226 Mont. 356, 359-60, 735 P.2d 314,

317).

¶16 Here, subsections two and three apply. In his affidavit, Richard De Voto (De Voto),

President of Canyon Resources Corporation, stated that,

[h]alf the proceeds from the August 6th sale of assets of Canyon and its

subsidiaries will go to their lenders, pursuant to prior agreements, and the

remainder will be utilized to meet and fulfill the ongoing expenses and

obligations of Canyon and its subsidiaries, including the funding of continued

reclamation obligations at the Kendall mine site. 

Accordingly, there is a very real possibility that, should the Shammels prevail at trial, they

will have no recourse against Canyon. This would render a judgment in the Shammels’ favor

ineffectual and produce a great or irreparable injury to them. 
8

¶17 This case, however, presents an additional obstacle. Generally, injunctive relief is not

granted where an action for monetary damages will afford an adequate remedy. Boyer, 178

Mont. at 31, 582 P.2d at 1177 (citing State v. Krieg (1965), 145 Mont. 521, 402 P.2d 405).

In Van Loan, this Court adopted a four-part test to determine “whether a preliminary

injunction should issue when a party’s monetary judgment may be made ineffectual by the

actions of the adverse party thereby irreparably injuring the applicant. The moving party has

the burden of proving these elements.” The test is:

(1) the likelihood that the movant will succeed on the merits of the action;

(2) the likelihood that the movant will suffer irreparable injury absent the

issuance of a preliminary injunction;

(3) the threatened injury to the movant outweighs whatever damage the

proposed injunction may cause the opposing party (a balancing of the

equities); and

(4) the injunction, if issued, would not be adverse to the public interest.

Van Loan, 271 Mont. at 182, 895 P.2d at 617. It is this test, Canyon contends, that the

Shammels have failed to meet.

¶18 Canyon argues the first element was not met because the court relied heavily on the

testimony of a lay witness, Stephanie Shammel (Stephanie), when the Shammels’ two expert

witnesses contradicted each other and raised real doubt as to the Shammels’ likelihood of

succeeding on the merits.

¶19 “Testimony in the form of an opinion or inference otherwise admissible is not

objectionable because it embraces an ultimate issue to be decided by the trier of fact.” Rule
9

704, M.R.Evid. According to the commission’s comments regarding this rule, it is identical

to the Federal Rules of Evidence and is consistent with Montana law. Advisory committee

notes to the Federal rule indicate that the “‘basic approach to opinions, lay and expert, in

these rules is to admit them when helpful to the trier of fact.’ The language of the rule

allows lay witnesses to give their opinions on an ultimate issue if the requirements of Rule

701 are met.” The Federal Rules and Montana Rules of Evidence, 701, indicate that 

[i]f the witness is not testifying as an expert, the witness’ testimony in the

form of opinions or inferences is limited to those opinions or inferences which

are (a) rationally based on the perception of the witness and (b) helpful to a

clear understanding of the witness’ testimony or the determination of a fact in

issue.

¶20 The District Court found Stephanie’s testimony “persuasive” as to the resolution of

a fact in issue. The lower court decided to hear from Stephanie regarding the harm the

plaintiffs were suffering because of the “bright-line dispute between the experts” regarding

water quality and quantity. Stephanie’s testimony was based on her rationally based

perception. She testified that beginning in 1988, she and her husband were involved in the

mine permitting process. The couple had water samples taken over the years and were

notified in 1996 that their water was contaminated with nitrates, selenium, thallium, and

elevations of sulfate. Stephanie further testified that water quantity had been significantly

reduced after the pump-back system was installed in 1996. The District Court did not err in

relying on Stephanie’s testimony. 

¶21 Regarding the second element, Canyon points to the District Court’s findings that

Canyon had been able to pay off nearly $32 million in loans in a six-year period, its
10

stockholder equity as of June 30, 2002, exceeded $33 million, and it had $990,000 cash on

hand as of October 1, 2002. Having determined that it is not in a financially precarious

position, Canyon contends it was inconsistent for the court to conclude that Canyon would

not be able to satisfy a judgment should the Shammels prevail at trial. 

¶22 As noted above, De Voto asserted in his affidavit that sequestering the funds would

hamper current reclamation efforts; that half of the proceeds from the auction were to go to

Canyon’s lenders; and that the other half of the proceeds would be used to meet operating

costs and obligations to various subsidiaries, including funding of continued reclamation

obligations. While Canyon correctly points out the District Court’s findings with respect to

Canyon’s financial position, the affidavits presented at the hearing do bring to light the

distinct likelihood that Canyon may not have money to satisfy a future judgment. As the

District Court pointed out, Canyon’s money appears to be obligated everywhere except

Montana. If this money is allowed to leave Montana and go to creditors and subsidiaries,

there is a likelihood that there will be no recourse for the Shammels should they prevail at

trial. 

¶23 As to the third element, Canyon argues that the District Court did not articulate any

basis or identify evidence that would show that the threatened injury to the Shammels

outweighed the damage the proposed injunction would cause Canyon. Canyon attempted

to bolster this argument by pointing out that the only evidence the court referenced in its

August order was the evidence Canyon offered to establish that an injunction would cause

it greater harm than the Shammels.
11

¶24 After the initial hearing for the preliminary injunction where the District Court found

that the damage to the Shammels would be greater than Canyon’s, the District Court

conducted an additional hearing to allow Canyon a further opportunity to present evidence

regarding the balancing of the equities. The District Court found the evidence presented by

Canyon as to the financial damage caused by the preliminary injunction to be “wholly

unconvincing.” The court noted Canyon’s ability to pay not only the Sheldon Good Auction

Company bill in the summer of 2002, but also its ability to repay nearly $32 million in loans

in a six-year period, and the $1.3 million Canyon made from a land sale in Argentina. Based

on these figures the court reasoned that Canyon’s resting the company’s financial future on

the $616,000 in auction proceeds was misplaced. We conclude that the District Court did

not err in finding that the Shammels would suffer greater injury if the injunction were not

issued. The record reflects that Canyon appears to have sufficient funding without the

$616,000 to carry on its operations. On the other hand, if the court had not sequestered the

$616,000, the Shammels would very likely be without recourse should they be successful at

trial.

¶25 Concerning the fourth element, Canyon contends that the injunction would be against

the public interest because sequestering funds from the auction jeopardized Canyon’s ability

to continue reclamation activities and maintain the public’s interest in a clean healthful

environment. 

¶26 The District Court concluded that because Montanans have a fundamental right to a

clean and healthful environment, it is in the public interest to ensure that funds are available
12

for potential clean up of contaminants on the Shammels’ private property. Art. II, Sec. 3,

Mont. Const. Assuming, as the District Court did, for purposes of issuing an injunction, that

there is pollution on the Shammels’ property, and given the pervasive nature of water

pollution, the court did not err in concluding that, under Art. II, Sec. 3, it is in the public’s

interest as well as the Shammels’ interest to assure that funds are available for potential clean

up of any such pollution.

¶27 We hold that the Van Loan test was met, and that the District Court did not manifestly

abuse its discretion when it granted the preliminary injunction. 

¶28 Canyon next argues that the District Court erred in granting the preliminary injunction

because the District Court failed to set forth its reasoning for issuing the injunction with

sufficient clarity to allow informed appellate review. Canyon correctly points out that Rule

52(a), M.R.Civ.P., requires that a court must set forth the findings of fact and conclusions

of law which constitute the grounds of its action in granting or refusing interlocutory

injunctions. However, we have held that “the extent of such findings and conclusions is

necessarily dependent on the facts and circumstances of each case . . . the litmus test in such

cases is whether the District Court’s order sets forth its reasoning in a manner sufficient to

allow informed appellate review.” Lake v. Lake County (1988), 233 Mont. 126, 134, 759

P.2d 161, 165 (citing Clemans v. Martin (1986), 221 Mont. 483, 487, 719 P.2d 787, 789-90.

We determine, based on the above discussion, that the District Court set forth its reasoning

in this case in a manner sufficient to allow informed appellate review.
3

Rule 201(b), M.R.Evid., states that “[a] fact to be judicially noticed must be one

not subject to reasonable dispute in that it is either (1) generally known within the

territorial jurisdiction of the trial court or (2) capable of accurate and ready determination

by resort to sources whose accuracy cannot be reasonably questioned.” 

13

¶29 Canyon also contends that because the instant case does not satisfy Van Loan, the

only other grounds upon which the District Court might have properly ordered the

sequestration of Canyon’s assets was under Montana’s prejudgment attachment statutes,

which are not applicable in this situation. Because we hold that the Van Loan requirements

were met, there is no need to address this issue.

¶30 Last, Canyon argues that the preliminary injunction should not have been granted

because the District Court improperly took judicial notice of numerous pages of newspaper

articles, editorials, letters, and excerpts from an MEIC report and denied Canyon’s request

for a hearing pursuant to Rule 201(e), M.R.Evid. While Canyon again correctly quotes the

law, and while judicial notice of the documents, assuming they were judicially noticed, may

have been inappropriate without offering Canyon an opportunity to be heard, Rule

201(2)(e),3

 the tenor of the articles had to do with whether Canyon was unreasonable in

resisting an increase in the reclamation bond. The issue here, however, was the sequestration

of sale proceeds, not the size of the reclamation bond. Assuming arguendo, that the District

Curt erred in taking judicial notice, the error was harmless. 

¶31 Accordingly, we affirm the District Court’s decision to grant the preliminary

injunction. 
14

Issue 2

¶32 Did the District Court err when it denied Canyon’s motion for a written undertaking

as provided for under § 27-19-306, MCA?

¶33 Canyon contends that the court improperly denied the motion for undertaking

because, even though Canyon is no longer mining, its reclamation activities constitute

“construction” under § 27-19-306(2)(b), MCA. 

¶34 Section 27-19-306, MCA, requires that “[i]f a party seeks an injunction or restraining

order against an industrial operation or activity, the judge shall require a written undertaking

to be filed by the applicant.” 

¶35 The District Court denied Canyon’s request for undertaking interpreting the statute

as follows: 

The legislature’s intent was those injunctions which stopped an activity of

mining, of timber, or other activity, as defined, grazing operation, as defined

in that statute, that that was their goal, that if these things are stopped in

process by an injunction you get this undertaking to cover the wages of those

poor folks who get stopped who can’t earn a living when the injunction is

granted, that they were dealing with very precise injunctions that were aimed

against timber and mining that were ongoing active enterprises with employed

people who will be stopped because of [the] injunction. 

This is not the instance here. We are not stopping an ongoing

operation. We are requiring the company to retain Montana assets for the

eventual outcome of this case . . . .

¶36 Canyon contends that the mandatory language in § 27-19-306(2)(a), MCA, is

applicable in the instant case. “[T]he judge shall require a written undertaking to be filed by

the applicant.” (Emphasis added.) This requirement, however, must be read in the context

of the entire subsection, which reads as follows:
15

The amount of the written undertaking must be set in an amount that includes

all of the wages, salaries, and benefits of the employees of the party enjoined

or restrained during the anticipated time that the injunction or restraining order

will be in effect. The amount of the written undertaking may not exceed

$50,000 unless the interests of justice require. The written undertaking must

be conditioned to indemnify the employees of the party enjoined or restrained

against lost wages, salaries, and benefits sustained by reason of the injunction

or restraining order.

Section 27-19-306(2)(a), MCA. The expressed purpose of the undertaking is to protect the

employees of the party enjoined from loss of wages, salaries, and benefits during the period

that operations are enjoined. The subsection has no application to the present case. The

injunction at issue does not restrain Canyon from engaging in an industrial operation or

activity. Rather, it requires sequestration of sale proceeds. 

¶37 Beyond that, the District Court has discretion whether an undertaking may be waived.

Section 27-19-306(1)(b), MCA. The District Court acted within that discretion in denying

the request for an undertaking, “in the interest of justice.” Section 27-19-306(1)(b)(ii),

MCA.

¶38 We affirm the District Court’s denial of Canyon’s motion for written undertaking. 

/S/ W. WILLIAM LEAPHART

We concur: 

/S/ JAMES C. NELSON

/S/ JIM REGNIER

/S/ PATRICIA COTTER

/S/ DOROTHY McCARTER

Honorable Dorothy McCarter, District

Judge, sitting in place of Justice John Warner
17

Justice Jim Rice dissenting. 

¶39 I dissent. I would conclude that the issuance of the injunction herein by the District

Court did not meet the Van Loan test, which, in my view, has not been fully set forth and

applied by the Court, and would reverse.

¶40 In devising the Van Loan requirements, this Court took direction from the United

States Supreme Court’s decision in Deckert v. Independence Shares Corp. (1940), 311 U.S.

282, 61 S.Ct. 229, 85 L.Ed. 189, and the Ninth Circuit’s decision in In re Estate of

Ferdinand Marcos, Human Rights Litigation (9th Cir. 1994), 25 F.3d 1467. Van Loan, 271

Mont. at 179-80. 895 P.2d at 615-16. We noted in our analysis of those cases that the

injunctive relief granted therein was premised upon the defendant’s insolvency, the

defendant’s history of secreting assets, or its present threat to do so. Van Loan, 271 Mont.

at 179-80, 895 P.2d at 615-16. We declared that injunctive relief in a tort case was only

available in the “extraordinary” case, defined by the Ninth Circuit as when “money damages

will be an inadequate remedy due to impending insolvency of the defendant or that defendant

has engaged in a pattern of secreting or dissipating assets to avoid judgment.” Van Loan, 271

Mont. at 179-80, 895 P.2d at 616 (quoting Estate of Marcos, 25 F.3d at 1469).

¶41 We adopted our own test based upon these principles, holding that injunctive relief

was appropriate “if it is alleged that the defendant threatens to, or is about to secret or

dissipate his/her assets in order to thwart any monetary recovery by the plaintiff . . . .” Van

Loan, 271 Mont. at 184, 895 P.2d at 619. We “caution[ed] that our analysis is to be

narrowly interpreted” and stressed that relief is to be granted “only under the most clear facts
18

that fully satisfy the four-part test.” Van Loan, 271 Mont. at 183, 895 P.2d at 618. The Court

decides this case today without referencing these principles or requiring that they be

satisfied.

¶42 Unlike the plaintiff in Van Loan, the Plaintiffs here have not established the required

elements with the required proof. In Van Loan, the defendant had “admitted liability and

stated that significant damages [had] occurred.” Van Loan, 271 Mont. at 183, 895 P.2d at

618. Here, the Plaintiffs’ own experts disagreed about the Defendants’ potential liability.

In Van Loan, the defendant “[had] threatened that he will move his assets out of [plaintiff’s]

reach.” Van Loan, 271 Mont. at 182, 895 P.2d at 617. Here, the District Court made no

findings whatsoever about a threat or history of asset dissipation by the Defendants in order

to thwart recovery. Although the clarity of proof presented in Van Loan may well be rare,

the District Court issued relief here on wholly inadequate grounds–because it was “gravely

concerned that the Defendants are operating a variety of subsidiaries with subsidiaries.”

Speculation or surmise is not proof. “Grave concern” about a company’s business structure

does not establish a pending insolvency, a threat or plan to dissipate assets, or an intention

to thwart a monetary recovery, as required by Van Loan, and does not qualify as “clear facts

that fully satisfy” the standards for the narrow, emergent relief we created in that case.

¶43 In ¶ 16, this Court references the Defendants’ proposed expenditure of the sale

proceeds, and from there makes the unsupported leap that “[a]ccordingly, there is a very real

possibility that, should the Shammels prevail at trial, they will have no recourse . . . .”

However, the distribution of $600,000 in sale proceeds by a $33 million company hardly
19

constitutes proof that a plaintiff will be left with “no recourse.” Neither is it correct to state

that “[i]f this money is allowed to leave Montana . . . there will be no recourse” (¶ 22). The

arm of the law reaches beyond our state’s borders. Van Loan requires “clear facts” of a

company’s pending insolvency or its intent to avoid a judgment. Neither were demonstrated

here.

¶44 Because of the failure to prove the requisite elements of the relief requested, I dissent.

/S/ JIM RICE

Chief Justice Karla M. Gray joins in the dissent of Justice Rice. 

/S/ KARLA M. GRAY