Court Opinion

ID: 9378333
Source: CourtListenerOpinion
Date Created: 2023-03-09 23:05:34.061873+00
Date Added: 2024-06-11T17:17:20.379933
License: Public Domain

ORIGINAL                                           03/09/2023

            IN THE SUPREME COURT OF THE STATE OF MONTANA                                Case Number: OP 23-0153

                                          OP 23-0153

                                                                      FILED
 INNOVATIVE CONTRACTING, LLC, a
 Montana limited liability company, ANDREW                             MAR 0 9 2°23
                                                                     Bowan Greenweod
 HOEL, JIM FORS, and JOHN DOES 1-5,                                Clerk of Supreme Court
                                                                      State of rvIontene

              Petitioners,

       v.                                                            ORDER

 THE MONTANA TWENTIETH JUDICIAL
 DISTRICT COURT, LAKE COUNTY, THE
 HONORABLE JAMES A. MANLEY, Presiding,

              Respondent.

       Petitioners Innovative Contracting, LLC, et al. seek a writ of supervisory control to
vacate a ruling of the Twentieth Judicial District Court in Lake County Cause No.
DV-19-240 in which that court agreed to stay proceedings if Petitioners file a bond with
the Clerk of Court sufficient to guarantee the satisfaction of any final judgment against
Petitioners up to $1.2 million. Petitioners assert the court erred in conditioning the grant
of a stay on the posting of this bond.
       Petitioners include the LLC and two of its members who are the defendants in civil
litigation regarding a dispute over the construction of a home for which Innovative was the
general contractor. According to the petition before this Court, the plaintiff homeowners
pled numerous causes of action against Petitioners, including breach of contract, fraud, and
conversion. They seek $400,000 in actual damages as well as treble damages.
       This matter has been set for trial on March 20, 2023. Petitioners assert that on
February 13, 2023, the plaintiffs' counsel informed their counsel that the plaintiffs had
discussed a criminal investigation of two of the LLC's members with an FBI agent, and
that the plaintiffs believed the FBI would pursue a criminal investigation if this civil case
went to trial. The next day, Petitioners asked the District Court to stay the case, arguing
that the potential for criminal charges meant that their witnesses would otherwise be forced
to either testify and waive their Fifth Amendment protections or invoke the Fifth
Amendment to the detriment of their defense in the civil case.
       On March 6, 2023, the District Court issued a Memorandum and Order on
Defendants' Motion to Stay and Motion for Expedited Briefing Schedule (Order). In that
Order, the court asserted that it was unclear whether a criminal investigation existed, or
how likely it was that the LLC members would face criminal charges. However, the court
found that the prospect of criminal charges was "not ephemeral." Noting that it had
previously granted stays under similar circumstances, the court determined that a stay
might be appropriate here. However, the court also determined that the plaintiffs may
suffer financial hardship from delaying the litigation and that it may be "especially unfair"
where the LLC was no longer doing business and thus might be rendered judgment proof.
       The court thus ruled that it would "favorably consider[]" the stay if Petitioners file
a bond, as described above, by 4:00 p.m. on Friday, March 10, 2023. The court further
ruled that if an adequate bond was not timely filed, this matter would proceed to trial on
March 20, 2023.
       This Petition followed. We have considered it on an expedited basis given the time
constraints as Petitioners filed this petition as expeditiously as possible.
       Supervisory control is an extraordinary remedy that is sometimes justified when
urgency or emergency factors exist making the normal appeal process inadequate, when
the case involves purely legal questions, and when the other court is proceeding under a
mistake of law and is causing a gross injustice, constitutional issues of state-wide
irnportance are involved, or, in a criminal case, the other court has granted or denied a
motion to substitute a judge. M. R. App. P. 14(3). Supervisory control is appropriate when
the district court is proceeding based on a mistake of law which, if uncorrected, would
cause significant injustice for which an appeal is an inadequate remedy. Truman v. Mont.
Eleventh Judicial Dist. Court, 2003 MT 91, ¶ 13, 315 Mont. 165, 68 P.3d 654 (citing Park

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v. Sixth Judicial Dist. Court, 1998 MT 164, ¶ 13, 289 Mont. 367, 961 P.2d 1267). Whether
it is appropriate for this Court to assume supervisory control is a "case-by-case decision
that depends on the presence of extraordinary circumstances and a particular need to
prevent an injustice from occurring." Truman, ¶ 13 (citing Park, ¶ 13).
       In this instance, Petitioners assert that they have no remedy on appeal for the District
Court's decision to condition the stay on Petitioners' filing a $1.2 million bond by March
10, 2023, although they somewhat inconsistently also assert that allowing the matter to
proceed would give them grounds for appeal as they believe this would "call any
subsequent verdict into clear question." Petitioners further assert that they are entitled to
the relief they seek here because this ruling will cause a gross injustice. Although they
offer no evidentiary support for their allegations, they claim they do not have assets
sufficient to obtain the bond and the LLC's insurer, who is defending under a reservation
of rights, has declined to post the bond. Thus, Petitioners assert, in the absence of a bond
they are left with two unpalatable options: "1.) affirmatively defend against civil fraud and
theft claims, where a plainly meritorious defense exists, but in doing so potentially provide
`further incriminating' information for a criminal investigation; or 2.) invoke the Fifth
Amendment to avoid potential 'further incrimination' but be lambasted with adverse
inferences where an otherwise meritorious civil defense exists."
       Petitioners argue that this presents them with a "Hobson's choice" akin to that faced
by a birthfather whose parental rights were terminated in In re A.N., 2000 MT 35, 298
Mont. 237, 995 P.2d 427. In that case, we distinguished cases in which a party is compelled
to incriminate themselves as opposed to those cases in which the party is "merely required
to make tactical decisions regarding the defense of his position." In re A.N.,¶ 35 (quoting
Matter of C.L.R., 211 Mont. 381, 386, 685 P.2d 926, 929 (1984)). While we determined
that A.N.'s birthfather fell in the former category, and thus faced the Hobson's choice of
either incriminating himself or refusing to cooperate in the dependent-neglect matter and
thus suffer termination of his parental rights, Petitioners in this case fall squarely in the
latter category as their decision whether to testify is a tactical decision. Moreover,

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Petitioners in this case have failed to demonstrate that they cannot establish their evidence
by alternative methods that do not require the testimony of these two LLC members. See
Matter of C.L.R., 211 Mont. at 387, 685 P.2d at 929 (citation and quotation omitted).
       The burden of persuasion is on the petitioner to convince this Court to issue a writ.
Westphal v. Mont. Eleventh Judicial Dist. Court, No. OP 21-0387, 405 Mont. 438, 495
P.3d 421 (Aug. 17, 2021). In this case, they have also not demonstrated that the District
Court's ruling was not merely discretionary, and their petition therefore fails to satisfy the
standards for supervisory control. See Henderson v. Mont. Third Judicial Dist., No. OP
22-0069, 408 Mont. 540, 507 P.3d 140 (Feb. 15, 2022).
       IT IS THEREFORE ORDERED that the petition for writ of supervisory control is
DENIED and DISMISSED.
       The Clerk is directed to provide immediate notice of this Order to counsel for
Petitioners, all counsel of record in the Twentieth Judicial District Court, Lake County,
Cause No. DV-19-240, and to the Honorable James A. Manley, presiding Judge.
       DATED this ea        -ay of March, 2022.

                                                                 Chief Justice

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