R. C. McDonough

The case concerned a Montana statute providing post-retirement pension adjustments to Teachers' Retirement System beneficiaries who were age 55 or older, or to disability and survivorship beneficiaries regardless of age. Plaintiff Debra Arneson, a 31-year-old beneficiary receiving benefits derived from her deceased mother's retirement, was denied the adjustment solely due to her age, whereas she would have qualified as a survivor if her mother had died while still employed. The Montana Supreme Court affirmed the district court's ruling that the age-based classification violated the equal protection clause of the Montana Constitution. The court applied rational basis review and found the distinction arbitrary because the legislative record and evidence contained no justification for treating retiree beneficiaries differently from survivors or disabled beneficiaries. The decision struck down the age restriction to the extent it denied benefits to qualifying individuals under 55.

civil rightslabor & employment

The case involved a dispute between Van's Tractor, a Montana farm equipment dealership, and Ford New Holland after the latter acquired Versatile's assets, including the dealership agreement, through bankruptcy proceedings. Van's Tractor claimed that Ford New Holland violated Montana statutes governing dealership terminations (§§ 30-11-802 and -803, MCA) and breached the covenant of good faith and fair dealing by designating the dealership for attrition without notice, refusing to approve a sale, demanding payment on a disputed bill, and imposing stop-ship status that prevented parts and equipment shipments. The Montana Supreme Court affirmed the district court's judgment for Van's Tractor, concluding that the statutes applied to the assigned agreement, that Ford New Holland had violated the statutes and the covenant through its termination procedures and handling of the bill and credit issues, and that the resulting damages, attorney fees, and costs were properly awarded.

business & regulatory

The case involved an insured party suing his auto insurer for breach of the covenant of good faith and fair dealing after the insurer denied an uninsured motorist claim arising from a 1984 motorcycle accident. Following a jury verdict awarding $750,000 in compensatory damages and $750,000 in punitive damages, the insurer appealed, raising issues about the trial court's handling of discovery and evidence. The Montana Supreme Court reversed the judgment and remanded for a new trial. It held that the district court erred by compelling production and admitting into evidence materials protected by attorney-client privilege and the work-product doctrine, as well as evidence of the insurer's post-filing litigation tactics and decision to appeal the underlying uninsured motorist verdict. The court reasoned that these evidentiary errors deprived the insurer of a fair trial.

torts & liabilityprocedurebusiness & regulatory

The case involved a deputy sheriff who responded to a teenage girl's suicide attempt, administered first aid, and later developed severe anxiety that prevented him from working, leading him to file a workers' compensation claim for mental stress injury. The claim was denied under Montana statute § 39-71-119, MCA (1987), which defines compensable injury to exclude mental stress without a physical component. The Workers' Compensation Court found the statute violated equal protection under Article II, Section 4 of the Montana Constitution by denying benefits based on the nature of the disability. The Montana Supreme Court reversed, holding that the statutory distinction is rationally related to legitimate interests in managing costs, preventing fraud, and ensuring verifiable work-related injuries, and therefore does not violate equal protection.

labor & employmentcivil rights

This case involved an insurance bad faith lawsuit filed by Tom and Jodie Stephens against Safeco Insurance after a fire damaged their auto body shop. The jury found that Safeco breached its duty of good faith and fair dealing, causing $38,333.33 in emotional distress damages to Tom Stephens, but also found that the Stephens breached their own good faith duty and interfered with Safeco, attributing 53% of the wrongful conduct to the Stephens and 47% to Safeco. The trial court denied any recovery to the Stephens on the ground that their greater share of fault barred recovery. The Montana Supreme Court reversed, holding that the Stephens were entitled to the full award because the insurer's bad faith sounded in tort while the insureds' conduct was only a contract breach, and the two could not be comparatively offset under Montana law.

torts & liabilitybusiness & regulatory

In Young v. Horton, a medical malpractice action, plaintiffs Lucille and Laurence Young claimed that defendant Dr. Vern H. Horton failed to obtain informed consent prior to performing an aorto-bifemoral bypass surgery on Lucille Young, which resulted in her paraplegia due to a complication. The Montana Supreme Court affirmed the jury verdict in favor of the defendant. The court reasoned that substantial credible evidence, including the doctor's testimony about discussing risks with the patient and supporting expert opinions, supported the jury's determination on informed consent, and found no abuse of discretion in the trial court's evidentiary rulings regarding medical journal articles or in its handling of trial recesses and voir dire.

torts & liabilityprocedure