TRUX L P v MINE MILL HYDRAULI
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BRUX, L.P., MINE AND MII-L HYDRAULICS, INC.; GLEN M. CALDWELL; KATHLlXD.4 BETSISE, a'k.'a KA'I'HLINDA CALDWELL; JAMES BURRINGTON; WILLII\M ANDERS; WILLIAM L-i. STINCHFIELD; GER.4LD E.NICHOLS; and MOKTANA HYDRAULICS, L1.C. Uefc~ldai~ts Respondents. and .4PPEAL FROM: District Co~irt the First Judicial District, of In and for the County of Lewis and Clark. Cause Xo. ADV-90-00370, Honorable Dor'othy McC'arter, Judgc Presidiiig COUNSEL OF RECORD: For Appellai~t: John M. Kaufiman, Kasting, Cornbs & Kauffnlan, Hozenlan, Montana For Respondents: l<iniberly S. Morc and Bruce A. Frcdricksoii, Crowlcy, flaughry. Manson: Toole & Dictriclr, Helena, Montana Submitted on Briefs: Fcbruary 7, 2002 Decided: Fchmar) 1.3, 2003 Justice Jiin Rice deiivcred the Opinic>i~ the Court. of !il The Appellant, TKIIX, L.P. iTrus), bsougirt this action agairist the Respnr~cionts alleging constructive fratid, breach of fiduciary duty and unjust enrichment. The District t.:ourt for the First Judicial District; Lewis and Clark County_granted summary judgment in favor of the Respondents and against Trus, concluding that 'Frus was barred from recovery by 4 27-1-303, MCA, bccausc Trux had already receued a judgment agalnst Mine and 11111 Hydraulics, Inc.. and because granting judgment against additional defendants lvouid d l l o ~ ~ . Trux to reco\er more than the satisfaction of its losses. Trux now appeals. We reverse $12 We rephrase and address the following issues on appeal: c3 1. \\here it is alleged that there are multiple tortfeasors who are jointly and se~erally liable and the plaintiff has obtained, in a separate action, a judgment against one of the tortfeasors for the full amount of damages alleged. but has received no reco%ery,does 5 27-1-303, MCA, prewent the plaintiff from bringing a separate action against the other tortfeasors? 2. \Vhether the Directors are shielded from personal liabilit! for the contractual ?I4 obligation of Mine and Nlill to Trux. !!5 On October 1") 1998, Mountain West Bank brought suit to collect on loans that it had made to Mine and Mill Hydraulics, Inc. (Mine and blill), alleging that hline and Mill had defaulted on its loans. That suit is known as itlozrtzrilitr !Test ilutzk ;V.;:A. 1;. iVfitze olrzd itfill ilycir-c~~~lii.~, czi., CDV 98-596 (the 'Bank Case"). Because 7'rux had a security i~iterest Irrc. ef in s o n ~ of the same collateral as Mountain C6'est Bank, the bank nained -1-ruxas an additiorial e 'ryithi~ suit, '1-nrx filed a cross-citrim against %lint and Mil! and Glen Caid\v\.ell. that sharcl-ioldiir and officer of Mine ant! Mill; for hreaci~of contnict, fraiid and un!iist cnrichmcnt. After conducting some discovery. Trux raoved ~lnder Rule 19. \/I.R.C~V,P.~ to add 'clontana f-%yciraulics, LLC (MH), as an additionili party to the Bank Case. in February 2000, the District Court denied Trus's request to add ME1 as a party, stating: [Clomplete disposition can be made in this case without joining Montana Hydraulics as a party. Mine and Mill is the debtor and the claints presented are against blilie and Mill on account of its default on various loan obligations. Mountain West holds first priority liens on the collateral which was leased to Montana Hydraulics. 'fKbX has superior priority to that of Mountain West in only the accounts receivable of Mine and Mill. 'There is no indication in the record, and TRIJX has not argued, that Montalia Hydraulics was involved with any aspect of those receivables. Furthermore, it has not been demonstrated that Montana I-lydraulics has any interest in the outcome of this foreclosure action, or in the ~tltimatedisposition of any funds received from the sale of the collateral. Accordingly. the Court conclutles that Montana Hydraulics need not be and brought into this aetioi~ that TRUX's motion to add Montana Hydraulics as a party should be denied. Court did not allow Trux to add MH to t l ~ c Bank Case, Trrix sought and Although the Distr~ct ultimately received a default judgment, on May 25, 2000, against Mine and Mill fbr S 1.012,019 plus attomcq fees of $27,330.5 1. $7 in June 1999, while the Rank Case was still proceeding and before receiving its dcfault jtidgnIent against Mine and 121111,Trux tiled its coruplaint In the instant case The original complaint is nearly identical to the cross-claim 'I'rux filed against Mine and Mill ir? thc Bit& Cast. Trux narncd as dcli.i~diitlts Mine arid ;~lii! iii~i~ and and Kaihiindii Caid\%cii* both sharchoiders a~~ird officers of Mine and Miii. 7jX 0 1 thc 1 same day that Trux received its default judgment against Mine and Mill in the Bank Case, 'Trux fi!cd an amended complaint in the instant case. adding as dofendants MFI and its Directors. The allegations in the amended complaint involve the same actions that led to the default judgment against Mitie and Mill in the Bank Case. 9 M H and its Directors (collectively "Respondents") thereafter moved the court to dismiss. arguing, in part, that allowing Trux to recover against them ivould violate 4 27-1- 303, MCA. The Respondents argucd that the statute prohibited T n ~ x from recovering a than greater amount of da~i~ages it suffered from any bi-each of an obligation, and that allowing Trux to proceed against them would esseirtially permit l'mx to reccive "double recovery" for its damages. The District Court converted the motion to one for summary judgment and on April 5,2001. granted summary judgment to the Respondents and against 'Trux, concluding that 5 27-1-303, MCIA, barred l'rux from recovering against the Rcspondents in light of the default judgment awarded Trux for its full damages against Mine and Mill. 7 10 Tmx moved the District Court to alter or amend its jtldgment, noting iil part, that 'Trux allegcd t!mt thc Respondents u-erc jointly and severally liable: and therefore, that any j~idgrncnt against thc Rcspondents, and damagcs collected tliercfrom, would he offset by any dslrniigcs itctualiy co!!ccted from the cief&uitjudgrncnt against Mint tind i.iiii.' The Dislrict C:uu-r cienied Tnix's rnotioi~. !/I I It is from the District Court's grant of summary judgment to tlie Kcspondents and frorn the District Court's denial of Trilx-s motion to alter and aincnd judgment that Trux now appeals. S 7 A liCrI1.il R L) 0F RE VIb:'W 712 f h c standard of review for a grant of surnmary judgment is rfe rzovo. This Court will apply the same etaluatlon as the distrtct cotlrt based upon K~rle b'I.R.C'rv.P. The mo\ ing 56, pally must establish both the absence of a genuine issue of ~naterial fact and entitlement to judgrnent as a matter of law. Gilrlzcz1e.s v. FValclt~lli, 2002 MT 262, Tj 9, 3 12 Mont. 240,y 9, rl 59 P.3d 377, 9. Once tlie mot~ing par?>:has met its burden, the opposing party must: if it ~vishes raise a genuine issue of material fact rather than merely arguing for a favorable to judgment, present rnaterial and substantial evidence essential to one or Inore elements of its ' case rather than presenting mere conclusory or spe~ulati\~c statements. (;otlsmles: 9. As we stated iu Cionzales, "[ojnce the moving party has met its burden, t11c opposing party must present material and subqtant~ale~ldenee.rather than mere conclusory or speculative Part of the District Court's concern when granting siimmary judgment was that Trux's default jndgmmt in the Bank Case diii uot explicitly provide for an o f k t from any amount rccovercd from other defendants. To allay this concern, Tr~rx moved for anil Xvas granted an atnendnient to its previous default judgment, providing that any recovery kom other defcndants ~vould offscl tlie mount collec~able Srom Mini: and Mill. Tliereafrer, Trux lilcd its uiotion to alter or arneiid the District Court's grant ofsumrnary judgment in the instant case. siillerncnls; 10 raise a genuine issiic of material hct." Oiir standard nf -cviclv o f a qircsrjan of law is whcthcr the lcgai conciusions o f the trial coiil-t arc correct, <;of2zde,7,7 9 1. Where it is alleged that there are multiple tortfcasoss who are jointly and severaliy liable and the plaintiff has obtained, in a separate action, a judgment against one of the tortfeasors for the full amount of damages alleged, but has received no recovery, does 8 27-1-303, MC.4, prevent the plaintiff from bringing a separate action against the other tortfeasors? Ill 1 14 1 Sectlon 27- 1-303, MCA, pro\ ides: Limitation of damages for breach of obligation. No person call recover a greater amount in damages for the breach of an obligation than he could have gained by the full performance thereof on both sides unless a greater recovery is specified by statute. ?] 15 '1-1-ux contends that the District C o ~ ~ r t in applying the above statute; arguing that erred the statute prohrbits only rccoi,ei-) of more than the satisfaction of its losses, but does not preclude its right to attain a judgment against any and all parties <vho may be jointly and severally liable ibr damages. Trux notes that it has recovered no darnages from its dehult judginent against Mtne and Mill in the Bank Case and that any recovery from the Respondents mould offset the ainount collectable from Vlne and Mill, thereby pret cnting , 1 rux from recovering a greater amount than its actual darnages. V6 i : The District Court disagreed with Trux's interpretation ofthe statutc. stating that the mordlng "does not llmit that statute to money actually rcco~ercd . . lf the legrslat~lre . liad intended to l~mit statutc to money actually reco\ered. the I[ Ia~igtiege that effect " The Dlstrtct Court concluded that to could hate inclnded exprcss 6 17-1-303, MCA, prohlb~ted Trux from adding thc Responilents as dcfikmtianrs to thc instant case and co~~ciitded that 'f'rux's interpretation would dcfeat the purpose of tlie statiitc 'ksincc i'laintiff s judgment can be cnfbiced at any time in the future, long after Plaintiff may ha\-e recovered from other I)cfcildants, resulting in a double recovery for Plaintiff." '17 011 appeal. the Rospondents agrcc and contend that ""any award of additional damages against Montana tlydrauhcs and the Directors nould constitute a double recopery . . . TRCX does not allege any additlo~~al damages b e ~ o n d those resulting from the allcged breach of contract by [Mine and Mill], which darnages were awarded in the prel-ious case." We disagree xith the Respondents and the District Court. 3ji 8 Scctior~ 27-1 -303, MCA, by its o ~ v n wording. "llinits the recovery to the amount the plaintiff could have gained by full performance of the contract" unless a greater recovery is specified by statute. Lnrsorl v. C',~denr(l990), 246 Mont. 336, 341, 805 P.2d 1318, 1322. While the srattite plainly limits total recovery to the satisfaction of a plaintiff's losses for breach of an obligation?the wordiitg of tlie statute nowhere shields from liability any parties who may be jointly or severally liable. 710 The District Court concluded that Trux offered no authority that joint artd several liability enabled it to collect more than it is entitled to collcct under the la\v. Trux did not arguc, hoivcver, that joint and several liability permitted or- cnablcd it to collcct nlore than it was entitled to collect under the law. Rather, Trux argued that 4 27-1-303, MCA, did not bar separate actions against jointly and severally liable tortfeasors even \vlsere Trux had already recci1:cd a dchuli judgment covering its iosscs: but had not hec~isucccssiirl in collecting thc jtid,irmcnt. 9120 We agrce with i'r~lx.Nothing in the plain worciing of 5 27-1 -303; MCA, prevents a pan) from pursuing and receiving scparaic jlidgmcnts against jointly and severally liable tortfeasors. This is true even if more than one judgment entitles the plaintiff to the full amou~it damages suffered. By definition, "a liability is said to be joint and several when of the creditor may denland payment or sue one or more of'the parties to such liability separately, or all of the111 together at [the creditor's] option." Black's Lan Dictionary 837 (6'"ed. 1990). 7121 In conjunction with joirrtand several liability. the plain languageof 3 27-1-303. MCA, prevents a person from recovering for breach of all obligatio~tan amount greater than the da~nagcs suffered. Pennitting joint and several liability-that is, separate judgme~itsagainst multiple tortfeasors-does not, as concluded by the District Court, defeat the purpose of the statute. Section 27-1 -303, MCA, does not shield a jointly and severally liable tortfeasor from judgment il~erelybecause a judgment for full recovery has already been entered against another jointly and severally liable tortfeasor. Tile statute docs not design;rtc which liable party mtrst pay. It merely limits a person's recovery to actual losses suffered by breach of an obligation. To inter-pret the statute as the ilistrict Court has done would effectively shield liable, and thiis responsible for a plaintiffs other tol-tfeasors who are jointly and scvc~-ally damages. simply because the plaintiffreceived a judgment, or right of recovery, against one oi'tbi: tortfeasors. This reasonir~g K-ouid cffectivciy provide a route lhrnugh which jointly and severally liable tortfeasors could avoid l i b l t .a resrrlt that is clcarly nor rhi: purpose iriiy or intention of the statute. rl22 We agree with Trux that its previous judgment merely represents a right to recover against Mine and Mill. The judgment does not represent aettral reco\.ery. Section 27-1-303, MC.4, is therefore inapplicable in the instant case. If it is determined that the Respondents are jointly and severally liable because they breached an obligation to Trux, the judgment against Mine and Mill will not shield them. '123 We conclude, therefore, that $27- 1-303, MC'A, by its plain language, merely prevents a person from recovering a greater amount of damages tiIan suffered by breach of an obligation unlcss otherwise provided by statulc. It docs not preclude separate judgn~ents against tortfeasors who are jointly and severally liable and is therefore inapplicable to the present ease. The District Court thus erred when it granted surnmary judgment on that basis. 2. Whether the Directors are shielded from personal liability for the contractual obligation of Mine and Nlill to Trux. 112.1 :j25 On appeal, the Respondents claim that joint and several liability is i~nproper because Trux did slot establish that the Ilirectors acted against the best ititerests of the corporation or acted only on the basis of their own pecuniary benefit or wit11 the intent to harm Trux. In granting summary judgment, the District Court did not address thc issue of wl~ethcrthe Respondents are or are not jointly and severally liable and the issue will not be addressed TlZ6 01 1 -1.h~:Rcspondcnts also allege that si!mmaryjucJgcrr~enrwould hare been appropriate the biasis of collsitcra? csluppei or-, aiter-natively; bccausi: Trux co~iidhatc ackicd ihc Respondents to the iiarlk Case under Rule 13(hj. M.R.Civ.P., bat failed to do so. The District Court ctici not grant summary jiidgment on thc basis o f these issues and the issues arc not properly before this Court on appcal. '27 We conclude that the District Court erred in granting surnlnary judgment to the Rcspondcnts on the basis of 9 27-1-303, MCA. We reverse and remand accordingly.
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