Flagstone Development, LLC et al v. Joyner et al
ORDER DENYING 505 Motion for New Trial. Signed by Judge Sam E Haddon on 6/23/2017. (AMC)
JUN 2 3 2017
Cler1<, U.S. District Court
District Of Montana
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
FLAGSTONE DEVELOPMENT LLC,
an Arizona limited liability company,
No. CV 08-100-BLG-SEH
TIMBERLANDS, LLC, a Montana
This case was remanded to this Court from the Ninth Circuit following
appeal to address and resolve a single question: whether the Buy-Sell Agreement 1
(the "Agreement") between Flagstone Development LLC and Rocky Mountain
Timberlands, Inc. had been abandoned. On February 10, 2016, a jury verdict
Trial Exhibit 1, Doc. 499-2.
finding the Agreement had not been abandoned was entered. 2
After the abandonment question was resolved, a hearing on issues
remaining to be tried was held on April 20, 2016. At that hearing the Court ruled
as a matter of law, for reasons stated, that claims previously asserted for:
Negligent Misrepresentation; 3 Negligence; 4 Libel and Slander; 5 Tortious
Interference; 6 Conspiracy;7 Bad Faith Breach ofContract; 8 and Violation of the
Right to Privacy; 9 were dismissed and out of the case. 10 One individual Plaintiff
and two individual Defendants were separately dismissed on August 31, 2016, 11
leaving only Flagstone Development LLC as Plaintiff and Rocky Mountain
Timberlands, LLC as Defendant. The only unresolved issues remaining for trial
were: (1) whether Defendant had committed a material breach of the contract; and
See Doc. 418 at 7.
(2) determination of any damages to Plaintiff resulting from such a breach.
Whether trial of liability for breach of contract should be bifurcated from
resolution of potential damages arising from breach was separately presented and
addressed as an issue for resolution in the Court's discretion.12 Defendant sought
such bifurcation. 13 Plaintiff opposed the request. 14
The bifurcation request was granted; 15 in part because multiple claims had
been removed from the case and dismissed by order of Court, 16 and in part because
the significant liability issue remaining for decision by jury trial turned on the
question of whether Defendant had committed a material breach of the contract.
Moreover, a substantial number of questions framed in a material breach of
contract special verdict form proposed by the parties related to claims that at one
point had been pleaded by Plaintiff but had later been removed from the case. 17
A jury trial limited to the breach of contract issue was commenced on April
See Fed. R. Civ. P. 42(b); see also M2 Software, Inc. v. Madacy Entm 't, 421 F.3d 1073,
1088 (9th Cir. 2005).
See Doc. 447 at 34-35.
See Doc. 447 at 35.
See Doc. 455 at 21-22.
See Doc. 458.
24, 2017. At that trial the jury determined by general verdict that the Defendant
had materially breached the Agreement. 18
Defendant has now moved for a new trial of the breach of contract issue
claiming error from submission of the material breach issue for decision by the
jury by general verdict. 19 The motion is opposed.
In determining remedies for breach of contract, Montana law distinguishes
between "material" and "incidental" breaches. 20 The non-breaching party is
entitled to terminate the contract for a "material" breach. 21 An "incidental" breach
only entitles the non-breaching party to sue for damages. 22
The jury instruction given at the April 24, 201 7, trial defined material
A material breach is a breach which touches the
Under Fed. R. Civ. P. 59(a)(l )(A), the court may grant a new trial "after a jury trial, for
any reason for which a new trial has heretofore been granted in an action at law in federal
court[.]" "Historically recognized grounds include, but are not limited to, claims 'that the verdict
is against the weight of the evidence, that the damages are excessive, or that, for other reasons,
the trial was not fair to the party moving."' Molski v. MJ Cable, Inc., 481 F.3d 724, 729 (9th
Cir. 2007) (quoting Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940)).
See R.C. Hobbs Enters., LLC v. JG.L. Distrib., Inc., 104 P.3d 503, 508 (Mont. 2004)
(citing Norwoodv. Serv. Distrib. Inc., 994 P.2d 25, 31 (Mont. 2000)).
fundamental purpose of the contract and defeats the
object of the parties in making the contract. Plaintiff has
the burden of proving that any breach of the contract was
a material breach. Defendant denies that it committed a
material breach. 23
The instruction was given without objection from either party. 24
Arguments advanced by Defendant in support of the new trial motion are
substantially related to matters of potential evidence and testimony not yet
presented and which may be expected to be offered, or opposed, by the parties in
support of or in opposition to breach of contract damages claimed by Plaintiff or
opposed by Defendant. Moreover, the Court has not yet addressed or resolved the
numerous factual and evidentiary issues which are likely to arise in the damage
phase of trial, including but not limited to: (1) the scope of damages for which
Plaintiff may seek recovery; (2) whether damages for which recovery is sought are
supported by admissible evidence; and (3) whether the claimed damages are, with
certainty, caused by the breach and are not speculative. 25
In addition, the Court has yet to address or determine the extent to which
Doc. 496 at 18.
See Fed. R. Civ. P. 5l(c); see also Birdv. Lewis & Clark Coll., 303 F.3d 1015, 1022-23
(9th Cir. 2002) (noting that failure to object to an instruction waives the right of review).
See Stensvad v. Miners and Merchs. Bank of Roundup, 640 P.2d 1303, 1310 (Mont.
damage claim evidence may, under Daubert principles, be presented, supported, or
opposed by opinion testimony. 26 Many of the yet undecided damage issues were
neither capable of nor appropriate for resolution by use of a special verdict form at
the liability phase of trial in the form proposed.
The damage phase of proceedings and trial remains and is yet to be
conducted. Issues related to damage theories and evidence, and the assertion of
both parties' claims and defenses, can and will be addressed in the next phase of
the trial process. A new trial on the breach of contract issue is neither necessary
The Motion for New Trial 27 is DENIED.
DATED this ').]-clay of June, 2017.
United States District Judge
See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589-95 (1993).
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