Lence Family Trust v. Christensen et al

Filing 49

ORDER granting 34 Motion for Summary Judgment; granting 22 Motion for Summary Judgment. Signed by Judge Donald W. Molloy on 8/20/2013. (NOS, )

FILED
AUG 2 0 2013
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION

Clerk, U.S District Court
District Of Montana
Missoula

CV 12-171-M-DWM

LENCE FAMILY TRUST,
Plaintiff,

ORDER

VS.

ELMER C. CHRISTENSEN;
LANDTECH ENTERPRISES LTD,
CO. and LANDTECH ENTERPRISES
LLC, Montana Limited Liability
Companies; JOANNE
CHRISTENSEN; LANDTECH
CORPORATION, a Montana
Corporation; and JOHN DOES 1-10,
Defendants.

INTRODUCTION

This is a Joint Motion for Summary Judgment. (Doc. 22; Doc. 34.)
Defendants Elmer Christensen, Joanne Christensen, Landtech Corp., and Landtech
Ltd. are seeking summary judgment pursuant to Federal Rule of Civil Procedure
56(a) on PlaintiffLence Family Trust's Second Amended Complaint. (Doc. 5.)
Defendant Landtech LLC has filed its own Motion for Summary Judgment. (Doc.

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34.) Landtech LLC asserts the same defenses that the other Landtech companies
assert, so this Order is organized by claim and not by company.
BACKGROUND

Landtech Corporation ("Landtech Corp."), incorporated in Montana in
1980, was involved in oil and gas field services and salt water disposal. (Doc.
24-1at2.) Landtech Corp.'s principal place of business was Sidney, Montana.
(Doc. 5 at 2.) From 1983 until 2005, the President ofLandtech Corp. was Elmer C.
Christensen. (Doc. 24-1at2-3.) From 1981 until August of2005, John Lenee was
the attorney for Landtech Corp. (Doc. 32-4 at 2.) Lenee also had an equity
interest in Landtech Corp. of between 25% and 50% during the same period. (Doc.
32-2 at 2.) Mr. Christensen and Landtech Corp. paid Lenee a $2,500 monthly
retainer, later raised to $5,000, for his legal services. (Doc. 32-4 at 2.) Lenee is
the senior trustee of the Lenee Family Trust, a Texas trust and the Plaintiff in this
action. (Doc. 32-4 at 1.) Landtech Corp. was involuntarily dissolved by the
Montana Secretary of State on December 4, 2006. (Doc. 24-1at3.)
Landtech Enterprises LTD Co. ("Landtech Ltd.") was a limited liability
company incorporated in Montana on September 21, 1998, (doc. 24-1at3), with
its principal place of business in Sidney, Montana, (doc. 5 at 2). It too was

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involved in oil and gas field services and salt water disposal. (Doc. 24-1 at 3.) The
initial members ofLandtech Ltd. were Elmer C. Christensen and Gary L. Wygal.
Each man had a 50% capital percentage and a 50% voting percentage in Landtech
Ltd. (Doc. 24-1at3.) From 1999-2006, both Elmer and his wife Joanne
Christensen were individual members ofLandtech Ltd. (Doc. 24-1at4.) On
December 4, 2007, Landtech Ltd. was involuntarily dissolved by the Montana
Secretary of State. 1 (Doc. 24-1at4.)
On December 31, 2004, Landtech Ltd.'s assets were sold to a North Dakota
company. (Doc. 36 at 2.) As part of the agreement, the buyer was allowed to use
the name "Landtech" in a new entity. (Doc. 36 at 2.) On June 21, 2005, this new
entity organized as a single member limited liability company, Landtech
Enterprises, LLC ("Landtech LLC"). (Doc. 36 at 2.) Company assets were
transferred between Landtech Ltd. and Landtech LLC from December 31, 2004 to
July 27, 2005. (Doc. 24 at 5.) The sale totaled $3,600,000 and resulted in a net
profit for Landtech Ltd. of over $2,500,000. (Doc. 32 at 5.) Landtech LLC is
owned by Badlands Power Fuels; Elmer Christensen has never had an ownership
interest in Landtech LLC. (Doc. 36 at 4.) Even though Landtech LLC is a North

1

It is not clear from the record why Landtech Corp. and Landtech Ltd. were involuntarily
dissolved.

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Dakota corporation, it is registered to do business in Montana and has an office in
Sidney. (Doc. 36 at 2, 6.)
This case stems from an Acknowledgement and Assignment signed by
Landtech Ltd., the Lenee Family Trust, and John Lenee's attorney, James Bartlett,
on March 8, 2004. (Doc. 24 at 5.) The parties agreed that ifLandtech Ltd. or its
assets were sold, the net proceeds would be shared equally: 50% to Elmer and
Joanne Christensen and 50% to the Lenee Family Trust. (Doc. 24 at 5.) Over the
course of correspondence, Christensen represented to Lenee that Christensen was
in very poor health, that he was unable to manage the company, and that the
company would have to be sold for far less than it was worth. (Doc. 5 at 3.) The
business sold in December 2004 to Landtech LLC; the Lenee Family Trust was
not notified of the sale or given its 50% share. (Doc. 33 at 6.) On August 11, 2005,
Gary Jackson, a lawyer representing Landtech Ltd., sent a letter to Lenee and
Attorney Bartlett. (Doc. 24 at 6.) The letter offered $100,000 as consideration for
and in full satisfaction of the Acknowledgement and Assignment. Also included
was a document that, when signed by Lenee, would release Elmer and Joanne
Christensen and Landtech Ltd. of all past and future claims, including claims
arising out of the Acknowledgement and Assignment. (Doc. 24-15 at 1.) Bartlett
answered Jackson four days later, asking for copies of the closing documents so
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that Lenee could make an informed decision on the $100,000 offer. (Doc. 24 at 6.)
Two days later, Jackson told Bartlett on the phone that Lenee did not own an
interest in Landtech Ltd. and, as a result, he would not receive copies of the
closing documents. (Doc. 24 at 6.) Lenee signed the Release of All Claims that
same day. (Doc. 24 at 7.) On August 22, 2005, Bartlett sent Jackson the signed
release along with a letter explaining why Lenee signed it: he was in dire financial
straits and needed the money for his family and attorney. (Doc. 24 at 7.) On
August 25, 2005, Jackson sent Bartlett a check for $100,000. The check was
deposited and the amount was never returned to Christensen. (Doc. 24 at 10.)
Janet Hagel is Lenee's secretary; she has had his general power of attorney
since April 7, 2004. (Doc. 24 at 6.) On September 9, 2005, Hagel signed a Notice
of Rescission on behalf of Lenee and the Lenee Family Trust. (Doc. 24 at 11.) The
Notice stated that Lenee and the Lenee Family Trust rescind the Release of Claims
in favor ofLandtech Ltd. and Elmer and Joanne Christensen. (Doc. 24 at 11.) The
Notice also requested that Christensen make a reasonable offer to settle payment
of the one-half share owed to the Lenee Family Trust ifhe wanted to avoid a
lawsuit. (Doc. 24 at 11.) Christensen maintained that he "did not owe John any
money." (Doc. 24 at 7.) Seven years passed. In 2012, Lenee tried to look up Elmer
Christensen to determine whether he had passed away. More than a dozen Bakken
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trade journals and the Sidney Herald contained ads for Landtech LLC. All the ads
listed Christensen as the manager of operations. (Doc. 41 at 3.) Upon receipt of
this information, Lenee concluded that he had in fact been defrauded by Mr.
Christensen. (Doc. 42 at 2-3.) He filed suit on behalf of the Lenee Family Trust on
October 5, 2012, for breach of contract, fraud, civil conspiracy, and constructive
fraud. (Doc. 1.)
STANDARD

Summary judgment is granted if the movant shows there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(a). "Rule 56(c) requires a party asserting there is an [sic]
genuine factual dispute to show evidence, not mere allegations. In resolving
whether a genuine issue exists, the Court 'view[s] the evidence and inferences
which may be drawn therefrom in the light most favorable to the adverse party.'"
Roaring Lion, LLC v. Nautilus Ins. Co., 2011 WL 3955800, at * 1 (D. Mont. Sept.
7, 2011) (quoting James River Ins. Co. v. Hebert Schenk, P.C., 523 F.3d 915, 920
(9th Cir. 2008)) (Molloy, J.). "On a motion for summary judgment, this Court must
determine whether a fair-minded jury could return a verdict for the non-moving
party. Only disputes over facts that might affect the outcome of the suit under the
governing law will properly preclude entry of summary judgment; factual disputes
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which are irrelevant or unnecessary to the outcome are not considered." Rice v.

Allstate Ins. Co., 2012 WL 1831114, at *1 (D. Mont. May 18, 2012) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 248 (1986)) (Molloy, J.). A
district court's decision to grant, see Bravo v. City ofSanta Maria, 665 F.3d 1076,
1083 (9th Cir. 2011), partially grant, see White v. City ofSparks, 500 F.3d 953,
955 (9th Cir. 2007), or deny, see Tibbetts v. Kulongoski, 567 F.3d 529, 535 (9th
Cir. 2009), a summary judgment motion is reviewed de novo.
SUMMARY CONCLUSIONS

Defendants are entitled to summary judgment on all claims: breach of
contract, fraud, civil conspiracy, and constructive fraud. The briefs in support of
the Motions for summary judgment raise similar defenses to the Complaint,
consequently all Defendants are entitled to summary judgment for the same
reasons as explained below.
ANALYSIS

I.

An accord and satisfaction bars the Plaintiff from asserting its breach
of contract claim.
A.

Only Defendant Mr. Christensen and Defendant Landtech Ltd.
can be held liable for breach of contract.

In its Second Amended Complaint, the Plaintiff asserts a breach of contract
claim against "Defendants." The Complaint alleges that "Defendants breached the
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contract by failing to perform and pay plaintiff as agreed." (Doc. 5 at 4.) The
language of the Complaint implies that the breach of contract claim is being
asserted against all Defendants. However, only Defendant Mr. Christensen and
Defendant Landtech Ltd. were parties to the contract that allegedly was breached.
(Doc. 5 at 3.) "Generally, the obligation of contracts is limited to the parties
making them, and, ordinarily, only those who are parties to contracts are liable for
their breach. Parties to a contract cannot thereby impose any liability on one who,
under its terms, is a stranger to the contract." 17A Am. Jur. 2d Contracts § 412
(2013). The Montana Supreme Court concluded that "the obligation of the
contracts is limited to the contracting parties." Gambles v. Perdue, 572 P.2d 1241,
1243 (Mont. 1977). Neither Christensen nor Landtech Corp. nor Landtech LLC
was a party to the Acknowledgement and Assignment of March 8, 2004. (Doc. 5 at
3.) Lenee Family Trust has no legal basis for their claim of breach of contract
against Mrs. Christensen, Landtech Corp. or Landtech LLC. These three
Defendants are entitled to summary judgment on the breach of contract claim as a
matter of law.

B.

The Release of Claims is a valid accord and satisfaction.

The Acknowledgement and Assignment signed by Christensen, Landtech
Ltd., and the Lenee Family Trust required that the net proceeds of a sale of
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Landtech Ltd. were to be shared equally by the Christensens and the Lenee Family
Trust. (Doc. 24-7.) When Landtech Ltd. was sold, the Lenee Family Trust was not
notified and did not receive its 50% share of the proceeds. (Doc. 5 at 3.) Plaintiff
claims that Defendants' failure to share the proceeds constitutes a breach of their
contract. (Doc. 5 at 4.)
However, Defendants insist that a valid accord and satisfaction releases
them from any obligations under the original contract. (Doc. 11 at 3.) Shortly after
the sale ofLandtech Ltd. was complete, Landtech Ltd.'s attorney, Gary Jackson,
offered Lenee $100,000 to sign a Release of All Claims. (Doc. 24 at 6.) The
Release stated, in relevant part,
John A. Lenee as Trustee of the Lenee Family Trust ... and
James C. Bartlett ... do hereby completely, finally, and
irrevocably release, acquit and forever discharge Landtech
Enterprises LTD. CO.... Elmer C. Christensen, and Joanne M.
Christensen ... from any and all collections, claims, actions,
causes of action, demands, punitive damages, other damages,
expenses and compensations whatsoever which the
undersigned may now have or which may hereafter accrue on
account of or in any way growing out of any and all matters
which in any manner relate to Landtech Enterprises Ltd. Co.
including, but not limited to, the Acknowledgment and
Assignment dated March 8, 2004 ... whether known or
unknown at this time and any foreseen and unforeseen
consequences thereof. The undersigned in consideration of the
sum of One Hundred Thousand and No/100 Dollars
($100,000.00) hereby acknowledge full satisfaction of any and
all claims they may have against Landtech Enterprises Ltd. Co.,
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Elmer C. Christensen and JoAnne M. Christensen arising out of
any and all matters relating to Landtech Enterprises Ltd. Co.
and the aforementioned Acknowledgment and Assignment. The
undersigned acknowledge that the receipt of the sum referenced
above constitutes the entire sum to be paid in exchange for the
release of the claims released herein and that it is their intent to
fully and completely settle all of the claims released hereby
upon delivery of the settlement sum to them.
(Doc. 24-15 at 1.) Lenee signed the release and deposited the $100,000 check.
(Doc. 24 at 7, 10). The question is whether that $100,000, in exchange for a
Release of All Claims, is a valid accord and satisfaction that extinguishes all prior
contractual obligations. (Doc. 23 at 7.)

"An accord is an agreement to accept in extinction of an obligation
something different from or less than that to which the person agreeing to accept is
entitled. Though the parties to an accord are bound to execute it, yet it does not
extinguish the obligation until it is fully executed." Mont. Code Ann.

§ 28-1-1401. "Acceptance by the creditor of the consideration of an accord
extinguishes the obligation and is called satisfaction." Mont. Code Ann.

§ 28-1-1402. Here, Lenee (the creditor) agreed to take something less than that to
which he was arguably entitled and the Defendants fully executed their new
obligation: to pay him $100,000. The Release of All Claims is an accord and the
$100,000 check Lenee took in consideration is a satisfaction. Notably, "the

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Montana Supreme Court defines a 'release' as 'nothing more than an accord and
satisfaction, or, one of several ways in which an obligation, contractually, may be
discharged or "settled" for less than or for something different than what is
owed.'" Greenwaldv. Safeco Ins. Co. ofAm., 2010 WL 2978140, at *5 (quoting

Watters v. Guaranty Natl. Ins. Co., 3 P.3d 626, 634 (Mont. 2000)) (Molloy, J.).
The doctrine of accord and satisfaction prevents Lenee from enforcing a breach of
contract claim against Christensen and Landtech Ltd.
Nonetheless, Janet Hagel, acting on behalf of Lenee, attempted to rescind
the Release of All Claims by sending the Defendants a Notice of Recession. (Doc.
24-19.) The Notice advises Defendants that the Acknowledgement and
Assignment of March 8, 2004 "is a binding a legal agreement and good faith full
compliance with its terms is expected." (Doc. 24-19 at 1.) A party to a contract
may rescind the contract only "(1) if the consent of the party ... was given by
mistake or obtained through duress, menace, fraud, or undue influence exercised
by or with the connivance of the party as to whom the party rescinds." Mont. Code
Ann.§ 28-2-1711(1). Lenee claims that his consent to the Release of All Claims
was obtained through undue influence. (Doc. 33 at 5.) Undue influence consists
of: "taking a grossly oppressive and unfair advantage of another person's
necessities or distress." Mont. Code Ann. § 28-2-407(3). The Montana Supreme
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Court sets a high standard for claiming undue influence: "For there to be undue
influence it is necessary that there be a destruction of free agency." In re Baby M,
921P.2d857, 860 (Mont. 1996). Although Christensen knew of Lenee's difficult
financial situation, (doc. 32-4 at 3), there is no evidence that he used this
knowledge in a grossly oppressive manner or to destroy Lenee's free agency and
thereby convince him to sign the Release of All Claims. Lenee cannot meet the
standard for a showing of undue influence, so he cannot rescind the Release of All
Claims on that basis. The Release of All Claims and payment is a valid accord and
satisfaction that discharges the Defendants' prior contractual obligations.
Defendant's Motion for Summary Judgment on the breach of contract claim is
granted.

II.

The statute of limitations on fraud was not tolled and now bars the
Plaintiff's claim.
The Lenee Family Trust argues that the representations Christensen made

about his poor health, the value ofLandtech Ltd., and the need to sell the company
were fraudulent because Christensen knew what he was saying was false but made
the representations anyway, hoping to convince Lenee to take $100,000 instead of
the half-share of the profits that was his due. (Doc. 5 at 4.) Defendants deny the

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accusations of fraud but claim that regardless the statute of limitations bars the
Plaintiffs claim. (Doc. 23 at 3-4.)

A.

The statute of limitations bars the fraud claim.

"A defendant is guilty of actual fraud ifthe defendant: (a) makes a
representation with knowledge of its falsity; or (b) conceals a material fact with
the purpose of depriving the plaintiff of property or legal rights or otherwise
causing injury." Mont. Code Ann§ 21-1-221(3). But "[a]ctual fraud exists only
when the plaintiff has a right to rely upon the representation of the defendant and
suffers injury as a result of that reliance." Mont. Code Ann§ 21-1-221(4). Fraud
is its own cause of action and, accordingly, has its own statute of limitations. A
cause of action for fraud must be commenced within two years, but the cause of
action does not accrue until "the discovery by the aggrieved party of the facts
constituting fraud." Mont. Code Ann§ 27-2-203. "A claim or cause of action
accrues when all elements of the claim or cause of action exist or have occurred,
the right to maintain an action on the claim or cause is complete, and a court ... is
authorized to accept jurisdiction of the action." Mont. Code Ann
§ 27-2-102(1)(a). The Montana Supreme Court holds "that the statute of
limitations for an action based on fraud begins when the fraud occurs unless the
facts which form the basis for the allegation are, by their nature, concealed. [It]
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also conclude[d] that even after acts which form the basis for an allegation of
fraud are discovered, the statute may be tolled if the defendant takes affirmative
action to prevent the injured party from discovering that he or she has been
injured." Cartwright v. Eq. Life Assurance Socy. of U.S., 914 P.2d 976, 985 (Mont.
1996). The party asserting fraud "must show that the acts of fraud were committed
under such circumstances that [it] would not be presumed to have knowledge of
them, it being the rule that if [it] has 'notice or information of circumstances which
would put [it] on inquiry which if followed would lead to knowledge, or that the
facts were presumptively within [its] knowledge, [it] will be deemed to have actual
knowledge of the facts."' Id. (quoting Mobley v. Hall, 657 P.2d 604, 607 (Mont.
1983).
The acts of the Defendants that constitute fraud, according to the Plaintiff,
took place during 2004 when Christensen made false representations about his
health and the need to sell the company, (doc. 5 at 3); in December 2004 when
Landtech. Ltd. was sold and the Lenee Family Trust was not notified or given its
50% share, (doc. 33 at 6); and in August 2005 when Attorney Jackson offered
Lenee $100,000 as consideration for a Release of All Claims but refused Lenee
access to the closing documents, (doc. 24 at 6). Lenee signed off anyway. The

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September 9, 2005 Notice of Recession informed Christensen that "[a]bsent
receipt of [a reasonable offer to settle payment of the Lenee one-half share] a
lawsuit will be filed against Landtech, you and your wife for fraud ...."(Doc. 24
at 11.) Accompanying the Notice was a handwritten letter from Mr. Lenee to Mr.
Christensen: "SHAME ON YOU. I THOUGHT OF YOU LIKE A BROTHER
ALL OF THESE YEARS. SHAME ON YOU, ELMER." (Doc. 24 at 11.) The
Notice and the letter that accompanied it shows that Lenee knew or suspected by
September of 2005 that he had been defrauded by Christensen. Defendants argue
that the statute of limitations on the fraud claim has run, but they do not specify a
date on which the fraud claim allegedly accrued. (Doc. 23 at 6; Doc. 37 at 7-8.)
This lack of specificity matters little, however, because at least seven years passed
between the events giving rise to the fraud claim and the filing of the lawsuit on
October 5, 2012. (Doc. 1.)
Lenee argues that he did not learn of the falsity of Mr. Christensen's
representations about his health until 2012, (doc. 33 at 4). Nothing in the record
shows why Lenee waited seven years to investigate these claims or why he failed
to exercise due diligence in investigating them. He also argues that the statute
should be tolled because "the defendant was in a position of trust or confidence
with the plaintiff." (Doc. 33 at 3.) The case Plaintiff cites for this proposition,
15

Skierka v. Skierka Brothers, Inc., requires that "there must be some active
affirmative concealment of the fraud ... in order to postpone the running of the
statute ... [u]nless there is some relation of trust or confidence between the parties
which imposes upon a defendant the duty of making a full disclosure of the facts."
629 P .2d 214, 217 (Mont. 1981 ). Christensen and Lenee were friends and business
partners for over twenty-five years. (Doc. 33 at 3). If Christensen had a duty to
disclose all of the facts to Lenee is irrelevant because Lenee allegedly learned of
the fraud on his own. He rescinded the Release of All Claims, demanded his halfshare, and threatened a lawsuit for fraud on September 9, 2005. (Doc. 24-19 at
1-2.) Lenee's actions indicate that he knew of facts and circumstances giving rise
to Christensen's fraud before he discovered that Christensen had prevaricated
about his health and even though Christensen may have failed to make a full
disclosure of the facts surrounding the sale of Landtech Ltd. There is no
circumstance in this case that would have tolled the statute of limitations. Thus the
Plaintiffs claim is barred and Defendants' Motions for Summary Judgment on the
fraud claim is granted.

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III.

The Plaintiff does not have a colorable civil conspiracy claim and the
claim is barred by the statute of limitations.

The third claim in the Complaint is for civil conspiracy. Plaintiffs allege that
Christensen, Landtech Corp., Landtech Ltd., and Landtech LLC "agreed by words
and conduct to accomplish the unlawful goal of cheating [the Lenee Family Trust]
of its share of the proceeds of the sale of the companies through the unlawful
means of defrauding [the Lenee Family Trust] with misrepresentations regarding
the business and [Mr. Christensen's health." (Doc. 5 at 5.) In Montana,
"A civil conspiracy is a combination of two or more persons by
concerted action to accomplish an unlawful purpose, or to
accomplish some purpose not in itself unlawful by unlawful
means .... The essential elements required to establish a civil
conspiracy are the same as those required to establish a
criminal conspiracy. In general, to constitute a civil conspiracy
there must be: (1) Two or more persons, and for this purpose a
corporation is a person; (2) an object to be accomplished; (3) a
meeting of minds on the object or course of action; (4) one or
more unlawful overt acts; and ( 5) damages as the proximate
result thereof." ... If the object of an alleged "conspiracy" is
lawful, and the means used to attain that object are lawful,
there can be no civil action for conspiracy. The foregoing is
true even though damage may result to the plaintiffs and even
though defendants may have acted with a malicious motive. If
such were not the rule, obviously many purely business
dealings would give rise to an action in tort on behalf of one
who may have been adversely affected.
Duffy v. Butte Teachers' Union, No. 332, AFL-CIO, 541P.2d1199 (Mont. 1975)
(quoting 15A C.J.S. Conspiracy§ 1(1-2)). In this case, the object of the alleged
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conspiracy (sale of Landtech Ltd.) was lawful, and the means used to attain that
object (transfer of the company assets to Landtech LLC) were lawful. The transfer
of assets may indeed have been done with a malicious motive, as the Plaintiff
asserts, but an allegation or proof of malice is not enough to transform a legal
transfer of assets into an unlawful conspiracy.
In Montana, "the period prescribed for the commencement of an action upon
a liability not founded upon an instrument in writing is within 3 years." Mont.
Code Ann. § 27-2-204. The misrepresentations and transfer of assets that form the
basis of the Plaintiffs civil conspiracy complaint took place in 2004 and 2005.
The statute of limitations ran sometime in 2007 or 2008. All Defendants are
entitled to judgment as a matter of law and their Motions for Summary Judgment
on the civil conspiracy claim are granted.

IV.

Plaintiff's constructive fraud claim is barred by the statute of limitations.
The Plaintiffs fourth and final claim is for constructive fraud. Plaintiff

argues that Christensen and the Landtech companies had a duty to disclose to the
Lenee Family Trust all material information about the sale ofLandtech Ltd., that
Christensen and the Landtech companies breached that duty by misrepresenting
certain material facts, and that the Lenee Family Trust suffered damages as a
proximate result of the Defendants' breach of their duty. (Doc. 5 at 5-6.)
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Constructive fraud consists of: (1) any breach of duty that,
without an actually fraudulent intent, gains an advantage to the
person in fault or anyone claiming under the person in fault by
misleading another person to that person's prejudice or to the
prejudice of anyone claiming under that person; or (2) any act
or omission that the law especially declares to be fraudulent,
without respect to actual fraud.
Mont. Code Ann. § 28-2-406. In a recent case, this Court held that "[c]onstructive
fraud is essentially actual fraud without the element of intent and has similar
elements as negligent misrepresentation." Hayes v. AMCO Ins. Co., 2012 WL
5354553, at *4 (D. Mont. Oct. 29, 2012). Fraud can be actual or constructive,
Mont. Code Ann.§ 28-2-404, but both kinds are subject to a two year statute of
limitations, Mont. Code Ann. § 27-2-203. The statute of limitations that bars the
Plaintiffs fraud claim also bars the Plaintiffs constructive fraud claim. As a
result, Defendants are entitled to judgment as a matter of law and the Court grants
their Motions for Summary Judgment on the constructive fraud claim.
CONCLUSION

Defendants are entitled to judgment as a matter of law on all counts of the
Complaint for the reasons set forth above.
Therefore, IT IS ORDERED that defense motions (docs. 22, 34) are
GRANTED. Summary judgment shall be entered in favor of each Defendant and
against Plaintiffs claims.
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The Clerk is directed to enter judgment in accordance with this order in
favor of Defendants and against Plaintiff on all claims and to close the file.
Dated this

~ay of August, 2013.

olloy, District Judge
District Court

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