Cross Claims
Rule 13g: Crossclaim Against a Coparty. (typically D’s, because P’s have agreed to sue, against the same type of parties)
A pleading may state as a crossclaim any claim by one party against a co-party if the claim arises out of the transaction or occurrence that is the subject matter of the original action or of a counterclaim, or if the claim relates to any property that is the subject matter of the original action. (Implicitly required that you must have at least two parties on one side of the case)
· Allegations do not have to mirror the initial complaint, don’t have to be factually identically
· Don’t have to make the same argument against the other D as what the P is alleging against all D’s.
· If there is a logical relationship, cross-claim will be allowed!! Very permissive in nature.
· Logically related-if you would duplicate the same efforts/work/arguments to bring this matter separately
Old Homestead Bread Co v. Continental Baking Co-P sued group of D’s for price discrimination and conspiracy. Interstate, one of the D’s, sued the remaining D’s for price fixing in a cross-claim P moved to dismiss the cross claim. The court held that the cross-claim was logically related and was appropriately filed. (1)Cross-claims don’t have to directly mirror the complaint. But, unlike permissive counter claims, (2)there must be a logical connection! 13a is compulsory 13g is permissive. Failure to raise a cross-claim does not result is res judicata. Court has the ability to separate the claims later if necessary.
Brown v. Commerce Trust, Hiram Elliot Construction– P sues bank after being injured on the premises. Bank joins construction co as a co-defendant and subsequently files a cross-claim against the construction co for contributory negligence. In Mt, general exceptions to general contractor liability. Great case of example of occurrence under 13g.
· Cross-claims are permissive and they turn on occurrence or transaction
· Cross-claims can be prospective – the other party is potentially liable
The Reply (mandatory P reply to counterclaim)
General rule: P doesn’t have to reply to the D’s answer!! Normally the P doesn’t have to respond!
Two caveats: When there is an affirmative duty to respond.
1. The court may order the P to reply! (example of Rovoco case) VERY RARE!!!
2. A Plaintiff is required to reply to a counter claim, which is labeled as such.
i. Language of 7a has been changed. Originally, the language was reply. All have been modified to say “answer”
ii. Example of needing to look at the commentary of the rules! P’s are required to reply to counterclaim that is labeled as such! If it isn’t labeled as a counterclaim, you don’t have to reply.
Wheat v. Safeway Stores (MT SC)-was P required to respond? P sold D r/e and agreed to accept smaller commission upon an oral promise that D would employ P to handle r/e transaction for Helena location. D ended up purchasing location directly from seller. P brought suit and D filed answer of general denials. P didn’t respond to D’s answers. D made motion for judgment on the pleadings b/c there was no response and they were granted. SC reversed b/c no response was mandated because there wasn’t a counterclaim titled as such. (This is an exception to the gen rule of not requiring a lot of specificity, here, you have to have your counterclaim labeled as such to get a reply!)
Amendments (VERY LIBERAL AMENDMENT POLICY)
Giving notice to the opponent of each litigant’s position on the factual and legal issues is the principal function of the pleadings under the Rules of Civil Procedure
Rule 15a – Amendments. Parties may amend the pleadings once before being served with a responsive pleading, or within 20 days after serving the pleading if a responsive pleading is not allowed and the action is not yet on the trial calendar. Other amendments: Otherwise, a court order and consent of the opposing party to amend. The court should freely give leave when justice so requires. Leave to amend is freely granted. If a responsive pleading is required to the amended pleading, it must be filed 10 days after service of the amended pleading.
· Amendments will typically be granted unless it is prejudicial
· w/in 20 days can amend w/out permission, after 20 days, can amend with permission from court or parties agree
· the longer the time, less likely you will be allowed to amend
Pretence Lumber v. Hukill(MT SC)-case gives us the general exceptions to rule of liberal amendment policy and an example of bad faith. Pursuing action against directors. Wanted to amend pleadings to make directors responsible. This case give us the reasons when motions to amend should not be granted:(1)bad faith, (2)undue prejudice,(3) undue delay, (4)futility(no utility in the amendments) and (5)repeated failure to cure deficiencies. This case involved all of these situations and is the only MT case to deny leave to amend for bad faith. Case gives us five reasons when amendments shouldn’t be allowed and helps us understand “freely amend.” Gives us the outer limits of “freely grant.” Denial to amend by DC affirmed by MT SC.
Mitchell v. Mitchell (MT SC)-father/son dispute over oral contract regarding r/e. Issue was NO NOTICE which prejudiced P! Atty asked for a continuance. Case gives us the standard for considering delay and good faith – when justice so requires. Rule 15a doesn’t articulate a time limitation – theoretically you can amend at any time, but earlier is always better. Lower court didn’t analyze the exceptions listed above…bad faith, undue delay, etc. Court must undertake this analysis. Mitchell builds on factors in Pretence Lumber. DC decision vacated & remanded.
Kearns v. McIntyre-Case involves amending legal theory (from torts to contracts). Gravel from borrow. Late request for an amend. Can change the legal basis if it doesn’t really change the evidence and the arguments you make. The court determined the underlying basis of the suit was not affected therefore the amendment did not surprise or prejudice the D. Unlike Mitchell, amend can be granted despite the late date because there wasn’t prejudice. Court building on idea of prejudice – only prejudice if the foundation/elements have changed. Even tho switching, the basic elements of the case have not changed. No prejudice!! Elements from Pretence lumber do not apply. D should have asked for a continuance.
State ex. Rel. Florence-Carlton School District v. District Court-undervalued coal leases on school land. Several motions to amend. MT looked to fed court because MT doesn’t have developed case law. Under 15a, courts have broad discretion. Courts (MT & Fed) can condition amendments and this may include fees. Even though the courts have authority, courts may only apply fees in extraordinary circumstances. Court will balance between P & D. Before using broad discretion court must consider 3 items: good faith, reason of delay and length of delay. Two prong cases, yes-(1)in MT a lower court can condition a motion to amend on such things as fees, however; in this case the award of fees wasn’t appropriate because there wasn’t adequate analysis. (2)but, to award conditions there must be exceptional circumstances and the court must do an analysis of what condition is appropriate.
Cases clarify 15a2, “when justice so requires”. Pretence gives us five limitations. Mitchell says there must be notice/opportunity to respond. From Kearns, can change the legal basis of the claim if the facts and evidence remain the same. FC says courts can condition a motion to amend, but there must be exceptional circumstances and the court must do an analysis of what is appropriate. Courts will balance between P&D (consider 3 items before utilizing broad discretion)
Writ of supervisory control – unique to MT. Allows you to go to the Supreme Court and have them review what the lower court is doing. Challenging the lower court before a final judgment has been made.
Rule 15c – Relation back. This rule is important when the complaint is amended after the statute of limitations has run. Relation back will be allowed if it does
ise the new unpleaded issue. Case builds on idea of implied consent. There must be notice! Notice is more than just attaching something to complaint. NO NOTICE is difference from Reilly.
Keaster v. Bozik (MT SC)-option contact for r/e and D refused to convey the r/e. P wanted to amend to show loss of crops. If you fail to show prejudice, the court can grant an amendment. Policy is in favor of granting amendments. Must make a strong allegation of prejudice! (1) Notice (2)Always good to include a 54c statement, “such other and further relief as the court deems just and proper”, (3) if you are going to argue prejudice, you must make a request for a continuance (time to recover from the injury), and if you object, you need to prove prejudice. Important fact – court focuses on language of “such other…” Court says you had notice that he wouldn’t have the crops, but also, the complaint includes the above language! Because there was notice, amend allowed. If there is notice, harder to claim prejudice!
MT & Fed rule are parallel: neither system permits implied consent based on mistake or error. Both insist the new issue must be plainly recognizable when injected into the case by introduction of evidence that does not conform to the issues pleaded. Mt slightly more stringent, as MT insists on adequate notice. US DC has rules there can be no inference that the evidence was intended to raise the new unpleaded issue.
Rule 11: Sanctions
Rule 11: Sanctions
· Tool courts can use to sanction attorneys or their clients for misconduct, typically due to misrepresentation to the court
· The most common ground for sanctions has been an attempt to re-assert positions or arguments that have already been decided against the litigant
· Atty’s required to sign anything submitted to the court – you are warranting to the court you have done your due diligence and you are not submitting based on bad faith
Brown v. Jensen(MT SC)-multiple lawsuits about land filed to harass D. Court imposed sanctions and the SC justified this due to atty’s bad conduct and failure to follow prior warnings issued by court. Arguments/allegations must be based on facts or law! Must have legal or factual support for allegations or you will be subject to sanctions. Must make a showing of what is reasonable for sanctions. Fed rule says you must have notice and opportunity to respond any time there are rule 11 sanctions imposed against you. MT rule doesn’t specifically say this, even though there is case law supporting it. Fed rule much more specific!! Case law interpreting rule 11 has clarified MT’s rule – bringing it into alignment with the fed rule. (1)when you submit a complaint, rule 11 requires it must be fact on fact or law, if not, you will be in violation of Rule 11!
Lindy’s v. Goodover-fifth appeal stemming from a boundary dispute. This case builds into the state rule what the federal rule says. MT rule doesn’t say you are entitled to a show cause hearing, but this case says you are entitled to defend what you did. Court says it is only fair to give notice! Fed & MT rules have the same result, but Fed explicitly says it. Example of case supplementing the rules. Due to this case, in MT you have right to a show cause hearing to defend yourself
