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Comerica Bank v. Montana Second Judicial District Court

Supreme Court of Montana

December 17, 2013

COMERICA BANK, Petitioner,
v.
THE MONTANA SECOND JUDICIAL DISTRICT COURT, BUTTE SILVERBOW COUNTY, THE HONORABLE KURT KRUEGER, PRESIDING JUDGE, Respondent.

ORDER

Comerica Bank (Comerica) has filed a petition for writ of supervisory control. Comerica is a third party defendant in an action pending in the Second Judicial District Court, Silver Bow County, denominated Butte Local Development Corporation v. Masters Group International, Inc., et. al., Cause No. DV 2011-372. A jury trial in the matter is scheduled for January 6, 2014.

As alleged in the petition, Comerica is a Michigan corporation that loaned $9 million to Masters Group International, Inc. (Masters) in 2006. Masters is a Delaware Corporation. Subsequent to obtaining the Comerica loan, Masters borrowed $200, 000 from the Butte Local Development Corporation (BLDC). In 2008, Masters defaulted on its loan obligations to Comerica, which ultimately took possession of the collateral pledged by Masters, namely, Masters' Michigan bank accounts, which Comerica offset against the debt owed by Masters. Masters defaulted on its loan to BLDC. The petition alleges that BLDC and Masters entered an agreement whereby Masters acknowledged its debt to BLDC and agreed that BLDC would be paid out of the proceeds of Masters' suit against Comerica. BLDC then filed suit in the Second Judicial District Court against Masters, who in turn filed third party claims against Comerica, alleging breach of contract, breach of the implied covenant, constructive fraud, deceit, wrongful offset, and interference with prospective economic opportunity, arising from their loan transactions. Masters also claimed punitive damages.

Citing the choice-of-law provisions in the loan agreements between Comerica and Masters and the occurrence of that transaction within Michigan, Comerica asserts in its petition that all claims made against it by Masters in the litigation, contract and tort, are governed by Michigan law. Comerica states it has filed several motions "implicating" the choice-of-law issue but that, following two oral arguments in which the issue was addressed, its motions have been deemed denied by operation of law under local rule for lapse of time.

Although Comerica submits an extensive appendix of documents with its petition, it does not submit a copy of any motion directed to the District Court in which it seeks a ruling on the choice of law question. Further, it appears from the limited excerpts of transcript attached to the petition that Comerica did not actually request a ruling on the choice of law issue until shortly before the proceedings which took place on November 26, 2013. (Transcript of Proceedings, page 8, Tab 22).

According to the Second Judicial District Court Rules, a motion not ruled upon within 45 days is deemed denied. Given the information supplied to us, we cannot conclude, as Comerica asserts, that the District Court has failed to timely rule on a motion concerning choice of law and concluded by operation of law that Montana law will apply to all aspects of the parties' dispute.

It is incumbent upon the petitioner to demonstrate to this Court that the District Court is proceeding under a mistake of law causing a gross injustice. M. R. App. P. 14(3). It is not evident on the record before us that this is so. Further, we trust that the District Court will resolve the choice of law issue without the necessity of our intervention. Therefore,

IT IS HEREBY ORDERED that Comerica's petition for writ of supervisory control is DENIED.

The Clerk is directed to provide copies of this Order to counsel for all parties in Butte-Silverbow County Cause No. DC 2011-372, and to the Honorable Kurt Krueger, presiding District Judge.


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