United States District Court, D. Montana, Billings Division
ORDER AND ORDER
P. WATTERS UNITED STATES DISTRICT JUDGE
the Court is Defendant State Farm Fire and Casualty
Company's Motion to Dismiss Pursuant to Rule 12(b)(1),
(Doc. 25), and Plaintiff Mid Continent Casualty Company's
Motion for Leave to File Second Amended Complaint for
Subrogation (Doc. 28). For the following reasons, the Court
grants State Farm's Motion to Dismiss and denies Mid
Continent's Motion to Amend.
action involves a salt water disposal line associated with
oil field operations in eastern Montana. In 2013, Defendant
Dry Prairie Rural Water Authority intended to install water
piping in the ground to transport water to Bainville,
Montana, a community in eastern Montana. (Doc. 10 at 1). Dry
Prairie contracted with Defendant Alan Engelke to dig the
trench in which Dry Prairie would lay its piping.
(Id. at 2). While Engelke was trenching, he hit and
damaged the underground salt water disposal line, which was
owned by Avery Bakken Disposals, LLC. (Id. at 3). He
covered up the damaged line with dirt. (Id.). He did
not advise anyone that he had damaged the line or reburied
2014, Avery Bakken placed the salt water disposal line back
into service. (Id. at 4). Salt water seeped out of
the damaged disposal line and caused damage to the
neighboring land. (Id. at 4-5). Avery Bakken's
insurer, Mid Continent, paid $134, 078 for the damage to the
land and remediation efforts. (Id. at 7).
asserts that before he started trenching, he contacted the
property owner, and was told that any pipelines on the
property were abandoned. (Doc. 11 at 1). Engelke also asserts
that he sought information about pipelines on the property
from the "one call" notification system, in
compliance with the "Montana Dig Law, " Mont. Code
Ann. § 69-4-501. (Doc. 17 at 2). Unfortunately, Avery
Bakken did not participate in the notification system, so
Engelke did not know about the salt water line before he
started trenching. (Id. at 2-4).
Farm insured Engelke at the time of the loss. (Doc. 10 at 8).
Mid Continent brought suit against Engelke, Dry Prairie, and
State Farm in state court. (See gen. id.). Mid
Continent alleges that State Farm has a duty to pay Mid
Continent because of Engelke's alleged negligence.
(Id. at 8). Dry Prairie crossclaimed against State
Farm, seeking contribution or indemnity from State Farm in
the event Dry Prairie is found liable. (Doc. 22). State Farm
removed the case to this Court. (Doc. 1). State Farm now
moves to dismiss the claims against it, arguing until
Engelke's liability has been established, Mid
Continent's and Dry Prairie's claims against State
Farm are not ripe and must be dismissed. (Doc. 26 at 3).
under Fed.R.Civ.P. 12(b)(6) "is appropriate only where
the complaint lacks a cognizable legal theory or sufficient
facts to support a cognizable legal theory."
Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d
1097, 1104 (9th Cir.2008). For purposes of a motion to
dismiss, the plaintiffs allegations are taken as true, and
the court must construe the complaint in the light most
favorable to the plaintiff. Jenkins v. McKeithen,
395 U.S. 411, 421 (1969). At the same time, "[w]hile a
complaint attacked by a Rule 12(b)(6) motion to dismiss does
not need detailed factual allegations, a plaintiffs
obligation to provide the 'grounds' of his
'entitle[ment] to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do." Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (internal citations
omitted). Thus, a court need not accept as true conclusory
allegations, unreasonable inferences, legal
characterizations, or unwarranted deductions of fact
contained in the complaint. Clegg v. Cult Awareness
Network, 18 F.3d 752, 754-755 (9th Cir. 1994).
to amend must be granted unless it is clear that the
complaint's deficiencies cannot be cured by amendment.
Lucas v. Dep 't of Corrs., 66 F.3d 245, 248 (9th
Cir. 1995). When amendment would be futile, dismissal may be
ordered with prejudice. Dumas v. Kipp, 90 F.3d 386,
393 (9th Cir. 1996).
Farm moves to dismiss Mid Continent's claim for
subrogation in its First Amended Complaint because it is not
ripe and no justiciable controversy exists. State Farm also
asserts that Mid Continent's motion for leave to file the
Second Amended Complaint should be denied as futile because
the new causes of action alleged are not recognized by
Montana law. The Court addresses these arguments in order.
Mid Continent's Subrogation Claim is Not Ripe.
a claim is ripe for adjudication goes to a court's
subject matter jurisdiction under the case or controversy
clause of article III of the federal Constitution."
St. Clair v. City o/Chico,880 F.3d 199, 201 (9th
Cir. 1989). The test under Montana law for whether a
justiciable controversy exists contains three elements, (1)
the parties must have existing and genuine, as distinguished
from theoretical, rights or interests; (2) the controversy
must be one upon which the court's judgment may
effectively operate, as distinguished from an argument
invoking a purely political, philosophical, or academic
conclusion; and (3) the court's judicial determination
must be able to effect a final judgment in law or decree upon
the rights, status or legal relationships of the real parties
in interest in the controversy. See Brisendine v. State
Dept. of Commerce,833 P.2d 1019, 1020 (Mont. 1992). The
justiciable controversy test "prevent[s] courts from
determining purely speculative or academic matters, entering
anticipatory judgments, ...