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Estate of Ostby v. Yellowstone County

United States District Court, D. Montana, Billings Division

July 6, 2018

ESTATE OF MICHAEL OSTBY, et al., Plaintiffs,
v.
YELLOWSTONE COUNTY, et al., Defendants.

          FINDINGS AND RECOMMENDATION OF U.S. MAGISTRATE JUDGE

          TIMOTHY J. CAVAN UNITED STATES MAGISTRATE JUDGE

         Plaintiffs, the Estate of Michael Ostby, Nicole Hale, Joe Ostby, and Cassandra Ostby (collectively, the “Estate”), brought this action against Defendants Yellowstone County, Billings Clinic, and RiverStone Health for negligence and civil rights violations after the decedent, Michael Ostby, committed suicide while being held as a pretrial detainee at the Yellowstone County Detention Facility. (Doc. 6.) Yellowstone County has also filed a Crossclaim and Third-Party Complaint against Billings Clinic (Doc. 3, 7), and a Crossclaim and Third-Party Complaint against RiverStone Health. (Doc. 4, 7.)

         Presently before the Court are Billings Clinic's Motion to Dismiss and RiverStone Health's Motion for Judgment on the Pleadings with respect to Yellowstone County's Third-Party Complaints and Crossclaims. (Docs. 17, 36.)

         The motions have been referred to the undersigned under 28 U.S.C. § 636(b)(1)(B), and are fully briefed and ripe for the Court's review.

         Having considered the parties' submissions, the Court RECOMMENDS Billings Clinic's Motion to Dismiss be DENIED, and RiverStone Health's Motion for Judgment on the Pleadings be GRANTED. I. BACKGROUND FACTS In June 2013, Yellowstone County entered into a contract with RiverStone Health (“RiverStone”) to provide medical and dental care to inmates at the Yellowstone County Detention Facility (“YCDF”). (Docs. 4 at ¶ 4; 4-1.) The agreement did not contain an indemnification provision.

         In September 2014, Yellowstone County entered into a contract with Billings Clinic to provide mental health counseling to inmates at YCDF. (Docs. 3 at ¶ 4; 3-1.) The contract included a mutual indemnification clause that stated in relevant part:

Billings Clinic shall indemnify, defend and hold harmless the County and the Sherriff and its affiliates, and its officers, directors, employees and agents (referred collectively as the ‘the County') from any loss, claim, cause of action, costs and expenses, including reasonable attorneys' fees, or damage suffered by the County or the Sheriff as a result of the alleged negligence or intentional actions of Billings Clinic's employees or agents.

(Doc. 3-1 at 4.)

         On May 7, 2015, Michael Ostby (“Ostby”) was arrested and detained at YCDF. (Docs. 3 at ¶ 6; 4 at ¶ 6.) On July 1, 2015, Ostby committed suicide while incarcerated. (Docs. 3 at ¶ 9; 4 at ¶ 9.) The contracts between the County and RiverStone and the County and Billings Clinic were in effect during Ostby's incarceration at YCDF. (Docs. 3 at ¶ 6; 4 at ¶ 6.)

         On June 30, 2017, Ostby's Estate filed a complaint in state court alleging, inter alia, that Yellowstone County, Billings Clinic, a former employee of Billings Clinic, and RiverStone were negligent in failing to provide adequate medical and psychiatric care for Ostby's at YCDF. (Doc. 1-2.) The case was removed to this Court on September 21, 2017. (Doc. 1.)

         On September 6, 2017, Yellowstone County sent Billings Clinic a letter tendering the defense of the Estate's action against the County to the Clinic under the indemnification provision of their contract. (Docs. 3 at ¶ 14; 3-2.) Billings Clinic did not respond to the letter. (Doc. 3 at ¶ 15.)

         The Estate settled with RiverStone Health; and on September 8, 2017, the Estate filed a Notice of Dismissal in state court dismissing RiverStone Health with prejudice. (Doc. 5-1 at 7.)

         On September 15, 2017, Yellowstone County filed an Answer and Cross-Claims against Billings Clinic and RiverStone Health for breach of contract. (Doc. 7.)

         On September 25, 2017, Yellowstone County also filed Third-Party Complaints against Billings Clinic and RiverStone for breach of contract. (Docs. 3, 4.) The County alleges Billings Clinic breached their contract by failing to adequately address Ostby's mental health concerns, and by failing to defend and indemnify the County against the Estate's claims under the indemnity clause in their contract. (Doc. 3 at ¶ 18-19.) The County similarly claims RiverStone Health breached their contract by failing to adequately address Ostby's physical health concerns. (Doc. 4 at ¶ 15.)

         The Estate settled with Billings Clinic and its employee Terry Jesse on September 26, 2017, and dismissed Billings Clinic and Terry Jesse with prejudice. (Doc. 10.)

         On October 23, 2017, Billings Clinic filed a Motion to Dismiss the Third-Party Complaint. (Doc. 17.) On December 15, 2017, RiverStone filed a Motion for Judgment on the Pleadings regarding ...


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