United States District Court, D. Montana, Billings Division
OPINION AND ORDER
P. WAITERS UNITED STATES DISTRICT JUDGE.
the court are Defendant Alan Engelke's Motion for Summary
Judgment (Doc. 41), Defendant Dry Prairie Rural Water
Authority's Motion for Summary Judgment (Doc. 45), and
Plaintiff Mid Continent Casualty Company's Motion for
Partial Summary Judgment (Doc. 49). For the following
reasons, Defendants' motions are granted in part and
denied in part, and Mid-Continent's Motion for Partial
Summary Judgment is granted in part and denied in part.
Statement of Facts
fall of 2013, Dry Prairie hired Alan Engelke, an excavator in
northeastern Montana, to assist in extending Dry
Prairie's water lines to real property owned by Joseph
Picard. (Doc. 55-5 at 12:18-23). Dry Prairie needed Engelke
to dig a trench on Picard's property, in which Dry
Prairie would place underground water lines for a new house
on the property. (Id. at 15:10-17). At that time,
Engelke had an independent contractor's exemption with
the State of Montana. (Doc. 47-2 at 38:20-24).
Dry Prairie marked the excavation route, Engelke spoke with
Picard and looked over the property. (Doc. 50-1 at 26:2-4;
Doc. 55-1 at 14:5-15:8). Picard advised Engelke that there
were underground lines beneath the property, including a
saltwater disposal line from an oil well (the Anvil Well)
approximately three quarters of a mile away. (Id.).
Based on his work in the field, Engelke knew that a salt
water disposal line is used to transfer salt water from the
oil pump to a salt water recovery station during the oil
pumping process. (Id. at 14:15-15:16). Based on
Picard's description of where he thought the salt water
line was located, Engelke believed his excavation trenching
would not reach the salt water line. (Id. at
14:5-15:8). Picard also told Engelke that there would be some
lines that may not be in use any more and not to worry about
them. (Id. at 14:8-10; 14:25-15:3).
also contacted Montana's One-Call Notification Center to
obtain information concerning the location of underground
facilities on Picard's property. (Id. at 8:6-9).
A One-Call ticket was generated on September 29, 2013,
identifying those individuals or entities registered with the
Notification Center with underground facilities in the area
of Engelke's proposed work. (Id.). While some
lines were identified on the ticket, the saltwater disposal
line was not, since the then-owner of the Anvil Well, Windy
Butte, had not registered the location of the line with the
Notification Center. (Doc. 47-3 at 65:10-19).
after obtaining the One-Call ticket, Engelke began his
excavation. (Doc. 55-1 at 8:6-10). He provided his own
equipment and insurance for the job. (Doc. 47-2 at 37:14-22).
While excavating, Engelke felt a "pop," and both
ends of a line came to the surface. (Id. at 8:8-17).
The line was not in use and appeared to Engelke to be
abandoned. (Id. at 10:8-15). After hitting the line,
Engelke spoke with Picard. Picard told Engelke that he also
believed the line was abandoned because a local construction
company had previously hit a line fairly close to the one
Engelke hit, which they determined had been abandoned. (Doc.
47-4 at 15:23-16:25). Picard went out to see the line and
told Engelke he was pretty sure the line was abandoned and
that any active line ran elsewhere. He told Engelke that if
it were him, he would bury the line. (Id. at
25:20-23). Engelke buried the line and finished the project.
(Doc. 50-2 at 23:25-24:5). He billed Dry Prairie a set amount
for the job. (Doc. 47-2 at 38:11-15).
Engelke had hit the saltwater disposal line, which was placed
back into operation a few months later. (Doc. 50-3 at
39:11-14). Because of the damage to the line, salt water
running through the line was discharged into the ground,
causing damage. (Id. at 39:11-40:11). By the time
the line was placed back into service, the Anvil Well with
which the saltwater disposal line was associated, had
transferred ownership twice. (Id. at 57-5 at ¶
4). At the time the discharge occurred, the Anvil Well was,
and still is, owned by Avery Bakken. (Id. at
¶¶ 3-4). It is disputed whether the saltwater
disposal line at issue transferred with the Anvil Well during
the ownership transfers. (Doc. 53-1 at 73:2-76:18).
Avery Bakken was charged by the State Oil and Gas Commission
to clean up the release. (Id.) Mid-Continent insured
Avery Bakken's loss. (Doc. 54-3). Mid Continent now
stands in Avery Bakken's shoes seeking subrogation. The
parties have stipulated that all previous owners of the Anvil
Well during the relevant time frame are the same company for
purposes of this lawsuit.
Rule of Civil Procedure 56(a) entitles a party to summary
judgment "if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law." A movant may satisfy this
burden where the documentary evidence produced by the parties
permits only one conclusion. Anderson v. Liberty Lobby
Inc., 477 U.S. 242, 251 (1986). "[T]he mere
existence of some alleged factual dispute between the parties
will not defeat an otherwise properly supported motion for
summary judgment." Id. at 247-48. There must be
a genuine dispute as to any material fact, which is a fact
"that may affect the outcome of the case."
Id. at 248.
considering a motion for summary judgment, the court may not
weigh the evidence or make credibility determinations, and
the court must construe all facts in the light most favorable
to the non-moving party. Nelson v. City of Davis,
571 F.3d 924, 928 (9th Cir.2009) (citation omitted). When
presented with cross-motions for summary judgment on the same
matters, the court must "evaluate each motion
separately, giving the non-moving party the benefit of all
reasonable inferences." American Civil Liberties
Union of Nevada v. City of Las Vegas, 333 F.3d 1092,
1097 (9th Cir. 2003).
the Montana Dig Law, codified at Mont. Code. Ann. §
69-4-501, et seq., owners of underground facilities
like water lines or fiber optic cables register their
underground lines with a One-Call Notification Center. Prior
to excavating in a particular area, an excavator must call
into the Notification Center and provide the location of
their intended excavation operations. The Notification Center
issues a ticket that identifies the registered underground
lines in the area. The ticket is provided to the excavator
and the registered owners of the underground lines existing
in that particular location. The underground owners then have
a period of time to go onsite and mark the location of their
lines so that the excavator does not hit them. The Dig Law
also provides direction in the event that an excavator
encounters unmarked underground facilities during excavation.
argues that once Engelke uncovered the saltwater disposal
line, he had a duty, evidenced by certain sections of the Dig
Law, to stop his excavation operations and advise the line
owner or the One-Call Notification Center that he had damaged
the line. (Doc. 45 at 8-9). Mid-Continent argues that summary
judgment on liability is appropriate because Engelke did not
stop excavating and instead buried the line, allowing the
damage to remain, which ultimately resulted in property
damage once the Anvil Oil well was placed back into service
and saltwater leached out of the damaged line. (Doc. 49 at
8-13). Mid-Continent asserts this duty exists under both a
common law negligence theory and a negligence per se theory.
(Doc. 49, Doc. 54 at 27).
Prairie asserts that Mid-Continent is not entitled to
maintain this subrogation action because it has not made its
insured/subrogor whole. Additionally, Defendants argue that
Mid-Continent's negligence per se theory fails because
Engelke did not breach the statute and Mid-Continent is not a
member of the class the statute intends to protect. (Doc. 43
at 6-8; Doc. 45 at 4-8). Defendants argue that
Mid-Continent's common law negligence claim is preempted
by Montana's Dig Law, codified at Mont. Code Ann.
69-4-501, et seq. (Doc. 43 at 5; Doc. 45 at 4).
Engelke argues that Mid-Continent, through its subrogors,
acted negligently per se by failing to be a member of the
One-Call Notification Center. (Doc. 42 at 8). Dry Prairie
also argues that even if Mid- Continent's common law
claim is not pre-empted, Mid-Continent cannot establish a
prima facie case of negligence because it does not have an
expert who can establish that Engelke's actions were
negligent. (Doc. 52 at 6-9). The court addresses each of
these arguments in turn.
Mid-Continent is Entitled to Pursue Subrogation
Montana, an insured must be "totally reimbursed for all
losses as well as all costs" before the insurer is
entitled to seek subrogation against a third party.
Swanson v. Hartford Ins. Co. of Midwest, 46 P.3d
584, 587 (Mont. 2002). Dry Prairie argues that Mid-Continent
has not reimbursed Avery Bakken for the full amount Avery
Bakken paid out for property damage resulting from the
saltwater release. (Doc. 52 at 4). As a result, Dry Prairie
argues that Mid-Continent cannot pursue its claim for
subrogation under Montana law. The undisputed facts before
the court reflect otherwise.
Avery testified by affidavit that Mid-Continent fully paid
Avery Bakken for all the amounts Avery Bakken paid in
connection with the saltwater release. (Doc. 61-1 at 8).
Additionally, in its discovery responses, Mid-Continent sets
out all the amounts it expended on clean up, including those
amounts paid to Avery Bakken, which amounts to full
reimbursement. (See Doc. 55-4 at 2). Dry Prairie has
not produced any evidence that disputes Avery's testimony
or the amounts listed in Mid-Continent's discovery
responses. Accordingly, the court finds that Mid-Continent is
entitled to stand in the shoes of Avery Bakken and its
subrogation claim may lawfully proceed.
Mid-Continent's Claims are not Preempted
on the recent case AT&T Corporation v. Jackson
Utilities, LLC, 2017 WL 2296994 (D. Mont. 2017),
Defendants argue that Mid-Continent's common law
negligence claims are preempted by the Montana Dig Law, Mont.
Code Ann. § 69-4-501 et seq., so only
Mid-Continent's negligence per se claim may move forward.
The court disagrees.
Defendants read the court's preemption determination in
Jackson too broadly. There, AT&T brought
negligence and negligence per se claims against Jackson, an
excavator, because Jackson damaged an AT&T underground
fiber optic cable while excavating. Id. at *6.
AT&T's negligence claim centers on the damage Jackson
caused to its fiber optic cable during excavation.
Jackson, 2017 WL 2296994 at * 1. In contrast,
Mid-Continent's negligence claims focus on Engelke's
conduct after he damaged the saltwater disposal
line, and the ensuing saltwater release that stemmed from
that conduct, not damage to the line itself. (See
Doc. 61 at 11, stating "[t]he focus is on Engelke's
negligent acts and omissions after he struck and
damaged the Line and the cause of damages that flowed from
those negligent acts and omissions." (Emphasis in
distinction between AT&T's claim and
Mid-Continent's claim is critical. While the Dig Law
carves out statutorily-mandated remedies and damage fees for
excavator-caused damage to underground facilities like fiber
optic lines and saltwater disposal lines, see Mont.
Code Ann. § 69-4-505(1)-(2), it does not address
restoration damages that stem from excavator-caused damage to
the underground facility, like a saltwater release. In other
words, the Dig Law declares excavators' duties with
respect to calling, reporting, and trenching while located
within the vicinity of underground facilities, and sets out
liability and damages when excavators damage underground
facilities. See gen. Mont. Code Ann. §
69-4-501, et seq. As a result, under Montana law, no
common law claim may exist with respect to such claims. Mont.
Code Ann. § 1-1-108, ("there is no common law in
any case where the law is declared by statute.").
Accordingly, under circumstances like those in
Jackson, a claimant may bring a claim for a
statutory violation, but not a negligence claim, whether it
be common law or negligence per se.
however, the Dig Law specifically provides that remedies
other than those covered by the Dig Law may be pursued in the
event of an excavator's negligence. See Mont.
Code Ann § 69-4-505(4) ("[t]he act of obtaining
information as required by this part... does not excuse the
excavator from liability for any damage or injury resulting
from the excavator's negligence."). This language
signals that the Legislature intended to carve out specific
statutory remedies for damages caused to underground
facilities, but no more. In other words, claims for
restoration damages, like Mid-Continent's, are not
preempted by the statute, and may proceed under a negligence
theory. The court turns to those two theories.
Negligence Per Se
allege that Mid-Continent cannot sustain a negligence per se
claim because Engelke did not violate Mont. Code Ann. §
69-4-503(6) and Mid-Continent is not a member of the class
the Legislature intended to protect. Engelke also argues that
while he complied with the Dig Law, Mid-Continent, through
its subrogors, did not because they did not register with the
One-Call Notification Center and Mid-Continent is thus
negligent per se.
establish negligence per se in Montana, a plaintiff must
prove five elements; (1) the defendant violated a particular
statute; (2) the statute was enacted to protect a specific
class of persons; (3) the plaintiff is a member of that
class; (4) the plaintiffs injury is the sort the statute was
enacted to prevent; and (5) the statute was intended to
regulate a member of defendant's class. Edie v.
Gray, 121 P.3d 516, 520 (Mont. 2005). Common law
negligence, on the other hand, is the failure to use the
degree of care that an ordinarily prudent person would have
used under the same circumstances. Id.
key distinction between negligence per se and ordinary
negligence is that once a violation of a statute is proven,
and the [five standards above] are met, a defendant is
negligent, as a matter of law." Estate of Schwabe v.
Custer's Inn Associates, LLP,15 P.3d 903, 908
(Mont. 2000). "The effect of negligence per se is to
stamp the defendant's conduct as negligence, with all the
effects of common law negligence, but with no greater effect.
There will still remain open such questions as the causal
relationship between the violation and the harm to the
plaintiff, and, in the ordinary case, the defenses of
contributory negligence[.]". Giambra v. Kelsey, 162
P.3d 134, 144 (Mont. 2007) (quoting Keeton, The Law of
Torts § 36, at 230) (emphasis in original).
Liability does not become fixed ...