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Estate of Ostby v. Yellowstone County

United States District Court, D. Montana, Billings Division

September 12, 2018

ESTATE OF MICHAEL OSTBY, et al, Plaintiff,
YELLOWSTONE COUNTY, et al., Defendants.


          SUSAN P. WATTERS United States District Judge.

         Before the Court are United States Magistrate Judge Timothy Cavan's findings and recommendation filed July 6, 2018. (Doc. 53). Judge Cavan recommends this Court grant Third-Party Defendant Riverstone Health's motion for judgment on the pleadings and deny Third-Party Defendant Billings Clinic's motion to dismiss. (Doc. 53 at 2).

         I. Standard of review

         Yellowstone County and Billings Clinic filed timely objections to the findings and recommendation. (Docs. 58 and 59). Yellowstone County and Billings Clinic are entitled to de novo review of those portions of Judge Cavan's findings and recommendation to which they properly object. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3).

         A motion to dismiss for failure to state a claim is governed by Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678.

         Rule 12(c) provides that "[a]fter the pleadings are closed - but early enough not to delay trial - a party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). A Rule 12(c) motion is "functionally identical" to a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted. Cafasso, United States ex rel. v. General Dynamics C4 Systems, Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011). Thus, the same legal standard "applies to motions brought under either rule." Cafasso, 637 F.3d at 1054.

         II. Parties' objections

         The procedural and factual history contained in Judge Cavan's findings and recommendation is not objected to, apart from a minor and immaterial contention by Billings Clinic, and is adopted in full.

         Yellowstone County objects to Judge Cavan's conclusion that Riverstone's settlement with the Plaintiff requires judgment on the pleadings of the third-party complaint against Riverstone. Billings Clinic objects to Judge Cavan's conclusion that Billings Clinic's settlement with the Plaintiff does not require dismissing the third party-complaint against Billings Clinic.

         III. Discussion

         The Plaintiff, the estate of Michael Ostby, filed a complaint against Yellowstone County, Riverstone, and Billings Clinic, alleging, among other things, that they had negligently caused Michael Ostby's death. (Doc. 6 at 1-19). Ostby was an inmate held at Yellowstone County Detention Facility. (Doc. 6 at 2). Riverstone and Billings Clinic contracted with Yellowstone County to provide healthcare for inmates at Yellowstone County Detention Facility. (Doc. 6 at 2-3). Yellowstone County filed third-party complaints against Riverstone and Billings Clinic, alleging they were responsible for the death of Ostby. (Docs. 3 and 4). Riverstone and Billings Clinic settled with Ostby and filed the present motions, arguing Yellowstone cannot seek contribution or indemnity from them under Burden v. Hydro Flame Corp., 983 P.2d 943, 949 (Mont. 1999), which provides that "a settlement by one tortfeasor precludes claims for both contribution and indemnity against the settling tortfeasor, irrespective of the nature of the underlying tort claim."

         A. Riverstone

         Yellowstone County argues Durden does not bar its claim against Riverstone because the claim is for breach of contract, not contribution or indemnity. Riverstone responds the claim, for all practical purposes, is for contribution or indemnity. Judge Cavan recommended Durden barred Yellowstone County's claim because it was, at its core, a claim for contribution. The Court agrees with Judge Cavan.

         Yellowstone County argues that when a claim can sound in either tort or contract, the claimant can choose which claim to pursue. As a general proposition, Yellowstone County is correct. See Dewey v. Stringer\325 P.3d 1236, 1239 (Mont. 2014). However, this case presents an exception to the general proposition for a few reasons. First, Yellowstone County is incorrect that Riverstone owed Yellowstone County no legal duty absent the contract. By statute, any party to a negligence action "has the right of contribution from any other person whose negligence may have contributed as a proximate cause to the injury complained of." Mont. Code Ann. § 27-1-703; Dewey, 325 P.3d at 1239 (citation omitted). Even if Riverstone and Yellowstone County had no contract, a claim they allegedly jointly caused an injury gives rise to a tort claim between the two.[1] Second, Yellowstone County's alleged damages are the damages Riverstone caused Ostby, with whom Riverstone has settled. Yellowstone seeks to have Riverstone pay for what it has already paid. Third, and most importantly, allowing Yellowstone County's claim to proceed would undermine the strong public policy behind Durden. In Burden, the Montana Supreme ...

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