United States District Court, D. Montana, Helena Division
BILLIEJ. SCHULL, et al., Plaintiffs,
MARYLAND CASUALTY COMPANY, a Maryland Corp; and DOES A - Z, Defendants.
OPINION AND ORDER
CHARLES C. LOVELL SENIOR UNITED STATEST DISTRICT JUDGE
Maryland Casualty Company (Maryland Casualty or MCC), now
known as Zurich American Insurance Company, successor by
merger to Maryland Casualty as of December 31,
2015, has moved under Fed. R. Civ. Pro.
12(b)(6) to dismiss all but one of the claims asserted against
it in the Eighth Amended Complaint With More Definite
Statement based on the statute of limitations.
twenty-nine plaintiffs named in the complaint are all
represented by the same attorneys. Plaintiffs' counsel
concedes that Maryland Casualty's motion is well taken as
to Plaintiffs Randy J. Carlson and George P. Williams.
Plaintiffs' counsel also concedes that Maryland
Casualty's motion is well taken as to the survival claims
brought by personal representatives on behalf of the estates
of Richard G. Davidson, Donald A. Johnson and Eddie E.
Eggers, but opposes the motion as to their wrongful death
claims and as to all claims raised by the remaining
plaintiffs. (Doc. 55 at 5).
of the plaintiffs in this case were employed by W.R. Grace
(Grace) in Libby, Montana. Five of the plaintiffs are
"non-worker spouses or children of Grace workers who
were [allegedly] exposed to asbestos carried home on Grace
workers' clothing." (Doc. 55 at 5). Maryland
Casualty was "Grace's primary general liability
insurer and workers' compensation carrier from 1962 to
1973." (Doc. 46 at 6).
filed for bankruptcy in the United States Bankruptcy Court
for the District of Delaware (Delaware Bankruptcy Court) on
April 2, 2001. Watson v. BNSFRy. Co., 405 P.3d 634,
¶ 5 (Mont. 2017). On April 2, 2001, the Delaware
Bankruptcy Court granted Grace's request for a temporary
restraining order enjoining the prosecution or commencement
of certain actions. (Doc. 46-1). On May 3, 2001, the Delaware
Bankruptcy Court granted Grace's motion for preliminary
injunction staying and enjoining all actions, including cases
filed or pending in any court against Maryland Casualty,
pending a final judgment in the adversary proceeding in
bankruptcy court. (Doc. 46-3)
Schull, Denning, Fiebelkorn, Mack, Fredenberg, Benoit, and
Troyer filed a complaint against Maryland Casualty in the
Circuit Court for Baltimore City, Maryland (Baltimore case)
on June 6, 2001. Plaintiff Johnson was added to the Baltimore
case on July 25, 2001, and Plaintiff LeCount was added on
December 13, 2001.
filed the instant case in the Montana First Judicial District
Court, Lewis and Clark County, on November 19, 2001. (Doc. 5
at 15). The only defendant named in Plaintiffs' initial
complaint was the State of Montana. (Doc. 6 at 5). Plaintiffs
filed an amended complaint adding Maryland Casualty on March
22, 2002. (Doc. 7). There is nothing in the state court
record indicating that either the amended complaint or the
second amended complaint, which was filed on July 11, 2002,
were served on Maryland Casualty. (Doc. 5).
January 22, 2002, the Delaware Bankruptcy Court modified its
"May 3, 2001 Injunction for the express purpose of
'reinstating] the bar against the commencement of new
actions against Affiliated Entities."' Watson, 405
P.3d at ¶ 20. In its January 22, 2002, Order, the
Bankruptcy Court stated: "Any additional Actions that
are filed and served upon Affiliated Entities are, upon
completion of service, stayed and enjoined pending a final
judgment in this adversary proceeding or further order of
this Court;." (46-4 at 5).
Bankruptcy Court clarified the application of its injunction
as to affiliated entities again on June 20, 2002, when it
denied a motion made by Carole Gerard. (Doc. 46-5). Gerard
sought clarification of the Bankruptcy Court's injunction
to allow her to proceed with a civil suit against Maryland
Casualty filed in Baltimore, Maryland. Gerard continued to
pursue her civil suit after the Bankruptcy Court denied her
motion, resulting in a contempt order being entered against
Gerard's counsel. (Doc, 55-4). Gerard was represented by
Jon L. Heberling and McGarvey, Heberling, Sullivan &
McGarvey, P.C. on May 24, 2004, when the Bankruptcy Court
entered its contempt order. (Doc. 55-4 at 2). Shortly after
the contempt order was issued, Mr. Heberling, who represented
Plaintiffs in the instant case until recently, filed a notice
of dismissal without prejudice of their case against Maryland
Casualty and a No. of other defendants.
Delaware Bankruptcy Court's injunction was lifted on
February 3, 2014. Watson, 405 P.3d at ii 21. Plaintiffs filed
their Seventh Amended Complaint on June 6, 2014. (Doc. 13).
The Eighth Amended Complaint was filed on May 8, 2017. (Doc.
14). Maryland Casualty executed an acknowledgment and waiver
of service on June 1, 2017, (Doc. l at ii 7), and removed the
case to federal courtonJune30, 2017. (Doc. 1).
STANDARD FOR MOTION TO DISMISS
determining a motion to dismiss under Rule 12(b)(6), this
Court accepts all factual allegations and reasonable
inferences as true and construes them in the light most
favorable to the nonmoving party, but does not consider
conclusory allegations of law and unwarranted inferences.
Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir.2004)
(citing Sprewell v. Golden State Warriors, 266 F.3d
979, 988 (9th Cir.2001)). To survive a 12(b)(6) motion to
dismiss, a plaintiff must allege sufficient facts to state a
"claim to relief that is plausible on its face."
Bell Atl. Corp, v. Twombly, 550 U.S. 544, 570
(2007). "When a motion to dismiss is based on the
running of the statute of limitations, it can be granted only
if the assertions of the complaint, read with the required
liberality, would not permit the plaintiff to prove that the
statute was tolled." Cervantes v. City of San
Diego, 5 F.3d 1273, 1275 (9th Cir.1993) (quoting
Jablon v. Dean Witter & Co., 614 F.2d 677, 682
(9th Cir. 1980)).
a court is generally limited to considering the contents of
the complaint when deciding a Rule 12(b)(6) motion, "a
court may properly look beyond the complaint to matters of
public record and doing so does not convert a Rule 12(b)(6)
motion to one for summary judgment." Mack v. S. Bay
Beer Distributors, Inc., 798 F.2d 1279, 1282 (9th
Cir.1986), abrogated on a different issue by Astoria Fed.
Sav. and Loan v. Solimino, 501 U.S. 104, 107 (1991).
The history of this case, which Plaintiffs originally filed
in state court against the State of Montana in November of
2001, is unusually complex and involves documents filed in
state court, which have been incorporated into this case, and
various orders entered by the United States Bankruptcy Court
for the District of Delaware. Both parties have cited orders
entered by the Delaware Bankruptcy Court and this Court takes
judicial notice of those orders in deciding Maryland
Casualty's motion to dismiss.
Court's analysis of the statute of limitations issues
raised by the parties begins with the following basic
principles. This Court applies the state law of the forum
state when deciding substantive issues in cases, like this,
in which its jurisdiction is based on diversity of
citizenship. Erie R. Co. v. Tompkins, 304 U.S. 64,
73 (1938). The Court therefore looks to Montana law to
determine the statute of limitations and related issues
raised by the parties. Cervantes, 5 F.3d at 1275.
general tort limitations period is three years and applies to
Plaintiffs' bad faith and negligence claims. Mont. Code
Ann. § 27-2-204(1) (2017). In Montana, "a claim or
cause of action accrues when all elements of the claim or
cause exist or have occurred, the right to maintain an action
on the claim or cause is complete, and a court or other
agency is authorized to accept jurisdiction of the
action." Mont. Code Ann. 27-2-102(a) (2017). The statute
of limitations for a wrongful death action is also three
years in Montana, unless the wrongful death results from
homicide. Mont. Code Ann. § 27-2-204(2) (2017). Wrongful
death claims accrue at the time of decedent's death.
Carroll v. W.R.Grace & Co., 830 P.2d 1253, 1255
Montana Supreme Court began using the discovery doctrine to
toll the statute of limitations long before the Montana
Legislature adopted the discovery doctrine by statute in
1987. See Wilson v. Brandt, 406 P.3d 452,
¶¶ 16 - 17 (Mont. 2017) (discussing history of
discovery doctrine). "The doctrine was based on
equitable considerations of 'giving full scope to the
statute of limitations on the one hand and according a
reasonable measure of justice to the plaintiff on the
other."' Id. at ¶ 16 (quoting Grey
v. Silver Bow Cnty., 425 P.2d 819, 821 (Mont, 1967).
Montana Supreme Court recognizes the doctrine of equitable
tolling, which "arrests the running of statutes of
limitation while the claimant reasonably and in good faith
pursues one of several possible legal remedies."
Sorenson v. Massey-Ferguson, Inc., 927 P.2d 1030,
1032 (Mont. 1996). A plaintiff seeking application of the
equitable tolling doctrine "must first show a reasonable
and good faith pursuit of one of several possible remedies
and then demonstrate the [following] three criteria ... have
been satisfied: (1) the defendant was notified timely within
the statute of limitations by the filing of the first claim;
(2) the defendant's ability to gather evidence for
defense of the second claim was not prejudiced; and (3) the
plaintiff reasonably and in good faith filed the second
claim." Lozeau v. Geico Indemnity Co., 207 P.3d
316, ¶ 14 (Mont. 2009).
law protects injured parties who are prohibited from filing
suit by an injunction or court order. When an injunction or
court order stays the commencement of an action, the time
during which that order is in place "is not part of the
time limited for the commencement of the action." Mont.
Code. Ann. 27-2-406 (2017). In other words, the limitation
period is tolled while an injunction or court order prohibits
a party from filing a civil suit.
considering issues relating to the statute of limitations in
Montana, this Court must keep in mind that the Montana Rules
of Civil Procedure allow plaintiffs far more time to serve a
filed complaint than the Federal Rules. A plaintiff has three
years to accomplish service of process under Mont. R. Civ. P.
4(t) while a plaintiff in most cases has only 90 days to
serve a filed complaint under Fed.R.Civ.P. 4(m).
Dates for Individual Plaintiffs
Montana Supreme Court considered the accrual date for
asbestosis related claims in Orr v. State, 106 P.3d
100 (Mont. 2004). After noting the lack of dispute as to the
fact that "asbestosis can take years to manifest,"
the Court held that plaintiffs' negligence claims against
the State accrued when Plaintiffs' asbestosis related
diseases manifested. Id. at ¶ 72. The Montana
Supreme Court reasoned that the provisions of
"Montana's statutory version of the discovery
rule" are "instructive on the question of when a
Montana cause of action accrues." Id. at ¶
76. The Court noted that Montana and other states adopted the
discovery doctrine "because it fairly allows injured
plaintiffs to seek relief for long-dormant injuries caused by
tortious conduct that occurred much earlier."
Id. at ¶ 73. The parties in this case appear to
agree that the negligence and bad faith claims accrued when
the particular plaintiff making the claim was diagnosed with
asbestosis and that the wrongful death claims accrued at
following information is drawn from the second attachment to
the Eighth Amended Complaint With More Definite Statement.
Plaintiff Schull's negligence and bad faith claims
accrued when he was diagnosed, on August 26, 1998.
Plaintiff Denning's negligence and bad claims accrued on
July 22, 1998 and his wrongful death claim accrued on June 8,
Plaintiff Fiebelkorn's negligence and bad faith claims
accrued when he was diagnosed, on July 28, 1998.
Plaintiff Mack's negligence and bad faith claims accrued
when he was diagnosed, on July 28, 1998.
Plaintiff Fredenberg's negligence and bad faith claims
accrued when he was diagnosed, on July 28, 1998.
Plaintiff Johnson's negligence and bad faith claims
accrued on November 9, 1981 and his wrongful ...