ADAM PUMMILL, as an individual, and ADAM PUMMILL and KURTIS ROBERTSON, as members of Black Gold Enterprises, LLC, members of, and on behalf of, BLACK GOLD ENTERPRISES, LLC, Plaintiffs and Appellees,
JOSHUA T. PATTERSON a/k/a JOSH PATTERSON, as an individual and d/b/a PATTERSON ENTERPRISES, INC., also d/b/a ROCKY MOUNTAIN EQUIPMENT, INC., p/k/a ROCKY MOUNTAIN JCB, INC., also d/b/a ROCKY MOUNTAIN RENTAL SPECIALISTS, LLC, also d/b/a ROCKY MOUNTAIN EQUIPMENT, also d/b/a ROCKY MOUNTAIN RENTAL, also d/b/a ROCKY MOUNTAIN EQUIPMENT OF MISSOULA MONTANA, Defendants and Appellants.
Submitted on Briefs: August 28, 2019
FROM: District Court of the Fourth Judicial District, In and
For the County of Missoula, Cause No. DV-18-1450 Honorable
John W. Larson, Presiding Judge
Appellant Brian J. West, West Law Firm, P.C., Missoula,
Appellee: James P. O'Brien, O'Brien Law Office, P.C.,
JEREMIAH SHEA, JUSTICE
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
Internal Operating Rules, this case is decided by memorandum
opinion, shall not be cited and does not serve as precedent.
Its case title, cause number, and disposition shall be
included in this Court's quarterly list of noncitable
cases published in the Pacific Reporter and Montana Reports.
Joshua T. Patterson, individually and in his official
capacity as owner of various business entities, appeals from
the Order of the Fourth Judicial District Court, Missoula
County, appointing a receiver to operate Black Gold
Enterprises, LLC, of which Patterson is a member. We affirm.
Black Gold Enterprises, LLC (BGE) is a limited liability
company that primarily operates as a landlord, renting its
real property to various commercial tenants. BGE was formed
in March 2013 as a member-managed limited liability company
with each member having an equal interest. Patterson and
Appellees Adam Pummill and Kurtis Robertson are the only
members of BGE.
Patterson is also the owner and operator of various business
entities which are commercial tenants of BGE. These entities
include Patterson Enterprises, Inc.; Rocky Mountain
Equipment, Inc.; Rocky Mountain Rental Specialists, LLC;
Devil Dog Firearms, LLC; Riley Auto, LLC; and Rocky Mountain
JCB, Inc. No formal rental agreement has ever existed between
these entities and BGE. Instead, Patterson paid amounts he
deemed reasonable based on what his business entities could
afford and the needs of BGE.
In 2018, Pummill and Robertson called several meetings of the
BGE members to change certain procedures related to operating
the business. The BGE members passed several resolutions over
Patterson's objection; specifically, a resolution
allowing BGE to retain legal counsel to execute rental
agreements to ensure timely and consistent rental payments
from all BGE tenants, including Patterson's business
entities. At the time, Patterson's business entities owed
BGE rent arrears of approximately $68, 719.55. Patterson
ignored the resolution and refused to pay his business
entities' past-due rent. Patterson also refused to enter
into rental agreements on behalf of his business entities
with BGE to establish payment terms for future rent.
BGE members also passed a resolution to sell certain BGE real
property, but Patterson refused Pummill and Robertson access
to the property to prepare it for sale. Patterson also failed
to maintain the property while it was in his possession.
During this time, BGE struggled to pay its mortgage and other
bills. At one point, BGE's checking account was
overdrawn. BGE had to negotiate with its mortgage lender to
On November 6, 2018, Pummill and Robertson filed derivative
claims against Patterson, asserting that Patterson and his
business entities' actions were harming BGE's
business interests. Pummill and Robertson later filed a
Motion for Preliminary Injunction and Appointment of
Receiver. After a hearing, the District Court found Patterson
harmed BGE by refusing to pay his business entities'
past-due rent and refusing to enter into a written rental
agreement with BGE to establish payment terms for future
rent. The District Court granted the preliminary injunction
and directed the appointment of a receiver to operate BGE.
Patterson appeals the District Court's appointment of the
We review for an abuse of discretion a district court's
appointment of a receiver, which is a provisional remedy
imposed by a district court to preserve and manage property
while litigation is pending. See Sandrock v.
DeTienne, 2010 MT 237, ¶ 25, 358 Mont. 175, 243
P.3d 1123; Crowley v. Valley W. Water Co., 267 Mont.
144, 151, 882 P.2d 1022, 1026 (1994) (citing Stoner v.
Hannan, 113 Mont. 210, 223, 127 P.2d 233, 236-37
(1942)). An abuse of discretion occurs when a district court
"acts arbitrarily, without employment of conscientious
judgment, or in excess of the bounds of reason resulting in