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Mitchell v. First Call Bail And Surety, Inc.

United States District Court, D. Montana, Missoula Division

December 2, 2019

EUGEN DESHANE MITCHELL, SHAYLEEN MEUCHELL, on their own behalf and as nextfriend of B.M., Plaintiffs,


          Dana L. Christensen, Chief District Judge

         Before the Court is Plaintiffs' Motion for Partial Summary Judgment (Doc. 43) and Defendants First Call Bail and Surety, Inc., Allegheny Casualty Company, and International Fidelity Insurance Company's Rule 56(d) Motion to Allow for Discovery. (Doc. 57.) For the reasons explained, both motions will be granted in part and denied in part.[1] Because the parties are familiar with the facts, they will not be restated here.

         Legal Standard

         Summary judgment is proper when the moving party demonstrates "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party bears the initial burden of demonstrating the absence of any genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party has met its initial burden, the party opposing the motion bears the burden to demonstrate that summary judgment is not proper. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).


         On August 9, 2019, Plaintiffs moved for summary judgment on their declaratory judgment claims-claims 12 and 13 of the Complaint (Doc. 1). (Doc. 43.) Plaintiffs seek a declaration that two provisions of the Bail Bond Agreement (Doc. 1-1) are unenforceable as void for public policy and/or unconscionable. (Doc. 44 at 14, 18.) The provisions at issue include a clause that waives Defendants' liability for any harms that result from bounty hunting and requires Plaintiffs to indemnify Defendants against any associated costs including attorney fees (the "hold harmless clause")[2] and a clause that waives all claims arising from Defendants' conduct (the "waiver clause").[3] (Doc. 1-1 at 2, 4.)

         The Declaratory Judgments Act provides that "[i]n a case of actual controversy within its jurisdiction . . . any court of the United States .. . may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201(a). Before awarding declaratory relief, a district court must "first inquire whether there is an actual case or controversy within its jurisdiction." Principal Life Ins. Co. v. Robinson, 394 F.3d 665, 669 (9th Cir. 2005). Second, if a case or controversy exists, the court must decide whether to exercise its jurisdiction by analyzing the Brillhart factors. Id. (citing Brillhart v. Excess Ins. Co. of Am., 316 U.S. 497 (1942)).

         Defendants argue that this issue is not justiciable and amounts to a request for an advisory opinion because Defendants have not asserted their contractual rights against Plaintiffs. This is simply not the case. Defendants have already sought to dismiss Plaintiffs' claims by arguing that such claims are contractually barred. (See Doc. 21 at 34-35.) Additionally, by ruling that the bondsman's privilege originates in the contractual relationship between the parties (Doc. 54 at 10, 12-14), the Court has teed the parties up to argue whether and to what extent Mitchell contractually consented to the conduct in this case. This necessarily places the waiver clause at issue in the litigation.

         Furthermore, Plaintiffs concern that Defendants will seek to enforce the hold harmless clause against them if Plaintiffs prevail in litigation is not so speculative an injury as to preclude standing. See Clapper v. Amnesty Int'l USA, 568 U.S. 398, 401 (2013) (standing requires more than a speculative future injury; the injury must be one that is "certainly impending"). Here, the analysis is simple: Litigation has commenced. Defendants included an indemnification clause in the contract. It requires no leap of faith to conclude that Defendants included the clause because they intend to assert it. This Court has standing, and this matter is ripe for review.

         Nevertheless, the Court must still consider whether to exercise its discretion over the subject matter by analyzing the Brillhart factors. Principal Life Ins., 394 F.3d at 672. In doing so, the Court is mindful of its duty to balance concerns of "judicial administration, comity, and fairness to the litigants," as it considers the following: (1) whether the question involves a "needless determination of state law issues"; (2) whether the action is being pursued "as a means of forum shopping"; and (3) whether the court's decision will result in "duplicative litigation." Id. (quoting Am. States Ins. Co. v. Kearns, 15 F.3d 142, 144 (9th Cir. 1994) and Gov't Employees Ins. Co. v. Dizol, 133 F.3d 1220, 1221 (9th Cir. 1998)). These factors are nonexclusive, and a federal court might also consider "whether the declaratory action will serve a useful purpose in clarifying the legal relations at issue." Id. (quoting Dizol, 133 F.3d at 1225, n.5).

         The Court's consideration of the contract does not involve a needless determination of state law. Here, any interpretation of state law is not needless because it is important to the parties, and the state law at issue (whether a contract is void for public policy or unconscionable) is well-settled and does not require the Court to speculate as to any novel questions.[4] Second, there is no indication that any forum shopping has occurred. This case is in federal court because Plaintiffs assert RICO claims which gives rise to federal question jurisdiction. Finally, there is no concern that this question involves duplicative litigation as there is no separate state action. Here, the declaratory judgment claims are pled in the same complaint as Plaintiffs' substantive claims which are all pending before this Court. Finally, Plaintiffs' counsel has persuasively argued that it is important to Mitchell and Meuchell to know whether the Court will enforce the indemnification of attorney fees against them in the event that they prevail, as this would frustrate their purpose in pursuing the litigation. For these reasons, the Court will exercise its discretion over Plaintiffs' declaratory judgment claims.

         I. Plaintiffs Twelfth Claim

         In their twelfth claim for relief, Plaintiffs seek a declaration from the Court that the hold harmless and waiver clauses contained in paragraphs 5 and 15 of the Bail Bond Agreement are unenforceable because the provisions are contrary to public policy and unconscionable. (Doc. 1 at 64-65.) Plaintiffs argue that both contentions are purely legal inquiries, and therefore there is no factual dispute that would preclude summary judgment. (Doc. 44 at 7.)

         Defendants argue that summary judgment is not proper because the enforceability of a contract does not occur in a legal vacuum and that questions of waiver and unconscionability are fact-intensive. (Doc. 55 at 24, 29.) The Court agrees with Defendants that the doctrine of unconscionability is a fact-intensive inquiry. See Lenz v. FSC Sec. Corp.,414 P.3d 1262, 1274 (Mont. 2018). However, the question of whether the contract is void for public policy presents a purely legal question of ...

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