No. 89-285
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
TED J. DAY and DORIS D. DAY,
Plaintiffs, Appellants and Respondents,
-vs-
MONTANA POWER COMPANY,
Defendant, Appellant and Respondent.
APPEAL FROM: District Court of the Second Judicial District,
In and for the County of Silver ROW,
The Honorable Mark P. Sullivan, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Arthur W. Ayers, Jr. argued and Michael G. Alterowitz
argued; Ayers & Alterowitz, Red Lodge, Montana (Day)
For Respondent: (~ppellant)
Patrick T. Fleming arg,ued and Robert T. OtLeary argued,
Montana Power Co., Butte, Montana
Submitted: December 12, 1989
Decided: March 2 0 , 1990
fair dealing, lost profits and for Doris Day's physical injury and
suffering. The District Court permitted Days to amend their
complaint and base their punitive damage claim on MPC's negligence
in violating provisions of the Natural Gas Pipeline Safety Act of
1968, 49 U.S.C. § 1671 (1982).
Days moved to compel discovery of MPC1s claim file arguing
that the file lacked the status of a privileged communication.
Subsequent to hearing on the matter, the District Court ruled in
favor of MPC. Several months later, Days requested the issuance
of subpoenas duces tecum to C.J. Woods and Byron Mazurek
respectively. Both were employed by MPC in its Claims Department.
The subpoenas demanded production of all llmemoranda,reports,
letters, photographs, sketches, interviews, written estimates or
evaluations and all other documents or copies thereof" prepared in
relation to the fire at TJts. Upon MPC1s failure to produce a
report prepared by Byron Mazurek, Days moved that MPC be held in
contempt. The District Court denied the motion.
On December 2, 1988, the jury returned a verdict awarding the
Days $350,000 for the destruction of the restaurant building, its
contents, lost profits and related expenses; $25,000 to Doris Day
for physical injury and suffering; and $450,000 to Ted Day for
emotional distress, nervous shock and mental anguish. The jury
3
Justice Diane G. Barz delivered the Opinion of the Court.
A jury in the District Court for the Second Judicial District,
Silver Bow County, awarded Ted and Doris Day damages resulting from
a fire caused by the negligence of Montana Power Company's (MPC)
employee. The jury awarded $350,000 to both Days for property
destruction, $25,000 to Doris Day for personal injury and $450,000
to Ted Day for emotional distress. From this verdict, MPC appeals
the $450,000 emotional distress award and Days cross appeal. We
reverse in part and affirm in part.
In the process of installing underground electrical service
to an adjacent structure, MPC employee Mark Dickhausen negligently
ruptured a gas service line leading to TJ's Family Restaurant in
Red Lodge. Natural gas migrated along the underground service
line, accumulated in the restaurant and was later ignited,
presumably by a pilot light. The resulting fire and explosion
completely destroyed the restaurant owned by plaintiffs Ted and
Doris Day.
In an action filed February 24, 1987, the Days claimed damages
for destruction of property, emotional distress, nervous shock and
mental anguish, loss of their established way of life, punitive
damages based on MPC1s violation of the covenant of good faith and
2
found the Days were not entitled to either punitive damages or
damages for loss of their established way of life. Following entry
of judgment, MPC moved for judgment notwithstanding the verdict,
relief from judgment and reduction of award, all of which were
denied by the District Court.
The following issues are raised on appeal and cross appeal:
1. Did the negligent act of MPC1s employee substantially
invade a legally protected interest of Ted Day thus justifying an
award of damages for emotional distress?
2. If this Court adopts Restatement (Second) of Torts 5 46
(1965), as the standard for recovery of emotional distress damages
would Ted Day be entitled to the same?
3. Did Ted Day introduce sufficient evidence to sustain an
award of damages for his emotional distress?
4. Did the District Court properly instruct the jury
regarding apportionment of damages?
5. Did MPC waive its right to attack the jury award of
$450,000 to Ted Day for emotional distress, and, if not, was such
award grossly disproportionate to any detriment established at
trial?
6. Did the District Court err in refusing to instruct the
jury on MPC1spossible violation of the Natural Gas Pipeline Safety
4
Act of 1968?
7. À id Days waive their right to attack the jury's refusal
to award them damages for loss of their established way of life by
failing to move for a new trial?
8. id MPC waive its claim of privilege regarding the report
prepared by Claims Representative Byron Mazurek thereby requiring
production of such report?
9. Should Days1 appeal be dismissed either because it is a
conditional appeal or because Days failed to comply with the
Montana Rules of Appellate Procedure?
The first group of issues concern the propriety of an award
of emotional distress damages and related jury instructions. We
will briefly review Montana law in this area. Although Montana has
not yet recognized the tort of intentional infliction of emotional
distress, this Court has indicated that ''where [defendant's]
conduct has been so outrageous in character, and so extreme in
degree, as to go beyond all possible bounds of decency, and to be
regarded as atrocious, and utterly intolerable in a civilized com-
munity . . ." then it may allow recovery for the same. Frigon v.
Morrison-Maierle, Inc. (Mont. 1988), 760 P.2d 57, 63-64, 45 St.Rep.
1344, 1352 (quoting Restatement (Second) of Torts 5 46, Comment d
(1965)). We have narrowly construed the tort of negligent
5
infliction of emotional distress. Versland v. Caron Transport
(1983), 206 Mont. 313, 322-23, 671 P.2d 583, 588.
"Emotional distress under Montana law has been and remains
primarily an element of damages rather than a distinct cause of
action.'' Friqon, 760 P.2d at 63. By statute, plaintiffs may
recover in tort actions "the amount which will compensate for all
the detriment proximately caused [by the defendant's actions],
whether it could have been anticipated or not.'' Section 27-1-317,
MCA. In the matter of recovery for emotional distress absent
physical injury, this Court has imposed an additional test:
I' [Wlhether tortious conduct results in a substantial invasion of
a legally protected interest and causes a sisnificant impact upon
the person of plaintiff. (Emphasis in original.)" Johnson v.
Supersave Markets, Inc. (1984), 211Mont. 465, 473, 686 P.2d 209,
213.
In Johnson we adopted both the reasoning of the Oregon Court
of Appeals in Meyer v. 4-D Insulation Co., Inc. (Or. 1982), 652
P.2d 852, and the species of the case approach utilized by that
court in order to allow emotional distress damages to stand where
defendant violated plaintiff's constitutional rights. Johnson, 686
P. 2d at 213. We note, however, that on facts substantially similar
to those of the instant case, the Meyer court denied recovery for
6
emotional distress. Meyer sued 4-D Insulation claiming its
negligent installation of insulation adjacent to a wood stove flue
pipe ignited a fire resulting in damage to Meyerls home. Mever,
652 P.2d at 853. Meyer alleged no physical injury and the Court
of Appeals refused to permit recovery of emotional distress damages
where I1[p]laintiff . . . pleaded only negligently caused damage to
his property. . .I1 Meyer, 652 P.2d at 857.
This Court has permitted plaintiffs to recover for their
emotional distress as an element of damages in certain underlying
actions: (1) private nuisance (French v. Ralph E. Moore, Inc.
(1983), 203 Mont. 327, 661 P.2d 844); (2) violation of certain
constitutional rights (Johnson, Stensvad v. Towe (Mont. 1988), 759
P.2d 138, 45 St.Rep. 1129); and (3) breach of the covenant of good
faith and fair dealing (Gibson v. Western Fire Ins. Co. (1984), 210
Mont. 267, 682 P.2d 725; Dunfee v. Baskin-Robbins, Inc. (1986), 221
Mont. 447, 720 P.2d 1148; Safeco Ins. Co. v. Ellinghouse (1986),
223 Mont. 239, 725 P.2d 217).
Mr. Day's claim does not fall within any of the above
categories. The instant case is analogous to Semenza v. Leitzke
(Mont. 1988), 754 P.2d 509, 45 St.Rep. 829. Semenzas sought
recovery of emotional distress damages when Leitzke allegedly
improperly installed their mobile home. Semenza, 754 P.2d at 510.
7
This Court affirmed the lower courtlsdirected verdict in favor of
Leitzke, stating:
[Tlhe Semenzas failed to establish a legally
protected interest. They rely upon French v.
Ralph E. Moore, Inc. (1983), 203 Mont. 327,
661 P.2d 844, to attempt to establish a
legally protected interest in "a safe and
comfortable home. l1 However, the wrong done in
French was not merely negligence but trespass
to property.
Semenza, 754 P.2d at 511-12.
We decline to extend recovery for emotional distress damages
to cases where the defendant negligently damages or destroys real
property and the plaintiff suffers no physical injury. MPC
negligently destroyed the Days1 restaurant and Days received
adequate compensation for that destruction. We therefore reverse
the award of damages for emotional distress to Ted Day. We need
not address the issues of sufficiency of the evidence,
apportionment of damages, related jury instructions or any waiver
of MPC1s right to attack the jury verdict.
We have adopted only comment j to Restatement (Second) of
Torts 5 46 (1965), defining severe emotional distress. First Bank
(N.A.) v. Clark (Mont. 1989), 771 P.2d 84, 91, 46 St.Rep. 291, 299.
Section 46 concerns the tort of intentional infliction of emotional
distress which we have not yet recognized as a cause of action.
Days1 next specification of error concerns the District
Court's refusal to give certain of their proffered instructions
regarding punitive damages. Days contend that MPC violated
provisions of the Natural Gas Pipeline Safety Act of 1968, 49
U. S.C. $4 1671 (1982), and that such violations constituted presumed
malice thus entitling Days to punitive damages. Specifically, Days
maintain MPC failed to properly odorize gas transported through its
pipelines, failed to prepare a written emergency program and lacked
adequate emergency communication facilities. The District Court
refusedthese instructions based on a lack of sufficient supporting
evidence.
Although Days introduced limited evidence regarding each
claimed violation for none of the alleged infractions was the
evidence sufficient to support a jury determination that the
statute in question was violated. "This Court has held that
instructions not supported by the evidence need not be given."
Mydlarz v. Palmer/Duncan Const. Co. (1984), 209 Mont. 325, 347, 682
P.2d 695, 706. We affirm the District Court's refusal to give
instructions related to MPCts alleged violations of the Natural Gas
Pipeline Safety Act.
Days contend the jury erroneously failed to award them damages
for loss of their established way of life. We affirm. Although
9
confronted with conflicting evidence, the jury had more than
sufficient evidence upon which to base its denial of an award for
loss of established way of life. Ted Day testified that the
restaurant never did more than break even since it was purchased
in 1984, and that the Days paid their living expenses out of the
monthly payments they received from the sale of the Red Lodge Cafe.
Evidence showed that TJ1s Restaurant lost $43,000 in 1985 and
$10,667 in 1986 up until the time of the explosion. The Days never
received a salary the entire time the restaurant was operating
although Doris testified she frequently worked 12 hour days.
Both Days testified that for a short period after the
explosion, they were employed by a restaurant and casino in Red
Lodge. Ted Day's doctor testified that because of his pre-
existing heart condition and high blood pressure, Ted Day should
not work in the restaurant business. Because we affirm the jury
verdict denying damages for loss of established way of life, we
need not address the issue of whether Days waived their right to
attack the jury verdict by failing to move for a new trial.
Days next contend MPC waived its claim of privilege regarding
the report prepared by its employee Byron Mazurek and contained
within its claim file. This claim is based upon MPCts production
of the remainder of the file. Because MPC produced all portions
10
of the file except the report, Days argue this constitutes a waiver
as to the report pursuant to Rule 503 (a), Mont.R.Evid. Rule 503 (a)
states:
A person upon whom these rules confer a privilege against
disclosure waives the privilege if he or his predecessor
while the holder of the privilege voluntarily discloses
or consents to disclosure of any significant part of the
privileged matter.
MPC contends the only significant portion of the file was the
report and that its release of other materials contained within the
file did not constitute waiver of its privilege. We agree. We
would also note that counsel for the Days attempted to compel
production of this document during discovery at which time the
District Court ruled it was privileged. Counsel for appellants
later sought to obtain the document through the use of a subpoena
duces tecum. While the record does not clearly reflect impropriety
on the part of counsel, we will not assist in this attempt at back
door discovery by reversing the order of the District Court.
Having previously denied appellant's motion to dismiss
respondents' cross appeal, we decline reconsideration of this
issue.
We reverse the award of emotional distress damages to Ted Day.
We affirm the District Court's refusal to instruct the jury on
alleged violations of the Natural Gas Pipeline Safety Act, the
jury's refusal to award damages for loss of established way of life
and the lower court's ruling that MPC did not waive its claim of
privilege with regard to Byron Mazurek's report.
We concur: 7Ky
Q
Chief Justice
Justices
Justice John Conway Harrison dissenting.
As noted in the majority opinion:
This Court has permitted plaintiffs to
recover for their emotional distress as an
element of damages in certain underlying
actions: (1) private nuisance (French v. Ralph
E. Moore, Inc. (1983), 203 Mont. 327, 661 P.2d
844); (2) violation of certain constitutional
rights (Johnson, Stensvad v. Towe (Mont. 1988),
759 P.2d 138, 45 St.Rep. 1129) ; and (3) breach
of the covenant of good faith and fair dealing
(Gibson v. Western Fire Ins. Co. (1984), 210
Mont. 267, 682 P.2d 725; Dunfee v. Baskin-
Robbins, Inc. (1986), 221 Mont. 447, 720 P.2d
1148; Safeco Ins. Co. v. Ellinghouse (1986),
223 Mont. 239, 725 P.2d 217).
The majority also found that Mr. Day's claim did not fall within
any of the above categories. With this holding I must disagree.
In Johnson v. Supersave Markets, Inc. (1984), 211 Mont. 465,
473, 686 P.2d 209, 213, we noted:
This Court adopts the species of case
approach which requires a factual analysis of
each case to determine whether the alleged
"emotional distresst1merits compensation. In
determining whether the distress is
compensable absent a showing of physical or
mental injury, we will look to whether
tortious conduct results in a substantial
invasion of a legally protected interest and
causes a siqnificant impact upon the person of
plaintiff. (Emphasis in original.)
In French, we found that the substantial invasion of a legally
protected interest includes injury to real property. In Gibson,
we found that there was no impact, except to a medical doctor's
business, and was a property interest and not a personal interest.
In the case at bar, plaintiffs' property suffered serious damage
which was caused by the defendant's negligence. The defendant
clearly recognized the seriousness of the property damage when
ordered to pay a judgment for that damage. I would hold that the
right to be secure in one's person, papers, and property is a
legally protected interest without distinction as to the type of
interest involved.
I cannot find it proper that the right to possess property
without interference, or the right to pursue a lawful business, are
not property rights legally protected both by the United States and
Montana Constitutions. The right to pursue a lawful business is,
in my opinion, a property right within both the Fifth and the
Fourteenth Amendments of the Constitution and was so found in the
case of United States v. Tropiano (1969), 418 F.2d 1069, 1075-76.
Articles I1 and I11 of our Montana Constitution lists as one of
those inalienable rights the right to "acquire, possess, protect
property.
This Court was correct in the cases set forth above. The
facts of this case show actual physical presence of the plaintiffs
at the explosion and demolition of their restaurant. This, in my
opinion, is a sufficient basis to allow Mr. Day's recovery of
emotional distress damages.
The Days were clearly entitled to damages for destruction of
their property, emotional distress, nervous shock, mental anguish,
and loss of their established way of life all due to the
14
defendant's negligence.
I would affirm the jury's award to Mr. Day for emotional
distress.
Justice John C. Sheehy, and ~ u A t d c eWilliam E. Hunt, Sr., join
in the foregoing dissent of Justice John C. Harrison.
. ,
i
6.
Justice
Justice