06/13/2017
DA 16-0518
Case Number: DA 16-0518
IN THE SUPREME COURT OF THE STATE OF MONTANA
2017 MT 141
JONATHAN HARRINGTON,
Plaintiff and Appellant,
v.
ENERGY WEST, INC., and DOES 1-4,
Defendants and Appellees.
APPEAL FROM: District Court of the Eighth Judicial District,
In and For the County of Cascade, Cause No. DDV 13-159(c)
Honorable John A. Kutzman, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
John E. Seidlitz, Jr., Seidlitz Law Office, Great Falls, Montana
For Appellees:
Oliver H. Goe, Christy S. McCann, Browning, Kaleczyc, Berry & Hoven,
P.C., Helena, Montana
Submitted on Briefs: April 26, 2017
Decided: June 13, 2017
Filed:
__________________________________________
Clerk
Justice Beth Baker delivered the Opinion of the Court.
¶1 Jonathan Harrington asserted several employment-related claims against Energy
West Inc. Following our remand in Harrington v. Energy West, Inc., 2015 MT 233,
380 Mont. 298, 356 P.3d 441 (hereafter Harrington I), the District Court denied
Harrington’s motion to amend his complaint and granted Energy West’s motion to dismiss
based on the doctrine of forum non conveniens. Harrington contends that the District Court
abused its discretion in denying him leave to amend his complaint and that it incorrectly
dismissed the case under forum non conveniens.
¶2 We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 Energy West is a Montana corporation and a corporate subsidiary of Gas Natural,
Inc.—an Ohio corporation with corporate offices in Ohio and Montana. As we noted in
Harrington I, it is unclear whether Energy West or Gas Natural hired Harrington as a
corporate controller in February 2011. Nevertheless, the record establishes that Harrington
entered into his employment agreement in Ohio; that the agreement was made between
Harrington and Gas Natural employees; that Harrington resided and worked primarily in
Ohio; that he provided services to Energy West from Gas Natural’s Ohio office; and that
Energy West issued Harrington’s paychecks and paid Harrington’s payroll taxes,
withholdings, and insurance premiums to the State of Ohio.
¶4 In October 2012, Harrington’s employment was terminated. Harrington filed suit
against Energy West in Montana’s Eighth Judicial District Court, alleging wrongful
discharge under the Montana Wrongful Discharge from Employment Act, negligent
2
infliction of emotional distress, and defamation. Energy West moved under M. R. Civ. P.
12(b)(1) to dismiss for lack of subject-matter jurisdiction. The District Court granted the
motion after hearing oral argument. The court determined that Ohio law governed and that
it therefore lacked subject-matter jurisdiction, or, alternatively, that Ohio was the
appropriate forum to exercise jurisdiction. Harrington appealed.
¶5 In Harrington I, we concluded that the District Court did not abuse its discretion by
declining to hold an evidentiary hearing before granting Energy West’s motion to dismiss.
Harrington I, ¶ 11. In so doing, we noted that the “parties vigorously dispute whether
Harrington’s employer was Energy West or Gas Natural.” Harrington I, ¶ 11. That
dispute, we emphasized, was “not material to determinations bearing on the resolution of
Energy West’s motion” to dismiss. Harrington I, ¶ 11. We concluded that the material
facts relevant to Energy West’s motion “concern[ed] the place where Harrington entered
into his employment agreement and performed his employment.” Harrington I, ¶ 11. We
noted that the parties did not dispute those material facts. Harrington I, ¶ 11.
¶6 Analyzing the issue of subject-matter jurisdiction, we first considered whether
Montana or Ohio law governed Harrington’s employment contract. Harrington I,
¶¶ 17-22. We confirmed that the record undisputedly established that “Harrington
performed the majority of his duties in his Ohio office” and “that Harrington’s employment
agreement was made in Ohio between Harrington and Gas Natural employees.”
Harrington I, ¶ 21. We thus concluded pursuant to § 28-3-102, MCA, that the District
Court “correctly determined that Ohio law governs Harrington’s contract claims” and that
3
Harrington could not rely on Montana law for his wrongful termination claims. Harrington
I, ¶¶ 21-22.
¶7 Notwithstanding application of Montana law, we concluded that Montana courts
had subject-matter jurisdiction over Harrington’s claim. Harrington I, ¶ 25. We then
examined the District Court’s alternative basis for dismissal, that Ohio was the appropriate
forum for exercise of subject-matter jurisdiction. Harrington I, ¶¶ 26-29. This alternative
basis, we deduced, “appear[ed] to refer to the doctrine of forum non conveniens.”
Harrington I, ¶ 26. We held:
Based on the record on appeal, we cannot determine whether an alternative
forum is available for Harrington’s claims. Ohio seems the natural location
for this litigation, but for an Ohio court to hear this case it would have to have
personal jurisdiction over Energy West. The parties have not argued whether
there are obstacles to jurisdiction in Ohio, but Energy West is a Montana
corporation with its principal place of business in Montana, and Energy West
has not stated whether it would consent to personal jurisdiction in Ohio. We
will not resolve this question without the benefit of argument.
Additionally, Harrington also has claims of negligent infliction of emotional
distress and slander that may or may not rely on Montana law. The District
Court would need to consider these claims as well in evaluating forum non
conveniens. We thus conclude that we cannot resolve the issue of dismissal
under the doctrine of forum non conveniens based on the record before us.
Harrington I, ¶¶ 28-29. Accordingly, “[w]e vacat[ed] the District Court’s dismissal and
remand[ed] for further proceedings to consider whether dismissal under the doctrine of
forum non conveniens is appropriate.” Harrington I, ¶ 30.
¶8 Upon remand, Harrington sought leave to file an amended complaint. Harrington’s
proposed amended complaint dropped his claims for wrongful discharge and negligent
infliction of emotional distress. Harrington instead asserted claims for deceit, negligent
4
misrepresentation, constructive fraud, unjust enrichment, negligent slander, and punitive
damages. Energy West opposed Harrington’s motion. It also filed a motion to dismiss
based on forum non conveniens.
¶9 The District Court held a hearing on the motions. During the hearing, Energy West
consented to personal jurisdiction in Ohio. The court’s subsequent order denied
Harrington’s motion to amend his complaint on the grounds that it would prejudice Energy
West and that this Court had remanded for consideration of forum non conveniens. The
court’s order also granted Energy West’s motion to dismiss under forum non conveniens.
The District Court based its decision on its conclusion that the convenience of witnesses
and interests of justice supported trying Harrington’s original claims in Ohio. Harrington
appeals.
STANDARD OF REVIEW
¶10 We generally review a district court’s denial of a motion to amend pleadings for an
abuse of discretion. Bardsley v. Pluger, 2015 MT 301, ¶ 10, 381 Mont. 284, 358 P.3d 907.
A district court abuses its discretion if it acts arbitrarily, without employment of
conscientious judgment, or exceeds the bounds of reason resulting in substantial injustice.
Bardsley, ¶ 10.
¶11 Section 25-2-201(3), MCA, which governs motions to change venue within
Montana on the ground of convenience of witnesses and the ends of justice, reflects the
principles of forum non conveniens. San Diego Gas & Elec. Co. v. Ninth Judicial Dist.
Ct., 2014 MT 191, ¶ 24, 375 Mont. 517, 329 P.3d 1264 (citing State ex rel. Burlington N.
R.R. v. Dist. Ct., 270 Mont. 146, 153, 155, 891 P.2d 493, 498-99 (1995); Modroo v.
5
Nationwide Mut. Fire Ins. Co., 2008 MT 275, ¶ 70, 345 Mont. 262, 191 P.3d 389). We
have held that Ҥ 25-2-201(3), MCA, grants the district court wide discretion, and we will
not disturb the court’s decision absent a clear abuse of that discretion.” In re Marriage of
Lockman, 266 Mont. 194, 201-02, 879 P.2d 710, 715 (1994); accord Wagman v. Motl,
2015 MT 168, ¶ 6, 379 Mont. 439, 352 P.3d 609 (“A district court exercises its discretion
when transferring venue from one proper county to another proper county for the
convenience of witnesses and the ends of justice [under § 25-2-201(3), MCA], and we will
not disturb such a decision absent an abuse of discretion.”). Because a forum non
conveniens analysis turns on similar considerations, we review a district court’s
determination on a motion to dismiss under forum non conveniens for an abuse of
discretion.
DISCUSSION
¶12 1. Whether the District Court abused its discretion in denying Harrington’s motion
to amend his complaint.
¶13 The District Court explained that Harrington’s proposed amended complaint
dropped all but one of his previous legal theories and replaced them with five new theories.
The court noted that the “common thread in the new theories is alleged misrepresentations
to [Harrington] that he worked for Energy West.” The court determined that Harrington’s
“new” theories “do not outweigh the prejudice to Energy West that would result from
changing the legal basis of this case three years after it started and after Energy West
prevailed on an important motion.” In addition, the court explained, this Court remanded
the case in Harrington I “for more analysis of the forum non conveniens issue, . . . not so
6
Mr. Harrington could experiment with different legal theories.” The court concluded, “The
combination of the prejudice to Energy West that would result from this untimely
amendment and the fact that it diverges sharply from the Supreme Court’s remand
instructions overcomes the normal preference for free amendment of pleadings.”
¶14 On appeal, Harrington argues that the District Court abused its discretion in denying
his motion to amend his complaint. He first asserts that M. R. Civ. P. 15(a)(2) provides
that leave to amend should be freely given so long as the other party is not prejudiced. The
amendment could not prejudice Energy West, Harrington maintains, because there was no
scheduling order in place, the parties had conducted “only preliminary discovery,” and
Energy West had not yet filed an answer to the original complaint. Harrington asserts that
we determined in Harrington I that Gas Natural—and not Energy West—was his
employer. Thus, Harrington contends that “the elements of a cause of action for negligent
misrepresentation” against Energy West did not arise until after our remand in Harrington
I, when he first learned that Gas Natural was his employer.
¶15 M. R. Civ. P. 15(a)(2)’s preference that a court “freely” grant leave to amend “when
justice so requires” “does not mean that a court must automatically grant a motion to
amend.” Kershaw v. Mont. Dept. of Transp., 2011 MT 170, ¶ 25, 361 Mont. 215, 257 P.3d
358 (citation and internal quotations omitted). A district court does not abuse its discretion
in denying a motion to amend “for an apparent reason such as . . . undue prejudice to the
opposing party by allowance of the amendment.” Farmers Coop. Ass’n v. Amsden, LLC,
2007 MT 286, ¶ 12, 339 Mont. 445, 171 P.3d 690. We have affirmed a district court’s
denial of a motion to amend “when the opposing party already had expended substantial
7
effort and expense in the course of the dispute that would be wasted if the moving party
were allowed to proceed on a new legal theory.” Farmers Coop. Ass’n, ¶ 14 (citation and
internal quotations omitted). In making a determination on undue prejudice, a court must
balance the prejudice suffered by the opposing party “against the sufficiency of the moving
party’s justification of the delay.” Farmers Coop. Ass’n, ¶ 14 (citation omitted).
¶16 Contrary to Harrington’s assertions, we did not conclude in Harrington I that Gas
Natural employed Harrington. We observed that “the parties vigorously dispute whether
Harrington’s employer was Energy West or Gas Natural.” Harrington I, ¶ 11. We
concluded that the dispute was “not material to determinations bearing on the resolution of
Energy West’s motion.” Harrington I, ¶ 11. As we explained later in the Opinion, where
Harrington entered into his employment agreement and where he did his job were the facts
material to determining whether Ohio or Montana law applied. Harrington I, ¶¶ 18-22.
We concluded that Ohio law governed, not because we determined that Gas Natural
employed Harrington, but because the record established that “Harrington performed the
majority of his duties in his Ohio office” and that “Harrington’s employment agreement
was made in Ohio between Harrington and Gas Natural Employees.” Harrington I, ¶ 21.
Harrington’s contentions that his negligent misrepresentation claims did not arise until after
our remand in Harrington I do not establish that the District Court abused its discretion by
refusing to allow him to amend the complaint.
¶17 As the District Court found, Harrington’s proposed amended complaint dropped all
but one of his original claims and asserted five completely new legal theories. Harrington
sought to amend his complaint over two-and-a-half years after he filed his original
8
complaint. During that time, Energy West had argued successfully that Ohio law applied
to Harrington’s wrongful termination claims in his original complaint. We affirmed that
conclusion. Harrington I, ¶ 22. By the time Harrington filed his motion to amend, Energy
West “already had expended substantial effort and expense in the course of the dispute that
would be wasted if [Harrington] were allowed to proceed on a new legal theory.” Farmers
Coop. Ass’n, ¶ 14.
¶18 Further, we remanded in Harrington I for the narrow purpose of considering
“whether dismissal under the doctrine of forum non conveniens is appropriate.”
Harrington I, ¶ 30. As the District Court emphasized, we did not remand to give
Harrington the chance to start over with all new theories. We said only that, in addition to
the wrongful discharge claim, the “District Court would need to consider [Harrington’s
negligent infliction of emotional distress and slander] claims as well in evaluating forum
non conveniens.” Harrington I, ¶ 29.
¶19 The District Court did not act arbitrarily or exceed the bounds of reason in
concluding that Harrington’s amendment would prejudice Energy West and that the
amendment would run counter to our remand instructions in Harrington I. Accordingly,
the District Court did not abuse its discretion in denying Harrington’s motion to amend.
¶20 2. Whether the District Court abused its discretion in granting Energy West’s
motion to dismiss based on forum non conveniens.
¶21 The District Court first addressed whether Ohio courts could exercise personal
jurisdiction over Energy West. In so doing, the court noted that neither party “identified
any Ohio-law obstacle to Ohio exercising personal jurisdiction over Energy West,” that
9
personal jurisdiction may be waived by a defendant in Ohio, and that Energy West had
“firmly committed” to waiving personal jurisdiction if Harrington brought suit in Ohio.
The District Court therefore concluded that there were no obstacles to jurisdiction in Ohio.
¶22 The District Court began its forum non conveniens analysis by noting that a
plaintiff’s “choice of a forum should not be disturbed except for weighty reasons.”
(Quoting Harrington I, ¶ 27.) Relying on San Diego Gas & Elec. Co., the court affirmed
that § 25-2-201(3), MCA, reflects the principles of forum non conveniens. “That statute,”
the court explained, “requires changing the place of trial when ‘the convenience of
witnesses and the ends of justice could be promoted by the change.’” (Quoting
§ 25-2-201(3), MCA.) The court then proceeded to analyze whether forum non conveniens
justified dismissing Harrington’s claims of negligent infliction of emotional distress and
slander.
¶23 The District Court noted that Harrington’s claim for negligent infliction of
emotional distress, “by its own terms,” alleged that Energy West inflicted emotional
distress “in its handling of [Harrington’s] employment discharge.” The court emphasized
that Harrington performed the majority of his duties in Ohio and that his office and his
supervisor were located in Ohio. Further, the court went on, Harrington “necessarily
experienced or suffered the alleged emotional distress in Ohio, where he was living and
working, and where he was physically located when he learned of his discharge . . . . Thus
the people who allegedly inflicted the emotional distress, together with the people who
know of its alleged extent, are in Ohio.”
10
¶24 The District Court summarized Harrington’s slander claim as follows: “In effect,
[Harrington] argues that the allegedly unauthorized use of his name on post-discharge SEC
filings that later became controversial defames him.” The court found that the damages
Harrington asserted “result either from Gas Natural stamping his name on reports Gas
Natural was submitting to the SEC on behalf of its wholly-owned subsidiary Energy West
or, alternatively, Gas Natural permitting its wholly-owned subsidiary Energy West to
continue stamping or printing Mr. Harrington’s name on those filings.” “Either way,” the
court continued, “the culpability—if any—and the knowledgeable witnesses are at Gas
Natural headquarters in Mentor, Ohio.”
¶25 The court stated that the following factors supported a conclusion that “the
convenience of witnesses and interests of justice” necessitated trying Harrington’s claims
in Ohio:
The Montana Supreme Court has already determined that Ohio law
governs, Harrington [I], ¶ 21, and Ohio courts are far better suited
than this Court to identify and apply Ohio law;
Mr. Harrington’s employment ended in Ohio;
Mr. Harrington and the individual responsible for his termination
reside in Ohio;
Gas Natural’s records are largely if not exclusively located in Ohio;
Most of the witnesses who know about Mr. Harrington’s discharge,
the infliction of the alleged emotional distress, the extent of the
alleged emotional distress, and how Mr. Harrington’s signature came
to be associated with the disputed SEC filings are in Ohio;
To the limited extent any potential witnesses are in Montana, M. R.
Civ. P. 28(c) provides a straightforward process pursuant to which the
11
Montana clerk of court will issue a Montana deposition subpoena
upon the presentation of an appropriate subpoena from the Ohio
courts; and
Montana jurors should not be burdened with a case based on Ohio law
and conduct that occurred in Ohio.
The court noted that the “scant few facts Mr. Harrington might try to prove through
Montana witnesses or Montana documents simply do not outweigh the fact that the center
of gravity of Mr. Harrington’s employment relationship was in Ohio rather than Montana.”
¶26 Harrington does not directly address the District Court’s analysis of forum non
conveniens. Instead, Harrington contends that the court failed to analyze whether his
negligent infliction of emotional distress and slander claims relied on Montana law
pursuant to his reading of our remand in Harrington I. Harrington asserts that the District
Court improperly relied on our conclusion in Harrington I that Ohio law governed his
wrongful termination claims in concluding that his negligent infliction of emotional
distress and slander claims belong in Ohio. Moreover, Harrington contends, the court erred
by not holding an evidentiary hearing to determine whether records of his employment
were located in Montana or Ohio. Finally, he argues that he “clearly set forth by affidavit
the fact Montana employees were responsible and involved in each of the wrongful acts
alleged” in his original complaint.
¶27 The common law doctrine of forum non conveniens “allows a court to resist
imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a
general venue statute.” San Diego Gas & Elec. Co., ¶ 22 (citation and internal quotations
omitted). Under the doctrine, a court may “dismiss a case when it believes that the action
12
may be more appropriately and justly tried elsewhere, including another state, taking into
account the convenience of witnesses and the ends of justice.” Harrington I, ¶ 26 (citations
and internal quotations omitted). A district court is granted “wide discretion” in
determining whether the convenience of witnesses and the ends of justice would be
promoted by a change in venue. In re Marriage of Lockman, 226 Mont. at 201-02, 879
P.2d at 715.
¶28 Harrington’s reliance on our reference in Harrington I to his negligent infliction of
emotional distress and slander claims is misplaced. Although we acknowledged that
Harrington’s claims “may or may not rely on Montana law,” we simply directed the District
Court “to consider these claims . . . in evaluating forum non conveniens.” Harrington I,
¶ 29. The District Court clearly did so.
¶29 We agree with the District Court that both of Harrington’s claims relate to his
discharge from employment—he claimed emotional distress due to his discharge, and his
slander claim rested on post-discharge actions allegedly taken by Gas Natural. The record
confirms the District Court’s findings that Harrington’s employment ended in Ohio, that
both he and the person who terminated him reside in Ohio, that the witnesses who know
about his discharge reside in Ohio, that the infliction of the alleged emotional distress
occurred in Ohio, that the witnesses who know the extent of the alleged emotional distress
reside in Ohio, and that the witnesses who know why his signature appeared on the disputed
SEC filings are in Ohio. As the District Court concluded, “the center of gravity of Mr.
Harrington’s employment relationship was in Ohio rather than Montana.” The District
13
Court also was correct in its observation that Harrington may depose any potential Montana
witnesses pursuant to M. R. Civ. P. 28(c).
¶30 Given the facts and circumstances of this case, we conclude that the District Court
did not abuse its discretion by determining that resolution of Harrington’s claims in Ohio
would promote the convenience of witnesses and the ends of justice. Its decision to dismiss
Harrington’s complaint based on forum non conveniens is affirmed.
CONCLUSION
¶31 We affirm the District Court’s order denying Harrington’s motion to amend and
granting Energy West’s motion to dismiss.
/S/ BETH BAKER
We Concur:
/S/ MIKE McGRATH
/S/ LAURIE McKINNON
/S/ MICHAEL E WHEAT
/S/ JAMES JEREMIAH SHEA
14
Harrington v. Energy West, Inc.
Court: Montana Supreme Court
Date filed: 2017-06-13
Citations: 2017 MT 141, 387 Mont. 497, 396 P.3d 114
Copy CitationsCombined Opinion