Harrington v. Energy W. Inc.

• Decision Date: 11 August 2015
• Docket Number: No. DA 14–0465.,DA 14–0465.
• Citation: 2015 MT 233,380 Mont. 298,356 P.3d 441
• Parties: Jonathan HARRINGTON, Plaintiff and Appellant, v. ENERGY WEST INC., and Does 1–4, Defendants and Appellees.
• Court: Montana Supreme Court

380 Mont. 298

356 P.3d 441

2015 MT 233

Jonathan HARRINGTON, Plaintiff and Appellant

v.ENERGY WEST INC., and Does 1–4, Defendants and Appellees.

No. DA 14–0465.

Supreme Court of Montana.

Submitted on Briefs June 10, 2015.

Decided Aug. 11, 2015.

For Appellant: John E. Seidlitz, Jr., Seidlitz Law Office, Great Falls, Montana.

For Appellees: Oliver H. Goe, Kimberly A. Beatty, Christy S. McCann, Browning, Kaleczyc, Berry & Hoven, P.C., Helena, Montana.

Opinion

Justice BETH BAKER delivered the Opinion of the Court.

¶ 1 Jonathan Harrington sued Energy West, Inc. for claims relating to the termination of his employment. The Eighth Judicial District Court, Cascade County, dismissed Harrington's suit for lack of subject-matter jurisdiction. Harrington appeals. We address the following issues on appeal:

1. Whether the District Court correctly considered evidence outside the pleadings in disposing of Energy West's M.R. Civ. P. 12(b)(1) motion to dismiss;2. Whether the District Court correctly dismissed Harrington's suit.

¶ 2 We affirm the District Court's resolution of facts and its determination that Ohio law applies to Harrington's contract claims, but we vacate its dismissal and remand for further proceedings.

PROCEDURAL AND FACTUAL BACKGROUND

¶ 3 Energy West is a Montana corporation with its principal place of business in Montana. It is a corporate subsidiary of Gas Natural, Inc. Gas Natural is an Ohio corporation with corporate offices in Ohio and Montana.

¶ 4 In February 2011, either Energy West or Gas Natural—the parties dispute which—hired Harrington as a corporate controller. While he held this position, Harrington resided and worked primarily in Ohio. Harrington provided services to Gas Natural's several corporate subsidiaries, including Energy West, and he made four business trips to Montana over the course of eighteen months. Energy West's human resources department manages payroll and benefits for employees of Gas Natural and some of its subsidiaries. Energy West issued Harrington's paychecks and Energy West paid Harrington's payroll taxes, withholdings, and insurance premiums to the State of Ohio.

¶ 5 Harrington's employment at Gas Natural's Ohio office was terminated in October 2012. Harrington applied for and received unemployment benefits through the State of Ohio. In February 2013, Harrington filed suit against Energy West in Montana's Eighth Judicial District Court, alleging wrongful discharge under the Montana Wrongful Discharge from Employment Act (WDEA), § 39–2–904(1)(b), MCA ; negligent 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. Harrington opposed the motion, requested a hearing, and requested limited discovery on issues related to Energy West's motion. The District Court permitted limited discovery.

¶ 6 On July 1, 2014, the District Court held a non-evidentiary, oral argument hearing on the motion. The court ruled from the bench, granting Energy West's motion and dismissing the action. The court relied primarily on Burchett v. MasTec N. Am., Inc., 2004 MT 177, 322 Mont. 93, 93 P.3d 1247, in analyzing subject-matter jurisdiction under Restatement (Second) Conflict of Laws §§ 187 and 188 (1971). The court determined that Ohio law governs Harrington's claims. The court then dismissed Harrington's action, holding that, because Ohio law governs, it lacked subject-matter jurisdiction, or, in the alternative, that the exercise of jurisdiction was not appropriate in Montana. The District Court entered a written order that same day dismissing the action “due to lack of subject-matter jurisdiction and/or that the State of Ohio is the appropriate forum for exercise of subject-matter jurisdiction in this case.” Harrington appeals.

STANDARDS OF REVIEW

¶ 7 We review a dismissal for lack of subject-matter jurisdiction de novo. In re Marriage of Sampley, 2015 MT 121, ¶ 6, 379 Mont. 131, 347 P.3d 1281. We also review de novo a district court's conflict-of-laws determination of the law that will govern a case. Masters Grp. Int'l, Inc. v. Comerica Bank, 2015 MT 192, ¶ 33, 380 Mont. 1, 352 P.3d 1101. We affirm a district court's factual findings unless clearly erroneous. Stewart v. Rice, 2013 MT 55, ¶ 15, 369 Mont. 203, 296 P.3d 1174.

DISCUSSION

¶ 8 1. Whether the District Court correctly considered evidence outside the pleadings in disposing of Energy West's M.R. Civ. P. 12(b)(1) motion to dismiss.

¶ 9 When presented with a M.R. Civ. P. 12(b)(1) motion to dismiss for lack of jurisdiction, if the plaintiff's complaint fails to “state [ ] facts that, if true, would vest the court with subject matter jurisdiction,” a court may dismiss based on the complaint alone.

Gen. Constructors, Inc. v. Chewculator, Inc., 2001 MT 54, ¶¶ 16, 39, 304 Mont. 319, 21 P.3d 604, overruled on other grounds by

Big Spring v. Conway, 2011 MT 109, ¶ 45, 360 Mont. 370, 255 P.3d 121. A court also has discretion to receive evidence of facts bearing on the M.R. Civ. P. 12(b)(1) motion and determine that it lacks subject-matter jurisdiction based on that evidence. See

Sampley, ¶ 9.

¶ 10 Harrington appears to argue that, in resolving Energy West's motion, the District Court improperly determined factual issues. To the extent that Harrington is arguing that the District Court could not rely on the affidavits and documents submitted by the parties to resolve the M.R. Civ. P. 12(b)(1) motion, he is mistaken. See Sampley, ¶ 9; TC Fuel Components, LLC v. Mont. Eleventh Judicial Dist. Court, S.Ct. No. OP 13–0798, 374 Mont. 540, 346 P.3d 363 (Table) (Jan. 21, 2014) (“M. R. Civ. P. 12(d) makes clear that matters outside the pleadings can be considered on a motion to dismiss for lack of jurisdiction.”); c.f. Knoepke v. Sw. Ry. Co., 190 Mont. 238, 244, 620 P.2d 1185, 1188 (1980) (concluding that a court may rely on affidavits to resolve a personal jurisdiction issue).

¶ 11 Harrington also argues that the District Court should have held an evidentiary hearing before ruling on Energy West's motion. Harrington fails to cite any authority in support of his argument. Although it is “not this Court's obligation to locate authorities or formulate arguments for a party in support of positions taken on appeal,” Cutler v. Jim Gilman Excavating, Inc., 2003 MT 314, ¶ 22, 318 Mont. 255, 80 P.3d 1203 (citation omitted), we will address Harrington's argument briefly. Whether to hold a hearing “is a matter left to the discretion of the district court.” Sampley, ¶ 9. We accordingly review a district court's decision not to hold a hearing for an abuse of discretion. Sampley, ¶ 9. Two factors that counsel in favor of an evidentiary hearing are whether the court must resolve a dispute of material fact or weigh the credibility of witnesses. Sampley, ¶ 12. Here, the parties vigorously dispute whether Harrington's employer was Energy West or Gas Natural. This dispute is not material to determinations bearing on the resolution of Energy West's motion. Rather, as explained in ¶¶ 18–22, the material facts concern the place where Harrington entered into his employment agreement and performed his employment. There is no dispute about these material facts. The District Court did not abuse its discretion by declining to hold an evidentiary hearing.

¶ 12 2. Whether the District Court correctly dismissed Harrington's suit.

¶ 13 Subject-matter jurisdiction is the power of a court to hear and adjudicate a particular type of controversy. Harland v. Anderson Ranch Co., 2004 MT 132, ¶ 31, 321 Mont. 338, 92 P.3d 1160. Montana courts derive subject-matter jurisdiction from constitutional and statutory authority. LaPlante v. Town Pump, Inc., 2012 MT 63, ¶ 15, 364 Mont. 323, 274 P.3d 724. The Montana Constitution provides that a Montana district court has, without limitation, subject-matter jurisdiction in “all civil matters.” Mont. Const. art. VII, § 4 ; Ballas v. Missoula City Bd. of Adjustment, 2007 MT 299, ¶ 12, 340 Mont. 56, 172 P.3d 1232. The Montana Constitution also provides that the United States Congress and the Montana Legislature may delegate additional subject-matter jurisdiction to Montana district courts. Mont. Const. art. VII, § 4.

¶ 14 As mentioned, the District Court based its dismissal on Burchett. In Burchett, a district court dismissed the plaintiff's WDEA claim for lack of subject-matter jurisdiction. Burchett, ¶ 1. On appeal, this Court addressed two questions: whether the district court erred by determining that Montana law did not apply to Burchett's claim, and whether the district court erred when it dismissed Burchett's complaint for lack of subject-matter jurisdiction. Burchett, ¶¶ 2–4. To resolve the first issue, the Court conducted a conflict-of-laws analysis under Montana law and Restatement (Second) Conflict of Laws §§ 187 and 188, and determined that Montana law should apply to Burchett's suit. Burchett, ¶ 31. The Court then addressed the second issue and held that the district court had subject-matter jurisdiction because “it naturally follows that Montana courts have subject matter jurisdiction in a case involving a Montana resident when Montana law applies.” Burchett, ¶ 33.

¶ 15 The dissent in Burchett argued that the district court correctly determined that it lacked subject-matter jurisdiction because Burchett could avail himself of an Indiana law that would have provided him a remedy for wrongful discharge. Burchett, ¶ 38 (Gray, C.J., dissenting). The WDEA provides a cause of action as long as a discharge is not “subject to any other state or federal statute that provides a procedure or remedy for contesting the dispute.” Section 39–2–912(1), MCA. Thus, according to the dissent, a district court “does not have subject matter jurisdiction over a wrongful discharge claim where other state or federal legislation provides a procedure for resolving the claim.” Burchett, ¶ 37 (Gray, C.J., dissenting).

¶ 16 Here, the District Court concluded from the dissenting and majority opinions in ...