Covey v. Brishka

• Decision Date: 23 July 2019
• Docket Number: DA 18-0498
• Citation: 396 Mont. 362,2019 MT 164,445 P.3d 785
• Parties: Michael J. COVEY and Stacy D. Covey, Individually and as Trustees of the Amended and Restated Covey Family Trust U/D/T/ Dated October 23, 2006, Plaintiffs and Appellees, v. Alexander R. BRISHKA and Ilma Brishka, as Co-Trustees of the Brishka Trust Established March 20, 1999, Defendants and Appellants.
• Court: Montana Supreme Court

396 Mont. 362

445 P.3d 785

2019 MT 164

Michael J. COVEY and Stacy D. Covey, Individually and as Trustees of the Amended and Restated Covey Family Trust U/D/T/ Dated October 23, 2006, Plaintiffs and Appellees,

v.Alexander R. BRISHKA and Ilma Brishka, as Co-Trustees of the Brishka Trust Established March 20, 1999, Defendants and Appellants.

DA 18-0498

Supreme Court of Montana.

Submitted on Briefs: February 13, 2019

Decided: July 23, 2019

For Appellant: Paul R. Haffeman, Joseph M. Sullivan, Davis, Hatley, Haffeman & Tighe, P.C., Great Falls, Montana

For Appellee: Sean S. Frampton, Laura J. Webb, Frampton Purdy Law Firm, Whitefish, Montana

Justice James Jeremiah Shea delivered the Opinion of the Court.

¶1 Appellants Alexander and Ilma Brishka, as co-trustees of the Brishka Trust (collectively "Brishkas"), appeal the jury trial verdict and judgment of the Eleventh Judicial District, Flathead County, finding the Brishkas strictly liable for the breach of a pond on their property and awarding damages to Michael and Stacy Covey and the Covey Trust (collectively "Coveys"). We address the following issues on appeal:

Issue One: Whether the District Court erred in its application of strict liability.

Issue Two: Whether the District Court erred when it allowed the Coveys to claim the full amount of damages for the increased cost to the driveway project.

Issue Three: Whether the District Court erred by allowing evidence regarding the diminution of the Coveys’ property value.

Issue Four: Whether the Coveys made improper closing arguments regarding the Brishkas’ alleged negligence.

Issue Five: Whether the District Court erred when it excluded evidence of other causes of the pond breach.

¶2 We affirm.

PROCEDURAL AND FACTUAL BACKGROUND

¶3 In January of 2000, the Brishkas purchased property on Big Mountain Road in Whitefish. The Brishka property included a 4.5 million-gallon man-made fish pond built by a previous owner. In 2005, the Coveys purchased a plot of land on Whitefish Lake, downhill from the Brishka property.

¶4 In 2009, the Coveys commenced plans to construct a home on their property. They hired landscape architects, engineers, and excavators to design and build a driveway to access the property. Prior to beginning construction, and as part of their investigation, the engineers dug test pits, which revealed no water, and concluded the soils on the property were dry. The engineers noted a culvert existed uphill from a neighboring property, but the engineering investigation revealed water did not historically drain through it. The excavators similarly concluded the soil conditions were dry.

¶5 Due to the steep terrain, it was necessary for the driveway project to traverse the lots of adjacent property owners, Cora Belle and Patrick Montalban (the Montalbans). The initial driveway bid was $233,000. The Coveys contracted with all of the necessary parties and paid all of the upfront costs for the driveway construction. The Coveys testified that they had an informal agreement with the Montalbans to be reimbursed a pro rata share of the driveway project costs.

¶6 During a large storm on August 2-3, 2013, the Brishkas’ pond breached its banks and water flowed downslope. The water carried boulders, trees, and other debris downhill and carved large channels into the hillside. Following the pond breach, the Coveys conducted additional surveys. The engineers and excavators concluded the ground was saturated, water was flowing through the culvert that historically was dry, and measurements revealed historical drainage patterns were greatly altered by the pond breach.

¶7 On July 28, 2016, the Coveys brought suit against the Brishkas for negligence, nuisance, strict liability, and trespass. On September 8, 2017, the Coveys filed an amended complaint. Following the Brishkas’ pond breach, the Coveys alleged the driveway construction bid was increased to $498,000. The Brishkas responded that they were not responsible for the damage to the Coveys’ property and, as one of their asserted defenses, contended that another party was the cause of the Coveys’ damage.

¶8 In response to discovery requests, the Coveys described their damages as:

[The Coveys] suffered damages in the amount of $265,512.87. This is the cost of the road construction, drainage features, engineering and design to mitigate the groundwater and surface water flows resulting from the pond breach. The amount was calculated by subtracting the amount of the original competitive bid–awarded prior to the pond failure–from the final completed expense of the Project.

[The Coveys] also claim emotional distress damages for the interference with the use of their property. This is a claim for general damages that will be determined by a jury based on the evidence presented and thus no calculation has been made.

The Pretrial Order set forth the Coveys’ damages as the increased cost of the driveway project and all damages "allowed by law including economic, tort damages, damages to property, and emotional distress."

¶9 Both parties filed several motions in limine . The Coveys moved to exclude, among other things, evidence at trial regarding road construction by the Montana Department of Transportation (DOT) that allegedly affected the drainage into the Brishkas’ pond. The Brishkas moved to prohibit the Coveys from claiming the entire amount of $265,512.87 for the increased cost of the driveway project. The Coveys opposed that motion and sought to preclude the Brishkas from arguing at trial that the Coveys had not suffered the entire amount of $265,512.87 for the increased cost of the driveway project.

¶10 From April 2-4, 2018, the District Court presided over a three-day jury trial. Immediately prior to the start of the trial, the District Court orally ruled on the parties’ motions in limine . The District Court granted the Coveys’ request to exclude testimony that would apportion any liability to DOT. The District Court also determined the Brishkas could not introduce evidence that the Montalbans were sharing the increased cost of the driveway project with the Coveys.

¶11 At trial, Michael Covey, over objection, testified that he was solely responsible for paying the entire amount of the increased cost of the driveway project. Michael Covey also offered testimony, over objection, speculating as to a decrease in the property value following the pond breach. The Coveys presented expert testimony that an outlet culvert that drained from the Brishkas’ pond was obstructed by a berm on one side of the pond, making a pond breach more likely.

¶12 At the close of trial, the Coveys withdrew their trespass, nuisance, and negligence claims, preserving only the strict liability claim. The District Court analyzed whether the Brishkas’ pond was an abnormally dangerous activity or condition such that strict liability should apply based on two lines of case law:

It appears to me that there are two separate lines of cases that address the situation, one is embodied in Dutton [v. ] Rocky Mt. Phosphates ... [a case that held] that impoundment of material on your property the property owner can be strictly liable for.

Certainly in this case this was an impoundment of water on the property .... [Next,] the Montana Supreme Court in Matkovic [v. ] Shell Oil ... adopted the Restatement Second of Tort’s [d]efinition of Strict Liability stating: ‘One who carries on an abnormally dangerous activity is subject to liability for harm to the person, land or chattels of another resulting from the activity though he has exercised the utmost care to prevent the harm; two, the strict liability is limited to the kind of harm the possibility of which makes the activity abnormally dangerous.’

In Chambers [v. ] City of Helena , ... the [C]ourt articulated the factors for determining whether an abnormally dangerous condition exists, the same ones as adopted in Matkovic and Restatement Second...."

The District Court applied each factor from the Restatement (Second) of Torts to the condition of the Brishkas’ pond and concluded that "maintenance of the pond constitute[d] an abnormally dangerous condition" warranting application of strict liability.

¶13 During closing argument, the Coveys’ counsel discussed testimony regarding the blocked outlet culvert and the berm on the Brishkas’ property and used this testimony to cast doubt on Alexander Brishka’s credibility as a witness. The District Court overruled the Brishkas’ objection that the evidence about the blocked culvert and berm were no longer relevant for the only remaining claim: strict liability.

¶14 The District Court instructed the jury that the Coveys brought a claim for strict liability, and that it had ruled that the Brishkas are strictly liable for any harm caused by the breach of their pond. The District Court then instructed the jury that it would be analyzing only the issues of causation and damages. The District Court instructed that if the jury found the Brishkas’ pond caused the Coveys’ harm, it "must determine the amount of damages that will reasonably and fairly compensate the [Coveys] for the harm caused by the [Brishkas]."

¶15 The District Court gave the following instruction regarding assessment of damages:

For claims involving damage to real property, you may award damages for:

(1) the difference between the value of the land before the harm and the value after the harm, or at [the Coveys’] election in an appropriate case, the cost of restoration that has been or may be reasonably incurred;

(2) the loss of use of the land; and (3) discomfort and annoyance to [the Coveys as occupants].

Neither party objected.

¶16 After instructing the jury, the District Court submitted the following special verdict form to the jury:

(1) The Court has found the Brishka Trust strictly liable for all harm caused by a breach of its pond.

(2) Did the Brishka Trust’s liability cause damages to the Covey Trust?

...

(3) What is the amount of damages suffered by the Covey Trust?

...

(4) Did the Brishka Trust’s liability

...