Lampi v. Speed

• Citation: 2011 MT 231,362 Mont. 122,261 P.3d 1000
• Decision Date: 14 September 2011
• Docket Number: No. DA 10–0169.,DA 10–0169.
• Parties: Rohnn LAMPI, Plaintiff and Appellant,v.Allen SPEED, Defendant and Appellee.
• Court: United States State Supreme Court of Montana

362 Mont. 122

261 P.3d 1000

2011 MT 231

Rohnn LAMPI, Plaintiff and Appellant,

v.Allen SPEED, Defendant and Appellee.

No. DA 10–0169.

Supreme Court of Montana.

Argued and Submitted Feb. 16, 2011.Decided Sept. 14, 2011.

For Appellant: L. Randall Bishop (argued), Jarussi & Bishop, Billings, Montana, Alex Rate, Rate Law Office, Bozeman, Montana.For Appellee: Randall G. Nelson (argued), Nelson & Dahle, P.C., Billings, Montana.For Amicus: Lawrence A. Anderson (argued), Attorney at Law, Great Falls, Montana (for Montana Trial Lawyers Association).Justice BRIAN MORRIS delivered the Opinion of the Court.

[362 Mont. 123] ¶ 1 The Twenty–Second Judicial District Court, Carbon County, denied motions for summary judgment and judgment as a matter of law filed by Appellant Rohnn Lampi (Lampi). Lampi sought an order that restoration damages constituted the appropriate measure of damages for his fire loss claim. The court also denied Lampi's motion in limine to exclude evidence of diminution in market value of Lampi's property caused by the fire and Lampi's objection to a jury instruction. We apply Restatement (Second) of Torts § 929 as adopted by our decision in Sunburst School Dist. No. 2 v. Texaco, Inc., 2007 MT 183, 338 Mont. 259, 165 P.3d 1079. We reverse and remand for a new trial.

¶ 2 We review the following issue on appeal:

¶ 3 Whether the District Court wrongly denied Lampi's motions to establish restoration damages as the appropriate measure of damages in his case.

FACTUAL AND PROCEDURAL HISTORY

¶ 4 Lampi owns forty acres of land near Red Lodge, Montana. Allen Speed (Speed), Lampi's neighbor, admitted liability for negligently dumping ashes that caused a wildfire that burned the trees and vegetation on Lampi's property. Firefighters saved Lampi's house, but the rest of his property suffered extensive damage from the burn.

¶ 5 Lampi grew up in Red Lodge and purchased the land for a vacation and retirement home. He carefully selected his land for its aesthetic beauty and wild setting. Lampi did not buy the land for investment purposes. Lampi intends to hand the land down to his children and grandchildren. Lampi shot his first deer with his father on this property. Lampi also testified that he intends to take every measure that he can to restore his land back to its pre-fire condition. The fire destroyed 481 pine trees and 687 aspens. Lampi felt particularly fond of the aspen grove directly behind his house that provided shade, privacy, and wildlife viewing.

¶ 6 Speed admitted liability for negligently burning Lampi's land. The parties could not agree, however, on what constituted fair compensation for Lampi's loss. Lampi's estimated cost to replace the lost trees on his land exceeded the decline in monetary value to his property from the fire. Lampi argued that he should be allowed to recover damages to replace the trees and restore his land because he had no plans ever to sell his land and that the loss in monetary value of the property should be deemed irrelevant to him. Lampi based his claim on our recent decision in Sunburst School District No. 2, where we approved a jury award for the plaintiffs' restoration cost that exceeded by seven times the diminution in market value of the affected property.

¶ 7 Lampi brought this action in district court and sought a jury trial to determine damages. Speed admitted liability, so the jury's only duty consisted of determining the amount of damages that Speed owed Lampi for the harm caused to Lampi's land by the fire. Lampi filed several motions to establish that restoration damages represented the appropriate measure of damages for his claim. The District Court denied the motions and the case proceeded to trial.

¶ 8 Lampi and Speed presented expert testimony at trial to establish the amount of Lampi's damages. Lampi's expert, Tom Yelvington (Yelvington), testified that it would cost about $1,050,000 to replant all of the trees and restore the property to pre-fire conditions. Speed's restoration expert, Jim Cancroft (Cancroft), testified that it would cost about $550,000 to replant trees and restore the property to pre-fire conditions. Both Yelvington and Cancroft testified to less expensive restoration options, but the alternative options did not attempt to restore the property to its original condition. Cancroft testified that the vegetation on the property, especially the aspen grove, naturally would restore itself within a reasonable period of time. Speed's property expert, Tom Wicks (Wicks), valued Lampi's property at $646,000 (not including the house). Wicks testified that the property had lost $193,800 in value as a result of the fire.

¶ 9 The District Court presented the jury with the question of whether the usual diminution in market value or restoration damages to restore the trees constituted the appropriate measure of Lampi's damages. The court first instructed the jury that it could award “the difference in the market value of the property immediately before and immediately after the damage occurred.” The court instructed in the alternative that, based on the jury's own consideration of the evidence, it could award reasonable restoration costs with the allowance for natural regeneration “if the jury finds that [diminution in market value] fails to fully compensate the plaintiff.” The court overruled Lampi's objection to the instruction. The jury awarded Lampi $250,000. The verdict did not specify whether the jury awarded diminution in market value, restoration damages, or some combination. Lampi appeals.

STANDARD OF REVIEW

¶ 10 This Court reviews de novo a district court's ruling on a summary judgment motion applying the same criteria as the district court pursuant to M.R. Civ. P. 56. Plains Grains L.P. v. Bd. of Co. Commrs. Cascade Co., 2010 MT 155, ¶ 21, 357 Mont. 61, 238 P.3d 332. We also review de novo a district court's ruling on a motion for judgment as a matter of law. Johnson v. Costco Wholesale, 2007 MT 43, ¶ 18, 336 Mont. 105, 152 P.3d 727.

¶ 11 A court may grant summary judgment only if the evidence presented to the court establishes that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law. M.R. Civ. P. 56. Lampi bears the initial burden of showing that no genuine issues of material fact exist. PPL Mont., LLC v. State, 2010 MT 64, ¶ 84, 355 Mont. 402, 229 P.3d 421. Once Lampi has met this burden, Speed must present substantial evidence essential to an element of the case to raise a genuine issue of fact. Id.

DISCUSSION

¶ 12 Whether the District Court wrongly denied Lampi's motions to establish restoration damages as the appropriate measure of damages in his case.

¶ 13 Lampi filed two separate motions for partial summary judgment, one before discovery and one after discovery, on the matter of restoration damages. He argued that restoration damages constituted the appropriate measure of damages under Sunburst based on the undisputed facts of this case. The District Court determined that disputed facts existed that precluded it from determining whether Lampi's claim justified restoration damages. Lampi also filed a motion for judgment as a matter of law at the close of trial in which he asked the court to establish the cost of restoration as the appropriate measure of damages. The court denied Lampi's motion.

¶ 14 The parties present different interpretations of this Court's restoration damages rule adopted in Sunburst. Lampi argues that the rule pronounced in Sunburst entitled him to restoration damages as a matter of law because he had established (1) that he suffered a temporary injury, (2) that he had “reasons personal” to restore the property, (3) that he genuinely intends to restore the property, and (4) that the cost of restoration is not disproportionate to the pre-tort value of the property.

¶ 15 Speed counters that the restoration damages rule from Sunburst should not extend to Lampi's claim. Speed argues that Lampi's injury—burned vegetation—will naturally restore itself, unlike the toxic contamination in Sunburst. Speed suggests that Sunburst applies only to cases involving toxic contamination.

¶ 16 This case presents the Court its first opportunity to interpret and apply Sunburst and the restoration damages rule set forth in Restatement (Second) of Torts § 929. The Court rejects both Lampi's and Speed's interpretation of the rule. The following sections discuss the Court's adoption of the restoration damages rule in Sunburst. We then apply the rule to Lampi's claim.

I. Sunburst.

¶ 17 Montana formerly followed the presumption that diminution in market value constituted the appropriate measure of damages for injury to property. Burk Ranches, Inc., v. State, 242 Mont. 300, 790 P.2d 443 (1990). The Court always had recognized, however, that no single measure of damages can serve in every case to compensate adequately an injured party. Burk Ranches, 242 Mont. at 305, 790 P.2d at 445. Our decision in Sunburst officially rejected any one-size-fits-all approach to property damages. A review of the circumstances giving rise to the decision in Sunburst to broaden the available remedies in property damages cases provides helpful guidance in resolving Lampi's claim.

¶ 18 Texaco Inc. (Texaco) operated a gasoline refinery just outside of the town of Sunburst, Montana. The refinery leaked gasoline that contaminated the groundwater and soil in the town of Sunburst. Sunburst, ¶ 10. Sunburst residents sought $30 million in damages to restore the property to its pre-tort condition. Texaco objected to an award of restoration damages on the grounds that the cost of remediating the contamination greatly exceeded the market value of the property. The contaminated property had an aggregate market value of approximately $2 million. Id. at ¶ 49. The contamination essentially rendered the property valueless.

¶ 19 The district court instructed the jury to award all costs that “reasonably...