Wigton v. Murphy

• Decision Date: 18 October 2019
• Docket Number: CV 18-73-M-DWM
• Citation: 410 F.Supp.3d 1121
• Parties: Carla Marie WIGTON, Plaintiff, v. David Thomas MURPHY, Defendant.
• Court: U.S. District Court — District of Montana

410 F.Supp.3d 1121

Carla Marie WIGTON, Plaintiff,

v.David Thomas MURPHY, Defendant.

CV 18-73-M-DWM

United States District Court, D. Montana, Missoula Division.

Filed October 18, 2019

Kenneth Cotter, Cotter Law Office, Ann L. Moderie, Moderie Law Firm, PLLC, Polson, MT, for Plaintiff

Justin K. Cole, Kathleen L. DeSoto, Garlington Lohn & Robinson, PLLP, Dylan McFarland, Knight Nicastro MacKay, LLC, Tyson A. McLean, Kris Mclean Law Firm, PLLC, Missoula, MT, for Defendant

ORDER

Honorable Donald W. Molloy, United States District Judge

Carla Marie Wigton alleges David Thomas Murphy sexually assaulted her at his home and again in her apartment complex, where he was the property manager. She sued Murphy and the property management company, Sheni, LLP, for assault, battery, negligence, premises liability, and violations of federal and state fair housing law. (Am. Compl., Doc. 16.) Wigton settled her claims against Sheni, who was then dismissed from the case. (Docs. 19, 20.) Wigton also settled her claims against Murphy at the same settlement conference. As part of the settlement, Murphy assigned Wigton his rights against his homeowners' insurer, State Farm, which has refused to defend him in this case, in exchange for a covenant not to execute. (Doc. 32-1 at ¶¶ 6, 7.) In doing so, he did not admit liability. Wigton now seeks a ruling that the Murphy settlement amount is reasonable and requests entry of a stipulated judgment that she can enforce against State Farm as permitted by state law. (Doc. 22); see, e.g. , Abbey/Land LLC v. Interstate Mech., Inc. (" Abbey/Land I "), 378 Mont. 372, 345 P.3d 1032, 1034 (Mont. 2015).

The Court previously expressed concerns that the settled suit no longer presents a live case or controversy, (Docs. 29, 30, 32), but proceeded with a reasonableness hearing as requested by Wigton, (Docs. 24, 33, 39). Rather than assuage the Court's doubts, the hearing made clear that the prerequisites for subject matter jurisdiction under Article III are no longer met. Of note, neither Wigton nor Murphy attended the hearing personally. Further, though counsel for both sides were present, Murphy's attorneys did not participate; they made no statements to the Court, offered no evidence, and performed no cross-examination. Finally, Wigton's attorneys made no effort to connect the settlement to the particular claims in the case, which, paired with Murphy's failure to admit liability, raises the question of what grounds the requested judgment will be entered on. See Fed. R. Civ. P. 54(b) (describing "judgment" as adjudicating the parties' rights and liabilities); cf. TeleVideo Sys., Inc. v. Heidenthal , 826 F.2d 915, 917–18 (9th Cir. 1987) (requiring liability to be established before entry of default judgment).

This stipulated judgment procedure is apparently common, or at least accepted, in Montana state courts, courts of general jurisdiction. See Abbey/Land I , 345 P.3d at 1034 ; Tidyman's Mgmt. Servs. Inc. v. Davis ("Tidyman's I "), 376 Mont. 80, 330 P.3d 1139, 1153–54 (Mont. 2014). Indeed, what Wigton seeks here, a stipulated judgment to enforce against an insurer for allegedly breaching its duty to defend, is entirely a creature of Montana insurance law, which provides broad protections for insureds. See id. In essence, this mechanism grants an advisory opinion about reasonable settlement amounts and turns the court's imprimatur into a tactical and strategic tool in a possible bad faith claim. But federal courts are courts of limited jurisdiction constrained by Article III's "case or controversy" requirement. A crucial aspect of that limited jurisdiction is that federal courts do not render opinions when there is not a case or controversy extant.

To be sure, stipulated judgments are not unheard of in federal court, though they are more often called "consent decrees." However, consent decrees generally involve the enforcement of federal statutory or constitutional rights and require ongoing monitoring for compliance.¹ That differs greatly from the proposed stipulated judgment...