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WASATCH ELECTRIC v. ALSTROM GRID et al

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Case Number: 
4:14-cv-00054 Search Pacer
ACE Group party(s): 
Opposing Party: 
Wasatch Electric
Court Type: 
Federal
US District Court: 
District of Montana
Date Filed: 
Aug 1 2014

Wasatch Electric, a Division of Dynalectic Co. ("Wasatch"), by and through
its attorneys, Jackson, Murdo, & Grant, P.C. and Neal Law, P.C, has moved this
Court to intervene in the above-captioned matter pursuant to Mont. R. Civ. P. 24,
and to join, pursuant to Mont. R. Civ. P. 19, 20(a)(2) and/or 21, Westchester Fire
Insurance Company, the named corporate surety in the bond approved by Order of
this Court discharging Wasatch's construction lien ("Westchester"). This
Memorandum is filed in support of Wasatch's Motion.
Wasatch's motion to intervene should be granted as a matter of right under
Rule 24(a) because Wasatch claims an interest relating to the property or
transaction which is the subject of Cause No. DV 14-12, and failing to grant
Wasatch's motion will impair or impede Wasatch's ability to protect its interest in
the property. Alternatively, Wasatch's motion should be granted under Rule 24(b)
because Wasatch has a claim or defense that shares a common question of law or
fact with Cause No. 14-12.
This Court has broad discretion to add Westchester as a party under Mont.
R. Civ. P. 21. Wasatch's motion to join Westchester should be granted pursuant to
Mont. R. Civ, P. 19(a) because if Westchester is not joined, then this Court cannot
accord complete relief among the existing parties. In the alternative, Wasatch's
motion to join Westchester should be granted pursuant to Mont. R. Civ. P.
20(a)(2).

FACTUAL BACKGROUND
1. Wasatch performed services and/or furnished materials for the improvement
of real property generally located in Glacier County, Montana, described as
follows:
E1/2E1/2SW1/4 of Section 1, T35N R05W, County of Glacier,
State of Montana, and all improvements located thereon, including
an electric transmission line switchyard and all related facilities
and site improvements ("Hay Lake Substation").
2. Wasatch filed a construction lien with the Glacier County Clerk and
Recorder's Office on November 29, 2013, under Document No. 276701
("Construction Lien"), attached as Exhibit "A," and incorporated herein, securing
full payment for the services Wasatch performed and/or materials Wasatch
furnished for the improvement of the Hay Lake Substation.
3. Wasatch performed services and/or furnished materials improving the Hay
Lake Substation at the request of Alstom Grid, Inc. ("Alstom"). Construction
Lien.
4. Wasatch first performed services and/or furnished materials for the
improvement of the Hay Lake Substation on or around September 9, 2012.
Construction Lien.
5. Wasatch last performed services and/or furnished materials for the
improvement of the Hay Lake Substation on or around September 10,2013.
Construction Lien.
6. Wasatch has not received full payment for the services Wasatch performed
and/or materials Wasatch furnished to improve the Hay Lake Substation.
Construction Lien.
7. On March 11, 2014, Alstom, on behalf of the contracting owners of the Hay
Lake Substation, filed with this Court a "Petition for Court Approval of Surety
Bond Pursuant to M.C.A. § 71-3-551" ("Alston's Petition"), attached as Exhibit
"B," and incorporated herein, and the Court assigned Cause Number DV 14-12 to
such action.
8. On March 11, 2014, Alstom, on behalf of the owners of the Hay Lake
Substation, filed with this Court a "Bond To Release Mechanic's Lien," attached
as Exhibit "C," and incorporated herein ("Bond").
9. Alstom is Principal under the Bond. Bond.
10. Westchester is Surety under the Bond. Bond.
11. Under the Bond, Vernon C, Berger, Ellen A. Berger, John E, Harris, Randall
C. Harris, David S. Harris, Cheryl A. Parrish, MATL, LLP, and Enbridge-MATL
are owners of the Hay Lake Substation (collectively "Hay Lake Substation
Owners"). Bond.
12. Under the Bond, the Hay Lake Substation is subject to the Construction
Lien. Bond.
13. Under the Bond, Alstom and Westchester hold and firmly bind themselves
to the Hay Lake Substation Owners. Bond.
14. The Bond is conditioned that if Wasatch is finally adjudged to be entitled to
recover upon the claim upon which the Construction Lien is based, Alstom or
Westchester, being held and firmly bound to Hay Lake Substation Owners, shall
pay to Wasatch on behalf of the Hay Lake Substation Owners the amount of
Wasatch's judgment, together with any interest, costs, attorney fees, and other
sums that Wasatch would be entitled to recover upon foreclosure of the
Construction Lien. Bond.
15. On March 13, 2014, this Court issued an Order (attached and incorporated
herein as Exhibit "D") in Cause Number DV 14-12, granting Alstom's Petition,
discharging and releasing the Construction Lien in full, and substituting the Bond
for the Construction Lien pursuant to M.C.A. § 71-3-552.
16. The Construction Lien has been discharged and released pursuant to the
Order. Order.
17. The Bond has been substituted for the Construction Lien pursuant to the
Order. Order.
18. Wasatch was not made a party to Alstom's action under Cause Number DV
14-12.
19. Wasatch only learned that the Construction Lien had been discharged from
the Hay Lake Substation upon receipt of a litigation guarantee from a title
insurance company.
LEGAL BACKGROUND
20. The purpose of Montana's construction lien statutes are to secure payment
for the services and/or materials famished by a contractor at a construction site.
Dick Anderson Construction, % 17 (citing § 71-3-521, MCA).
21. "The [construction] lien law is subject to the most liberal construction, for it
is remedial in character, and rests upon the broad principle of natural equity and
commercial necessity." Fed, Land Bank of Spokane v. Green, 108 Mont. 56, 90
P.2d 489,491-92 (1939); see also Swain v. Battershell, 1999 MT 101,126, 294
Mont. 282,983 P.2d 873, 878 (the Montana Supreme Court has consistently held
that "the statutes will be liberally construed so as to give effect to their remedial
purpose").
22. The Montana Supreme Court "respect[s] the significance of a
[construction] lien as a property right." James Talcott Const., Inc. v. P &DLand
Enterprises, 261 Mont 260, 264, 862 P.2d 395, 397 (1993).
23. The "right to retain a [construction] lien until the debt secured thereby is
paid is a substantive property right." James Talcott Construction, 261 Mont, at
264.

STANDARD OF REVIEW
Under Mont. R. Civ. P. Rule 24, "intervention may be either as a matter of
right or by permission of the court." In re Adoption ofC.C.L.B., 2001 MT 66, f
14, 305 Mont. 22, 27, 22 P.3d 646, 649. "The intervention rule is a discretionary
judicial efficiency rule used to avoid delay, circuity and multiplicity of suits."
(Internal quotations and citation omitted) Estate of David Schwenke v. Becktold
(1992), 252 Mont. 127; 827 P.2d 808, 811.
An intervenor as a matter of right must set forth a direct, substantial, legally
protectable interest in the proceedings. C.C.L.B., % 16. "An application for
intervention as a matter of right under Rule 24(a) must: (1) be timely; (2) show an
interest in the subject matter of the action; (3) show that the protection of the
interest may be impaired by the disposition of the action; and (4) show that the
interest is not adequately represented by an existing party." Estate of Schwenke,
252 Mont. 127; 827 P.2d at 811.
Rule 24(b), Mont. R. Civ. P. permits any party to intervene upon a timely
motion where the moving party "has a claim or defense that shares with the main
action a common question of law or fact." The District Court is to consider
whether participation by the intervening party will unduly delay or prejudice the
adjudication of the rights of the original parties. Rule 24(b) Mont. R.Civ.P.; see
also Shilhanek v. D-2 Trucking, Inc., 2000 MT 16, U 46, 298 Mont. 101, 994 P.2d
1105.
Mont. R. Civ. P. 21 states that "[o]n motion or on its own, the court may at
any time, on just terms, add or drop a party." See also Mohl v. Johnson, 275 Mont.
167,169, 911 P.2d 217, 219 (1996). The Montana Supreme Court reviews "for an
abuse of discretion the district court's decision whether to join a party," Mohl, 275
Mont, at 169-70, 911 P.2d at 219. The Supreme Court has stated that "in the
interests of judicial economy, all parties claiming an interest in the subject of the
suit should be joined." Blaze Cosnt., Inc. v. Glacier Elec. Co-op., Inc., 280 Mont.
7,11, 928 P.2d 224, 226 (1996).

ARGUMENT
I. Wasatch's Motion to Intervene Should Be Granted Under Rule 24 of
the Montana Rules of Civil Procedure
The Montana Supreme Court recently remarked that an application for
intervention as a matter of right must; "(1) be timely; (2) show an interest in the
subject matter of the action; (3) show that the protection of the interest may be
impaired by the disposition of the action; and (4) show that the interest is not
adequately represented by an existing party." J AS, Inc. v, Eisele, 2014 MT 77, \
26, 321 P.3d 113, 118 (citations omitted). Wasatch's motion to intervene as a
matter of right should be granted because it meets each of these criteria.
Wasatch's motion is timely. Alstom petitioned this Court to approve its
surety bond and discharge Wasatch's construction lien on March 11, 2014. This
Court granted Alstom's motion to that effect on March 13, 2014. Wasatch did not
have any notice of those proceedings, and only learned that its construction lien
had been discharged after consulting with a title insurance company. Wasatch
filed this motion to intervene as soon as it learned about these proceedings. In
Eisele, the Supreme Court determined that a party had filed a timely motion to
intervene more than five months after a case had been opened. Eisele, If 27.
Slightly more than two months have passed since Alstom petitioned this Court to
discharge Wasatch's construction lien; thus, Wasatch's motion to intervene is
timely. Eisele, ^[27.
Wasatch has an interest in the subject matter of this action. The discharge of
Wasatch's Construction Lien from the Hay Lake Substation already has deprived
Wasatch of a "substantive property right." James Tahott Construction, 261 Mont,
at 264. For that reason, protection of Wasatch's interest in this matter may be
further impaired by Alstom if Wasatch is not allowed to intervene. For these
reasons, Wasatch's motion to intervene should be granted as a matter of right
pursuant to Mont. R. Civ. P. 24(a). Eisele, \\ 26-28.
In the alternative, this Court could permit Wasatch to intervene pursuant to
Mont. R. Civ. P. 24(b) because, as the foregoing illustrates, Wasatch has a "claim .
.. that shares with the main action [brought by Alstom] a common question of law
or fact."
III. Wasatch's Motion To Join Westchester Fire Insurance Company Should
Be Granted
The Montana Supreme Court has held that, "whenever feasible, persons
materially interested in the subject of an action [should] be joined so that they may
be heard and a complete disposition of the case be made." Mohl, 275 Mont, at
171, 911 P.2d at 220 (quoting Village Bank v. Cloutier, 249 Mont. 25,29, 813 P.2d
971, 974). Under Mont. R. Civ. P. 19, a district court must determine "whether the
absent party is necessary to the action." Blaze Const, Inc., 280 Mont, at 11, 928
P.2d at 226. The Supreme Court has remarked that "There is no precise formula
for determining whether a particular non-party is necessary to an action," thus, this
determination "is heavily influenced by the facts and circumstances of each case."
Green v. Gremaux, 285 Mont. 31,36, 945 P.2d 903, 906 (1997). More
specifically, the Court has stated that persons "shall be joined as parties if complete
relief cannot be accorded without their participation." Mohl, 215 Mont, at 169,
911 P.2dat219.
Wasatch's Motion to Join Westchester should be granted pursuant to Mont.
R. Civ. P. 19(a) because complete relief cannot be accorded without Westchester's
participation. Westchester is the named surety in the bond that discharged
Wasatch's lien under this Court's Order pursuant to § 71-3-552, MCA. As §71-3-
551, MCA, makes clear, the bond "must be conditioned that if the construction lien
claimant is finally adjudged to be entitled to recover upon the claim upon which
the construction lien is based, the principal or the principal's sureties shall pay to
the claimant the amount of the claimant's judgment, together with any interest,
costs, attorney fees, and other sums that the claimant would be entitled to recover
upon the foreclosure of a construction lien against the principal." Complete relief
under the Bond cannot be accorded in the absence of Westchester's participation
The Montana Supreme Court has expressly held that H[s] ince the surety is
jointly or jointly and severally liable with the principal to the creditor, the surety
may in any case be joined with the principal in an action by the creditor," Morgen
& Oswood Const Co., Inc. v. U. S. Fid. & Guar. Co., 167 Mont. 64, 68, 535 P.2d
170,172(1975).
Wasatch's Motion to Join Westchester also could be granted pursuant to the
plain language of Mont. R. Civ. P. 20 and/or 21. Rule 21 gives District Court's
broad discretion to "at any time, on just terms, add or drop a party" in response to a
"motion or on its own." Mohl, 275 Mont, at 169,911 P.2d at 219. Mont. R. Civ.
P. 20(a)(2)(b) permits this Court to join a defendant if "any question of law or fact
common to all defendants will arise in the action." The terms of the Bond make it
clear that Westchester and Alstom are bound to the same questions of law and fact
under an action on the Bond; as a result Westchester should be joined as a
defendant in Cause Number DV 14-12.

CONCLUSION
For the foregoing reasons, Wasatch's motion to intervene pursuant to Mont.
R. Civ. P. 24 and to Join Westchester Fire Insurance Company in the abovecaptioned
matter pursuant to Mont. R. Civ. P. 19, 20, and/or 21 should be granted,
the caption of this case should be amended to join Westchester, and the Complaint
and Jury Demand (attached and incorporated herein as Exhibit "E"), accompanying
this Motion pursuant to Mont. R, Civ. P. 24(c), should be approved for filing.
Dated this ,2 day of June, 2014.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.

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