Jaime MacNaughton 1205 8th Ave. PO Box 202401 Helena, MT 59620-2401 406-444-2942 (tel) jmacnaughton@mt.gov ti,\ fl ( r SW [ [~I [ 'f Gene R. Jarussi ,. .., .... '- L [ .., 'C' •.• I' - - - 'I John Heenan BISHOP & HEENAN I 9: 53 1631 Zimmerman Tr. Bi11ings, MT 5(91 0)2 '.- '. _ E D 406-839-9091 te1 ,. . genejarussi@bishopandheenan.tom « : ·: ~.~? john@bishopandheenan.com Attorney for the Commissioner of Political Practices Special Attorneys General I [ r. .:- · -· IN THE DISTRICT COURT OF THE STATE OF MONTANA FIRST JUCIDIAL DISTRICT, LEWIS AND CLARK COUNTY The COMMISSIONER OF POLITICAL ) ) PRACTICES FOR THE STATE OF MONTANA, through JONATHAN R. ) MOTL, acting in his official capacity as ) The Commissioner of Political Practices, ) ) Plaintiff, Counter-Claim ) ) Defendant, ) ) ) vs. Cause No. XBDV-2014-251 COPP'S BRIEF IN SUPPORT MOTION FOR RULE 11 SANCTIONS ) ARTHUR ART" WITTICH, II ) Defendant, Counter-Claimant, and Third Party Plaintiff, ) ) vs. ) ) ) STEVE BULLOCK, BRUCE TUTVEDT, ) JIM MURRY, JONATHAN MOTL, and ) ) JOHN DOES 1-20, ) Third Party Defendants. ) ) INTRODUCTION 1 k The Commissioner of Political Practices ("COPP") has filed a motion seeking sanctions against Arthur "Art" Wittich (Wittich) pursuant to Rule 11, MRCivP. This Brief is filed in support of the Motion. The COPP' s motion is based upon Wittich' s relentless campaign to cast aspersions on the integrity, ethics, and motives of Jonathan Motl ("Motl"), the Commissioner of Political Practices, as a defense to the claims against him in this case. Since the inception of this case in the spring of 2014, Wittich and attorneys associated with him have engaged in a series of personal attacks on COPP Motl. In every ruling to date, this Court and the Commission on Practice have rejected Wittich' s attacks. By a motion and brief dated January 21, 2016, Wittich launched his latest salvo. He has accused COPP Motl of destroying material emails (the "Steab archive") compiled by Julie Steab, a former employee of the Office of the Commissioner of Political Practices. Wittich accuses Motl of conduct that, according to Wittich, is a felony. This is a serious charge. This spurious accusation, and Wittich' s litigation strategy of personal attacks upon COPP Motl, are factually unfounded and violate the "frivolousness clause" of Rule 11, MRCivP. More broadly, the intentional adoption of a defensive strategy consisting of personal attacks against Motl is designed to harass and intimidate the COPP and deflect attention from the real issues raised by the claims against Wittich. This is a violation of the "improper purpose" clause of Rule 11. 2 ARGUMENT A. The Law The purpose of Rule 11, MRCivP is to discourage dilatory or abusive tactics as well as to "streamline the litigation process by lessening frivolous claims or defenses." In re Morin, 2013MT146, if38, 370 Mont. 305, 302 P.3d 96. In pertinent part, Rule 11 provides: (b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper- whether by signing, filing, submitting, or later advocating it-an attorney ... certifies to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and There are two grounds for imposing sanctions: (1) the "frivolousness clause," meant to cover pleadings not grounded in fact or law; and (2) the "improper purpose clause," meant to cover pleadings filed for an improper purpose. In re Morin, 2013MT146, if37, 370 Mont. 305, 302 P.3d 96, citing D'Agostino v. Swanson, 240 Mont 435, 445, 784 P.2d 919, 925 (1990). The standard for determining "whether a pleading has a sufficient factual or legal basis is reasonableness under the circumstances." D'Agostino, 240 Mont. 3 at 445, 784 P.2d at 925 (citations omitted). The standard used to determine whether a party acted with an improper purpose is also "reasonableness under the circumstances." Id. Wittich's pattern and practice of repeatedly injecting a defense that has already been rejected by the Court, and personally attacking COPP Motl in an attempt to distract attention from the allegations against him, as most recently reflected in Wittich' s "Principal Brief in Support of Arthur "Art" Wittich' s Alternative Motion to Dismiss, or in Limine, Re spoliation of Evidence," violates both the frivolousness clause and the improper purpose clause of Rule 11. B. ANALYSIS. 1. Wittich's attacks on Motl are frivolous a. Wittich' s "spoliation" motion is factually unfounded As noted above, on January 21, 2016, Wittich moved for sanctions against the COPP, accusing Motl of intentionally destroying the email archive of former COPP employee Julie Steab. The sole evidentiary basis for this serious charge was an unsigned declaration of former employee Julie Steab, in which she stated that she never deleted her own emails. As it turns out, it is a good thing it was unsigned. Had she signed it, she would have been committing perjury, since Information and Technology employees of the State of Montana were able to conclusively determine that it was Steab, under her own personal password, who actually deleted her own emails prior to quitting her job with the COPP. See 4 Baldwin Affidavit, attached as Appendix B to Copp's Brief in response to Wittich's Alternative Motion to Dismiss, or in limine, re Spoliation of Evidence. Wittich, based on Steab' s unsigned declaration, makes very serious allegations against COPP Motl, asserting that he ought to be "sanctioned" because he purposely deleted the Steab email archive, that his "spoliation stems from a deliberate attempt to hamper the opposing party," that the destruction of the Steab archive "can be no accident," and that the destruction of the emails is a felony. See Arthur "Art" Wittich's Brief in Support of his Alternative Motion to Dismiss, or in Limine, re Spoliation of Evidence, pgs. 4, 9, 10. These serious allegations of criminal spoliation of evidence against Motl were made without pointing to any discovery request that sought production of the Steab archive, and therefore obligated the COPP to produce them to Wittich. They were made without first attempting to meet and confer about what is essentially a discovery matter, as required by Rule 37, MRCivP. Accusing Commissioner Motl of felony spoliation of evidence, with no evidentiary basis other than an unsigned declaration, is sanctionable conduct under Rule 11. b. Wittich' s claims of political persecution have been rejected by the Court and are factually unfounded From the start of this case, Wittich has repeatedly argued that he has been "selectively prosecuted" and that Motl has an ulterior motive-to remove him from office. These continuous allegations are part of a campaign to attack the in- 5 tegrity of the COPP and divert the focus of the case from the claims against Wittich. The Court has consistently rebuffed Wittich's attempts to raise "selective prosecution" or "political conspiracy" as a defense in this case. In response to the Complaint filed in this matter, Wittich served his Answer to Complaint, Counterclaims, and Third Party Complaint, counterclaiming against COPP Motl and naming as third party defendants Governor Bullock, Motl and others. Among various allegations, Wittich asserted that COPP Motl had an ulterior purpose of removing him from office (Third Counterclaim, '1(7) and was guilty of official misconduct (Fourth Counterclaim). Wittich alleged that two or more of the third party defendants had engaged in a civil conspiracy to harm Wittich and other conservative Republicans (third party claim I), and that Bullock, Motl and two others were guilty of official misconduct (third party claim II). Judge Sherlock dismissed all of the counterclaims and third party claims in an Order on Various Motions dated August 26, 2014. (Docket #109). In that Order (Docket #109), Judge Sherlock succinctly and forcefully rejected Wittich' s argument that Motl had an "ulterior motive" when he ruled: However, Motl's purpose of removing Wittich from office is anything but ulterior-it is explicitly requested in Motl' s prayer for relief (Comp!., 16, '1(2 (Apr. 1, 2014).) pursuant to statute which mandates that an individual convicted of violating election law "is ineligible to be a candidate for any public office" and "must be removed from nomination or office." Mont. Code Ann. §13-35-106. Since Motl openly seeks what is not only authorized by required by law, his purpose cannot be ulterior ...• 6 (Order on Various Motions dated August 26, 2014)(emphasis added). (Docket# 109). At the hearing held on Wittich's 2014 motion to compel (November 13, 2014), Wittich's attorney argued that he was being "selectively prosecuted" because he was a" conservative Republican." However, he did not attempt to formally raise the issue at that time. (Order on Various Motions dated Oct 20, 2015, pg. 7). (Docket #204). On September 21, 2015, Wittich moved to amend his Answer in the present case and assert a new affirmative defense- selective prosecution. Judge Sherlock recognized that this proposed defense suggested "that Wittich is being selectively prosecuted because of his political views, constituting illegal discrimination, ... " (Order, pg. 6). Judge Sherlock ruled that "the eighth defense shall not be allowed." (Order, pg. 8) (emphasis added). Despite the Court's clear and repeated rejection of Wittich' s attempts to make this case about Motl and not about his own conduct, Wittich persists in his efforts. Virtually every brief is laced with impassioned statements about Motl' s political agenda against him. But despite his rhetoric, at the end of the day Wittich cannot prove that there is anything biased about the assertion of the claims against him. Wittich accuses Motl of wanting to "[hound] Republican leaders from office" by filing cases "against exclusively Republican candidates and supporters ... " See Arthur "Art" Wittich's Brief in Support of his Motion for Rule 37 Sane- 7 tions, pg. 9. The simple fact is that Wittich has not been singled out by Motl for enforcement of the campaign finance laws. The COPP has been an equal opportunity enforcer when it comes to the Direct Mail/WTP/NRTWC investigation. Every 2010 candidate whose identity was disclosed by the WTP "Colorado documents" has been investigated and had complaints filed against them. 1 Aside from Wittich, they have all either entered into settlements with the COPP or their cases are still pending. Wittich alone has chosen to proceed to trial, and that is his right. But he must do so within the confines of the Rules of Civil Procedure, including Rule 11. Instead, Wittich continually lobs accusations of bias and improper motive, · yet he cannot point to any discriminatory enforcement of the law. For example, if cases have been filed "against exclusively Republican candidates," it is because there is no evidence whatsoever that any Democrat ever enjoyed the benefits of services by Direct Mail, Inc/Western Tradition Partnership/Right to Work staff, as did Wittich and a number of his fellow Republicans during the 2010 election cycle. (In truth, the evidence shows that they would certainly not have been permitted to, had they attempted to do so.) And Wittich cannot point to any similar constellation of organizations and events involving Democrats that The "Colorado documents "are those documents referred to in LeFer v. Mum;, 978 F.2d 1177 (D. Mont. 2013). Wittich was one of the eight legislative candidates identified. Later discovery revealed that other legislative candidates also received the "works," but the statute of limitations had expired. 1 8 would warrant similar claims that were not brought, so that the failure to do so evinces any kind of political agenda. Simply pointing out obvious differences between cases, without further inquiry or analysis, is not enough to show that political animus was a motivating factor. As a simple example, Wittich suggests that he was subject to disparate treatment by Motl arising from the fact that a Sufficiency Decision and Civil Complaint were filed on the same day in his case, but not in other cases. See Ar- thur "Art" Wittich's Brief in Support of his Motion for Rule 37 Sanctions, pg. 3 & Ex. 13. However the difference is easily explained by the fact that Wittich's conduct in 2010 was subject to a four year statute of limitations that had to be heeded after the investigation in early 2014, whereas the cases listed in Wittich's Ex. 13 suffered from no such vulnerability. These and other examples proferred by Wittich are inadequate to show bias, as the most basic of inquiries would have informed him. Additionally, it must be pointed out that the initial complaint against Kennedy "and also the other (WTP) supported candidates" was filed by a 2010 Republican candidate (Debra Bonogofsky). Upon receipt of the Bonagofsky complaint, COPP Motl was statutorily required to investigate and make a determination as to whether or not sufficient facts existed establishing that Kennedy "and also the other (WTP) supported candidates" (including Wittich) violated the law. Section 13-37-111, MCA. There is no discretion in this mandate that could be swayed by bias or ulterior motive. 9 Wittich is certainly entitled to mount a zealous defense of the claims against him. But he is not entitled to inject factually unsupported issues and accusations of felony misconduct into the case without any repercussion. Sanctions are warranted based on these violations of the "frivolousness" clause of Rule 11. 2. Wittich and his counsel have a pattern and practice of such conduct and it amounts to harassment In addition to the above-described attempts by Wittich to inject Motl' s supposed bias as a defense in this case, Wittich has also done the following: In March 2014, after he was advised of the COPP's investigation into his campaign finance practices in the 2010 election, Wittich, as an attorney, filed a lawsuit against Motl and C.B Pearson (a witness in the present case), claiming that Pearson had submitted false or fraudulent claims for payment and Motl had approved them. By an Order dated January 12, 2016, the District Court granted summary judgment in favor of Motl and Pearson and denied a motion to amend. (Order attached hereto as App. A) 2 In December 2014, Attorney Michael Rabb, an associate in Wittich's law firm and one of Wittich' s counsel in this case, filed a complaint against Motl with the Office of Disciplinary Counsel. The ODC dismissed the complaint, and Rabb appealed the dismissal to the Commission on Practice. The Commission affirmed the ODC's dismissal by a letter dated October 22, 2015. (App B, attached hereto). 2 The COPP recently received a Notice of Appeal from this ruling. 10 Thereafter, Wittich disclosed Dr. Robert Saldin as an expert witness on October 12, 2015. An Amended Disclosure outlining Saldin's expected testimony was served in November. Saldin is expected to testify about the philosophy, vision, goals and general position on the American political spectrum of certain organizations (e.g. Common Cause), that they are left-of-center with a commitment to defeat candidates like Wittich. Saldin is also expected to testify that Governor Bullock is a Democrat and is an arch-political rival with Wittich. Bullock and Wittich are rivals in the legal system. This testimony has no relevance except for Wittich' s persistent attempts to show bias in the assertion of campaign finance claims against Wittich. The COPP has moved to strike the expert disclosure and to preclude Saldin from testifying at trial. The motion has been fully briefed and is pending. In October of 2015, Wittich served a Notice of Deposition for Purposes of Obtaining Records along with a Subpoena Duces Tecum on Hilltop Public Solutions, LLC, (a political consulting firm) wanting Hilltop to produce "all records, whether stored in paper or electronic format, pertaining to the 2012 election campaign of Governor Steve Bullock." Again, this deposition could only have been intended to fish for evidence to support Wittich' s theory that Motl is politically biased against him. On October 30, 2015, Hilltop, through its attorney, filed an objection to Wittich' s subpoena, and the deposition was cancelled. On December 21, 2015, the COPP moved for partial summary judgment, contending that Wittich' s campaign reports, filed with the COPP as required by 11 law, and his campaign bank account records, established as a matter of law that he had violated certain Montana statutes and administrative rules. These are not issues even potentially involving matters of credibility or bias. Basically, the documents standing alone show that Wittich either did or did not violate the statutes and rules. Yet in response, Wittich submitted an Affidavit signed by Julie Steab dated January 12, 2016, in which Steab claims that Motl had a keen dislike for Wittich and was out to get him along with other named Republicans. This Affidavit was yet another attempt by Wittich to raise the "selective prosecution" argument/ defense first raised in 2014 and raised a second time in 2015 when Wittich sought to add a new affirmative defense. (See Judge Sherlock's discussion and rejection of the "selective prosecution" defense on pages 6-8 of the Order dated October 20, 2015 (Docket #204)). Next, on January 21, 2016, Wittich' s counsel Quentin Rhoades wrote to the undersigned, threatening to again report COPP Motl to the Office of Disciplinary Counsel for purportedly violating an ethics rule. (See copy of attorney Rhoades' January 21 letter attached as App C). Lastly, as discussed above, on January 21, 2016, Wittich filed a motion and supporting brief signed by Attorney Quentin Rhoades, accusing Motl of committing a felony (destruction of Julie Steab's email archive). The only evidentiary basis for the motion is the unsigned Declaration of Julie Steab dated January 21, 2016. As established in the COPP' s response brief filed February 8, 2016, the accusation is untrue. It was Steab who attempted to destroy her own email archive 12 January 21, 2016. As established in the COPP's response brief filed February 8, 2016, the accusation is untrue. It was Steab who attempted to destroy her own email archive before leaving her job with the COPP in late October of 2015. See Baldwin Affidavit, attached as Appendix B to Copp's Brief in response to Wittich's Alternative Motion to Dismiss, or in limine, re Spoliation of Evidence. "Making stuff up" is a litigation tactic that Attorney Rhoades has tried, albeit unsuccessfully, before. Attached as App D is a copy of a news article entitled "JUDGE SLAMS ATP ATTORNEY FOR 'UNSUPPORTED' CLAIMS," dated June 27, 2013. As reported in the article, Rhoades claimed that prior COPP Jim Murry had "secretly" given thousands of pages of documents to the news media pertaining to WTP as well as Christian and Allison LeFer. 3 In his decision, U.S. District Judge Donald Molloy found that the Complaint filed by Rhoades "presents a fanciful screed replete with distorted accusations implying bias and nefarious motive on the part of the Commissioner [Murry]" and labeled the Commissioner as" a liberal Democrat political patronage appointee." LeFer v. Murry, 978 F.2d 1177, 1183 (D. Mont. 2013). Judge Molloy further found that the factually inaccurate claim of improper conduct by the COPP "echoes the implications of bias and nefarious motive present in the original Complaint." Id. The same can be said here. Wittich's factually unsupported allegations of felony spoliation of evidence by Motl merely echo the 3 WTP and LeFers figure prominently in the present case. 13 Lefer, Rhoades obviously believes that "the end justifies the means, a principle that has no safe harbor in the rule of law." Id. This litany of unsupported allegations of personal misconduct against the COPP have gone on long enough, and the latest accusation of felony spoliation of evidence crosses the line. As can be seen from the case before Judge Molloy, Mr. Rhoades evidently has a penchant for manufactured political theater, obviously designed to distract attention from the issues at hand and give "red meat" to Wittich' s political supporters. But the COPP has had enough of the drama, and Rule 11 sanctions are now appropriate. C. Sanctions Requested Rule 11 requires that "[i]f ... the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation." Rule 11(c)(l), MRCivP. As an appropriate sanction for Wittich' s conduct in accusing COPP Motl of criminal spoliation of evidence based only upon the unsigned Declaration of Julie Steab, whose "testimony" has unequivocally been shown to be untruthful, the COPP respectfully requests that the Court preclude Julie Steab from testifying at the time of trial, and preclude Wittich from any reference to the substance of her testimony at trial during voir dire, opening and/ or closing statements, direct examination, cross-examination, rebuttal, or otherwise. 14 As a further appropriate sanction for Wittich' s ongoing and relentless attempts to inject irrelevant and factually unsupported issues into this case, including the filing of the above mentioned accusations of felony spoliation directed at the COPP, the COPP respectfully requests that the Court preclude Wittich from inquiring into any matters related to personal animosity, bias, selective enforcement, or other improper motive on the part of COPP Jonathan Motl, during void dire, opening and/ or closing statements, direct examination, cross-examination, rebuttal, or otherwise. The COPP further requests that the Court impose a monetary sanction upon attorney Quentin Rhoades, because this type of behavior appears to be an acceptable litigation tactic for him and should be deterred. If the requested sanctions are granted, the trial in this matter will be freed from frivolous allegations and limited to the merits of the case, which Judge Sherlock succinctly summarized as follows: At issue is are actions of Defendant Arthur "Art" Wittich that relate to possible misconduct concerning his 2010 primary election campaign to Montana Senate District 35. The complaint alleges that Wittich failed to maintain accurate accounts disclosing all expenditures and contributions; that he improperly coordinated his campaign with outside entities; and accepted illegal contributions from corporations. Allegations also center around Wittich' s alleged failure to properly record contributions and expenditures.(Order on Various Motions, October 20, 2015, (Dkt. # 204), pgs 1, 2). Otherwise, it promises to be a free-for-all with unfounded allegations (and the rejected defenses) of bias, unfairness, personal animosity, selective enforcement, and ulterior motives injected by Wittich at every turn in an attempt to confuse and distract attention from his own conduct and the real issues at hand. 15 and ulterior motives injected by Wittich at every turn in an attempt to confuse and distract attention from his own conduct and the real issues at hand. CONCLUSION For the foregoing reasons, as this case advances towards trial, the COPP respectfully requests that the Court put an end to Wittich' s litigation strategy of casting aspersions on the integrity, ethics and motives of Jonathan Motl, the Commissioner of Political Practices, as a defense to the claims against him in this case. DATEDthis \]..,~ dayofFebruary,2016. ~ GM'e.~ ~\~ iWIL ~ Gene R. Jarussi, S pal Attorney General, representing COPP CERTIFICATE OF SERVICE I hereby certify that I have served in the manner noted a true and correct copy of COPP's Brief in Support of Motion for Rule 11 Sanctions on counsel of record at the addresses listed below this \ 2.~ day of February, 2016. Michael Rabb Wittich Law Firm, PC 602 Ferguson Ave., Ste 5 Bozeman, MT 59718 [x] U.S. Mail [] Express Mail []Fax [] Federal Express []Email Quentin M Rhoades Nicole Siefert Rhoades & Siefert, P.L.L.C. 430 N. Ryman, Second Floor Missoula, MT 59802 [x] U.S. Mail [] Express Mail []Fax [] Federal Express ~ u~ ~()j.\w 16 • • •it.ti(.~ SWEENEY :L~l'{K t~ST?.!C.T C.OUl'tT "!"' ' l ! > '·' . 2 ,••I ~('\, ' : _-'") : ... ' ·-·' 4~ -. 1" r~v ! ·; I . ....... , L. t.:. ~ ,/-- A' ~ ,!1r-rl~ 3 4 5 INDEXED 6 7 8 MONT ANA FIRST JUDICIAL DISTRICT COURT LEWIS AND CLARK COUNTY 9 10 11 12 13 THE STATE OF MONTANA, ex rel., DAN SKATTUM, 14 Petitioner and Plaintiff, 15 16 17 18 19 20 21 22 Cause No. ADV-2014-739 DECISION AND ORDER ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S MOTION TO AMEND COMPLAINT v. JOHNATHAN MOTL, Montana Commissioner of Political Practices; M + R STRATEGIC SERVICES; and C.B. PEARSON, Individually and as an agentofM + R STRATEGIC SERVICES, Defendants. 23 24 On July 21, 2014, Plaintiff State of Montana ex rel. Dan Skattum (Skattum) 25 filed a complaint against Defendants Jonathan Motl, Montana Commissioner of • • 1 Political Practices (Motl), M+R Strategic Services, Inc. (M+R), and C. B. 2 Pearson (Pearson) alleging Defendants violated the Montana False Claims Act 3 set forth in Montana Code Annotated§§ 17-8-401 through-416. Arthur V. 4 Wittich and Michael L. Rabb represent Skattum. W. Anderson Forsyth and 5 Christopher T. Sweeney represent Defendants. 6 Before the Court are Defendants' motion for summary judgment and 7 Skattum's motion for leave to amend his complaint. The Court held oral 8 argument on the motion for summary judgment on November 19, 20 I 5.. Upon 9 consideration of the parties' arguments, the Court grants Defendants' motion for 10 11 12 summary judgment and denies Skattum' s motion to amend his complaint. FACTUAL AND PROCEDURAL BACKGROUND Motl is the Montana Commissioner of Political Practices (COPP). 13 The COPP is a public official, appointed by the governor and subject to 14 confirmation by a majority of the Montana senate. Mont. Code Ann. § 13-37- 15 102(1). The COPP is authorized to investigate violations ofMontana's election 16 laws and, in conjunction with county attorneys, is responsible for enforcing those 17 election laws. Mont.Code Ann.§§ 13-37-111,-124. 18 M+R is a New York corporation licensed to do business in Montana. 19 Pearson is the senior vice president of M+R and has been employed with the 20 corporation since 1999. As an employee, Pearson provides expert services to 21 M+R's clients, including expert opinion and testimony on campaign issues 22 related to direct mailing and voter persuasion. 23 Pearson has performed services for the COPP on numerous cases. He 24 produced expert reports in the following cases in the Montana First Judicial 25 District Court: COPP v. Wittich, Cause No. BDV-2014-251, and COPP v. Decision and Order on Defendants' Motion for Summary Judgment and Plaintiff's Motion to Amend Complaint -page 2 • • 1 Miller, Cause No. CDV 2014-62. At issue in this case are two contracts for 2 services between the COPP and M+R. Under the first contract, effective 3 September 24, 2013 to June 30, 2014 (2013 Contract), M+R agreed to provide 4 expert witness services at a rate of$125 per hour, not to exceed a total of$5,000. 5 (Def.'s Br. Supp. Mot. S.J., Ex. B (Jul. 8, 2015).) Under the second contract, 6 effective September 2, 2014 to June 30, 2015 (2014 Contract), M+Ragreed to 7 provide expert witness services at a rate of $200 for depositions, testimony and 8 trial testimony, and $125 for all other services. (Pl.'s S.J. Hrg. Br. (Nov.19, 9 2015), attach. Depo. C. B. Pearson, Ex. 6.) The total payment allowed under the 10 2014 Contract was capped at $6,000. 11 On October 22, 2013, November 6, 2013, and June 19, 2014, M+R 12 submitted invoices to the COPP for services pursuant to the 2013 Contract. The 13 first two invoices, each for $625, did not specifically list the number of hours 14 M+R employees worked. The third invoice was for $3,250. In his original 15 complaint, Skattum alleged Pearson and M+R employees did not perform the 16 work billed pursuant to the first two invoices. Moreover, Skattum alleged Motl 17 acted outside the scope of his employment as COPP when he conspired with 18 Pearson and M+R to submit the fraudulent claims. 1 According to Skattum, these 19 invoices constitute false claims under Montana's False Claims Act and 20 Defendants are personally liable for damages to the State. 21 Skattum recently discovered five additional invoices billed for 22 $12,770.49 which M+R submitted pursuant to the 2014 Contract-$6,770.49 23 24 above the stated contract amount of$6,000. Skattum has filed a motion seeking 25 1 Skattum further alleged the COPP illegally contracted with M+R because M+R is not licensed to conduct business in the state of Montana. Since filing the complaint, Skattum has discovered M+R Is licensed to conduct business in Montana and has voluntarily withdrawn !ha! allegation. Decision and Order on Defendants' Motion for Summary Judgment and Plaintiffs Motion to Amend Complaint - page 3 • • 1 leave to amend his complaint to include the following allegations: (1) the June 2 19, 2014 invoice is a false claim because M+R did not perform the work billed, 3 and (2) the five invoices submitted pursuant to the 2014 Contract are false claims 4 because they exceed the total amount permissible under the 2014 Contract. 5 STANDARD OF REVIEW 6 Summary judgment is appropriate when "the pleadings, the discovery 7 and disclosure materials on file, and any affidavits show that there is no genuine 8 issue as to any material fact and that the movant is entitled to judgment as a 9 matter of law." Mont. R. Civ. P. 56(c)(3). The party moving for summary l0 judgment must establish the absence of any genuine issue of material fact and the 11 party is entitled to judgment as a matter oflaw. Tin Cup County Water &/or 12 Sewer Dist. v. Garden City Plumbing, 2008 MT 434,, 22, 347 Mont. 468, 200 13 P.3d 60. Once the moving party has met its burden, the party opposing summary 14 judgment must present affidavits or other testimony containing material facts 15 which raise a genuine issue as to one or more elements of its case. Id at ii 54 16 (citing Klock v. Town of Cascade, 284 Mont. 167, 174, 943 P.2d 1262, 1266 17 (1997)). Conclusory statements and assertions are not enough to defeat a motion 18 for summary judgment. Id. The mere denial of a fact does not satisfy the non- 19 moving party's burden of establishing a genuine issue of material fact and is not a 20 proper basis for denial of a motion for summary judgment. Vettel-Becker v. 21 Deaconess Med. Ctr. ofBillings, Inc., 2008 MT 51, iJ 27, 341 Mont. 435, 177 22 P.2d 1034. 23 A party may amend its pleadings once as a matter of course within 24 twenty one days of serving it. Mont. R. Civ. P. 15(a)(l ). Thereafter, a party may 25 only amend a pleading with the other party's written consent or with the court's Decision and Order on Defendants' Motion for Summary Judgment and Plaintift's Motion to Amend Complaint -page 4 • • 1 leave. Mont. R. Civ. P. l5(a)(2). Leave to amend pleadings to correct mistakes 2 should be freely given when amendment will not mislead the opposing party to 3 its prejudice. Haugen Trust v. Warner, 204 Mont. 508, 512, 665 P.2d 1132, 1135 4 (Mont. 1983 ). If a motion to amend is offered at a reasonable time; it is generally 5 an abuse of discretion lo refuse amendment unless the amendment causes the 6 opposing party prejudice, it causes undue delay, it is done for an improper 7 purpose, or it is futile. Stunda/ v. Stundal, 2000 MT 21,, 12, 298 Mont. 141, 8 144, 995 P.2d 420, 422. 9 10 11 DISCUSSION I. Motion for Summary Judgment Under Montana's False Claims Act, a person who "knowingly 12 presents or causes to be presented a false or fraudulent claim for payment or 13 approval" to a governmental entity, or conspires to do so, is personally liable to 14 the governmental entity for three times the amount of damages it sustains, and 15 may be fined up to $11,000. Mont. Code Ann. §17-8-403. A claim is "any 16 demand for money, property, or services, whether made pursuant to a contract 17 and regardless of whether a governmental entity holds title to the money or 18 property." Mont. Code Ann. § 17-8-402. 19 In his affidavit, Pearson states he worked fifteen hours reviewing the 20 COPP's decision regarding a matter before the commission in September 2013, 21 but only billed five hours ($625) on the invoice dated October 22, 2013. (Def.'s 22 Br. Supp. Mot. S.J., Ex. A, Aff. C.B. Pearson,, 10 (Oct. 28, 2014).) Similarly, 23 Pearson states he worked fifteen hours in October 2013 for which he billed only 24 for five hours as represented on the invoice dated November 6, 2013. Id. , 1O. 25 When Pearson was deposed on this matter, he stated he worked between fourteen Decision and Order on Defendants' Motion for Summary Judgment and Plaintitl's Motion to Amend Complaint -page 5 • • 1 and sixteen hours in both September and October 2013. (Depo. Pearson, 98:7- 2 8). 3 Skattum argues the inconsistency between Pearson's affidavit and 4 deposition statements create a credibility issue that should be resolved by a jury. 5 The uncontroverted evidence, however, demonstrates that Pearson, an M+R 6 employee, worked at least five hours in September and October 2013, for which 7 M+R submitted invoices for five hours of work. "To raise a genuine issue of 8 material fact, the party opposing summary judgment must present material and 9 substantial evidence rather than merely conclusory or speculative statements." 10 First Sec. Bank v. Abel & Abel Enters., 2008 MT 161, 1112, 343Mont.313, 184 11 P.Jd 318. Skattum's suspicion that Pearson is not telling the truth, without any 12 corroborating evidence, does not raise an issue of material fact. Accordingly, 13 Defendants' motion for summary judgment is warranted. 14 2. 15 16 Motion to Amend Complaint a. June 19, 2014 Invoice Pearson submitted an invoice to the COPP on June 19, 2014 for I7 $3,250 seeking payment for services performed under the contract. In an ~mail 18 dated June 20, 2014 Pearson wrote he worked 14 hours from June 1 through June 19 19, 2014. Pearson estimated he would work 12 hours between June 20 and June 20 30, 2014-a total of26 hours of work for the month of June. Skattum alleges 21 Pearson did not work 12 hours between June 20 and June 30, 2014, thus the 22 invoice constitutes a fraudulent claim. 23 Skattum's allegations are unsupported by the record in this matter. In 24 June 2014, the COPP asked Pearson to provide a bill of services for the 25 remainder of the month, including those services yet to be performed. According Decision and Order un Defendants' Motion for Summary Judgment and Plaintiff's Motion to Amend Complaint -page 6 • • . 1 to the COPP, the state of Montana's fiscal year ends on June 30 of the calendar 2 year. If M+R did not provide the invoice in June, the COPP would have been 3 required to use money from the subsequent fiscal year budget to pay for the 4 services. The undisputed evidence shows M+R employees performed the work 5 billed under this invoice. At the COPP's request, M+R submitted an invoice for 6 $3,250 for 26 hours of work in June at a rate of$125 per hour. Pearson has 7 provided details for the work included in the invoice. (Depo. Pearson 106:5-23.) 8 There is no evidence to support Skattum's allegations Pearson did not perform 9 the services for which he billed the COPP. Skattum allegations are mere I0 speculation. Without evidence to support his claims, Skattum's efforts to amend 11 his complaint would be futile and are therefore denied. 12 13 b. 2014 Contract Invoices In his second proposed amendment, Skattum alleges the Defendants 14 violated Montana's False Claims Act because M+R submitted false claims to the 15 COPP when Pearson submitted invoices in excess of the $6,000 allowed under 16 the 2014 contract- the COPP subsequently paid M+R more than agreed upon in 17 their contract. There is no allegation the specific work (for which Pearson billed 18 and the COPP paid) was not performed. Rather, Skattum alleges Defendants 19 exceeded the cap set forth in the contract. Defendants argue this does not amount 20 to a violation of the Montana False Claims Act. The Court agrees. 21 The evidence indicates M+R and the COPP entered into a contract in 22 September 2013. Skattum's original claims and his first proposed amendments 23 arise from the work Pearson performed under that contract. In September 2014, 24 M+R and the COPP entered into a second contract. The evidence further 25 Decision and Order on Defendants' Motion for Summary Judgment and Plaintiff's Motion to Amend Complaint - page 7 • • I indicates Pearson performed the work for which he was paid under the 20 t 4 2 contract. 3 Parties to a written contract may modify the contract by an executed 4 oral agreement. Mont. Code Ann.§ 28-2-1602. Defendants modified the 2014 5 contract when M+R performed services in excess of the amount specified in the 6 contract and when the COPP paid M+R for those services. Alternatively, the 7 parties completed performance of the 2014 Contract, and M+R continued to 8 provide services under an oral contract. In either instance, it is not a violation of 9 the Montana False Claims Act to modify a contract. Because the invoices IO submitted under the 2014 Contract were not false or fraudulent claims, Skattum's ll allegations do not support a claim under the False Claims Act. To allow him to 12 amend his complaint will prove futile. Accordingly, Skattum's motion to amend 13 is denied. 14 Based on the foregoing, 15 IT IS HEREBY ORDERED Defendants' motion for summary 16 17 18 19 judgment is GRANTED. IT IS FURTHER ORDERED Skattum's motion to amend complaint is DENIED. DATED this 11.,... day of January 2016. 20 21 22 23 24 25 ' '2r/L '1vtc~ ,,/ MIKE MENAHAN District Court Judge pc: Arthur V. Wittich/Michael L. Rabb Chris J. Gallus W. Anderson Forsythe/Christopher T. Sweeney Decision and Order on Defendants' Motion for Summary_ Judgment and Plaintiffs Motion to Amend Complaint -page 8 COMMISSION ON PRACTICE OF THE SUPREME COURT OF THE B.TATE OF MONTANA 301 S. PARK, SUITE 328 P.O. BOX203005 HELENA, MONTANA 59620-3005 CHAIRMAH WPRO E. TAl.EFF Attomey al llw PO Box8D9 Great Falls, MT 59403 PER§QNAL AND CONFIDENTIAL Telephone: (408)761·9400 VICECHAI_,. STEPHEN R. BROWN. JR. AHomeyatLaw PO Box7152 October 22, 2015 Havre. MT 59501 Telophcne: (406) 265·6706 EXECUTIVE SECRETARY TRACY AXElBEl'G Attorney at Law PO Bax737tl Kallopel, MT 69904-0370 Attoirne:)l.ll 620 Fer·guson,.~ Bozeman, MT T-hOne: (406) 751-6000 MEMBERS BRAD BELKE Attorney at Law PO Box4079 Butte, MT 59702 Telop!IOn•>: (406) 782-9m PATRICIA DEVRIES PO Box562 Polson, MT 58660-0562 RE: . File No. 14-186 Jonathan Motl, Esq. Dear Mr. Raab: Telephone: (406) 883-9250 JEANFAUAE Attorney at Lew PO BoxZ466 Great Falt, MT 59403 Telephone: (406) 452-6500 DONALD L HARRIS AllorneyatLaw 3936 Ave. 8, 518. 0 Blllnga, MT 59102 The Commission on Practice has completed its consideration of your appeal from the Office of Disciplinary's July 7, 2015, decision to dismiss your complaint against Jonathan Motl. As part of its review, the Review Panel considered your letter dated August 4, 2015, Disciplinary Counsel's original report, and your original complaint. TelophOne: (406) 284-2000 JAMES HUB8LE Attorney at LaW P.O. Box 556 Stanfonl, MT 59479-0556 Telephone: {406) 566-2500 GENE HUNTINGTON The Review Panel concluded that the facts of your complaint does not demonstrate clear and convincing evidence of ethical violations by Mr. Motl. Accordingly, your appeal has been affirmed and dismissed. 725 N. Warren Helena, MT 59601 T . - . . : 1406) 442-8362 JAMES F. JACOBSEN 7 Muellel .Court Helena. MT 59601 T""""""'"' (406) 449-7233 DANIEL N, McLEAN Attorney at LllW paeoxrg1 Helena, MT 59624-0797 Telephone: (406) 44M165 L.OIS MENZIES 6D:Z 2""Sl Helena. MT 59601 Telephone: (406) 44S-0206 RICHARD A OCHSNER 5175 U.S. Hwy 93 S Missou'a, MT 59804 T-no; (406) 207-4717 ROBERT J. SAVAGE AltOrnty at.Law PO Box 1105 Sidney, MT 59270 Tetepnone: (408) 433-9770 OFFICE ADMINISTRATOR SHELLY NASH 301 S. Peril, Suite 328 P.O. Box 203005 Helena. MT 59820-3005 TelephOne: (406) 841·2976 FAX: (406) 841-2956 ADlllN. lllCllETAllY KARA BERGUM r - : (406) 841·Z•n For your information Rule 14, Montana Rules for Lawyer disciplinary Enforcement, provides as follows: Rule 14 -- Request for Reconsideration by Complainant of a Review Panel's Decision. A. Dismissal of complaint. Upon review of Disciplinary counsel's dismissal of a complaint pursuant to Rule 1OC(3), if a Review Panel affirms the dismissal, the Commission shall notify the complainant in writing that the complainant may, within thirty-five days of the date on which the notice w8s sent, request in writing to the Commission, review ofthe disposition by the Supreme Court. B. Review discretionary. Tue Supreme Court may, in its sole discretion, review the Panel's disposition. Michael Raab October 22, 2015 Page2 Because a Review Panel has reconsidered your complaint and approved its original disposition, i.e., dismissal, the Commission on Practice has exhausted its authority with respect to your complaint and cannot consider it further. You are reminded that all matters before the Commission, prior to filing of fortnal. charges of unethical conduct in the Supreme.Court against a lawyer, are required by the Supreme Court to remain confidential. Since no formal charges are to be filed in this case, any disclosure concerning the fa.ct that you filed a complaint with the Office of Disciplinary Counsel or filed an appeal with the Commission on Practic.e is prohibited. Very truly yours, ~~ S~e;.· Smj£1Office Administrator COMMISSION ON PRACTICE cc: Jonathan Motl, Esq. Shaun R. Thompson, Esq. rhoades siefert Quentin M. Rhoades Nicole L. Siefert tria I attorneys PLLC January 21, 2016 Gene R. Jarussi BISHOP & HEENAN 1631 Zimmerman Tr. Billings, MT 59102 RE: ]011atlia11 Motl Dear Mr. Jarussi, It has come to my attention that in the second half of the year 2013, yoUl' client, Jonathan Motl, and licensed attorney, asked his paralegal, Julie Steab to contact one of my then clients, Direct Mail & Communications, Inc. Ms. Steab, as I understand it, questioned this request, on grounds that DMC was represented by counsel. Motl overruled her, and directed that she do so on grounds that DMC had never requested that Motl only contact it through counsel, and besides, Motl had no litigation pe11ding against DMC. He also told her that since she is not a licensed attorney, she could ignore her concern. I believe this conduct is a violation of Rule 4.2, which reads: In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless tile lawyer has the consent of the other lawyer or is authorized to do so by law or a cow·t order. I also believe that I am duty bound to report Mt·. Motl for the violation. See Rule 8.3. That is, unless Mr. Motl can supply an explanation fo1· having his agent contact my client without my knowledge or consent. I ask that you please confer with Mr. Motl, and provide me with an explanation for his conduct consistent with the Rules of Professional Conduct. Thank you for your kind attention. If Mr. Motl has other counsel for matters of professionalism, please forward this request to them. l look forward to hearing from you soon. Sincerely yours, Gene R. Jarussi January 21, 2016 Page2. professionalism, please forward this request to them. I look forward to hearing from you soon. Sincerely yours, RHOADES & SIE,PERT, PLLC uentin M. Rhoades Direct Line 406.541.6840 cc: Client J uugt: s1ams A. U' aLLUrnt:y ror uru;uppunt:a c1aims j IV10mana 1'-iews I 0111mgsgaz.t:ut.cum ragt i u1 "+ http://billingsgazette.com/news/state-and-regional/montana/judge-slams-atp-attorney-forunsupported-claims/article_745f0117-e505-5cd9-8625-12a866c27a8d.html Judge slams ATP attorney for 'unsupported' claims By MATIHEW BROWN Associated Press jun 27, 2013 Molloy KU RT W I LSON/ Missoulian A federal judge chastised the attorney for two political consultants in court Thursday for suggesting a state official was guilty of wrongdoing in releasing a trove of documents connected to the conservative group American Tradition Partnership. iAWENDixD Juugt:: s1ams Alr allomt::y 1ur unsuppunt::u Claims I 1V10mana l'lews I ouungsgazt::ut:.<.:um n1g1: ,_ u1 .. U.S. District Judge Donald Molloy said attorney Quentin Rhoades had presented no proof to back his allegations that former Commissioner of Political Practices Jim Murry "secretly" gave 15,000 pages of campaign-related documents and business records to the news media. Rhoades had also implied Murry could have been motivated by his past involvement with the AFL-CIO labor union, a group Rhoades said was at odds with his clients' work on campaign finance issues. But Molloy sternly cautioned the Missoula attorney against such allegations, saying at one point that Rhoades was "making stuff up." "Be careful who you accuse of nefarious conduct if you don't have anything to support it," the judge said. "What evidence do you have that they secretly shared them with anybody?" "It's almost as if you are arguing to the newspapers instead of arguing to the law," Molloy added. Rhoades' clients, Christian and Allison LeFer, sued the state over the document release but now want the case dismissed so they can refile in state court. The couple has filed notice that they intend to seek $1 million in damages from the state over the release, Rhoades said. Rhoades said after the hearing that he was trying to illustrate the "unfairness" of the circumstances regarding the document release. The LeFers had a right to privacy, he said, and since their names were among those in the documents, constitutional due process required notice, if not a hearing, before those documents could be released. The documents were delivered to the Commissioner of Political Practices office after they were allegedly stolen from the LeFers in Colorado in 2010. Just before last November's election, they were featured in a documentary by "Frontline" and a story by ProPublica suggesting American Tradition Partnership, a tax-exempt social welfare group, may have unlawfully coordinated with Republican candidates. http://billingsgazette.com/news/state-and-regional/montana/judge-s!ains-atp-attomey-for-u... 2/11/2016 The LeFers attended Thursday's hearing. Christian LeFer was ignored by Molloy when he raised his hand and asked to speak during the exchange between Rhoades and the judge over Murry's actions. LeFer later declined comment when asked about his future plans in the political arena. "All that matters to me is that this not be allowed to stand," he said, adding that could lead to a scenario in which "someone who's robbed can have their tax return put out to the media." The documents have since been turned over to a federal grand jury investigation, details of which have not been revealed. The state attorney general's office has said that in seeking to dismiss the case, the LeFers are shopping for a favorable judge. Attorneys for Murry and the state oppose the move to dismiss and want a judgment that would allow them to collect legal fees. Molloy did not immediately rule Thursday. American Tradition Partnership has launched lawsuits that have successfully overturned Montana's 100-year-old ban on some corporate spending in elections, and that led to a temporary suspension during the fall of the state's campaign contribution limits. MORE INFORMATION Montana wants decision in campaign documents dispute Bullock to make political practices pick next week ATP directors reveal identities in court filing Bill to overhaul campaign finance law passes Governor's 'dark money' bill hits committee judge says ATP documents belong with grand jury http ://billingsgazette.com/news/state-and-regional/montana/judge-slams-atp-attorney-for-u... 2/11/2016 Montana asks to hit secretive campaign group with big fine Judge tells ATP to pay Montana's attorney fees http ://billingsgazette.com/news/state-and-regional/montana/judge-slams-atp-attomey-for-u... 2111/2016