Supreme Court Overturns Damage Awards in Libby Lawsuit

By Beacon Staff

HELENA – The Montana Supreme Court has overturned more than $380,000 in damages awarded a Libby couple in a lawsuit against the developer of an exclusive golf community near their property.

The court said a new trial should be held for Craig and Lisa McKay’s case against Wilderness Development. Justices overturned some lower court decisions and concluded jurors were not given proper instructions in awarding the damages.

The McKays alleged the developer cleared out a swath of trees near the couple’s land and built a road to access property where the developer built a maintenance building, which violated rules governing the Koocanusa Estates subdivision where the McKays live.

The 500-acre development included 50 acres of Koocanusa Estates. The maintenance building was built on 10 acres that had been subdivided from another 10-acre plot the McKays owned.

After a trial in April 2008, a District Court jury awarded the couple $1 million in punitive damages, $350,000 in damages for violating the subdivision covenant and $6,500 for cutting down the trees. The District Court reduced the punitive damages to $25,000.

Wilderness Development and the McKays both filed appeals in the case.

“We’re pleased with the vacating of the judgment and a chance for retrial,” Wilderness Development’s attorney Sean Frampton of Whitefish said Wednesday. “The Supreme Court clarified a lot of issues in the case, so it’ll make a retrial in the matter a lot more focused.”

Amy Guth, the attorney for the McKays, said she respected the court’s decision and looks forward to the new trial.

The Supreme Court affirmed a ruling that Wilderness did not trespass on the McKay’s property and reversed a District Court ruling that said Wilderness did not have an easement to access the 10 acres of land adjacent to the McKay’s property.

“The location, permissible use, and width of such easement could be the subject of further litigation on remand,” the high court wrote.

The Supreme Court upheld a ruling that the developer violated subdivision covenants that prohibit the construction of a commercial building and said the couple can seek punitive damages and damages for intentional or negligent infliction of emotional distress. However, the court said Wilderness would not have to remove its maintenance building.

The court overturned $350,000 in damages the jury awarded for violating the covenant, saying such an award could not be justified without including damages for emotional distress.

“The jury was improperly instructed on the McKay’s claim for emotional distress damages,” the court wrote in its ruling, which was filed Friday.

The court also reversed the $6,500 the jury awarded the McKays for the trees that were cut down, and directed the District Court to change that amount to $600, saying the jury was not instructed on how to determine the amount of any damages in that instance.