Sharbono v. Cole, 2015 MT 257 (Sept. 1, 2015) (McGrath, C.J.; Baker, J., concurring) (5-0, rev’d)
Issue: (1) Whether the district court properly granted Coles’ motion in limine to exclude Sharbonos’ expert witnesses; and (2) whether the district court properly granted judgment to Coles and awarded them attorney fees.
Short Answer: (1) No; and (2) no.
Reversed and remanded
Facts: Sharbonos and Coles own adjoining parcels of land adjacent to Rock Creek in Carbon County. Sharbonos have a senior right to use water that arises on Coles’ property and flows or seeps into a pond on Sharbonos’ property. In 1994, Coles obtained a water use permit for a pond on their property, and in subsequent years engaged in development and construction activities, which Sharbonos contend greatly reduced or eliminated the flow of water onto their land.
In 2008, Sharbonos sued Coles, contending they interfered with Sharbonos’ water right by building a pond, engaging in significant construction, and placing rip-rap and fill in wet areas without adequately protecting the flow of water onto Sharobonos’ property. Sharbonos sought damages, restoration of the flow of water, and attorneys’ fees and costs.
In 2012, Coles moved for summary judgment, contending Sharbonos had no right to any water arising on Coles’ property because Sharbonos’ point of diversion was not on Coles’ property. Sharbonos moved the district court to certify the water right issue to the Montana Water Court, which it did.
In May 2013, the Water Court found Sharbonos had an irrigation right dating to Aug. 5, 1963, and the source was water arising on or flowing through Coles’ property. It found Coles’ assertions about the source of Sharbonos’ right “wrong as a matter of law, and defie[d] common sense.” ¶ 7.
The case returned to the district court in 2013. Coles moved in limine to exclude Sharbonos’ experts based on inadequate expert disclosures under Rule 26(b)(4), M.R. Civ. P. The court granted the motion, and held a bench trial.
Procedural Posture & Holding: At the close of Sharbonos’ case in chief, the district court granted Coles’ motion for judgment as a matter of law. It issued FOF/COLs finding Coles had not interfered with Sharbonos’ water right, Sharbonos could only prove their case through expert testimony, and Coles’ activities did not unreasonably interfere with Sharbonos’ water rights. The court entered judgment for Coles, and awarded them costs and attorneys’ fees of $81,846.51. Sharbonos appeal, and the Supreme Court reverses.
Reasoning: (1) The Rules of Civil Procedure allow discovery of information about any expert the opposing party intends to call as a witness. The spirit of the Rules requires “liberal disclosure,” so as to eliminate surprise and promote effective cross-examination of experts. The Court reviews a sanction for inadequate expert disclosure to determine whether the consequences of the sanction relate to the extent and nature of the discovery abuse; the extent of prejudice to the opposing party; and whether the district court warned the answering party of the consequences. One factor in determining prejudice is whether the party could have obtained additional information by deposing the designated expert.
Sharbonos made an initial disclosure in October 2011, and the Coles moved to exclude based on inadequate compliance with the rule. Sharbonos served a supplemental disclosure in February 2012, and a third supplemental disclosure in March 2014. A review of Sharbonos’ expert disclosures makes it clear that they did not abuse the discovery process, and adequately complied with Rule 26(b)(4). The district court abused its discretion in striking all of Sharbonos’ expert witnesses. The district court did not warn Sharbonos they were in danger of having their case gutted, and there is no demonstrable prejudice to Coles from the disclosures that were made. The rule requires disclosure of subject matter areas, the substance of facts and opinions, and a summary of the grounds. The Sharbonos met those requirements. If Coles needed more information, they were free to depose the experts.
(2) Because the experts were wrongfully excluded, the judgment must be reversed and the award of attorney fees is reversed.
Justice Baker’s Concurrence: The district court appears to have applied the federal standards for expert disclosures, which the Montana advisory commission specifically rejected when amending Montana’s Rules of Civil Procedure. Sharbonos’ disclosures may not have met the federal Rule 26 standards, but they did meet Montana’s more relaxed standard.