Randall Childress v. Costco ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RANDALL CHILDRESS; Nos. 19-35441
CLAUDIA CHILDRESS, 19-35493
Plaintiffs-Appellees/
Cross-Appellants, D.C. No.
9:18-cv-00183-DWM
v.
COSTCO WHOLESALE ORDER CERTIFYING
CORPORATION, QUESTION TO THE
Defendant-Appellant/ SUPREME COURT OF
Cross-Appellee. MONTANA
Appeal from the United States District Court
for the District of Montana
Donald W. Molloy, District Judge, Presiding
Argued and Submitted September 4, 2020
Seattle, Washington
Filed October 19, 2020
Before: Jay S. Bybee and Daniel P. Collins, Circuit Judges,
and James Alan Soto, * District Judge.
Order
*
The Honorable James Alan Soto, United States District Judge for
the District of Arizona, sitting by designation.
2 CHILDRESS V. COSTCO WHOLESALE
SUMMARY **
Certification to Montana Supreme Court
The panel certified to the Montana Supreme Court the
following question:
Whether, under Montana law, parasitic
emotional distress damages are available for
an underlying negligence claim for personal
property damages or loss.
COUNSEL
Susan Moriarity Miltko (argued) and Tyler C. Smith,
Williams Law Firm P.C., Missoula, Montana, for
Defendant-Appellant/Cross-Appellee.
Quentin M. Rhoades (argued) and Kristin Bannigan,
Rhoades Siefert & Erickson PLLC, Missoula, Montana, for
Plaintiffs-Appellees/Cross-Appellants.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
CHILDRESS V. COSTCO WHOLESALE 3
ORDER
The appeal pending before this Court calls on us to
determine whether, under Montana law, so-called parasitic
emotional distress damages are available for an underlying
negligence claim for personal property damage or loss. This
central question of state law is determinative of the instant
case, and we find no controlling precedent in the decisions
of the Montana Supreme Court. Mont. R. App. P. 15(3).
Thus, we respectfully certify this question of law to the
Montana Supreme Court pursuant to Rule 15 of the Montana
Rules of Appellate Procedure.
As a general matter, “[t]he task of a federal court in a
diversity action is to approximate state law as closely as
possible in order to make sure that the vindication of the state
right is without discrimination because of the federal
forum.” Ticknor v. Choice Hotels Int’l, Inc., 265 F.3d 931,
939 (9th Cir. 2001) (quoting Gee v. Tenneco, Inc., 615 F.2d
857, 861 (9th Cir. 1980)). If the state’s highest appellate
court has not decided the question presented, then we must
predict how the state’s highest court would decide the
question. Id. However, if state law permits it, we may
exercise our discretion to certify a question to the state’s
highest court. Lehman Bros. v. Schein, 416 U.S. 386, 391
(1974). We may elect to certify a question sua sponte.
Parents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1,
294 F.3d 1085, 1086 (9th Cir. 2002), certified question
answered, 72 P.3d 151 (Wash. 2003); see also Lombardo v.
Warner, 391 F.3d 1008 (9th Cir. 2004) (en banc) (certifying
question from an en banc court). The Montana Supreme
Court permits certification of questions of law from federal
courts. Mont. R. App. P. 15(3). “We invoke the certification
process only after careful consideration and do not do so
lightly.” Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir.
4 CHILDRESS V. COSTCO WHOLESALE
2003). In deciding whether to exercise our discretion, we
consider: (1) whether the question presents “important
public policy ramifications” yet unresolved by the state
court; (2) whether the issue is new, substantial, and of broad
application; (3) the state court’s caseload; and (4) “the spirit
of comity and federalism.” Id. at 1037–38.
Whether parasitic emotional distress damages are
available for an underlying negligence claim for personal
property damage or loss presents important policy
ramifications for Montana that have not yet been resolved by
the Montana Supreme Court. Therefore, after considering
these factors, and in the spirit of comity and federalism, we
exercise our discretion to certify this question to the
Montana Supreme Court.
Pursuant to Montana Rule of Appellate Procedure 15(6),
we provide the following information for the consideration
of the Montana Supreme Court.
1
We first provide the factual context of this dispute, along
with the procedural history. This case arises from events that
occurred on September 23, 2016, when Randall and Claudia
Childress (“the Childresses”) visited Costco’s tire center in
Missoula, Montana to have routine work done on their
vehicle. When the work was complete, a Costco employee
gave the car keys to a man in the garage bay who claimed to
be the Childresses’s son. The man absconded with the
vehicle. The Childresses found their vehicle a short time
later, but the contents had been disturbed and some items had
been stolen, including a handgun, ammunition, documents
containing their home address, and keys to their house.
When Costco denied liability, the Childresses sued.
CHILDRESS V. COSTCO WHOLESALE 5
The Childresses asserted various causes of action against
Costco but proceeded to trial only on their claims for
bailment and negligence. They presented evidence that
Randall suffered post-traumatic stress disorder (“PTSD”)
following his military service and tours in Vietnam. Randall
had successfully treated his symptoms, but the theft
exacerbated them, causing stress, paranoia, sleeplessness,
fear, adverse appetite, irritability, anger, lack of intimacy,
and anxiety. Randall sought therapeutic treatment for his
symptoms 17 times. The Childresses also presented
evidence that Claudia suffered from stress, sleeplessness,
fear, and nightmares.
Near the close of trial, the district court held a conference
to discuss jury instructions. Costco moved to exclude any
claim for emotional distress damages, arguing that Montana
law does not allow for parasitic emotional distress damages
arising out of claims for negligent damage to personal
property. Over Costco’s objection, the district court
instructed the jury that if it found for the Childresses on their
negligence claim, it “must determine the amount of
damages” to compensate the Childresses for any injury
caused, including “the mental, physical, and emotional pain
and suffering experienced and that with reasonable
probability will be experienced in the future.” This
instruction was modified from the Montana Pattern Jury
Instruction 25.02 entitled “Personal Injury (Emotional
Distress - Generally).”
The jury concluded that Costco was liable for bailment
and negligence. It awarded the Childresses $2,278.43 in
property damages on their bailment claim and $62,750 in
unspecified, non-property damages on their negligence
claim.
6 CHILDRESS V. COSTCO WHOLESALE
2
The Montana Supreme Court has not decided whether
parasitic emotional distress damages are available for an
underlying negligence claim for personal property damage
or loss. Montana law currently recognizes two ways for
plaintiffs to recover emotional distress damages: (1) by
asserting an independent claim for negligent or intentional
infliction of emotional distress; or (2) by claiming emotional
distress damages parasitic to an underlying tort claim. In
Sacco v. High Country Independent Press, Inc., 271 Mont.
209, 232 (1995), the Montana Supreme Court held that “[a]
cause of action for negligent infliction of emotional distress
will arise under circumstances where serious or severe
emotional distress to the plaintiff was the reasonably
foreseeable consequence of the defendant’s negligent act or
omission.” Id. The court defined serious or severe
emotional distress as distress “so severe that no reasonable
[person] could be expected to endure it.” Id. at 234. Sacco
tasked trial courts with determining, as a threshold issue,
whether the evidence in a given case could support a claim
of serious or severe emotional distress. Id. at 232–33.
Subsequently, in Jacobsen v. Allstate Insurance
Company, the Montana Supreme Court established that
Sacco’s heightened standard does not apply to parasitic
emotional distress claims:
We therefore hold that the “serious or severe”
standard announced in Sacco applies only to
independent claims of negligent or
intentional infliction of emotional distress.
To the extent our earlier cases, including
First Bank, Johnson, and Noonan, suggest
that a plaintiff must make a threshold
showing of serious or severe emotional
CHILDRESS V. COSTCO WHOLESALE 7
distress before a claim for parasitic emotional
distress damages is allowed to go to the jury,
we overrule those decisions. As for
emotional distress that is claimed as an
element of damage for an underlying tort
claim (parasitic emotional distress damages),
we hereby explicitly adopt the standard set
forth in the Montana Pattern Jury Instruction
(M.P.I.2d 25.02, 15.01–03), cited in Lorang,
and set forth above.
351 Mont. 464, 483 (2009). The jury instruction the court
adopted states, in relevant part, that “[t]he law does not set a
definite standard by which to calculate compensation for
mental and emotional suffering and distress[,] . . . [but that]
[t]he compensation must be just and reasonable.” M.P.I.2d
25.02, 15.01–03.
However, the standard articulated in Jacobsen was
adopted in the context of an insurance bad faith claim.
Indeed, as the Jacobsen court noted, Montana law already
recognized claims for emotional distress damages in such
cases. Jacobsen, 351 Mont. at 481 n.3 (“Emotional distress
damages are available in the context of insurance bad faith,
whether brought under the UTPA or the common law. See
Gibson v. Western Fire Ins. Co., 210 Mont. 267, 682 P.2d
725, (1984); Lorang v. Fortis Ins. Co., 2008 MT 252, 345
Mont. 12, 192 P.3d 186.”). The Montana Supreme Court has
also recognized parasitic emotional distress damages in the
context of discrimination, Vortex Fishing Sys., Inc. v. Foss,
308 Mont. 8, 15₋16 (2001), and the loss and enjoyment of
real property, Maloney v. Home and Inv. Ctr., Inc.,
298 Mont. 213, 233 (2000). But it is unclear whether
Jacobsen’s standard for the recovery of parasitic emotional
distress applies to all tort claims, or only to the specific
8 CHILDRESS V. COSTCO WHOLESALE
subset of cases in which the Montana Supreme Court has
already recognized the availability of such damages based
on the nature of the claims and/or underlying policies. See,
e.g., Vortex, 308 Mont. at 16 (“Because of the broad
remunerative purpose of the civil rights laws, the tort
standard for awarding damages [for independent actions for
emotional distress] should not be applied to civil rights
actions” (internal quotation omitted)). Further, it is not clear
whether Montana law recognizes a distinction between
emotional distress claims arising from personal property and
those arising from real property. See Restatement (Third) of
Torts: Physical and Emotional Harm § 47 cmt. m. (Am. Law
Ins. 2020) (“Recovery for emotional harm resulting from
negligently caused harm to personal property is not
permitted under this Section.”).
3
In light of the foregoing, we respectfully certify the
following question to the Montana Supreme Court:
Whether, under Montana law, parasitic
emotional distress damages are available for
an underlying negligence claim for personal
property damage or loss?
We acknowledge that, as the receiving court, the
Montana Supreme Court may reformulate the certified
question. Mont. R. App. P. 15(6)(a)(iii).
The names and addresses of counsel for the parties, as
required by Mont. R. App. P. 15(6)(a)(iv), are as follows:
CHILDRESS V. COSTCO WHOLESALE 9
Quentin M. Rhoades and Kristin Bannigan
Rhoades, Siefert & Erickson, P.L.L.C.
430 N. Ryman, 2nd Floor
Missoula, MT 59802
for Plaintiffs-Appellees/Appellants
Susan Moriarity Miltko and Tyler C. Smith
Williams Law Firm, P.C.
235 E. Pine, P.O. Box 9440
Missoula, MT 59807-9440
for Defendant-Appellant/Appellee
4
The Clerk shall forward a certified copy of this
certification order, under official seal, to the Montana
Supreme Court. The Clerk is also ordered to transmit a copy
of the Excerpts of Record filed in this appeal to the Montana
Supreme Court and, if requested by the Montana Supreme
Court, provide all or part of the district court record not
included in the Excerpts of Record. Mont. R. App. P. 15(5).
The Clerk is further directed to forward a copy of the briefs
filed by the parties. Submission of this appeal for decision
is vacated and deferred pending the Montana Supreme
Court’s final response to this certification order. The Clerk
is directed to administratively close this docket, pending
further order. The parties shall notify the Clerk of this court
within fourteen days of the Montana Supreme Court’s
acceptance or rejection of certification, and again, if
certification is accepted, within fourteen days of the
Montana Supreme Court’s issuance of a decision.
QUESTION CERTIFIED; PROCEEDINGS
STAYED.