Town of Lodge Grass ordered to pay $4.6 million dollars in civil lawsuit

Thursday, September 12, 2019

The town of Lodge Grass has been ordered by the Montana 22nd Judicial District Court to pay over $4.6 million in unpaid fees and accrued interest for breach of contract stemming from a February 2018 agreement between the city and Black Canyon, LLC.

The details of the case allege that Black Canyon, LLC entered into a written contract with the Town of Lodge Grass for removal of 715 Dry Metric Tonnes of sludge from the Lodge Grass wastewater treatment facility at $900 per DMT.

However, when Black Canyon completed the removal of all 5,381 DMT’s of sludge, the town was left with a $4,842,900 bill.

The case file alleges Lodge Grass refused to provide payment of services to Black Canyon for the work completed at the town sewer lagoons.

Black Canyon served Lodge Grass with a complaint on March 2, 2018, which town officials did not respond to in the prescribed timeframe, which resulted in litigation.

Lodge Grass filed a motion to dismiss the case due to Black Canyon’s “failure to state a claim upon which relief may be granted and inadequate service of process.”

Black Canyon responded back to Lodge Grass’ filings against them in a timely manner and on April 25, 2018 the town’s attorney then moved the court to stay the proceedings in order for the two parties to mediate the issue at hand.

Black Canyon agreed to the motion, but continued to assert that the court had subject matter jurisdiction and should grant Black Canyon their previously motioned and requested relief.

In May 2018, the court entered an order to stay proceedings pending mediations, making it clear that if the parties did not resolve their dispute during mediations, the court would then lift the stay and address any pending motions.

A few weeks later, Black Canyon provided a status report to the court that informed the court that the two entities had not resolved their dispute and that litigation had needed to proceed forward.

Both parties were then served with a scheduling order in June 2018, however, Lodge Grass filed a motion to set aside entry of default.

Upon receiving filing from Lodge Grass, Black Canyon filed a five-page brief opposing the motion and outlining the inconsistencies of the motion filed by Lodge Grass.

Black Canyon propounded discovery concerning jurisdiction consistent with the court’s scheduling order, but Lodge Grass failed to respond to the discovery.

Over the course of the next few months, from July to September was a consequent filing and re-filing by Black Canyon against the town of Lodge Grass, who subsequently either failed to respond to Black Canyons motions in a timely manner, then counteracted with their own filings that were denied.

On December 26, 2018, the court entered an order denying the Lodge Grass’ motion to set aside entry of default. The court then found that Black Canyon had been diligent in pursuing the case, whereas Lodge Grass had been subsequently noncompliant with the court’s order.

During the default judgment hearing held on July 9, Black Canyon provided the court with the uncontroverted evidence that Lodge Grass is subject to statutory authority since it is an incorporated town and therefore a non-tribal entity, and the government of the town of Lodge Grass is not affiliated with any recognized tribal entity.

The court acknowledged that Lodge Grass was in default of its contractual obligations from March 27, 2018 forward and had paid $489,060, but still had the remaining $4,353,840 left to pay.

Upon reviewing the evidence Judge Blair Jones decided that the evidence was undeniably stacked against Lodge Grass.

Consequently, it was the court’s decision that the town of Lodge Grass was responsible for breach of the contract that had been established in 2018, and subsequently owes Black Canyon, LLC $4,353,840 to pay off the original debt incurred in the contract agreement, $109,639.23in withheld liquidated damages and $522.50 for Black Canyon’s legal fees, totaling $4,646,001.73.

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