WRONGFUL PROSECUTION claims by former county commissioner properly dismissed except for breach of contract and covenant claims which are not time-barred… McMahon affirmed, reversed.

Laura Obert was a Broadwater Co. Commissioner 2008-19. In 9/15 Co. Atty. Cory Swanson asked the DCI to investigate whether she was unlawfully being paid overtime and also whether she violated an ethics statute by voting on measures involving Montana Business Assistance Connection where her husband worked. After investigating, DCI sought prosecution by the AG for felony theft and misdemeanor official misconduct.

On 7/25/16 Obert entered into a deferred prosecution agreement with Asst. AG Brant Light, who explained that he believed she had not intended to act deceptively or unlawfully by taking overtime and that neither she nor her husband had received any personal financial gain from her votes on matters involving MBAC and the alleged conflict of interest did not exist.

The Agreement required Obert to repay the County wages she was paid beyond her statutory salary, which she immediately paid, and “abstain from voting on any measures or actions where she has a conflict of interest.”

In 7/19, on Swanson’s recommendation, the Commission appointed Special Broadwater Co. Atty. Marty Lambert to pursue charges against Obert for breaching the Agreement by failing to disclose a conflict of interest when she voted on the Wheatland Targeted Economic Development District with which her husband was involved in his work with MBAC.

In 5/20 Lambert charged Obert with felony theft based on the original overpay issue and misdemeanor official misconduct based on her votes related to TEDD.

On 3/10/21 Judge Menahan dismissed the charges, ruling that the Agreement prohibited the theft charge because Obert had complied with its provisions and fully paid restitution and there was insufficient evidence to support the misconduct charge because neither Obert nor her husband gained any personal benefit from TEDD. The State did not appeal.

On 3/28/22 Obert sued the State alleging breach of contract, breach of the implied covenant, and violation of her procedural due process rights. On 8/5/22 she added prosecutorial misconduct claims against Lambert and Swanson. On 3/10/21 Judge McMahon dismissed all claims pursuant to Rule 12(b)(6). (On Lambert’s motion, the Court dismissed Obert’s case against him 9/11/23. Lambert and Obert settled her appeal of this order and we dismissed Lambert as an appellee.) Obert appeals.

McMahon erred in dismissing Obert’s contract and implied covenant claims as time-barred. He concluded that her damages accrued when the State allegedly breached the Agreement — “at the latest, on May 21, 2020.” We agree with Obert that her contract and covenant claims did not accrue until the criminal charges terminated in her favor. They were dismissed 3/10/21 and the order became final 20 days later — 3/30/21 — after the State declined to appeal. She filed her original complaint 3/28/22, less than 1 year after the dismissal became final. His order to dismiss these claims is reversed.

McMahon did not err in dismissing Obert’s bad faith claims based on his determination that she was not in a “special relationship” with the State when the Agreement was executed. She was represented in negotiating it and asserts no facts that she was “faced with no option but to sign the contract.” Warrington (Mont. 2019). She reviewed the terms, fully understood them, and voluntarily agreed to them. The parties were not in inherently unequal bargaining positions as a matter of law.

McMahon did not err in dismissing Obert’s malicious prosecution claim based on prosecutorial immunity. Allowing individuals to pursue civil actions against county attorneys for referring suspected official misconduct to the AG would run afoul of §7-4-2718 and potentially frustrate them from pursuing prosecutions in other matters. Whether Swanson “instigated” the prosecution or not, he may not be held civilly liable for performing his statutory duties. Criminal defenses and/or remedies may be available if a prosecutor’s actions are so egregious that they violate a claimant’s fundament rights.

McMahon did not err in dismissing Obert’s due process claims. The State indicted her only after it obtained leave to file an information on probable cause. The Court then held a pretrial evidentiary hearing on her motion to dismiss and granted her motion. The protection she was afforded by the Agreement was vindicated by the Court — the proper forum to determine whether either party breached. Verrusio (7th Cir. 1986).

McGrath, Rice, Baker.

Gustafson and McKinnon concurred as to Issues 1 & 4 and dissented as to Issues 2 & 3.

Sandefur concurred as to Issues 3 & 4 and dissented as to Issues 1 & 2.

Obert v. State and Swanson, DA 23-560, 11/12/24.

Kyle Nelson & Henry Tesar (Goetz, Geddes & Gardner), Bozeman, and Brian Gallik (Gallik & Bremer), Bozeman, for Obert; Patricia Klanke & Kale Guldseth (Drake Law Firm), Helena, for the State and Swanson.