Flathead District Judge David Ortley held off Tuesday issuing an immediate ruling in a case in which an insurer says it is not liable for claims made by a California real estate mogul who constructed a multimillion-dollar mansion on an island in Flathead Lake.

Attorneys spent three hours vehemently arguing the case, which has been going on since 2009. Attorneys for two entities owned by real estate businessman Donald Abbey argued that insurance company James River should be held to a previous ruling in Flathead District Court to pay $12 million in insurance coverage that resulted from construction of Abbey’s estate on Shelter Island.

The property is listed for sale as a private, 24-acre island with a 32,000-square-foot building billed as “largest private home in Montana.” It includes 7,000 feet of lakeside frontage, according to a real estate listing asking for $59.5 million for the island. The island was purchased by Abbey in 2001 under the name Abbey Land. After contracts with other contractors fell apart, Abbey formed his own construction company, Glacier Construction Partners, in 2009.

Glacier Construction Partners then entered into a $1.4 million contract with Interstate Mechanical Inc. for the design and installation of plumbing and heating-cooling systems in the home. After the cost ballooned by more than $1 million, the two companies entered arbitration in 2009 so Interstate could recover payments for its work.

In September 2009, Glacier Construction Partners and Abbey Land filed a lawsuit against Interstate Mechanical and other businesses involved in the construction project.

In September 2011, Abbey Land amended its complaint, and named its sister company Glacier Construction as a defendant; the company previously had been a plaintiff.

In 2013, Glacier Construction and Abbey Land settled between themselves. The agreement required Glacier to confess to a $12 million judgment in favor of Abbey Land and to assign to Abbey Land all its rights against various insurers, including James River.

James River claims the judgment was collusive. The Montana Supreme Court decided in March 2015 that the company should be allowed to file a motion in the case to go before Judge Ortley, who can decide whether or not the possibility of collusion should be considered.

James River has not been allowed to complete discovery in the case, but it has relied heavily on other spin-off lawsuits that resulted from construction on the island.

Robert Baldwin, attorney for James River, pointed to a case settled in federal court in Oregon involving another insurer where a magistrate wrote that: “There is no factual dispute that Glacier actively colluded with Abbey Land in the Flathead County case.”

The magistrate wrote that the collusion was “extreme.” The parties in the other lawsuit settled and the findings of the magistrate were vacated as a result, but Baldwin said he believes the findings in the case should still hold weight.

Baldwin’s legal team also wants some of the attorneys involved on the other side of the case to be disqualified because they allegedly worked together in ways that are not permitted legally and ethically.

“The defense lawyers called the plaintiff’s expert,” Baldwin said. “In most cases if that happened, someone would be here seeking sanctions ... I have never called a plaintiff’s attorney and said, ‘Yeah, you missed some things and can jack up your claim.’”

The attorneys for Abbey Land and Glacier Construction claim they did nothing improper. They cited a court case decided by former Flathead District Judge Ted O. Lympus in which attorneys from opposing sides in a lawsuit got the OK for being creative and effective by working together to come to a resolution.

Abbey Land and Glacier Construction attorneys also said that while Abbey Land and Glacier Construction are owned by the same person, the parties did not collude to reach a settlement agreement. Each is registered as its own limited liability corporation.

“LLCs are persons,” Abbey Land attorney Dave Cotner said. “LLCs are entities. LLCs are separate.”

Ortley said that he wanted to do some reading and research before he issued any ruling in the case.

“You both have raised things that I want to look at again,” Ortley said.

He wants the case to conclude before the end of December.

Reporter Megan Strickland can be reached at 758-4459 or mstrickland@dailyinterlake.com.