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STATE v ROLL

N/A

83-195

Montana

Montana Supreme Court

No. 83-195 I N THE SUPREME COURT O F THE STATE O F MONTANA 1983 THE STATE O F MONTANA, P l a i n t i f f and Respondent, -vs- MICHAEL ROLL, Defendant and Appellant. APPEAL FROM: D i s t r i c t Court o f t h e Fourteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Musselshell, The Honorable P e t e r L. Rapkoch, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Nye & Meyer; J e r r o l d L. Nye, B i l l i n g s , Montana For Respondent : Hon. Mike Greely, Attorney General, Helena, Montana John L. P r a t t , County Attorney, Roundup, Montana - Submitted on B r i e f s : August 4 , 1 9 8 3 Decided: October 1 3 , 1983 F i l e d : tjCr i 3 1983 Mr. Justice Fred J. Weber delivered the Opinion of the Court. Defendant appeals from an order of the Fourteenth Judicial District Court, Musselshell County, denying his motion to dismiss made on grounds that judge, jury and prosecutor failed to appear for trial as originally scheduled. We affirm. The only issue raised by defendant is whether the District Court erred in denying defendant's motion to dismiss. Defendant was charged on December 9, 1982 with felony theft, being accused of stealing two head of cattle. Defendant pleaded not guilty and trial was set for February 22, 1983 at 9:30 a.m. in the Musselshell County Courthouse. On January 25, 1983, defendant moved for disqualification of Judge Rodeghiero, based on a conflict of interest. Judge Rapkoch was called in from Lewistown to preside at the trial. After unsuccessful plea negotiations, defense counsel was told by the prosecutor on February 17 that they would proceed as scheduled with trial on February 22. Defendant appeared with his witness and counsel on February 22, but the clerk told them there would be no trial that day. No notice had been given to defendant or his counsel. The record does not indicate why the judge and prosecutor failed to appear for trial or why no notice was given to defendant. The District Court ordered a continuance, as shown by a February 23 minute entry resetting trial for March 28. The State explains that Judge Rapkoch continued the trial on his own motion because a trial in his home district conflicted with defendant's trial. The defendant contends that the continuance was requested by the prosecution, but there is nothing in the record to support that contention. On February 24, defendant moved for dismissal on grounds that the judge and prosecutor had failed to appear for trial as scheduled. At defendant's request, the motion was decided on the parties' briefs without a hearing. On March 21, the District Court denied the motion to dismiss. Defendant was tried and convicted by jury on March 28 and 29. He received a three-year suspended sentence and was fined $2000. Defendant appeals denial of his motion to dismiss. Defendant contends that failure of the State or judge to appear as scheduled at trial mandates dismissal of the charges against him. Defendant does not cite any direct authority for this novel argument. He argues on the basis of speedy trial cases that the State has a duty to prevent unnecessary delay and to assure that judge, jury and prosecution appear as scheduled, prepared to try the case. He concedes, however, that his right to a speedy trial was not violated. He further argues that because a continuance will not be granted to a defendant who fails to appear for trial, the State should not be allowed a continuance when it fails to appear. Defendant contends that these considerations require reversal of his conviction and dismissal of the charges. We reject this argument. A defendant's motion to dismiss criminal charges is in effect a motion requesting the court to exercise its discretion to dismiss the charges "on its own motion" and "in furtherance of justice" under section 46-13-201, MCA. State v . Cole (1977), 174 Mont. 380, 383-84, 571 P.2d 87, 89. Thus, a decision whether to dismiss is directed to the discretion of the District Court, to be exercised in view of the constitutional rights of the defendant and the interests of society. Cole, 174 Mont. at 384, 571 P.2d at 89. Defendant concedes that he received a speedy trial. He has suffered no prejudice as a result of the continuance. The trial was delayed for a period of 34 days, but that delay did not cause defendant any prejudice with respect to his defense or the State's case against him. The only ill effect of the delay was that defendant and his counsel made an unnecessary trip from Billings to Roundup. That is unfortunate, but does not warrant dismissal of the charges. The interests of society would be harmed if the charges were dismissed because of a harmless procedural technicality. Although the State may have a duty to move the case rapidly to trial, there has been no showi-ng that the State failed to do so. Defendant was tried within four months of initiation of charges against him. The scheduling conflict, which apparently necessitated the continuance, occurred because it was necessary to substitute a judge in the interest of fairness to the defendant. There is nothing in the record to show that the State asked for the continuance. Defendant's argument regarding refusal of continuances to parties who fail to appear for trial does not apply here, as there is no showing that the State moved for the continuance. The State argues that the District Court has broad discretion under section 46-13-202, MCA to grant continuances on its own motion and in the interests of justice. In ordering a continuance, the trial court must exercise its discretion to the end that criminal cases are tried with due diligence, consonant with the rights of the defendant and the State to a speedy trial. Section 46-13-202 (3) , MCA. The substantial rights of the defendant were unaffected by the granting of the continuance and defendant received a speedy trial. Further, the State argues there is no requirement that a court notify a party of a continuance. In State ex rel. Greely v. District Court (1979), 180 Mont. 317, 325, 590 P.2d 1104, 1109, this Court recommended, but did not require, that district courts decline to grant continuances ex parte in criminal cases to either party and without notice to opposing counsel, absent exigent and compelling circumstances. There is no rule that courts must give notice of continuances, although it certainly is advisable to do. Failure to give such notice does not of itself mandate dismissal. The interests of society would be unjustly harmed if the charges against defendant were dismissed because of a harmless procedural error. The District Court did not abuse its discretion in refusing to dismiss the charges. The District Court's order is affirmed. We concur:

October 13, 1983

c4166d8d-3604-40ec-bfc1-7cd73461d648

STATE v GREENWELL

N/A

83-155

Montana

Montana Supreme Court

NO. 83-155 1 1 4 T H E SUPREME COURT O F T H E STATE OF M O N T A N A 1933 STATE O F M O N T A N A , P l a i n t i f f and Appellant, -vs- HOWARD EDWARD GREETWELL, Defendant and Respondent. APPEAL FROM: D i s t r i c t Court of t h e Nineteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Lincoln, The Ifonorable Robert ? I . H o l t e r , Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Bon. Mike Greely, Attorney General, Helena, Montana William A. Douglas, County Attorney, Libby, Montana For Respondent: S c o t t B. Spencer, Libby, Montana Submitted on B r i e f s : August 4 , 1383 Decided: October 6 , 1983 F i l e d : OCT 6 - '1983 -- c l e r k Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal of a conviction of two counts of aggravated assault following a jury trial in the Nineteenth Judicial District, the Honorable Robert H. Holter presiding. The appellant was sentenced to serve a period of ten years in the Montana State Prison on each count, sentences to run concurrently. In addition, each of the sentences were enhanced by a two-year term pursuant to section 46-18-221, MCA, due to the fact that a weapon was involved in the assaults. The appellant was designated a dangerous offender . The appellant and his family attended a Libby Logger Days carnival in Libby, Montana, on July 18, 1982. Appellant drove to the carnival in a 1973 two-door Pontiac which contained several guns which he was keeping, according to his testimony, because of a recent burglary of his home. Appellant testified that earlier in the day he had gotten into an altercation with Bob Precht and Randy Martin, a/k/a "Teardrop." At the time of this altercation, the appellant apparently pulled a pocketknife on "Teardrop" and he testified that "Teardrop" tried to pull a knife first. Fortunately, a deputy sheriff was summoned and managed to stop the argument and sent the appellant home. According to the appellant's testimony, they returned to the carnival about 6:00 p.m. at the request of his children. He testified that he and his wife stayed outside the carnival grounds while the children went in. At the time the children were returning to the car, the appellant testified he had a confrontation with "Teardrop" and that "Teardrop" stated he was going to get a gun. He testified that "Teardrop" ran off when the children arrived at the car. They then got into the car and started to drive off. The appellant testified that as he was driving through the gate to the carnival, he saw "Teardrop" with a gun pointed at him, and that his daughter Eva screamed at him, "Daddy, he's got a rifle." In addition, his son Howard, Jr. said, "He's got a rifle. Let's get out of here." He testified that he jumped out of his car, pulled his rifle out and at that time, he could see "Teardrop's" gun pointed at him. He further testified that he consciously pointed the gun only at "Teardrop." Shortly thereafter, a deputy sheriff arrived and took away the appellant's rifle. The State's witnesses tell a considerably different story. Michelle Taaffe is a thirty-year-old Libby resident and a mother of one child. On the evening of July 18, 1982, she was volunteering her time selling watermelons in a Girl Scout booth at the Libby Logger Days carnival, helping to raise money for a babysitting co-op. Camilla Leckrone, another State witness, is a thirteen-year-old eighth grader who attends Libby Junior High School. Mrs. Taaffe testified that at approximtely 7:00 p.m. she was getting ready to close down the watermelon stand. The stand was located near the entrance of the fairgrounds. Camilla Leckrone was walking out of the parking lot in the vicinity of the watermelon stand and at that time she t e s t i f i e d s h e saw a s c a r e d , unarmed man running toward h e r , g o i n g t o w a r d t h e e n t r a n c e t o t h e f a i r g r o u n d s . She recognized t h e man a s a c a r n i v a l worker named Randy Martin. A t t h e same t i m e , a c a r was coming from t h e same d i r e c t i o n a s Martin had been running from, and s h e t e s t i f i e d it p u l l e d d i r e c t l y i n f r o n t of t h e watermelon s t a n d . The c a r stopped and t h e a p p e l l a n t , Howard Greenwell, pushed a r i f l e o u t of t h e window of t h e c a r . She t e s t i f i e d t h a t t h e r i f l e was p o i n t e d a t h e r . Mrs. T a a f f e f u r t h e r t e s t i f i e d t h a t Randy Martin was running through t h e e n t r a n c e of t h e f a i r g r o u n d s when t h e d e f e n d a n t g o t o u t o f t h e c a r w i t h a r i f l e . Randy Martin had n o t y e t reached a p i c k u p parked i n t h e c a r n i v a l grounds and s h e t e s t i f i e d t h a t t h e a p p e l l a n t p o i n t e d h i s gun a t her b e f o r e Randy Martin l e f t h e r l i n e of s i g h t . Testimony f u r t h e r i n d i c a t e s a s t h e a p p e l l a n t g o t o u t of t h e c a r , he r a i s e d t h e r i f l e t o h i s s h o u l d e r , looked Mrs. T a a f f e r i g h t i n t h e e y e s and t r a i n e d t h e r i f l e a t h e r . Mrs. T a a f f e t e s t i f i e d t h a t t h e r i f l e was h e l d on her f o r s e v e r a l seconds and t h a t it was l e v e l e d a t h e r t h r e e times. She t e s t i f i e d t h a t s h e was a f r a i d of being s h o t because it looked t o h e r a s though t h e a p p e l l a n t , who was v e r y c l o s e t o h e r , could s h o o t h e r and o t h e r s around h e r . She was a f r a i d of s e r i o u s b o d i l y harm. Testimony i n d i c a t e s t h a t s h e was worried a b o u t t h e c h i l d r e n around h e r and t h a t s h e f e l t s h e should g e t t h e y o u n g s t e r s i n t o a v e h i c l e backed up a g a i n s t t h e watermelon s t a n d and l e a v e t h e p l a c e . She grabbed a f r i e n d ' s l i t t l e g i r l and p u t h e r i n t h e c a r and t r i e d t o p r o t e c t a l i t t l e g i r l who was s t a n d i n g t o her l e f t . T h i s l i t t l e g i r l was Camilla Leckrone. According t o Mrs. T a a f f e , Camilla was "petrif ied" and "couldn' t move. " Camilla "was crying, her face was all red, her hands were down at her sides, and she was just shaking." At that point, Mrs. Taaffe grabbed Camilla, put her in the back of the car and went directly to the police department. Camilla testified that as she was leaving the fairgrounds she saw a dark blue car approach her. The car stopped, the defendant got out of the car, waved a gun at the people, and pointed the gun directly at her head. She testified that the appellant held the gun into his shoulders, leveled the gun at her, and told her to "get the out of here." She said the defendant's eyes were looking at her while the rifle was leveled at her and that all of this happened at a distance of about twelve feet. In addition to the testimony of these two women, Vicky Ericksmoen, a friend who was with Camilla, testified that the appellant pointed the gun in the direction of Camilla and Mrs. Taaffe. Jean Richmond, another friend who was with Camilla, testified that the appellant pointed the gun at her for three seconds when she startled him. In addition to the testimony of the women, there was testimony by the law officers who were in the area. Don Bernall, a detective for the Lincoln County sheriff's department testified that he was off-duty and driving past the Logger Day's carnival after picking up his two children. He testified he saw the appellant yelling and waving his rifle in front of the crowd of people. Bernall, fearing for the safety of his two little boys who were in the car with him, pulled his car up the road, turned it off and ran back to the appellant's location. At that point, he observed a n o t h e r L i n c o l n County deputy s h e r i f f , C l i n t G a s s e t t , who had a r r i v e d on t h e s c e n e a b o u t t h e same time and saw him g r a b t h e gun (which was p o i n t e d up i n t h e a i r ) away from t h e d e f e n d a n t , d i s a r m i n g him. The weapon was p l a c e d i n G a s s e t t ' s c a r where B e r n a l l examined it and found it t o be a B r i t i s h . 3 0 3 r i f l e , which was loaded w i t h a round i n t h e chamber, a d d i t i o n a l rounds i n t h e c l i p , and t h e s a f e t y w a s o f f . A t t h a t p o i n t , t h e a p p e l l a n t was p l a c e d under a r r e s t and charged w i t h t h r e e c o u n t s of a g g r a v a t e d a s s a u l t , A t t h e c l o s e o f t h e e v i d e n c e , t h e t r i a l c o u r t g r a n t e d t h e a p p e l l a n t ' s motion t o d i s m i s s c o u n t t h r e e , t h e a g g r a v a t e d a s s a u l t c h a r g e s i n v o l v i n g Randy Martin. The t r i a l judge d e n i e d motions t o d i s m i s s count one and two, t h o s e i n v o l v i n g Mrs. T a a f f e and C a m i l l a L e c k r o n e b e c a u s e t h e r e w a s s u f f i c i e n t evidence and t h e r e f o r e t h e m a t t e r s h o u l d go t o t h e j u r y . Two i s s u e s a r e p r e s e n t e d : 1. Is t h e r e s u f f i c i e n t s u b s t a n t i a l e v i d e n c e t o s u p p o r t t h e v e r d i c t ; and 2, Is t h e e v i d e n c e c o n s i s t e n t w i t h any t h e o r y o f innocence? The S t a t e n o t e s t h a t t h e a p p e l l a n t o f f e r s two i n c o n s i s t e n t p r o p o s i t i o n s f o r r e v e r s a l : (1) a t o t a l l a c k o f e v i d e n c e t h a t p r o v e s a c u l p a b l e mental s t a t e ; and, ( 2 ) t h e c i r c u m s t a n t i a l e v i d e n c e i s a s e q u a l l y c o n s o n a n t w i t h innocence a s w i t h g u i l t , t h e r e f o r e , mandating a n a c q u i t t a l . But s i n c e t h e a p p e l l a n t a d m i t t e d t h a t a weapon was i n v o l v e d and t h a t both v i c t i m s were a p p r e h e n s i v e o f s e r i o u s b o d i l y i n j u r y , t h e s o l e i s s u e on a p p e a l is whether t h e e v i d e n c e s u p p o r t s t h e j u r y ' s f i n d i n g s t h a t t h e a p p e l l a n t a c t e d w i t h the requisite mental state. It is the respondent's position that the appellant's intent was proven by the use of circumstantial evidence, and that the evidence relied on by the jury to convict under the facts here is susceptible of only one reasonable inter- pretation -- that the appellant knowingly or purposely caused a reasonable apprehension of serious bodily harm to the two victims. Finally, the State argues that the evidence is substantial and more than adequate to support the verdict. The statute delineates the offense: "a person commits the offense of aggravated assault if he purposely or knowingly causes reasonable apprehension of serious bodily injury in another by use of a weapon." Section This Court recently, in the case of State v. Starr (Mont. 1983), 664 P.2d 893, 40 St.Rep. 796, considered the statutory words of purposely and knowingly. We noted in that opinion: "Occasionally, this Court has referred to 'specific intent' in discussing mental states since the adoption of the 1973 Criminal Code. Parties and attorneys should not be misled. It is well to keep in mind the provisions of the Montana Criminal Code as explained by Essman, A Primer on Mental state in the ~ o n t a n a ----------- Criminal Code of 1973. 37 Mont.L.Rev. "The Montana Code used only three classifications in evaluating the defendant's mental state: purposely, knowingly, and negligently. These mental state classifications are defined in relation to four objectively measurable conditions or occurrences: conduct, circumstances, facts, and result. However, all four criteria do not apply to each mental state. 'Purposely,' which means with a conscious objective, relates to conduct or result. 'Knowingly,' defined as 'awareness,' relates to conduct, circumstances, facts or result. 'Negligently,' relates only to circumstances and result, thus two functions are performed in analyzing the statute which describes an offense. First, determining which mental state must be proved, and second, determining to which of the four conditions or occurrences the mental states relate." 664 P.2d at 897-8. In this case, whether the appellant had the requisite "specific intent" as set forth by our stautes to assault the victims is a question for the jury. The problem of proving intent was considered by this Court in State v . Gone (1978), 179 Mont. 271 at 278, 587 P.2d 1291 at 1296: ". . . criminal intent, being a state of mind, is rarely susceptible of direct or positive proof and therefore must usually be inferred from the facts testified to by witnesses and the circumstances as developed by the evidence. The question of intent is a question for the jury." State v . Pascgo (1977), 173 Mont. 121, 566 P.2d 802, 805, citing State v . Cooper (1971), 158 Mont. 102, 489 P.2d 99. Here, the State's direct evidence proved that the appellant acted with a culpable mental state, and it was not necessary to rely on circumstantial evidence. It is the appellant's position that a reasonable interpretation of the evidence given at trial, is that the appellant did not point the gun at the victims. He testified that any assault against Mrs. Taaffe and Miss Leckrone were unintentional and excusable. The other interpretation of the evidence is that the defense was not established, the assaults upon the victims were deliberate and were not excusable. Under this view, the circumstances of the assault clearly prove that the appellant acted with the requisite mental state. This interpretation established t h e a p p e l l a n t ' s g u i l t . The a p p e l l a n t a r g u e s t h a t t h e j u r y was bound t o a c c e p t t h e f i r s t view and reject t h e second, s i m p l y because t h e a p p e l l a n t would b e found i n n o c e n t under t h e former and g u i l t y under t h e l a t t e r . W e have l o n g h e l d t h a t it is up t o t h e j u r y t o r e s o l v e c o n f l i c t s of evidence. I t is a l s o up t o t h e j u r y t o g i v e some t e s t i m o n y more weight t h a n o t h e r s o r t o d i s c o u n t some t e s t i m o n y a l t o g e t h e r . On a p p e a l , w e h a v e h e l d t h a t p r e s u m p t i o n s change. T h i s Court is n o t a judge of e v i d e n c e , t h e j u r y is. The e v i d e n c e is weighed on a p p e a l i n a l i g h t most f a v o r a b l e t o t h e S t a t e , and a p p l i c a t i o n of t h e r u l e t o c i r c u m s t a n t i a l e v i d e n c e d o e s n o t change t h a t mandate. Our s t a n d a r d of review on c r i m i n a l c a s e on a p p e a l is w e l l e s t a b l i s h e d . The e v i d e n c e is examined t o d e t e r m i n e i f t h e v e r d i c t is s u p p o r t e d by s u b s t a n t i a l e v i d e n c e . See, S t a t e v. Merseal ( 1 9 7 5 ) , 167 Mont. 412 a t 415, 538 P.2d 1366 a t 1368; Pascgo, 173 Mont. a t 125, 566 P.2d a t 805. I n S t a t e v. F i t z p a t r i c k ( 1 9 7 3 ) , 163 Mont. 220 a t 226, 516 P.2d 605 a t 609, we n o t e d t h a t t h i s C o u r t w i l l n o t a c t a s a t r i e r of f a c t s . I f t h e r e is s u b s t a n t i a l e v i d e n c e t o s u p p o r t a v e r d i c t , it w i l l s t a n d . A c a r e f u l and thorough c o n s i d e r a t i o n of t h e r e c o r d c o n v i n c e s u s t h a t t h e r e is more t h a n s u f f i c i e n t e v i d e n c e t o s u p p o r t t h e v e r d i c t of t h e j u r y and t h e judgment e n t e r e d t h e r e o n . The judgment of t h e District C o u r t is a f f i r m e d . W e concur: Chief Justice -

October 6, 1983

15278649-d093-4cf3-bb32-5b781031bcfc

GALLATIN VALLEY MEDICAL DENTAL CEN

N/A

83-168

Montana

Montana Supreme Court

No. 83-168 I N T H E SUPREJ!!lE C O U R T O F TEE STATE O F M O N T A N A 1983 GALLATIN VALLEY MEDICAL DENTAL CENTER, I N C . , a Mont. Corp., P l a i n t i f f and Respondent, -vs- MICHAEL J. LEMLEY, Defendant and Appellant. APPEAL FROM: District Court of t h e Eighteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of G a l l a t i n , The Honorable Joseph E. Gary, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Joseph E. Mudd, Bridger, Montana For Res2ondent: Douglas R. Drysdale, Bozeman, Plontana Submitted on B r i e f s : J u l y 2 1 , 1983 Decided: October 6 , 1983 - . . - - Clerk Mr. Justice L.C. Gulbrandson delivered the Opinion of the Court. Defendant, Michael J. Lemley, appeals from a judgment of the Eighteenth Judicial District Court awarding plaintiff, Gallatin Valley Medical-Dental Center, Inc. $4,340.25 in rent. We affirm. The parties entered into a five year lease for a space in a building known as Gallatin Valley Medical-Dental Center in Bozeman, Montana. Appellant agreed to pay a total of $11,571 during the first two years of the lease in equal installments of $482.25 per month commencing on July 1, 1979. By the terms of the lease, the premises was to be used as a pharmacy and could not be sublet without the written consent of the respondent. In August, 1979, without any notice to respondent, appellant sold his pharmacy business to Donald A. and Hazel Angle. The Angles added their signatures to the original lease and paid the respondent rent until September 1, 1980 when they vacated and abandoned the premises. On September 24, 1980 the respondent wrote a letter to appellant advising him that he was in default and the lease was terminated, but that all rights and remedies contained in the lease were reserved. The respondent eventually relet the premises on July 1, 1981 for $300 per month. Respondent commenced this action on June 12, 1981 claiming appellant owed him $4,340.25 in lost rent. The complaint alleged that appellant had violated the terms of the lease by not paying $482.25 per month from October 1, 1980 to the date of the complaint. In his answer, appellant admitted owing the respondent $4,340.. 25 but asserted he had been released from his obligations under the lease because respondent had terminated the lease and accepted rent from the Angles. The District Court held that respondent's letter of September 24, 1980 did not terminate appellant's liability and appellant owed respondent $4,340.25 pursuant to the terms of the lease. Appellant now contends the District Court erred in awarding respondent the lost rent. Specifically, appellant asserts that respondent's letter of September 24, 1980, read in conjunction with the lease, indicates that any liability for rent was terminated by the language of the letter. Moreover, appellant asserts that the lease must be construed against the respondent because Section 28-3-206, MCA provides that an ambiguous contract must be interpreted most strongly against the party who caused the uncertainty to exsist. We affirm the judgment of the District Court. Initially, we note that the record does not indicate that respondent prepared the lease. Thus, the agreement cannot be construed against respondent pursuant to Section 28-3-206, MCA. In this dispute, the applicable portion of the lease is section 7, which, in pertinent part, provides: "If the leased property shall be deserted or vacated,. . . "or there shall be a default in the payment of any rent or any part thereof, for more than fifteen (15) days . . . " after written notice of such default by the Landlord, Tenant's rights in this lease . . . " shall thereupon terminate and end, and the Landlord shall have the right to enter or reposses the leased property . . "Landlord may likewise . . . "and in addition to any other remedies which Landlord may have upon default, let and re-let said premises in whole or in part . . . "and Tenant shall be liable unto Landlord for any deficiency between the remaining upaid rental and the rental so procured by the Landlord for the period of said letting or re-letting and shall further be liable for costs of re-letting . . . "and Landlord may institute action for the whole of such deficiency immediately upon effecting a letting or re-letting and shall not thereafter be precluded from further like action in the event that such letting or re-letting shall not embrace the whole unexpired portion of the term hereof. . . "If the Landlord shall give the notice of termination as herein provided, then at the expiration of such period, this Lease shall terminate as completely as that were the date herein definitely fixed for the expiration of the term of this lease, and Tenant shall then surrender the leased property to Landlord. . . "the notice hereinbefore provided is only for the purpose of creating conditional limitation hereunder pursuant to which this lease shall terminate." The appellant argues that respondent's letter of September 24, 1980 triggered that portion of section 7 which provides: "If the Landlord shall give the notice of termination as herein provided, then at the expiration of such period, this Lease shall terminate as completely as that were the date herein definitely fixed for the expiration of the terms of this lease. . ." In making this argument, appellant points to the fifth paragraph of the letter of September 24, 1980 which states, "Therefore, the Landlord d o e s elect w i t h o u t f u r t h e r n o t i c e t o t e r m i n a t e t h e l e a s e b e a r i n g t h e d a t e of J u n e 22, 1979, and r e f e r r e d t o above, r e s e r v i n g t o i t s e l f a l l o t h e r r i g h t s and remedies c o n t a i n e d i n t h e s a i d lease i n t h e e v e n t of d e f a u l t . " Thus, a p p e l l a n t a s s e r t s t h e o b l i g a t i o n t o pay r e n t was t e r m i n a t e d by t h e l e t t e r . The l e t t e r o f S e p t e m b e r 2 4 , 1 9 8 0 , t a k e n i n i t s e n t i r e t y , d i d n o t end a p p e l l a n t ' s o b l i g a t i o n t o pay r e n t . The r e s p o n d e n t ' s l e t t e r d i d t e r m i n a t e t h e l e a s e s o f a r a s a p p e l l a n t ' s r i g h t s were concerned, b u t t h e r e m e d i a l o p t i o n s of t h e l e a s e were r e s e r v e d . The p o r t i o n of t h e l e t t e r a p p e l l a n t r e l i e s upon c l e a r l y s t a t e s t h a t a l t h o u g h a p p e l l a n t ' s lease was b e i n g t e r m i n a t e d , r e s p o n d e n t was " r e s e r v i n g t o i t s e l f a l l o t h e r r i g h t s and remedies c o n t a i n e d i n t h e s a i d l e a s e i n t h e e v e n t o f d e f a u l t . " T h i s is a c l e a r i n d i c a t i o n t h a t p r o v i s i o n s of t h e l e a s e , i n c l u d i n g t h e r i g h t t o c o l l e c t l o s t r e n t , were being r e s e r v e d . I n a d d i t i o n , it s h o u l d have been e v i d e n t t o t h e a p p e l l a n t t h a t t h e l e t t e r of S e p t e m b e r 2 4 , 1980 was n o t s o l e l y a t e r m i n a t i o n o f a p p e l l a n t ' s r i g h t s under t h e l e a s e . The t h i r d p a r a g r a p h of t h e l e t t e r s t a t e s : " T h i s is i n t e n d e d a s t h e s p e c i f i c f i f t e e n - d a y n o t i c e of d e f a u l t and non-payment c a l l e d f o r i n your l e a s e " (emphasis a d d e d ) . Thus, t h e language o f t h e l e t t e r e x p r e s s l y i n d i c a t e d t h a t because a p p e l l a n t was i n d e f a u l t , r e s p o n d e n t was t e r m i n a t i n g h i s r i g h t s and r e s e r v i n g remedies under t h e l e a s e . S e c t i o n 7 o f t h e lease p r o v i d e s t h a t i n t h e e v e n t o f d e f a u l t ". . . T e n a n t ' s r i g h t s i n t h i s l e a s e ( i f t h e Landlord s o e l e c t s a n d s u c h e l e c t i o n i s r e s e r v e d ) . . . s h a l l thereupon t e r m i n a t e and end, and t h e Landlord s h a l l have t h e right to enter or repossess the leased property. . . " The lease further provides, "Landlord may. . . at Landlord's option, and in addition to any other remedies which Landlord may have upon default, let and relet said premises. . . and the Tenant shall be liable unto Landlord for any deficiency between the remaining unpaid rentals and the rentals so procured. . . " Thus, the respondent had the right to terminate appellant's rights in the lease, in order to let or relet, and still hold the appellant liable for rent. Finally, appellant argues that respondent's remedies were exclusive, i.e., respondent could not terminate appellant's rights in the lease and relet the premises. This assertion is not what appellant agreed to when he entered into the lease. As previously discussed, the language of the lease states that in the event of default appellant's rights were terminated and respondent could repossess and relet the premises. In sum, we find no reversible error and therefore af f irm. We concur:

October 6, 1983

2fda9a64-c9c4-4e3e-9b6c-1b23338d124a

STATE v HENRICKS

N/A

83-239

Montana

Montana Supreme Court

No. 83-239 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 STATE OF MOIJTANA, Plaintiff and Respondent, -vs- GARRY HENRICKS, Defendant and Appellant. APPEAL FROM: District Court of the Second Judicial District, In and for the County of Silver Bow, The Honorable Mark P. Sullivan, Judge presiding. COUNSEL OF RECORD: For Appellant: Garry Henricks, pro se, Billings, Montana For Respondent: Eon. Mike Greely, Attorney General, Helena, Montana Robert McCarthy, County Attorney, Butte, Montana Submitted on Briefs: August 18, 1983 Decided: November 10, 1983 - - Clerk Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Petitioner Garry Henricks appeals an order of the District Court of the Second Judicial District of the State of Montana, County of Silver BOW, dismissing plaintiff's petition for post-conviction relief. We affirm. During the late evening hours of September 12, 1981, Richard Graham was struck and killed while crossing a street in Butte, Montana. Graham was struck by the Henricks automo- bile in a hit-and-run accident. Both Garry and his wife Lorraine were in the automobile at the time of the accident, and both had been drinking heavily throughout the afternoon and evening. Following the hit-and-run, Garry and Lorraine decided to abandon the car and report it stolen because they had both been drinking heavily and did not have insurance. The Henricks car was located by the police on September 13, 1981. On October 10, 1981, Lorraine gave a statement in which she claimed that she was the driver of the vehicle which struck and killed Graham. Upon completion of her statement, she was arrested and charged with the crime of negligent homicide. On October 16, 1981, Lorraine gave a second statement in which she recanted her previous confes- sion and in which she claimed that her husband Garry was actually driving at the time of the accident. The allega- tions contained in Lorraine Is second statement were investi- gated and on November 5, 1981, she was released from jail. On the same day, November 5, 1981, Garry was arrested and charged with the crime of negligent homicide. Henricks made an initial appearance in justice court on November 5, 1981, at which time he was advised of his rights, including his right to be represented by counsel. Henricks's initial appearance continued on November 6, 1 . 9 8 1, during which time Brad Belke, public defender for Butte-Silver Bow County, sat in on the proceedings. A preliminary examination was scheduled for November 10, 1981, but instead the District Court granted the State Leave to file an information pursuant to section 46-11-201, MCA. Henricks was arraigned in District Court on November 23, 1981, at which time he was represented by his retained counsel, Gregory R. Todd. A plea of not guilty was then entered and trial was set for January 18, 1982. Henricks was represented by counsel at all stages in the proceedings except his initial appearance. On Januarv 4, 1982, Henricks signed and filed a consent to substitution of counsel, replacing Gregory R. Todd with attorney John G. Winston. Winston had been serving as county a.ttorney for Silver Bow County on a part-time basis until his termination on November 13, 1981. At the time of the hit- and-run, Winston was assigned only juvenile and police court cases for the county attorney's office. On January 4, 1982, Winston filed a motion to continue and waiver of right to a speedy trial. Henricks signed the motion, which included the following paragraphs: "That defendant has been notified by his attorney, that John G. Winston was the County Attorney for Butte-Silver Bow for six (6) years and was working on a part time basis handling Juvenile and Police Court cases, for the County Attorney's office when this accident occurred. "V. "That the defendant does not view the facts stated in Paragraph IV (above), as being detrimental to his case because he has been informed that John G. Winston was not being assigned to felony cases and was doing only Juvenile and Nisde- meanor cases as stated above." Based upon the above facts, Henricks presents essen- tially three issues for review: 1. Did Henricks receive effective assistance of counsel? 2. Was it a conflict of interest for attorney Winston to represent Henricks a.nd for attorney Belke to sit in d.uring Henricks's initial appearance? 3. Was Henricks prejudiced by inaccuracies in the presentence investigation report? Before beginning our discussion of the issues present- ed, we note that Henricks is appearing pro - se in this appeal of the denial. of his petition for post-conviction relief. Since Henricks has elected to a.ct in this capacity, we find that he will be held to the same standards as a.ny appellate attorney in a matter such as this. Secondly, as we noted recently in Fitzpatrick v. State (Mont. 1 9 8 3 ) , P.2d , 40 St.Rep. 1598, we observe that all of the issues presented here could have been brought at the time of Henricks's original appeal of his conviction. While we may consider these issues at this time, we will also take into consideration the fact that these issues, if valid., could and should have been raised at the time of appeal of the conviction. It is clea.rly an abuse of the post-convic- tion relief statute to raise or manufacture issues long after the proper time for presentation of such issues. With the above two factors in mind, we now proceed to the discussj.on of the issues presented. Did Henricks receive effective assistance of counsel? Henricks presents us with a list of twenty-eight charg- es which he alleges are evidence of "per se" ineffective - assistance of counsel. Most of these charges are frivolous and vague and are not supported by evidence in the record. Of the twenty-eight charges listed, the following might be of merit if supported by the record: (1) failure by Winston to invoke the spousal privilege set forth in section 46-16-212, MCA; (2) failure by Winston to interview a witness and call certain other witnesses; (3) failure by Winston in not being present during the present.ence investigation report interview; and, (4) fa.ilure by Winston to object to alleged prosecuto- ria.1 misconduct. As to the charge of failure by Winston to invoke the spousal privilege, Henricks has clearly waived his right to question that trial tactic at this time. When Lorraine Henricks was called to testify, the court interrupted the direct examination and asked.: "The Court: For the record now I would like Mr. Henricks to advise the Court whether he is consenting to Mrs. Henricks testifying. "Mr. Henricks: Yes, I do." We also note that Henricks signed an affidavit stating that the spousal privilege ha.d been explained to him. While this affidavit alone perhaps would not suffice, we find that the affidavit in conjunction with Henricks's response in court clearly constitutes waiver. Consequently, Yenricks cannot now claim failure to invoke the spousal privilege as evidence of ineffective assistance of counsel. Even if the affida.vit and testimony did not constitute waiver, Henricks has failed to show prejudice. Four other witnesses gave testimony from which the jury could infer Henricks was driving at the time of the hit-and-run. State v. Henricks (Mont. 1982), 653 P.2d 479, 481, 39 St.Rep. 2022, 2024. (2) The second issue to be discussed is the failure by Winston to interview a witness and call- certain other wit- nesses. Henricks claims that Winston's failure to interview Dr. Mark Borke, an emerqency room physician who examined Henricks and his wife following the accident, constituted ineffective assistance of counsel. As in the other allega- tions, Henricks again fails to allege how this prejudiced him. It is also abundantly clear from the transcript that Dr. Borke's lack of experience, training and knowledge was clearly brought out by defense attorney Winston on cross-examination. Henricks also states that certain named witnesses should have been called. However, he fails to state the signif icance of these witnesses, i. e. , what they would have said, how their testimony would have assisted in his defense, and how he was prejudiced by Winston's failure to call them. There is also no evidence to show Henricks wanted these witnesses called during trial and that he informed Winston of of this. ( 3 ) The third allegation to be discussed is the failure by Winston in not being present during the presentence investigation report interview. Again, Henricks cites no authority for alleging this to be an act of ineffective assistance of counsel and again fails to show how he was prejudiced by Winston's absence. The State cites Baumann v. United States (9th Cir. 1982), 692 F.2d 565, as follows: "We hold that a routine presentence interview of an individual convicted of a noncapital federal offense is not, . . . a critical stage of the proceeding in which counsel's presence, or advice, is necessary to protect the defendant's right to a fair trial." Baumann, 692 F.2d at 578. We find no compel- ling reason to hold otherwise under these circumstances. (4) The fourth allegation to be discussed is the fail- ure by Winston to object to alleged prosecutorial misconduct. This omission which Henricks alleges constitutes ineffective assistance of counsel relates to Winston's failure to object to the prosecutor giving a defense witness his Miranda warn- ings while the witness was on the stand preparing to testifv. Initially, Henricks cites no authority to support this alle- gation of failure to object as evidence of ineffective assis- tance. Nor does he cite anv authority in his original brief stating that such an act is prosecutorial misconduct. In his reply brief, Henricks again attempts to address this issue but cites cases which are not on point. We note that Henricks, in making the diverse allega- tions, has failed to show how these allegations, even if true, resulted in prejudice to him and stemmed from neglect or ignorance rather than from informed, professional deliber- ation. We stated this requirement in State v. Morigeau (Mont. 1982), 656 P.2d 185, 189, 39 St.Rep. 2311, 2317, and find that Henricks has failed to meet this burden. As we stated in State v. LaValley (Mont. 1983), 661 P.2d 869, 872, 40 St.Rep. 527, 530, "[hlistorically, in Monta.na and else- where, the burden has been heavy on one who seeks to reverse a judgment on the grounds of incompetency of counsel. " In LaValley, the issue of heffective assistance of counsel was properly raised on direct appeal of the convi.ction of delib- erate homicide and aggravated kidnapping. If the burden is heavy when the issue is raised on direct appeal, it follows that the burden on petitioner must be even heavier when the issue is raised, apparently as an afterthought, only after petitioner's conviction has been upheld on appeal. As we stated in Fitzpatrick, it is not the purpose of the post-con- viction relief statute to provide successive opportunities for access to the appellate court simply because petitioner is not pleased with his conviction or has failed on direct appeal. The post-conviction relief statute requires peti- tioner to meet a two-part test, which test Henricks has failed to meet. Fitzpatrick, 40 St.Rep. at 1600. In State v. Rose (Mont. 1980), 608 P.2d 1074, 37 St. Rep. 642, this Court adopted. the "reasonably effective assistance test" as stated by the Ninth Circuit Court of Appeals in Cooper v. Fitzharris (9th Cir. 1978), 586 F.2d 1325: "Persons accused of crime are entitled to the effec- tive assistance of counsel acting within the range of compe- tence demanded of attorneys in criminal cases." State v. Rose, 608 P.2d at 1081. As we stated in LaVal-ley, "In evalu- ating defense counsel's representation, it is not our func- tion to second-guess trial tactics and the strategv." LaValley, 661 P.2d at 872. We also noted that "reasonably effective counsel does not mean that the defendant is consti- tutionally guaranteed such assistance of counsel as will necessarily result in his acquittal." Lavalley, supra. "Success is not the test of efficient counsel, frequently neither vigor, zeal, nor skill can overcome the truth." State v. Rose, 608 P.2d at 1082, quoting State v. Forsness (1972), 159 Mont. 105, 110, 495 P.2d 176, 178-179. The second major issue raised by Henricks is whether it wa.s a conflict of interest for Winston to represent Henricks and for attorney Belke to sit in during Henricks's intitial appearance. We note that Winston was hired by Henricks a.nd not appointed by the court. We also note that the motion to continue, quoted above, a.nd signed by Henricks, clearly informed Henricks of Winston's prior association with the county attorney's office. Despite this fact, Henricks re- tained Winston as his defense counsel. Under these specific circumstances, Henricks, by his acts, waived his right to assert any conflict of interest charge against Winston based on Winston's prior employment. Henricks also asserts that it was a conflict of inter- est for Belke to sit in on Henricks's initial hearing. At the time of the hearing, Belke was a public defender repre- senting Henricks's wife Lorraine. Belke sat in on the hear- ing at the request of the justice of the peace. We have stated the rule on representation at initial hearings as follows : "The United States Constitution requires the appointment of counsel for indigent defendants at all critical stages of the prosecution. . . The initial appearance is not a 'critical stage' of the prosecu- tion in Montana. There was no potential for substantial prejudice to the defen- dant's rights. The defendant was merely made aware of the charges against him and informed of his constitutional rights. We therefore hold that the defendant's right to effective assistance of counsel was not violated." State v. Dieziger (Mont. 1982), 650 P.2d 800, 802, 39 St.Rep. 1734, 1736. The State argues that since Henricks was not constitu- tionally entitled to an attorney at his initial hearing, he cannot now claim prejudice because his wife's attorney sat in on the proceedings. We find the State's argument persuasive and hold. accordingly. 111. The third major issue raised by Henricks alleges preju- dice due to inaccuracies in the presentence investigation report. It was pointed out to the court at the sentencing hearing that there was an error regarding a DUI charge listed on November 4, 1980. The court recognized that the date was incorrect. Henricks also claims that charges entered clearly on the report as having been dismissed should not have been included. This contention is contrary to law in this state and therefore without merit. State v. Baldwin (Mont. 1981) , 629 P.2d 222, 224, 38 St.Rep. 882, 884. Henricks also states that a juvenile charge should not have been included in the presentence report. We have held it permissible to allow juvenile records as part of the presentence investigation report at a sentencing hearing. State v. Radi (Mont. 1979), 604 P.2d 318, 321, 36 St.Rep. 2345, 2348. In conclusion, we find Henricks's allegations not only untimely but also without merit. Consequently, we affirm the order of the District Court dismissing Henricks's petition for post-conviction relief. %-k4 Chief Justice t-%Mcv.e-p~ We concur:

November 10, 1983

67adad90-9173-4622-81ce-7e6e3690b171

State v. Fitzpatrick

427 P.2d 300

11258

Montana

Montana Supreme Court

427 P.2d 300 (1967) The STATE of Montana, Plaintiff and Respondent, v. Bernard FITZPATRICK, Defendant and Appellant. No. 11258. Supreme Court of Montana. Submitted April 12, 1967. Decided May 4, 1967. Howard C. Foreman (argued), Billings, for appellant. *301 John L. Adams, Jr., County Atty. (appeared), Billings, William A. McCormick, Asst. Atty. Gen (argued), Honorable Forrest H. Anderson, Atty. Gen., Helena, for respondent. JOHN C. HARRISON, Justice. This is an appeal from the judgment and the court's denial of a motion for new trial in the thirteenth judicial district, Yellowstone County, Judge C.B. Sande presiding. Appellant Bernard Fitzpatrick was charged and found guilty of an assault against Leroy Gash with a Waffenfabrik Mauser .32 Automatic. Fitzpatrick's wife, Donna Mae, was previously married to Gash, and there were two children by the prior marriage. Fitzpatrick, in explaining why he was carrying a gun, testified that on the evening of the alleged assault he had gone home to get the gun to make a loan on it. He left home with the gun about 7:00 p.m. He had been drinking downtown earlier in the day. About 10:15 p.m. Fitzpatrick went to the Montana Bar, where he met Gash whose wife had just had a son. The new father gave Fitzpatrick a cigar; Fitzpatrick bought Gash a beer. They left the bar to sit at a table. They had an apparently friendly conversation concerning Gash's children by the former marriage, and conversation was continued in the restroom of the bar. In the restroom Fitzpatrick showed Gash his gun which had been concealed in his waistband, and when Gash asked to see the gun he ejected the cartridges on the floor. Appellant said "don't do that" and reloaded the gun, fired the gun into the wall and then put the pistol in the waste basket. The bartender aroused by the noise came to the door and was told by Gash the noise was probably a firecracker. The discussion about the children was continued with Fitzpatrick apparently trying to get Gash to come out and see the children of Gash's first marriage. At this point of this rather bizarre situation Fitzpatrick said "Maybe you will understand this," and thereupon shot Gash seven times in the upper part of the left leg. Gash in an effort to save a leg or his life attempted to take the pistol from Fitzpatrick, but Fitzpatrick raised the gun, swung on Gash, using the gun as a club. At this point Gash abandoned his pacification efforts on Fitzpatrick and left to get medical attention. When Fitzpatrick was arrested at his home later, he was unconscious (or drunk) on his bed. Fitzpatrick testified that he remembered nothing after entering the restroom and that it was his opinion considering his medical history that drinking caused him dizzy spells and blackouts. The first specification of error is that the district court judge refused to give the following instruction: "You are instructed that in every crime or public offense there must exist a union or joint operation of act and intent, or criminal negligence." This is a restatement of section 94-117, R.C.M. 1947. The portion of the assault statute (section 94-602) which is to be read with the foregoing statute says: "Every person who, under circumstances not amounting to the offense specified in the last section: * * * "4. Willfully and wrongfully assaults another by the use of a weapon, or other instrument or thing likely to produce grievous bodily harm * * * is guilty of an assault in the second degree * * *." Mr. Justice Castles writing in State v. Straight, 136 Mont. 255, 262, 263, 347 P.2d 482, 487, said: "Specific intent needs to be proved in second degree assault charges only under subdivisions 1, 2 and 5 of section 94-605, because in those instances the statute demands it." Later on page 270, 347 P.2d on page 491 he said, "As we have heretofore mentioned, subdivisions 3 and 4 of section 94-605, do not specifically require intent in order to constitute an assault. * * * Under the above assault sections the prosecution is only required to prove that the assault was committed wilfully, wrongfully, and unlawfully." As Mr. Justice Castles inferred, a general non-statutory intent to do a harm wilfully, wrongfully, and unlawfully is an element under section 94-602(4), but a specific statutory intent to do any particular kind or degree of injury to the victim is *302 not an element under this subsection. Burke v. United States, 9 Cir., 282 F.2d 763, 92 A.L.R.2d 628. Criminal negligence has been found to be an element of assault with a deadly weapon in some jurisdictions. 92 A.L.R.2d 650. However, criminal negligence has never been found to be an element of assault in Montana under section 94-602(4). In this case we find that the giving of section 94-117 in its entirety would have hindered rather than helped the deliberations of the jury. We find that the following portion of given instruction 13 covered the problem: "You are instructed that in every crime or public offense there must exist a union or joint operation of act and intent." Appellant also specifies as error a failure to give the following instruction: "You are instructed that in order to convict the defendant of the crime of assault in the second degree you must find beyond a reasonable doubt that he committed the act willfully, wrongfully, and unlawfully." Though not in exactly the same words, the given instruction 1-8 adequately covered the material in the proposed instruction concerning the wrongfulness, and unlawfulness, and concerning a finding beyond a reasonable doubt. The trial court did not err in refusing to give the proposed instruction. As the third error, appellant's counsel specified the failuse of the district judge upon motion of appellant's counsel to exclude police officers who were called as witnesses for the respondent. Counsel cites section 93-1901-2 which states: "Witnesses not under examination may be excluded. If either party requires it, the judge may exclude from the courtroom any witness of the adverse party, not at the time under examination, so that he may not hear the testimony of other witnesses." In State v. Walsh, 72 Mont. 110, 232 P. 194, 196, the court held that two members of the sheriff's force, who were witnesses, were exempt from the exclusion rule. This principle was supported in State v. McLeod, 131 Mont. 478, 311 P.2d 400, 409. Appellant also specified as error the failure to give any one of three almost identical instructions concerning misfortune or accident in this case. It is the understatement of the year to say that shooting a person seven times was an accident or misfortune. Particularly in view of appellant's statement, "maybe you will understand this." The motion for new trial is without merit. The conviction in the lower court is affirmed, and in view of appellant being out on bond pending this appeal and his propensity for "accident or misfortune" it is ordered that remittitur issue forthwith. MR. CHIEF JUSTICE JAMES T. HARRISON and MR. JUSTICES DOYLE, ADAIR and CASTLES concur.

May 4, 1967

9b26ca65-96ba-4aee-afc9-dff991a02736

FITZPATRICK v STATE

N/A

82-476

Montana

Montana Supreme Court

I N T H E SUPRMEE COURT O F T H E STATE O F MONTANA 1983 B E R N A R D JAMES FITZPATRICK, P e t i t i o n e r and Appellant, STATE O F M O N T A N A , Respondent and Respondent. APPEAL FROM: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Big EIorn, The Honorable Charles Luedke, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Stephens & Cole; Robert L. Stephens, Jr. argued, B i l l i n g s , Montana Timothy K. Ford, S e a t t l e , Washington For Respondent: Hon. Mike Greely, Attorney General, Helena, Montana John Maynard, A s s t . Atty. General, argued, Helena James Seykora, County Attorney, argued, Hardin, Montana Submitted: June 2 , 1983 Decided: October 6, 1983 Filed: fJ(3T 6 - 1983 - Clerk Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Petitioner, Bernard J. Fitzpatrick, appeals an order of the District Court of the Thirteenth Judicial District of the State of Montana dismissing petitioner's amended peti- tion for post-conviction relief. In October 1975, petitioner Bernard J. Fitzpatrick and four others, Gary Radi, Travis Holliday, Paul Bad Horse and Edwin Bushman were tried by a jury on the charges of deli- berate homicide, aggravated kidnapping, and robbery of Monte Dyckman, a Hardin Safeway supermarket clerk. Petitioner was found guilty on all counts and was sentenced to death. On appeal, this Court reversed the convictions of all the defendants and on October 19, 1977, remanded the cases for separate retrials. State v . Fitzpatrick (1977), 174 Mont. 174, 569 P.2d 383. The question of effective assistance of counsel was an issue on this first appeal. Fitzpatrick, 569 P.2d at 389. On November 29, 1977, attorney John L . Adams, Jr., was appointed by the District Court to represent petitioner at his retrial. In December 1977, both the State and peti- tioner filed motions asking the District Court to appoint counsel. other than Adams, who had represented codefendant Paul Bad Horse in the first trial, or to have a hearing to see if Fitzpatrick was satisfied with Adams as counsel. Petitioner's motions were filed pro se. A hearing was held on January 16, 1978, at which time Fitzpatrick withdrew his request, stating that he wished to keep Adams as his counsel. At his second trial in 1978, Fitzpatrick was again convicted of deliberate homicide, aggravated kidnapping, and robbery. He was agaln sentenced to death. During that second trial, his sentencing hearing and the subsequent appeal, he was represented by John L. Adams, Jr. This Court, after hearing oral argument on two separate occa- sions, affirmed his conviction. The United States Supreme Court twice denied certiorari. Fitzpatrick v. Montana (1980), 449 U.S. 891, and Fitzpatrick v . Sentence Review Division (1980), 449 U.S. 891. Fitzpatrick then filed a petition for post-conviction relief in Big Horn County. The District Court dismissed all claims in that petition but reserved ruling on his claim No. 8(c), which charged ineffective assistance of counsel. The District Court denied petitioner's motion for reconsidera- tion or amendment. Fitzpatrick then appealed the denial of the petition for post-conviction relief. This Court affirmed dismissal of the other claims and remanded the cause to the District Court for an evidentiary hearing solely on the issue of ineffective assistance of counsel. Fitzpatrick v. State (1981), Mont. , 638 P.2d 1002, 38 St.Rep. 1448. A five-day hearing was held in April 1982. On September 1, 1982, the District Court issued an order and memorandum dismissing that claim. Fitzpatrick now appeals. Post-Conviction Relief: Because the post-conviction procedure is a civil remedy, the failure to present claims in earlier proceedings wlll not bar them from presentation at this time. Neverthe- less, the fact that an issue is not raised at a pretrial hearing, during trial or on direct appeal will be considered by this Court as an element bearing on the merits of that particular claim. The language of t h e s t a t u t e providing f o r post- conviction relief is clear. Section 46-21-101, MCA. Circum- stances i n which v a l i d i t y of a sentence may be challenged, presents a two-part t e s t which a petitioner must meet i n order t o qualify for such r e l i e f . The s t a t u t e reads: "A person adjudged g u i l t y of an offense i n a court of record who has no adequate remedy of appeal - and who claims t h a t sentence was imposed i n violation of the constitution or the laws of t h i s s t a t e or the constitution of the United States, that the court was without jurisdiction t o impose t h e sentence, or t h a t t h e sentence was i n excess of the maximum authorized by law or is otherwise subject to c o l l a t e r a l attack upon any ground of alleged error available under a writ of habeas corpus, writ of coram nobis, or other common law or statutory remedy may p e t i t i o n the c o u r t which imposed t h e sentence or the supreme court t o vacate, s e t a s i d e , or c o r r e c t t h e sentence." (Emphasis added.) The f i r s t element of the t e s t which a petitioner m u s t s a t i s f y is that petitioner be "adjudged g u i l t y of an offense in a court of record who h a s no adequate remedy of appeal . . . I' T h i s phrase does not mean t h a t a petitioner may avail him or herself of the appellate review process, and, when the r e s u l t s are unfavorable, u t i l i z e the post-convic- tion review procedure t o , i n e f f e c t , f i l e numerous and successive "appeals." The language of the s t a t u t e for p a r t one of the t e s t clearly intends t h i s form of r e l i e f t o be available to convicted persons who have not had t h e i r sentences reviewed by the appellate court. It is c l e a r l y an abuse of the r e l i e f procedure to withhold issues which could and should have properly been raised on appeal, or t o manufacture issues years l a t e r , i n an attempt to manipulate and obstruct the criminal justice process. Such abuse of the s t a t u t e is particularly apparent in this case where the petitioner has had such extensive experience in the criminal justice system. Clearly, the statute was intended to prevent the miscarriage of justice, not to provide an opportunity to manipulate and obstruct justice. As the United States Supreme Court so succinctly stated in a recent opinion, "when the process of direct review . . . comes to an end, a presumption of finality and legality attaches to the conviction and sentence." Barefoot v. Estelle (1983), U.S. - 1 - S.Ct. - 1 - L.Ed.2d , 51 L.W. 5189 (No. 82-6080, decided July 6, 1983). The Court further quoted from Lambert v. W d (1895), 159 U.S. 660, as follows: "It is natural that counsel for the condemned in a capital case should lay hold of every ground which, in their judgment, might tend to the advantage of their client, but the administration of justice ought not to be interfered with on mere pretexts." We agree. And we cannot further allow the abuse of the post-conviction relief statute to obstruct the course of justice. aCEfZQr The sole issue in this ! $ e z z is whether petitioner was denied effective assistance of counsel during his retrial on the charges of deliberate homicide, aggravated kidnapping and robbery. Petitioner's amended petition alleges ineffective assistance of counsel in numerous particulars. We will discuss these allegations item by item. Petitioner alleged that Adams did not consult with petitioner regarding his case until January 7, 1978, and did not have time to adequately prepare the case. In December, 1977, petitioner asked that other counsel be appointed to represent him because he felt that John L. Hon. Frank I. H a s w e l l Chief J u s t i c e , Supreme C o u r t Room 414 J u s t i c e B u i l d i n g 215 North S a n d e r s Helena, Montana 59620 CORRECTION. In preparing this opinion for pub- lication, we noted in our verification o f titles and citations the matters listed below. Corrections have been made on our copy o f the opinion. Date: November 7 , 1983 Re: F i t z p a t r i c k v. S t a t e , N o . 82-476, O c t . 6 , 1983 Page 5 , l i n e 1 1 -- Lambert v. Jackson s h o u l d read Lambert v. B a r r e t t . WEST PUBLISHING COMPANY Box 3526 St P ; l r r l M M R R 1 F ; R Adams, J r . , d i d n o t have s u f f i c i e n t time t o r e p r e s e n t him i n h i s r e t r i a l . I n response, t h e p r o s e c u t i o n a l s o r e q u e s t e d t h a t a h e a r i n g be h e l d and t h a t it be determined t h a t p e t i - t i o n e r be s a t i s f i e d w i t h h i s c o u n s e l , n o t o n l y a s t o t h e t i m e such c o u n s e l could d e v o t e t o t h e m a t t e r , b u t a l s o i n view of t h e f a c t t h a t such c o u n s e l had r e p r e s e n t e d a n o t h e r d e f e n d a n t i n t h e f i r s t t r i a l . A h e a r i n g was h e l d w i t h t h e f o l l o w i n g r e s u l t : "THE COURT: Court w i l l be i n s e s s i o n . W e have Big Horn County C r i m i n a l Cause No. 1107-C, e n t i t l e d S t a t e of Montana v e r s u s Bernard James F i t z p a t r i c k . Mr. F i t z p a t r i c k , you have f i l e d w i t h t h i s Court a r e q u e s t t h a t t h e Court c o n s i d e r r e p l a c i n g Mr. John Adams a s your a t t o r n e y on t h e ground t h a t he, being a p u b l i c d e f e n d e r , h a s s o much t o do t h a t he is n o t a b l e t o a d e q u a t e l y t a k e c a r e of your c a s e . You have l i k e w i s e f i l e d a s i m i l a r r e q u e s t w i t h t h e Montana Supreme Court and t h e y have responded t o you, and t o m e a s w e l l , and t h e n , s i m i l a r l y , t h e County A t t o r n e y o f Big Horn County h a s l i k e w i s e f i l e d a motion r e q u e s t i n g t h a t you be g i v e n t h e o p p o r t u n i t y t o e x p r e s s y o u r s e l f on t h i s v e r y p o i n t . And s o t h a t is why we a r e convened h e r e t h i s a f t e r n o o n , Mr. F i t z p a t r i c k . Do you have any s t a t e m e n t t h a t you'd l i k e t o make t o t h e Court a t t h i s time? "THE DEFENDANT: Yes I do. I f i l e d a m o t i o n w i t h t h i s C o u r t a n d w i t h t h e Supreme Court t h a t Mr. John Adams was a p u b l i c defender and d i d have a heavy c a s e l o a d and t h a t , b u t s i n c e t h a t f i l i n g I have had a t a l k w i t h Mr. Adams and Mr. Adams is working on my c a s e , and working h a r d , and I am s a t i s f i e d w i t h t h e work and I do feel t h a t -- H e a s s u r e s m e t h a t h i s c a s e l o a d i s n ' t t o o heavy t o handle t h i s c a s e , and I ' m i n c l i n e d t o b e l i e v e t h a t it i s n ' t , and I would l i k e t o withdraw whatever it is on t h a t , keep Mr. Adams . "THE COURT: A l l r i g h t , I want t o e x p l a i n t o you, t h e r e a s o n I a p p o i n t e d Mr. Adams is because No. 1, he h a s been i n t h i s Court a good many y e a r s and I know he is c o m p l e t e l y c o m p e t e n t ; No. 2 , h e h a s a l r e a d y been through t h i s c a s e once and so he's familiar with all the details so he can be of more help to you quicker and easier than anybody else I could find." Following retrial and sentencing, petitioner wrote to Adams expressing his displeasure with Adams' representation of him. Be later wrote Adams advising that a lot of what he had said was not true and that "you are a very competent lawyer and you were more than competent at my trial." At the evidentiary hearing, petitioner advised that the reason he recanted was only to keep his counsel on the case during its appeal to the Montana Supreme Court. Follow- ing the decision of the Montana Supreme Court which was unfavorable to the petitioner, he again returned to his accusations of incompetency. To put these accusations in the proper perspective, it is crucial to understand that petitioner is comparing the final result of his retrial to that of the result of the second trial of defendant Radi which preceded petitioner's trial by several weeks. Defendant Radi was acquitted on all counts. The thrust of petitioner's argument is two-fold: first, that evidentiary material which was presented on behalf of Radi was not used in petitioner's retrial; second, that defense counsel did not call certain specified wit- nesses additional to those used by Radi, which petitioner listed for his counsel as being able to support his alibi defense. As to the Radi trial evidence, it is apparent that petitioner believes it should have been identically pre- rsented in his retrial, without regard to other considera- tions. Since petitioner contends he was with Radi, and since Radi was acquitted, petitioner believes he should have been acquitted also. Petitioner also obviously believes, regardless of other factors, that the use of additional wit- nesses which were not called at his retrial would have resulted in his acquittal. Since Radi was acquitted and shortly thereafter petitioner was convicted, petitioner concludes that the cause of his conviction was an inadequacy on the part of his defense counsel. Petitioner conveniently overlooks the fact that the key witnesses in the prosecution's case at the Radi trial failed to appear and testify in person and consequently, the prosecution was forced to rely upon evidence offered by casual observers who had knowledge of various aspects of the events. The key witnesses were available for Fitzpatrick's retrial and this circumstance alone is more than adequate to explain the differing results of the two trials. The allegations with regard to petitioner's contention that additional witnesses should have been called will be discussed witness by witness. Dennis Sasich: Petitioner's amended petition states that Sasich "could have testified that he saw Radi at the Squire Lounge in Billings on the evening of April 4th or 5th, 1975, and that he saw petitioner in that same place with Radi around the same time." At Radi's trial, this witness could not conclusively state that Radi was in the Squire Lounge on April 5th. At the evidentiary hearing held on Fitzpatrick's amended petition, Sasich appeared and testified in effect that he had never seen petitioner before. The witnesses used by counsel on behalf of petitioner at retrial were two cocktail waitresses from the Squire Lounge, Shirley Graham and Gloria LeVe. Graham testified that petitioner's female companion, Christine Fetters, was seen by her in the Squire Lounge on the night of April 5 and that petitioner could have been with her although Graham did not specifically recall seeing him. LeVe's testimony placed both Fetters and petitioner together in the Squire Lounge at that time. Obviously, the witnesses selected by counsel to testify on behalf of petitioner were much stronger than a witness who did not even know petitioner. Barbara Hansen (Radi): Petitioner's amended petition states that this witness and Radi were "with Fitzpatrick at several points during that afternoon and evening in bars in Billings . . ." Her testimony at the Radi trial as to the events of April 5 was not confirmed by another member of the party, Shelley Beaumont, who was also called as a witness. At the evidentiary hearing, Ms. Radi augmented her testimony and further modified it on cross-examination. She further stated that while she is friendly to petitioner now, in 1978 he was a stranger to her and she did not want to be a witness for him or be involved in his trial in any way. By the time of petitioner's trial she had left Montana, and the investigator assisting Fitzpatrick's counsel determined that she was somewhere in Idaho but was unable to contact her. She had a pattern of using different names at different times and the search was discontinued. It appears from the testimony of this witness in the Radi trial that on the night in question she had used mari- juana, LSD and alcohol and was, in her own words, "a mess." At the time of the homicide she was a prostitute working in Nevada but home on vacation living with Radi in a "hustler" relationship. Defense counsel had listened to some of her testimony in the Radi trial and had observed her demeanor on the stand. Be judged her effect upon the jury as belng detri- mental and was not impressed with her credibility. Given the totaiity of the atmosphere which accompanied the appearance of this witness, it cannot be said that it was an exercise in incompetency to have doubts about her predictability and veracity, particularly if she were to be an unwilling wltness. Herscnel Wilson: Petitioner alleged in his amended petition that this witness could have testified that the petitioner was in billings on the evening of April 5. This witness did not testify at the Radi trial and was Intoxicated at the evidentlary hearing. He could only testify that he saw petitioner in the Standard Bar with a girl from Butte shortly after petitioner was released from prison. This witness could not and did not testify that petitioner was in Billings at the time the crime occurred in Hardin. It clearly cannot have been a lack of competency to have failed to call this witness. Cheryl Wilson (originally alleged as "Jackie Wilson"): In n l s amended petition Fitzpatrick states that this witness could have testified that petitioner was in the Standard Bar on April 5, 1975. This witness did not testify at the Radi trial but did appear at the evidentiary hearing. Her testimony was that she had never seen petitioner prior to the evidentiary h e a r l n g . She t e s t i f i e d t h a t s h e and Herschel Wilson had been involved i n a five-day d r i n k i n g p a r t y a t about t h e t i m e of t h e homicide i n 1975. Edna Torske: I n h i s amended p e t i t i o n , F i t z p a t r i c k a l l e g e d t h a t Torske could p l a c e him i n t h e S t a n d a r d Bar on t h e n i g h t of A p r i l 5 because of a f i g h t which had o c c u r r e d and which s h e had d i s c u s s e d w i t h him. Torske d i d n o t t e s t i f y a t t h e Radi t r i a l b u t d i d appear a t t h e e v i d e n t i a r y h e a r i n g . She t e s t i f i e d t h a t s h e d i d see p e t i t i o n e r a t t h e S t a n d a r d Bar two o r t h r e e t i m e s a f t e r h e g o t o u t of p r i s o n b u t d i d n o t know whether it was d u r l n g t h e day o r n i g h t , on a week day o r weekend, b u t a t any r a t e could n o t have been l a t e r t h a n 9:00 p.m. because t h a t is when s h e g o t o f f work. She had been c o n t a c t e d even b e f o r e t h e 1975 j o i n t t r i a l and, a t f i r s t , was encouraging t o t h e d e f e n s e i n what s h e would say. S h o r t l y t h e r e a f t e r , however, s h e concluded t h a t s h e had been m i s t a k e n i n her memory and s t a t e d t h a t s h e wanted t o be l e f t a l o n e . She was u n c o o p e r a t i v e w i t h everyone and, a t t h e t i m e of t h e 1978 t r i a l , r e f u s e d t o t e s t i f y voluntarily when c o n t a c t e d by d e f e n s e c o u n s e l . She t o l d c o u n s e l t h a t she could n o t remember and a l s o s t a t e d t h a t t h e f l g h t s h e d o e s remember d i d n o t occur on t h e day of t h e murder. She f e l t t h a t p e t i t i o n e r was t r y i n g t o u s e her ~ m p r o p e r l y . Defense c o u n s e l d e c i d e d t h a t s h e would be u n a b l e t o s u p p o r t t h e a l i b i d e f e n s e and c o n s e q u e n t l y d i d n o t c a l l h e r . I t is n o t an a c t of incompetency t o r e f u s e t o c a l l an u n f a v o r a b l e w i t n e s s . I n a d d i t i o n , it developed a t t h e e v i - d e n t i a r y h e a r l n g t h a t , by p e t i t i o n e r ' s own admission, t h e f i g h t i n q u e s t i o n was on A p r i l 4 , n o t A p r i l 5 , and t h i s was confirmed by a complaint and report from Billings Police Department records. Clearly, Torske was justified in refusing to verify petitioner's allegations and Adams was justified in declining to call this witness. Don Collett and Laurel Collett: Petitioner alleges in his amended petition that these two parties could place him in Billings on April 5, 1975. Neither of these witnesses testified at the Radi trial. Don Collett did appear at the evidentiary hearing but was intoxicated and left the courtroom before he could be called as a witness. He could not be found after he left so his testimony was not taken. However, the paralegal that spoke to him in preparation for the hearing advised that Mr. Collett's recollection was even worse than that of Herschel Wilson. Laurel Collett's testimony was taken by deposition while she was hospitalized. She testified that she saw petitioner with Radi in the Standard Bar at some time between 6:00 p . m . and 2:00 a.m. for a brief period of time on the night of the murder. Harriet Torgerson: The amended petition states that this witness could testify that petitioner checked into the Ponderosa Inn Motel before 2:00 or 3:00 a.m. on April 5, 19'75. This witness did not appear at the Radi trial. At the evidentiary hearing, she testified that she checked peti- tioner in "towards morning." She could not be more specific regarding the exact time, except that she was certain it would have been later than 3:00 a.m. and could have been as late as 5:00 or 6:00 a.m. with the room receipt still dated April 5, 1975. It was her practice that the date change was not made until after she had checked the books for the pre- vious day. This witness's testimony supports the prosecu- tion's case rather than contradicts it as alleged in peti- tioner's amended petition. It can hardly be ineffective assistance for counsel to decline to call a witness which he knew would support the prosecution. Christine Fetters: Petitioner contends that this witness's testimony was impeachable in a number of ways. Petitioner alleged that Fetters' children had been taken from her and she was being threatened with being deprived of their custody by the State. For this reason, she testified, according to petitioner, for the State. Fetters denied this at the evidentiary hearing, and petitioner did not offer any evidence in support of this allegation. Fetters' evidence regarding burial of the gun was also impeachable according to petitioner. However, at the evi- dentiary hearing, her testimony was confirmed. Her trial testimony regarding the financial position of petitioner and herself also was not impeached at the hearing. Petitioner alleged that a witness named Robert Miller could testify that he loaned petitioner a sum of money. Robert Miller could not be located either for the trial or the hearing, and it was noted that "Robert Miller" was a pseudonym sometimes used by petitioner. Witnesses were presented on Fitzpatrick's behalf at the trial to testify to his financial condition. Petitioner himself testified that he made money through the sale of drugs shortly after his release from prison. At the hearing, Fetters did amend her testimony somewhat as to the date she heard the radio announcements of the Dyckman murder. Petitioner characterized Fetters as a "surprise" witness. In actuality, she had been listed by petitioner before the trial as one of his alibi defense witnesses. As trial approached, however, both defense counsel and the investigator ascertained that she would be an undesirable witness and that her testimony would not be favorable to petitioner. At the 1978 trial when the State sought to call Fetters as a prosecution witness, defense counsel objected on the basis that she was a defense witness and could have been in a common-law marriage relationship with petitioner. In summary, the evidence does not support petitioner's allegations that the testimony of Fetters was readily impeachable. Iva Lee Finch and Cindy Lee Morgan: Petitioner alleges that defense counsel failed to adequately bring out the effect of LSD upon these witnesses. However, the trial transcript demonstrates that this area was adequately covered. Robyn Vandersloot Spaulding: Petitioner alleges that this wltness could have testified as to the hair colors and styles of the two individuals she observed with Dyckman. At the evidentiary hearing, she testified that she could describe neither the styles nor the colors but that neither of the individuals with Dyckman were Fred or Raleigh Kraft, two men at whom petitioner was attempting to cast suspicion. Kenny Elms and Jim Doane: Petitioner alleges that these witnesses could have testified regarding the car seen following the Dyckman vehicle. This evidence was covered by three other witnesses and would only have been repetitive. Further, the automobile identification testimony was empha- sized in cross-examination of Sheriff Brown and Lyle Doane and in the Ronald Potts testimony. Art Mulkey: The prosecution contended that the car seen following the Dyckman vehicle was Radi's. Radi's car was a 1971 Pontiac with single headlights, a vertical configuration in the grill area and oblong taillights. The total effect of the testimony elicited by Fitzpatrick's counsel at trial, through the witnesses Effie and Everett Knows the Ground and Monte Doane, was that in the car they saw following the victim's car the headlights were dual (Doane) and the taillights were round (Everett). Conse- quently, the testimony developed at the trial regarding the car following the Dyckman vehicle was to Fitzpatrick's benefit. Mulkey's testimony, if he had agreed to return from Georgia and testify as to the differences in appearance between Radi's car and the car described by Doane and Everett and Effie Knows the Ground, would simply have reiterated other testimony. Edwin Bushman: Petitioner alleges that the testimony of this key prosecution witness could have been impeached regarding where the victim was depositing the Safeway receipts. This allegedly could have been accomplished by calling Everett Stoltz. In fact, Stoltz did testify and that point was covered both on direct and cross-examination. Petitioner also contends that suspicion could have been directed at Bushman if Larry Cole, the defense investi- gator, had been called to testify regarding the time it took to drive from the Post Office to Toluca and back to the Post Office. This point was brought directly to the attention of the jury in defense counsel's presentation of Sheriff Brown's testimony. Raleigh Kraf t : Petitioner alleges that this witness's testimony could have been impeached as to when he learned of the murder. It is clear that petitioner misread the Fred Kraft statement by interpreting it to mean that Fred Kraft had not heard of the crime prior to the discussion with Bushman. Ronald Potts: Petitioner alleges that defense counsel failed to bring out prior inconsistent statements of this witness with regard to the car he saw parked in front of Safeway. Defense counsel questioned this witness on both direct and cross-examination, and the questioning covered this point, among others. Irene Girard and Barbara Howell: Petitioner alleges that these two witnesses should have been called to verify that they had sent him money. The depositions of these witnesses were taken for presentation at the evidentiary hearing, and they testified that Girard had sent $50 and Howell $20 in May or June, 1975. Petitioner alleges that certain records could have been presented regarding the issues. The minimum amounts sent by Girard and Howell are not significant in terms of the total financial picture. Also, these items were not at issue as Christine Fetters had already testified as to their receipt. With regard to the Snelling & Snelling employment records, the record demonstrates that there was never any issue that petitioner applied for work through this agency. Ken Greene: Petitioner alleges that Greene, an attorney working with the Defender Project at the Montana State Prison, could have testified that he had advised Fitzpatrick shortly before Fitzpatrick's release from prison that if Fitzpatrick did not leave the state he would be constantly picked up as a suspect and charged with crimes committed where Fitzpatrick resided. Petitioner contends that this testimony could have countered any prosecution claim that petitioner's departure circumstantially indicated guilt. Defense counsel considered this testimony irrelevant as the record shows that petitioner stayed i . n Butte and also repeatedly made trips to Billings after the murder. If defense counsel had presented this testimony, it would have been apparent that petitioner had not left the state for any significant period of time after release from prison. Larry Cole: Petitioner alleges that defense counsel erred in not calling this witness, the defense investigator, regarding the chain of custody of the Radi vehicle. Cole and defense counsel discussed the possibility of Cole testi- fying and decided against it. Petitioner's defense was alibi, so there was a question of relevancy with respect to matters concerning the Radi vehicle. If petitioner were not in Hardin the night of the crime, which was petitioner's defense, the contents of the Radi vehicle weeks later would be immaterial to him. Robert McRae: Petitioner maintains that this witness should have been called to testify regarding a shell casing found in the Radi vehicle. Cole contacted McRae and dis- cussed his testimony. It was decided not to have McKae testify as his testimony would not be germane to the alibi defense. Forensic Evidence from the Murder Scene: Petitioner alleges that negative results of tests should have been presented. The transcript shows that such evidence was covered in the cross-examinations of Sheriff Brown and Carl Zarndt, an FBI agent. Further Evidence: Petitioner alleges in his amended petition that there was further evidence, presumably favor- able to petitioner, which defense counsel failed to present. No such further evidence was presented to the court at the evidentiary hearing. Insufficient Defense Legal Research: These general- ized allegations have, for the most part, already been discussed and ruled upon in the District Court's prior order dismissing Fitzpatrick's petition, which order has been affirmed by the Montana Supreme Court. Insufficient Trial Preparation: This contention was discussed in the findings of fact and conclusions of law previously issued on January 7, 1981, in which, at page 20, the District Court stated: "At the outset, petitioner attempts to show that there was insufficient defense preparation at, and prior to trial. Omit- ted from the 'facts1 is recognition that defense counsel had served as counsel for a codefendant in the first trial of this cause and already had detailed familiar- ity with the case, so that there is no significance to be presumed from the facts alone surrounding the date of his appointment to serve this petitioner, or the date upon which inception of consul- tation with the petitioner commenced. The facts which petitioner relies upon to support his claim of insufficient defense preparation are merely conclusory allega- tions and, as such, are insufficient." The o n l y i t e m of e v i d e n c e o f f e r e d i n t h i s c o n n e c t i o n a t t h e e v i d e n t i a r y h e a r i n g was E x h i b i t AF, p u r p o r t i n g t o show t h a t d e f e n s e c o u n s e l , d u r i n g December 1977 and J a n u a r y and February 1978, was burdened w i t h a t o t a l of f o r t y - s e v e n pending c r i m i n a l c a s e s . The p o i n t is t h a t , being s o bur- dened, he was u n a b l e t o p r o p e r l y p r e p a r e f o r p e t i t i o n e r ' s t r i a l . E x h i b i t AF is a c l a s s i c example of how a case l o a d l i s t i n g , by i t s e l f , can be d e c e p t i v e and m i s l e a d i n g . A s examples, Case No. 10259 was a c t u a l l y c l o s e d a s t o Adams i n May 1977 and was still a l i v e i n December 1977 o n l y because of t h e e x i s t e n c e of a c o d e f e n d a n t r e p r e s e n t e d by o t h e r c o u n s e l . The same is t r u e of Case 10332. Case 10449 was c l o s e d on December 1, 1977. Case 10461 was d i s m i s s e d December 5, 1977. Case 10491 was completed December 5, 1977, and 14089 was completed on December 1 9 , 1977. Adams withdrew from 10460 on J a n u a r y 11, 1978, and a g u i l t y p l e a i n 10478 o c c u r r e d on t h a t same d a t e . Case 10500 was d i s - missed December 5, 1977, and 10521 was c l o s e d on December 1, 1977. Cases 10577 and DC-78-002 were b o t h c l o s e d on J a n u a r y 9 , 1978. None of t h e s e cases i n v o l v e d t r i a l t i m e o r t r i a l p r e p a r a t i o n and t h e Freeman murder c a s e , which p e t i t i o n e r mentioned i n h i s t e s t i m o n y , d i d n o t go t o t r i a l u n t i l A p r i l 1978. Case 10568, shown as a n a c t i v e c a s e i n December 1977 and J a n u a r y 1978, is one i n which Adams was n o t a p p o i n t e d c o u n s e l u n t i l March 2 2 , 1 9 7 8 , which w a s a f t e r p e t i t i o n e r ' s t r i a l . An examination of t h e r e c o r d s w i l l f u r t h e r show t h a t u n d e r t h e p a c e o f c o u r t c a l e n d a r i n g , t h e cases f i l e d s u b s e q u e n t t o N o . 10557 i n which a c o n t e s t developed would not mature until in April or May 1978, or later. Those which would close earlier would be by way of guilty pleas. It should also be recalled at this point that defense counsel's case load was a primary issue at the hearing which petitioner requested prior to his second trial. At this hearing on the petition which requested appointment of other counsel, petitioner withdrew his objection to his court- appointed counsel and stated that he thought Adams could handle his case effectively. It follows that Exhibit AF falls short in its proba- tive effect on the point urged by petitioner. Sentencinq: Petitioner alleges in his amended petition that defense counsel presented no evidence in mitigation, although such mitigating evidence was allegedly available through his mother, his doctor and hospital records. At the evidentiary hearing, there was no evidence presented as to any doctor or hospital records relating to treatment of petitioner for dizzy spells and headaches. Petitioner's mother, Irene Girard, whose testimony was taken by deposition, did advise of dizzy spells suffered by petitioner as a child, resulting in his ears being lanced. However, because of a family break-up, her contact with petitioner was very spotty over the years. She left when he was seven years old and she saw him for a period when he was fifteen, again when he was seventeen, and finally on a brief vlsit when he was twenty-two or twenty-three years old. She had not seen him since, although petitioner did advise his mother in a telephone conversation at a time when he was confined in the Montana State Prison that he was still having dizzy spells, but the records of the prison made no mention of that fact or of any history of headaches. At the evidentiary hearing, Chris Fetters recalled that petitioner had told her that he had lied and attempted to use headaches and dizzy spells in the past to excuse his conduct. It is not made clear by petitioner what the rele- vancy might be with respect to dizzy spells and headaches in connection with the sentencing process. No specificity is provided as to how it could enter into sentencing as a miti- gating factor provided by the statutes. In connection with the deposition of Irene Girard, respondent's exhibit A was attached and discussed as a part thereof. It consists of a questionnaire submitted by the Montana State Prison Reception Unit to Mrs. Girard, seeking background information in connection with petitioner's reception at some time into the state prison. To it is attached a letter written by Mrs. Girard, which outlines the developmental history of petitioner. It mentions petitioner being expelled from school, his membership in a school gang, car thefts, juvenile commitments, attempted escape, A.W.O.L. from the Army on two occasions, acquittal upon a charge of killing a man with his bayonet, transporting a stolen car across state lines, and going through a period of being "knife crazy," among other significant points. As the record shows, defense counsel was we11 acquainted with Fitzpatrick's history and had known him since the early 1960's. Given Fitzpatrick's criminal history and considering counsel's duty to avoid misleading the court, any approach taken by Adams during the sentencing hearing, other than the approach he reasonably selected , would have had substantial and hazardous pitfalls. The remaining areas touched by petitioner's allega- tions on performance of defense counsel at sentencing appear to already have been considered and ruled upon both by the District Court and this Court in prior proceedings. Defense counsel did admit at the evidentiary hearing, in connection with the sentencing phase, that one mistake was made--namely, that he informed the court that the slay- ing of Alfred Falcon in the Montana State Prison was a matter of self-defense, when, in fact, petitioner denied having committed it at all. Petitioner had originally been convicted of such charge, which was affirmed on direct appeal but was later overturned in a post-conviction pro- ceeding, resulting in the charges being dismissed. Defense counsel's copy of petitioner's presentence investigation conducted in connection with sentencing at the first trial, and which was found in Chris J. Nelson's file (petitioner's former attorney), did contain notations indicating that petitioner had admitted the prison slaying. At the eviden- tiary hearing, Nelson indicated that part of his sentencing strategy was to point out that, although petitioner admitted previous crimes, he maintained his innocence in this case, thereby fortifying his attempt at credibility. This notation could have misled defense counsel at the time of sentencing on the retrial in 1978. At the evidentiary hearing , the witness Christine Fetters did testify that petitioner had made admissions to her saying that, with respect to the murder of Alfred Falcon, it was something that had to be done because he was a beast and was taking over the prison. In view of this, the slip of defense counsel in saying it was a matter of self-defense casts petitioner's relationship with the incident in more favorable light than what the prosecution could possibly have presented if it became a contested point. Defense Counsel John L. Adams, Jr.: Adams graduated from the University of Montana Law School in 1954. He became a Deputy County Attorney in Billings, Montana, in 1956, and County Attorney in 1965. He served as County Attorney until 1970. From 1970 to the present he has served continuously as court-appointed defense counsel in the District Court. His legal work has been almost exclusively in the field of criminal law and he has tried at least 200 felony cases, including several capital cases. During the first trial of the codefendants, Adams was appointed to represent Paul Bad Horse. He was assisted in his representation of Bad Horse by Jerome Cate, who was selected by the Indian tribe. After Adams was appointed counsel to Fitzpatrick for the second trial, he discussed Fitzpatrick's case with Chris EJelson, Fitzpatrick's attorney during the original trial. In addition, Nelson gave Adams most of his work product, including witnesses' statements. Nelson had withdrawn from representing Fitzpatrick during the second trial because he had recently joined a firm which included Mr. Sinclair, a co-prosecutor in the first trial. Adams furnished Fitzpatrick with much of the original file and later supplemented it. In addition, he and Fitz- patrick went over the notes and material Fitzpatrick provided. Adams was assisted in the defense by Larry Cole, the court-appointed special investigator, who was at that time an attorney licensed in Wyoming and awaiting licensing in Montana. After defendant Radi was acquitted on retrial, Adams discussed the case with Mr. Stephens, Radi's counsel, and was given some of Stephens' case material. Adams has known Fitzpatrick since the 1960's and made an appearance once as prosecutor in a previous charge against him. Adams has defended Fitzpatrick on other charges at least twice. In 1972, Adams represented Fitzpatrick on "burglary, drugs and other offenses." Prior to the 1978 trial, Adams also represented Fitzpatrick when he was charged with assault involving a weapon which resulted in Fitzpatrick's imprisonment. Prior to the second trial, Adams filed a number of motions on petitioner's behalf, including a motion to limit any testimony of Gary Radi, a notice to rely on the defense of alibi listing thirty-seven witnesses, a supplement to the alibi defense, discovery motions, a motion to dismiss, a motion for appointment of a special investigator, a motion for a change of venue, and a subsequent motion, submitted at petitioner's request, to withdraw the motion for change of venue. In addition, Adams requested that a number of subpoenas and subpoenaes duces tecum issue on behalf of Fitzpatrick and responded to the State's motion for produc- tion of evidence. Additional motions were submitted by defense counsel prior to trial and a brief relating to the testimony of Edwin Bushman was submitted during the course of the trial. At the conclusion of the trial, Adams submitted fifty-seven jury instructions for the court's consideration. Conflict of Interest: Petitioner asserts that because defense counsel had represented Bad Horse at the first trial, a conflict of interest existed in that counsel could not attempt to shift suspicion from Fitzpatrick to Bad Horse. However, as a result of the first trial, Bad Horse had been acquitted of the charges of deliberate homicide and aggravated kidnap- ping. Clearly he cannot be tried again for those same charges in this case. Consequently, we find petitioner's argument totally without merit. We note that at no point in the allegations of the petition or amended petition which served as the basis of the evidentiary hearing below did petitioner or his counsel allege conflict of interest as a basis for the charge of ineffective assistance of counsel. At the hearing prior to the 1978 retrial, petitioner indicated he was satisfied with counsel and wanted to withdraw his petition to have Adams removed from the case. The issue of conflict of interest was not raised on the appeal of petitioner's second conviction. As noted previously, it was not included in petitioner's list of allegations which prompted the evi- dentiary hearing. Now it appears. It cannot be that peti- tioner has suddenly become aware of such a charge. In Petition of Fitzpatrick (1970), 154 Mont. 512, 464 P.2d 507, an action filed by defendant pro se in this Court, Fitz- patrick raised the issue that he was denied his right to counsel when certain incriminating statements were made by him to police following a shooting. Petitioner was next before the Montana Supreme Court on the direct appeal of his conviction for the second degree murder of Alfred Falcon. State v. Fitzpatrick (1973), 163 Mont. 220, 516 P.2d 605. That appeal was unsuccessful. Subsequently, petitioner filed a pro se petition for a writ of habeas corpus in this Court the following year. The issue in that case was that Fitzpatrick's alibi defense had been hampered by a delay in appointment of counsel. This inaction on the part of the State was found to have deprived Fitzpatrick of effective representation by counsel. Given Fitzpatrick's extensive prior experience in the crlminal courts and r ight-to-counsel issues, his statement that he abandoned his early attempts to have Adams removed as his counsel because he feared being left without counsel on this capital case are without merit. Further, after thorough review of the entire file in this matter, it is clear that petitioner's allegation of conflict of interest is also without merit. Ineffective Assistance of Counsel: The standard of review for ineffective assistance of counsel claims within this jurisdiction is known as the "reasonably effective assistance" test and may be stated as follows : "Persons accused of crime are entitled to the effective assistance of counsel acting within the range of competence demanded of attorneys in criminal cases." In order to find ineffective assistance of counsel, the errors made must be "errors a reasonably competent attorney acting as a diligent conscientious advocate would not have made, for that is the constitutional standard." Cooper v. Fitz- harris (9th Cir. 1978), 586 F.2d 1325, cert. denied, 440 U.S. 974 (1979). In addition, when the claim of ineffective assistance of counsel rests upon specific acts and omissions of counsel, relief will be granted only if it appears that the defendant was prejudiced by counsel's conduct. Cooper, 586 F.2d at 1331. Further, "claimed inadequacy of counsel must not be tested by a greater sophistication of appellate counsel, nor by that counsel's unrivaled opportunity to study the record at leisure and cite different tactics of perhaps doubtful efficacy. Success is not the test of efficient counsel, frequently neither vigor, zeal, nor skill can overcome the truth." State v. Forsness (1972), 159 Mont. 105, 110, 495 P.2d 176, 179. And, ". . . Hindsight cannot now be used to say what perhaps could have been done to achieve a possible but highly speculative result . . ." State v. Noller (1963), 142 Mont. 35, 38, 381 P.2d 293, 294. Petitioner contends the proper standard for determin- ing ineffective assistance of counsel is that enunciated in Washington v. Strickland (5th Cir. 1983) , 673 F.2d 879; (Unit B) (en banc) 693 F.2d 1243, cert. granted, June 6, 1983. The Washington test is as follows: (1) petitioner has the burden of proving that his right to effective assistance of counsel was violated; (2) then petitioner must establish prejudice that worked to his actual and substantial disadvantage; and (3) a writ must be granted unless state proves counsel's ineffectiveness was harmless beyond a reasonable doubt. Petitioner has the burden to demonstrate not only a possiblity of prejudice but that it worked to his actual and substantial disadvantage. Washington, 693 F.2d at 1258. Washington also recognizes that certain lines of defense may be contradictory and thus incapable of being presented persuasively in tandem. Washington, 693 F.2d at 1253. Such was the case here. Petitioner alleges in his amended petition that certain witnesses should have been called to testify regarding certain evidence found in Radi's vehicle. To call such witnesses and elicit such testimony would have been totally incongruent with petitioner's alibi defense. Even under the Washington analysis, it is presumed that an attorney is competent and has rendered effective assistance. We have reviewed the voluminous record in this case and the extensive and superb memorandum prepared by the District Court Judge which accompanies the order dismissing petitioner's amended petition. We find that even under the Washington analysis, petitioner has failed to meet his burden. The State of Florida has sought and been granted a writ of certiorari from the United States Supreme Court regarding the Washington case. Florida has adopted the analysis seen in Knight v . State (Fla. 1981), 394 So.2d 997, and United States v. DeCoster (D.C. Cir. 1979), 624 F.2d 196. Knight requires: (1) specific omissions/acts must be detailed in an appropriate pleading; (2) defendant has burden of proof to show substantial and serious deficiency measurably below the performance of competent counsel; and (3) that within the circumstances of the case, the prejudice was s o e x t e n s i v e t h a t t h e r e was a l i k e l i h o o d it a f f e c t e d t h e outcome of t h e c a s e . ( 4 ) The S t a t e t h e n h a s an o p p o r t u n i t y t o r e b u t by showing beyond a r e a s o n a b l e d o u b t t h a t t h e r e was no p r e j u d i c e . Even under t h e Knight/DeCoster s t a n d a r d , p e t i t i o n e r h e r e h a s f a i l e d t o meet h i s burden of p r o o f . A review of t h e r e c o r d of t h i s c a s e c l e a r l y shows t h a t p e t i t i o n e r h a s f a i l e d t o meet any s t a n d a r d argued by h i s c o u n s e l . An a d d i t i o n a l element i n t h i s case is t h e c o n c e p t o f waiver. Montana r e c o g n i z e s t h a t a d e f e n d a n t may waive a p o t e n t i a l c o n f l i c t of i n t e r e s t . S t a t e v. G a l l a g h e r ( 1 9 7 2 ) , 162 Mont. 155, 161, 509 P.2d 852, 855. I n d e t e r m i n i n g whether s u c h a c o n f l i c t h a s been waived, it is n e c e s s a r y t o c o n s i d e r t h e f a c t s and c i r c u m s t a n c e s s u r r o u n d i n g t h e case, i n c l u d i n g t h e background, e x p e r i e n c e and conduct o f t h e d e f e n d a n t . United S t a t e s v. P a r t i n ( 9 t h C i r . 1 9 7 9 ) , 601 F.2d 1000. W e h o l d t h e r e was no c o n f l i c t h e r e ; however, even i f t h e r e had been a p o s s i b l e c o n f l i c t of i n t e r e s t i s s u e , p e t i t i o n e r h a s waived h i s r i g h t t o r a i s e such a n i s s u e by h i s conduct and s t a t e m e n t s a t t h e p r e t r i a l h e a r i n g r e g a r d i n g p o s s i b l e appointment of o t h e r c o u n s e l , by h i s f a i l u r e t o broach t h e s u b j e c t a t t r i a l and/or on a p p e a l , and by h i s knowledge from t h e o u t s e t t h a t h i s c o u n s e l had defended a c o d e f e n d a n t d u r i n g t h e f i r s t t r i a l . C r i t i c a l t o t h i s d e t e r m i n a t i o n is t h e f a c t t h a t t h i s p e t i t i o n e r is e x t r e m e l y knowledgeable of t h e c r i m i n a l j u s t i c e system and h a s argued i n e f f e c t i v e a s s i s t a n c e of c o u n s e l i s s u e s i n t h e p a s t . P e t i t i o n e r h a s a t t e m p t e d t o show t h a t a p e r se c o n f l i c t i n i n t e r e s t e x i s t e d i n c o u n s e l ' s d e f e n s e of Bad Horse in the first trial and of petitioner Fitzpatrick in the second trial. However, the authorities cited fail to support this contention. Petitioner also suggests a different standard should apply in capital cases. We decline to set a separate standard for judging effective assistance of counsel in a capital case. The reasons for refusal are well expressed in Washington v . Watkins (5th Cir. 1981), 655 F.2d 1346, 1357: "Innumerable practical problems would be presented by such a holding. For example, since effective assistance is not judged by hindsight, the heightened standard would have to apply to all cases in which a capital offense was charged, regardless of whether the jury subsequently convict- ed the defendant of a non-capital offense or refused to impose the death penalty in a capital case. Recognition of a 'sliding scale' for this constitutional standard would also suggest, for example, that a defendant charged with aggravated assault would be entitled to a more effective lawyer than one charged with simple as- sault or public intoxication. We decline to embark on such a treacherous path." We agree. Our research has failed to disclose any case from any jurisdiction which has held that there is a constitutional requirement of a separate and higher standard for assistance of counsel in capital cases. In conclusion, we find that, regardless of the tests advocated by petitioner, he has failed to support his allegation of ineffective assistance of counsel. Conse- quently, we hereby affirm the District Court in dismissing petitioner's amended petition. ? 4 4 Chief ~ustike d ~ , @ We concur: nold 01-sen, Dis- t%ict Judge, sitting in place of Mr. Justice John C . Sheehy Mr. Justice Frank B. Morrison, Jr., specially concurring: I concur in the result. However, I do believe that Mr. Adams's representation of Mr. Bad IIorse created a potential conflict of interest. My vote to affirm is based upon waiver on the part of petitioner, Bernard Fitzpatrick. Mr. Justice Daniel J. Shea, dissentidg: This is a death penalty case, and I remain convinced that defense counsel did not do all that he could do, and not even all that he should have done. For example, based on my previous dissents relating to the prejudicial and inconsistent jury instructions and jury verdicts, to which defense counsel did not object, a basis exists to reverse the conviction not only for the legal error inherent in the instructions and verdict forms, but also for the failure of defense counsel in a capital case to he more careful about t h e i n s t r u c t i o n s and v e r d i c t forms on which a death penalty may ultimatedy be based. Therefore, I would order a new t r i a l .

October 6, 1983

2abcf153-ffcc-433e-8e21-38f1d09d7df9

ACKERMAN v PIERCE PACKING CO

N/A

82-485

Montana

Montana Supreme Court

NO. $2-485 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 CHARLES J. ACKEFWAN, Claimant and Appellant, PIERCE PACKING CO., Employer, and ILJTERMOUNTAIN INSUPANCE CO. , Defendant and Respondent. APPEAL FROM: Workers' Compensation Court, The Honorable Timothy Reardon, Judge presiding. COUNSEL OF RECORD: For Appellant: Kelleher Law Offices; Robert C. Kelleher argued, Billings, Montana For Respondent : Crowley Law Firm; Terry G. Spear argued, Billings, Montana Submitted: June 7, 1983 Decided: November 17, 1983 Filed: , - l$a3 a . - Clerk Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Claimant Charles J. Ackerman, appeals an order of the Workers' Compensation Court barring his claim for compensation because he had not notified his employer of the injury within 60 days of the injury. We reverse and hold that the notice to the employer was established on the day of the injury, December 22, 1980, by claimant t-elling the nurse of his accident, and we further hold that notice was established because the nurse had actual notice and can be considered for purposes of notification of injuries, as the managing agent. Aside from the notice issue, claimant would also have this Court decide his case on the merits and fix his disability rating. Claimant also asks this Court to order cost reimbursement, attorney fees and the 20 percent penalty as provided for bv statute. We decline to rule on these questions as they are properly questions for the Workers' Compensation Court to first decide. Claimant injured his back while working at Pierce Packing Company when he was lifting a box containing pork loins. He went to the company nurse and reported his problem--that his back hurt--and she referred him to a doctor. She made no further inquiry as to when or how claimant injured his back. The doctor's report turned out to be a misdiagnosis--he found that the claimant suffered from prostatitis. Because the nurse did not believe that prostatitis was work related, she did not fill out and begin the processing of a compensation form. However, claimant was later referred to an orthopedic specialist on Februa.ry 25, 1981 (more than 60 days after the injury) and a back injury was then diagnosed. After learning of this diagnosis, the nurse prepared the compensation forms for the claimant and he signed them on March 4, 1 . 9 8 1 . . The employer, however, contested liability on the ground that it had not been notified of the accident within 60 days as required by section 39-71-603, MCA. This statute provides that in all cases other than a death claim the employer must be notified of the time and place of injury and the nature of injury--within 60 days of the injury. The statute also provides that notice to the employer can be satisfied if the employer or the employer's managing agent or superintendent in charge of the work has actual knowledge of the injury. The trial court expressly found that claimant had told the company nurse on duty at the employer's premises, that he had injured his back that day while lifting a loin box at work. However, the court then found that this actual notice was not notice to "a managing agent or the employer, or a superintendent in charge of the work on which the claimant was engaqed,. . ." and therefore that the notice coul-d not constitute actual knowledge. Therefore, the claim for compensation was denied. We conclude that the employer was given notice of the injury and that the employer had actual knowledge of the injurv. The claimant came to the company nurse and complained of his injury, and she referred him to a doctor. Although it may be true that claimant did not provide her with the details of the injurv, the nurse was free to obtain this information but did not do so. This failure cannot operate to bar the claimant's claim, for the information was readily available to the nurse and to the employer upon the mere asking of the questions. Several states have held that the notice to employer required in a Workers' Compensation case is satisfied by telling the company nurse. In Aluminum Co. of America. v. Baker (Tenn. 19761, 542 S.W.2d 819, the court held. that claimant's calling the company nurse was sufficient notice to the employer. In Hollingsworth v. Auto Specialties Mfg. Co. (Mich. 1958), 89 N.W.2d 431, the court held that reporting an injury to an industrial nurse on the date of its occurrence gave the employer sufficient notice. In Firestone Tire and Rubber Co. v. Workmen's Compensation Appea.1 Bd. (Penn. 1979), 396 A.2d 902, the court held that notice to an employer is complied with by reporting an accident to an employer's nurse. In Thrall Car. Mfg. Co. v. Industrial Commission (Ill. 1976), 356 N.E.2d 516, the court held that sufficient notice was given when the claimant told a company nurse that he ha.d "trouble in his knees" and that he "wanted to see a doctor. " We have no doubt that notice was given to the employer under the first part of section 39-71-603, MCA, and if any defects existed in the information imparted to the nurse, those defects must be ascribed to the failure of the nurse, the company's agent, to obtain the necessary j-nformation. We further hold that under the second part of the statute dealing with actual notice as another method of compliance with the notice requirement, the nurse can be held to be the maria-ging agent insofar as notice of the injury is concerned. Nurses are present on the employer's premises to help workmen when they are injured, and no doubt they are in a better position than anyone else not only to render immediate aid to the injured workman but also to obtain the necessary information concerning the time and place of the injury. To hold that actual knowledge of a company nurse would not be sufficient compliance with the statute would be to exalt form over substance. We must liberally construe the Workers' Compensation Act (section 39-71-104, MCA), and there is probably no area more important to apply a liberal construction than on the question of whether sufficient notice was given of the accident. A liberal construction here leads us to conclude that the company nurse was in effect the managing agent insofar as receipt of notice of injuries is concerned. As we have already indicated, claimant's disability rating is not now properly before this Court, nor is his claim for costs, attorney fees and the statutory penalty. The order of the Workers' Compensation Court is reversed and this cause is remanded for further consideration of the merits of the claim as well as the question of whether the employer must pay costs, attorney fees and the statutory 20 percent penalty. We Concur: ~d$,yd,u-9_~0 Chief Justice Justices Mr. J u s t i c e L.C. Gulbrandson d i s s e n t i n g . I r e s p e c t f u l l y d i s s e n t . S e c t i o n 39-71-603, MCA, r e a d s a s f o l l o w s : "Notice of i n j u r i e s o t h e r t h a n d e a t h t o be s u b m i t t e d w i t h i n s i x t y days. No c l a i m t o recover b e n e f i t s under t h e Workers ' C o m p e n s a t i o n A c t , f o r i n j u r i e s n o t r e s u l t i n g i n d e a t h , may be c o n s i d e r e d cornpensable u n l e s s , w i t h i n 60 d a y s a f t e r t h e o c c u r r e n c e of t h e a c c i d e n t which is claimed t o have caused t h e i n j u r y , n o t i c e of t h e time and p l a c e where t h e a c c i d e n t o c c u r r e d and t h e n a t u r e of t h e i n j u r y is g i v e n t o t h e employer o r t h e e m p l o y e r ' s i n s u r e r by t h e i n j u r e d e m p l o y e e o r someone on t h e employee's b e h a l f . A c t u a l knowledge of t h e a c c i d e n t and i n j u r y on t h e p a r t of t h e e m p l o y e r o r t h e e m p l o y e r ' s managing a g e n t o r s u p e r i n t e n d e n t i n c h a r g e of t h e work upon which t h e i n j u r e d employee was engaged a t t h e t i m e of t h e i n j u r y is e q u i v a l e n t t o n o t i c e . " I n t h e c a s e of H a r t 1 v. Big Sky of Mont., I n c . ( 1 9 7 8 ) , 176 Mont. 540, 579 P.2d 1239, t h i s Court c o n s t r u e d S e c t i o n 39-71-603, MCA, and found t h a t , " I n t h e i n s t a n t c a s e , t h e i n f o r m a t i o n was conveyed t o t h e a g e n t s s p e c i f i e d i n t h e s t a t u t e , and t h e y t h e r e b y a c q u i r e d a c t u a l knowledge of t h e a c c i d e n t and t h e i n j u r y . " (emphasis s u p p l i e d ) I n t h e e a r l i e r c a s e o f Maki v. Anaconda Copper Min. Co. ( 1 9 3 0 ) , 87 Mont. 314, 287 P. 170, t h e c l a i m a n t had a t t e m p t e d t o p r e s e n t h i s c l a i m t o t h e company through its c l a i m a g e n t and s a f e t y e n g i n e e r . T h i s Court s t a t e d : "Again, t h e r e c o r d f a i l s t o show t h a t any i n f o r m a t i o n imparted by t h e c l a i m a n t t o t h e s a f e t y e n g i n e e r was communicated t o t h e ' e m p l o y e r , managing a g e n t o r s u p e r i n t e n d e n t . ' O f c o u r s e , a c o r p o r a t i o n can o n l y have such a c t u a l knowledge a s is p o s s e s s e d by i t s a g e n t s , b u t o u r s t a t u t e d e c l a r e s , i n t h i s i n s t a n c e , t h e a c t u a l knowledge o f w h a t a g e n t s s h a l l be deemed t h e knowledge o f t h e employer." "We a g r e e t h a t p r o v i s i o n s o f t h e C o m p e n s a t i o n A c t s h o u l d b e g i v e n a l i b e r a l c o n s t r u c t i o n i n o r d e r t o d o j u s t i c e , and, f o r t h i s r e a s o n , w e have gone t o g r e a t e r l e n g t h s t h a n d i d h i s l e a r n e d c o u s e l i n s e e k i n g t o d i s c o v e r i n t h e r e c o r d some e v i d e n c e on which w e could s a y t h a t t h e c l a i m a n t showed e i t h e r t i m e l y w-ritten n o t i c e , o r its e q u i v a l e n t o f a c t u a l knowledge on t h e p a r t o f t h o s e p e r s o n s enumerated i n t h e s t a t u t e , b u t have found no evidence on which we can r e l i e v e t h e c l a i m a n t from t h e d e c l a r e d r e s u l t of h i s own n e g l e c t . "No r u l e of c o n s t r u c t i o n can j u s t i f y t h e d i s r e g a r d of t h e p l a i n mandate of t h e law. ' I n t h e c o n s t r u c t i o n of a s t a t u t e t h e o f f i c e of t h e judge is simply t o a s c e r t a i n and d e c l a r e what is i n terms o r i n s u b s t a n c e c o n t a i n e d t h e r e i n , n o t t o i n s e r t what h a s been o m i t t e d , o r t o o m i t w h a t h a s b e e n i n s e r t e d . " ( e m p h a s i s s u p p l i e d ) Here, c l a i m a n t Ackerman t e s t i f i e d r e g a r d i n g a p r e v i o u s i n j u r y w h i l e employed a t P i e r c e , a s f o l l o w s : "Q. And i n October of 1977, you were o f f work f o r approximately a w e e k w i t h a neck i n j u r y ; is t h a t c o r r e c t ? "A. Y e s . "Q. And you d i d n o t i n i t i a l l y r e p o r t t h a t you'd i n j u r e d your neck t o anyone? "A. Not t h a t day it happened. "Q. A s a r e s u l t of t h a t , t h e r e was some p r o b l e m a b o u t w h e t h e r it was a n i n d u s t r i a l a c c i d e n t ? "A. Right. "Q. A f t e r t h a t , I imagine you were p r e t t y f a i t h f u l about r e p o r t i n g i n j u r i e s ? "A. I t r i e d t o b e , yeah." The c l a i m a n t f u r t h e r t e s t i f i e d : ( a ) T h a t i n February, 1979, he h u r t h i s back when a b a r r e l 1 s l i p p e d o f f a p a l l e t and t h a t h e r e p o r t e d it t o h i s supervisor; (b) that in May, 1979, he strained a back muscle lifting bags of sugar, reported it to his supervisor and received benefits; (c) that in October, 1979, he had stomach pains at work and immediately reported the incident; (d) that in July, 1980, he pulled a back muscle, reported the incident the same day to his supervisor and received treatments from Dr. Cabberra. Regarding the December 22, 1980, incident, the claimant testified that he told the company nurse that his back hurt while lifting boxes; that she told him to see his family physician, Dr. Cabberra; that his doctor treated him for approximately two months for an infected prostate; that he was then referred to a urologist who referred the claimant to Dr. Daniels, who recommended exercises and physical therapy; that in June, 1981, the claimant requested a leave of absence from Pierce because he had secured a position as landman with a different company. In my view, the claimant had knowledge of the required reporting procedures from past personal experience. He neither reported the incident to a specified agent, nor gave notice within sixty days to the employer. Based upon the facts of this case, and the prior decisions of this Court, I would aff irm the decision of the Workers' Compensation Judge. /r ,/'

November 17, 1983

864b66bd-f831-4827-b7a9-1aa5d272f507

KUIPER v GOODYEAR TIRE RUBBER CO

N/A

82-224

Montana

Montana Supreme Court

NO. 82-224 I N THE SUPREME COURT OF THE STATE OF MONTANA 1983 DENNIS KUIPER, Plaintiff and Respondent, -vs- THE GOODYEAR TIRE & RUBBER COMPANY, et al., Defendant and Appellant. APBEWL FROM: District Court of the Eighth Judicial District, In and for the County of Cascade, The Honorable H. William Coder, Judge presiding. COUNSEL OF -CORD: For Appellant: Dzivi, Conklin & Nybo; William Conklin argued, Great Falls, Montana John C. Noonan argued, Kansas City, Missouri Kenneth R. Betzler, Akron, Ohio For Respondent : Conner, Baiz & Olson; Dennis P. Connor argued, Great Falls, Montana Niewald, Risjord & Waldeck; John C. Risjord argued, Kansas City, Missouri Submitted: May 12, 1983 Decided : Novernber 2 5, 19 8 3 Filed: NOV 2 j 1983 Clerk Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. P l a i n t i f f , Dennis Kuiper, brought a p r o d u c t s l i a b i l i t y a c t i o n a g a i n s t t h e Goodyear T i r e and Rubber Co. (Goodyear) a f t e r he was i n j u r e d while working on a m u l t i - p i e c e t r u c k wheel rim. Following a twenty-five day t r i a l i n t h e Eighth J u d i c i a l D i s t r i c t Court f o r Cascade County, t h e j u r y awarded p l a i n t i f f $325,000 i n compensatory damages and $1,500,000 i n p u n i t i v e damages and judgment was e n t e r e d based upon t h e j u r y v e r d i c t . The D i s t r i c t Court denied a new t r i a l . Goodyear appeals. W e r e v e r s e and remand f o r new t r i a l . On August 1 3 , 1979, p l a i n t i f f , a twenty-two y e a r o l d newly-married man, was employed a t an independent Goodyear d e a l e r s h i p i n G r e a t F a l l s , Montana, known a s Andy's D & K . H e had been employed f o r o n l y a s h o r t p e r i o d of t i m e and was w o r k i n g i n t h e s h o p a s a t i r e r e p a i r m a n , c a l l e d a t i r e b u s t e r . L a t e i n t h e a f t e r n o o n of August 13, t h e s e r v i c e manager i n s t r u c t e d K u i p e r t o d o a f l a t r e p a i r on a m u l t i - p i e c e t r u c k t i r e w i t h a rim known a s a Goodyear K-28. Kuiper had never worked on t h a t t y p e of a wl~eel, s o a co-worker, David Huston, helped Kuiper dismount t h e t i r e , r e p a i r t h e tube, and i n s t r u c t e d Kuiper how t o p u t t h e t i r e and r i m back t o g e t h e r . Huston l e f t t o work on a n o t h e r p r o j e c t , and Kuiper assembled t h e rim and t i r e and i n f l a t e d t h e t i r e i n a s a f e t y cage. A f t e r t h e t i r e was i n f l a t e d , Kuiper r o l l e d t h e t i r e t o t h e t r u c k and proceeded t o mount t h e t i r e and wheel on t h e wheel l u g s . A s he was mounting t h e t i r e and wheel t h e r i n g e x p l o s i v e l y s e p a r a t e d from t h e rim base and s t r u c k Kuiper i n t h e f a c e . Kuiper s u f f e r e d m u l t i p l e f a c i a l f r a c t u r e s , jaw f r a c t u r e , l o s s of t e e t h , d i p l o p l i a of t h e r i g h t e y e , f a c i a l p a r a l y s i s and a c e r e b r a l c o n t u s i o n . Doctors t e s t i f i e d t h a t a s a r e s u l t of t h e s e i n j u r i e s , Kuiper c o n t i n u e d t o s u f f e r from f a c i a l p a r a l y s i s , l o s s of s e n s e of smell and t a s t e , l o s s of memory and c o n c e n t r a t i o n , a n x i e t y , d e p r e s s i o n and t r a u m a t i c n e u r o s i s . Medical e v i d e n c e was c o n f l i c t i n g a s t o whether Kuiper had s u f f e r e d o r g a n i c b r a i n damage. A f t e r p a r t i a l r e c o v e r y , Kuiper r e t u r n e d t o work a t Andy's D & K a s a salesman. Be was unable t o f u n c t i o n a s a salesman due t o memory l a p s e s and l o s s of c o n c e n t r a t i o n . H e n e x t r e t u r n e d t o work i n t h e shop b u t was unable t o cope w i t h t h e a n x i e t y h e e x p e r i e n c e d w h i l e w o r k i n g t h e r e . Following medical recommendations t h a t h e should change o c c u p a t i o n , Kuiper e n r o l l e d a t a v o c a t i o n a l t e c h n i c a l s c h o o l i n Missoula s t u d y i n g f o r e s t r y . On December 28, 1979, Kuiper f i l e d a c o m p l a i n t i n D i s t r i c t Court a g a i n s t Goodyear. The complaint s o u g h t damages from Goodyear a s t h e d e s i g n e r and manufacturer of t h e K-type wheel, f o r s t r i c t l i a b i l i t y f o r d e f e c t i v e d e s i g n , f a i l u r e t o warn, manufacturing d e f e c t and m a l i c i o u s conduct. Because t h e c a s e is r e t u r n e d f o r new t r i a l , we need n o t review t h e e x t e n s i v e f a c t u a l r e c o r d . Our f a c t u a l review w i l l be b r i e f w i t h t h e aim of i l l u s t r a t i n g t h e c o n t e n t i o n s of t h e p a r t i e s . The wheel which s e p a r a t e d and caused Kuiper 's i n j u r y is a Goodyear K-type-28, manufactured i n March, 1944. The wheel h a s two p a r t s : (1) a s p l i t b a s e ( 2 ) a combined s l i d e r i n g and l o c k i n g r i n g . P l a i n t i f f ' s mechanical e n g i n e e r w i t n e s s t e s t i f i e d t h a t t h e most p r o b a b l e c a u s e of t h e s e p a r a t i o n was t h e absence of a p o r t i o n of t h e g u t t e r hook on t h e s p l i t b a s e which s e r v e s t o hold t h e s l i d e r i n g and l o c k i n g r i n g i n p l a c e when t h e p a r t s a r e assembled and t h e t i r e is i n f l a t e d . That w i t n e s s t e s t i f i e d t h a t t h e m i s s i n g p o r t i o n of g u t t e r hook was a manufacturing d e f e c t which may have been i n c r e a s e d w i t h t h e usage of t h e wheel, and he f u r t h e r t e s t i f i e d t h a t t h e lock r i n g was manufactured .032 of an inch t o o l a r g e . H e a l s o t e s t i f i e d t h a t t h e m i s s i n g g u t t e r hook and o v e r s i z e d r i n g caused t h e u n s a f e a s s e m b l y which e x p l o s i v e l y s e p a r a t e d w h i l e K u i p e r was mounting t h e wheel on t h e t r u c k . H e f u r t h e r t e s t i f i e d t h a t a l o c k i n g d e v i c e p a t e n t e d t o Goodyear i n t h e 1 9 3 0 ' s could have been p l a c e d on K-type w h e e l s t o d e c r e a s e t h e r i s k of e x p l o s i v e s e p a r a t i o n . Goodyear p r e s e n t e d e x p e r t testimony t h a t t h e K-type wheel was n o t d e f e c t i v e l y designed and t h a t t h e wheel i n v o l v e d i n K u i p e r ' s a c c i d e n t was n o t d e f e c t i v e l y manufactured. Goodyear e x p e r t s t e s t i f i e d t h a t t h e m i s s i n g g u t t e r hook was caused by wear and t h a t Kuiper should have recognized t h e dangerous c o n d i t i o n of t h e wheel and n o t reassembled it. Such e x p e r t s t e s t i f i e d t h a t t h e K-type wheel is a s a f e wheel i f p r o p e r l y maintained and assembled a c c o r d i n g t o Goodyear ' s i n s t r u c t i o n s . A Goodyear w i t n e s s , t i r e s u p e r v i s o r f o r a Georgia e x p r e s s company, t e s t i f i e d t h e K-type wheel is s a f e i f p r o p e r l y maintained and assembled, although he t e s t i f i e d t h a t h i s shop had two a c c i d e n t s i n v o l v i n g K-type w h e e l s c a u s e d by i m p r o p e r m o u n t i n g procedures. K u i p e r i n t r o d u c e d e v i d e n c e o f o t h e r a c c i d e n t s i n v o l v i n g m u l t i - p i e c e wheels i n g e n e r a l and K-type wheels i n p a r t i c u l a r . One e x h i b i t r e v e a l s t h a t a s of May 1981, Goodyear had n o t i c e o f a s many a s e i g h t y - s i x o t h e r r e p o r t e d a c c i d e n t s i n v o l v i n g K-type w h e e l s . No e v i d e n c e was i n t r o d u c e d showing e x a c t l y how o t h e r a c c i d e n t s occured, nor t h e age o r c o n d i t i o n of t h e e x p l o d i n g wheels. P l a i n t i f f i n t r o d u c e d an i n t e r - o f f i c e memo w r i t t e n by a manager o f f i e l d e n g i n e e r i n g of t h e motor wheel d i v i s i o n of Goodyear i n which he s t a t e d t h a t p a r t s of t h e m u l t i - p i e c e r i m a r e i n h e r e n t l y dangerous both on t h e highway and i n t h e shop. H e s a i d t h e p a r t s "sometimes c a t a s t r o p h i c a l l y c e a s e t o s e r v e t h e i r intended purpose" and t h a t " t h e t i m e a t which t h e u s e f u l n e s s c e a s e s is dependent on chance, s e r v i c e p r o c e d u r e , maintenance, proper u s e of t o o l s , and t h e use, abuse and misuse of which p a r t s have been s u b j e c t e d d u r i n g t h e i r l i f e t i m e . " That w i t n e s s e s t i m a t e d t h e u s e f u l l i f e of t h e a v e r a g e K-type wheel a t twelve t o f o u r t e e n y e a r s . The wheel involved i n t h i s c a s e was approximately t h i r t y - f i v e y e a r s o l d . I t is s i g n i f i c a n t t o n o t e t h a t Goodyear c e a s e d p r o d u c t i o n of t h e K-type wheel i n 1968, p r i o r t o any of t h e i n c i d e n t s r e f e r r e d t o i n t h e t r i a l of t h e c a s e . With r e g a r d t o t h e Goodyear p o l i c y of n o t i f y i n g t i r e r e p a i r shops of t h e n e c e s s i t y o f u s i n g c a r e i n h a n d l i n g t h e wheels, Goodyear p r e s e n t e d evidence showing t h a t Goodyear had d i s t r i b u t e d a m u l t i t u d e o f c h a r t s , p o s t e r s a n d a d v e r t i s e m e n t s which demonstrated t h e p r o p e r assembly o f m u l t i - p i e c e rims. A Goodyear w i t n e s s t e s t i f i e d t h a t t h e c h a r t s , p o s t e r s and a d v e r t i s e m e n t s warn t h a t m u l t i - p i e c e rims can be dangerous i f t h e y a r e n o t p r o p e r l y assembled o r i f t h e p a r t s a r e worn o r abused. Goodyear a l s o had a v a i l a b l e a f i l m e n t i t l e d , "You May Not G e t a Second Chance" which showed explosive separation of a multi-piece rim. The film was shown at some seminars and was available to independent dealers for a fee. The service manager at Andy's D & K testified there was some of the multi-piece warning posters and literature in the shop, but he did not recall exactly which ones. In 1977, during the administration of President Carter and subsequent to the problems of the Nixon administration which are later discussed, the Director of the Office of Defects Investigation of the Department of Transportation reopened the K-type wheel investigation. In November, 1979, he transmitted a letter to the Vice President of Goodyear stating: "By 1973, inclusive, we have identified at least four ty-two accidents and twelve deaths involving the explosive disassembly of K-type rims. All types of multi-piece rims can be subject to a variety of servicing procedures, including the use of warnings, corroded or mismatched parts. When recognizing this, the significantly higher number of accidents found among K-type rims is totally unacceptable and points to an inherent safety defect in these rims." He requested Goodyear to notify him within seven working days whether they would conduct a safety recall. Goodyear reponded to that request stating they would attempt to recall the K-type wheels rims by replacing, without charge those manufactured in 1968 or purchased after January 1, 1971. Wheels manufactured prior to 1968 could be replaced with a new type rim at a discounted price. The recall was unsuccessful. Originally Goodyear offered ten percent of cost discount and later raised that to twenty-five percent. Following are the issues: 1. Did the trial court err in admitting the following irrelevant and prejudicial evidence in connection with the plaintiff's allegations of political bribery and lying to the Ervin Committee: (a) the political campaign contributions by Goodyear ; (b) all of plaintiff's references to Watergate; (c) the DeYoung videotape? 2. Did the trial court err in admitting the following irrelevant and prejudicial evidence of other accidents : (a) documents mentioning other accidents dissimilar to the plaintiff's accident; (b) testimony by Youngdahl from a document identified as Phase 111; (c) a video-taped dramatization of other accidents, which was shown to the jury; (d) the Brandford letter? 3. Did the trial court err in submitting instructions 13, 27 and 41 to the jury: (a) were instructions 13 and 27 erroneous because they did not include "without substantial change in condition" as an essential element of plaintiff's proof; (b) did instruction 41 erroneously equate "unjustifiable conduct" with malice? 4. Did the trial court err in submitting the issue of "failure to warn" to the jury? 5 . Was the jury verdict influenced by misconduct of the bailiff? 6. Was the jury verdict excessive, based on an unsupported assumption, and inspired by passion and prejudice? We will discuss those issues which require reversal or which may cause problems on retrial. Issue 1 relates to plaintiff's opening statement to the jury, plaintiff's evidence and plaintiff's closing argument with regard to an un-taxed slush fund in a Swiss bank account used by Goodyear as contribution to CREEP (Committee to Re-elect the President), extensive references, by name, to those persons involved in the Watergate scandal, with particular emphasis upon those convicted of crimes in the Watergate scandal, a video-tape of Goodyear chairman DeYoung appearing on television before the Ervin Senate Committee to discuss the campaign contribution, and the conviction of Goodyear in regard to that contribution. The theory upon which the plaintiff contends that all of such matters are admissible is under Section 27-1-221, MCA, which provides that exemplary damages may be allowed where a defendant has been guilty of "oppression, fraud, or malice, actual or presumed." The general standard for the recovery of punitive damages is restated in Graham v. Clarks Fork Nat. Bank (Mont. 1981), 631 P.2d 718, 721, 38 St.Rep. 1140, 1143, 1144, to wit: ". . . we stated the general rule respecting punitive awards: "'To warrant the recovery of such damages the act complained of must not only be unlawful, but must also partake somewhat of a criminal or wanton nature. And it is an almost universally recognized rule that such damages may be recovered in cases, and only in such cases, where the wrongful act complained of is characterized by some such circumstances of aggravation as willfulness, wantonness, malice, oppression, brutality, insult, recklessness, gross negligence, or gross fraud on the part of the defendant.'" (emphasis added) The Goodyear act complained of is the alleged defective design, failure to warn or manufacturing defect of the K-type wheel. The record fails to disclose any relationship between the political activities of Goodyear and the wheel case at issue here. We recognize that the purpose of the opening statement is to inform the jury of the evidence to be presented to justify recovery and place it in perspective. In plaintiff's opening statement, it is apparent that the intent was to persuade the jury that the criminal and wanton conduct of Goodyear in making its political contribution to CREEP and supporting the scandalous conduct of the Nixon administration, was a proper reason to conclude that punitive damages should be awarded against Goodyear, regardless of the presence or absence of a direct connection to the design, production and manufacture of the K-type wheel. Plaintiff's opening statement to the jury fills approximately seventy-two pages of transcript. Over forty of those pages are devoted to a recounting of the political slush fund, the contribution to the Nixon administration, and the Nixon Watergate scandal, with great emphasis placed upon the names of those who were convicted of various crimes in the Nixon administration. Following are illustrative portions of plaintiff's opening statement: ". . . It developed that in the 1960fs, Goodyear, through their foreign affiliates in Europe, were getting kickbacks or rebates from suppliers to their foreign affiliates, and rather than report them honestly and on the books, they decided not to pay any tax, not to report them on their books, to issue by some kind of a financial controller's gimick [sic] a bank check to the subsidiary and aquire the cash rebate. They were always paid in cash, and put it in a secret account that they set up with nothing but a code name. That code name of that account was Goyeda. That bank in Switzerland accumulated the cash then over a period of time. "One of the purposes, or the one we're concerned with of that cash fund, was to build up a domestic political slush fund in this country. . . "The opportunity to use it in influencing domestic politics arose either late 1971 or early 1972. . . " . . . In December 1971, the White House operative for personnel, the man who was doing the job in the federal government, he's the key man, was Fred Malek. . . "Fred Malek was on the Nixon White House Staff in the Office of Management and Budget as the personnel director. If you wanted a fat federal job, you saw Malek . . . you will recall that the Chief of Staff of Nixon's White House was the gentleman named H.R. Haldemann. In December of 1971, Malek suggested in a long memorandum, which is a public government record, that Haldemann allow Malek to set up a program, which he first talked about politicizing the bureaucracy, by which fancy words he meant, 'We're going to make the people who are civil servants in Washington and work in the departments such as the Department of Transportation, work for the re-election of the president.' "They finally smoothed this out to a euphamism called the responsiveness program, by which they proposed to make the departmental people in the executive branch of government responsive to the President's needs to be re-elected. And as you'll all recall, Mitchell became the chairman of the committee that became notoriously known as CREEP, the Committee to Re-elect the President. "He had been the Attorney General. Maurice Stans had been the Secretary of Commerce and became the Chairman of the Finance Committee to Re-elect the President. . . "In February, 1972, . . . Maurice Stans at a business counsel meeting in Washington meets Russell DeYoung. Who is he? Russell DeYoung is the Board Chairman of the Goodyear Tire & Rubber Company, and he asks Russell DeYoung if he can come and see him. The testimony will be DeYoung responds, 'You don't need to come and see me, I'll send a man to see you.' And he does. "The man he sends is the man that's in charge of the slush fund, Mr. Arden Firestone. "DeYoung and Firestone agree that they're going to contribute $20,000 to the request of Stans, and they hand-carry in cash $20,000 by way of courier, Firestone to the Off ice of the Finance Committee to Re-elect the President. "When Firestone carries the money in the bag wrapped in brown paper, it is testified, to 1701 Pennsylvania Avenue and delivers it to the Committee to Re-Elect the President, Stans advises him that he is disappointed, it is not enough, and sends him back to Akron for more. Firestone consults with Russell DeYoung and they agree between themselves they will add another $20,000 to the ante. And then DeYoung decides that he will add $3,000 of his own, and a check from his wife for two more. A total of $45,000. The other twenty comes out of a safe, and now they are up at $45,000. Firestone returns to Washington with the cash, delivers it to Stans, and it is accepted without comment. "Now, it develops that the Finance Committee to Re-elect the President is made up of, among other people, of Maurice Stans, of course, and a budget committee serving with him, and Magruder, and on the political committee is Fred Malek. . . " . . . In January 1972, following the Nixon re-election, the president of the Union Oil Company, Claude Griniger, G-R-I-N-I-G-E-R, I believe, became the Secretary of Transprotation. His righthand man, Dr. James Gregory, became the Administrator of the National Highway Traffic Safety Administration. The other Secretary of Transportation, and the evidence will be that Mr. Malek proposed that we work through the undersecretary, he's our man--the Undersecretary of Transportation, Egil Krogh. He--strange name, E-G-I-L K-R-0-G-H, but pronounced like the bird. Egil Krogh had been in the Nixon White House Staff. He had been the man who organized the White House security force that became known as the plumbers. "Egil Krogh acted under Secretary of Transportation through the spring of 1973, before the plumbers and the grand juries finally got to him. ". . . In April 1973, fact, Common Cause, a consumer public interest group, following the burglary and the aftermath of the Watergate, files a lawsuit in the United States District Court for the District of Columbia against the Committee to Re-elect the President. "In April, they're asking for records of the contributors to the Finance Committee to Re-elect before the April 7, 1973 deadline. . . "Firestone advises him, we'll have to get back to Stans. He talked to DeYoung. Stans and DeYoung conclude that they'll give them some phoney names. Stans and DeYoung met with the executives of Goodyear, that included Mr. Pilliod, Mr. Lane, who is their public relations man, and others. They explained the situation, and those gentlemen agree that their names can be misrepresented as the contributors, when they didn't give a cent of money. "Well, by July, Common Cause, it now appears to the lawyer for the Finance Committee to Re-elect, that the judge is going to make him reveal the records of who it was that gave this pre-April 7th money. Now, the only evidence, the only record of it, because they destroyed all the evidence, was a list prepared at F. CREEP, and sent down the street a block to 1600 Pennsylvania Avenue, addressed to Rosemary Wood, the personal secretary to Richard Nixon. That became know as Rosemary Smith, and Rosemary's list was the only record of the contributors prior to April 7th, coding, cash or whatever. Goodyear employees appear on Rosemary's list, which will be in evidence. "Mr. Meyers and Mr. DeYoung and Mr. Firestone consult with outside counsel, and they decide the jig 's up, so they go to the Watergate special prosecutor, who you recall is Archibald Cox at the time, to his staff, and they tell their story. "Archibald Cox charges Goodyear with violation of the federal election law, felony offense, or it could be a felony offense, and also charges Russell DeYoung with that same crime. . . "On April 19, 1973, Russell DeYoung pleads guilty to violating the federal election law by giving the corporate contribution, and the Goodyear Tire & Rubber Company pleads guilty to the same charge, or substantially the same. Those guilty pleas are a matter of record and they'll be before you. "Mr. DeYoung is subpoenaed to appear before the Irvin [sic] Committee, that's the Committee of the Senate, Senate Select Committee on Presidential Campaign Activities. It's chaired by Sam Irvin [sic] from North Carolina. He appears on November 15, 1973, and before the Irvin [sic] Committee and a television audience of 50 million, possibly including some of yourselves. He testifies under oath about the scenario of these payments." No statement was made by plaintiff's counsel in the opening statement to connect all of the foregoing to the Department of Transportation, the wheel investigation and this case. Goodyear moved for a mistrial at the conclusion of plaintiff's opening statement, on the basis that the plaintiff had failed to state sufficient facts to show any relationship to the actions of the Department of Transportation and its investigation of the K-type wheel. Counsel also argued that the plaintiff had not stated sufficient facts to show a basis for an award of punitive damages based on the political contribution issue. The District Court considered the objections and denied the motion stating in part: "THE COURT: Okay. Well I don't need any further agrument, gentlemen. There isn't any question about it that references to Watergate and the participants in this thing is prejudicial. I agree with that, John [Goodyear's counsel] . There's just simply no question about that. Whether or not we can overcome that by admonitions and instructions to the jury from here on out remains to be seen. "The difficulty I have with the motion for a mistrial is that granting that would prevent the plaintiffs from putting on their case, and they've got a right to their theory of the case. "And accordingly, predicated upon that fact alone, the motion for a mistrial is denied. The same is denied, however, without prejudice to resubmit that motion or any other relevant motion having to do with the prejudice or the removal of this particular issues from the case. Alright?" From opening, through plaintiff's case-in-chief, to closing, plaintiff presented his theory of the Goodyear political contribution to the Nixon Administration in an unsuccessful attempt to tie the activities of the Nixon Administration to the investigation of the K-type wheels. In addition to the motion for mistrial at the conclusion of the opening statement, Goodyear moved for mistrial at the close of plaintiff's evidence and again at the close of all evidence. All motions were denied. The record shows that Goodyear admitted that it had p l e a d g u i l t y t o making a c o n t r i b u t i o n t o CREEP, t h a t t h o s e c o n t r i b u t i o n s were i n v i o l a t i o n of T i t l e 1 8 , U.S.C., S e c t i o n 601, a misdemeanor, and Goodyear p a i d f i n e s of $5,000 and $1,000. Throughout t h e t r i a l , p l a i n t i f f attempted t o l i n k t h e Goodyear c o n t r i b u t i o n t o an attempted avoidance of t h e r e c a l l of t h e K-type wheels. Testimony b e f o r e t h e S e n a t e E r v i n Committee was shown t o t h e j u r y , w i t h emphasis on t h e e f f o r t s of Mr. Malek, a member of t h e Committee t o Re-elect t h e P r e s i d e n t . Malek, who t e s t i f i e d b e f o r e t h e E r v i n C o m m i t t e e , d e n i e d knowing o f a n y s i t u a t i o n s i n w h i c h p r o c e e d i n g s b e f o r e any department o r agency were i n t e r f e r e d w i t h , i n f l u e n c e d o r o b s t r u c t e d . P l a i n t i f f ' s t h e o r y i n o f f e r i n g e v i d e n c e o f t h e Goodyear c o n t r i b u t i o n t o t h e j u r y was t o s u g g e s t t h a t t h e c o n t r i b u t i o n was made i n o r d e r t o p r e v e n t t h e K-type wheels from being r e c a l l e d . I t should be noted t h a t it was n o t u n t i l 1974, a f t e r t h e i n v e s t i g a t i o n had been c l o s e d , t h a t NHTSA ( t h e N a t i o n a l Highway T r a n s p o r t a t i o n & S a f e t y A d m i n i s t r a t i o n ) was empowered t o o r d e r any r e c a l l . I n a d d i t i o n , even a f t e r t h e 1974 s t a t u t o r y change which allowed r e c a l l , NHTSA could o r d e r r e c a l l s o n l y i n s i t u a t i o n s where t h e r e had been a f i n d i n g of s a f e t y - r e l a t e d d e f e c t s . Up t o t h e t i m e of t r i a l , t h e r e was never a f i n d i n g by NHTSA t h a t t h e Goodyear rims had a s a f e t y - r e l a t e d d e f e c t . Our c a r e f u l review of t h e v e r y e x t e n s i v e r e c o r d , shows a t o t a l a b s e n c e of e v i d e n c e c o n n e c t i n g t h e p o l i t i c a l c o n t r i b u t i o n of Goodyear t o t h e i n v e s t i g a t i o n by a f e d e r a l agency of m u l t i - p i e c e rims of t h e t y p e which i n j u r e d t h e p l a i n t i f f . A s a r e s u l t , it is c l e a r t h a t t h e evidence of Goodyear's contribution to the Committee to Re-elect the President was inadmissible under Rule 402, Mont.R.Evid. In allowing the injection of the Goodyear political contribution, its criminal conduct in making that contribution, the Watergate scandal, and the references to the criminal participants in that scandal, the trial court allowed a relatively simple products liability case to become a political circus and denied the parties the right to a fair trial. We note that the jury split 8-4 on liability indicating it was rather close on the products liability questions. However, the vote for punitive damages was 12-0. This suggests improper influence of the jury on the punitive damage question. In failing to exclude the prejudicial statements and prejudicial evidence, the trial court permitted the jury to indulge in improper speculation and guesswork contrary to our holding in Graham v. Rolandson (1967), 150 Mont. 270, 435 P.2d 263. It has long been the law in Montana, that to sustain a recovery the evidence relied upon, whether direct or indirect, must be substantial--more than a mere scintilla. Escallier v. Great Northern Ry. Co. (1912), 46 Mont. 238, 127 P. 458; McIntyre v . Northern Pac. Ry. Co. (1920), 58 Mont. 256, 191 P. 1065. A verdict cannot rest upon conjecture, however shrewd, nor upon suspicion, however well grounded. Olson v. Montana Ore Purchasing Company (1907), 35 Mont. 400, 89 P. 731. In Monforton v . Northern Pac.Ry.Co. (1960), 138 Mont. 191, 211, 355 P.2d 501, 511, this Court held: "The record presents no evidence whatever that appellee's attention was distracted by the Cloyd car or that Monforton, because of any distraction, failed to make the necessary look-out for the train. To find otherwise involves an assumption or inference based upon speculation or conjecture that the Cloyd car did distract his attention and the second assumption or inference based on the first, that this distraction was the cause of the failure of Monforton to discover the train's approach. But under section 93-1301-1 to 4, and Fisher v. Butte Electric Ry., 72 Mont. 594, 235 P. 330, one inference cannot be drawn from any other inference or presumption." See also Graham v. Rolandson, supra; Hageman v . Tourance (1965), 144 Mont. 510, 398 P.2d 612. In allowing this evidence to be admitted the jury was allowed to speculate concerning the government's investigation into the K-type wheels, known as the IR-215 investigation, despite the fact that Goodyear voluntarily discontinued the manufacture of the K-type wheels three years earlier and despite the fact that NHTSA had no power to order any of those rims to be recalled. It allowed the jury to speculate about on the Malek memorandum, and to surmise, with no evidentiary support, that Goodyear believed that there was a commitment by the White House prior to making its contribution. It allowed the jury to conclude, with no evidentiary basis, that unknown persons in the White House knew of Goodyear's preferences and were in a position to order them to be carried out. It allowed the jury to think, despite all the evidence to the contrary, that Andrew Detrick was moved to the head the Office Defects Investigation, the ODI, by the Secretaty of the Department of Transportation at the direction of unknown White House employees. Finally it allowed the jury to assume, with no evidence to support the assumption that Detrick closed the IR-215 investigation in 1972 differently than those closed by his predecessor. We find no evidence to support these conclusions, much less proof that these inferences and conclusions are reasonable or even probable. The evidence of Goodyear's contribution should not have been submitted to the jury under Rule 402, Mont .R.Evid. Unquestionably, the plaintiff's allegations of political bribery were prejudicial to the appellant Goodyear. Circumstances pertaining to the Watergate investigation and subsequent name dropping of the notorious parties had no connection with the cause of action. As previously noted, the trial court observed, "advice of . . . mentioning Watergate and all the rest of it is inherently prejudicial." The court also noted that the prejudice of putting such evidence before the jury outweighed its probative value. As we review the order of the District Court in the present case, we conclude that it is possible that the trial judge misunderstood our holding in Kuiper v. The Dist. Court of the Eighth Judicial Dist. (Mont. 1981), 632 P.2d 694, 38 St.Rep. 1288. In that holding, we allowed the plaintiff considerable latitude in discovery including, taking the depositions of Goodyear executives and requesting production of documents. However, our holding in that case did not in any manner reduce the duty of the District Court to pass upon the admissibility and relevancy of information produced in the course of discovery. Last we consider as a part of issue 1 the admissibility of the DeYoung videotape. On retrial this tape should not be played to the jury. It fails to show a n y t h i n g d i r e c t l y c o n n e c t e d w i t h t h e K-type w h e e l i n v e s t i g a t i o n o r t h e a c c i d e n t which is t h e s u b j e c t of t h i s a c t i o n . See Montana Rules of Evidence 402 and 403; 31 C.J.S. Evidence, S e c t i o n 108. A f t e r a c a r e f u l r e v i e w o f t h e e x t e n s i v e r e c o r d i n c l u d i n g t h e t r a n s c r i p t , we conclude t h a t t h e D i s t r i c t Court e r r e d i n a d m i t t i n g i r r e l e v a n t and p r e j u d i c i a l e v i d e n c e of t h e Goodyear p o l i t i c a l campaign c o n t r i b u t i o n and a l l o f t h e e v i d e n c e r e l a t i n g t o Watergate. I n r e a c h i n g t h a t c o n c l u s i o n , w e do n o t i n any way condone t h e s u r r e p t i t i o u s c o n t r i b u t i o n o f $40,000 by Goodyear t o t h e Committee t o Re-elect t h e P r e s i d e n t . T h a t was g r o s s l y improper conduct. S i m i l a r l y , w e d o n o t i n a n y way a p p r o v e o r c o n d o n e Watergate, i n c l u d i n g t h e p a r t i c i p a n t s and t h e i r a c t i o n s , which were s o g r a p h i c a l l y d e s c r i b e d t o t h e jury. T h a t is a n a t i o n a l s c a n d a l of which none o f u s a r e proud. The key element is t h a t p l a i n t i f f c o m p l e t e l y f a i l e d t o c o n n e c t t h e p o l i t i c a l c o n t r i b u t i o n o f Goodyear t o t h e f e d e r a l i n v e s t i g a t i o n of t h e m u l t i - p i e c e wheels. The p l a i n t i f f f a i l e d t o prove t h a t t h e c o n t r i b u t i o n was r e l a t e d i n any manner t o t h e m u l t i - p i e c e wheel, which exploded and caused t h e i n j u r y t o t h e p l a i n t i f f . W e a g r e e w i t h t h e D i s t r i c t C o u r t ' s c o n c l u s i o n t h a t t h i s evidence was e x t r e m e l y damaging and o b v i o u s l y i n f l a m a t o r y i n n a t u r e and should have been a d m i t t e d o n l y upon proof showing its r e l e v a n c e t o t h e p r e s e n t a c t i o n . The r e c o r d d i s c l o s e s a t o t a l f a i l u r e t o e s t a b l i s h such r e l e v a n c e . The p o s s i b i l i t y o f p r e j u d i c e is c l e a r l y p r e s e n t upon t h e examination o f t h e v e r y s u b s t a n t i a l p u n i t i v e damages. W e r e g r e t t h a t c o u n s e l deemed i t n e c e s s a r y t o b r i n g i n t h i s t o t a l l y e x t r a n e o u s a n d p r e j u d i c i a l m a t e r i a l . I t prevented h i s s e r i o u s l y - i n j u r e d c l i e n t , a s w e l l a s t h e d e f e n d a n t , from r e c e i v i n g a f a i r t r i a l . The second i s s u e t o be c o n s i d e r e d is whether t h e t r i a l c o u r t e r r e d i n a d m i t t i n g i r r e l e v a n t and p r e j u d i c i a l e v i d e n c e o f o t h e r a c c i d e n t s . T h i s i s s u e is s u b d i v i d e d i n t o sub-paragraphs. W e w i l l d i r e c t our a t t e n t i o n t o t h o s e s u b - p a r a g r a p h s c o v e r i n g m a t e r i a l t h a t s h o u l d n o t b e c o n s i d e r e d on r e t r i a l . I n Runkle v. The B u r l i n g t o n Northern (Mont. 1 9 8 1 ) , 613 P.2d 982, 37 St.Rep. 995, t h i s Court set f o r t h t h e t e s t f o r d e t e r m i n i n g t h e r e l e v a n c y of " o t h e r a c c i d e n t s " e v i d e n c e . The a d m i s s i b i l i t y t e s t f o r s u c h evidence is t o whether t h e c i r c u m s t a n c e s s u r r o u n d i n g t h e p r o d u c t involved i n o t h e r a c c i d e n t s were s u b s t a n t i a l l y t h e same o r s i m i l a r t o t h e a c c i d e n t a t i s s u e . T h i s r u l e s h o u l d be t h e g u i d e f o r t h e t r i a l c o u r t on r e t r i a l . A c o n c e r t e d e f f o r t should be made by t h a t c o u r t t o a l l o w t h e admission of e v i d e n c e of o n l y t h o s e a c c i d e n t s where both t h e p r o d u c t and t h e c i r c u m s t a n c e s s u r r o u n d i n g t h e a c c i d e n t were s i m i l a r t o t h e c a s e a t b a r . I n a p r o d u c t s l i a b i l i t y c a s e t r i e d i n t h e f e d e r a l c o u r t , Rexrode v. American Laundry P r e s s Co. ( 1 0 t h C i r . 1 9 8 2 ) , 674 F.2d 826 a t 829, t h e c o u r t h e l d t h a t s u b s t a n t i a l s i m i l a r i t y is r e q u i r e d i n o r d e r t o " p r e v e n t t h e j u r y from being m i s l e d , " and t h e c o u r t f u r t h e r h e l d t h a t t h e p a r t y o f f e r i n g t h e " o t h e r a c c i d e n t s " b e a r s t h e burden o f showing such s i m i l a r i t y . With t h e s e r u l e s , t h e t r i a l c o u r t can on r e t r i a l c a r e f u l l y p r o t e c t t h e r e c o r d o f a d m i s s i o n s o f t h e r e s p o n d e n t s h e r e . I s s u e No. 5 is d i r e c t e d t o whether t h e c o u r t committed e r r o r i n denying a new t r i a l f o r t h e a l l e g e d misconduct of t h e b a i l i f f . T h i s i s s u e is d i s c u s s e d p r i n c i p a l l y because t h i s c a s e is being remanded f o r r e t r i a l . W h i l e t h e f a c t s i t u a t i o n involved h e r e i n might n o t n e c e s s i t a t e a r e v e r s a l on t h i s i s s u e a l o n e due t o t h e f a c t t h a t t h e d e f e n d a n t ' s counsel l e a r n e d of t h i s misconduct w h i l e t h e j u r y was still o u t and f a i l e d t o b r i n g t h e m a t t e r immediately t o t h e a t t e n t i o n of t h e t r i a l c o u r t , it is of such import t h a t w e u r g e t h e t r i a l judge t o i n s t r u c t t h e b a i l i f f s of t h e c o u r t t o f o l l o w t h e s t a t u t e a s t o t h e i r d u t i e s and n o t communicate w i t h t h e j u r o r s d u r i n g t h e i r d i s c u s s i o n s . The p e t i t i o n f o r a new t r i a l a l l e g i n g t h e misconduct o f t h e b a i l i f f was made u n d e r PICA, 25-11-102, w h i c h p r o v i d e s : "Grounds f o r new t r i a l . The f o r m e r v e r d i c t o r o t h e r d e c i s i o n may be v a c a t e d and a new t r i a l g r a n t e d o n t h e a p p l i c a t i o n of t h e p a r t y aggrieved f o r any of t h e f o l l o w i n g c a u s e s m a t e r i a l l y a f f e c t i n g t h e s u b s t a n t i a l r i g h t s of such p a r t y : " ( 1 ) i r r e g u l a r i t y i n t h e p r o c e e d i n g s of t h e c o u r t , j u r y , or a d v e r s e p a r t y o r any o r d e r of t h e c o u r t o r abuse of d i s c r e t i o n by which e i t h e r p a r t y was prevented from having a f a i r t r i a l ; " Here t h e a f f i d a v i t o f c o u n s e l f o r t h e d e f e n d a n t Goodyear s t a t e d t h a t , (1) t h e b a i l i f f t o l d t h e j u r o r s n o t t o " g e t hung up" on t h e i n s t r u c t i o n s i n d e c i d i n g t h e c a s e ; and, ( 2 ) d u r i n g t h e d e l i b e r a t i o n s w h i l e s e v e r a l j u r o r s were t r y i n g t o a p p l y t h e i n s t r u c t i o n s , t h o s e j u r o r s were reminded by a n o t h e r j u r o r of what t h e b a i l i f f had s a i d a b o u t n o t " g e t t i n g hung up" on t h e i n s t r u c t i o n s ; and, ( 3 ) t h e b a i l i f f , upon being informed by a j u r o r t h a t t h e r e were " f o u r hard-nosed women i n t h e r e you c a n ' t g e t a n y t h i n g done w i t h , " responded, "well, can't you work around them?" and, (4) when a juror gave the bailiff a written question about an instruction, the bailiff stated that the question was "self-explanatory. " Such conduct by a bailiff cannot be tolerated. The appellant next argues the question of instructions given, and whether the court erred in submitting instructions 13, 27 and 41 to the jury, and that these instructions did not include "without substantial change and condition" as an essential element of the plaintiff's proof. This Court entered into the age of product liability in 1973 with its opinion in Brandenburger v. Toyota Motor Sales, U . S . A . . Inc. (1973), 162 Mont. 506, 513 P.2d 268. In that opinion, we adopted Section 402A of the Restatement of Torts (2nd Ed.), as the applicable law in Montana for strict product liability cases. That opinion was further developed in a case of this Court that came down five years later, Brown v . North American Manufacturing Company (1978), 176 Mont. 98, 576 P.2d 711. Many of the arguments of defense counsel in this case were made in Brown. This is particularly true as to the argument of appellants that the danger was "open and obvious" and that the product was not "defective" or "unreasonably dangerous" if the danger, occasioned by the use, is open and obvious to the user. As we noted in Brown, supra, the appellant advanced the "open and obvious danger," or "patent-latent" rule as a bar to the plaintiff's recovery under the theory of strict liability. There we rejected such rule noting also that it had been rejected by many other jurisdictions. We held in Brown, that the "open and obvious dangern rule is not contained in 2 Restatement of Torts (2nd Ed.) Section 401A, nor in the comments thereto. The source of that rule was a New York case, Campo v. Scofield (1950), 301 N.Y. 468, 95 N.E.2d 802. However, that rule was abandoned by the New York Court of Appeals in a later case, Micallef v . Miehle Co., Division of Miehle-Goss Dexter, Inc. (1976), 39 N.Y.2d 376, 384 N.Y.S.2d 115, 348 N.E.2d 571. In Brown, following the better reasoned cases, we held that such a rule would operate to encourage misdesign. The fact that it was a patent danger does not prevent a finding that the product is in a defective condition or unreasonably dangerous to the particular plaintiff. Rather, the obvious character of the defect or danger is but a factor to be considered in determining whether the plaintiff in fact assumed the risk. We held in Brown, supra, that, "a showing of proximate cause is a necessary predicate to plaintiff's recovery in strict liability." Strict liability is, of course not "complete liability without fault." There is no absolute immunity. Plaintiff's behavior may result in a break in the chain of causation and operate to bar recovery as discribed in 2 Restatement of Torts (2d Ed.), Section 402A, comment (n). We further hold that the above standard of conduct, set forth in Section 402A, comment (n), of plaintiff as related to the injury must be considered on the assumption of risk when applied to strict liability cases. We further hold that in considering assumption of risk in strict liability cases, the actions of the plaintiff are to be judged by applying a subjective standard to plaintiff Is conduct rather than the objective standard of a reasonable man. The evidence produced in this case, including tl~~? appellant Goodyear's records and records from federal. government investigation of the rim design, indicates that there were numerous accidents experienced over a considerable period of time involving the K-type rim. Testimony from both the Goodyear engineers and plaintiff's experts, as well as Goodyear's field surveys and their conclusions, indicates that the K-type rim was an inherently and unreasonably dangerous design, and that for some years Goodyear had knowledge of that fact. Part of the testimony of Goodyear's expert, a field engineer, R.M. Smith, showed that the parts of the rim were "inherently dangerous both on the highway and in the shop. When in use, the dangerous condition is often masked." In this case, the appellant does not raise the question of sufficiency of the evidence of design defect. There was no issue presented in the case of intervening alteration in the design of the product. Goodyear's design engineer, Gerhart Gerbeth, testified that he could find no evidence of any indication that anyone had changed Goodyear's design of either the rim or the ring, either or both of which could have contributed to the explosion that injured the plaintiff. Appellant Goodyear contends that instruction no. 13 is erroneous in omitting the language requiring that the "product reached Dennis Kuiper without substantial change in the condition in which it was sold." However, appellant in this instruction did not submit the defective condition of the product, but rather that the product was defectively designed. Appellant objects to instruction no. 13 which states: "You are instructed that in order to recover on the allegation of design defect, the plaintiff must prove: "First, that the defendant designed and manufactured the K-type rim base and ring which at the time of manufacture was defective in design and unreasonably dangerous to the user. "Second, that at the time of the accident the K-type rim base and ring were being used by Dennis Kuiper in a manner reasonably anticipated by the defendant. "Third, that the defective design in the K-type rim base and ring proximately caused injury to the plaintiff." Appellant argues that the instruction omits the requirement that the product be shown to be in substantially the same condition at the time of injury as it was at the time it left the manufacturer's hands. The correct law governing plaintiff's proof in a design case is found in Brown, 176 Mont. at 105, 106, 576 P.2d at 716, we stated: "[l] In order to establish a prima facie case in strict liability based upon the above definition, a plaintiff must prove the following elements: (1) The product was in a defective condition 'unreasonably' dangerous to the user or consumer; (2) The defect caused the accident and the injuries complained of; and ( 3 ) The defect is traceable to the defendant." Court's instruction no. 13 requires the jury to find that the product was defective in design at the time of manufacturing. This satisfies the three-prong test for a prima facie case in strict liability, which is the third element of the plaintiff's case set forth in Brown, supra. F J e find that all of the elements of the design defect case are set forth in Brown and are incorporated in the instruction no. 13. At this point we note that the respondent cites as authority in its brief, Kuiper v . District Court of the Eighth Judicial Dist., supra, for the proposition that said case sets forth the elements of strict liability for defective design and failure to warn. The respondent further bases much of his argument on a citation allegedly made in Kuiper to that effect. We note that the action in Kuiper was one of supervisory control directed to the discovery of certain documents and compelling answer thereto. In rejecting Goodyear's argument denying his motion for new trial, the trial court very carefully considered the objections to the above two instructions and set forth his reasons for denying the same. We concur in the trial judge's holding and find no error. The trial judge noted in denying the motion for new trial that, "There is no requirement that a design remain in substantially the same condition since obviously the design of the product does not change from the date of its original manufacture, absent some modification in design which was not an issue in this case. "This issue is considered at length during the instruction conference between the court of counsel and it is the court's concerted opinion that in a [product liability] design case, the changes in the product through wear, tear, or even abuse do not affect the question of whether the original design was defective and unreasonably dangerous. Design is judged not by the condition of the product, but the state of scientific and technical knowledge availabe to the designer at the time the product was place on the market." Goodyear acknowledged this proposition in its offered instuction 27(a), which was court's instuction no. 14. "If the design was defective and that defect proximately caused the accident, any design changes and condition of the rim during the prior uses are irrelevant and would not preclude the plaintiff's recovery for design defect. * * *" The Court notes that Goodyear's proposed instruction 25(a), given as court's instruction no. 24, uses the word "anticipate" and resolves any possible confusion or misdirection regarding substantial change by requiring a finding in favor of Goodyear. If the jury determined the product was not defective and unreasonably dangerous when it left Goodyear's control, but was made dangerous by subsequent alteration, change, improper maintenance, abuse, or abnormal use, which the manufacturer could not reasonably anticipate, there would be no liability. These instructions were read together, and in light of the evidence of the case make it clear that Goodyear could not be held liable for defects in the product occurring after it left Goodyear's control, as opposed to design defect. Both instructions are correct statements of the law. Obviously, the trial judge here instructed the jury to the effect of subsequent alteration or change, but they were cautioned that the law does not presume that the product was in defective condition at the time it left the hands of the manufacturer. Instruction no. 20, stated that the lapse of time from the date of the manufacture to the date of the accident, was a factor to be considered; instruction no. 22, t h a t t h e manufacturer is n o t r e q u i r e d t o produce o r s e l l a p r o d u c t t h a t w i l l never wear o u t ; i n s t r u c t i o n no. 23, t h a t i n o r d e r t o r e c o v e r , t h e p l a i n t i f f had t o prove t h a t t h e r i m base and r i n g were being used i n manner r e a s o n a b l y a n t i c i p a t e d by Goodyear; i n s t r u c t i o n no. 1 3 , t h a t t h e j u r y must f i n d t h a t t h e p r o d u c t was d e f e c t i v e i n d e s i g n a t t h e t i m e of manufacturing i n o r d e r f o r p l a i n t i f f t o r e c o v e r . Not o n l y were t h e s e i n s t r u c t i o n s p r o p e r s t a t e m e n t s of t h e law i n p r o d u c t l i a b i l i t y i n Montana, b u t t h e y were p r o p e r l y g i v e n i n t h i s c a s e . W e f i n d no e r r o r . W e have h e l d i n s t r i c t l i a b i l i t y c a s e s , such a s Brandenburger, and Brown, t h a t : "On whatever t h e o r y , t h e j u s t i f i c a t i o n f o r s t r i c t l i a b i l i t y h a s been s a i d t o be t h a t t h e s e l l e r , by marketing h i s p r o d u c t f o r t h e u s e and c o n s u m p t i o n , h a s u n d e r t a k e n a n d assumed a s p e c i a l r e s p o n s i b i l i t y toward any member of t h e consuming p u b l i c who may be i n j u r e d by it; t h a t t h e p u b l i c h a s a r i g h t and d o e s e x p e c t , i n a c a s e o f p r o d u c t s which it needs and f o r which it is f o r c e d t o r e l y on t h e s e l l e r , t h a t r e p u t a b l e s e l l e r s w i l l s t a n d behind t h e i r goods; t h a t t h e p u b l i c p o l i c y demands t h a t t h e burden o f a c c i d e n t a l i n j u r i e s caused by p r o d u c t s i n t e n d e d f o r consumption t o be p l a c e d upon t h o s e who m a r k e t t h e m , and b e t r e a t e d a s a c o s t of p r o d u c t i o n a g a i n s t w h i c h l i a b i l i t y i n s u r a n c e c a n b e o b t a i n e d ; and t h a t t h e consumer of such p r o d u c t s is e n t i t l e d t o t h e maximum o f p r o t e c t i o n a t t h e hands of someone, and t h e p r o p e r p e r s o n s t o a f f o r d it a r e t h o s e who p l a c e d t h e p r o d u c t i n t h e market." Restatement of T o r t s (2d Ed.), S e c t i o n 402A, comment ( c ) , p. Recognizing t h a t t h e s e l l e r is i n t h e b e s t p o s i t i o n t o i n s u r e p r o d u c t s a f e t y , t h e law of s t r i c t l i a b i l i t y imposes on t h e s e l l e r a d u t y t o p r e v e n t t h e r e l e a s e of "any p r o d u c t " i n t h e d e f e c t i v e c o n d i t i o n unreasonably dangerous t o t h e user or the consumer, "into the stream of commerce." See Restatement of Torts (2d Ed.), Section 401(a)(65). This duty is unknown in the law of negligence and it is not fulfilled even if the seller takes all reasonable measures to make his product safe. The liability issue focuses on whether the product was defective and unreasonably dangerous, not only upon the conduct of the user or the seller. Put in this light, the only duty imposed on the user is to act reasonably with respect to the product which he knows to be defective and dangerous. It is only when the user unreasonably proceeds to use a product which he knows to be defective and dangerous, that he violates this duty and relinquishes the protection of the law. In summary, assumption of risk is an available defense in a strict liability case. The defense must establish that plaintiff voluntarily and unreasonably exposed himself to a known danger. If the defense is found to exist then plaintiff's conduct must be compared with that of defendant. The same Montana law which governs comparison of contributory negligence controls comparison of assumption of risk. The policies of negligence and warranty liability will best be served by keeping the spheres in which they operate separate until such time as the legislature indicates how and by what extent they are to be changed. The standards of care and the duties are well-defined in each sphere. We have carefully examined the many issues raised on this appeal, and except to the issues here addressed, we find further discussion of these issues unnecessary. However, under the facts and circumstances herein recounted, it can o n l y be s a i d t h a t t h e i r r e l e v a n t p o l i t i c a l e v i d e n c e a f f e c t e d t h i s j u r y . I t t a k e s no f a n c i f u l f l i g h t t o p e r c e i v e t h e s t r o n g p r o b a b i l i t y o f p r e j u d i c e t o t h e d e f e n d a n t p r e p a r i n g t o defend a p r o d u c t l i a b i l i t y cause. I t is u n d e r s t a n d a b l e f o r p e r s o n s w i t n e s s i n g t h e enormity of t h e misconduct of t h e o f f i c i a l s of Goodyear T i r e & Rubber Company, i n i t s e f f o r t s t o r e - e l e c t Richard Nixon t o hold t h e i r feet t o t h e f i r e and make them pay f o r t h e i r misdeeds. That is n o t t h e problem t h i s Court had t o f a c e i n d e c i d i n g t h i s c a s e . The f i r s t J u s t i c e Harlen s p e a k i n g f o r t h e c o u r t i n t h e c a s e of Vicksburg and Meridan R a i l r o a d Co. v. O'Brien ( 1 8 8 6 ) , 119 U . S . 99, 103, 7 S.Ct. 172, 174, 30 L.Ed. 299, 300, s t a t e d : "While t h i s c o u r t w i l l n o t d i s t u r b a judgment f o r a n e r r o r t h a t d i d n o t o p e r a t e t o t h e s u b s t a n t i a l i n j u r y of t h e p a r t y a g a i n s t whom it was committed, it is w e l l - s e t t l e d t h a t a r e v e r s a l w i l l be d i r e c t e d u n l e s s it a p p e a r s beyond a d o u b t t h a t t h e e r r o r complained o f d i d n o t and could n o t have p r e j u d i c e d t h e r i g h t s of t h e p a r t y . " See a l s o , Goff v. K i n z l e ( 1 9 6 6 ) , 148 Mont. 61, 417 P.2d 105. T h i s c a u s e is remanded f o r a new t r i a l . W e concur: 74?@U&\ Chief J u s t i c e Justices Mr. Justice L.C. Gulbrandson specially concurring. I concur with the result expressed in Mr. Justice John Conway Harrison's Opinion, but not with the comments expressed therein which reaffirm an abandonment of the defense of assumption of risk enunciated in 2 Restatement of Torts (2d Ed.), Section 402A, comment (n). , / / / Mr. Justice Frank B. Morrison, Jr. dissents as follows. I very vigorously dissent from that aspect of the majority opinion relating to Goodyear's political activities. The serious departure from evidentiary standards found in the position results from an emotional reaction "Watergate". From time to time the judicial vision of even appellate judges becomes clouded. Sadly, this is one of those times. Let us forget about political partisanship. Let us not debate the morality of the Nixon administration. This is a court of law. Well recognized evidentiary principles exist and properly applied, they control the resolution of this issue. The applicable legal principles are: 1. In civil actions, a trial court has wide discretion in admitting circumstantial evidence and its ruling will not be disturbed on appeal absent a showing of abuse of discretion. Unified School District #490, Buttler County v. Celotex Corp. (1981), 6 Kan. App.2d 346, 629 P.2d 196; Barmeyer v. Montana Power Co. (1983), 657 P.2d 594, 40 St.Rep. 23. 2 . Circumstantial evidence sufficient to prove a fact in a civil cause need not exclude every reasonable conclusion other than the conclusion sought to be established. Plaintiff's evidence is sufficient if it affords a basis for a reasonable inference by the trier of fact although there are other reasonable inferences which might be drawn by that trier of fact. Jacques v. Montana National Guard (1982), 649 P.2d 1319, 39 St.Rep. 1565. 3. Fraudulent, dishonest and dishonorable conduct cannot often be proven by direct evidence. Therefore, the courts grant great latitude to the one having the burden of proof. Facts which throw suspicion on a transaction or course of dealing are admissible even though a certain amount of speculation is necessarily involved when drawing inferences from those facts. Montana National Bank v. Michels (1981), 631 P.2d 1260, 38 St.Rep. 334; Merchants National Bank v. Greenhood (1895), 16 Mont. 395, 41 P. 250. The evidence which the majority found to be improperly admitted, and which will be excluded from the future trial, can be summarized as follows: In April of 1970, the PJational Highway Traffic Safety Administration had instituted an investigation of K-rims. The stated purpose of the investigation was to determine whether the problem represented a safety defect within the meaning of the National Traffic and Motor Vehicle Safety Act of 1966 (tr. 1894). The investigation was known as OBI-215. The investigation was officially closed on December 31, 1973, without a consumer notification or recall campaign (plaintiff's exhibit 37, tr. 1893 and 1899). There is no question that Goodyear was seriously concerned about the investigation and the potential of having to notify consumers that K-rims were dangerously defective. There were 2,900,000 K-type rims in service in 1972-73 (tr. 3181) . Joseph Hutchison, the head of safety for Goodyear, estimated the cost of replacing K-rims at $50 apiece (tr. 1712). The cost of a recall would reach the magnitude of $145,000,000. Hutchison, the head of safety, characterized the investigation of K-rims as an "overwhelming problem" (plaintiff's exhibit 72) . A Goodyear engineer researching the problem, was told by the Department of Transportation that the investigation had "top priority" (tr. 3735-36) . The person who, prior to March of 1972, had headed the office of defects investigation for NHTSA was one Joseph Clark. In February and March of 1972, Goodyear executives had negotiated a cash contribution to the Committee for Re-election of the President. Initially, Goodyear offered $20,000. Maurice Stands rejected this offer and said that he hoped for $50,000. Thereafter, a Goodyear vice president named Arden Firestone carried cash and checks totaling approximately $45,000 to the Committee to Re-elect. This was done March 14, 1972. Three days later, on March 17, 1972, Carter was removed from his position and transferred to Ohio. He was replaced by Andrew Detrick, who was placed in charge of the office of defects investigation though he had no background in that kind of work. In early August, 1972, Joseph Hutchison met in Washington with Andrew Detrick to lobby him regarding the K-rim investigation. After Hutchison's first meeting with Detrick, he wrote a letter summarizing his meeting as follows: "Detrick stated that he feels a safety problem exists on these multi-piece truck rims, and that he would like to handle this problem before it gets any more publicity." In the months that followed, Goodyear executives lobbied Detrick against requiring a manufacturers' notification campaign. Investigation 215 was officially closed on December 31, 1973, without requiring consumer notification. The closing of investigation 215 resulted from a recommendation by Andrew Detrick. Detrick briefed the administrator of the National Highway Traffic Safety Administration and the job was accomplished. The facts here are very simple. The decision to move Detrick in as head of product defects investigation was made by the Nixon administration. It was a political decision pure and simple. The move occurred several days after a $45,000 contribution was made to the campaign. To say that this evidence cannot be considered by a jury because, as a matter of law, there is no connection between the contribution and the personnel change, is to totally fail in recognizing the realities of the political process. All of the activities of Goodyear in attempting to influence government action are admissible for one or more of the following reasons: (1) The evidence shows that Goodyear had knowledge of the defect. (2) The evidence shows that Goodyear was not taking steps to notify the public of the known defect, but in fact was attempting to scuttle any notification. (3) The evidence tends to prove fraud, malice, or oppression, which form the basis for an award of punitive damages. In Kuiper v. District Court (19811, 632 P.2d 694, 38 St.Rep. 1288, we said: "That investigation was commenced in 1970 for the purpose of determining why K-type truck rims seemed to cause numerous accidents. The relator seeks to establish that Goodyear attempted, through government influence, to terminate the investigation. The relator alleges that Goodyear 'covered up' the defect in a product, which Goodyear knew to be unsafe, and that the relator is entitled to prove such facts to establish a basis for punitive damages." 632 P.2d at p. 696, 38 St.Rep. at p. 1289. And, "Relator's deposition questions are designed to prove Goodyear knew it had a defective product and attempted to prevent public knowledge of that defect. Such facts would tend to prove malice and -- are relevant to the issues ~leaded." (em~hasis - L added) 632 p.2TaFp. 703, 3g ~ t . ~ e ~ - . at p. 1298. Likewise, the District Court held this evidence to be admissible and in the order denying Goodyear's motion for a new trial, on pages 15 and 16 of the order, said: "In these circumstances Goodyear's motions in limine must be denied in that the facts established a submissible jury issue on the basis that the slush fund payments were evidence of an attempt to abort the spirited investigation at the NHTSA as proof of defect in the product. In the Matter of - - the National Deposition of James D. Rhoades ( s i c ) , Archivist - - of the united States, ~iscellaneous No. 79-0216, United States District Court for the District of Columbia, October 1, 1980. Such evidence was also admissible on the issue of malice. Kuiper v. District Court, Mont . , 632 P.2d 694 (Mont. 1981)." Dishonest conduct can seldom be proven with direct evidence. The difficulties of the task are eloquently described by Justice De Witt in Merchants' National Bank v. Greenhood, supra, wherein he said: "Fraud cannot often be proven by direct evidence. Fraud conceals itself. It does not move upon the surface in straight lines. It goes in devious ways. We may with difficulty know 'whence it cometh and whither it goeth.' It 'loves darkness rather than light, because its deeds are evil.' It is rarely that we can lay our hand upon it in its going. We are more likely to discover it at its destination, before we know that it has started upon its sinuous course. When we so discover it, the search light of a judicial investigation goes back over its trail and lightens it from beginning to end. As the woodsman follows his game by slight indications, as a broken twiq or a displaced pebble, so fraud may become apparent by innumerable circumstances, individually trivial . . . but in their mass 'confirmation strong as proofs of holy writ.' The weight of isolated items tending to show fraud may be 'as light as the shadow of drifting snow,' but the drifting snow in time makes the drift, the avalanche, the glacier. Fraud may hang over the history of the acts of a man like the leaden-hued atmosphere upon the house of Usher, 'faintly discernible but pestilent, an atmosphere which has no affinity with the air of Heaven.'" 16 Mont. at p. 429, 41 P. at p . 259. Justice De Witt, in concluding remarks, stated the scope of judicial review which should have guided the deliberations of this Court. "Under this atmospheric pressure of fraud the jury in this case lived and breathed for the 21 days of the trial. We have followed them through the history of those days, as it is transmitted to this court in the record. We have not the advantage of breathing and seeing and hearing which they had. The district court had that advantage, and agreed with the findings of the jury. We are of opinion that, under these circumstances, the evidence is not so insufficient that we should disturb the result." 16 Mont. at pp. 429-430, 41 P. at p. 259. The majority places emphasis upon the fact that the trial court found that evidence of Goodyear's attempts to suppress knowledge of the dangerous propensities of its split-rim and its efforts to scuttle the investigation would be prejudicial to the defendant. Of course such evidence would be prejudicial. The purpose of offering the evidence is to expose the fraud and punish the defendant. The question is not just whether the evidence is prejudicial, but rather whether our rules of evidence permit consideration of the evidence. The evidence here introduced was not only relevant and probative but was essential to prove a course of conduct that plaintiff seeks to punish. If I understand the majority opinion correctly, no certain piece of testimony or document is found to be irrelevant, thereby justifying a new trial. Rather, any evidence, either testimonial or documentary, which falls under the umbrella designated "Watergate" is to be suppressed. Like Rosemary's tapes, this evidence of wrongdoing is erased from public scrutiny and forever shielded from jury censor. The majority states: "We regret that counsel deemed it necessary to bring in this totally extraneous and prejudicial material. It prevented his seriously-injured client, as well as the defendant, from receiving a fair trial." In my judgment trial counsel would have been remiss not to have presented the evidence of bribery. The failure is not counsel's. The fault lies here. As with most dissents, my cry may neither be heard nor felt. At least my conscience is clear. * Mr. Justice John C. Sheehy, dissenting: I dissent. My heart does not bleed with the majority for the captains of industry called Goodyear who were caught in a sticky wicket. Instead, my heart bleeds for a grievously-injured Dennis Kuiper who must return yet again to the courtroom to get just compensation, but this time hobbled in his proof of the malice of these honorable industry captains. The majority of justices see no relevance in this case in the illegal donation to Nixon's campaign and the almost immediate dismissal by the Nixon administration of its investigation of the safety of the K-28 rims. The majority wants a smoking gun for proof, ignoring the many times in opinions that each has signed that fraud is almost never subject to direct proof, because the evil that men do is done clandestinely, without record, and that circumstantial evidence is necessary to bring out fraud. Dennis Kuiper was injured on August 13, 1979. For more than ten years prior to that date, Goodyear was aware that its K-28 rim could come apart explosively, and that the rim posed a danger to the life and limb of any person mounting or dismounting tires thereon. Properly, Dennis Kuiper has sued for punitive as well as compensatory damages. Punitive or exemplary damages are allowed when the tortfeasor has been guilty of oppression, fraud or malice, actual or presumed, and are given for the sake of example and by way of punishing the tortfeasor. Section 27-1-221, MCA. Therefore, Goodyear's knowledge that it had a dangerously defective rim, and its efforts to avoid curing that defect or removing the rim from the market over a period of years is an essential part of Kuiper's proof of malice against Go0dyea.r. The sordid donation by Goodyear to Nixon's campaign was a part of Goodyear's malicious effort to keep its defective product on the market and in use in spite of its knowledge of the defect. The relevance of the Nixon campaign donation by Goodyear is best summarized by the District Court in this case, in denying Goodyear's motion for new trial: ". . . A summary of the plaintiff's evidence includes the undisputed fact that Goodyear for many years prior to the investigation of the K rim maintained an offbook account known only by the code name 'GOYEDA' in a Swiss bank from which funds were drawn and maintained at Goodyear's world headquarters in Akron, Ohio for the purpose of ma-king illegal domestic political contributions. Goodyear's Board Chairman and general counsel participated in cash payments of $40,000 to Maurice Stans, Chairman of the Finance Committee to Reelect the President (FCREEP) in March of 1972 in circumstances which give rise to an inference of attempts to seek political favors. Goodyear became listed on the document known in the Watergate investigation as Rosemary's List, a record of substantial poltical contributors maintained by the personal secretary of Richard Nixon. --- At the--time of these contributions there was ~endina before the - - . 2 National Highway Traffic Safety Administration (NHTSA) a defects investigation involving the Goodvear K rim which is the subiect of this suit= 2 - - - - - - well as a Firestone multi-piece rim and proposed rule making which had the potential for limiting or discontinuing production of most multi-piece truck rims. Contemporaneous with the cash payments by Goodyear to 'FCREEP' key personnel in charge of these proceedings at 'NHTSA' were transferred to other positions and new personnel of questionable qualifications were placed in charge of the proceedings. The defect investigation of the K rim was thereafter discontinued inconsequentially following the Nixon reelection and the appointment of Egil Krogh as Under Secretary of Transportation. In a memorandum of August 15, 1972, Goodyear's safety vice-president report to the president of Motor Wheel Corporation that he had had a conference with the newly selected chief of the Office of Defects Investigations at the 'NHTSA' and was advised that in view of that public official 'a safety problem exists on these multi-piece truck rims, and that he (the public official) would like to handle this problem before it gets any more publicity. Then followed a meeting with the public official several days after the Nixon reelection and the investigation was closed without requiring any recall of the product. Goodyear's subsequent conduct in a.ttempting to cover up the existence of the investigation and effect of the corporate nature of the contributions is additional evidence that a quid pro quo was intended. The evidence was undisputed that following the relevations of the connection between the Committee to Reelect the President and the Watergate burglary, the Common Cause litigation forced the disclosure of identity of contributors and as a result Maurice Stans contacted Goodyear general counsel Arden Firestone requesting the names of the contributors on behalf of Goodyear. Instead of disclosing to Stans and to the United States District Court of the District of Columbia that the cash contributions to FCREEP were corporate monies, Firestone met with Russell DeYoung , Goodyear board chairman, and they agreed. to submit the names of Goodyear executives who purportedly contributed when in fact they had not given a single penny. This continued effort to cover up through misrepresentation of the identity of the source of the contribution leads to the inference that Goodyear sought a quid pro quo in attempting to avoid public disclosure of the fact. According to DeYoung's testimony before the Ervin Committee, the videotape which was in evidence, it was only the pressure from Archibald Cox, Watergate Specia.1 Prosecutor and the fear of adverse publicity that caused Goodyear to come forward with the admission of a corporate contribution. "Goodyear and its board chairman Russell DeYoung pleaded guilty to violating the Federal Election Laws with respect to the contribution. Following the convictions of Goodyear and its board chairman, DeYoung was subpoenaed before the Ervin Committee on November 15, 1973. At that time DeYoung swore under oath before the Senate of the United States tha.t: 'at the time the contribution was made, the company was not engaged in any significant litigation with the government and was not aware of any material problems it faced with any branch of the federal government,' and that the illegal contribution was merely for the good of the country. There was no disclosure of the defects investigation of the Goodyear K multi-piece rim, or the rule making proceedings involving multi-piece rims, which were both pending at the time Goodyear made the illegal payments. The video-tape of the proceedings which was offered by the plaintiff and viewed by the jury not only documented the facts of the payment and denial of the investigations pending, but the jury had the opportunity to judge the demeanor and credibility of the Goodyear board chairman when asked about the reason for the payment and his explanation thereof. Four days following DeYoung's testimony before the Ervin Committee and denial of the existence of any pending national investigations at the time the payments were made, an interna.1 Goodyear memorandum reported that the same government official who told Goodyear's safety vice-president that he wanted to handle the matter without publicity was reported to have advised that Goodyear should 'sit quietly' with respect to closing of the K rim investigation until the government official advised Goodyear what 'its next move should be.' In these circumstances Goodyear's motions in limine must be denied in that the facts established a submissible jury issue on the basis that the slush fund payments were evidence of an attempt to abort the spirited investigation at the NHTSA as proof of defect in the product.. . ." The District Court's foregoing summary of the evidence with respect to the campaign donation is brief and correct. The expanded record before us, so lengthy that we cannot incorporate it here in full, and so devastatingly connected to the government's K-rim investigation in 1972 is so shocking, that no smoking gun is needed. Undoubtedly, Goodyear was buying its protection through the political dona tion. 1llustra.tive of the machinations that were going on between Goodyear and the administration officials is the memorandum by its technical manager for product quality and safety addressed to J. F. Hutchison, vice-president of Goodyear, on November 19, 1973: "J. F. Hutchison, vice-president. "Subject: Rim investigation -- Case -215. "I have just talked with Andy Detrick [the federal official in charge] this morning relative to the closing of the above case. "As you know there have been a number of questions raised by Mr. Garbeth as to certain information which we feel should be held out of the closed file. "Mr. Detrick informs me that they have their legal people working on this and we should sit quiet and wait until we hear from Detrick as to what our next move should be. I should add that there is a question in their own minds as to whether or not the information they gleaned from our files in Akron will be kept out or not, and this is the one part that their law people are looking into." The rim investigation was closed by the qovernment in December 1973. In light of the foregoing record, it is interesting to note the testimony of Russell DeYoung, board chairman of Goodyear before the Ervin Committee on November 15, 1973, when he stated under oath: ". . . It [the $40,000 contribution] was made solely because we thought the reelection of the president was in the best interest of the country. It was not made with a view to obtaining government favors. Nor was I pressured in any way into making it. Goodyear's total business with the federal government, most of which is obtained at competitive bidding, constitutes less than 3 percent of its sales. At the time the contribution ---- was made the company was not engaqed in any - - - - - significant litigation with the government and was -- -- not aware of any material problems - it faced with any branch o f -- the federal government. No Goodyear employee in charge of government business was aware of the contribution, and there is no indication that any government official was made aware of the contribution." (Emphasis added.) DeYoungls statement that Goodyear was not aware of a.ny material problem it faced with the government is an outright untruth. Its own people estimated that a. recall of the rims in use would have cost Goodyear approximately $140 million. The monstrous extent of the evil that was the Nixon administration is hard for some people to accept. Ten years later, a syndicated columnist finds Nixon merely "unlucky." Often one hears that Nixon only did what others have done, though his actions are an unparalleled trough in our national ethics. It was expressed in our own conference on this case that Goodyear could not ha.ve hoped to "buy out" for a mere $46,000. But Nixon and his coterie were not selling to the highest bidder, they were selling to any bidder. FCREEP agent Maurice Stans had set out with a suitcase full of corporate officials that either wanted to gain government contracts or to avoid adverse regulation. Favorable government consideration, or the hope of it, was the bait. The very nature of Stans' offer should have alerted the offerees. If they contributed before April 7, 1972, there would be "no record" because of a hole in the law then applicable. Stans' undertaking was tailor-made for the gullible, the greedy and the crooked. That he would come together with the Goodyear officials was as natural as the meeting of two moles in the dark. For truth to tell, the men who ran Goodyear in the early 70's were cheats. They cheated their stockholders by siphoning into a Swiss bank account discounts accruing from European purchases, stealing from company profits by that much. They cheated the I.R.S. by understating company profits, thus increasing taxes for the rest of us. They cheated our election laws and soiled our democracy by illegally coughing up at the command of a corrupt administration the cash they had smuggled into our country. They travelled to Washington, D.C. as bagmen, to hand-deliver the illicit lucre like truckling sycophants. Their lawyers now tell this Court that these cheats made their dark, forbidden contributions of stolen money under cover of unlawful secrecy to achieve "good government." And strange to tell, there are judges who see no dispute for a jury in that. Thieves and brigands, these cheats find a haven in the very institutions they would have torn up by the roots. No whisper of their chicanery in hiding the death-dealing K-rims shall echo in the next District Court. Hidden from the next jury and the fierce light of its scrutiny is the sordid story of venal men who did not give a snap for human safety, for working men like Dennis Kuiper. In the sanitized next trial, the Goodyear blimp will float in pristine blue, far above the wiles and schemes of its ground crew. I know not what other trenchant orders may issue while I sit on this Court, but I pray that someday some grandchild will read and be glad that I had none of this. There is other manifest error in the majority opinion. It is needless for me to comment on it, as any comment would go unheeded as is this comment. It is enough to say that I would affirm the judgment of the District Court. & @ > & ? , - . . - Justice u Mr. Justice Daniel J. Shea, dissenting: By a simple stroke of the pen, and by a failure to fairly analyze the evidence, the majority declares that plaintiff failed to show a connection between the 1972 Goodyear contributions to the Committee to Re-elect the President and the government's decision later that vear, after President Nixon had been re-elected, to quietly end the government's multi-piece rim product safet.y investigation. The maiority sta.tes (pp. 15-16) : "Our careful review of the very extensive record, shows a total absence of evidence connecting the political contribution of Goodyear to the investigation by a federal agency of multi-piece rims of the type which injured the plaintiff. As a result, it is clear that the evidence of Goodyear's contribution to the Committee to Re-elect the President was inadmissible under Rule 402, M0nt.R.Evi.d." This conclusion arrived at by reviewing the testimony of Mr. Malek in isolation, could not be farther from the truth. Justices Morrison and Sheehy have amply set forth the contrary evidence, evidence that fully justified the jury ' n inferring the necessary facts in a . circumstantial case, to awa.rd exemplary damages zga.inst Goodyear. It was not merely a coincidence that the National Highway Traffic Safety Administration closed its official investigation on December 31, 1 : 9 7 3 , less than two months after the re-election of President Nixon, thereby avoiding an expensive consumer notification program or possibly even a government request that Goodyear voluntarily reca.11 its K-rim wheels. Goodyear was vita-lly concerned about the investigation and the ramifications of notifying consumers that the K-rim wheels were dangerously defective. The proiected cost to Goodyear was 145 million dollars, and it was characterized as an "overwhelming problem." Goodyear was fully aware that the governmental investigation had top priority--hut then the Goodyear people went to work. In February and March 1972, Goodyear made its contributions to the Committee to Re-elect the President. Three days after these contributions, the person who headed the investigation for the government, Joseph Clark, was removed from his position and transferred to an innocuous position in Ohio. His replacement, Andrew Detrick, had no background in product defects investigation. After Detrick's appointment and a few months after the contributions (August 1972), a Goodyear representative, Joseph Hutchinson, met with Detrick to discuss the K-rim wheel investigation. This Goodyear agent later summarized this meeting in a memo to his company, by explaining that Detrick indeed felt a safety problem existed (for the wheels still being used by the public) but "that he [Detrick] would like to handle this problem before it gets publicity." By the end of December this task was accomplished. In the following months after August Goodyear executives succeeded in lobbying Detrick against a governmental requirement that Goodyear notify purchasers of the potential hazards of the K-rim wheels. In late December 1972, after President Nixon was re-elected and while Egil Krogh was Undersecretary of the Department of Transportation, the government quietly announced that the multi-piece wheel investigation was ended. Goodyear's political contributions took on added meaning because of the revelations during the Watergate episode, and especially revelations before the Ervin Committee investigating the Watergate Hotel break-in and its ramifications. These developments proved that Goodyear attempted. to cover up the source of the corporate contributions to the Committee to Re-elect the President. It was also established that Goodyear attempted to cover up the significance of the contributions by the testimony of its chairman, who testified that when the contributions were made Goodyear was not involved in significant proceedings with the government. But it was revealed that Goodyear had two rather significant proceedings pending with the government, both proceedings involving multi-piece wheel rims--wheel rims like the one that burst apart and grievously injured Dennis Kuiper . Post-election Watergate investigations developed the connection between the Watergate burglary and the Committee to Re-elect the President--that is, the Committee, directly or indirectly, brought about the Watergate burglary. After these revelations, Goodyear was asked to reveal its contributors, but Goodyear, throuqh Chairman DeYoung and Arden Firestone, decided that instead the corporation would claim that corporate officers had individually given the money rather than the corporation. This evidence was given to the Ervin Committee. This continuing coverup is circumstantial evidence that the jury was entitled to hear as bearing on the motivations of Goodyear in making the contributions to the Committee to Re-elect the President. Through a videotape of Goodyear Chairman DeYoung's testimony before the Ervin Committee, the jury saw and heard his falsifications. He admitted that it was only pressure from the Special Prosecutor Archibald Cox and fear of adverse publicity that Goodyear was finally persuaded to admit that the contributions were actually corporation contributions. The Goodyear chairman was asked whether these contributions were motivated by ulterior motives and Chairman DeYoung replied that the contributions were motivated solely "for the good of the country." Yet he testified falsely in stating that when, the contributions were ma.de, no governmental action of any consequence was pending. The uncontradicted and undeniable evidence was that two significant government proceedings were pending regarding the mu1 ti-rim wheels. First, the government was conducting the multi-rim wheel defect investigation, and the Goodyear company projected a government ordered consumer notification program to cost Goodyear at least 145 million dollars. Second, the government also had pending rulemaking proceedings involving multi-piece wheel rims. Both government proceedings involved the same kind of multi-piece wheel rims that burst apart into Dennis Kuiper's head. Although the majority would grant a new trial and order that evidence of the government investiga.tion of the multi-piece wheel rims and political contributions of Goodyear be excluded nowhere does the majoritv discuss the evidence that was admitted at trial. Instead, the majority focuses on the opening statement of plaintiff's counsel and on the testimony of Mr. Malek before the Ervin Committee. As a result of this selective focusing, the majority declares: ". . . The key element is tha.t plaintiff completely failed to connect the political contribution of Goodyear to the federal investigation of the multi-piece wheels. The plaintiff failed to prove that the contribution was related in any manner to the multi-piece wheel, which exploded and caused the injury to the plaintiff." (Slip op. at 19.) I am not sure I understand this conclusion by which the majority declare that plaintiff's proof failed. The conclusion appears to have two parts, but I do not believe that as to the second part, the majority truly mean what it says. In the first sentence, the majority states that plaintiff did not establish the connection between the political contributions and governmental multi-piece wheel investigation. If this is the key conclusion, it could only have been reached by ignoring the evidence set forth by Justices Morrison and Sheehy in their dissents. But if in the second sentence the majority is stating that plaintiff had a duty to prove the contributions were made to influence governmental action on the particular wheel rim that injured plaintiff, the majority has placed an impossible burden on all plaintiffs, for that kind of proof is impossible. I do not, however, believe that the majority would impose such a requirement, although by the language used, it appears that it has. Assuming that the majority holding is confined to the conclusion that plaintiff did not prove the connection between the political contributions and multi-piece wheel rim investigation, how does the majority reach this conclusion? Reliance is placed on the opening statement of plaintiff's counsel which failed, in the eyes of the majority, to make this connection, and on the testimony of Mr. Malek, a member of the Committee to Re-elect the President, who testified - he knew of no connection between the contributions and any attempt by Goodyear to influence government action on any matter. The majority opinion confuses me. The opinion devotes several pages to quoting parts of the opening statement of plaintiff's counsel as it relates to the political contributions and the government investigation of the multi-piece wheels. The majority also says the opening statement was defective because it did not set forth the connection between Goodyear's contributions and the government's investigation of the wheels manufactured by Goodyear. The majority then appears to say that because the opening statement was defective, it ipso facto prejudiced the trial. And yet the majority does not appear to grant a new trial because of its declaration that the opening statement was defective. Rather, the majority grants a new trial, and orders evidence excluded at the new trial, because the trial evidence did not establish the connection between the Goodyear contributions and the government investigation of Goodyear's multi-piece wheels. To reach this conclusion from the trial evidence, the majority relies exclusively on the testimony of Mr. Malek, a member of the Committee to Re-elect the President. This is hardly classifiable as even-handed appellate review. Although the majority devotes several pages of the opinion to quoting the opening statement of plaintiff ' s counsel, the opening statement has no bearing on the issues relied on by the majority to vacate the jury verdict. The majority orders a new trial based on its perception of the evidence, presented at trial, not on whether the opening statement was either defective or prejudicial. The opening statement is not evidence and it can shed no light on whether the trial. evidence established the connection between the political contributions and the government investigation. Rather than to quote from the opening statement, which is not used as a basis to grant a new trial, it is the majority's obl..igation to fairly deal with the evidence presented at trial--the evidence set forth by Justices Morrison and Sheehy in their dissents. REASONS GIVEN FOR THE INADMISSIBILITY OF THE EVIDENCE ARE ILLUSORY: Why must the government investigation and political contribution evidence not reach the eyes and ears of the jury? The majority lists several reasons, and states in essence as to each that the jury was allowed to speculate with no evidentiary foundation, and therefore its conclusions are unfounded. I believe, however, that sufficient evidence was presented for the jury to fit the pieces together and reach its verdict assessing exemplary damages against Goodyear. I discuss each of the reasons listed by the majority, which are illusory at best. What is so important, so vital in Mr. Malek's testimony that the majority orders a new trial and evidence to be excluded from the second trial? Malek, a member of the Committee to Re-elect the President, testified, according to the majority's summary, that - he had - no knowledge of situations in which "proceedings before any department or agency were interfered with, influence, or obstructed." Assuming the truth of this statement, it proves only that - Mr. Mal-ek had no knowledge of attempts by re-election committee members on behalf of Goodyear or other contributors, to influence government proceedings then pending. Malek' s testimony does not exonerate the entire re-election committee, it does not exonerate the officials of the Department of Transportation, and it certainly does not exonerate the Goodyear officials. On its face, and considered in an evidentiary vacuum, Malek's testimony establishes nothing for or against plaintiff. But when considered with other testimony and evidence admitted at trial, Malek's testimony was not irrelevant. The jury was entitled to conclude, based on all the evidence, that Malek's testimony before the Ervin Committee was simply another effort to cover up and therefore should be given no weight. Or, alternatively, if the jury believed Malek's testimony before the Ervin Committee, the jury was entitled to conclude that Malek was walking through those times wearing a blindfolder and earplugs. And now to the reasons given for the inadmissibility of the governmental investigation and political contribution evidence. First, the majority says the jury was impermissibly allowed to speculate on the K-rim wheel investigation. Just what speculation was permitted of the jury, the majority doesn't say. But the majority says that speculation on the investigation was impermissible because Goodyear had voluntaril-y discontinued the manufacture of the K-rim wheels three years before the investigation and because at the time of the investigation the government didn't have the authority to order a wheel recall. This reasoning is baffling and misses the point. Voluntary discontinuing production of an item does not establ-ish that the item already in the hands of the public was not defecti~~e and dangerous. Nor does the presence or absence of power to recall a product establish that the product already in the hands of the public was not defective. In fact, discontinuance or production may have been motivated by the conclusion that the product was both defective and dangerous to the public. Nor does the presence or absence of governmental power to recall defective products bear on Goodyear's motives in influencing a favorable governmental decision on the investigation. The undeniable fa.ct is that the government did have the authority to investigate product defects and to require the manufacturer to notify the consumers who had come into possession of those products by the distributing efforts of the manufacturer. Here the situation is that the Department of Transportation did not order a notification campaign and in fact closed the investigation shortly after the re-election of the President. The totality of the evidence supported a jury inference that the investigation was closed because the campaign contributions had their intended effect. Second, in concluding that the evidence irnpermissiblv allowed the jury "to surmise, with no evidentiary support, that there was a White House Commitment before Goodyear made its contribution," the opinion relies entirely on the testimony of Malek before the Ervin Committee to establish this fact. (Emphasis added.) The Malek memorandum, however, was not offered to prove a pre-existing commitment from the White House to grant political favors to contributors. The memorandum spoke for itself: it simply suggested that the re-election functionaries were out to politicize the executive branch of government by using the enormous influence of governmental favors as the carrot. It is odd indeed that although the majority relies entirely on the Malek memorandum as the impermissible evidence by which all the evidence was to be measured, not once does the majority discuss this evidentiary piece of evidence other than the reference to it in quoting from the r>pe:lr-nq skatement of plaintiff ' s counsel. The majority o ~ ~ ~ ? r I c ~ c i k ~ t h e fact that the essential question at all times was whether Goodyear made political contributions with an expectation of reaping favorable governmental action on issues close to Goodyear's pocketbook. It is not important whether the governmental officials, or those c1zivinr.r ' : ( - > 'lnve the power to influence governmental decisions, committed themselves before or after the contributions. The motives and actions of the Goodyear officials were on trial, and the motives and actions could only be demonstrated by proof of governmental complicity. With Goodyear's actions as the focal point I have no doubt that the jury had before it a strong circumstantial case that Goodyear expected to reap hai~dsome returns from favorable governmental. action on the multi-rim wheel investigation. Who knows, had the investigation not been closed after President Nixon's re-election, possibly the very tire rim that exploded into Dennis Kuiper's head would not then have been in use. Although evidence of attempts to influence an investigation by political contributions would be sufficient by itself for the jury to consider exemplary damages, here the plaintiff could only get the picture before the jury by revealing to the jury what the post-Watergate break-in investigation evidence disclosed. It was only through this evidence that the jury would have a more complete picture of what Goodyear had attempted to accomplish and in fact accomplished through its political contributions. The third reason given for the inadmissibility of the political contributions and investigation evidence is that the jury was allowed to speculate from the evidence that unknown persons in the White House knew of and could attend to Goodyear's needs before the Department of Transportation. The majority states that a jury conclusion to this effect would be wholly without foundation, but the fact is that the majority's statement is wholly without foundation. Only one fitted with blindfolders and earplugs could conclude that the Department of Transportation's decision to close the K-rim wheel investigation did not have direct or indirect White House influence. Aside from the majority's ignoring the political realities, the reason assigned for excluding the evidence misses the point. The evidence against Goodyear was admissible regardless ~f whether it could be proved that specific White House personnel could accomplish Goodyear's objectives in the investigations pending before. the Department of Transportation. The evidence certainly tended to prove Goodyear's ulterior motives in making its political contributions, and it is, after all, Goodyear's motives and conduct that form the basis for the jury to consider an award of exemplary damages. Whether or not Goodyear was successful in its efforts to influence government conduct by its political contributions is not necessary to an award of exemplary damages against Goodyear; but the evidence of Goodyear's success gave to the jury a mare complete picture of the magnitude of the involvement and the harm created by the collusion of big business and biq government. The evidence without question permitted a iury inference that people in high places were looking out for the interests of Goodyear. Goodyear knew how strongly the government was focusing on the serious problems that the wheel rims posed for the public, and Goodyear's own people estimated a possible 145 million dollar cost to Goodyear. But then the Goodyear people went to work. The evidence set forth by Justices Morrison and Sheehy, and that I have repeated in a different format in this dissent, surely gives rise to an inference that someone beyond the Department of Transportation influenced its decision to close the multi-piece wheel investigation. A serious safety problem is hardly handled properly from the standpoint of either the government or the public, when the government makes the decision to close the investigation before the safety problems become too widely publicized. Fifth and finally, the majority declares that the evidence is inadmissible because it permitted the jury to improperly speculate that Andrew Detrick "closed the K-rim investigation differently than those closed by his predecessors." If there is evidence to suggest that Detrick followed standard operating procedures, and that Detrick was not influenced by improper motives, the majority do not suggest what it is. The evidence suggests, and the jury was entitled to believe, that improper political influence was the motivating factor behind the closure of the multi-piece wheel investigation. Ample evidence exists in the record for the jury's assessment of exemplary damages against Goodyear. I would affirm the judgment.

November 25, 1983

197b6ec6-1bbf-4208-a595-ba223f6d78ed

MARRIAGE OF TRIMP

N/A

83-275

Montana

Montana Supreme Court

PJo. 83-275 I N THE SUPREME COURT O F THE STATE O F M O N T A N A 1383 I N R E THE MARRIAGE O F ALLEN MONROE TRIMP, P e t i t i o n e r and Appellant, -vs- FiARRIET ANN TRIMP, Respondent and Respondent. APPEAL FROM: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t , I n and f o r t h e County of Lewis & Clark, The Honorable Henry Loble, Judge p r e s i d i n g . COUNSEL O F XECORD: For Appellant: Cannon & Sheehy; Edmund F. Sheehy, Jr., Helena, Montana For Respondent: Ann L. Smoyer, Helena, Hontana Submitted on E r i e f s : September 1 5 , 1 9 8 3 Decided: November 1 5 , 1983 Clerk Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Allen Monroe Trimp appeals the May 10, 1983 order of the District Court of the First Judicial District, Lewis and Clark County, denying his April 12, 1983 motion to modify child support payments required of him. The marriage of Allen Monroe Trimp (husband) and Ha-rriet Ann Trimp (wife) was dissolved on February 25, 1983. The decree dissolving the marriage approved and incorporated the Custody, Support and Property Settlement Agreement (Agreement) entered into by the parties that same day. The relevant portion of the Agreement provided that as of March of 1983, husband would pay child support of $350 per child per month for each of the parties' two minor children, payments to be made bi-weekly. Husband made the March payments, but wrote wife at the end of March to inform her that due to a decrease in pay, he would no longer be able to make the $700 a month payments. He offered to pay her $350 a month instead. Wife refused. At the beginning of April, husband paid wife $200 as child support rather than the agreed upon $350. Thereafter, husband filed this petition to modify his child support payments. At the time the Agreement was entered into, husband was earning a net monthly salary of $1422 as a bus driver for Rimrock Stages of Billings, Montana. He supplemented that salary with extra income earned from driving charter buses and from repairing buses. A hearing was held April 27, 1983 on husband's petition to modify. Husband was the sole witness. He testified that Rimrock Stages had switched from a salary pay plan to a wage pay plan in the middle of March 1983. As a result, he was receiving 19C per mile, driving 460 miles on each working day and working a schedule of four days on, four days off, for a total net pay of approximately $1100 per month. In addition, his opportunities to drive charter had decreased as Rimrock Stages had hired a full-time charter bus driver. The only evidence presented in support of that testimony was husband's pay stub for April 1 through April 15, 1983. His net income for that two week period was $587. He presented no proof in support of his allegation that the wage-based pay plan was permanent. Husband further testified that his $587 paycheck of April 15, 1983 was spent as follows: 1. Rent $250 2 . Child Support 200 3. Truck Payment 76 4 . Television Payment 93 5. Montana Power 25 6. Medical Bill for Son 25 The only documentation of those expenses presented at the hearing was a receipt indicating that his monthly rent, including utilitites, was $250. The parties agreed that wife's expenses had not changed since the time the Agreement was entered into. Section 40-4-208(2)(b), MCA, controls when a trial court can grant a petition for modification of a child support decree. It states in relevant part: " (2) (b) Whenever the decree proposed for modification contains provisions relating to maintenance or support, modification . . . may only be made: i upon a showing of changed cirucumstances so substantial and continuing as to make the terms unconscionable. " Based upon the testimony set forth above, the trial court held that husband's change in circumstances was neither so substantial or continuing as to make the original child support payments unconscionable. "This Court will reverse the District Court on this issue only if the District Court's findings are clearly erroneous in light of the evidence in the record. Rule 52 (a) , M.R.Civ.P. ; Reynolds v. Reynolds (1982) (sic) , Mont . , 660 P.2d 90, 40 St.Rep. 321." Hughes v. Hughes (1983), 666 P.2d 739 at p. 741, 40 St.Rep. 1102 at p. 1105. That evidence must also be viewed in the light most favorable to the prevailing party. PJicolai v. Nicolai (19811, 631 P.2d 300 at p. 303, 38 St.Rep. 1100 at p. 1103. Viewing the evidence in the record in the light most favorable to wife, we cannot say that the decision of the trial court was clearly erroneous. The evidence indicates that husband's bi-weekly pay check for the period April 1 through April 15, 1983 was approximately twenty percent less than his bi-weekly pay checks were at the time husband entered into the Child Support Agreement. If husband's - income is to remain permanently at this level and if - husband's net worth is not substantial, it would be unconscionable to require him to pay 63% of his monthly income as child support if he would then be unable to meet - his other financial obligations. However, husband has left the trial court with too many "ifs". Husband has failed to prove that his total financial situation warrants a finding that his decrease in income changed his financial circumstances substantially. Further, he has totally failed to prove that the change would be continuing. Thus, pursuant to section 40-4-208(2)(b), MCA, the trial court acted correctly in denying husband's petition for modification. Affirmed. W e concur: " d - A A 4 I;a/rlkd+ Chief J u s t i c e

November 15, 1983

abe6b6ea-6e94-41eb-bad1-7c0d22801ae4

DAWSON v HILL HILL TRUCK LINES

N/A

83-133

Montana

Montana Supreme Court

IN THE SUPREME COURT OF THE STATE OF MONTANA JAMES H. DOLORES JAMES H. DAWSON, Individually, J. DAWSON, Individually, DAWSOlJ as Personal Representative, Plaintiffs and Petitioners, -vs- HILL & HILL TRUCK LINES, Defendant and Respondent. ORIGINAL PROCEEDING: COUNSEL OF RECORD: For Petitioners: Hoyt & Trieweiler; John C. Hoyt, Great Falls, l v l o n t a n a For Respondent: Robert J. Emrnons, Great Falls, Montana - - - - " - - - Submitted on Briefs: June 30, 1983 Decided: October 21, 1383 Clerk Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. By declaratory relief, petitioners request this Court to answer the following question certified by the United States District Court for the District of Montana, Great Falls Division: "Are damages for the sorrow, mental distress or grief of the parents of a deceased minor recoverable in a wrongful death action brought pursuant to section 27-1-512, MCA, 1979?" This is a wrongful death action arising out of a five-vehicle crash which occurred on a snowy day in January, 1982, on U.S. Highway 87 between Belt and Great Falls, Montana. The petitioners, James H. Dawson and Dolores J. Dawson, allege that a driver for the defendant, Hill & Hill Truck Lines, attempted to pass two vehicles even though the weather conditions made it impossible for him to see traffic approaching from the opposite direction. Before the driver could return to his lane of traffic, petitioners allege that his loaded and protruding flatbed trailer was struck by a gasoline tanker truck, which was proceeding from the opposite direction. The petitioners' son and daughter were in one of the cars being passed. As a result of the accident, the Dawsons' seventeen-year old son was killed and a daughter was injured . The deceased was the petitioners' only son. Petitioners allege he was an outstanding individual and student who would have been the valedictorian of his graduating high school class had he lived another four months. By this request for declaratory relief, the petitioners have asked this Court to recognize that "just" damages authorized by statute include the mental distress and anxiety suffered by petitioners as a result of the wrongful death of their son. The statute governing damages which may be awarded in an action brought under section 27-1-512, MCA, is section 27-1-323, MCA, which provides: "In every action [for wrongful death], such damages may be given as under all the circumstances of the case may be just. " Montana has not allowed wrongful death awards to be unrestricted. Rather, we have followed the pecuniary loss rule, although recovery is permitted for loss of society and companionship to the extent such loss has a pecuniary value. Mize v. Rocky Mountain Bell Telephone Co. (1909), 38 Monk. 521, 100 P. 971; Hollingsworth v. Davis-Daly Estates Copper co (1909), 38 Mont. 143, 99 P. 142. The majority of jurisdictions has consistently refused to permit recovery for mental anguish in a wrongful death action. In so doing, these jurisdictions have followed the English decision rendered in Blake v. Midland Railway Co. (QB Prior to the Blake decision, the British Parliament enacted Lord Campbell's Act which, in pertinent part, provided : " [W] henever the death of a person shall be caused by wrongful act, neglect, or default . . . such as would have entitled the parties injured to maintain an action and recover damages in respect thereof, then and in every such case the person who would have been liable if death had not insued shall be liable . . . [Alnd in every such action the jury may give such damages as they may think proportioned to the injury resulting from such death to the parties respectively for whom and for whose benefit such action shall be brought . . ." Fatal Accidents Act, 1846, 9 & 10 Vict. c. 93. Lord Campbell's Act was Parliament's attempt to ameliorate the harshness of a decision by Lord Ellenborough who, in Baker v. Bolton (KB 1808), 170 Eng.Rep. 1033, held that at common law there could be no recovery for the wrongful death of a person. Lord Campbell's Act, like the Montana statute governing wrongful death damages, seemed to provide for all damages as were found by the jury to be just. However, the English courts soon imposed the limitations first defined in Blake. John Blake was killed when two of the defendant's trains collided. Liability was admitted and the case proceeded to trial on damages. The trial judge instructed the jury that the might, in addition to awarding loss of support, also compensate the widow for her emotional pain. The appellate court reversed the plaintiff's judgment, holding that the jury had been improperly instructed on damages. The court stated: "The title of this Act may be some guide to its meaning: and it is 'An Act for Compensating the Families of Persons Killed;' not for solacing their wounded feelings . . ." Blake, 118 Eng.Rep. 35 at p. 42. The court seemed to feel that a more expansive rule would be impossible for the jury to apply. The court said: "[Tlhe measure of damages is not the loss or suffering of the deceased, but the injury resulting from his death to his family. This language seems more appropriate to a loss of which some estimate may be made than to an indefinite sum independent of all pecuniary estimate to soothe the feelings "We conceive that the Legislature would not have thrown upon the jury such great difficulty in calculating and apportioning the solatium to the different members of the family without some rules for their guidance." Blake, 118 Eng.Rep. 35 at p. 43. The English rule has been followed by most American jurisdictions. See 1 Speiser, Recovery for Wrongful Death, (2d Ed. 1975), 3 : Prosser, The Law of Torts (4th Ed. Blake must be read and understood in its historical context. The social policies existent in 1852 England and which may have influenced the court were traced by the Supreme Court of Michigan in Wycko v. Gnodtke (1960), 361 Mich. 331, 105 N.W.2d 118: " . . . The rulings reflect the philosophy of the times, its ideals, and its social conditions. It was the generation of the debtor's prisons, of some 200 or more capital offenses, and of the public flogging of women. It was an era when ample work could be found for the agile bodies and nimble fingers of small children . . . "This, then, was the day from which our precedents come, a day when employment of children of tender years was the accepted practice and ther (sic) pecuniary contributions to the family both substantial and provable . . . "That this barbarous concept of the pecuniary loss to a parent from the death of his child should control our decisions today is a reproach to justice. We are still turning, actually, for guidance in decision, to 'one of the darkest chapters in the history of childhood. ' Yet in other areas of the law the legal and social standards of 1846 are as dead as the coachman and his postilions who guided the coaches of its society through the dark and muddy streets, past the gibbets where still hung the toll of the day's executions." (citations omitted) 105 N.W. 2d at pp. 120-121. The English court in Blake articulated the rule's rationale to be the certainty of loss estimation. The underpinnings of the rule were discussed by a Federal District judge in In Re Sincere Navigation Corp. (E.D.La. "Human experience, as well as the literature of psychiatry and psychology bear abundant evidence of the debilitating effect of grief and the resultant depression. It is certainly no less real, and no more difficult to appraise, than the 'mental and physical pain and suffering' attendant upon personal injury that is awarded those who survive, or the pain and suffering prior to death that is recoverable as part of the death action here. . ." (citations omitted) 329 F. Supp at p. 656. Montana, unlike many jurisdictions, allows recovery in a wrongful death action for loss of care, comfort, society and companionship, holding that the speculative nature of such awards is no objection. Burns v. Eminger (1929) , 84 Mont. 397, 276 P. 437. In Davis v. Smith (19681, 152 Mont. 170, 448 P.2d 133, this Court said: "As to the third item, loss of society, comfort, care and protection . . . no extensive proof was made except that the son was a normal child. It is obvious that to put a monetary value on this is something solely within the province of the jury." 152 Mont. at p. 174, 448 P.2d at p.135. Although Montana has consistently adhered to the requirement that the loss of society and companionship be susceptible of "pecuniary loss" translation, this Court has refused to require a yardstick for measurement? If a jury can evaluate the intangible loss suffered from not having the decedent's care, comfort and companionship, surely that same jury can be trusted to ascribe damages to grief. The remaining argument advanced for denying expansion of the rule lies embedded in stare decisis. A rule whose ancestral origins are rooted in Charles Dickens' England does not square with the tort principles of our time. Chief Justice Haswell, dissenting in Consolidated Freightways Corp. v. Osier (1979) , Mont . , 605 P.2d 1076, 36 St.Rep. 1810, stated eloquently a refutation for blind adherence to the English common law: "The source of the rule . . . is the English common law . . . Being a rule of the common law, it is purely judge-made law. Judges created the rule by judicial decision, and judges can change it in the same manner . . . This approach is now as extinct as the dodo. Montana's 1972 Constitution guarantees access to the courts to all persons and speedy recovery afforded for every injury of person, property or character. Art. 11, Sec. 16, 1972 Mont. Const. When the reasons for the rule no longer exist, the rule itself fails. Section 1-3-201, MCA. Mont. at p. , 605 P.2d at pp. 1082-1083, 36 St.Rep. at p. 1818. Justice Cardozo, in his singular style, wrote: "If judges have woefully misinterpreted the mores of their day, or if the mores of their day are no l ~ o r an excellent discussion of Montana cases, see Strong and Jacobsen, Such Damages -- as are Just: A Proposal -- for More Realistic Compensation - in Wrongful Death Cases, 43 Mont. L. Rev. 55 (1982). longer those of ours, they ought not to tie, in helpless submission, the hands of their successor." - B. Cardozo, The Nature of the Judicial Process 152 7 - (1921). Other jurisdictions have begun to flee the constraints imposed by Blake. Prior to 1970, Arizona had construed its Wrongful Death Act to allow for the same type of recovery permitted in Montana, including expanding the pecuniary loss rule to embrace compensation for loss of care, comfort and society. City of Tucson v. Wondergem (1970), 105 Ariz. 429, 466 P.2d 383, afforded the Arizona Supreme Court an opportunity to shed the vestiges of English common law: "There can be little argument against allowing damages 'resulting from the death' for 'anguish, sorrow, stress, mental suffering, pain and shock,' under the facts of the instant case, where we have held, as in Boies v. Cole [ (1965) , 99 Ariz. 198, 407 P.2d 9171, that damages for loss of companionship, comfort and guidance are recoverable. The loss of companionship and comfort certainly results in sorrow, and the failure to permit such recovery falls short of 'fair and just' standards set forth in [our statute] . . ." 466 P.2d at p. 387. Petitioners' brief relies upon the concurring opinion filed in Bedgood v. Madalin (Tex. 1980), 600 S.W.2d 773. In that case Justice Spears quoted Lambert, Rheingold & Joost, Recent Important Tort Cases 30 N.A.C.C.A.L.J. "It is hard to distinguish the deep emotional wounding of the bereaved parent from the physical pain and mental suffering of the plaintiff with bodily injury, or the loss of enjoyment of one who can no longer engage in sports or favorite activities, or the loss of consortium by the spouse of an injured victim." 600 S.W.2d at p. 779. Petitioner also points to Stanford v. McLean Trucking Co. (E.D. Texas 1981), 506 F.Supp 1252, wherein a federal judge predicted that Texas would follow Justice Spears' concurrence. Respondent counters by arguing the majority of the Texas court held mental anguish, sorrow, or grief were not recoverable and limited recovery to pecuniary damages. Respondent further states on page 44 of its brief: " . . . The prediction by the Federal Court in Stanford v. McLean Trucking Co., 506 F.Supp. 1252, 1259 that Texas would follow the concurring opinion in Bedgood is bizarre when the majority opinion denied the recovery of these damages. In fact, Bedgood recognized that any change on this issue must essentially come from legislation." The Texas debate has been answered in an opinion issued April 27, 1983, rehearing denied June 15, 1983. The Supreme Court of Texas has overruled all prior decisions and decreed that damages for mental anguish will be permitted in a wrongful death action instituted by a parent for the death of a minor child. Sanchez v. Schindler (Tex. 1983) , 651 S.W.2d The Texas court addressed the question of whether the judiciary should await legislative action. The court said: "The legislature has attempted to amend the Texas Wrongful Death Act to allow damages for loss of society and mental anguish; however, none of the bills have passed. This court should not be bound by the prior legislative inaction in an area like tort law which has traditionally been developed primarily through the judicial process. Green, Protection of the Family under Tort Law, 10 - - Hastinas L. ~'-r 2 3 7 245 (1959). In his article, Dean ~;een stated 'that because the difficulties in reducing the refinements of tort law doctrines into statutory form often result in legislation which is either underinclusive or overbroad and which is frequently couched in ambiguous terms which the court must interpret, judicial decision is the best way to develop tort law. Id. at 246. Inaction of the legislature c a n n o t be interpreted as prohibiting judicial reappraisal of the judicially created pecuniary loss rule . . ." 651 P.2d at 252. An English court in the 1852 Blake case judicially restricted a legislatively granted remedy. The courts which followed that lead should, one-hundred thirty-one years later, be free to apply a more fitting interpretation. Montana allows the estate of a decedent to recover damages for the decedent's pain suffered prior to death. Surely a jury which can lawfully weigh such intangible damage can be trusted to fairly compensate for the grief suffered by the survivors. The same day that this opinion is being released another opinion from this Court is being released answering a certified question from the United States District Court in a case entitled Sharon K. Versland, Individually, as Personal Representative of the Estate of Bert Martin Versland, Deceased, and as Next Friend of Michelle Louise Jones and Laura Korpela, Minor Children, vs. Caron Transport. In the Versland case, this Court, for the first time, recognizes a cause of action for negligent infliction of mental and emotional distress. The opinion in this case, for the first time, allows recovery for mental distress damages in a wrongful death action. The two are not to be confused. A negligent infliction action, such as the one recognized in Versland, supra, compensates for mental distress from having witnessed an accident. The mental distress for which recovery can be sought under the rationale of Dawson, is limited to mental anguish, sorrow or grief resulting from the death. The two actions are distinct and separate. If the two actions are joined in one case then damages for the negligent infliction of mental and emotional distress must be limited to those damages caused by the witnessing of the accident. Damages awarded for mental distress as the result of wrongful death must be limited to the damages which are caused by the loss of the decedent's life. We hold that damages for the sorrow, mental distress or grief of the parents of a deceased minor are recoverable in a wrongful death action brought pursuant to section 27-1-512, MCA. Any previous Montana decisions, to the extent they conflict with this holding, are We concur: .. . . . ~ h ' & & W d d @ Chief . I JustYce '- Justici Harrison deems himself disqualified and did not participate. Mr. Justice Fred J. Weber respectfully dissents as follows: In its opinion the majority concludes by overruling any previous Montana decisions which are in conflict, without analyzing the same. I do not agree with that procedure. The majority is making a significant change in the case law of this state and should specify the decisions being modified or overruled. Sanchez v. Schindler (Tex. 1983), 651 S.W.2d 249 is the Texas case cited as authority in the majority opinion. The Texas Supreme Court listed in a footnote the cases it overruled. Sanchez, 651 S.W.2d 249, 251 n.2. historical perspective, the majority opinion refers to the 1852 Blake decision and other 19th century cases from England. No reference is made to California, the state from which Montana adopted its wrongful death statute. In addition to the English cases, reference is made to case law from Michigan, Louisiana, Arizona and Texas. I believe the cases from Michigan, Louisiana and Arizona are clearly distinguishable, but will not discuss them in detail. In VJycko v. Gnotke (1960), 361 Mich. 331, 105 N.W.2d 118, 122, the Michigan Supreme Court held that the pecuniary value of a child's companionship was recoverable. In 1968, this Court reached the same conclusion, modified the strict pecuniary loss rule which had originated from Lord Campbell's Act, and allowed recovery for loss of a child's society, comfort, care and protection. See Davis v. Smith (1968), 152 Mont. 170, 174, 448 P.2d 133, 135. I found no Michigan authority allowing recovery for grief and sorrow of a survivor. The Louisiana and Arizona case law appear inapposite since the Louisiana code specifically allows recovery for "grief, mental anguish, and distress" and the Arizona Constitution specifically prohibits any limitation on recovery in wrongful death cases. See La. Code Civ. Proc. Ann., Forms 321 & 325; Ariz. Const. art. 2, 531. The Texas case of Sanchez is discussed at length by the majority. One of the problems of using that case as authority is best stated by Chief Justice Pope, who noted in his dissent in Sanchez that the majority failed to: ". . .cite a single case in which a court has authorized damages for mental anguish by overruling a longstanding statutory construction that has been ratified by legislative reenactment . . .. " 651 S.W.2d at 257. The Montana Legislature has met a number of times since the 1877 enactment of what today is section 27-1-323, MCA. The Legislature has not seen fit to modify this Court's interpretation of that statute by amendment or otherwise. In Sanchez, Chief Justice Pope noted that aside from the Supreme Court of Texas, only eleven states have permitted recovery for mental anguish of survivors in wrongful death cases. Ten of those eleven states have allowed recovery by legislative action. See Sanchez, 651 S.W.2d 249, 257 n.6. This is a strong argument for leaving to the Montana Legislature the decision which the majority is making here. The trend to allow recovery for grief, sorrow and mental distress in wrongful death cases appears to be legislative, rather than judicial. I note that in the Pacific Reporter region, nine states including Montana have statutes allowing such damages as are just. Alaska Stat. S09.55.580 (fair and just) ; Cal.Civ.Proc. Code S377 (a) (just) ; Hawaii Rev. Stat. 5663-3 (fair and just); Idaho Code 55-311 (just); section 27-1-323, MCA (just) ; N.M. Stat. Ann. S41-2-3 (fair and just); Utah Code Ann. S78-11-7 (just) ; Wash. Rev. Code 54.20.020 (just). washington has, by statutory amendment, allowed recovery for injury to or destruction of the parent-child relationship. Wash. Rev. Code 54.24.010. This statute has been judicially interpreted to include recovery for grief. Kansas, Nevada and Oklahoma statutory law specifically permit such recovery. Kan. Stat. Ann 560-1904 (mental anguish, suffering or berievement) ; Nev. Rev. Stat. 541-090 (grief or sorrow); Okla. Stat. Ann. title 12 51053 (grief). California, from which Montana adopted its wrongful death statute, has not amended its statute and has refused to allow recovery for grief and sorrow by judicial decision. Krouse v. Gra.ham (1977), 19 Cal.3d 59, 73, 562 P.2d 1022, 1028, 137 Cal.Rptr. 863, 869. This suggests the wisdom of allowing the Legislature to determine if public policy has changed and whether recovery for mental distress, grief and sorrow requires abandonment in Montana of longstanding statutory construction that is consistent with that of other jurisdictions with similar legislation. The majority opinion does not state if it is modifying or abandoning the pecuniary loss rule in Montana, as was done in Sanchez by the Texas Court. If the rule has not been abandoned, will substantial evidence of the pecuniary value of the loss of companionship and society still be required in Montana? Will a different standard be applied to measure damages recoverable for loss of companionship and damages recoverable for grief and sorrow? I am unable to distinguish between mental or emotional distress recoverable in a wrongful death case (Dawson) and mental or emotional distress recoverable in a negligent infliction of emotional distress case (Versland) . Our Versland decision is based upon the California case of Dillon v. Legg (1968), 68 Cal.2d 728, 441 P.2d 912, 69 Cal.Rptr. 72. In Dillon, the California Supreme Court allowed recovery for emotional distress suffered by a mother who witnessed her daughter being struck and killed by a motorist. That case is factually comparable to Versland, where the wife watched the collision in which her husband was killed. Dillon and subsequent California cases have allowed recovery by bystanders for emotional distress suffered as a result of witnessing or hearing the accident with damages including mental and emotional distress suffered after the victim's death. Note that California does not, however, allow recovery for grief, sorrow or mental distress in a case like Dillon. In seeking to analyze Versland in relation to Dawson, the majority points out that if the action for mental distress from having witnessed the accident is combined with a wrongful death action for mental anguish, sorrow and grief, then the recovery under Versland is limited to the damages caused by witnessing the accident but does not include the mental distress resulting from the death. That concept suggests that there is a line between the emotional distress suffered from witnessing an accident that results in the instantaneous d.eath of a loved one, and the emotional distress suffered from sorrow and grief that follows the death. I do not understand that distinction and would be

October 21, 1983

b7c58bd2-5511-4297-93f2-94673e5901b9

HOWE v BIG HORN ELECTRIC COOP

N/A

83-085

Montana

Montana Supreme Court

No. 83-85 I N THE SUPREME COURT O F T H E STATE O F M O N T A N A 1983 B E T H HOWE, P l a i n t i f f and Appellant, -vs- B I G HORN ELECTRIC COOPERATIVE, I N C . , Defendant and Respondent. APPEAL FROM: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Big Born, The Honorable Robert 13. PJilson, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: P a t t e n & Renz, B i l l i n g s , Montana D. Michael Eakin, Montana Legal S e r v i c e s , B i l l i n g s , Montana For Respondent : B e r t W. Kronmiller; Kronmiller & Seykora, Hardin, Montana Submitted on B r i e f s : J u l y 1 4 , 1983 Decided: October 1 9 , 1983 F i l e d : ih.3 1 d /%3 - Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. This appeal involves the reasonableness of a Rural Electric Cooperative's termination of service to a customer. After a hearing in the District Court of the Thirteenth Judicial District of the State of Montana in and for the County of Big Horn, The Honorable Robert H. Wilson dismissed the member's complaint. Appellee Big Horn County Electric Cooperative, Inc., (hereinafter the Co-op) is a membership corporation organized and existing under the Rural Electric and Telephone Cooperative Act, Section 35-18-101, MCA, et. seq., and appellant is a member of the Co-op. On September 21, 1979, appellant executed an "Application for Membership and for Electric Service," attempting to secure electric service for the house she was renting south of Lodge Grass, Montana, in an area served by the Co-op. The owner of the house, appellant's landlord, had been supplied electricity by the Co-op at the residence before he moved out and all the necessary wiring and other hardware were in place. At the time appellant applied for service, there was an outstanding bill of approximately $270 which had been amassed by appellant's landlord. Appellant agreed to be liable for and pay $10 per month to reduce the delinquent bill, though the record is unclear as to how the agreement came about. Appellant claims she was required to agree to this arrangement before she would be provided service, pursuant to a Co-op policy, but the Co-op contends she offered to make the payments. The application was approved and appellant's electricity was turned on. Appellant complied with the agreement through the remainder of 1979 and 1980. However, it appears that she lost her job in the winter of 1980-81 and began having difficulty making the payments. The payments were not always made on time, and instead of paying the extra $10 per month she was only paying $1 over her own bill. After sporadic payments in the spring of 1981, appellant received a "Notice of Termination of Service and Demand for Payment" on July 14, 1981. Appellant made one payment leaving the unpaid portion at $41.83, and on July 18, 1981, her service was disconnected. This action was commenced on August 10, 1981, by appellant, alleging that she was coerced into the agreement, which amounted to extortion and an unfair trade practice in violation of Sections 30-14-103 and 45-6-317, MCA. By her complaint, appellant sought a temporary restraining order to have her service reconnected, a declaratory judgment that the Co-op's policy was illegal and an injunction to prevent the Co-op from enforcing the policy. The temporary restraining order and order to show cause was issued and a hearing date set. At the hearing, it was stipulated between counsel that the issue upon which the case rested was whether "the policies and by-laws of the Electric Cooperative regarding the refusal of service based upon charges against the land is valid and proper." The specific policy concerned is commonly known as Policy Number 24A, which was adopted by the Board of Trustees of the Co-op on March 13, 1979. Policy 24A gives the manager of the Co-op the authority to discontinue service to a member or customer who fails to pay the fees incurred for the service. After certain documents and facts were stipulated to and briefs filed, the case was submitted to the District Court judge for his decision. On November 12, 1982, the judge found that the policies, rules and regulations of the Co-op were part of a binding contract between the Co-op and appellant, and that the policy in question was reasonable. The complaint was ordered dismissed and from this order the appeal is taken. Appellant has framed the issue thus: May a rural electric cooperative make electric service to one customer contingent upon payment of the delinquent bill of another customer? This issue is not capable of resolution on the District Court record as it stands. The relationship between the Co-op and each member is contractual in nature. Sutton v . Hunziker (1954), 75 Idaho 395, 272 P.2d 1012. The articles of incorporation, by-laws, rules and regulations of the cooperative contain the provisions of the contract, as the member agrees to be bound by them in signing the application for membership. Such was the case in the present controversy as the Co-op's membership application provides that the member agrees to "comply with, and be bound by the provisions of the articles of incorporation and by-laws of the Cooperative, and such rules and regulations as may from time to time be adopted by the Cooperative." The rules, regulations and by-laws adopted after the execution of this contract became a valid part of the agreement. While it is true that the member is bound by this agreement, the articles, by-laws, rules and regulations of the cooperative must be reasonable. Sutton, supra; Smith v. Pickwick Electric Cooperative (1963), 212 Tenn. 62, 367 S.W.2d 775. Cooperatives hold a favored position in the law. In Montana, rural electric cooperatives have limited powers of eminent domain, Section 35-18-106(9), MCA; have the right to conduct power lines across public thoroughfares, Section 35-18-106(8), MCA; and are exempt from Montana tax laws, Section 35-18-503, MCA. Conversely, cooperative members are often in a disadvantageous position with respect to the cooperative, as they are in rural areas which are less likely to be serviced by a public utility and must rely on the cooperative for power. In dealing with an unreasonable rule, a member has the option of either attempting to amend the adopted rule or to discontinue service, both of which are inadequate remedies. This inadequacy is exacerbated by the circumstances in the present case where the member's residence is already connected with the cooperative and finding an alternative supply of electricity would be quite costly. This disparity between the relative positions gives rise to an obligation on the part of the Cooperative to deal in a reasonable manner with its members. The Cooperative may not foist either unreasonable rules or interpretations of rules on its members simply because they have agreed to be bound by the actions taken by the governing body. The adoption and implementation of all rules must be done fairly and in a reasonable manner with proper regard for the rights of the member and his property. Whether a rule is reasonable is a question of fact. Sutton, supra. Likewise, the reasonableness of its interpretation is a question of fact. In the present case, the District Court found that the policy of the Co-op allowing disconnection of service for nonpayment of fees was reasonable. We do not disagree with this finding. However, the dispositive issue in this case is not whether the policy is reasonable, but whether its implementation was reasonable. As stated above, this issue is not capable of resolution on the present record. From its order dismissing appellant's complaint, it appears the District Court assumed that appellant agreed to be liable for the prior customer's bill of her own volition, making it reasonable for the Co-op to disconnect for nonpayment. However as noted above, there is a basic disagreement between the parties as to the facts and circumstances surrounding appellant's signing the application for electric service. Appellant contends she was required to agree to pay the delinquent bill before she would be provided service, but the Co-op claims she offered to make the payments. The District Court did not hold a hearing to determine whose contentions were correct, but relied on a stipulation of facts submitted by the parties which did not address the question either. Without first making a finding of the pertinent facts, the District Court erred by ruling that the Co-op acted reasonably. The District Court must find whether the agreement to pay was voluntary, or a result of unequal bargaining power to judge the reasonableness of the Co-op's use of Policy 24A. It is unreasonable for a Co-op to use its superior bargaining position to force a prospective member to pay another member's delinquent bill and terminate service for nonpayment. The District Court must further find whether appellant was delinquent so as to justify the termination of service. There was no finding of the amount of payments made, or whether they were made in payment of her own bill or her predecessor's bill. If the District Court finds that appellant was unreasonably coerced into paying the prior tenant's bill, such payments must be credited to her own bill and then a determination of its status made. If the District Court finds that appellant volunteered to pay the prior tenant's bill, then the court must find that she was delinquent to uphold the Co-op's termination of service. Appellant raises a second issue, whether a rural electric cooperative serving customers on Indian trust land may require that the charges for electric service run with the land. It was stipulated that the residence in question is located on the Crow Indian Reservation. The membership application provides that the member agrees to a lien on the property served to secure payment of the fees incurred. However, the application expressly exempts Indian trust land from this provision. Reversed and remanded for further proceedings in accordance with this opinion. We concur: ( 1 w Chief Justice Justices /

October 19, 1983

5b576653-1b86-4759-8463-c1a0743e6b3a

ANDERSON v JACQUETH

N/A

82-487

Montana

Montana Supreme Court

No. 52-487 I1J THE SUPREP4E C O U R T O F THE STATE O F M O N T A N A 1983 T R I C I A ATJDERSON, P l a i n t i f f and Appellant, -vs- SCOTT JACQUETH, Defendant and Respondent. APPEAL FROM: D i s t r i c t Court of t h e Nineteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Lincoln, The Honorable Robert M. H o l t e r , Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Douglas J. Wold; C h r i s t i a n , McCurdy & Wold, Polson, P4ontana For Respondent : Gary C h r i s t i a n s e n ; Warden, C h r i s t i a n s e n , Johnson & Berg, R a l i s p e l l , Montana Submitted on B r i e f s : J u l y 2 1 , 1983 Decided: s p - 8 1983 F i l e d : SEP 8 - 1983 Clerk Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion o f t h e Court. T h i s i s a n a p p e a l f r o m a j u r y v e r d i c t f o r t h e defendant/respondent i n a n e g l i g e n c e a c t i o n e n t e r e d i n t h e N i n e t e e n t h J u d i c i a l D i s t r i c t , L i n c o l n County. The a p p e l l a n t brought s u i t f o r i n j u r i e s s u s t a i n e d a t a "kegger" p a r t y . A p p e l l a n t claimed respondent n e g l i g e n t l y t o s s e d a l a r g e rock t h a t s t r u c k a p p e l l a n t and caused s u b s t a n t i a l head i n j u r i e s . The j u r y r e t u r n e d a v e r d i c t f o r d e f e n d a n t and p l a i n t i f f a p p e a l s . On March 21, 1980, t h e a p p e l l a n t , T r i c i a Anderson, a t t e n d e d a d i n n e r " t a c o " p a r t y w i t h some f r i e n d s i n Libby, Montana. M s . Anderson, a t t h e t i m e , was a h i g h s c h o o l s e n i o r and had l i t t l e o r no d r i n k i n g e x p e r i e n c e . A t t h e p a r t y s h e consumed a c o u p l e of b e e r s . She l e f t t h e p a r t y w i t h some f r i e n d s and t h e y drove around Libby. They had beer i n t h e c a r and some of t h e o c c u p a n t s consumed it. L a t e r t h a t n i g h t t h e y d r o v e t o a "kegger" l o c a t e d on t h e Kootenai River approximately two t o t h r e e m i l e s downstream from t h e Kootenai Dam. Both h i g h s c h o o l and c o l l e g e s t u d e n t s a t t e n d e d t h i s p a r t y t o consume beer and s o c i a l i z e . A t approximately 11:30 p.m. M s . Anderson joined a f r i e n d , Amy (Wilson) G i l d e n , t o go down t o t h e r i v e r s o a s t o r e l i e v e bladder p r e s s u r e s , brought on by b e e r consumption. The kegger s i t e i n c l u d e d a l a r g e f i r e where p e o p l e s t o o d around and a t r a i l t h a t descended a p p r o x i m a t e l y f i f t e e n t o twenty f e e t down t o t h e r i v e r b e d . The r i v e r , a t t h e t i m e o f t h e p a r t y , flowed low t h e r e b y l e a v i n g many r o c k s exposed. Both M s . Anderson and h e r f r i e n d f e l l down a s t h e y followed t h e t r a i l down t o t h e r i v e r . M s . Anderson t e s t i f i e d s h e cannot remember anything pertaining to the incident following that point. The girls then walked out on the rocks of the riverbed. Ms. Gilden then heard moaning and discovered Ms. Anderson bleeding from a head injury. She testified she never saw how the injury occurred. Ms. Gilden then sought assistance for Ms. Anderson. Some males at the "kegger" carried Ms. Anderson up from the river and transported her to the hospital where she received medical attention for a fractured skull and teeth injuries in Libby. Approximately five minutes or less before Ms. Gilden informed the parties of Ms. Anderson's condition and sought assistance, Scott Jaqueth, the respondent, admitted he threw a fifteen to twenty pound rock in the general direction of the river. He claimed he heard it crash against other rocks. He asserted that the rock traveled at an angle different from the direction of the appellant. The next day two of Ms. Anderson's friends returned to the site of the injury. They found blood on a large cone-shaped rock. They also saw, about five feet from that rock, tracks that indicated a small rock had been rolled or kicked. At trial, appellant argued that she was hit by the rock respondent threw. Respondent countered by asserting appellant suffered her injury by falling on the rock found with blood on it. Appellants sole issue on appeal is whether there was sufficient evidence to support the verdict? In reviewing the sufficiency of the evidence we, "review the evidence in a light most favorable to the prevailing party. We will reverse only where there is a lack of substantial evidence to support the verdict." Gunnels v . Hoyt (1981) , Mont. , 633 P.2d 1187, 1191, 38 St. Rep. 1492, 1495; Groundwater v . Wright (1979), 180 Mont. 27, 588 P.2d 1003; In Matter of Estate of Holm (1979),, 179 Mont. 375, 588 P.2d w. , "Evidence may be inherently weak and still be deemed substantial, and substantial evidence may conflict with other evidence." Gunnels v. Hoyt, supra; In Matter of Estate of Holm, supra. "If there is conflicting evidence in the record, the credibility and weight given to such conflicting evidence is the province of the jury and not this court." Gunnels v. Hoyt, supra; Holm, supra; In Re Carrol's Estate (1921), 59 Mont. 403, 196 P. 996. The appellant asserts the medical evidence indicates only one cause of the injury. Dr. Rice (appellant's attending physician) testified that appellant "was struck on the head by a large solid object." Hospital record introduced indicated the appellant either "fell over" or "was struck by a very large rock." From such testimony and evidence the jury could reasonably accept the respondent's explanation for the injury as resulting from a fall. Appellant questions evidence that respondent presented in support of his theory that appellant sustained injuries from a fall. While the evidence at the time appeared somewhat contrary, it didn't render the respondent's explanation impossible. In reviewing the evidence in a light most favorable to the respondent, we find substantial evidence for the jury to reach their verdict. Here we find that the appellant could have fallen on the rock due to intoxication, slippery rocks, darkness, or stumbling over a small rock. Although the respondent's hands and knees lacked bruises or grit on them, that does not render it impossible to have fallen. Clearly, appellant could have fallen with her hands in her pockets or could have been sufficiently intoxicated to impare her use of her hands in a fall. Appellant argues that a verdict cannot be based on speculation and conjecture. Hurley v . N. P. Railroad Co. (1969), 153 Mont. 199, 455 P.2d 321. It is as much speculation and conjecture to believe the appellant's story as the respondent's story. Respondent introduced evidence that the wound contained sand and grit, blood was found on a large rock and no other rocks, a small rock near the large rock had been moved in a manner indicating it could have been tripped over. While no absolutely conclusive evidence exists to establish the exact cause of the injury, nothing in the evidence rendered either explanation impossible. This was a question of fact for the jury to decide. "Questions of fact are for the jury to resolve and should not be taken from the jury when reasonable men might draw different conclusions from the evidence. (citations omitted) . . . This Court will not disturb the jury's determination if the evidence furnishes reasonable grounds for different conclusions." Gunnels v. Hoyt, 633 P.2d at 1192, 38 St.Rep. at 1496, 1497. We find substantial evidence to support the jury's verdict when the record is viewed in light most favorable to the respondent. We affirm the judgment of the District Court. We concur: C h i s Justice

September 8, 1983

6e28485f-81b2-4eec-9929-6bf7641f2de5

HENKEL v HEWITT AGENCY

N/A

82-017

Montana

Montana Supreme Court

No. 82-17 IN T I I E SIJPREME COURT OF THE STATE OF P i l O N T A N A 1983 STUART HENKEL and SELMA HETJKEL, husband & wife, and JULIE BRONNICHE, Plaintiffs and Respondents, -vs- HEWITT AGENCY, INC., a Montana corp., Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Charles Luedke, Judge presiding. COUNSEL OF RECORD: For Appellant: ; James P. Murphy argued, Billings, Montana For Respondents : Anderson, Brown, Gerbase, Cebull & Jones; James L. Jones argued, Billings, Montana Submitted: July 211 1983 Decided: October 20, 1983 Filed: Clerk Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Hewitt Agency, Inc. appeals an order of the Yellowstone County District Court requiring the agency to sell certain property to the plaintiffs pursuant to the terms of a buy-sell agreement signed by Jean Houle. Jean Houle is the majority stockholder of the corporation, one of its three directors, its president, general manager, and real estate agent. Plaintiffs' interests are primarily represented by Stuart Henkel, a licensed real estate broker with many years experience. The trial court held that Jean Houle, as president, had actual and ostensible authority to bind the corporation. It entered an order of specific performance. Hewitt Agency appeals, claiming Houle's lack of authority to bind the corporation invalidates the contract. We reverse the trial court based on indefiniteness of the original buy-sell agree- ment. None of the issues raised on appeal address the issue of specificity and definiteness of the terms of the agreement. We raise the issue under the plain error doctrine, and find it dispositive. The agreement lists a contract price of $160,000. Interest was initially set at 7 1/2 percent per annum. It was modified by the consent of parties to 9 1/2 percent per annum. Interest was to begin July 1, 1978. Monthly payments of $1,000 were to commence August 1, 1978. At 7 1/2 percent interest, the annual interest totaled $12,000. The monthly payments covered only the interest. The agreement made no provision for payment of the principal. When the parties adjusted the interest rate to 9 1/2 percent, the annual interest was $15,200. The monthly payments of $1,000 now would not even cover interest. Still no provision was made for payment of the principal. Only where all the terms of the agreement are definite may a contract be specifically enforced. The terms of this buy-sell agreement are so indefinite as to be without meaning unless rewritten. If the terms must be rewritten, they cannot be specifically enforced. The judgment granting specific performance is reversed. We Concur: 3.4&, & & Chief fistice

October 20, 1983

975d4b36-59d5-458a-a991-a39a4176501e

HARRIS v BAUER

N/A

83-111

Montana

Montana Supreme Court

IN THE SUPREME COURT OF THE STATE OF MONTANA No. 83-111 WILLIAM G. HARRIS, Petitioner and Respondent, GENEVIEVE BAUER, Superintendent of Schools, Yellowstone County, Montana, sitting for Sonja Spanning, et al., Respondents and Appellants. NQV P'ci" 5983 ORDER Cl" ,j f ! c i t. . .r~r;dcm PER CURIAM: The opinion in this cause which was handed down November 14, 1983 is hereby amended. The following portion of the opinion, which constitutes the last seven lines of the original opinion, is hereby stricken: " "Here, the delay will exceed that in Yanzick because the School Board must now make an initial determination as to the propriety of the discharge procedures used and a proper award to respondent. "We remand to the District Court with instructions to remand this cause to the County Superintendent for further proceedings consistent with this opinion. " In place of the stricken language the following is inserted: "Here, the total time prior to a final determination may exceed that in Yanzick. "We remand to the District Court with instructions in turn to remand to the County Superintendent for a determination of the lawfulness of the discharge procedures used by the Livingston County School Board against Mr. Harris, as required under the petition originally filed with the County Superintendent." DATED this day of November, 1983. NO. 83-111 IN THE SUPREME COURT OF THE STATE OF MONTANA 1383 WILLIAM G. HARRIS, Plaintiff and Respondent, GENEVIEVE BAUER, Superintendent of Schools, Yellowstone County, Montana, Sitting for Sonja Spannering, et al., Respondents and Appellants. Appeal from: District Court of the Sixth Judicial District, In and for the County of Park Honorable Nat Allen, presiding Judge Counsel of Record: For Appellants: Karl Knuchel argued, Livinqston, Plontana For Respondent: Rerqer Law Firm, Billings, Montana Arnold Berger argued, Billings, Montana For Amicus Curiae: Charles E. Erdmann argued, Helena Montana Submitted September 20, 1983 Decidedl November 1 4 , 1 9 8 3 Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. Genevieve Bauer, Yellowstone County Superintendent of Schools sitting for the Park County Superintendent, issued an order on December 15, 1981 finding that William Harris was not entitled to tenure. Harris appealed to the State Superintendent of Public Instruction, who affirmed the County Superintendent's order. Harris then appealed to the District Court of Park County, which overturned the prior administrative determinations, found that Harris had tenure, and ordered him reinstated with back pay. This appeal was taken from the District Court's judgment. We affirm the judgment in part and remand the cause for further proceedings. The principal issue on appeal is whether a teacher, who was certified by the State of Montana, hired under a teacher's contract and worked as a school psychologist, obtained tenure. Respondent Harris received a B.S. degree in 1962, was certified to teach science, biology, chemistry, guidance and counseling, and was employed as a teacher in Gardiner, Montana from September, 1963 until May, 1972. Respondent returned to coll-ege, majored in psychology, and received a M.A. in Education in 1972. He applied for the position of school psychologist in Livingston in January, 1973 and was hired for the 1973-74 school year under an emergency authorization. He worked for Livingston School Districts Nos. 1 and 4 until 1981, when he was purportedly discharged. Respondent's employment contracts were preprinted forms with blanks for name, dates, salary and signatures. These contracts were variously titled: "Teacher Contract, " "Teacher's Contract" and "Individual Teacher's Contract." Paragraph (1) of the 1973-74 and 1974-75 contracts provided: "That said School District hereby agrees to employ the said teacher to teach, or to render related professional services, as and where assigned by the Board of Trustees of the Livingston Public Schools . . .." Paragraph (1) of the contracts signed for the 1975-76 through 1980-81 school years provided: "That said School District hereby agrees to employ the said teacher to teach, within his areas of certificate endorsement, or to render related professional services, as and where assigned by the Board of Trustees of the Livingston Public Schools . . . ." The County filed annual reports with the State Office of Public Instruction listing respondent's "Assignment-Subject (s) " as Elementary Counselor (1973) , Special Education, Resource Room (1974), School Psychologist (1975, 1977, 1979, 1980), and Special Education, School Psychologist (1978) . Between 1963 and 1980, respondent maintained teacher certification. In January 1973, the Office of the State Superintendent (now the Off ice of Public Instruction and referred to as OPI) conditionally approved Harris' psycho- logical testing credentials. In 1981 when professional certification became available, OPI informed Harris by letter that school psychologists who had practiced continually since were eligible for initial certification without meeting specific standards. Harris had served as school psychologist since 1973. From March, 1975 to August, 1981, respondent also worked half-time as Director of Special Education for the Livingston School Districts. He received school notices addressed to "ALL TENURED Special Education Teachers." The Livingston School District made contributions on respondent's behalf to the Teacher's Retirement Fund from 1973 through 1980. On March 20, 1981 Patrick Boyer, Director of Special Services, filed a report for the 1980-81 school year evaluating respondent's work as "less than adequate" and stating Boyer was "reluctant to make a firm recommendation for his retention as School Psychologist in the District." By contrast, Boyer's reports from preceding school years were highly complimentary. Mr. Boyer wrote respondent on April 8, 1981 that he was "relieved of all duties as a school psychologist," but that he was required "to observe teacher's hours" until his contract expired on June 5, 1981. On April 14, the School Board voted to terminate respondent's services as school psychologist. He was notified of his dismissal by letter dated April 15, 1981. At that time, respondent's contract term for the 1980-81 school year had not yet expired. Respondent appealed the Board's notice of dismissal to the County Superintendent, then to the State Office of Public Instruction. Based upon stipulated facts, both agencies determined that respondent served as a specialist in an ancillary, non-teaching, support staff capacity and was not entitled to receive tenure. The District Court found that respondent was a tenured teacher, discharged without compliance to statutory procedures. The court ordered respondent reinstated as a teacher, compensated for the unexpired portion of his "automatically renewed teacher's contract" for the 1981-82 school year, and paid to date on the automatically renewed 1982-83 contract. Section 20-1-101(20), MCA defines a teacher as: ". . . any person, except a district superintendent, who holds a valid Montana teacher certificate that has been issued by the superintendent of public instruction under the provisions of this title and the policies adopted by the board of public education and who is employed by a district as a member of its instructional, supervisory, or administrative staff. . .." In 1979, the Legislature amended section 20-4-106, MCA (formerly section 75-6006, R.C.M. 1947) to distinguish specialists and teachers for purposes of certification. In both the 1978 and 1979 codes, subsection 20-4-106(1), MCA specifies five classes of teacher certificates. The 1979 amendment added the following language to section 20-4-106, MCA : "(2) The superintendent of public instruction shall issue specialist certificates, and the board of public education shall adopt specialist certification policies. The specialist certificate may be issued to an otherwise qualified applicant who has the training, experience, and license required under the standards of the board of public education for the certifications of a profession other than the teaching profession." The Compiler's Comments state the legislative purpose of distinguishing specialist and teacher certificates: "The intent of this bill is to establish a certification category for non-teaching school personnel. It is not intended to restrict or authorize the practice of any profession outside the public school system. "Specialist certificates may be developed in areas such as school psychology or school nursing." Section 20-4-106, MCA, Annot. Compiler's Comments. In 1979, the Legislature also made a distinction between teachers and specialists for purposes of tenure, as well as for certification. Section 20-4-203, MCA (1978) (formerly section 75-6103, R.C.M. 1947) exempted only district superintendents from the protection of tenure. The current tenure statute as enacted in 1979 provides: "Whenever a teacher has been elected by the offer and acceptance of a contract for the fourth consecutive year of employment by a district in a position requiring teacher certification except as a district superintendent or specialist, the - teacher shall be deemed to bereelected from year to year thereafter as a tenure teacher at the same salary and in the same or a comparable position of employment as that provided by the last executed contract with such teacher . . ." Section 20-4-203, MCA (emphasis added) . Six of respondent's employment contracts predate these 1979 statutory changes distinguishing specialists and exempting specialists from teacher tenure. No such distinctions existed in 1973, when respondent began working for Livingston School Districts Nos. 1 and 4. As a general rule of statutory construction, "retroactive effect is not to be given to a statute unless commanded by its context, terms or manifest purpose." Falligan v. School Dist. No. 1 (1917), 54 Mont. 177, 179, 169 P. 803, 804. The 1979-80 and 1980-81 contracts must be read in conjunction with section 20-4-203, MCA, set forth directly above. However, former law applies to Harris' contracts for school years 1973-74 through 1978-79. At the time that respondent executed an employment contract for the 1976-77 school year, the tenure statute required three factors to be met before tenure could be granted: (1) that the employee be "a teacher;" (2) that a contract "for the fourth consecutive year of employment by a district" be executed; and (3) that the teacher be serving "in a position requiring teacher certification." Section 20-4-203, MCA. Section 20-1-101 (20) , MCA defines "teacher" as a person "who holds a valid Montana teacher certificate" and "who is employed by a district as a member of its instructional, supervisory, or administrative staff . . .." This definition has not changed since enactment in 1971. Harris held valid Montana teacher certificates and was employed by the Livingston School Districts as a member of the administrative staff. Respondent was a teacher. The first element of the tenure test is satisfied. Harris' fourth consecutive employment contract with the Districts was for the 1976-77 school year. Thus, the second element of the tenure test is likewise satisfied. The third and final element of the test is whether Harris served " in a position requiring teacher certification." During each of the four consecutive school years between 1973-74 and 1976-77, Harris' contracts required him to maintain teacher certification. The 1977-78 contract additionally required him to register a copy of the certificate with the Park County Superintendent of Schools. Although neither the OPI or the County Superintendent required school psychologists to file teacher certificates, Harris was by contract specifically required to do so. He satisfied this contractual obligation by maintaining and filing valid teacher certificates for each school year he was employed. As defined by his contracts, Harris' position required teacher certification. The fact that the Livingston School Districts continued to execute "Individual Teacher's Contracts" that required respondent to hold a valid teacher certificate, rather than a specialist certificate in 1980 and 1981, is additional evidence that Harris was actually a teacher assigned by the Board to render related professional services. We conclude, as did the District Court, that the contracts of the parties are clear and unambiguous, and the contact language expresses the intention of the parties. In Sorlie v. School Dist. No. 2 (Mont. 1983), 667 P.2d 400, 40 St.Rep. 1070, a classroom teacher with 20 years experience accepted an administrative position as Coordinator of Intermediate Education in 1978 and was discharged in 1980. This Court noted that " [tlhere is no separate tenure for administrative personnel." 667 P.2d at 403, 40 St.Rep. at 1073. We concluded that: " . . . tenure acquired as a teacher applies to a subsequent administrative position. Section 20-1-101(20), MCA, clearly provides that a teacher and administrator are comparable positions for the -- urpose of acquiring tenure. If this were not so, $n educator could lose tenure rights by accepting a promotion to an administrative position." 667 P.2d at 403, 40 St.Rep. at 1073-74 (emphasis added). Both Mrs. Sorlie and Mr. Harris became certifiable as specialists in 1979; however, both earned tenure prior to the 1979 change in the law. In Sibert v. Community College of Flathead Ctv. (1978), 179 Mont. 188, 587 P.2d 26, we held that an employee who did not hold a position requiring teacher certification was not authorized to receive tenure. Neither Sibert nor Harris were required to perform any classroom teaching duties. As Manager of Services, however, Sibert was not required to maintain valid teacher certification and, therefore, was not authorized to receive teacher tenure. Sibert, 179 Mont. at 191-92, 587 P.2d at 28. Harris, on the other hand, was required by contract to maintain teacher certification. Amicus Curiae, Montana School Boards Association, Inc., cites Mish v. Tempe School Dist. No. 3 (Ariz. App. 1980), 125 Ariz. 258, 609 P.2d 73, a case with facts strikingly similar to this case. In Arizona as in Montana, tenure is achieved with the fourth consecutive contract. Mish was a certified teacher, hired under a probationary teacher's contract in 1972 and assigned to work as a computer programmer for the District. The School District "used the probationary teacher's contract in hiring several non-teaching (although certified) employees" so that they would qualify for higher salaries and more lenient work schedules, and also as "a matter of convenience" to the School District. Mish, 609 P.2d at 75. Like Harris, Mish was required to maintain a valid teacher certificate as a condition of employment. She attended "teacher only1' conferences and tested children. Mish contended that the District hired her as a teacher, but assigned her to render the related duties of computer programming and research. The Arizona Appellate Court held that Mish failed to satisfy Arizona's 4-prong test for tenure, the third element of which provides: "3. The person must be one of the following: (a) Employed and working as a full-time classroom teacher; or (b) A school principal devoting not less than fifty percent of his time to classroom teaching; or (c) A supervisor of children's activities." Flish, 609 P.2d at 77. The Court held that Mish did not fulfill this part of Arizona's test. No such element is contained in Montana's tenure statute. Montana's 3-prong test (section 20-4-203, MCA) is distinguishable from Arizona's 4-prong test (A.R.S. 515-251). A "continuing teacher" in Arizona comparable "tenure teacher" in Montana. The Arizona Teachers Tenure Act, A.R.S. S15-251(A)(2), specifically defines a continuing teacher as a certified teacher whose contract has been renewed for the fourth consecutive year of employment as a full-time classroom teacher, a school principal devoting not less than fifty per cent of his time to classroom teaching, or a supervisor of children's activities. Montana's teacher tenure law, section 20-4-203, MCA, contains no such qualification or prerequisite, nor does section 20-1-101(20), MCA, which defines "teacher." Although the facts in Mish and Harris are similar, the differences between Arizona and Montana law render Mish valueless as precedent here. The fact that the Livingston School Districts contributed on respondent's behalf to the Teachers1 Retirement System has little, if any, probative value. Members of that system include persons other than teachers. Section 19-4-302, MCA. We hold that respondent was employed for the fourth consecutive year in 1976-77, served as school psychologist, and was required by contract to maintain teacher certification in order to serve in that position. Based on the specific language contained in respondent's employment contracts, the manner in which the parties dealt with each other over the course of nine years, and the fact that the School Board continued to employ respondent as a teacher after the Board became empowered on July 1, 1979 to employ a specialist, we hold that William Harris was a teacher and that he received teacher tenure in 1976. By exempting specialists from teacher tenure in 1979, the Legislature restricted the class of persons protected by tenure under section 20-4-203, MCA. In doing so, however, it did not affect tenure earned before 1979. Regarding the issues of dismissal procedures and damages, we note that this case was submitted to the County and State Superintendents and to the District Court on the parties' Stipulation of Facts and attached exhibits. Harris' Notice of Appeal to the County Superintendent and his Petition for Review by the District Court requested reinstatement with back pay. Neither the County Superintendent nor the OPI addressed the issues of dismissal procedures and damages. The District Court, having found that Harris was a tenured teacher, determined that section 20-4-204, MCA applied. The Court reinstated respondent with back pay because the Board had failed to follow the statutory procedures for termination of a tenured teacher. The District Court's order exceeds the scope of the State Superintendent's judgment. Yanzick v. School Dist. No. 23 (Mont. 1982), 641 P.2d 431, 436-39, 39 St.Rep. 191, 196-201, sets forth the standards of review to be applied by the County Superintendent, the State Superintendent of Public Instruction, the District Court and this Court. Section 20-4-204, MCA authorizes the County Superintendent to review the Board of Trustees' decision to terminate a teacher's employment. The County Superintendent acts as fact-finder in a trial de novo, as well as furnishing appellate review of the Board's decision. Sections 20-3-210(2) and 2-4-612, MCA. "The statutes do not contain a limitation on the decision-making power of the County Superintendent." Yanzick, 641 P.2d at 438, 39 St.Rep. at 198. Section 20-3-107, MCA sets forth the essential elements for appeal of the County Superintendent's determination to the State Superintendent of Public Instruction. This section requires the State Superintendent to make a determination based on the record. Section 2-4-623, MCA requires that findings of fact and conclusions of law be stated separately. This section applies to the State, as well as to the County Superintendent. Yanzick, 641 P.2d at 438, 39 St.Rep. at 199. We note that the State Superintendent's decision in this matter does not comply with this statutory requirement. The District Court likewise is subject to the provisions of the Montana Administrative Procedure Act in its judicial review of contested cases. The standard of review by the District Court is set forth in section 2-4-704, MCA: "(1) The review shall be conducted by the court without a jury and shall be confined to the record. . . . The court, upon request, shall hear oral argument and receive written briefs. " (2) The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: "(a) in violation of constitutional or statutory provisions; "(b) in excess of the statutory authority of the agency; "(c) made upon unlawful procedure; "(d) affected by other error of law; "(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; "(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or " (g) because findings of fact, upon issues essential to the decision, were not made although requested." The District Court, in effect, sits as a lower appellate tribunal, basing its conclusions on a review of the printed record. Yanzick, 641 P.2d at 438-39, 39 St.Rep. at 200. The court can review only those issues determined by the State Superintendent, which in turn reviews only those issues determined by the County Superintendent. The County Superintendent concluded that Harris "was not a teacher," but did not address the issues of termination procedures or damages. The State Superintendent affirmed the County Superintendent's decision. The District Court's findings and conclusions are supported by the record, but go beyond those of the superintendents. The District Court should properly have reversed the superintendents on the issue of teacher tenure and remanded the cause for negotiation between Mr. Harris and the School District and, if unsuccessful, for determination of the remaining issues by the County Superintendent. We note that 24 years have passed since Mr. ~arris first challenged the Board of Trustees1 decision to terminate his employment. Although Mr. Harris did not receive a hearing before the Board, as Mr. Yanzick did, we believe the suggestion made to the legislature in Yanzick applies here as well. "We suggest that the initial hearings followed by three separate and in part duplicating appeals does not appear to be judicial economy or an appropriate manner of disposing of a contested case under MAPA without delay. We suggest this is an appropriate area for legislative consideration. l1 641 P. 2d at 439, 39 St.Rep. at 201. Here, the delay will exceed that in Yanzick because the School Board must now make an initial determination as to the propriety of the discharge procedures used and a proper award to respondent. We remand to the District Court with instructions to remand this cause to the County Superintendent for further proceedings consistent with this opinion. We concur: - Chief ~usticY/

November 14, 1983

7f51d809-5d1e-4006-871f-ede8c34428a8

MARRIAGE OF POPP

N/A

83-180

Montana

Montana Supreme Court

NO. 83-180 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 IN RE THE MARRIAGE OF: ROBERT A. POPP, Petitioner and Respondent, and SUSAN POPP, Respondent and Appellant. Appeal from: District Court of the Thirteenth Judicial District In and for the County of Yellowstone Honorable Diane G. Barz, Judge presidina. Counsel of Record: For Appellant: Allen Beck, Billings,Montana For Respondent : Moses Law Firm, Billings, Montana Filed: Submitted on briefs. July 14, 1983 Jjecided. October 27, 13 8 3 Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Appellant, Susan Popp, appeals a final iudgment of the District Court of the Thirteenth Judicial District, Yellowstone Countv, entered February 7, 1983. Appellant challenges the valuation and the disposition of the marital estate. The parties were married on August 19, 1961, and sepa- rated August 20, 1981. There are four children of the mar- riage; however, the matters of child custody and support and visitation rights are not issues in this appeal. The dispute arises from the District Court's valuation and apportionment of the marital property, including the family ranch, crops, ranch vehicles, farm machinery and farm tools. Appellant wife appeals the District Court's refusal to order the ranch sold. This is the first marriage of both appellant wife and respondent husband. Testimony indicates that the property at issue was acquired by the parties during the course of their marriage. The marital estate consists primarily of an 834-acre ranch upon which the parties raised cattle, horses and crops, as we11 as maintained the related vehicles and implements used to operate that ranch. The family home is also located on the ranch; however, the valuation of this asset is not at issue. Appellant raises the following issues on appeal: 1. Whether the District Court erred in failing to meet its own stated objective of awarding 60 percent of the mari- tal estate to the husband and 40 percent to the wife. 2. Whether the District Court erred in ordering a 60 percent (husband) , 40 percent (wife) division of the marital estate. 3. Whether the District Court erred in failing to require husba-nd to account for the decrease in assets between the date of separation and the date of the trial and later hearing. 4. Whether the District Court erred in its virtually verbatim adoption of husband's proposed findings of fact and conclusions of law. 5. Whether the District Court erred in failing to order the ranch sold. STANDARD OF REVIEW - In Parenteau v. Parenteau (Mont. 1983), 664 ~ . 2 d 900, 40 St.Rep. 815, we stated the following regarding the proper standards of review in marital dissolution cases: "'The standards governing review of a District Court's property distribution . . . are well-settled in Montana. The District Court has far-reaching discretion in making property divisions. Torma v. Torma (1982), - Mont . , 645 P.2d 395, 399, 39 St.Rep. 839, 8 m Zell v. Zell (1977), 174 Mont. 216, 220, 570 P.2d 33, 35. "'The reviewing court does not substitute its judgment for that of the trial court, and will not alter a judgment unless it finds an abuse of discretion, i.e., that the trial court acted. arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial iniustice. Torma. 645 P.2d at . , 399, 39 St.Rep. at 843; Zell, 174 Mont. at 220, 570 P.2d at 35; Creon v. Creon (19811, - Mont . , 635 P.2d 1308, 1309, 39 St.Rep. 1828,830. " I [Wlhile a district court, in its discre- tion, may equally divide the marital assets, section 40-4-202, MCA, does not mandate equal distribution. Martens v . Martens (1981), - Mont . , 637 P.2d 523, 526, 38 St.Rep. 2 1 3 5 , 1 3 8 ; In re Marriage of Aanenson (1979), - Mont . , 598 P.2d 1120, 1123, 36 St.Rep. 1525, 1528.' Kowis v. Kowis (1983). Mont . These standards still apply and qovern our review of this matter. FAILURE TO DIVIDE PROPERTY ACCORDING TO COURT-ORDERED PLAN ANDFAILURE OF HUSBAND TO ACCOUNT FOR ASSETS -- - - Appellant wife contends that the District Court erred in failing to meet its stated objective of dividing the property 60 percent to the husband and 40 percent to the wife. We agree. Section 40-4-202, MCA, requires the equitable distribu- tion of the parties' property in a dissolution proceeding. This property includes "the property and assets belonging to either or both, however and whenever acquired." For all property to be distributed it must all first be valued and included in the gross marital estate. That did not occur in this matter. As we stated in Lippert v. Lippert (Mont. "A proper disposition of marital property in a dissolution proceeding requires a finding of the net worth of the parties at or near the time of the dissolution. Hamilton v. Hamilton (1980), Mont . , 607 P.2d 102, 37 St.Rep. 247; Vivian r ~ i v i a n (1978), - Mont. , 583 P.2d - 1072, 35 St.Rep. 1359; Kramer v. Kramer (1978), 177 Mont. 61, 580 P.2d 439; Downs v. Downs (1976), 170 Mont. 150, 551 P.2d 1025. The basic reason for the rule is obvious; however, it is equally apparent that application of the rule is dependent upon the kinds of marital assets under consid-eration. The time for proper valuation cannot be tied to any single event in the dissolution process. The filing of a petition, trial of the matter, or even the granting of the decree of dissolution do not control the prbper point of evaluation by the Dis- trict Court." However, while there may be no standard, fixed time to properly value the marital assets, in this case the District Court clearly erred in valuing the 1982 crops in February rather than around harvest time. This early valuation re- sulted in the elimination of a significant asset from the gross marital estate. This in itself is sufficient error to destroy the court's proposed 60-40 distribution. However, the court compounded its error by valuing the debts of the parties at the time of trial. Consequently, whi1.e the wife was not allowed to share in the profits of the ranch accrued since the date of separation, she was nevertheless charged with a proportionate share of the debts which accrued during that same time period. This is fundamentally unfair and constitutes clear error on the part of the District Court. It is also clear from a thorough review of the file on this matter that the court valued some assets at their depre- ciated value as listed on the parties' income tax returns instead of at their fair market va-lue. Yet there is no finding stating that the depreciated value is equal to fair market value of certain items of equipment. Without such a finding we hold the District Court's decision was "clearly erroneous." The 60-40 split also fails in that the court failed to require the husband to account for al-1 marital assets in his possession and under his control during the separation of the parties. Without an accounting of all assets the gross marital estate cannot be determined and the property cannot be equitably divided. The cumulative effect of the foregoing errors contrib- ute to the court's failure in fact to divide the property on a 60-40 basis. We have held that when the trial court's findings and conclusions do not adhere to its decision to split the marital property on a certain percentage basis, the trial court's judgment distributing assets of the marria.ge must be vacated and remanded. In re Marriage of Gohner (Mont. 19801, 609 P.2d 288, 37 St.Rep. 613. Therefore, this matter must also be vacated and remanded on this issue. The greatest error which wife claims destroys the 60-40 split is the undervaluation of the ranch which is the main asset of the parties. Appellant wife submitted an appraisal at trial prepared by an accredited rural appraiser (the "Hall appraisal") . Hall was available at trial and testified as to his valuation procedures. Hall valued the ranch a.t $386,110. Husband's appraisal was admitted into evidence by stipulation (the "Wright appraisal") . Wright valued the ranch at $283,300. We also note that there was a . bona fide offer for the ranch in the amount of $350,000. We further note a discrep- ancy between the appraisals as to the number of irrigated acres. In most material respects, the two appraisals are diametrically opposed. We stated in Biegalke v. Biegalke (1977), 172 Mont. 311, 564 P.2d 987, that "the trier of the facts has the discretion to give whatever weight he sees fit to the testi- mony of the expert from 0 to loo%." However, Biegalke is distinguishable in that the parties there agreed to the court appointment of a single appraiser, stipulated to his qualifi- cations, and generally accepted his appraisal without objec- tion. On appeal, we held the court properly exercised its discretion in determining valuation. In the instant case, as in Peterson v. Peterson (Mont. 1981), 636 P.2d 821, 38 St.Rep. 1723, the parties secured different appraisers who presented widely conflicting valuations. Unlike Peterson, here, upon review of the record, we cannot say the District Court improperly exercised its discretion in selecting the value it did based upon the findings of fact as stated. 60-40 DIVISION OF PROPERTY - Appellamt wife also challenges the 60-40 division of property. It is clear from the record that this was the first marriage of each of the parties and both brought virtu- ally no assets to this marriage. The property to be distrib- uted was acquired by the parties during their marriage. Clearly, the primary asset is the ranch property. The only reference by the court in its findings to the 60-40 split is one sentence in Finding No. 54. "This above a-mount represents a 40-60% split of the net marital estate." No reasoning is given for the basis of such a distribution. We cannot determine whether such a division is an abuse of discretion without findings by the court explaining the reasoning behind such a decision. Consequently, we must also remand for findings with regard to this issue. Appellant contends that the District Court ordered the 60-40 property division based on Finding of Fact No. 48. It states, "The Court specifically finds that Respondent [appel- lant] has made no contribution to the ranch since separating from the Petitioner [respondent] .I1 Since there are no find- ings stating the reason for the 60-40 division, we are unable to determine whether this is, in fact, the basis for the court's decision. However, as we stated in &arson v. Larson (Mont. 1982), 649 P.2d 1351, 39 St.Rep. 1628: "We ca-ution the trial court not to place emphasis on petitioner's lack of connec- tion with the ranch during the pendency of these proceedings. Cf. Torma v. Torma (19821, - Mont. - , 645 P.2d 395, 39 St.Rep. 839 (discussion of parties' relative contributions toward property maintenance and equity after final decree has been entered) . Though petitioner ' s homemaking services and nonmonetary contributions may not have been rendered in the ranch context, they nevertheless continued as petitioner had custody and primary responsibility for the physical and. emotiona.1 needs of the parties' minor children. This no doubt facilitated respondent's ability to maintain his employment and ranch responsibilities as he was not required to take time from these activities to ensure that the children's basic needs were being met." In this case the wife cared for the youngest child of the parties during the pendency of these proceedings. We consider that to be a significant contribution under the circumstances and hold that the District Court should recon- sider its findings with regard to the wife's contribution since separation, and if this is in fact the basis for the 60-40 division, should also reconsider its decision to divide the property in such a manner in light of our holding in Larson. ADOPTION - OF HUSBAND'S FINDINGS OF FACT AND CONCLUSIONS OF LAW --- -- Appellant also alleges error in the District Court's virtuall-y verbatim adoption of petitioner ' s findings of fact and conclusions of law. This Court has repeatedly stated its position that findings and conclusions which are sufficiently comprehensive and pertinent to the issues to provide a basis for decision, and which are supported by the evidence, i. e. , are not "clearly erroneous" in light of the evidence, will not be overturned simply because the trial court relied upon proposed findings and conclusions submitted by counsel. Parenteau v. Parenteau (Mont. 1983), 664 P.2d 900, 40 St.Rep. 815; Kowis v. Kowis (Mont. 1983), 658 P.2d 1084, 40 St.Rep. 149; In re Marriage of Hunter (Mont. 1982), 639 ~ . 2 d 489, 39 St.Rep. 59; In re Marriage of Jensen (Mont. 1981), 631 ~ . 2 d 700, 38 St.Rep. 1109. The error here is not in the adoption of the findings but rather in their insufficiency and errors in fact. Consequently, this matter must be remanded. SALE OF RANCH -- Finally, appellant alleges error in the District Court's failure to order the ranch sold. The court's find- ings numbered 54 and 55 deal with this matter and state: "54. . . . If the Petitioner is unable to comply with the above terms, then and in that event the entire marital estate will be sold and the net proceeds after all the marital liabilities are paid shall be divided for the basis of 60% to petitioner, 40% to respondent. "55. It is the strong desire of the Court to allow the family ranch operation to continue, although the respondent's presentations and proposals clearly indicate that it is her contention that the ranch is not an economic unit and shall be sold. This court noting the difficult economic times for farmers everywhere cannct in good conscience destroy a family ranching oepration if there is any chance to save it." We agree with the above findings and hold that the court's ruling against selling the ranch property is af- firmed, subject to the District Court's stated conditions. In summary we affirm the District Court's order that the ranch not be sold., subject to the conditions stated in the findings. However, we find that the District Court abused its discretion in determining the value of the marital estate of the parties. It also erred in failing to provide sufficient findings of fact and conclusions of law to support its judgment dividing the marital estate. With the exception of the issue regarding the sale of the ranch, the judgment is vaca.ted and remanded for further proceedings consistent with this opinion. $4- Chief Justice $9d*r~9~{ We concur:

October 27, 1983

3e13c385-a2b9-413d-b09f-255045e69767

MARRIAGE OF GARST

N/A

83-151

Montana

Montana Supreme Court

No. 83-151 I N T H E SUPREME C O U R T O F T H E STATE O F MONTANA 1983 I N RE THE MARRIAGE O F S H A R O N M. GARST, P e t i t i o n e r and Respondent, and ORAH W. GARST Respondent and Appellant. Appeal from: D i s t r i c t Court of t h e S i x t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Powder River, The Honorable A. B. Martin, Judge p r e s i d i n g . Counsel of Record: For Appellant: James J. S i n c l a i r , B i l l i n g s , Montana For Respondent : Lucas & Monaghan; A. Lance Tonn, M i l e s C i t y , Montana - Submitted on B r i e f s : J u l y 7 , 1983 Decided: September 29, 1983 F i l e d : SEP 2 9 1983 Mr. Justice Fred J. Weber delivered the Opinion of the Court. Orah W. Garst appeals from the judgment of the Sixteenth Judicial District Court, Powder River County, apportioning marital property. We modify and affirm the District Court's j udgment . The issues on appeal are: (1) Did the District Court err in its valuation of the marital ranch property? (2) Did the District Court abuse its discretion by ordering an inequitable division of marital property? (3) Did the District Court err by granting the wife a lien on marital property or its proceeds in a specific dollar amount? Sharon M. Garst (Sharon) filed a petition for dissolution of marriage on July 1, 1980. Trial was held July 17, 1981 and the District Court issued findings and conclusions on September 10, 1981. Sharon appealed from that judgment and this Court affirmed in part, reversed in part and remanded the case for redetermination of the net marital estate and reapportionment of marital property. Garst v . Garst (Mont. 1982), 649 P.2d 450, 39 St.Rep. 1477. Trial was held December 15, 1982. The principal issue at trial wa.s the value of the net marital estate, which turned upon valuation of marital ranch property and improvements and upon other matters not challenged on appeal. All other assets and all liabilities were found to have been conclusively determined in the first trial. Orah W. Garst (Dub) testified that the ranch consisted of the following types and amounts of acreage: hay land 186 acres crop land 340 acres improved pasture 120 acres grazing land 2,603.63 acres TOTAL 3,249.63 acres Dub testified that the value of the ranch was $100 per acre or approximately $325,000, including improvements. Dub testified that the "improved pasture" was originally grazing land, which had been plowed and planted for the purpose of growing sufficient crops to pay for a tractor for the ranch. After one or two crops were harvested, the land was replanted to grass and used for grazing. Dub testified that this pasture would support no more cattle than other grazing land and was worth no more than other grazing land. Sharon's expert appraiser, Dennis Jurica, testified that the improved pasture should be valued as farm land rather than grazing land. Jurica testified that the ranch and improvements were worth approximately $500,000. His appraisal was based upon several different methods of valuation. He valued the improvements alone at approximately $75,000. Sharon testified that she felt the ranch and improvements were worth $500,000. Dub's expert appraiser, M. L. Watson, testified that the farm land was worth $367.50 per acre and the grazing land was worth $70.44 per acre. Watson's appraisal, prepared before trial, was based upon acreage figures different from those testified to by Dub at trial. Watson testified that these differences affected the valuation of the ranch. The acreage figures testified to by Dub at trial were substantiated by Jurica's testimony. Sharon's counsel stated to the Court that she was willing to accept Dub's acreage figures. Watson further testified that ranch improvements were worth $55,000, and the ranch, $387,000, including improvements. The District Court found that the value of the ranch and improvements was $485,804.69. The Court accepted the acreage figures supplied by Dub and the values per acre supplied by Watson. The Court accepted Jurica's testimony regarding value of the 120 acres of improved pasture, valuing that land at the higher farm land figure. Ranch value was calculated by the District Court as follows: 340 acres farmland and 120 acres farmland returned to pasture, at $367.50 per acre: $169,050.00 186 acres hayland at $367.50 per acre: 68,355.00 2,603.63 acres range land at $70.44 per acre: 183,399.69 Total $420,804.69 To this value, the Court added a compromise value for improvements of $65,000, for a total ranch value of $485,804.69. The Court found there was a net marital estate of $204,374, to which each party was equally entitled. The Court ordered that all ranch assets be distributed to Dub, who in return was to pay Sharon $102,187 or half of the net marital estate. Because it was doubtful that Dub could raise that amount by borrowing against the ranch, the Court ordered that if no payment agreement was worked out within 90 days, the ranch property was to be sold. The Court granted Sharon a lien upon the ranch property or proceeds in the amount of $102,187. Dub appeals. Dub first contends that the District Court erred in its valuation of marital ranch property. He argues the District Court rejected, without stating reasons, the opinions of both experts, and that the Court's valuation figure was thus chosen arbitrarily and is not supported by the evidence. However, the record clearly shows these contentions are without merit. It is well-settled that this Court will not disturb the fact findings of the District Court if they are based upon substantial credible evidence. Kowis v. Kowis (Mont. 1983) , 658 P.2d 1084, 1087, 40 St.Rep. 149, 152. In Kowis, we stated that although conflicts may exist in the evidence presented, it is the duty of the trial judge to resolve such conflicts. His findings will not be disturbed on appeal where they are based on substantial though conflicting evidence, unless there is a clear preponderance of evidence against such findings. 658 P.2d at 1087, 40 St.Rep. at 152. We find there is substantial credible evidence to support the District Court's valuation of the marital ranch property. In reaching its determination of ranch value, the District Court used Dub's acreage figures and the values supplied by Dub's appraiser, Watson. The Court did not reject the testimony of Watson. The record clearly shows that the acreage figures used by Watson in preparation of his appraisal were erroneous. The Court applied Watson's values per acre to the acreage figures testified to by Dub at trial. Those figures were supported by Jurica's testimony, and Sharon indicated to the Court that they were acceptable to her. The Court questioned the witnesses with respect to acreage figures. The District Court was not bound to accept either all or none of the testimony of any witness. In Goodmundson v. Goodmundson (Mont. 1982), 655 P.2d 509, 39 St.Rep. 2295, we stated: "In adopting proposed values or in setting its own, the District Court is free in its discretion to adopt the recommendation of a party or a layman over that of an expert. Dickerson v. Dickerson - (1980), Mont. , 614 P.2d 521, 37 St.Rep. 1286. Also, the District Court may average the values given by experts to arrive at an eqGitable solution. . .. In Re the Marriage of Jensen (19811, Mont . , 631 P.2d 700, 38 St.Rep. 1109. "Here, the District Court adopted some findings supported by the wife's valuations, some findings that were averages of values set by experts, and some findings based on the husband's testimony and that of his appraisers. The husband claims this is illogical and inconsistent. . .. "We disagree with the husband simply because the findings are supported by the evidence and that is the determinative test." 655 P.2d at 511-12, 39 St.Rep. at 2297. Here, as in Goodmundson, the District Court's valuation was based on selected portions of the testimony of various witnesses. Each step of the District Court's valuation process was supported by substantial credible evidence. Dub argues that the District Court committed reversible error in failing to state its reasons for rejecting the valuation of the expert witnesses, citing Marriage of Peterson (Mont. 1981), 636 P.2d 821, 823, 38 St.Rep. 1723, 1726. Peterson is distinguishable, however. There, we stated that we were unable upon review of the record to say that the District Court properly exercised its discretion, without some indication of its reasoning. 636 P.2d at 824, 38 St.Rep. at 1726. Here, the reasons are clear from the record for the Court's acceptance or rejection of various testimony. There is no merit in Dub's contention that the District Court committed reversible error in accepting the testimony of Dub and his expert witness. Dub contends that the District Court erroneously valued the 120 acres of improved pasture as farm land rather than grazing land. The testimony was in conflict on this question. Dub testified that the improved pasture was worth no more than the grazing land. But Jurica testified that the property should be valued as farm land. The land in question had been farmed by Dub for at least one or two seasons, and crops were harvested. The District Court's finding that this land should be valued as farm land is supported by substantial credible evidence. We find no error in the District Court's valuation of the marital ranch property. 11. Dub next contends that the District Court abused its discretion by ordering an inequitable method of division of marital property. More specifically, he argues that the Court erred in ordering that the marital ranch property be sold so that Sharon will receive her share of the net marital estate. We reject this argument. The District Court has far-reaching discretion in making property divisions. The reviewing court does not substitute its judgment for that of the trial court, and will not alter a judgment unless it finds an abuse of discretion, i.e., that the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. Kowis, 658 P.2d at 1087, 40 St.Rep. at 153. Dub argues that Montana follows the rule that a family ranch should be kept intact wherever there is a reasonable means of providing the other spouse with his or her equitable share of marital property short of selling the land, citing Biegalke v. Biegalke (1977), 172 Mont. 311, 564 P.2d 987. He notes that in furtherance of this policy, Montana courts allow one spouse to buy out the equitable share of the other spouse in a lump sum or according to installment schedules established by the court or the parties. Marriage of Jacobson (1979), 183 Mont. 517, 600 P.2d 1183. Dub argues that the District Court here failed to reasonably and realistically consider his ability to buy Sharon's equitable interest in the ranch through the ranch's income-producing or borrowing capacity. These general principles of property division are not disputed. However, the policy of keeping a family ranch intact cannot be used to deprive a spouse of his or her equitable share of the marital estate. Marriage of Owen (Mont. 1980), 609 P.2d 292, 295, 37 St.Rep. 616, 619. In resolving this issue it is important to consider the District Court's finding number 8: "The Court finds that [Dub] is without financial means to pay [Sharon] her one-half share, and the Court has been advised by counsel that there is doubt if [Dub] can raise that amount by further encumbering the ranch property. In the event [Dub] is unable to pay [Sharon] the amount awarded or cannot arrive at an agreement with [Sharon] for installment payments within 90 days from date of judgment, all ranch property belonging to the marital estate shall be sold. . .." Clearly, the District Court recognized the principles urged by Dub. The Court gave Dub 90 days to arrange financing or to work out an agreement with Sharon for purchase of her interest. However, the Court found it was doubtful whether such an arrangement was possible. The marital ranch liabilities were substantial, making it unlikely that Dub could obtain additional financing against the ranch assets. Dub concedes that the ranch is already subject to "tremendous liabilities." The District Court's order is an equitable and fair decision with respect to both parties. If Dub is able to arrange financing, he can preserve the ranch. However, if he cannot, Sharon's interest is protected. On this record, we cannot say that the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason. Finding no abuse of discretion, the District Court's order that the ranch be sold if no purchase agreement is reached within 90 days is af firmed. Finally, Dub contends that the District Court erred in granting Sharon a lien on ranch property or proceeds in the specific amount of $102,187, after stating the property was to be divided equally. The substance of this contention is that the percentage split of the net marital estate will not be 50-50 if the ranch sells for either more or less than the value determined by the District Court. He argues that to grant the lien for a specific amount under these circumstances is to act arbitrarily and. without employment of conscientious judgment. We agree. The lien amount of $102,187 is based upon the entire net marital estate of the parties. If the ranch property sells for more than $485,804 or if other ranch assets are sold for more than the values set by the District Court, the lien amount will be less than half the net marital estate, and Sharon will receive less than her share. On the other hand, if assets are sold for less than the values determined by the Court, the lien amount will be greater than half, and Dub will receive less than his share. This problem is easily corrected by modifying the decree to state that the lien shall be in the amount of $102,187 or, in the event that property is sold for more or less than the value determined by the District Court, the lien shall be adjusted accordingly so that the lien is for one-half of the net marital estate. We order that the judgment be so modified. Finally, we note that the trailer home included in the District Court's valuation of the net marital estate has apparently been distributed to Sharon. If this is so, the value of the trailer must be subtracted from the amount of the net marital estate due Sharon from Dub, and the trailer should be paid for with proceeds of the sale of marital assets. Similar adjustments are to be made for any other items included in the net marital estate and already distributed. With the modifications noted above, we affirm the judgment of the District Court. We Concur: ? A & & . Q + J Q Chief ~usfice

September 29, 1983

f21a2b5c-ce0a-479a-8be0-eb7cbde51482

STATE v GILLHAM

N/A

82-366

Montana

Montana Supreme Court

NO. 82--366 I N T H E SUPREME COURT OF T H E STATE OF M O N T A N A 1983 THE STATE OF M O N T A N A , P l a i n t i f f and Respondent, -vs- H E N R Y JAMES GILLHml, Defendant and Appellant. APPEAL FROM: D i s t r i c t Court of t h e Nineteenth J u d i c i a l District, I n and f o r t h e County of Lincoln, The Honorable Robert M. H o l t e r , Judge p r e s i d i n g . COUNSEL OF RECORD: For Appellant: Kerry 1J. Newcomer, Iioundup, Montana (argued) P u b l i c Defender For Respondent: Hon. Mike Greely, Attorney General, Helena, Montana C h r i s Tweeten (argued) ,P,sst. Atty. General, Helena William A. Douglas, County Attorney, Libby, Montana Submitted: A p r i l 26, 1983 Decided: October 6 , 1983 F'iled: gje r (j - 983 -- Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. Defendant appeals from a conviction of attempted deliberate homicide following jury trial in the Nineteenth Judicial District Court, Lincoln County. We affirm. Defendant raises the following issues for review: (1) Did the District Court admit "other crimes" evidence without following required procedures? (2) Is defendant entitled to a new trial on the basis of juror misconduct? (3) Did the prosecutor's closing argument violate defendant's right to a fair trial? (4) Is the conviction based on insufficient evidence? (5) Did cumulative error deny defendant a fair trial? On the morning of November 13, 1981, Jean Nordahl notified the Lincoln County Sheriff's Department that he had found a bomb made of several sticks of dynamite and an electrical blasting cap behind the seat of his logging truck near Eureka, Montana. The bomb was removed by ordnance experts from Fort Lewis, Washington, one of whom later testified that had it been wired properly, it would have exploded, destroying the cab of the truck and killing any occupants. On November 24, 1981, Gillham's daughter, Linda Weitz, and her boyfriend, Michael Darby, contacted the Lincoln County Sheriff's Department and submitted affidavits implicating Gillham in the attempted homicide. The same day, when a search pursuant to a warrant uncovered evidence in Gillham's home, he was arrested. On December 3, 1981, Gillham was charged by information with attempted deliberate homicide, as follows: "William A. Douglas, County Attorney of Lincoln County, Montana charges that on the 13th day of November, 1981, at off U.S. Highway #93, South of Eureka, Montana in Lincoln County, Montana the above named Defendant committed the offense of: Attempted Deliberate Homicide, a felony "The facts constituting the offense are, to-wit: "-the Defendant, Henry James Gillham, did purposely or knowingly attempt to cause the death of another human being; that is to say, the said Henry James Gillham did purposely or knowingly wire explosives into the truck owned and operated by Jean Nordahl with the purpose to kill Jean Nordahl. [§§45-4-103; 45-5-102, MCA, 19811" Gillham was tried before a jury April 27 through May 1, 1982. The evidence presented at trial indicated that Gillham had made no secret of his plan to earn $5,000 - $10,000 from Jean Nordahl's wife, Carolyn, by blowing up Jean Nordahl with dynamite. Linda Weitz and Mike Darby both testified that when they first arrived in Eureka from the west coast in September of 1981, Gillham showed them a blasting cap and wires and claimed to have dynamite in his truck. Weitz testified that Gillham told them "he'd gotten into a new business . . . He was going to blow this guy up." Sometime later, after Weitz met Carolyn Nordahl, Gillham identified Mrs. Nordahl as the wife of the man he intended to blow up. Weitz and Darby lived with Gillham during their first several weeks in Montana. Weitz testified that "[tlhis mess with Jean Nordahl, the bombing threats," became a constant topic of conversation around the house. She and Darby feared Gillham and moved into their own house about November 1, Weitz and Darby testified that on November 12, 1981 they accompanied Gillham to the Nordahl residence, ostensibly to go "poaching" and deliver some moonshine. Darby and Weitz remained in the car while Gillham went up to the Nordahl house. Through a window, they saw Carolyn Nordahl pass an object to Gillham. Gillham returned carrying a .22 caliber Ruger pistol, which was later found in his home. He told Weitz and Darby he was supposed to shoot Nordahl with the pistol and bury him in a hole behind the house where Weitz and Darby were living. Because Nordahl was not at home, the trio visited elsewhere and returned to the Nordahl residence later that afternoon. Nordahl's logging truck was there. Again Weitz and Darby remained in the car while Gillham entered the Nordahl house. He returned briefly to get the pistol, which he stuck in the waist of his trouser and covered with a jacket, and a jug of moonshine, which he carried into the house. In a few minutes, Gillham, Jean Nordahl and Carolyn Nordahl left the house, where there were a number of guests, and walked into the new shop building. After a few minutes, Carolyn Nordahl emerged from the shop looking "upset or angered." She "smacked a tree" and entered the house. A few minutes later, Jean Nordahl and Gillham left the shop. When Gillham returned to the truck, he told Weitz and Darby that Carolyn Nordahl had wanted him to shoot Jean Nordahl while they were in the shop, as Nordahl leaned over a solvent tank. Gillham refused to do so. The three returned to their homes. About 10 : 30 that evening, Weitz and Darby were awakened when Gillham, who was very excited, burst into their house shouting "Get up! Get up! It's time to go!" Gillham ordered Darby to go with him. Weitz and Darby testified they were afraid of Gillham and did not object very strenuously to his order that Darby accompany him. Darby testified that Gillham drove them to the Nordahl property and parked off the main road out of sight of the house. Carrying a brown paper bag, he proceeded through the woods and entered the back door of Nordahl's shop. Gillham told Darby to stand guard at the front office window, while for about twenty minutes he busied himself by Jean Nordahl's logging truck. At one point, Gillham complained that the bomb was too big and that he had to remove some sticks of dynamite to place the bomb behind the driver's seat. He indicated the wiring was tricky. The bomb was wired to detonate a few seconds after Norda.hl turned on the truck headlights. He usually waited to do so until he was outside of the shop. His wife wished to spare the building. Gillham also remarked that he had dropped a piece of wire. Darby located it, tangled around Gillham's feet, and pocketed it. Gillham finished his business with the logging truck and dropped Darby off at his home. Weitz and Darby testified that when they saw Gillham the next day, he told them "[tlhe damn thing didn't go off." According to Weitz, Gillham was extremely worried that his fingerprints on the tape holding the bomb together would give him away. He conducted a number of experiments with tape, egg cartons and mirrors to determine whether he might have left fingerprints. Gillham asked Weitz and Darby to hide the Ruger pistol, a red suitcase containing "some other items," and the fluorescent orange jacket he had worn the night he wired the Nordahl truck. They agreed to hide the items. On November 23, Gillham took back the pistol and jacket but the suitcase could not be found. Both Weitz and Darby feared that Gillham might harm them because they knew too much and were dispensable. At 6:00 a.m., November 24, 1981, they contacted the Sheriff's office and prepared the affidavits which led to Gillham's arrest. Weitz's and Darby's testimony was far from the only incriminating evidence against Gillham at trial. Jean Nordahl's nineteen-year-old stepdaughter, Sonja, testified that her mother and a "gravelly-voiced man" she identified by voice as Gillham had numerous telephone conversations. They occasionally used her as a telephone relay to transfer details of Jean Nordahl's schedule. She recalled that on September 9, 1981 her mother received a telephone call from the "gravelly-voiced man." Shortly afterword, Sonja accompanied her mother into Eureka, where Carolyn Nordahl slipped a manila envelope into a "gunky, green station wagon" behind the Eureka Cafe and Tavern. Gillham owned an old green Chevrolet station wagon. Two acquaintances of Gillham testified that in the fall of 1981 Gillham had shown them money in a manila envelope. He told them it was $5,000 he was being paid to make someone's husband "come up missing." Jean Nordahl's accountant testified that in late August of 1981 Carolyn Nordahl had written two checks for cash totaling $5,000. Sonja Nordahl testified that although she had seen and heard her mother, Gillham and a friend of Gillham's discussing Jean Nordahl's murder in the Nordahl home, she never believed they were serious about it. On November 12, 1981, when Gillham was present, Sonja saw her mother carrying the Ruger Bearcat pistol, but Sonja did not see it thereafter. Finally, later that night she telephoned Gillham for her mother and told him "[hle was supposed to hurry up and get this thing done." Gillham responded that "[Jean Nordahl] wouldn't make it out of the driveway the next morning." The next morning, Sonja called Gillham again. The transcript contains her description of the conversation, as follows : "Q. What was the message - or what did you say to him? A. I told him he had made it out of the house fine . . . I told him, '[hle had left for work fine; that nothing had happened.' Q. What was his response to that? A. He said something like, 'Oh, my God! It should have gone off within fifteen seconds.' " Sonja did not communicate any of the above information to her stepfather. In fact, according to her testimony, she "hated his guts." But she insisted that she believed the discussions about killing Jean Nordahl were not serious, but were "a pathetic form of comic relief." Marvin Miller, an employee and friend of Gillham who helped him cut Christmas trees early in the fall, testified that Gillham talked about planning to kill Jean Nordahl "all the time, to everybody." Gillham told Miller in late October " [i] t' s all set, " and the same day while passing Nordahl ' s house, he told Miller, " [t] hat is the place. " Gillham also told Miller in October that he had already received $5,000 of $10,000 Carolyn Nordahl would pay him for killing Jean Nordahl. On November 13, 1981, after the bombing attempt was discovered, Gillham told Miller, " [t] he bomb didn't go off," and "[ilt was all set." According to Miller, Gillham was "scared to death. " Another daughter of Gillham, Laurel Lyons, testified that she had heard Gillham refer to his "new business," and that he could get paid for "blowing someone away." He showed her dynamite in a suitcase. Lyons recalled Gillham leaving the house with the suitcase, saying he had a job to do. When he returned, Gillham told Lyons he had almost been caught; he "had the hood up and the wires were ready to hook up" when a dog that "should have been penned up" alerted a girl. Gillham said he nearly shot the girl. This evidence was admitted over a continuing objection by defense counsel concerning "other crimes" evidence. Lyons also testified that on November 13, 1981, after the bomb was discovered, Gillham told her, "[ylour daddy fucked up." Linda Weitz's daughter, Tess Moore, testified that on November 13, 1981, after the bomb was discovered, her grandfather Gillham discussed the matter with her: "He just told me that he did it and he didn't want me to think bad about him - about him doing it. And he told me that he was the one that did it - he was the one that set it behind the seat and everything. " On May 1, 1982 the jury returned a verdict of guilty on the charge of attempted deliberate homicide. The ~istrict Court sentenced Gillham to sixty years for that crime and an additional ten years for the use of a destructive device. He was designated a dangerous offender. Gillham appeals. The first issue is whether the District Court admitted evidence of other crimes, acts, or wrongs of the defendant without following required procedures. The trial transcript reflects Gillham's continuous objections to the introduction of evidence which he argued could not be admitted without the procedures mandated by State v. Just (19791, Mont . 1 602 P.2d 957, 36 St.Rep. 1649. The record establishes that the Just procedural requirements of notice, admonition and instruction were not satisfied. The State does not argue that the Just procedures were followed. It argues that they were not required because the District Court properly characterized the disputed evidence as either (1) acts which were not criminal in nature or (2) acts which were so inextricably related to the crime charged as to be part and parcel of it. The State argues that acts which are not crimes may be admitted without the procedural safeguards of Just. It is true that a substantial portion of the evidence was not evidence of crimes. This includes evidence that defendant acquainted a significant portion of Eureka's population with his plan to kill Nordahl, that he called and visited the Nordahl home and that he followed Nordahl's vehicle intending to harm Nordahl. But whether the acts are criminal or not does not resolve the issue of the applicability of Just. In State v. Casagranda (19811, Mont . , 637 P.2d 826, 829, 38 St.Rep. 2122, 2127, we stated: "This general rule, along with the exceptions, has been codified in Rule 404 (b) , Mont .R.Evid. , which states: 'Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.' "The important language of this rule overlooked --- the State is that the rule is not limited to 'other ------ - - - crimes.' The rule also applies to 'wrongsor acts' --- -- o f -- defendant." (emphasis added) The fact that the evidence is of non-criminal acts of the defendant does not exempt admission of the evidence from the procedural guidelines established in Just. This Court has recognized that the State is entitled to "present the entire corpus delecti of the charged offense including matters closely related to the offense and explanatory of it . . . ." This rule overrides the requirements of Just. State v. Riley (1982), Mont . , 649 P.2d 1273, 1279, 39 St.Rep. 1491, 1499. Riley was a deliberate homicide case where the death of a child followed severe physical abuse by members of a communal group including defendant. Evidence was admitted at trial of a systematic pattern of brutal disciplinary punishment extending over a period of many months before the victim's death. Evidence was also admitted to show a pattern of violence by defendant against other children of the group and by other members of the group against the victim and other children. We held that the evidence provided a context of a continuous series of beatings in which the jury was entitled to view defendant's actions. The evidence was closely related to the offense and explanatory of it. Evidence that Gillham possessed dynamite and blasting equipment, that Carolyn Nordahl gave him a gun and urged him to shoot Jean Nordahl the evening of November 12, 1981, and that he made an earlier attempt to wire explosives to Nordahl's vehicle fits squarely within the rule articulated in Riley. Each act, whether criminal or not, is inseparably related to the act charged. None of the acts can be characterized as "wholly independent" or unrelated acts. See State v. Trombley (1980), Mont. , 620 P.2d 367, 368, 37 St.Rep. 1871, 1873. Likewise, evidence that Gillham told others of his plan to kill Nordahl, that he visited the Nordahl home, and that he followed Nordahl's vehicle intending to harm Nordahl is admissible under Riley as part of the corpus delicti of the crime charged. All of this evidence provides an explanatory context in which the jury was entitled to view the actions of Gillham. The State was entitled to present at trial the entire corpus delicti of the crime charged, including this evidence of acts closely related and explanatory of the crime charged. The District Court did not admit evidence in violation of the Just procedural requirements. Gillham argues that reversal of his conviction is required by our decision in State v. Gray (1982), Mont. , 643 P.2d 233, 39 St.Rep. 622. We do not agree. The facts of Gray are distinguishable from the facts of this case. In Gray, the District Court admitted evidence of an act committed five days after the crime charged. Here, none of the disputed evidence is of subsequent acts. It is evidence of acts inseparable from the crime charged. Gray does not require reversal of Gillham's conviction. Although the District Court did not violate Just, we encourage trial courts to apply the safeguards of Just liberally. Even though the procedures of Just may not be required in a given case, their use may be proper and wise. Especially in close cases, use of the Just procedures would assure fairness to defendants. The procedural safeguards were designed to protect those accused of crime from unfair surprise or double punishment. They should be liberally applied to that end. 11. After the jurors returned their verdict, defense counsel polled them regarding their exposure to media coverage of the trial. One juror had merely glanced at some headlines, but before the defendant's case had been presented, a second juror had read an entire newspaper article which summarized the State's case. She said she either had not heard or had forgotten the judge's admonition to avoid reading reports of the trial. The admonition was given the first day of the trial, but not thereafter. She admitted her mistake in reading the paper, but said the report was accurate and had in no way reinforced her opinions or affected her deliberations. Defense counsel asked that the jury be held until the accuracy of the article could be verified or, in the alternative, moved for mistrial. The court denied both requests. Gillham now argues that he is entitled to a new trial because of juror misconduct. He emphasizes that because a unanimous verdict is required for a conviction, the vote of this juror was so critical that the possibility she was prejudiced is sufficient to warrant reversal and retrial. We agree that where jurors have been exposed to prejudicial and inadmissible outside information which may have influenced their verdict, retrial is in order. In Putro v. Baker (1966), 147 Mont. 139, 410 P.2d 717, we ordered a new trial where, during deliberation in a negligence action arising from an automobile accident, jurors were exposed to inadmissible evidence that defendant had been convicted of manslaughter for deaths arising out of the accident. We stated that where prejudicial outside information was improperly before the jury, prejudice would be rebuttably presumed. We also stated that a juror could not purge himself by merely declaring that such information did not affect his judgment in forming the verdict. Putro, 147 Mont. at 147, 410 P.2d at 721-22. We noted, however, that " [tlhe presumption may be rebutted by the use of testimony of the jurors 'to show facts which prove that prejudice or injury did not or could not occur.'" Putro, 147 Mont. at 147, 410 p.2d at 721, citing State v. Jackson (18901, 9 Monte 508, In this case, the single juror who read the newspaper article testified that it was an accurate and factual report, "about the same" as the admissible testimony already before the jury. As the State correctly observes, there was no evidence before the trial court that the information was prejudicial. Indeed the juror declared that it was not and that it was no more than a factual account of the State's case. Clearly there was juror misconduct but that in itself does not necessitate reversal. As the Oklahoma court stated in Tomlinson v. State (Okla. Crim. App. 1 9 7 6 ) , 554 P.2d 798, " [Wlhere jury prejudice [by media report exposure] is alleged at any stage of trial or appeal the burden of persuasion is on the defendant to show by clear and convincing evidence that (1) the jurors were specifically exposed to media reports which (2) were prejudicial t o -- the defendant. Mere proof that a juror or jury was exposed - to factual account of txe triaT w i l l n o t meet this burden of - - - - - - - persuasion." (emphasis added) We hold that Gillham has not met his burden of establishing the prejudicial nature of the information to which the juror was exposed. The trial court did not err in denying Gillham's request for mistrial. While the trial court was perhaps unnecessarily brusque in releasing the jury before the factual nature of the newspaper account could be verified, it was 2:45 a.m. Defendant could have raised the matter on a motion for new trial if the article had been prejudicial. We find no error on this issue. The remaining three issues are without merit and may be disposed of summarily. First, in closing argument the prosecuting attorney disparaged a witness whose testimony tended to link Linda Weitz with a plan to kill Jean Nordahl. He referred to the testimony of "a little tootie thirteen-year-old when she was pregnant and coming from a shack with a stepdad with a name of 'Hippie Dave'." He indicated this girl's testimony had been introduced without "second pre-notice" to the State, making it impossible for the State to investigate what relationship existed between "her moonshine-drinking stepdaddy" and "the moonshine-making defendant." Defendant now argues that his right to a fair trial under the United States and Montana Constitutions was jeopardized by these improper remarks of the prosecutor. He argues they must be considered on appeal, pursuant to section 46-x-702, MCA, despite the absence of objection at trial. A 0 We hold that, in light of the entire trial and considering the strength of the State's case, this single statement, concededly outside the boundary of fair comment, did not constitute such a gross abuse as to render the whole trial unfair. Both this Court and the United States Supreme Court have stated that while a defendant is entitled to a fair trial, he is not entitled to a perfect one. United States v. Hastings, No. 81-1463 (U.S. May 23, 1983); Brown v. United States (1973), 411 U.S. 223, 93 S.Ct. 1565, 36 ~.Ed.2d $ k ~ t e V, 208; Weinberger (1983), A Mont . I P.2d I 40 St.Rep. 844; State v. Powers (1982), Mont . I 645 P.2d 1357, 1363, 39 St.Rep. 989, 996. In Hastings, the Supreme Court noted that the harmless error rule "'block[s] setting aside convictions for small errors or defects that have little, if any, likelihood of having changed the result of the trial' . . .. [I]t is the duty of a reviewing court to consider the trial record as a whole and to ignore errors that are harmless, including most constitutional violations . . . . " Slip op. at 9, quoting Chapman v. California (1967) , 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705. Defendant's remaining two arguments, that his conviction must be reversed for insufficient evidence and because of cumulative error, are likewise without merit. The case against him is overwhelming and the alleged errors are technical and insignificant. We find no error which compels reversal. Affirmed. W e concur: % a # * & Chief J u s t i c e J u s t i c e s M r . J u s t i c e Daniel J. Shea, s p e c i a l l y c o n c u r r i n g : I j o i n t h e m a j o r i t y ' s r e s u l t , b u t I d o n o t a g r e e w i t h a l l t h a t i s s a i d .

October 6, 1983

9ddc6994-7d64-405a-b819-0862a3c9f5ff

HUTTINGA v PRINGLE

N/A

82-299

Montana

Montana Supreme Court

1 1 0 . 82-299 I T J THE SUPREME COURT OF THE STATE OF MONTANA 1983 RICHARD R. BUTTINGA, et al., Plaintiffs and Respondents, -vs- GARY W. PRITJGLE, et al., Defendants and Appellants. APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Joseph B. Gary, Judge presiding. COUNSEL OF RECORD: For Appellants: Robert R. Throssell, Deputy County Attorney, argued, Bozeman, Montana Eleanor A. Parker, Dept. of Health, argued, Helena, Montana For Respondents: Page Wellcome; argued, Bozeman, &Tontana - Submitted: June 6 , 1983 Decided: September 8, 1983 Filed: SEP 8 - 1983 L- Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. Defendants appeal from a judgment of the Eighteenth Judicial District Court, Gallatin County, granting a writ of mandamus to the plaintiffs directing Montana Department of Health and Environmental Sciences (DHES) to certify property described in a deed as not subject to sanitary restrictions, and directing the Clerk and Recorder of Gallatin County to record the deed. We reverse the judgment. Following are the dispositive issues: 1. Did the Clerk and Recorder fail to perform a clear legal duty in refusing to file plaintiffs' certificate of survey and to record their warranty deed? 2. Did the Gallatin County Health Department (GCHD) act as an agent of the DHES when it denied a county subsurface sewage disposal system permit to plaintiffs? 3. Did the DHES violate a clear legal duty to grant plaintiffs approval of their subdivision? The key facts are contained in the uncontested findings of fact which include the following: In 1971 the plaintiffs planned to purchase five acres of land from J. Huttinga, father of Richard, for the purpose of erecting a home for the plaintiffs. Notwithstanding that the five acres was not a subdivision under the laws of Montana in 1971, plaintiffs filed an application for an individual sewage disposal installation permit with the GCHD. An inspection of the ground was made by Emery Nelson, Gallatin County Sanitarian. After the inspection, plaintiffs were never notified by the GCHD that the septic tank and sewage disposal system did not comply with the requirements of state law or the regulations of the County or the State Board of Health, predecessor to DHES. The District Court further found that at the time Emery Nelson inspected the installation, it was in the process of being constructed. At no time in the following six years did anyone notify plaintiffs that the installation would not be approved. The District Court next found that in 1978 the plaintiffs applied to the County Clerk and Recorder for the recording of a deed, which was refused without the sanitary restrictions being either approved or removed. Plaintiffs then consulted with GCHD and discovered that the department contended the system was not approved, even though it had been installed and used for seven years. Tests made in 1979 showed no evidence of contamination of the water in the well. While not included in the District Court finding of facts, the uncontested evidence is that the Gallatin County Sanitarian assisted the plaintiffs with the design and specifications for the sewage system in 1971, and the plaintiffs installed the system in accordance with those plans. Although Sanitarian Nelson testified at trial that the system could not be approved because there was ground water in the drainfield trenches in 1971, and that the drainfield therefore violated the County regulations requiring a 2-foot separation between the bottom of the trench and the highest water table, the District Court specifically found that any such disapproval was not communicated to the plaintiffs. Mr. Huttinga, Richard's father, testified that one of the County sanitarians had "said it was ok to go ahead and fill it." The trench was then covered. Plaintiffs occupied the trailer house and used the completed septic system for over seven years. After the County Clerk and Recorder refused to record the deed in 1978, plaintiff Richard Huttinga and Sanitarian Nelson obtained water samples from above and below the septic system to test whether the system was polluting the water. Nelson testified he believed the State might approve an existing system "if it could be shown that water, the water table, was not being degraded." Nelson subsequently returned the $4.00 testing fee to the plaintiffs, explaining that the DHES would not pass the system for State subdivision review as it lacked County approval. In addition, without County approval, the DHES would not conduct subdivision review and would not issue its own certificate of approval indicating there were no sanitary restrictions. In May of 1979, plaintiffs attempted to file the certificate of survey and to record the deed of the 5.002 acres. The Gallatin County Clerk and Recorder refused to file the same without the DHES certificate stating there were no sanitary restrictions. Without a filed survey, the deed itself could not be recorded by the County. In July of 1979, a tapwater sample was taken by the plaintiffs, tested by DHES, and found not to be contaminated. DHES informed the plaintiffs that "these results cannot be relied upon as indicating the safety of the water at all times unless the source is properly located and maintained." In August of 1979, GCHD notified plaintiffs that unless they complied with current, more stringent requirements for subsurface sewage disposal systems, GCHD would not approve the plaintiffs' system. On January 31, 1980, plaintiffs petitioned the District Court for a writ of mandamus ordering the Clerk and Recorder to file the certificate of survey and record the deed. Following a hearing, the District Court joined DHES as a party defendant and set a new hearing date. Prior to that hearing, the parties stipulated that no additional testimony would be given and the transcript from the first hearing would suffice. On April 5, 1982, the District Court entered judgment for the plaintiffs and issued a writ of mandamus ordering the defendants to certify that the property was subject to no sanitary restrictions and requiring the Clerk and Recorder to record the deed. By subsequent order, the Court awarded attorneys' fees of $1,539.13 to be borne equally by DHES and Gallatin County. Defendants appeal. During the pendency of this action, Gary W. Pringle succeeded Lucille Bridges as Clerk and Recorder of Gallatin County. Because the suit is against the Clerk and Recorder in his or her official capacity, Pringle has been substituted for Bridges as a party defendant pursuant to Rule 37(c) (I), M.R.App.Civ.P. Based upon the previously described findings of fact, which are not contested by the defendants, the District Court concluded that it was incumbent upon the Gallatin County Health Department to advise the plaintiffs of any disapproval, and that the failure to notify the plaintiffs for a period of six years after installation of the drainfield constituted grounds for estoppel under the law. While the parties agree that Gallatin County is estopped from disapproving the system, the defendants argue that it is not appropriate to estop either the Clerk and Recorder, who only has a duty to file and record or the DHES, which has not actually participated because no application has been made to it. The issue raised by the Clerk and Recorder is whether the Clerk and Recorder failed to perform a clear legal duty by refusing to file the certificate of survey and to record the deed of the plaintiffs. Our conclusion is determined by the statutes. Sections 76-3-101 through 76-3-614, MCA constitute the chapter entitled "Montana Subdivision and Platting Act." This chapter controls the survey required in the present case. Under section 76-3-104, MCA, a subdivision comprises a parcel less than 20 acres which has been separated from the original tract. Section 76-3-207(1), MCA provides that certain divisions of land, even though less than 20 acres, are not subdivisions under this particular chapter but are subject to surveying requirements. The Huttinga property meets one of these exceptions, that being a division outside of a platted subdivision for the purpose of a gift or sale to a member of the landowner's immediate family. Section 76-3-207(1) (b), MCA. As a result, the tract here involved is required to be surveyed under section 76-3-401, MCA. Under this chapter, there is no specific requirement for sanitary restrictions. Sections 76-4-101 through 76-4-1251, MCA control sanitation restrictions in subdivisions. Section 76-4-102 (7), MCA defines subdivisions under this chapter as parcels containing less than 20 acres of land. The key provision is section 76-4-122, MCA, which in relevant part provides: "(1) The county clerk and recorder shall not file or record any map or plat showing a subdivision unless it complies with the provisions of this wart. "(2) A county clerk and recorder may not accept a subdivision plat for filing until one of the following conditions has been met: "(a) The person wishing to file the plat has obtained approval of the local health officer having jurisdiction and has filed the approval with the department [DHES], and the department has indicated by stamp or certificate that it has approved the plat and plans and specifications and that the subdivision is subject to no sanitary restriction . . .." While the survey here involved is not a plat under the Montana Subdivision and Platting Act, it covers a tract defined as a subdivision under section 76-4-102(7), MCA which comes within the recording provisions referred to in section 76-4-122, MCA. In addition, under section 76-4-125(2), MCA, the survey must be submitted for review by the DHES. We conclude that in the present case, before the plaintiffs could file their survey, they were required to obtain the approval of the local health officer having jurisdiction and the DHES was required to certify that the division was not subject to sanitary restrictions. The plaintiffs chose not to proceed by requesting approval of the local health officer or of the DHES, and instead have argued that all parties are estopped from any position other than an admission that the survey and plat are subject to - no sanitary restrictions. The statutes are sufficiently specific so that no contention can be made that the Clerk and Recorder was under a duty to file the survey and record the deed under the facts of this case. The Clerk and Recorder was statutorily required to refuse to file the survey and, in the absence of such a survey, to refuse to record the deed. In the absence of the required approvals from the appropriate health officer and DHES, the statutory obligation of the Clerk and Recorder to refuse a survey or plat should be enforced. The Clerk and Recorder lacks discretion to accept a survey absent compliance with the specific requirements of section 76-4-122, MCA. We therefore hold that the Clerk and Recorder did not fail to perform a clear legal duty in refusing to file the plaintiffs' certificate of survey and to record their deed. Did the Gallatin County Health Department act as an agent of the Department of Health and Environmental Sciences when it denied a county subsurface sewage disposal system permit to the plaintiffs? Finding IX of the District Court in substance held that the GCHD was a representative and in substance held that the GCHD was a representative and agent of the DHES. As such, the Court found that if the septic tank and drainfield did not meet sanitary requirements, the defendants had a duty to notify plaintiffs when the system was being installed and to stop the installation. This was not done. The DHES contends there was no statute or legal principle which would make the GCHD an agent for the State in 1971. In 1971 when the application for the county permit was made by the plaintiffs, no subdivision review question was raised. All that the plaintiffs did was to seek a county permit from the GCHD. Plaintiffs have not cited and we have not located any statute or decision which establishes that in 1971 the GCHD could be classed as agent for the DHES or its predecessor. It was not until 1977 that section 76-4-128, MCA was amended to allow the DHES to delegate to a local government the authority to review a subdivision if the local government has qualified personnel to review adequately the water supply and sewage disposal facilities. In State v. District Court of Thirteenth Jud. Dist. (1976), 170 Mont. 15, 550 P.2d 382, this Court held that police officers are servants of the city and cannot be classed as servants or agents of the State. We reasoned that the State exercises no direct, detailed or daily supervision over a police officer and is powerless to avoid or prevent negligent acts by them. We pointed out that the State does not pay, hire or fire the policemen. In a similar manner, there is no indication here that the GCHD was in any way a servant or agent of the DHES, its predecessor or the State of Montana. The statutes show that the State and its agencies could not exercise any direct, detailed or daily supervision, or hire or fire employees, or otherwise provide the services, which were the function of the GCHD in 1971. The record does not show that the GCHD in any way acted as agent for the DHES in 1971. We hold that the GCHD did not act as an agent of the DHES when it denied the county sewage disposal system permit requested in 1971. The last issue is whether the DHES violated a clear legal duty to grant the plaintiffs approval of their subdivision. As previously discussed, sections 76-4-121 to 76-4-123, MCA prohibit the filing of a map or plat with the Clerk and Recorder until DHES has certified that the subdivision is not subject to sanitary restrictions. Under the statutes, DHES has the authority and responsibility to set standards by rules for determining whether a given subdivision should be approved. Section 76-4-104, MCA sets forth the rules and standards to be adopted by the DHES, which include requiring that a copy of the plat or other documentation be furnished to DHES; evidence that a water supply is sufficient in terms of quality, quantity and dependability; evidence that the potability of water has been met; evidence that a sewage disposal facility is sufficient in terms of capacity and dependability; and standards and technical procedures applicable to sanitary sewer plans and designs, including soil percolation, testing and similar items for on-lot sewage disposal systems. As pointed out by the DHES, no application has ever been submitted to it. Thus, the DHES has no actual knowledge of the nature of plaintiffs' system, nor of the plaintiffs' answer to any of the information which is required to be furnished to the DHES prior to its determination regarding sanitary restrictions. Absent an appropriate application to the DHES, there is no factual or statutory basis for estopping the DHES. The plaintiffs have yet to apply to the DHES. We hold that the DHES has not violated a clear legal duty by failing to approve the plaintiffs' survey. We therefore reverse the judgment of the District Court which determined that the plaintiffs are entitled to a writ of mandamus directing the Montana Department of Health and Environmental Sciences to certify that the property described in the deed is subject to no sanitary restriction and requiring the Clerk and Recorder to record the deed. We also reverse the order granting attorneys' fees to the plaintiffs. While we do not give advisory opinions, we make the following comments with the aim of reducing further legal proceedings. With its briefs, DHES furnished to the parties a form E.S. 91B. That form describes the information required to be submitted to the DHES in connection with the sanitary facilities here in question, and requires the furnishing of a copy of the survey and other documents designed to allow assessment of the application. An application should now be made by the plaintiffs on form E.S 91B to GCHD and DHES. GCHD properly may give its approval by virtue of the basis for estoppel shown in the trial of the present case. DHES then can proceed to complete the examination of the facilities in question and determine whether under all of the facts, an approval of the system is appropriate so far as it is concerned. We concur: %dQ, &e Chief Justice Justices Justice John C. Sheehy concurring and dissenting: I agree that Gallatin County Health Department is estopped from refusing to approve the Huttinga's sewage system. It is idle for this Court to suggest a new application addressed to the Department of Health and Environmental Sciences. It will automatically refuse to approve the new application. We should not allow the Huttingas here to suffer further from bureaucratic bungling.

September 8, 1983

0f3a6827-7301-4599-a4a3-612ae58956ea

RICHARDSON v SAFECO INC

N/A

83-108

Montana

Montana Supreme Court

SO. 53-108 I N T I 3 @ SUPRC;4E COURT OF THE: STATE OF 3 1 O N T A I ' J A 1983 LARRY RICHARDSON, Plaintiff and Appellant, SAFECO INSURANCE COMPANY OF AI\/IERICA, a Washington Corp. , and ROBERT J. PlcCORKLE , Defendants and Respondents. Apgeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Charles Luedke, Judge presiding. Counsel of Record: For Appellant: Kelleher Law Office; John S. Koder, Billings, Montana For Respondents: Keefer, Roybal, EIanson, Stacey & Jarussi; J. Dwaine Roybal, Billings, Plontana Submitted on Briefs: May 26, 1983 Decided: September 29, 1983 Filed: SEP 2 9 1983 Clerk Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Larry A. Richardson appeals an order of the Yellowstone County District Court granting summary judgment to defendants Safeco Insurance Company of America and Robert J. McCorkle. Richardson's claim was for actual and punitive damages. He claims he suffered economic loss, as well as mental and emotional distress, due to the actions of Safeco Insurance Company of America (Safeco) and its agent, Robert J. McCorkle, during negotiation and settlement of an accident claim. His claim of economic loss is based on attorneys fees incurred as a result of filing suit against Safeco to compel payment of car repairs. He also claims that he suffered mental and emotional distress by Safeco's fraudulent misrepresentation of intent to settle the claim, and Safeco's breach of good faith in the actual settlement of his claim. We affirm. When Richardson accepted Safeco's settlement, he released the insurance company from all claims arising out of the accident. Richardson claims his economic loss (attorneys fees) accrued after he signed the release. He also claims it was not his intent to release Safeco from liability for bad faith actions when he signed the release. The trial court found the attorneys fees and the alleged mental and emotional distress arose out of the same transaction as the car accident, and granted summary judgment to Safeco. We agree. We first hold that Richardson's duty to pay attorneys fees arose when he contracted with his attorney to file suit, rather than after Richardson signed the release. Second, we hold that Richardson's claim for bad faith was relinquished when he signed the release. The case arose out of an automobile accident between Richardson's son Jeff, driving Richardson's car, and a car insured by Safeco. Delays in processing the claim prompted Richardson to retain the Kelleher Law Firm on November 16, 1981. Richardson alleges the Safeco agent, McCorkle, offered payment in return for Jeff's statement regarding the accident. After receiving the statement, McCorkle offered an amount I.ess than the original estimate for repair. Richardson rejected this offer and filed an action to recover his full damages. In response, Safeco, through McCorkle, offered to settle for $950. When he accepted the settlement, Richardson signed a release of all claims against Safeco. After receiving payment, Richardson brought suit against Safeco and its agent, McCorkle. The claim alleged bad faith by Safeco in its manner of settlement resulting in Richardson's mental and emotional. distress. Richardson also alleged economic loss in the form of attorneys fees incurred when Richardson brought suit to obtain the full amount of repair costs. Larry Richardson claims he was damaged in the amount of attorneys fees, and this claim arose after he signed a release for Safeco. He also claims it was not his intent to release Safeco from 1-iability for bad faith when he signed the release. Whatever claims Richardson may have had against Safeco developed before the release was signed. Richardson's liability for attorneys fees arose when he contracted with the Kelleher Law Firm to pursue the property damage claim. Contracts require mutual consideration. Richardson's promise to pay attorneys fees was exchanged for his attorney's promise to pursue the action. The obligation came into existence then, not later. Richardson knew all the facts and possible causes of action relating to the accident when he signed the release, and retained no right to sue Safeco for attorneys fees. Although the actual amount of attorneys fees depended on the settlement figure, Richardson's obligation and duty to pay the fees arose at the time of filing the first suit. Richardson concedes that his mental and emotional distress arose before the signing of the release, but he nonetheless argues that he had no intent to release Safeco from a claim of bad faith. Language on the back of the check to Richardson specifically released Safeco from all claims arising out of the occurrence upon endorsement. Finally, one party's intent, unknown to the other, cannot change the obvious intent of the agreement. Safeco and McCorkle had no reason to know Richardson was not releasing them from all claims arising out of the accident. All possible claims Richardson might have had against Safeco matured before the release was signed. Summary judgment was properly granted. The District Court's order is affirmed. W e Concur: p d 3 . u Chief Just%e

September 29, 1983

277d34b0-1595-478f-aca0-77f141af7c71

STATE EX REL VOORHIES v THIRD JU

N/A

83-117

Montana

Montana Supreme Court

IN THE SUPREME COURT OF THE STATE OF MONTANA THE STATE OF MONTANA, ex rel. JAY VOORHIES, Relator, No. 83-117 DISTRICT COURT OF THE THIRD JUDICIAL DISTRICT OF THE STATE OF MONTANA, IN AND FOR THE COUNTY OF DEER LODGE, AND THE HONORABLE ROBERT J. BOYD, presiding as District Judge. Respondents. ORDER AND OPINION This Court accepted a petition for a writ of certiorari from Jay Voorhies, relator, who contends that the Deer Lodge County District Court exceeded its jurisdiction when it found him in willful contempt of a marital dissolution decree providing that he must make the house payments "until the minor children attain the age of 18 years or no longer reside in the home. " He argues the trial court failed to consider his ability to pay. We affirm the contempt order. The marital dissolution decree was entered by the Deer Lodge County District Court on August 13, 1980. Since then, the father's failure to pay the house payments has triggered two attempts by the wife to have him held in contempt and two petitions by the father to modify the decree. In addition to the order requiring the father to make the monthly house payments, the father was also ordered to pay $150 per month child support for each child. In May 1981, the father stopped making house payments and in September the son came to live with the father while the daughter remained with the mother. The mother asked that the father be held in contempt for failure to make the monthly house payments a.nd the father moved to modify the decree on custody. After a hearing on both issues, the trial court changed custody of the son from the mother to the father, but also found that the father was in contempt for failure to make the house payments. In ruling on the house payments, the trial court ordered the father to make them because "the necessity of providing support and shelter for his minor daughter remains constant." Clearly, the father's obl-igation under the decree to make house payments was unaffected by his obtaining custody of the son. The father did not appeal from the order finding him in contempt or from the order compelling him to continue making the monthly house payments. Sixteen months later (in April 1982), the father again stopped making the monthly house payments. Ten months later (in January 1983), the mother obtained an order for the father to show cause why he had stopped making the monthly house payments. A hearing was set for March 2, 1983, and on that date the father filed a response in which he asked that the trial court modify the house payment provision of the decree. His petition alleged no facts occurred after the last dissolution decree on which he based his request to modify. However, the father testified at the hearing that he had recently bought some property and that the payments on the property ($194.78 per month) prevented him from making the house payment ($190 per month). The trial court did not accept his explanation, finding that the father had voluntarily incurred the additional obligation that prevented him from making the house payment required in the dissolution decree. The trial court found the father in contempt for failure to make the house payments. The father then petitioned this Court for a writ of certiorari and we entered a stay order. In arguing that the trial court's contempt order should be set aside, the father relies on both the first modification hearing and the second modification hearing. First, he contends that when his son came to live with him he no longer had to make the house payments. However, the trial court ruled against him and found in the first modification order that the father's duty to make the house payment to support his daughter remained constant, and was not affected by the fact that his son was then living with him. The father did not appeal from that ruling and he cannot now raise it as a defense to the contempt order. Second, the father argues that at the second hearing the trial court did not consider his ability to pay. But the court found that the father had voluntarily incurred other obligations and that he could not use those obligations by which to relieve himself of the duty of making the monthly house payments. We agree. The father undertook these voluntary obligations knowing that he had an obligation to make the monthly house payments. His duty to make the monthly house payments comes first. Because the District Court clearly had jurisdiction to hold Jay E. Voorhies in willful contempt, the application for a writ of certiorari is denied, and these proceedings are dismissed. DATED this / w d a y of August, 1983. L C . s W e Concur: ~ , 4 4% @+, Chief J u s t f c e , . ' J u s t i c e s

August 18, 1983

f0256e63-334d-4bee-b96f-19fb7a4b24ad

WALTERS v CAMPEAU

N/A

82-378

Montana

Montana Supreme Court

No. 82-377 & 82-378 IN THE SUPREME COURT OF THE STATE OF MONTANA M. E. WALTERS , Plaintiff, PAUL CAMPEAU, Defendant and Appellant, FRED G. CARL AND JOAN A. CARL, Defendants and Respondents, and WILLIAM P. CHILCOTE, Petitioner and Ap2ellant. ORIGINAL PROCEEDING : & APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable Jack L. Green COUNSEL OF FGCORD: For Petitioner/Appellant: James J. Benn; Boone, Karlberg & Haddon, Missoula, Montana (argued) For Respondents: Moses Law Firm; Charles Moses (argued), Billings, Montana McChesney and Borg, Missoula, Montana William R. Baldassin, Missoula, Montana - - - - - - - - - Submitted: MaY 311 1983 Decided: September 2, 1983 Filed: SEP 2 - 1 9 8 3 ---- Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. William P. Chilcote (Chilcote) , not a party to the original action, seeks a Writ of Review and appeals from the determination by the District Court of the Fourth Judicial District, Missoula County, that Chilcote was in contempt of court, and that Fred G. Carl and Joan A. Carl (Carls) should therefore have judgment against him for $40,350. We reverse the judgment of the District Court. While a number of issues have been stated by the parties, we restate the controlling issue: Does the evidence support the findings of the District Court, its conclusion of contempt by Chilcote, and its judgment of $40,350 against Chilcote? The Carls entered into a contract for the construction by Paul Campeau (Campeau) of four duplexes in Missoula, Montana. During construction, a mechanic's lien was filed by plaintiff Walters. Walters obtained summary judgment against Campeau and is no longer a party to the controversies between Campeau and Carls. After trial of the claims for relief by Carls against contractor Campeau, the Carls obtained judgment against Campeau on April 27, 1981 for breach of contract. The District Court ordered that the necessary repairs be made to correct substantial defects in the four duplexes, Campeau was ordered to pay to Carls the cost of the correction, repairs and related expenses, the total of which was not to exceed $30,000 per unit, i.e. $120,000. Campeau failed to complete the improvements or payments. Carls recorded their $120,000 judgment against Campeau in Richland County, Montana. Campeau and Chilcote were engaged in a joint venture in Richland County where they were constructing and selling residences. The Campeau-Chilcote joint venture had nothing to do with the Missoula County construction contract, and Chilcote d.id not in any way participate in the construction of the Carls' Missoula County duplexes. In order to obtain title insurance required for the sale of the Richland County houses, Chilcote personally borrowed $120,000 from First National Bank in Missoula and deposited that $120,000 in Richland National Bank of Sidney, pursuant to a written agreement between the title and abstract companies and the bank whereby the $120,000 would protect the title to the Richland County properties against the Carls' judgment. That agreement provided that Chilcote was to be treated as the sole owner of the fund and that all funds were to be returned to Chilcote upon termination of the trust account. Next the Carls moved the District Court to force Campeau's compliance with the April 27, 1981 court order. A hearing was held. The District Court issued an order on November 4, 1981, allowing Campeau to complete the repairs to the duplex under supervision of designated architects. Security for payment of materialmen and subcontractors was ordered in the form of an interest-bearing account established in the amount of $60,000. Campeau's attorney, William Baldassin, was to maintain the account in the name of William Baldassin, Trustee, to be used to pay materialmen and subcontractors. That order also required the Carls to release the property in Richland County from the lien of the April 27, 1981 judgment, so that "the defendant Campeau's funds can be released from the sale of the residences and be transmitted to Mr. Baldassin as Trustee." The order did not name Chilcote in any manner and did not require or prohibit any conduct on his part. Pursuant to the November, 1981 order, Carls executed partial releases of judgment on the Richland County properties. The releases were forwarded by Carls' counsel to Mr. Baldassin, Campeau's counsel. Campeau's counsel forwarded the releases to the abstract company in Sidney. In his letter forwarding the releases, Baldassin asked the abstract company to "notify the bank that the judgments have been released and that they [the bank] can release all monies held in the Chilcote account to me for deposit in my trust account. I' At this point the testimony and understanding of Campeau's attorney, the abstract company and the bank is at variance. The attorney's letter to the abstract company did not condition recording of the releases upon the receipt by the attorney of the $60,000, but instead requested notification of the bank that it "can release" all monies held in the Chilcote account for deposit in the attorney's trust account. The attorney testified that he understood that he was to receive the $60,000 in return for the releases, and that he was not aware of any misunderstanding on this point between the officers of the abstract company or the bank and himself. In contrast, the officer of the abstract company testified that he did not understand this to be a conditional delivery of the releases, and he therefore recorded the releases, advised the bank of that recording, and furnished them a copy of the attorney's letter. In turn, the bank officer testified that he contacted his legal counsel, who advised him to return the $120,000 to Chilcote, which he did. The sales of the Richland County houses were completed and Chilcote received the net sales proceeds, as well as the balance of the $120,000 deposit in the Richland Bank. Chilcote repaid his $120,000 personal loan to the Missoula bank. On November 23, 1981 he paid $60,000 to Campeau as Campeau's share of their joint venture profits in Richland County. This is the action which the District Court found to be contemptuous in that it frustrated the November 4, 1981 order of the court requiring that $60,000 be held in a trust account with Mr. Baldassin as trustee. While Chilcote was not involved in the Missoula County construction, the contract problems or the court action between the Carls and Campeau, Chilcote was aware of the plan for a $60,000 trust account with Mr. Baldassin as trustee. Chilcote's testimony with regard to his $60,000 payment to Campeau is as follows: "Q. You had some awareness of the supplementary hearing in October, did you not? A. Yes. "Q. And you know that Mr. Baldassin wanted $60,000? A. Yes. "Q. But did you have any knowledge that anyone had required you to provide that $60,000 to any of them? A. No. "Q. What did you do with the money that Mr. Campeau had coming out of the proceeds of the sale? A. In November, you mean? "Q. Yes. A. I paid it to him. He's got all the money. "Q. At the time you paid it to him because you knew generally what was going on, did you tell him? A. I told him he better get that money down and - - - - -- ive it to Bill Baldassin, right, Bill? L--- "Q. Did he acknowledge to you that he would do that? A. He said he wasn't going to get me in trouble. "Q. That didn't prove to be accurate, did it? A. No." (emphasis added) Campeau paid $2,650 to the Carls and $17,000 to Baldassin, which was deposited in the trust account. Campeau then disappeared and none of the parties were able to bring him before the court during the balance of the proceedings. At oral argument counsel advised the court that Campeau apparently was in Australia. On December 30, 1981, Carls petitioned the District Court to find Baldassin, Campeau and Chilcote guilty of contempt for failure to obey the supplemental order. By order filed August 2, 1982, the District Court concluded that Chilcote "frustrated the order of this Court and prevented its execution and should be held in contempt of this Court and required to comply with the order . . . dated November 4, 1981. " Judgment in favor of Carls was entered on August 10, 1982 against Chilcote in the amount of $40,350, together with costs of suit. Chilcote then petitioned for a Writ of Review and also appealed. This consolidates challenges to the finding of contempt and to the money judgment. Does the evidence support the holding of contempt by the District Court? The rule with regard to our review of contempt proceedings is well stated in our opinion in Matter of Graveley (1980), Mont . , 614 P.2d 1033, 1039, 37 St.Rep. 1261, 1267, as follows: "It is the rule that on review of contempt proceedings, the Supreme Court determines only whether the District Court acted within jurisdiction, and whether or not the evidence supports the finding and order. State - v . District Court of Twelfth Judicial Dist. (1968), 151 Mont. 41, 4 3 7 438 P.2d 563; State v . Second Judicial Dist. Court (1935), 99 Mont. 209, 41 P.2d 1113." Chilcote does not contend that the court does not have jurisdiction because he is not a party to the proceeding between the Carls and Campeau. Graveley establishes there is no such limitation in Montana. In that case, the sheriff who was neither a party nor otherwise present in the courtroom was nonetheless found guilty of contempt for his disobedience of the order of the court. The specific statute which applies is section 3-1-501, MCA, which in pertinent part states: "(1) The following acts or omissions in respect to a court of justice or proceedings therein are contempts of the authority of the court: " (e) disobedience of any lawful judgment, order, or process of the court; "(i) any other unlawful interference with the process or proceedings of a court;" The pertinent portions of the District Court's August 2, 1982 findings of fact are as follows: XIV. "However the court finds that Mr. William Chilcote knew of the order of this Court and the requirements thereof through his attorney, through conversations and agreements with Mr. Campeau and through conversations with Mr. William Baldassin; . . . The Court further finds that Mr. Chilcote paid to Mr. Campeau two checks in the amounts of $45,000 and $15,000, making a total of $60,000, from the sale of said residences; "That William Chilcote not only knew of the order of this Court and the requirements of said order, but contrary to such order did the things and performed the acts as herein described, frustrating the Court's order and enabling Mr. Campeau to not perform the improvements upon the premises, and prevented the delivery of $60,000 to be placed in trust as required by the order." Section 3-1-501, MCA requires that there be a disobedience of a judgment, order or process, or other unlawful interference with process or proceedings. There was no judgment, order or process in any manner directed to Chilcote individually, and in the absence of any finding by the court that there was a disobedience of a judgment, order or process, it is clear that the facts do not substantiate a finding of contempt under section 3-1-501(l)(e), MCA. Therefore, we must conclude that the court found Chilcote guilty of contempt under subparagraph (i) , by some unlawful interference with the process or proceedings of the court. There is nothing in the findings or in the evidence which shows any unlawful interference on the part of Chilcote with the process or proceedings, unless the facts can be stated in such a manner as to show that Chilcote in some manner interfered with the deposit of the $60,000 in Mr. Baldassin's trust account. We here make reference to the above-quoted testimony on the part of Chilcote. There is no evidence to contradict his testimony that he told Campeau that "he better get that money down and give it to Bill Baldassin." Campeau advised Chilcote he would not get him in trouble, which is of course exactly what he did. In analyzing the evidence and the findings, we do find evidence to sustain the conclusion of the District Court that Chilcote knew of the requirement for the $60,000 deposit with Mr. Baldassin. The facts also show that there was no requirement by order, instruction or otherwise, that Chilcote deliver the $60,000 to Campeau's attorney, rather than to Campeau himself. There are no facts to support the conclusion of the District Court that Chilcote frustrated the court's order and prevented the $60,000 from being placed in trust. The facts only show that Chilcote delivered the $60,000 to Campeau with instructions to deliver the same to his own counsel, Mr. Baldassin. Unfortunately, Chilcote trusted Campeau when Campeau was not worthy of that trust and "left the country." In a similar manner, the Carls, their attorney and the District Court also extended trust to Campeau, believing that he would complete the construction according to his obligations and make payments as required. Unfortunately he proved unworthy of that trust. We can understand and sympathize with the sense of frustration on the part of the District Court, which devoted so much time and effort to work out a just solution of the controversies between the Carls and Campeau, and concluded with the unfortunate result that by court order the liens on the Richland County property had been released and yet the $60,000 had not been deposited in trust for the protection of the Carls. It is clear that there was a frustration of that order of the District Court. The facts show that it was Mr. Campeau (and not Mr. Chilcote) who frustrated the court's order and failed to deliver the entire $60,000 as he was required to do. Clearly Campeau was in contempt of the court. Clearly Chilcote did not prevent the payment by Campeau of the $60,000 into trust by his delivery of the funds to Campeau with instructions they be delivered to Campeau's own attorney. We therefore hold that there is not sufficient evidence to support the finding and order of contempt. As a result, the judgment for $40,350, together with costs of suit, must fall. Having reached this conclusion, there is no need to address the other issues raised by the parties. We reverse the finding and order of contempt on the part of Chilcote, reverse the judgment entered for the Carls against Chilcote, and remand for appropriate action by the District Court. We concur: a u . @ a d Chief Justice Justices Mr. Justice John C. Sheehy dissenting: I dissent. In this case, Chilcote, knowing of the existence and provisions of the District Court order, is guilty of an unlawful interference with , . the proceedings of the District Court. Section 3-1-50 (i) , MCA. For such contempt, he is k) liable to the power of the District Court, even though he is not a party to the underlying action. The power of the District Court reaches to any person or officer who is in contempt of the authority of the court by misbehavior in office or by any other unlawful interference with the process of proceedings of the court. See McPartlin v. Fransen (1978), 178 Mont. 178, 582 P.2d 1255. This Court is failing to recognize that a district court has the power to enforce its order by contempt proceedings. Our statutes recognize this, when they include: "Section 3-1-520. Imprisonment to compel perform- ance. When the contempt consists in [sic] the omission to perform an act which is yet in the power of the person to perform, he may be imprisoned until he shall have performed it. In that case, the act must be specified in the warrant of commitment." What the District Court was doing in this case was attempting to follow the provisions of our statutes with respect to its power. We should modify the order of the District Court in this case so that a fine is levied against Chilcote for his past contempt in frustrating the lawful order of the court, and imprisonment ordered until he performs the act which the District Court had decreed in its order, unless it is now beyond his power to do so. In a civil contempt proceeding, a fine is imposed as punishment for past contemptuous conduct and imprisonment is ordered where the defendant refuses to do an affirmative act required by an order mandatory in its nature. See U. S. v. Montgomery (D. Mont. 1957), 155 F.Supp. 633. One who refuses to perform a judicial order which he is able to perform may be imprisoned until he complies with such order. State ex rel. Lay v. District Court, Fourth Judicial District in and for Ravalli County (1948), 122 Mont. 61, 198 P.2d 761. The only question before this Court is the propriety of the District Court order holding Chilcote in contempt. He is in contempt as long as he does not deposit with the trustee named in the order the sum of $60,000. Whether eventually he may be liable for the full amount of $60,000 to the remaining parties is a matter of a future determination after trial by a court. But, at this juncture, the question before this Court and before the District Court, is, should Chilcote have been required to place in deposit with the trustee the sum of $60,000? The majority opinion goes afield from this question and raises complications which are unnecessary to its decision. All we have to decide here is whether Chilcote, a nonparty, is subject to the contempt jurisdiction of the District Court. In this case, all of us seem to recognize that he is. Since he is subject to the contempt power of the court, the lawful order of the court, which otherwise appears proper, ought to be permitted. Otherwise, the District Court is powerless to enforce its orders. I would, therefore, modify the judgment of the District Court to require that Chilcote follow the order by depositing $60,000 with the trustee; and, unless it is beyond his power to do so, I would enforce the order through the permitted fine, and to such jail time as is necessary to bring about compliance with the court's order. Section 3-1-520, MCA. Once the money is on deposit with the trustee, the remaining questions as to the extent of Chilcote's liability could be litigated.

September 2, 1983

db0fe6b4-bda1-4d2f-b7d1-816e1a6888e8

MARRIAGE OF HOLSTON

N/A

83-053

Montana

Montana Supreme Court

No. 8 3 - 5 3 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 3 I N RE THE MARRIAGE OF VALLINA RUTH HOLSTON, P e t i t i o n e r and R e s p o n d e n t , -vs- ROBERT BRUCE HOLSTON , J R . , R e s p o n d e n t and A p p e l l a n t . APPEAL FROM: D i s t r i c t C o u r t of t h e E l e v e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of F l a t h e a d , T h e Wonorable R o b e r t C. Sykes , Judge presiding. COUNSEL OF RECORD: F o r A p p e l l a n t : P a t r i c k M. S p r i n g e r , K a l i s p e l l , M o n t a n a F o r R e s p o n d e n t : James D. M o o r e , K a l i s p e l l , M o n t a n a S u b m i t t e d on B r i e f s : June 30, 1 9 8 3 D e c i d e d : S e p t e m b e r 2 , 1 9 8 3 F i l e d : SEP 2 - 1983 C l e r k Mr. Chief Justice Frank I. Ha.swel1 delivered the Opinion of the Court. Robert Holston appea.1~ the Flathead County District Court's property distribution pursuant to his dissolution of marriage. We affirm. Robert Bruce Holston and Vallina Ruth Holston were married on May 21, 1970, and lived together as husband and wife until approximately April 1981. Two children were born as issue of this marriage. Both parties are teachers. The wife is presently working in Montana, and the husband is working in Alaska. During the marriage Robert held various part time positions in addition to teaching and both husband and wife were involved in the enterta.inment business. On July 2, 1981, Vallina filed a petition for dissolution. The marriage was dissolved orally by the District Court on January 5, 1982, then by order on March 5, 1982. Custody of the minor children was granted to Vallina and Robert was ordered to pay $150 per month per child for their support. In its findings of fact and conclusions of law, the District Court found that the value of the marital personal property was $12,198 and awarded Vallina a portion thereof va-lued at $8,345. Robert was awarded the remaining personal property valued at $3,853. The net value of the residence was $38,058. The parties also owned three rental houses which were valued at $39,155. Vallina was awarded the residence and Robert was awarded the rental units. Vallina paid all marital debts; thus, Robert was ordered to reimburse her for one-half thereof. This amount was set off against an amount Vallina owed Robert. Robert appeals the property distribution and raises two issues for our consideration: 1. Did the District Court abuse its discretion by failing to include all marital assets in the marital estate? 2. Did the District Court abuse its discretion in apportioning the marital estate? Robert first argues that the District Court abused its discretion by not including Vallina's retirement benefits in the marital estate. The District Court further abused its discretion by not considering his nonmonetary contributions to the real property, thereby diminishing the value of his portion of the marital estate. Vallina first asserts that no testimony was offered with respect to her retirement fund; hence the District Court was correct in not including it in the marital estate. Second, she asserts that Robert's nonmonetary contributions outside the home placed a greater homemaking and child care burden on her while she maintained full time employment, thereby offsetting Robert's nonmonetary contributions. The standard for reviewing the property division in a dissolution decree is well settled in Montana. The apportionment made by the District Court will not be disturbed on review unless there has been a clear abuse of discretion as manifested by a substantially inequitable division of the marital assets resulting in substantial injustice. In re the Marriage of Schultz (1982), - Mont . , 649 P.2d 1268, 1271, 39 St.Rep. 1435, 1439; In re - Marriage of Brown (1978), 179 Mont. 417, 422, 587 P.2d 361, 364; In re Marriage of Blair (1978), 178 Mont. 220, 223-224, 583 P.2d 403, 405; Vivian v. Vivian (1978), 178 Mont. 341, 343-344, 583 P.2d 1072, 1074. Abuse of discretion is further indicated by a trial court's arbitrary action without employment of conscientious judgment or in excess of the bounds of reason resulting in substantial injustice. In re Marriage of Martens (1981) , Mont . - , 637 P.2d 523, 38 St.Rep.2135; In re Marriage of Creon (1981), - Mont . I 635 P.2d 1308, 38 St.Rep. 1828. In addition, section 40-4-202, MCA, calls for an equitable division of the marital estate by the court regardless of however or whenever acquired or in whose name the property is held. In re the Marriage of Houtchens (1979), 181 Mont. 70, 73, 592 P.2d 158, 160; Schultz, 649 P.2d at 1272, 39 St.Rep. at 1440. Retirement benefits are properly included within the marital estate and are subject to this apportionment. Kis v. Kis (1982), - Mont . , 639 - P.2d 1151, 39 St.Rep. 119. Also, nonmonetary contributions in the form of maintaining and improving property can be considered in ascertaining and apportioning the marital estate. Section 40-4-202(1)(b), MCA. This Court has recognized that such contributions affect the marital estate. In re Marriage of Sell (1981), - Mont . , 638 P.2d 222, 38 St.Rep. 950; Nunnally v. Nunnally (1981), Mont. , 625 P.2d 1159, 38 St.Rep 529. Robert asserts that since his retirement benefits were withdrawn to purchase one of the rental houses and such houses were part of the marital estate, Vallina's retirement benefits should also be part of the estate. We hold the District Court did not abuse its discretion by not including the wife's retirement benefits in the marital estate simply because no evidence regarding the benefits was presented at trial. In Karr v. Karr (1981), Mont . - , 628 P.2d 267, 38 St-Rep. 506, the husband argued that certain personal property should have been included in the marital estate. This Court held that the District Court was correct in not including the property because the parties had entered into a personal property division agreement and, like this case, no - evidence was adduced at trial with respect to such property. - -- Furthermore, we reject Robert's contention that his nonmonetary contributions were not considered in determining the marital estate. His labor contributed to the value of the marital real property and this is reflected in the total appraised value of the property; hence, such contributions were part of the estate. In another context, we find that Robert's nonmonetary contributions caused him to be away from his home and family maintenance duties. This increased the burden on Vallina to provide such services which would offset the increased contributions of Robert. Robert also contends that the District Court abused its discretion in apportioning the marital estate. While the findings and conclusions here do not expressly designate a basis for the District Court judgment, we cannot find that there was an abuse of discretion as a substantially equal apportionment of the marital property was ordered. An abuse of discretion is manifested by a substantially inequitable division of the marital estate. Brown, supra; Blair, supra; Vivian, supra; Schultz, supra. Here, the District Court awarded Vallina the residence and a portion of the personal property valued at $46,403, and Robert was awarded the rental units and personal property valued at $43,008. The wife paid marital debts of $2,225.37. The wife was ordered to pay husband $587.23. From these facts, it appears the value of the wife's portion of the marital estate is substantially equal to the husband's and does not in and of itself indicate an abuse of discretion. Moreover, the husband does not specifically allege why this apportionment resulted in substantial injustice to him. In light of the substantially equal distribution of property, Robert argues that the District Court abused its discretion in apportioning the estate. We cannot overturn an equal distribution of marital property on that basis alone without some indication of unreasonableness or lack of employment of conscientious judgment. Affirmed. ~ L - - I ! I ~ ~ Q / ~ w Chief Justice We concur: $ + P { & ; A ~ J tices

September 2, 1983

385fe482-7c84-409e-abc2-71c9f464fe0a

STATE v LONG

N/A

82-195

Montana

Montana Supreme Court

NO. 82-195 I N THE SUPREME COURT O F THE STATE O F F l O N T A N A 1983 STATE O F MOLJTANA, P l a i n t i f f and Respondent, JOHN D. LONG, a/k/a WAYNE A R L O HALL, SR., Defendant and Appellant. APPEAL FROpi: D i s t r i c t Court o f t h e S i x t e e n t h J u d i c i a l District, I n and f o r t h e County of Rosebud, The I-Ionorable Alfred B. Coate, Judge p r e s i d i n g . COUidSEL O F RECORD: For Appellant: Leo Gallagher, Helena, Montana For Respondent : Mon. Mike Greely, Attorney General, Helena, Montana John S. Forsythe, County Attorney, Forsyth, Montana Submitted on B r i e f s : June 9, 1983 Decided: September 2 9 , 1983 F i l e d : SEP 2 9 1983 Mr. Justice Fred J. Weber delivered the Opinion of the Court. Defendant appeals from a conviction of felony arson following jury trial in the Sixteenth Judicial District Court, Rosebud County. We affirm. Defendant raises two issues: (1) Did the District Court err in refusing to grant defendant's second request that a new attorney be appointed to represent him, after new counsel had previously been appointed? (2) Was defendant denied effective assistance of counsel because of insufficient communication between defendant and court-appointed counsel? In September 1981, defendant was working on the Brewer ranch near Forsyth, Montana. He was living in a trailer home owned and provided to him by his employers. Defendant was fired by the Brewers and shortly thereafter evicted from the trailer when he refused to leave. The day after defendant was evicted, the trailer was destroyed by an explosion and fire. Defendant's automobile was seen by witnesses at the trailer immediately before the blast and speeding away immediately after. Defendant had stated he intended to destroy the trailer. He was charged with and convicted of arson. He was sentenced to ten years incarceration and five years were suspended. Garry P. Bunke of Forsyth was appointed to represent defendant. Defendant pleaded not guilty. His motion for reduction of bail was denied, but his motion for psychiatric evaluation at Warm Springs was granted. At the omnibus hearing, counsel indicated defendant would present an alibi or insanity defense. But the defendant was found competent and capable of assisting in his own defense. At trial, the State's evidence established that although defendant had been in another town the day before the fire, he had been seen at the trailer the night before and the day of the fire. In November and early December defendant wrote two letters to Judge Coate complaining about his attorney. He claimed Bunke was not adequately representing him and that Bunke had a conflict of interest because he had previously represented some local law enforcement officers in personal matters. A hearing on defendant's request was held December 4, 1981. The Court removed Bunke as defense counsel and appointed John Houtz to represent defendant. Defendant nonetheless said he would write the Bar Association regarding the matter. Defendant wrote Judge Coate again on December 21, 1981, complaining that because Houtz was a partner of Bunke he should also be replaced, or defendant should be allowed to represent himself. In fact, Bunke and Houtz shared office space, but were not partners. The Court nonetheless ordered a hearing on defendant's request, which was held December 30, 1981. Defendant claimed he had received no legal advice from either attorney and that he thought unspecified additional actions should have been taken in his behalf. Judge Coate asked defendant for specific facts to show counsel was not adequately representing him. Defendant claimed that no one had explained the arson charge or his constitutional rights, even though Judge Coate had previously explained these matters to defendant. Houtz detailed the substantial work he had done on defendant's case. Defendant's request for new counsel was denied and a plea agreement was rejected by Judge Coate. It was disclosed later that at defendant's initial interview with Houtz, defendant refused to cooperate with Houtz, tried to overturn the table and stalked out of the room saying he wanted a new attorney. Rut defendant later contacted Houtz to discuss a plea change. Houtz apparently had advised defendant to plead guilty. This led to a plea agreement that was rejected by the Court at the December 30 hearing because defendant claimed to lack the requisite knowledge. In preparing for trial, Houtz discussed with defendant affirmative defenses that might be available, but suggested that the best strategy was probably a general denial of the charge, forcing the State to prove all elements of the crime. Defendant wrote to Judge Coate again on January 7, 1982, saying that he still wanted a new attorney, that he "retracted" everything he had said while being represented by Houtz, and that he had "fired" Houtz on December 23, 1981. Defendant said if he wasn't given a new lawyer he would not "come to court or trial at all." He did attend trial, but there apparently had been little communication between the defendant and Houtz because defendant had refused to cooperate in preparation of the defense. The State's witnesses were cross-examined, but the defense did not call witnesses. Defendant was convicted after a three day trial and now appeals. Defendant first argues that the District Court erred in refusing to order substitution of defense counsel. He argues that his letters of protest made clear to the District Court that counsel could not render effective assistance, and that failure to replace Houtz was therefore error. We disagree. In Peters v. State (1961), 139 Mont. 634, 366 P.2d 158, we stated: "The State of Montana provides one charged with crime with the assistance of counsel to be appointed by the District Court and paid by public funds. We do not question, that upon a proper showing, such counsel could be discharged by the Court and a substitution made, where it appears that failure to do so would substantially impair or deny the right of such assistance of counsel, but such discharge or substitution cannot be made by a defendant, unless defendant is able to provide s ; c h counsel at his own exDense or desires to undertake his own defense, bedause the discretion of the - - Court must be exercised, and it is not bound to - - - - - - honor such requests without yood reason." peters, 139 Mont. at 636, 366 P.2d at 159 (emphasis added). The District Court was correct in refusing to substitute counsel absent a showing that failure to do so would substantially impair or deny defendant's right to counsel. Defendant presented no specific details suggesting any lack of adequate representation by Houtz. Defendant's dissatisfaction with Houtz apparently stemmed from his erroneous belief that Houtz and Bunke were partners. Most of defendant's complaints were unrelated to the assistance of counsel issue. Consideration of requests to appoint new counsel is within the discretion of the District Court, and the determination of the District Court will be sustained absent an abuse of discretion. Good v. United States (9th Cir. 1967), 378 F.2d 934, 935. Defendant argues that the District Court ignored his pleas for appointment of a new attorney, thereby assuring that defendant would not receive assistance of an attorney familiar with defendant's version of the facts. The record shows, however, that the District Court took defendant's requests seriously. It ordered two hearings on the counsel issue. The first hearing resulted in appointment of new counsel as defendant had requested. The second hearing, on December 30, 1981, failed to establish a basis for replacing Houtz . After careful consideration, Judge Coate felt appointment of a third attorney was unwarranted. That the Court took defendant seriously is shown by the Court's refusal to accept defendant's change of plea after defendant claimed at that hearing to lack the requisite knowledge. Moreover, the statements of Houtz at that hearing supported the Court's determination that Houtz was rendering effective 1 assistance. There was no showing that continued representation by Houtz would substantially impair defendant's right to counsel. The District Court did not err in refusing to appoint a third attorney to represent defendant. Defendant next argues that he was denied effective assistance of counsel. Defendant was clearly entitled to reasonably effective assistance of counsel under State v . Rose (Mont. 1980), 608 P.2d 1074, 1081-82, 37 St.Rep. 642, 649-50. Defendant argues that because he and Houtz did not communicate there was no "meaningful relationship" between them, that this precluded Houtz from acting within the range of competence demanded of attorneys practicing criminal law, and that defendant was therefore necessarily denied effective assistance. We disagree. The United States Supreme Court rejected the "meaningful relationship" argument in the recent case of Morris v . Slappy, No. 81-1095 (U.S. April 20, 1983). There, defendant's original court-appointed counsel was unexpectedly hospitalized about one week before trial and a new attorney was substituted. Defendant refused to cooperate with the second attorney despite the attorney's thorough preparation and statements to the Court that he was ready for trial. The Ninth Circuit Court of Appeals held that the Sixth Amendment right to counsel guarantees a "meaningful attorney-client relationship". The Supreme Court reversed, stating: "The Court of Appeals' conclusion that the Sixth Amendment right to counsel 'would be without substance if it did not include the right to a meaningful attorney-client relationship,' 649 F.2dI at 720 (emphasis added), is without basis in the law. No authority was cited for this novel ingredient of the Sixth Amendment guarantee of counsel, and of course none could be. No court could possibly guarantee that a defendant will develop the kind of rapport with his attorney - privately retained or provided by the public - that the Court of Appeals thought part of the Sixth Amendment guarantee of counsel. Accordingly, we reject the claim that the Sixth Amendment guarantees a 'meaningful relationship' between an accused and his counsel." Morris v. Slappy, No. 81-1095, slip op. at 11-12 (U.S. April 20, 1983) (footnote omitted) . Lack of communication between defendant and defense counsel is not of itself basis for reversal on grounds of ineffective assistance of counsel. Defendant cites various provisions of the ABA Standards in support of his argument. Yet, nothing in the record shows that counsel omitted anything required by the ABA Standards or the Sixth Amendment. Defendant concedes that no errors were committed by trial counsel. The record shows that defendant received not only adequate, but diligent and conscientious representation. This representation included filing of various motions with supporting memoranda, questioning the State's witnesses before and during trial and sentencing, pre-trial investigation, numerous interviews with defendant and meetings with the prosecutor. The essence of the attorney-client relationship is that the attorney provide the client with meaningful representation. There is no showing that Houtz failed in this case to provide defendant with such representation. Defendant claims that because Houtz did not know his version of the facts, evidence which favored the defendant's story was not presented at trial. But defendant's claim that an available alibi defense was not presented is unsupported by the record or other appropriate documentation. At trial, evidence that defendant claimed to be in another town at the time of the crime was clearly refuted by evidence that defendant was seen at the trailer the night before and the day of the crime. Defendant further argues that it is unknown what evidence might have been presented if Houtz had been familiar with defendant's story. But defendant alone is responsible for this omission, if in fact any omission occurred. Significantly, defendant offers no facts which could have been presented at trial but were not. We have previously rejected ineffective assistance claims made by defendants who refused to cooperate in their own defense. In State v. Lopez (Mont. 1980), 605 P.2d 178, 37 St.Rep. 36, the District Court refused to substitute counsel after defense counsel submitted an affidavit stating that he was getting no cooperation from defendant in preparing a defense, that he would be unable at trial to do little more than sit at the counsel table, and that he would have difficulty representing defendant, although he would do his best despite defendan.tls refusal to cooperate. We rejected defendant's claim that the District Court's failure to remove defense counsel denied defendant a fair trial. We found that defense counsel had done his best under the circumstances and had provided an adequate defense. Because the problem was caused by the defendant's refusal to cooperate, we applied the general rule that ". . . a party who participates in or contributes to an error cannot complain of it. l1 605 P.2d at 181, 37 St.Rep. at 40. Similarly, in State v. Miller (1977), 173 Mont. 453, 568 P.2d 130, we held that the defendant could not claim ineffective assistance of counsel where the problems he complained of resulted from his own actions. 173 Mont. at 457, 568 P.2d at 132-33. Here, it is undisputed that the defendant refused to cooperate with Houtz. The record shows that defendant refused to accept the District Court's determination that he was not entitled to appointment of a third attorney. As in Lopez, we will not allow the defendant to complain of problems caused by his refusal to cooperate with defense counsel. We hold that the lack of communication between defendant and Houtz did not deny defendant effective assistance of counsel. The record clearly shows that defendant received effective assistance of counsel. Moreover, any lack of communication between Houtz and defendant was caused by defendant's refusal to assist in his own defense. Affirmed. We concur: ALP. Q~ Chief Justice Justic

September 29, 1983

ff858cbd-4bba-4316-9996-d7487da2063d

SIMMONS v STATE

N/A

83-102

Montana

Montana Supreme Court

NO. 83--102 IIJ T H E SUPREME C O U R T O F T H E STATE O F M O I J T A N A 1953 DAN SII@4ONS, a s Guardian A d Litem of Breton Simmons, A Minor, P l a i n t i f f and Appellant, -vs- STATE O F M O N T A N A and STATE O F OREGON, Defendants and Respondents. APPEAL FROM: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Missoula, The Honorable James B. Wheelis, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Douglas R. Austin, Missoula, Montana Alan G. Starkoff argued; S t a r k o f f & S t a r k o f f Co., Cleveland, Ohio For Respondents: Garlington, Lohn & Robinson; Larry E. Riley, >'Iissoula, Montana Pamela L. Abernathy argued, A s s t . Atty. General, Salem, Oregon Boone, Karlberg & Haddon; Tom Boone, Missoula, Montana - .- Submitted: June 1 0 , 1983 Decided: October 1 7 , 1983 Clerk Mr. Justice L.C. Gulbrandson delivered the Opinion of the Court. Plaintiff, acting as guardian ad litem for his minor son, appeals from an order of the District Court of the Fourth Judicial District, Missoula County, granting defendant State of Oregon's motion to dismiss plaintiff's lawsuit on grounds that Oregon did not have sufficient minimum contacts with Montana so as to subject it to this state's jurisdiction, and also that, in any event, considerations of comity warranted dismissal. (The action by plaintiff against the State of Montana is still pending in the District Court). We affirm the District Court on both grounds. The following pertinent facts are taken from the transcript of proceedings before the District Court, the pleadings, and relevant exhibits. Unless otherwise stated, these facts are not disputed or controverted by the respective parties. Section 50-19-203, MCA, requires that a test designed to detect inborn metabolic disorders be performed on all children born in Montana. The attending physician or person responsible for birth registration must ensure that a blood sample is taken from each child so that a test can be done. The Montana Department of Health and Environmental Sciences is responsible for either conducting the tests itself or contracting with an approved laboratory to perform the tests. Since 1977, the department has contracted with the Health Division of the Oregon Department of Human Resources to perform the test in its laboratory in Portland. Oregon a l s o performs t h i s s e r v i c e f o r Idaho, Nevada, and Alaska. P u b l i c h e a l t h o f f i c i a l s from a l l f i v e s t a t e s a p p a r e n t l y d e c i d e d t h a t it was more c o s t e f f e c t i v e t o have t h e Oregon l a b o r a t o r y c o n d u c t t h e t e s t s f o r t h e e n t i r e r e g i o n . Montana, f o r example, h a s such a low y e a r l y b i r t h r a t e t h a t it is cheaper t o have t h e samples s e n t t o t h e Oregon l a b o r a t o r y f o r a n a l y s i s . Under t h e terms of t h e i n t e r s t a t e c o n t r a c t , f i r s t e n t e r e d i n t o i n J u n e , 1977, Oregon agreed t o s u p p l y l a b s c r e e n i n g of a l l blood samples f o r m e t a b o l i c d i s o r d e r s , a c c o r d i n g t o s t a n d a r d s s e t f o r t h i n M.A.C. s e c t i o n 1 6 - 2 . 1 8 ( 6 ) - S 1 8 2 0 [now A.R.M. s e c t i o n 16.24.201-2131. A n a l y s i s was t o t a k e p l a c e i n Oregon. The Montana Department of H e a l t h and Environmental S c i e n c e s was t o be n o t i f i e d by m a i l o r by t e l e p h o n e of any abnormal t e s t r e s u l t s a c c o r d i n g t o t h e urgency of l a b o r a t o r y f i n d i n g s . Normal t e s t r e s u l t s were t o be r e p o r t e d a t weekly i n t e r v a l s by m a i l . Oregon m a i n t a i n e d a n in-house s p e c i a l i s t i n m e t a b o l i c d i s o r d e r s , who would be a v a i l a b l e f o r c o n s u l t a t i o n w i t h t h e S t a t e o f Montana o r t h e Montana p h y s i c i a n who took blood samples. The S t a t e of Montana a g r e e d t o c o l l e c t t h e blood samples f o r forwarding t o Oregon, and a g r e e d t o n o t i f y h o s p i t a l s o r p h y s i c i a n s of s i g n i f i c a n t f i n d i n g s . Montana a g r e e d t o pay Oregon $27,000 p e r y e a r , i n f o u r q u a r t e r l y i n s t a l l m e n t s , based on a n average of 12,000 t e s t s performed p e r y e a r . Montana would pay an a d d i t i o n a l $2.25 f o r each sample i n e x c e s s of 12,000. Oregon h a s argued, and t h e p l a i n t i f f h a s n o t d i s a g r e e d , t h a t t h e c o n t r a c t f e e s cover n o t h i n g more t h a n t h e m a r g i n a l c o s t o f l a b t e s t i n g procedures. Montana d o e s n o t c o n t r i b u t e t o t h e c o s t o f maintaining the laboratory or the establishing of the test procedures. Furthermore, Oregon does not profit from the contractual arrangement. The contract was signed in Montana and Oregon, and finally approved by Oregon budget authorities in 1977. Breton Simmons was born in Missoula, Montana, on June 22, 1977. Shortly thereafter, a sample of his blood was taken and forwarded to Oregon not long after the interstate contract was signed. For some reason, however, the laboratory failed to detect the presence of a particular metabolic disorder, congenital athyrotic hypothyroidism, the symptoms of which became apparent a few months after Breton was born. Breton did not receive initial treatment for the illness until late September, 1977. As a consequence, the boy has allegedly suffered permanent and irreparable brain and neuromuscular damage. Dan Simmons, as guardian ad litem for the boy, filed an action in Oregon District Court in August, 1979, alleging negligence on the part of Oregon authorities with respect to conduct of the lab test. Plaintiff's counsel in Oregon did not pursue the case, and it was subsequently dismissed for want of prosecution, although plaintiffs apparently have the option to refile in Oregon within the next few months. This appeal stems from a related suit filed in Montana, naming the State of Montana and the State of Oregon as defendants. Oregon filed a motion to dismiss the suit on grounds that it had not purposely availed itself of the privilege of conducting activities in Montana, and that the assertion of jurisdiction would be unreasonable and contrary to due process. In the alternative, Oregon argued that Montana should decline jurisdiction as a matter of comity. Plaintiff countered that Oregon has sufficient minimum contacts with this State, and that comity did not preclude jurisdiction in this instance. The trial court granted Oregon's motion to dismiss on both grounds. Plaintiff appealed from the trial court's order, asserting that the trial court erred by not finding that there were sufficient minimum contacts, and that comity did not preclude jurisdiction. This appeal was dismissed because it lacked proper certification under Rule 54(b), t4.R.Civ.P. Subsequently, the appeal was properly certified, and plaintiff again asks us to reverse the trial court on the issues of minimum contacts and comity. In a recent decision, the United States Supreme Court has emphasized that the reasonableness of asserting jurisdiction over a nonresident defendant must be assessed in the context of our federal system of government. See, World-Wide Volkswagen Corp. v . Woodson (1980), 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490. In other words, we are obliged to give serious consideration to the consequences acquiring jurisdiction will have on the maintenance of harmonious relations with other states. For a Montana court to exercise jurisdiction over a nonresident defendant, two questions must be considered. (1) Does the nonresident defendant come within the provisions of Montana's long-arm jurisdiction statutes; and (2) would exercise of long-arm jurisdiction over the nonresident comport with traditional notions of fair play and substantial justice. May v. Figgins (Mont. 1980), 607 P.2d 1132, 37 St.Rep. 493; Haker v . Southwestern Ry. Co. (1978), 176 Mont. 364, 578 P.2d 724. See, generally, International Shoe Co. v . Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95. If we find, as a matter of statutory construction, that the nonresident does not engage in any of the several activities enumerated in our long-arm statute, then our analysis ends and we must decline jurisdiction. However, even if the nonresident has done something which potentially confers jurisdiction, we must advance to the due process component which is ultimately determinative of the jurisdictional question. The relevant statute is Rule 4B(1), M.R.Civ.P., which provides, in pertinent part, that: "All persons found within the state of Montana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts: "(b) the commission of any act which results in accrual within this state of a tort action; "(e) entering into a contract for services to be rendered or for materials to be furnished in this state by such person; Oregon cannot be said to be "found within" Montana, so our attention is turned to subsections (b) and (e). Neither plaintiff nor the State of Oregon has devoted much space to this aspect of the statutory question, as both appear to agree that either one or both subsections potentially confers jurisdiction over Oregon. Therefore, we turn our a t t e n t i o n t o t h e c r u c i a l c o n s t i t u t i o n a l i n q u i r y . The Due P r o c e s s C l a u s e of t h e F o u r t e e n t h Amendment t o t h e United S t a t e s C o n s t i t u t i o n l i m i t s t h e power of a s t a t e c o u r t t o r e n d e r a v a l i d p e r s o n a l j u d g m e n t a g a i n s t a n o n r e s i d e n t d e f e n d a n t . Due p r o c e s s r e q u i r e s t h a t a s t a t e may e x e r c i s e p e r s o n a l j u r i s d i c t i o n o v e r t h e n o n r e s i d e n t o n l y s o l o n g a s t h e r e e x i s t "minimum c o n t a c t s " between t h e d e f e n d a n t and t h e forum s t a t e . See, I n t e r n a t i o n a l Shoe, s u p r a , 326 U.S. a t 316, 66 S.Ct. a t 158, 90 L.Ed. a t 102. See a l s o , Benham v. Woltermann(Mont. 1 9 8 2 ) , 653 P.2d 135, 39 St.Rep. 2017; Reed v. American A i r l i n e s , I n c . (Mont. 1 9 8 2 ) , 640 P.2d 912, 39 St.Rep. 335; 'May v. F i g g i n s , s u p r a . The c o n c e p t o f "minimum c o n t a c t s " h a s undergone development s i n c e I n t e r n a t i o n a l Shoe, and t h e l a t e s t phase o f t h a t development must be examined h e r e . I n World-Wide Volkswagen Corp. v. Woodson, s u p r a , t h e United S t a t e s Supreme C o u r t h e l d t h a t a n Oklahoma c o u r t c o u l d n o t e x e r c i s e p e r s o n a l j u r i s d i c t i o n over N e w York w h o l e s a l e and r e t a i l a u t o d e a l e r s who t r a n s a c t e d no b u s i n e s s i n t h a t s t a t e and whose o n l y " c o n t a c t " w i t h Oklahoma c o n s i s t e d o f a n a u t o m o b i l e , purchased i n N e w York by N e w York r e s i d e n t s , t h a t exploded i n a c o l l i s i o n i n Oklahoma. The c o u r t r e j e c t e d any a t t e m p t t o c o n n e c t t h e d e a l e r s t o t h e Oklahoma forum on t h e b a s i s t h a t t h e i r p r o d u c t might f o r e s e e a b l y end up i n t h a t s t a t e and c a u s e i n j u r y t h e r e . World-Wide Volkswagen, s u p r a , 444 U.S. a t 288-97, 100 S.Ct. a t 562-7, 62 L.Ed.2d a t 495-502. I n its o p i n i o n , t h e c o u r t e l a b o r a t e d on t h e c o n c e p t of minimum c o n t a c t s , t o w i t : "The c o n c e p t of minimum c o n t a c t s . . . can be s e e n t o perform two r e l a t e d , b u t d i s t i n g u i s h a b l e , f u n c t i o n s . I t p r o t e c t s t h e d e f e n d a n t a g a i n s t t h e b u r d e n s o f litigating in a distant or inconvenient forum. And it acts to ensure that the States, throuqh their courts, do not -- ...................... reach out beyond the limits imposed on them by their s t a t u s a s c o - e q u a l ............................ --- sovereigns in a federal system." 444 U.S. at 291-2, 100 S.Ct. at 564, 62 L.Ed.2d at 498. (emphasis added) Thus, there is a "federalism component" which we are bound to consider in our constitutional inquiry. Before examining this component in some detail, we first look to the considerations relevant to protecting nonresident defendants from inconvenient litigation in the forum state. In World-Wide Volkswagen, supra, the Supreme Court enumerated these criteria: "We have said that the defendant's contacts with the forum State must be such that maintenance of the suit 'does not offend "traditional notions of fair play and substantial justice."' Internatio a Shoe Co. v. Washington [326 U.S. &3&31@ 161, quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940). The relationship between the defendant and the forum state must be such that it is 'reasonable . . to require the corporation to defend the particular suit which is brought there.' [citation omitted] Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum state's interest in adjudicating the dispute [citation omitted] ; the plaintiff's interest in obtaining convenient and effective relief [citation omitted], at least when that interest is not adequately protected by the plaintiff s power to choose the forum [citation omitted]; the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies [citation omitted]." 444 U.S. at 292, 100 S.Ct. at 564, 62 L.Ed.2d at 498. The court observed that "limits imposed on state jurisdiction by the Due Process Clause, in its role as a guarantor against inconvenient litigation, have been substantially relaxed over the years." World-Wide Volkswagen, supra, 444 U.S. at 292, 100 S.Ct. at 565, 62 L.Ed.2d at 498. This relaxation has been effected by improvement in transportation and communication, as well as advancements in the field of interstate commercial transactions. 444 U.S. at 292-3, 100 S.Ct. at 565, 62 L.Ed.2d at 498-9. But these historical changes have not rendered the "federalism component" less critical to the due process inquiry. On the contrary, the court emphasized that: ". . . we have never accepted the proposition that state lines are irrelevant for jurisdictional purposes, nor could we, and remain faithful to the principles of interstate federalism embodied in the Constitution. . . . [Tlhe Framers also intended that the States retain many essential attributes of sovereignty, including, in particular, the sovereign power to try causes in their own courts. The sovereignty of each State, in turn, implied a limitation on the sovereignty of all of its sister States --- a limitation express or implicit in both the original scheme of the Constitution and the Fourteenth Amendment." 444 U.S. at 293;100 S.Ct. at 565, 62 L.Ed.2d at 499. Furthermore, the Court indicated that the reasonableness of asserting jurisdiction over a nonresident defendant had to be assessed "in the context of our federal system of government . . ." 444 U.S. at 293-4, 100 S.Ct. at 565, 62 L.Ed.2d at 499, (citing International Shoe, supra, 326 U.S. at 317, 66 S.Ct. at 158, 90 L.Ed. at 102). That this observation is to be construed as a requirement that the "federalism component" be controlling in the due process inquiry is supported by the Court's closing remarks on the relevant constitutional test of appropriate jurisdiction: "Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum state is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment. " 444 U.S. at 294, 100 S.Ct. at 565-6, 62 L.Ed.2d at 499-500 (citing Hanson v . B%+dGh (1958), 357 U.S. 235, 251, 254, Denc-his. 78 S.Ct. 1228, 1238, 1240, 2 L.Ed.2d 1283, 1296,1298. To summarize: our constitutional inquiry must recognize that the United States Supreme Court has "cut short any trend toward unlimited personal jurisdiction and emphasized that an isolated and unanticipated injury within the foreign state is not sufficient to support in personam jurisdiction." Taubler v. Giraud (9th Cir. 1981), 655 F.2d 991, 993. Because this Court has not had an opportunity to consider the effect of World-Wide Volkswagen on due process analysis, we look to opinions from federal and other state courts for persuasive guidance. The Court of Appeals for the Ninth Circuit has developed a standard of review commensurate with traditional due process analysis and the concerns expressed in World-Wide Volkswagen: "If the nonresident defendant's activities within a state are 'substantial' or 'continuous and systematic,' there is a sufficient relationship between the defendant and the state to support jurisdiction even if the cause of action is unrelated to the defendant's forum activities. [citations omitted] "If, however, the defendant's activities are not so pervasive as to subject him to general jurisdiction, the issue whether jurisdiction will lie turns on the nature and quality of the defendant's contacts in relation to the cause of action. In our circuit, we use the following approach in making this evaluation: (1) The nonresident defendant must do some act or consumate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking its laws. (2) The claim must be one which arises out of or results from the defendant's forum-related activities. (3) Exercise of jurisdiction must be reasonable. [citations omitted]." Data Disc, Inc. v. Systems Tech. Assoc., Inc. (9th Cir. 1977), 557 F.2d 1280, 1287. See, also, Ins. Co. of North America v . Marina Salina Cruz (9th Cir. 1981), 649 F.2d 1266, 1270; Plant Food Co-op v. Wolfkill Feed & Fertilizer (9th Cir. 1980), 633 F.2d 155, 158-9; Panos Inv. Co. v. District Court (1983), Colo. , 662 P.2d +8=&; 180 Schlatter v. Mo-Comm Futures, Ltd. (1983), Kan. I 662 P.2d 553, 562; Markby v. St. Anthony Hosp. Systems (Wyo. 1982), 647 P.2d 1068, 1073. Inherent in this approach is the recognition that while a nonresident defendant may be found to have purposely availed itself of activities within a forum state, the exercise of jurisdiction may still be unreasonable. The threshold question, then, is whether Oregon's activities in Montana are so pervasive as to subject it to the general personal jurisdiction of our courts. We cannot say that Oregon's contract with the Department of Health and Environmental Sciences amounts to "substantial" activity within this State. Nor can we say that this contract and the transactions related to it are "continuous and systematic" in the sense this concept is usually applied. Cases cited by plaintiff for the proposition that Oregon has either substantial or continuous and systematic connections with Montana generally involve individual or commercial enterprises that actively solicit business within other states and derive substantial revenue from their activities. There is, in other words, a conscious effort to be involved in the economic life of a particular state. See, Southern Machine Co. v. Mohasco Industries, Inc. (6th Cir. 1968), 401 F.2d 374 (nonresident company actively transacting machinery parts business in Tennessee); Electric Regulator Corp. v. St2rling Extruder Corp. (D.Conn. 1968), 280 F.Supp. 550 e (nonresident defendant contracts for machinery in Connecticut); Reed v. American Airlines, Inc., supra (nonresident airline company advertising and doing business in Montana, training instate travel agents, and deriving substantial revenue therefrom); State of North Dakota v . Newberger (Mont. 1980), 613 P.2d 1002, 37 St.Rep. 1119 (nonresident rock concert promoter actively promoting concerts & contracting for services in Montana). Oregon, on the other hand, has apparently been sought out by Montana and other states to perform a public health service for these states - in Oregon and for a price not designed to generate a profit. This is not the same as deliberate, focused commercial activity. Plaintiff's reliance on Wendt v . County of Osceola, Iowa (Minn. 1979), 289 N.W.2d M, is misplaced. In Wendt, b7 the Minnesota Supreme Court held that a political subdivision of Iowa was subject to the jurisdiction of Minnesota courts in a tort action arising from a road accident along the Minnesota-Iowa border. Plaintiffs in that case were injured on a road one-half of which lay on the Iowa side of the border. Osceola County, Iowa, had a long-standing contract with a neighboring Minnesota county to maintain the entire road. The Minnesota high court held that the maintenance contract amounted to continuous and systematic contract with Minnesota, and that this factor, inter alia, made personal jurisdiction possible and reasonable. Nevertheless, Wendt is distinguishable from the facts at bar. Osceola County was obliged to perform services - in the State of Minnesota on a continuing basis, whereas Oregon has contracted to conduct its activities within that state. In World-Wide Volkswagen, supra, the Supreme Court reasoned that nonresident defendants can usually foresee that their conduct or actions may ultimately have an impact in another state, but that the crucial factor with respect to due process analysis was that "the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into Court there." 444 U.S. at 297, 100 S.Ct. at 567, 62 L.Ed.2d at 501. While it is reasonable for an Iowa county to ancitipate being called into a Minnesota court located scarcely a few miles away to defend itself in an action related to work done in Minnesota, we think it less reasonable for Oregon to assume that it should expect to defend a similar action in Montana on the basis of activities performed in Oregon. Even if Wendt can fairly be read to support plaintiff's contention, personal jurisdiction over Oregon in this case would still be unreasonable for reasons expressed later in this opinion. Because Oregon's activities in Montana are not so pervasive, we turn to an analysis of that state's contacts under the three-prong test enunciated by the Ninth Circuit and deemed persuasive here. Because Oregon concedes that plaintiff's claim arises out of or results from Oregon's contract with the State of Montana, we need only consider the first and third prongs of the test. Turning to the first prong, we consider whether Oregon has done something by which it has purposely availed itself of the privilege of conducting activities in Montana, thereby invoking the benefits and protections of our laws. See Data Disc. and related cases, supra. Case law from other jurisdictions involving commercial contracts and provision of medical services are most apropos for evaluating Oregon's activities under the first prong. It is well-settled that a nonresident defendant's mere act of entering into a contract with a forum resident does not provide the necessary jurisdictional contact between the defendant and the forum state. See, e.g., Iowa Electric Light and Power Co. v. Atlas Corp. (8th Cir. 1979), 603 F.2d 1301; Lakeside Bridge and Steel v. Mountain State Construction (7th Cir. 1979)! 597 F.2d 596; Barnstone v. Congregation Am Echad (5th Cir. 1978), 574 F.2d 286; Anderson v . Schiflett (10th Cir. 1971), 435 F.2d 1036. Most of these cases involved situations where nonresident defendants and forum state plaintiffs contracted for various goods and services, but where all or most of defendant's performance took place outside the forum state. The defendants did not maintain businesses, property, or agents in the forum state, and they did not actively transact commercial o r i n d u s t r i a l a c t i v i t y t h e r e i n . A s s u c h , t h e i r a c t i v i t i e s were s t r u c t u r e d around t h e p r o s p e c t t h a t t h e y would n o t be l i t i g a t i n g c o n t r a c t d i s p u t e s i n t h e c o u r t s o f a n o t h e r state. The knowledge t h a t t h e d e f e n d a n t ' s " p r o d u c t " was " d e s t i n e d " i n some form f o r t h e forum was n o t a s u f f i c i e n t c o n t a c t w i t h t h a t s t a t e s o a s t o c o n f e r p e r s o n a l j u r i s d i c t i o n over t h e d e f e n d a n t , a s t h e c r i t i c a l performance had t a k e n p l a c e o u t s i d e t h e forum. Iowa E l e c t r i c , s u p r a , 603 F.2d a t 1306. Accord: C h a r i a v. C i g a r e t t e Racing Team, Inc. ( 5 t h C i r . 1 9 7 8 ) , 583 F.2d 184, 189; Benjamin v. Western Boat B u i l d i n g Corp. ( 5 t h C i r . 1 9 7 3 ) , 472 F.2d 723, 730, cert. d e n i e d , 414 U.S. 830, 94 S.Ct. 60, 38 L.Ed.2d 64. S i m i l a r l y , Oregon h a s no p r o p e r t y o r a g e n t s i n Montana, and t r a n s a c t s no b u s i n e s s h e r e . Oregon was s o u g h t o u t by t h e S t a t e of Montana t o conduct l a b t e s t i n g f o r m e t a b o l i c d i s o r d e r s , a n d t h i s s e r v i c e is c o n d u c t e d i n Oregon. Although it is aware t h a t t e s t r e s u l t s a r e d e s t i n e d f o r Montana, t h i s is n o t enough c o n t a c t t o w a r r a n t a h o l d i n g t h a t it h a s p u r p o s e l y a v a i l e d i t s e l f o f t h e p r i v i l e g e o f c o n d u c t i n g a c t i v i t i e s i n t h e forum s t a t e . Telephone and m a i l communication of t e s t r e s u l t s d o n o t t r a n s f o r m t h e n a t u r e of t h e c o n t a c t i n t o a p u r p o s e f u l i n j e c t i o n i n t o Montana. I n t e r s t a t e communication is a n a l m o s t i n e v i t a b l e accompaniment t o doing b u s i n e s s i n t h e modern world, and c a n n o t by i t s e l f be c o n s i d e r e d a " c o n t a c t " f o r j u s t i f y i n g t h e e x e r c i s e of p e r s o n a l j u r i s d i c t i o n . See, e .g., S c u l l i n S t e e l Company v. N a t i o n a l Railway U t i l i z a t i o n Corp. ( 8 t h C i r . 1 9 8 2 ) , 676 F.2d 309; S p o r t i n g Good D i s t r i b u t o r s , I n c . v. Whitney (N.D.Fla. 1 9 8 0 ) , 498 F.Supp. 1088. A s t h e E i g h t h C i r c u i t noted i n S c u l l i n S t e e l , s u p r a , t e l e p h o n i c and m a i l communication are generally "secondary or ancillary factors" to underlying transactions, and therefore do not provide the crucial minimum contacts. 676 F.2d at 314. In the immediate case, Oregon's mail and telephone communications merely confirm results reached in Oregon from tests performed there. (And, it is the Montana Department of Health and Environmental Sciences -- not the State of Oregon -- that has agreed to contact Montana physicians directly concerning test results.) These communications are within the realm of "secondary or ancillary factors." An examination of cases involving the interstate provision of medical services also suggests that Oregon, in its role as a regional provider of lab testing for metabolic disorders, cannot be said to have purposely availed itself of the benefits and protections of the Montana forum. In Wright v. Yackley (9th Cir. 1972), 459 F.2d 287, the Ninth Circuit explored the ramifications of interstate medical services and their connections to a particular state. Mina Wright, while a resident of South Dakota, had been treated by Yackley, a South Dakota doctor, and at his urging had taken medication prescribed and obtained in South Dakota. Wright later moved to Idaho, and when her prescription expired, sought to have it filled in Idaho. The local druggist required confirmation of the prescription, so Wright wrote the South Dakota doctor for a copy of the old prescription, which he provided at no charge. Wright had the old prescription filled in Idaho, but later alleged that she had suffered injury as a consequence of using the drugs. She filed a malpractice action in Federal District Court in Idaho, asserting that the court had jurisdiction over the South Dakota doctor by virtue of the prescription mailed to her. 459 F.2d at 288. Both the District Court and the Ninth Circuit disagreed with plaintiff's assertion. The Ninth Circuit held that: "[ilf [the doctor] was guilty of malpractice, it was through acts of diagnosis and prescription performed in South Dakota. The mailing of the prescriptions to Idaho did not constitute new prescription. It was not diagnosis and treatment by mail. It was simply confirmation of the old diagnosis and prescription and was recognized by the druggist as such. It did, of course, put the doctor on notice that consequences of his South Dakota services would be felt in Idaho and that it was by his very act of mailing that this would be made possible. In our view, however, this does no more than put the doctor in the position of one who, in South ------------ Dakota, treats an Idaho resident with knowledge of her imminent return to Idaho and that his treatment thus may cause effects there." 'f@ 43% F.2d at 288-9. (emphasis added) Furthermore, the exercise of personal jurisdiction would be unreasonable: "In the case of personal services focus must be on the place where the services are rendered, since this is the place of the receiver's (here the patient's) need. The need is personal and the services rendered are in response to the dimensions of that personal need. They are directed to no place but to the needy person herself. It is in the very nature of such services that their consequences will be felt wherever the person may choose to go. However, the idea that tortious rendition of such services is a portable tort which can be deemed to have been committed whenever the consequences foreseeably were felt is wholly inconsistent with the public interest in having services of this sort generally available. Medical services in particular should not be proscribed by the doctor's concerns as to where the patient may carry the consequences of his treatment and in what distant lands he may be called upon to defend it. . . . The s c o p e o f medical t r e a t m e n t s h o u l d be d e f i n e d by t h e p a t i e n t ' s n e e d s , a s diagnosed by t h e d o c t o r , r a t h e r t h a n by geography." The r e a s o n i n g of t h e N i n t h C i r c u i t h a s been f o l l o w e d i n s i m i l a r c i r c u m s t a n c e s i n o t h e r j u r i s d i c t i o n s . See, e.g., Lemke v. S t . Margaret Hosp. (N.D. I l l . 1 9 8 2 ) , 552 F.Supp. 833 ( a l l e g e d n e g l i g e n c e i n I n d i a n a -- i n j u r y i n I l l i n o i s ) ; Kennedy v . Ziesmann (E.D.Ky. 1 9 8 1 ) , 526 F.Supp. 1 3 2 8 ( a l l e g e d n e g l i g e n c e i n Ohio -- i n j u r y i n Kentucky); J a c k s o n v . Wileman (W.D.Ky. 1 9 7 9 ) , 468 F.Supp. 8 2 2 ( a l l e g e d n e g l i g e n c e i n Ohio -- i n j u r y i n Kentucky); Glover v. Wagner (D.Neb. 1 9 7 8 ) , 462 F.Supp. 308 ( a l l e g e d n e g l i g e n c e i n Iowa -- i n j u r y i n Nebraska); Kurtz v. Draur (E.D.Pa. 1 9 7 7 ) , 434 F.Supp. 958 ( a l l e g e d n e g l i g e n c e i n Nebraska -- i n j u r y i n P e n n s y l v a n i a ) . These c o u r t s have u n i f o r m l y d i s t i n g u i s h e d v o l u n t a r y i n t e r s t a t e economic a c t i v i t y , d i r e c t e d a t t h e forum s t a t e ' s e c o n o m i c m a r k e t s , f r o m t h e p r o v i s i o n o f m e d i c a l s e r v i c e s o u t s i d e o f t h e forum s t a t e where t h e p r o v i d e r h a s n o t s o l i c i t e d c l i e n t e l e . Under t h e s e c i r c u m s t a n c e s , t h e c o u r t s c o n c l u d e t h a t t h e a g g r i e v e d p l a i n t i f f "ought t o e x p e c t t h a t he [ o r s h e ] w i l l have t o t r a v e l a g a i n i f h e [ o r s h e ] t h e r e a f t e r complains t h a t t h e s e r v i c e s s o u g h t by him i n t h e f o r e i g n j u r i s d i c t i o n were t h e r e i n r e n d e r e d i m p r o p e r l y . " G e l i n e a u v . N e w York U n i v e r s i t y Hosp. ( D . N . J . 1 9 7 4 ) , 375 F.Supp. 661, 667. W e b e l i e v e t h a t t h e f a c t s i n Wright, s u p r a , and l a t e r c a s e s , c l o s e l y resemble t h o s e of t h e immediate c a s e . The r e s i d e n c e of p l a i n t i f f h e r e i s n o t t o t a l l y i r r e l e v a n t a s it was i n t h e c i t e d c a s e s , because h i s c h i l d was e n t i t l e d t o t h e t e s t i n g p r o c e d u r e a s p a r t o f t h e Oregon-Montana contract. As in the case of personalized medical services, however, the plaintiff, or more specifically, the blood sample, "traveled" to Oregon for tests conducted there. The results were then returned to Montana for the ultimate benefit of the child, while Oregon was compensated only for its marginal costs of operation. Oregon is certainly aware that the negative as well as positive consequences of its service will be felt in Montana, but, like the typical nonresident physician in the above-cited cases, it reasonably expects liability for the negative consequences only in its own state. In short, we think the facts of this case are more akin to the services discussed in Wright v . Yackley, supra, wherein the Ninth Circuit concluded that, because of the locus of performance and nature of the contract, the physician had not "purposely avail [ed] itself of the privilege of conducting activities within the forum State." 459 F.2d at 290, quoting Hanson v. Beak&+ (1958), DenckIs, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283, Plaintiff insists that the facts of the immediate case are virtually the same as those in McGee v. Riekhof (D.Mont. 1978), 442 F.Supp. 1276, and that the other medical services cases are therefore inapplicable. In McGee, the Federal District Court held a Utah physician subject to its jurisdiction on the basis of a telephone call made to his patient in Montana regarding a previously treated eye condition. But the plaintiff's only claim of negligence in that case was the new diagnosis given over the telephone; plaintiff was not resting any claim on the previous treatment in Utah. Thus, McGee is distinguishable from the f a c t s of t h e immediate case. Indeed, t h e c o u r t i n McGee n o t e d t h e r e l e v a n t d i f f e r e n c e b e t w e e n c a s e s i n v o l v i n g n e g l i g e n t d i a g n o s i s and/or t r e a t m e n t i n t h e d e f e n d a n t ' s s t a t e , and n e g l i g e n t d i a g n o s i s and/or t r e a t m e n t i n t h e forum s t a t e : " I n each of t h e s e cases [Aylstock v. Mayo Found. (D.Mont. 1 9 7 2 ) , 341 F.Supp. 560; McAndrew v. B u r n e t t (M.D.Penn. 1 9 7 4 ) , 374 F.Supp. 460; G e l i n e a u v. N e w York U n i v e r s i t y Hosp. ( D . N . J . 1 9 7 4 ) , 3 7 5 F.Supp. 6611 t h e p l a i n t i f f had t r a v e l e d o u t of t h e forum s t a t e t o seek medical s e r v i c e s e l s e w h e r e . W h i l e t h e y w e r e o u t s i d e t h e forum, a l l e g e d n e g l i g e n t acts o c c u r e d , and upon r e t u r n i n g t o t h e forum, t h e y s u f f e r e d i n j u r y . I n e a c h case t h e b a s i s f o r t h e E r o x i m a t e c a u s e o f t h e -------------- ---------- i n j u r i e s o c c u r e d o u t s i d e t h e forum. I t i s t o t h e s e c a s e s , t h a t t h e ' p o r t a b l e ------------ t o r t ' l a n g u a g e of Wright [v. Yackley] - is m o s t a p r o p o s . The case a t b a r is s i n g u l a r l y d i s t i n g u i s h a b l e because t h e a l l e g e d n e g l i g e n t a c t -- a d v i s i n g p l a i n t i f f t o r e t u r n t o work p r e m a t u r e l y -- occured i n Montana. T h i s is n o t a case of d e f e n d a n t t r e a t i n g p l a i n t i f f i n Utah and t h e n having t h e e f f e c t s of t h e t r e a t m e n t f e l t o n l y a f t e r p l a i n t i f f r e t u r n e d t o Montana. P l a i n t i f f McGee was i n Montana when t h e d i a g n o s i s was rendered." 442 F.Supp. a t 1278. The c o u r t observed t h a t i f t h e p l a i n t i f f had b a s e d h i s c o m p l a i n t upon t h e p r e v i o u s t r e a t m e n t i n Utah, t h e n t h e c o u r t would have d e c l i n e d j u r i s d i c t i o n . 442 F.Supp. a t 1278. P l a i n t i f f i n t h e immediate case is c l a i m i n g n e g l i g e n c e i n t h e t e s t i n g p r o c e d u r e and t h e d i a g n o s i s d e r i v e d t h e r e f r o m i n Oregon, u n l i k e McGee who c o u l d p o i n t t o a new d i a g n o s i s which was rendered where it was r e c e i v e d -- i n Montana. I n sum, w e f i n d McGee t o be i n a p p o s i t e under t h e f a c t s o f t h e immediate c a s e . Thus, we c a n n o t s a y t h a t Oregon h a s p u r p o s e l y a v a i l e d i t s e l f of t h e p r i v i l e g e of conducting a c t i v i t i e s i n t h i s forum. Admittedly, a fair argument to the contrary can be made if one accepts an analogy between Oregon's contractual obligations and those of a private company interjecting itself into the Montana economy. Nevertheless, even if we accept this analogy for the purpose of argument, the assertion of jurisdiction would not pass muster under the "reasonableness" aspect of the three-pronged test. It is to the question of reasonableness that we now turn our attention. As the United States Supreme Court observed in World-Wide Volkswagen, supra, the burdens imposed on nonresidents while defending lawsuits in a foreign State have diminished markedly through the years. 444 U.S. at 292-3, 100 S.Ct. at 565, 62 L.Ed.2d at 498. Oregon, without great difficulty, can adequately prepare for out-of-state suits and fairly defend its interests beyond its borders. But, this factor alone does not render it reasonable to subject the state to jurisdiction. Other criteria enumerated in - - World-Wide Volkswagen, supra, need to be considered here. Montana courts certainly have an interest in allowing Montana plaintiffs to seek restitution for tortious conduct. See, World-Wide Volkswagen, supra, 444 U.S. at 292, 100 S.Ct. at 564, 62 L.Ed.2d at 498; cf. Kulko v. California Superior Court (1978), 436 U.S. 84, 98, 98 S.Ct. 1690, 1700, 56 L.Ed.2d 132, 145. (forum state has legitimate interest in protecting child welfare in interstate custody dispute.) However, it can almost always be said that a state has a legitimate interest in protecting legal rights. And this right may not be so compelling "as to outweigh the factors m i l i t a t i n g a g a i n s t j u r i s d i c t i o n . " I n s . Co. o f N o r t h America v. Marina S a l i n a Cruz ( 9 t h C i r . 1 9 8 1 ) , 649 F.2d 1266, 1273, c i t i n g Kulko, s u p r a , 436 U.S. a t 92, 98-101, 98 S.Ct. a t 1696, 1700-1701, 56 L.Ed.2d a t 141, 145-146. L i k e w i s e , t h e Montana forum may p r o v i d e b o t h c o n v e n i e n t and e f f e c t i v e r e l i e f f o r p l a i n t i f f , e s p e c i a l l y i f a m u l t i p l i c i t y of l a w s u i t s c a n be avoided. But a s t h e Supreme C o u r t n o t e d i n World-Wide V o l k s w a g e n , s u p r a , a n d t h e N i n t h C i r c u i t r e i t e r a t e d i n Marina S a l i n a Cruz, s u p r a , 649 F.2d a t 1273, t h i s i n t e r e s t of p l a i n t i f f ' s might n o t be as s i g n i f i c a n t i f t h e p l a i n t i f f h a s t h e power t o select a d i f f e r e n t forum. I t is clear from t h e r e c o r d t h a t p l a i n t i f f had t h a t c h o i c e and e x e r c i s e d it i n f a v o r o f t h e Oregon forum i n 1979. And, t h e o p t i o n t o r e f i l e i n t h e n e a r f u t u r e is still open. I n d e e d , i n its r e p l y b r i e f , p l a i n t i f f a r g u e s t h a t " t h e i m p o s i t i o n o f p e r s o n a l j u r i s d i c t i o n would b e t t e r s e r v e t h e i n t e r e s t s o f j u s t i c e " because i n Montana, p l a i n t i f f c o u l d r e c e i v e up t o $300,000 under our s t a t e ' s t o r t claims law, a s opposed t o $ 1 0 0 , 0 0 0 u n d e r O r e g o n ' s t o r t l i a b i l i t y s t a t u t e . Or.Rev.Stat., S e c t i o n 30.270 ( 1 9 8 2 ) . ( W e n o t e h e r e t h a t i n o u r r e c e n t d e c i s i o n i n White v. S t a t e o f Montana (Mont. 1 9 8 3 ) , 661 P.2d 1272, 40 St.Rep. 507, w e h e l d t h a t t h e l i m i t a t i o n on governmental l i a b i l i t y f o r t o r t damages was u n c o n s t i t u t i o n a l , a l t h o u g h t h e Montana l e g i s l a t u r e s u b s e q u e n t l y r e s t o r e d t h i s l i m i t a t i o n . S e e , S.B. 465, 4 8 t h Mont.Leg., Reg. S e s s . , S e c t i o n 2 ( 1 ) , ( t o be c o d i f i e d a t 1983 Mont. Laws 6 7 5 ) ) . W e c a n n o t s a y whether t h e e v i d e n c e p o i n t s t o t h e j u s t i c e o f any p a r t i c u l a r award -- t h a t is f o r a j u r y t o d e c i d e . W e c a n s a y , h o w e v e r , t h a t p r e d i c a t i n g j u r i s d i c t i o n on which forum p r o v i d e s t h e h i g h e s t p o s s i b l e damage award would be conducive to the unacceptable practice of "forum-shopping." From the standpoint of efficient resolution of this case, it is clear that Oregon may provide a better forum for adjudication. Plaintiff seems to focus his complaint almost solely on allegedly negligent acts committed within the State of Oregon. The lab tests and diagnosis were conducted there. Apparently, the most important witnesses for both parties will be located there. Since the case would most likely turn on testimony of these witnesses, a hearing in the nonresident's home state may be more advantageous. See, Marina Salina Cruz, supra, 649 F.2d at 1273. The reasonableness of asserting jurisdiction over Oregon must also be assessed in light of the shared interest of both Montana and Oregon in advancing the state of quality medical testing technology. See, World-Wide Volkswagen supra, 444 U.S. at 292, 100 S.Ct. at 564, 62 L.Ed.2d at 498; Kulko, supra, 436 U.S. at 98, 98 S.Ct. at 1700, 56 L.Ed.2d at 145. The regional metabolic disorder testing program provided by Oregon is a by-product of the spirit of "co-operative federalism" as discussed by the U . S . Supreme Court. Because of our state's low birth-rate and the apparently high start-up costs of developing lab facilities and procedures, Montanans would normally not have the benefit of suitable testing procedures without access to Oregon's program. In expressing support for access to progressive out-of-state medical services, however, we do not belittle the significance of having those services performed according to the highest quality standards. See, e-g., McGee, supra, 442 F.Supp. at 1279. Justice undeniably would be d e f e a t e d i f t h e r e f u s a l t o a s s e r t j u r i s d i c t i o n would i n s u l a t e Oregon f r o m a n y m a l p r a c t i c e c l a i m s . N e v e r t h e l e s s , w e c o n c l u d e t h a t a c q u i r i n g i n p e r s o n a m j u r i s d i c t i o n over Oregon under t h e f a c t s of t h i s c a s e would be unreasonable. W e emphasize t h a t t h e s e r v i c e s being a t t a c k e d h e r e were performed i n Oregon, and t h a t Oregon c o u r t s a r e open t o v i n d i c a t e t h e i n t e r e s t s i n q u a l i t y m e d i c a l c a r e . Furthermore, c o u r t s have recognized t h a t , i n t h e s i t u a t i o n where medical s e r v i c e s have been performed o u t s i d e t h e forum s t a t e , c o n s i d e r a t i o n s of due p r o c e s s r e q u i r e more t h a n a n a p p r e c i a t i o n f o r q u a l i t y medical c a r e . I n Wright, s u p r a , t h e Ninth C i r c u i t reasoned t h a t : " t h e forum s t a t e ' s n a t u r a l i n t e r e s t i n t h e p r o t e c t i o n of its c i t i z e n s is h e r e c o u n t e r e d by a n i n t e r e s t i n t h e i r a c c e s s t o medical s e r v i c e s whenever needed. I n our o p i n i o n , a s t a t e ' s dominant i n t e r e s t on b e h a l f of its c i t i z e n s i n s u c h a c a s e a s t h i s is n o t t h a t t h e y s h o u l d be f r e e from i n j u r y by o u t - o f - s t a t e d o c t o r s , b u t r a t h e r t h a t t h e y should be a b l e t o s e c u r e adequate medical s e r v i c e s t o meet t h e i r needs wherever t h e y may go. T h i s s t a t e i n t e r e s t n e c e s s a r i l y r e j e c t s t h e ------------------- --- -------- E r o p o s i t i o n t h a t t h e s u f f i c i e n c y o f -- ........................... --- o u t - o f - s t a t e t r e a t m e n t i s s u b j e c t t o ......................... i n - s t a t e i n q u i r y . " 459 F.2d a t 291 (emphasis added). See a l s o Kennedy, s u p r a , W e f i n d t h e r e a s o n i n g o f t h e Ninth C i r c u i t p e r s u a s i v e , and conclude t h a t t h e concern f o r keeping t h i s i n t e r s t a t e m e d i c a l t e s t i n g p r o g r a m a v a i l a b l e w e i g h s a g a i n s t a n y i n t e r e s t i n a s s e r t i n g j u r i s d i c t i o n over Oregon. To f i n d o t h e r w i s e u n d e r t h e s e f a c t s m i g h t u l t i m a t e l y h a v e a " c h i l l i n g e f f e c t on t h e a v a i l a b i l i t y o f p r o f e s s i o n a l s e r v i c e s t o n o n r e s i d e n t s , " G e l i n e a u , s u p r a , 375 F. Supp. a t 667, to say nothing for the negative impact on the spirit of "co-operative federalism." If we found that jurisdiction was reasonable under the given facts, we would be creating precedent for jurisdiction over Oregon by other states that contracted with it for regional blood testing services. In that event, we think it highly likely that Oregon might refrain from providing the service rather than risk defending its interests in several foreign states. Thus, we find that proper respect for the mutual interests of interstate access to medical services and quality rendering of those same services requires that plaintiff pursue his malpractice claim in the Oregon courts. The previous discussion leads us to consider the "federalism componet" given high credence by the United States Supreme Court in World-Wide Volkswagen. The focus of our discussion here is not that the defendant is a sovereign state, but rather, the right of Oregon courts to try actions pertaining to those entities "found within" it. World-Wide Volkswagen, supra, 444 U.S. at 293, 100 S.Ct. at 565, 62 L.Ed.2d at 499. In Marina Salina Cruz, supra, the Ninth Circuit, in construing World-Wide Volkswagen, observed that "it may be unreasonable to subject an out-of-state defendant to jurisdiction where the allegedly tortious act is committed outside of the forum state, having only an effect within the state, if the act is negligent rather than purposeful." 649 F.2d at 1271, quoting Data Disc., supra, 557 F.2d at 1288. By analogy, the court reasoned that the "reasonableness of jurisdiction . . . depends also in part upon the seriousness of the potential affront to the sovereignty of a defendant's state." 649 F.2d at 1272. In the immediate case, the alleged negligent acts of the Oregon laboratory were apparently committed in that state and without intention of creating injury in Montana. It would, therefore, seem unwise to subject the State of Oregon to the jurisdiction of the courts of Montana. Plaintiff might still insist that the higher limitation on damage awards against the State of Montana would better serve the interests of justice. Under the particular facts of this case, however, a de-emphasis on sovereignty interests in order to insure the possibility of higher monetary damages would serve as an affront to the political decisions of Oregon, whose legislature has decided that a $100,000 limitation in suits against governmental agencies is appropriate . In summary, Oregon has not structured its activities in such a way as to purposely avail itself of the privilege of functioning in Montana. More importantly, careful evaluation of the interests of sovereighty, efficiency of resolution, and provision of important interstate medical services, compel the conclusion that subjecting Oregon to jurisdiction under these facts would be unreasonable. Even if we assume, for the purpose of argument, that the nature of Oregon's contacts with Montana are such that asserting jurisdiction would not offend due process, considerations of comity would compel dismissal of the suit. In Ehrlich-Bober & Co. v . University of Houston (1980), 49 N.Y.2d. 574, 404 N.E.2d 726, 427 N.Y.S.2d 604, the Court of Appeals of New York defined comity as: "'not a rule of law, but one of practice, convenience, and expediency' (Mast, Foos & Co. v . Stover Mfg. Co., 177 U.S. 485, 488, 20 S.Ct. 708, 710, 44 L.Ed 856). It does not of its own force compel a particular course of action. Rather, it is an expression of one state's entirely voluntary decision to defer to the policy of another (Zeevi & Sons v . Grindlay's Bank [Uganda], 37 N.Y.2d 220, 371 N.Y.S.2d 892, 333 N.E.2d 168 cert. den. 423 U.S. 866, 96 S.Ct 126, 46 L.Ed2d 95). Such a decision may be perceived as promoting uniformity of decision, as encouraging harmony among participants in a system of co-operative federalism, or as merely an expression of hope for reciprocal advantages in some future case in which the interests of the forum are more critical." Evaluation of these factors in the context of the immediate case lead us to the conclusion that plaintiff's lawsuit should be dismissed. We agree with plaintiff that a state like Oregon is not constitutionally immune from suit in another state, see Nevada v . Hall (1979), 440 U.S. 410, 99 S.Ct. 1182, 59 L.Ed2d 416, and we recognize that some state courts have, in light of the Hall decision, rejected comity arguments and asserted personal jurisdiction over other states, see, e.g., Mianecki v. Second Judicial Dist. Ct. (1983), Nev. I 658 P.2d 422; Wendt v . County of Osceola, Iowa, supra. However, even plaintiff notes that the rule expressed in Hall does not require this court to assume jurisdiction over Oregon. Indeed, the Hall court reasoned that " [i] t may be wise policy, as a matter of harmonious interstate relations, for states to accord each other immunity or to respect any established limits on liability. They are free to do so." Hall, supra, 440 U . S . at 426, 99 S.Ct. at 1191, 59 L.Ed2d at 429. Thus, we are "free to close [our] courts to suits against a sister state as a matter of comity rather than constititional command." Struebin v. State (Iowa 1982), 322 N.W.2d 84, 87. We find that our earlier observations with respect to due process apply with comparable force to the matter of comity . The instant case does not, so far as we can surmise, involve facts like those of Hall and related cases wherein non-resident defendants were clearly engaging in activities within the forum states. See Hall, supra, (Nevada employee involved in automobile collision with California residents on California highway); Mianecki, supra (Wisconsin parolee in Nevada involved in criminal conduct in Nevada); Wendt, supra (Iowa county involved in contract work in Minnesota). On the contrary, Oregon is performing a regional medical service within its boundaries. Furthermore, assumption of jurisdiction under these facts would impinge unnecessarily upon the harmonious interstate relations which are part and parcel of the spirit of co-operative federalism. Principles of comity, as well as due process, require that we not subject Oregon to the possibility of lawsuits in every state served by its medical testing facilities. To do otherwise could conceivably jeopardize the availability of this service. Contrary to plaintiff's assertions, our unwillingness to assume jurisdiction would not undermine the quality of this service. The Oregon forum is still open to vindicate any claim of negligence on the part of that state's medical laboratory. And, as we emphasized earlier in this opinion, the locus of the alleged negligent acts warrant consideration of the Oregon forum as the most convenient and efficient for resolution of this claim. Critical evidence and witnesses are located there, and therefore Oregon courts have j u s t a s much, i f n o t more, i n t e r e s t i n a d j u d i c a t i n g t h i s d i s p u t e . Once a g a i n , w e n o t e a s p e c i a l emphasis by p l a i n t i f f on t h e f a c t t h a t Montana h a s a h i g h e r l i m i t on t o r t l i a b i l i t y f o r n e g l i g e n t a c t s by p u b l i c a g e n c i e s t h a n t h a t adopted by t h e Oregon l e g i s l a t u r e , and t h a t p l a i n t i f f would t h e r e f o r e r e c e i v e a more j u s t compensation i n Montana. W e a r e r e l u c t a n t t o u s e t h i s a s j u s t i f i c a t i o n f o r h a u l i n g Oregon b e f o r e a Montana d i s t r i c t c o u r t . W e a r e i n no p o s i t i o n now t o d e t e r m i n e what c o n s t i t u t e s a " j u s t " award i n t h i s c a s e , a s t h e r e h a s been no t r i a l on t h e merits of p l a i n t i f f ' s claim. Moreover, under t h e f a c t s of t h i s c a s e , a s s e r t i o n of p e r s o n a l j u r i s d i c t i o n would u n n e c e s s a r i l y p r o j e c t Montana law o n t o t h e a l l e g e d a c t s of a n o t h e r s o v e r e i g n s t a t e . Comity u r g e s u s , a t l e a s t i n t h i s i n s t a n c e , t o g i v e Oregon c o u r t s t h e o p p o r t u n i t y t o h e a r t h i s c a s e under t h e laws o f t h a t s t a t e . I n c o n c l u s i o n , w e h o l d t h a t a s s e r t i o n of j u r i s d i c t i o n over Oregon i n t h i s c a s e would n o t comport w i t h p r i n c i p l e s o f d u e p r o c e s s . The m a t t e r s c o n s i d e r e d i n o u r c o n s t i t u t i o n a l i n q u i r y a l s o c o n v i n c e u s t h a t p e r s o n a l j u r i s d i c t i o n s h o u l d n o t be allowed i n t h e i n t e r e s t s o f comity. Accordingly, t h e judgment o f t h e d i s t r i c t c o u r t is a £ f irmed. , ? ' W e concur: J u s t i c e , / Justices Mr. Justice Fred J. Weber specially concurs as follows: I concur in the foregoing majority opinion only on the ground that we should decline jurisdiction as a matter of comity.

October 17, 1983

5d1af310-ff80-4f06-8533-f9afdedf6729

IOWA MANUFACTURING v JOY MANUFACTU

N/A

82-083

Montana

Montana Supreme Court

I N THE SUPREPIE C O U R T OF THE STATE O F M O N T A N A IOFJA MANUFACTURING C O M P A P S J , I %!?A24LL P l a i n t i f f and &, JOY MANUFACTURING COMPANY, Defendant and I Appeal from: D i s t r i c t Court o f t h e Second J u d i c i a l ~ i s t r i c t , I n and f o r t h e County of S i l v e r Bow Honorable Arnold Olsen, Judge p r e s i d i n g . Counsel o f Record: For Appellant: Ilenningsen & P u r c e l l , Butte, Montana Mark Vucwvich arqued, Butte, Montana For Respondent : C o r e t t e , Smith, Pohlman and Allen, B u t t e , Montana Gregory Black argued, Butte, Montana F i l e d : $%? % B 1 8 3 Submitted: June 7 , 1 9 8 3 Decided : September 1 9 , 1 9 8 3 Clerk Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Joy ~anufacturing Company (Joy) appeals from a judgment entered on a $50,000 jury verdict in favor of Iowa Manufacturing Company (Iowa) in the District Court of the Second Judicial District, Silver Bow County. The judgment also awarded to Iowa $14,349.40 in attorneys' fees. We affirm. On February 3, 1971, Jim Gilman Excavating Company (Gilman) purchased from Iowa an asphalt mixing plant for its operation in Butte. The plant included pollution control equipment which was designed and/or manufactured by Joy. In connection with Gilman's order, Iowa guaranteed that the particulate emissions from the plant would not exceed the amount allowed by Montana law as of February 1971 (61 b h r ) . Iowa's guarantee to Gilman was made in reliance upon Joy's guarantee to Iowa that the particulate emissions would not exceed 38 lbs./hr. The asphalt mixing plant was shipped to Gilman in June, and was operating by late August 1971. In 1973, a controversy arose between Gilman and Iowa which was based upon the late delivery of the plant. The controversy was resolved, and Gilman executed a release. Gilman testified in a deposition, however, that the release did not include any claims for air pollution problems. In 1975, the Montana Department of Health and Environmental Sciences (DHES) began questioning Gilman concerning pollution problems and complaints. On October 6, 1975, the DHES served a "Notice of Violation" on Gilman. Thereafter, an independent testing firm conducted several tests to determine the particulate emissions from the Gilman plant. Based upon these tests, the DHES issued an "Order to Take Corrective Action" on November 22, 1976. Another test, conducted on October 19, 1977, showed that the average emissions from the Gilman plant were 62 lbs./hr. Following this test, the DHES wrote a letter to Gilman stating that he could start up his plant only to demonstrate compliance. Gilman then purchased different pollution control equipment and filed a complaint against Iowa to recover damages in excess of $71,000 for negligence, breach of warranty, and strict liability. In responding to the allegations of the complaint, Iowa raised the affirmative defenses of statute of limitations and release. Iowa then gave Joy the opportunity to defend and indemnify Iowa in the action. When Joy declined to do so, Iowa filed a third party complaint against Joy, alleging that Joy designed the pollution control equipment and guaranteed that the equipment would meet the Montana Air Pollution Standards. As a result of this alleged breach of warranty, Iowa sought to be indemnified by Joy. Iowa then filed a motion for summary judgment in the underlying Gilman action, seeking a ruling on the defenses of statute of limitations and release. Joy joined in Iowa's motion for summary judgment, which was denied by the District Court. Approximately one week prior to trial, Iowa settled the underlying Gilman action for $50,000. Joy was given the opportunity to participate in this settlement, but it declined to do so. Thereafter, the action proceeded to trial on the third party complaint. Before trial, Iowa filed a motion in limine asking that the District Court prohibit Joy from producing evidence of the release entered into between Iowa and Gilman in 1973; and also to prohibit any testimony relating to the defense of the statute of limitations as between Iowa and Gilman. The District Court granted Iowa's motion in limine with respect to the release. The District Court also ruled as a matter of law, that as between Gilman and Iowa the statute of limitations commenced from the date of discovery of the defect. During the trial, Ronald Dunmire, an Iowa employee, testified that Iowa had given Gilman a specific warranty that the plant would meet Montana's air pollution control standards. On cross-examination of Dunmire, Joy attempted to place into evidence a copy of Iowa's Standard Air Pollution Control Performance Warranty. Iowa objected to the admittance of this document because the standard warranty was not given to Gilman and therefore was not relevant. Iowa's objection was sustained. Thereafter, Joy made an offer of proof and attempted to show that Dunmire's testimony was contrary to Iowa's answer to interrogatory no. 34. In the interrogatory, Gilman asked Iowa to describe all conversations between Iowa and Gilman relating to the warranty. Iowa responded in the interrogatory tha.t in one conversation, an Iowa employee represented that "the Plant would meet the State of Montana Air Pollution Standards subject to certain limitations such as contained in Iowa Manufacturing's standard air pollution control performance warranty in effect at the time of sale." Joy argued in its offer of proof that the standard warranty should be admitted "for the purpose of consideration by the jury as to whether or not Mr. Dunmire's testimony indicated that the warranty given was in lieu of the standard warranty." Iowa responded to Joy's offer of proof by stating that interrogatory no. 34 was in response to what conversations were held regarding the warranty. The ultimate warranty given to Gilman did not include the terms of the standard warranty. In this case, Iowa argued, the specific express warranty should displace any inconsistent implied warranties. The District Court agreed with Iowa, and again ruled that the standard warranty was irrelevant. The case was submitted to the jury on the question of whether the damages suffered by Gilman were caused by a breach of warranty of Joy entitling Iowa to indemnification for the sum paid to Gilman. Thereafter, a jury returned a verdict of $50,000 for Iowa. Joy's motion for new trial was denied, and the District Court awarded $14,349.40 in attorney fees to Iowa. Joy raises five issues on appeal: I. Had the statute of limitations for this action expired when Iowa filed its complaint against Joy? 2. Did Iowa sustain its burden in proving that the settlement with Jim Gilman Excavating, Inc. (Gilman) was reasonable and that Iowa was liable to Gilman? 3. Did the District Court err in refusing to admit into evidence Iowa's Standard Air Pollution Control Performance Warranty? 4. Did the District Court err in granting Iowa's motion in limine with regard to a release and the statute of limitations? 5. Did the District Court err in refusing to instruct the jury on active/passive negligence in this action? Joy argues that Iowa's cause of action was barred by the applicable statute of limitations for breach of warranty, section 30-2-725, MCA, since Iowa did not bring the action against Joy for more than four years after Joy tendered the air pollution equipment. Joy points out that a warrantor cannot be an indemnitor based on the warranty beyond the temporal scope of that warranty. This argument is well taken. To hold otherwise would allow a vendee to circumvent the warranty statute of limitations by retaining the goods beyond the term of the statute of limitations and then sell it with his own warranty and, having made good on his own warranty, hold his vendor upon a claim of indemnity. Acc. L.E. Talcott & Sons, Inc. v. Aurora Corp. (D. Del. 19591, 176 F.Supp 783, 786. However, Joy fails to recognize that the trial court properly ruled that section 30-2-725, MCA, does not bar Iowa's claim on the warranty or on indemnity. That section provides in part: "(1) An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. * * * "(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered." Where a vendor warrants the quality or specifications of goods, such warranty is breached when tender of delivery is made, absent explicit extension of the warranty to a future date. But, where a vendor warrants the performance of goods, that warranty necessarily contemplates a reasonable period of performance during which the defect or failure would manifest itself. By letter dated March 5, 1971, ,Soy warranted that the particulate ommissions from the Cedar Rapids plant would not exceed 38 pounds per hour (0.25 grams per standard cubic foot dry) when the equipment is operated in accordance with specified design conditions. Thus the warranty contemplates operation of the equipment for at least is long as would be necessary for the breach to be discovered. The trial court, in its ruling on the motion in limine, did not foreclose the statute of limitations defense. The court merely ruled that the statute ran from discovery and not from delivery. This ruling was correct. We are unable to rule, as a matter of law, that the defect was or should have been discovered more than 4 years before the initiation of this action. Joy's next substantive argument is that Iowa failed to prove that Iowa was liable to Gilman and that the settlement was reasonable. Since Iowa settled the underlying action with Gilman, it was required to prove that it was liable to Gilman and that the settlement was reasonable. 3A Frumer & Friedman, Products Liability 544.10 (2) . There is a divergence of authority on whether an indemnitee must prove actual or merely potential liability when it settles the underlying action with a third party. One solution was set forth in Morrisette v . Sears, Roebuck & Co. (N.H. 1974), 322 ~ . 2 d 7, 1 0 , wherein the New Hampshire court stated: "'If the indemnitor approves the settlement or defends unsuccessfully against the original claim, he cannot later question the indemnitee's liability to the original claimant. If the indemnitor declines to take either course, then the indemnitee will only be required to show potential liability to the original plaintiff in order to support his claim over against the indemnitor. ' (citation) . . . In the event that no offer is made to the indemnitor to either approve or defend, then the indemnitee should have the burden of showing actual liability to the original plaintiff." (Emphasis added. ) To the extent that it applies to this case, we approve this language. Since Joy failed to approve the settlement or take the opportunity to defend against the original claim, all that was required of Iowa was that it demonstrate potential liability, i.e., exposure to liability under the facts of its case and the law of this state. The jury was so instructed. There is evidence in the record to support potential liability. Iowa proved that the settlement was reasonable. Ronald Dunmire testified that Gilman's complaint asked for approximately $88,000 in damages. Therefore, Dunmire felt a settlement of $50,000 was realistic. Joy failed to rebut Dunmire's testimony as to the reasonableness of the settlement. The evidence given supports the verdict. Joy next contends that Iowa Company's Standard Air Pollution Control Performance Warranty should have been admitted into evidence because it contained language which limited the operation of any warranty given to Gilman to the "initial operating period." Joy argues that the standard warranty is relevant because 1) it shows that Iowa's warranty was limited to the initial operating period of the plant, and 2) it places the credibility of Ronald Dunmire at issue. Ronald Dunmire testified that the standard warranty was not given because the invoice received from Gilman asked for - a specific guarantee that the pollution equipment met certain Montana standards. Without foundation that the standard warranty was given, the text of the warranty is not relevant. It is true that Dunmire's testimony is contrary to the position taken by Iowa in interrogatory No. 34 and supplemental interrogatory No. 9, wherein Iowa stated that the specific warranty was "subject to certain limitations such as contained in Iowa Manufacturings' Standard Air Pollution Control Performance Warranty." Joy, however, did not use these interrogatories to impeach Dunmire's testimony. While the interrogatories may have had impeachment value the text of the warranty alone would not. Appellant, Joy, argues that the District Court erred in granting Iowa's motion in limine, because the existence of a release or running of the statute of limitations, as between - Iowa and Gilman, were relevant to demonstrate that Iowa was -- not actually liable to Gilman in the underlying cause of action. The evidence all indicates that the release executed by Gilman to Iowa in January of 1973 was for settlement of a claim for late delivery of the equipment and had nothing to do with the air pollution problems involved in Gilman's later suit against Iowa. The trial court correctly granted the motion in limine on the release question. The motion was granted on the statute of limitations question only to prohibit evidence proving the date of delivery as representing the starting time. The trial court correctly ruled that date of discovery governed running of the statute and left the question of when discovery was or should have been, open to proof. Appellant did not seek to show that the statute had run since discovery, nor did appellant offer any instruction covering the subject. Finally, Joy contends that the jury should have been instructed on active and passive fault because Iowa's conduct proximately caused injury to Gilman. Where a warrantee is supplied defective goods which constitutes a breach of warranty on the part of the supplier, but the warrantee's subsequent conduct proximately causes the injury to the third party, then the warrantee is not merely passively at fault and loses his right to indemnity. Town Pump, Inc. v. Diteman (1981), Mont . , 622 P.2d 212, 38 St.Rep. 54. Were there evidence that Iowa was more than passively at fault because its conduct was a proximate cause of the injury to Gilman, Joy's instruction would be proper. However, in this case, no evidence was presented to show that Iowa was actively responsible for the defects in the pollution control equipment. Although there was evidence that Iowa made adjustments to the equipment in 1975, no evidence was presented to show that this was a proximate cause of the pollution control problem. Therefore, a jury instruction on active/passive negligence would not have been proper. The judgment of the District Court is affirmed. We concur: Chief Justice Mr. Chief Justice Haswell, specially concurring: I concur with the foregoing opinion on all issues excepting the issue concerning the statute of limitations. I concur in the result of that issue but not in its rationale. My quarrel is with the application of the four-year statute of limitations on sales in the Uniform Commercial Code, section 30-2-725, MCA. In my view the a.pplica.ble statute of limitations is the five-year statute of limitations on implied contracts. This case is an action for indemnity based on breach of an express written warranty. An action for common-law indemnity is based on a theory of implied contract or quasi contract, and thus is very generally held to be governed by the statute of limitations applicable to actions on implied contracts. Annot., Limitation Applicable - to Indemnity Action, 57 ALR3d 833, 838, and copious case authority cited therein from numerous jurisdictions. An action on an implied contract of indemnity is wholly independent as a cause of action from the transaction or situation which gives rise to the right of indemnity. Annot., Limitation Applicable - to Indemnity Action, supra, at 839-840; Rieger et al. v. Frankstram Realties, Inc. (1946), 57 A.D. 411, 68 N.Y.S.2d 243. This distinction is illustrated and explained in a federal case similar to the one involved here. Stephenson v. Duriron (D.C. Ohio 1968), 292 F.Supp. 66, aff 'd., (6th Cir. 1970), 428 F.2d 387, cert. denied, 400 U.S. 943, 91 S.Ct. 245, 27 L.Ed.2d 247. In that case plaintiffs were injured and their property was damaged due to gas seepage and a resulting explosion caused by a fracture in a metal valve in the gas distribution system of a utility. The defective valve had been purchased by the utility from a supplier who warranted the valve to conform to certain specifications based on the same warranty given to it by the manufacturer of the valve. The supplier assigned its right of indemnification against the manufacturer to the plaintiffs. In an action in an Alaska state court, plaintiffs recovered judgment against the supplier who was held to be only secondarily liable with primary liability on the manufacturer. Plaintiffs then brought an action in federal- court in Ohio to enforce the Alaska judgment against the supplier and also sought judgment against the manufacturer as assignee of the supplier's right of indemnity against the manufacturer. The federal court applied the Ohio statute of limitations on oral contracts to the indemnity action rejecting the contention of the manufacturer that the action was barred by the statute of limitations governing actions for personal injuries and property damage. The court reasoned that plaintiffs were not seeking recovery for their personal injuries and property damage against the manufacturer, but on the contrary were seeking to enforce the implied contract for indemnification in favor of the supplier against the manufacturer that plaintiffs held by virtue of the assignment. The rationale of the majority in the instant case is bottomed on the proposition that the warranty given by Joy to Iowa is limited in time and that to hold otherwise would allow Iowa to destroy the protection afforded to Joy by the statute of limitations applicable to warranties. This contention is specious under the facts of this case. The warrantor can protect itself by inserting a time limitation in the warranty. But where, as here, the warrantor gives an express written warranty without a time limitation, the warrantor is bound by it. The express written warranty given by Joy to Iowa is set forth verbatim as follows: "Western Precipitation Division of Joy Manufacturing Company guarantees not to exceed the outlet dust loading when the equipment is operated in accordance with the design conditions as specified below: "I. SOURCE OF DUST ---------- Rock Dryer "11. TYPE OF PRECLEANER ------ 9VGR Multiclone "111. SCRUBBER INLET CONDITIONS "A. Estimated Dust Loading - gr/acf ..................... 6 to 10 "D. Moisture Content % by Wt.--- 27.2 "IV. WATER RATE - GPM ----------- 53 to 76 "V. SCRUBBER PF.ESSURE DROP - "Vh7C@ Oper. Condm ---------- 6 "VI. SCRUBBER OUTLET CONDITIONS "A. Volume - acfm -------------- 35,200 "C. Moisture Content - Saturated I ' D . Dust Loading 0.25 gr/scf dry" The right of indemnity accrued here when payment was made by Iowa to the Gilman Excavating Company under the terms of the compromise settlement. St. Paul Fire & Marine Insurance Co. v. Thompson (19691, 152 Mont. 396, 451 P.2d 98. Approximately one week prior to trial, Iowa settled the underlying Gilman action for $50,000 and the trial proceeded on the third party complaint for indemnity by Iowa against Joy. The statute of limitations for an implied or quasi contract in Montana is five years. Section 27-2-202(2), MCA. Accordingly, Iowa's action for indemnity is not barred. The result is the same in this case whether this Court applies the four-year statute of limitation on sales under the Uniform Commercial Code or the five-year statute on implied contracts of indemnity. However, considerable mischief can result in future cases from the holding of the majority. Since the right of indemnity does not accrue until payment is made or judgment secured in the underlying action, that right may be rendered meaningless and illusory to the indemnitee in some situations. For example, the statute of limitations in the underlying action may well have run before the right of indemnity accrues to the indemnitee. If the statute of limitations in the underlying action is applied to the indemnity action, the indemnitee's remedy may be barred before his claim for relief accrues unless he has filed a permissive but not mandatory third party complaint prior to accrual of his substantive right of indemnity. St. Paul Fire & Marine Insurance Co. v. Thompson, supra, where the indemnity action was not filed until approximately one year after final judgment in the underlying action was entered, is an example of a situation where the right of indemnity would be barred if the statute of limitations in the underlying action were applied. Hence, this special concurring opinion. s ; - a , J , p L & & , & Q Q Chief Justice I concur in the foregoing opinion of Mr. Chief,,,Justice Haswell. -- - Justice

September 19, 1983

84e732f0-d89e-4561-9f71-7dfe37505e50

LETFORD v KRAUS

N/A

83-153

Montana

Montana Supreme Court

No. 8 3 - 1 5 3 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 3 DAVID J. LETFORD AND DEBORAH R. LETFORD, P l a i n t i f f s and R e s p o n d e n t s , -VS- WILBERT KRAUS AND VIVIAN L . KPAUS, D e f e n d a n t s and A p p e l l a n t s . APPEAL FROM: D i s t r i c t C o u r t of t h e T h i r d J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of G r a n i t e , T h e H o n o r a b l e R o b e r t J. B o y d , Judge presiding. COUNSEL OF RECORD: F o r A p p e l l a n t s : R e x P a l m e r , M i s s o u l a , Plontana F o r R e s p o n d e n t s : J. A l l e n B r a d s h a w , P h i l i p s b u r g , Y o n t a n a F i l e d : S u b m i t t e d on B r i e f s : J u l y 2 1 , 1 9 8 3 D e c i d e d : N o v e m b e r 1 5 , 1 9 8 3 -&%,b @ - - C l e r k Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Defendant sellers of real property in Granite County appeal from a Granite County District Court order denyinq their request for a change of venue to Missoula County. Plaintiffs purchased the real property from the defendants and the sole issue for trial is whether defendants breached their warranty to deliver the property without defects. We affirm and hold that venue is proper in Granite County. The buyers, David and Deborah Letford, filed suit in Granite County against the sellers, Wilbert and Vivian Kraus, alleging a breach of warranty in failing to deliver real property free of defects, the real property being in Granite County. At the time suit was filed, the buyers were residents of Granite County and the sellers were residents of Missoula County. The defendant sellers moved on three grounds to have the trial changed to Missoula County. First they alleged that, as residents, they were entitled under section 25-2-108, MCA, to be sued in the county of their residence. Second, they alleged that the contract was to be performed in Missoula County. Third, they alleged that convenience of witnesses required a change of venue to Missoula County. We hold that the trial court properly found the contract was to be performed in Granite County, which, under section 25-2-101, MCA, defeats the right of the sellers to be sued in their county of residence. We further hold that the trial court properly exercised its discretion in holding that the convenience of witnesses did not require a change of venue to Missoula County. The record indicates that the real estate deal for property located in Granite County was closed in Missoula County and that payments under the contract for deed were paid into an escrow account in Missoula. However, when the buyers filed this action, all payments under the contract had been made, and the sellers acknowledged this fact. The buyers' complaint deals solely with the issue of whether the house had a defective fireplace and sewer system. Sometime after taking possession of the house in 1981, the buyers allegedly experienced problems with the fireplace and sewer system. The pa.rties agreed that the fireplace needed some work, and arrangements were made for the escrow agent to set aside $2,850 of the purchase money to repair the fireplace. The buyers then ha-d the fireplace and. sewer system repaired but allege that their personal outlay for the repairs exceeded the $2,850 in the escrow account by $12,231.69. The buyers therefore seek $12,231.69 as damages. The sellers present essentially two issues on appeal. First, they argue that under the general statutory rule, venue is proper in Missoula County because that is where they reside. Sellers agree that suits on contracts may be brought in the county where the contract is to be performed, regardless of where defendant resides. Sellers argue, however, that the contract here was to be performed in Missoula County, not Granite County as alleged by buyers, and therefore venue remains proper in Missou1.a County. Second, sellers argue that the trial court abused its discretion in denying their request for a change of venue when sellers presented "uncontradicted" evidence that hardship and inconvenience would result to sellers a.nd their witnesses if the ca.se was tried in Granite County. Subject to the specific exceptions provided in sections 25-2-101 through -107, MCA, the statutory rule in Montana is that a defendant is entitled to be sued in the county where he resides. That general rule is set out in section 25-2-108, MCA, which provides that "In all other cases . . ." (not specificall-y dealt with in sections 25-2-101 through -107, MCA), the action shall be tried in the county where defendant resides. Section 25-2-101, MCA, however, provides a specific exception in suits on contracts. That section gives the plaintiff a choice to bring the action on the contract in the county where the contract was to be performed, regardless of where defendant resides. Buyers in this case are entitled to try the case in Granite County if the contract in question was to be performed there. Payment of monies was only part of the performance. The gravamen of buyers' complaint is whether sellers have performed by delivering the property in Granite County defect-free. The issue has nothing to do with the payments in Missoula. We have held that where there is no clear expression on the face of the contract, the place of performance can be indicated by "necessary impli.cation." LaForest v. Ronald Leland and Company (1-977), 171 Mont. 518, 559 P.2d 1177. The real property in question is located in Granite County. Assuming, as alleged, that sellers were to perform by delivering the property defect-free, the fact that the property is located in Granite County necessarily implies that performance by delivery would take place in that county. Therefore, buyers are entitled under section 25-2-101, MCA, to bring this action in Granite County. Sellers also argue that under section 25-2-201(3), MCA, the trial court was required to grant their request for a change of venue to Missoula County because the "uncontradicted" evidence showed a trial in Granite County would inconvenience them and their witnesses. Sellers presented the testimony of seller, Wilbert Kraus, and affidavits of prospective witnesses to show that travel to and from Granite County would disrupt their work schedules and jeopardize their employment. However, the trial court has wide discretion under section 25-2-201(3), MCA, to determine whether the evidence warrants a change of venue. Being familiar with the geographic distances between the counties, the trial court here determined that sellers and their witnesses would not be greatly inconvenienced by trying the case in Granite County and refused to move the action to Missoula County. We believe the trial court was correct in determining that venue is proper in Granite County, despite the testimony of Kraus and the affidavits of defense witnesses, and the failure of the trial court to hear evidence from the buyers contesting the motion. Sellers ' evidence went "uncontradicted" because the trial court refused defendants' motion without hearing evidence from plaintiffs. Sel-lers were not prejudiced by the failure of the trial court to hear defendants' evidence contesting the motion. Further, in cases involving real property, the location of the property is an important factor in determining proper venue, and the trial court relied heavily on this fact. The complaint alleges breach of warranty to deliver defect-free real property in Granite County. The trier of fact must determine whether the property was in fact defective and may desire to visually inspect the property regarding repairs and modifications. Any visual inspection would have to be in Granite County and that fact militates against changing venue for purposes of the sellers' convenience. We hold that the trial court did not abuse its discretion in refusing to grant sellers' motion under section 25-2-201(3), MCA. We briefly comment on the trial court's denial of the sellers' motion without hearing evidence from the buyers who contested the motion for change of venue. While this procedure did not prejudice the buyers here, it is conceivable that an appeal where only part of the evidence is heard would require this Court to remand the case so that the other side could present their evidence. This procedure could well result in a double appeal on a preliminary question of a change of venue, and we therefore recommend that in the future all the evidence be presented before the trial court rules. The order of the trial court keeping venue in Granite County is affirmed. We Concur: ? L w J L s 9 , w Chief Justvce

November 15, 1983

120df724-b543-4155-80be-19e8f74979c7

MARRIAGE OF TURNER

N/A

83-179

Montana

Montana Supreme Court

No. 8 3 - 1 7 9 I N TI-IE SUPREME COURT OF THE STATE OF MONTANA T 9 8 3 I N THE MARRIAGE OF WAUNETA E. TURNER, P l a i n t i f f and R e s p o n d e n t , and VERNON N. TURNER, D e f e n d a n t and A p p e l l a n t . APPEAL FROPI: T h e D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of L e w i s & C l a r k , T h e H o n o r a b l e G o r d o n R. B e n n e t t , Judge p r e s i d i n g . COUNSEL OF RECORD: F o r A p p e l l a n t : Skedd, A s h l e y , M c C a b e & Weingartner; J. M a y o A s h l e y , H e l e n a , 1 4 o n t a n a F o r R e s p o n d e n t : John C o b b , A u g u s t a , Montana . - - S u b m i t t e d on B r i e f s : A u g u s t 1 8 , 1 9 8 3 D e c i d e d : O c t o b e r 1 7 , 1 9 8 3 F i l e d : /=- P @ A + , . a $ $ , & clerk Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Vernon N. Turner (husband) appeals from the judgment of the District Court, Lewis and Clark County, giving him only his personal possessions in a dissolution action brought by Wanneta Turner (wife). We affirm. The husband and wife married in 1972. They were both in their 50's when they married. The wife owned property near Lincoln, Montana, in her own name, given to her by her first husband. Mr. Turner was a commercial pilot when they married, and continued to fly when they moved to Lincoln. The Turners lived on the property for approximately 10 years. The wife claims the husband made no monetary or nonmonetary contribution to the Lincoln property. She claims the husband did not give her money for household expenses and failed to help maintain the condition of the house and outbuildings. The wife alleges she had to sell some of her personal property at the husband's insistence. Most of the proceeds from the sales were used for the husband's flying expenses. The husband claims he did make monetary and nonmonetary contibutions to the property. He cites various duties he performed around the property, such as clearing brush, snow-plowing the access road, and cutting thousands of dollars of firewood to heat the home. After a hearing, the trial court granted the dissolution. The court awarded to the wife all property owned by her before the marriage. The trial court granted the husband his personal belongings. This appeal follows. Two issues are raised by this appeal: 1. Did the trial court properly find that the husband made no contribution to the marriage which would justify apportionment of the wife's previously owned home? 2. Did the District Court err in not making a finding of the net value of the marital assets, namely the Lincoln property? Upon consideration of the evidence and testimony, the District Court found that the husband's position in the marriage was that of a "parasitic freeloader" who victimized the wife for the period of their marriage. The court therefore ruled that the wife was entitled to outright ownership of all the real property at her house near Lincoln. Disposition of property in a dissolution proceeding is governed by section 40-4-202, MCA, which provides that the court shall "equitably apportion" the property "belonging to either or both, however and whenever acquired." The statute also provides that in disposing of property previously owned by one spouse, consideration must be given to "contributions of the other spouse" including the nonmonetary contribution of a homemaker and the extent to which such contributions have "facilitated the maintenance of this property." 40-4-202, MCA. To conclude that the husband was not entitled to any claim against the Lincoln real property, it is necessary to find that he made - no contribution equitably justifying apportionment of that property. The District Court's finding that the husband was a parasitic freeloader victimizing the wife is just such a finding. We turn now to whether that finding was justified. This Court will not substitute its judgment for that of the trial court and will not alter a judgment unless it finds a clear abuse of discretion. Eschenburg v . Eschenburg (19761, 171 Mont. 247, 250, 557 P.2d 1014, 1016. After considering the record in a light most favorable to the respondent, this Court must find substantial facts supporting the discretionary judgment of the trial court. It is difficult to conceive of a marriage where absol-utely no contribution is made by one spouse. The equitable meaning of contribution envisioned by section 40-4-202, MCA, however, is an effort of a spouse which substantially aids in the accumulation and/or maintenance of the marital estate. The work of a homemaker is just such an effort and is specifically enumerated in the statute. The marital estate would obviously be substantially depleted if these necessary services had to be purchased. But where one spouse's contribution is so minimal that it would not even be self-supporting, that spouse is merely a burden. In such a case, the value of the other spouse's previously owned property results inspite of, rather than because of, the - first spouse's efforts. In this case, the wife was not only the homemaker, but also the chief earner. The husband's annual income was approximately $5,000, much of which was spent by the husband while he was away from the home. The wife paid all of the bills, with the exception of the husband's phone bills, bought the food and clothing, did the cooking, washing, cleaning, and other work to provide for the home. The only substantial effort of the husband during the ten year marriage was to clear snow from the driveway (with the wife's plow), and get wood for the heating of the home (with the wife's help). The District Court need not further substantiate its finding of lack of contribution. The burden is upon the husband to demonstrate his contiribution. He failed to do SO. We hold that under these facts the trial court did not abuse its discretion in finding that the husband made no contribution to the marriage within the meaning of section 40-4-202, MCA. This is not the first case where the non-acquiring spouse has been found to have no interest in previously owned property. In In re the Marriage of Balsam (1979) , 180 Mont. 129, 589 P.2d 652, this Court upheld such a distribution where a trial court found that none of the value of non-appreciated stocks was a product of contribution from the marital effort. The failure of the District Court to find the net value of the Lincoln property now becomes harmless. We take care to reemphasize the necessity of such a finding in the equitable apportionment of property in the typical marriage dissolution. The value of the marital assets is important information which should be weighed in the distribution determination. However in this case, the value of the Lincoln property would make no difference. Whether the property is worth $30,000 or $130,000, the husband is entitled to exactly none of it. The judgment concur : of the District Court is affirmed. aiJ--A J* jllw'.,pJg) Chief Justice

October 17, 1983

709b79ed-5c4a-4c59-801a-d38590c57448

MADDOX v NORMAN

N/A

83-141

Montana

Montana Supreme Court

NO. 83--141 IN THE SUFREME COURT OF THE STATE OF MONTANA 1983 FAYE ANN P r l A D D O X , Plaintiff and Appellant, FRANK A. NO~~IAN, JR. , and GLORIA E . NORMAN I & NORMAN RANCIJES INC. , Defendants and Respondents. APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Thomas Olsen, Judge presiding. COUNSEL OF RECORD: For Appellant: Berg, Coil, Stokes & Tollefsen; Ben Berg, Eozeman, 14ontana For Respondents : Moore, Rice, O'Connell & Refling; Ferry J. Moore, Bozeman, Montana Submitted on Briefs: May 26, 1383 Decided r SEP - 8 Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. Plaintiff appeals from the judgment of the Eighteenth Judicial District Court, Gallatin County, ordering her to transfer to Norman Ranches, Inc. her 75 shares of stock in that corporation in return for $20,000 and 20 acres of land. We affirm in part, reverse in part, and remand for further proceedings. The issues are: (1) Should the District Court have appointed a receiver to liquidate the corporate assets and distribute the proceeds ? (2) Did the District Court have power to compel plaintiff to sell her stock? (3) Were the findings of the District Court supported by substantial evidence? The Norman family ranch was incorporated in 1961. No assets were transferred to the corporation until December 20, 1963, when Frank Norman, Sr. (Frank Sr.) deeded approximately 1140 acres of land to the corporation. The ranch belonged to and had been operated by the Norman family for nearly 100 years. Frank Sr., who died July 28, 1980, was the father of defendant Frank Norman, Jr. (Frank J r , plaintiff Faye Maddox (Faye) , and T. Donald Norman (Donald) . Donald was originally a plaintiff in this action, but after settling with defendants was dismissed as a party. Frank Jr. 's wife, Gloria Norman (Gloria), is also a defendant. Originally, Frank Sr. held 997 of 1000 outstanding shares of Norman Ranches stock, and Frank Jr., Donald and Gloria each held one share. In 1970 Frank Sr. gave an additional 410 shares to Frank Jr., 75 shares to Faye, and 74 shares to Donald. At the same time, Frank Sr. executed a contract to sell his remaining 438 shares to Frank Jr. Those shares were transferred to Frank Jr. on February 13, 1980, after the purchase price had been fully paid. At the commencement of this action, ownership of Norman Ranches was: Frank Norman, Jr. 849 shares Gloria Norman 1 share Faye Maddox 75 shares T. Donald Norman 75 shares Faye and her husband lived and worked on the Norman ranch in 1946 and 1947, but in 1948 left the ranch and the state because they "couldn't make a living." Frank Sr. moved to Bozeman in 1968 and to Lacey, Washington in 1974. Faye testified that Frank Sr. was not involved in the ranch operation after leaving the ranch in 1968, but Frank Jr. testified that Frank Sr. continued to control the operation, returning in the summers to do light work and otherwise phoning weekly to discuss ranch decisions. Although after 1974 Frank Sr. and Faye both lived in Washington and had "very close contact," Faye was not informed until 1979 that her father had given her 75 shares of corporate stock. Beginning in 1978, the ranch affairs were handled by a new accountant and a new attorney. Frank Jr. and Gloria testified they had previously depended on the corporation accountant to prepare tax returns and the corporation attorney to prepare and mail the required notices. Faye, however, did not receive any notice regarding corporate matters. When Frank Jr. and Frank Sr. applied for a corporation loan in 1970, Faye was listed on the application as a shareholder. In November, 1979 Faye received her first annual shareholders' meeting notice. In 1979 and each successive year, she attended annual corporation meetings. No separate corporate records were kept by defendants prior to 1978. No separate journals, ledgers, balance sheets or bank accounts were prepared or maintained. On advice of the new accountant in 1978, a separate corporate checking account was established and separate corporate accounting mechanisms were adopted. The new accountant testified that a very thorough ledger had been kept in which all transactions were posted, but this ledger did not distinguish corporate from personal transactions. This ledger was not introduced at trial by either party. The accountant did testify there had been no apparent attempt to conceal any financial matters. However, no records were introduced at trial to account for corporate transactions from 1970 to 1978. In 1970 the Federal Land Bank loaned Norman Ranches $80,000 to pay for cattle, land and operating expenses. Proceeds of the loan were in part applied to repay the balance of a loan used to purchase the "Gervais" section. Title to this parcel of land passed to Frank Jr. rather than to the corporation. Frank Jr. testified that the corporation had merely loaned him that amount, but no evidence of such a loan was presented. Corporate lands originally were subject to a mortgage on the $80,000 loan, although they were later released from the mortgage. Loan payments were not in default, but it was not shown if payments were made with Frank Jr.'s personal funds or with corporate funds. Most of the balance of the $80,000 was used to purchase yearling heifers in Frank Jr. 's name. From 1971 to 1979 calves were sold and proceeds were deposited in the account of Frank Jr. and Gloria, or Frank Sr. No showing was made of reimbursement to the corporation for the money used to purchase the yearling heifers. Beginning in 1966, corporate lands were farmed by Frank Jr. under a 1/3 - 2/3 crop share agreement. From its 1/3 share of the crop, the corporation was responsible for payment of real estate taxes on corporate land, 1/3 of the seed grain planted, 1/3 of the fertilizer, 1/3 of the weed control, and all material for repair or construction of fences. In addition to providing the balance of seed, fertilizer and weed control, Frank Jr. as lessee provided all machinery for cultivation and harvesting. He was required to deliver all grain to the elevator. No showing was made that the corporation received its share of hay or grain. Frank Jr. kept no separate records of corporate shares of grain or hay. Proceeds from the sale of crops were deposited to the personal account of Frank Jr. and Gloria, or Frank Sr. From 1966 to 1977 no money was deposited in any corporate account. No amounts were entered in any separate ledger for grain or hay production under the crop share agreement. A summary of net lease income, based upon estimates prepared by the corporation's accountant in 1979, showed the corporate net lease income for that period as $76,744 or $48,257, depending on tax treatment. Further, two houses on a portion of the ranch known as the "Gray place" were rented beginning about 1977. Rent income was deposited in Frank Jr. ' s account. No showing was made that the corporation received any of the rent income. Faye attended the December 6, 1979 annual shareholders' meeting for Norman Ranches. At the meeting, Faye demanded an accounting for the income and expenses of the corporation from its beginning to date. At the February 1, 1980 meeting, Faye and Donald each received certificates representing their shares. The summary of net lease income was presented for examination and Frank Jr. briefly described the nature and cost of various corporation improvements. Faye's attorney requested that a detailed written statement be submitted and that defendants provide a detailed written accounting for the $80,000 loan proceeds. No accounting was made. At the next annual meeting on April 2, 1981, Faye requested and it was agreed that an appraisal be made of the corporate ranch property, the Gervais section and items of equipment and machinery belonging to Frank Jr. The appraisal valued the ranch property and improvements at $640,000, the Gervais section at $l6O,OOO, and items belonging to Frank Jr. at $46,008. The appraisal detailed the character and use of ranch lands. Based expressly upon present agricultural use and inclusion in the ranch unit, the appraiser set per-acre values for each type of ranch land. The appraisal was not of the corporation as a whole, but included primarily the ranch. None of the corporate liabilities or other assets were mentioned. In fact, the overall financial position of the corporation has not been established. The parties met on September 30, 1981 to discuss settlement of the dispute and possible purchase of plaintiffs' shares by the corporation. An agreement was reached by which defendants agreed to pay $175,000 for the 150 shares owned by Faye and Donald. The payment was contingent upon defendants obtaining financing within 30 days. They could not, and the agreement lapsed. Plaintiffs filed suit on November 2, 1981. Plaintiffs alleged misapplication and waste of corporate funds in that Frank Jr. and Gloria had used corporate assets for "personal benefit and gain." Plaintiffs asked the Court to appoint a receiver to liquidate the corporate assets and distribute the proceeds. On November 24, 1981, a hearing was held to allow defendants to show cause why a receiver should not be appointed. The Court issued findings and conclusions on December 30, 1981, finding that defendants' conduct "in the past disposition of the corporate share of hay and grain crops and the proceeds of calves and cattle constitutes a possible misapplication and waste of corporate assets." The Court conditionally accepted ("unless evidence indicates otherwise") the $175,000 settlement figure as fair value of plaintiffs' 150 shares. The Court allowed the parties until July 12, 1982 to reach a purchase agreement, otherwise a receiver would be appointed. At a second hearing on August 2, 1982 the parties sought court approval of a new settlement agreement between defendants and plaintiff Donald. Faye was not involved in the agreement. The Court had ordered that any transaction involving corporate assets must have prior court approval. The settlement agreement provided that Donald would transfer his 75 shares to the corporation in return for $20,000 and 20 acres of land. The agreement was negotiated for Donald by his son Ted Norman, to whom Donald had given power of attorney. A prior offer of $30,000 had been rejected. After hearing testimony that the agreement was fair, reasonable, and voluntarily and knowingly entered into, the Court approved the agreement and dismissed Donald as a party. At a third and final hearing on December 7, 1982, the Court heard defendants' motion to amend the findings and conclusions of December 30, 1981. Defendants presented evidence that the $175,000 settlement agreement had been contingent upon defendants obtaining financing. Defendants also presented evidence of specific 20-acre tracts comparable in value and aesthetics to the tract conveyed to Donald. Faye presented evidence of tracts valued around $87,500, half the $175,000 settlement agreement. In findings and conclusions dated December 30, 1982, the Court found that the $175,000 agreement had been contingent upon financing and "was nullified" by unavailability of financing; that defendants had settled with Donald, but Faye had refused the same settlement offer; that Faye's stock, being "closely held, seldom sold, [and] unlisted," was difficult to value, but that the settlement wit11 Donald was a "strong indication" of the fair market value of the stock. The Court found two specific tracts comparable in value and aesthetics to Donald's tract, and found that a settlement similar to Donald's was an equitable resolution for Faye. Finally, the Court found that although defendants' conduct was not per forma as to corporate law or the corporation's by-laws, "its informality was not oppressive toward the plaintiff, nor was she defrauded." Furthermore, the Court did not "find the misapplication of this personal-ranch corporation's assets nor waste of them." The Court refused to liquidate, reasoning that the "prodigal in this instance must defer to the one who stayed at home, built the ranch, worked with the father and struggled to a successful ranch unit. " The Court ordered that Faye transfer her 75 shares of stock to Norman Ranches in exchange for $20,000 and a 20-acre tract of land comparable to that received by Donald Norman. Plaintiff appeals. Plaintiff in substance argues that upon a bare showing of misapplication or waste of corporate assets, the District Court is required by section 35-1-921, MCA to appoint a receiver to liquidate the corporate assets and distribute the proceeds. Plaintiff maintains that because such a showing was made, the District Court erred in refusing to appoint a receiver. We do not agree. The Montana Business Corporation Act provides that "[tlhe district courts shall have full power to liquidate the assets and business of a corporation . . . when . . . the corporate assets are being misapplied or wasted." Section 35-1-921 (1) (a) (iv) , MCA. The comments on the statute suggest that this section was intended to clarify the dissolution powers of the district courts: "Cases differ as to whether a court has power on petition of a sFarxolder to d i s m a x l - a t e for deadlock, fraud or mismanagement, in the absence of a statute giving the court such a power. "When there is a statutory grant of such a power there are still two factors with which one seeking dissolution must contend: (1) Courts have tended to construe the statutes as discretionary rather than mandatory, even though the language of the particular statute may appear to make it mandatory. (2) Courts have tended to look beyond the language of the statute and into the equities of the situation. "This section provides discretionary authority to the district court to liquidate the assets and - business of a corporation upon the petition of a shareholder. . . . " Official Comment, Annot. to section 35-1-921, MCA (emphasis added). These comments indicate the drafters of the statute intended to remove existing uncertainty about whether the courts have any dissolution powers and to allow discretionary exercise of those powers. The statute is clearly couched in permissive language. To require dissolution on a showing of bare statutory grounds would be manifestly unjust, because it would dictate the harsh remedy of dissolution regardless of the facts of the case or the consequences. Liquidation is an extraordinary remedy and the power of the court to appoint a receiver must be exercised with extreme caution. Thisted v. Tower Management Corp. (1966), 147 Mont. 1, 14, 409 P.2d 813, 821. Traditionally, liquidation has been viewed as a remedy of last resort. This view was restated in State ex rel. Iverson v. District Court (1965), 146 Mont. 362, 406 P.2d 828: "The demand of any party for appointment of a receiver is generally very carefully considered by the courts, for this is a 'drastic' remedy which deprives the lawful owner of property the right to manage and control his own interests. As a result, . . . power to appoint a receiver is to be exercised sparingly and not as of course. A strong showing should be made and even then the authority must be exercised with conservation and caution . . . [citations omitted] The general rule is also stated that if the desired outcome may be achieved in any other way, rather than through the appointment of a receiver, then this course should be followed." Iverson, 146 Mont. at 371, 406 P.2d at 832-33, quoting Brown v. Erb-Harper-Rigney Co. (1913), 48 Mont. 17, 27, 133 P. 691, 694. See also OINeal, Close Corporations S9.27 (Supp. 1982) ; 19 C.J.S. Corporations §I454 (Supp. 1979). We hold that section 35-1-921, MCA is permissive rather than mandatory, and that district courts are empowered, but not required, to liquidate when corporate assets have been rr~isapplied or wasted. As noted in the Official Comment to section 35-1-921, MCA, courts look beyond the statutory criteria and "into the equities of the situation." This Court has held that "in addition to the bare statutory requirements, there is a further burden of proving equitable grounds for dissolution." FOX v. 7L Bar Ranch Co. (1982), Mont . , 645 P.2d 929, 935, 39 St.Rep. 862, 871. We reaffirm that holding. In Fox, we affirmed the dissolution of a close corporation, - finding that deadlock and oppression, two of the statutory grounds, were present and that the equities clearly favored dissolution. We emphasized that the dissolution issue is to be decided on a case-by-case basis. In affirming dissolution, - Fox held there was no adequate alternate remedy: "As we have stated, technical satisfaction of the deadlock requirements is not enough to warrant dissolution. Therefore, regardless of [plaintiff's] motives for seeking a dissolution, dissolution could not be ordered absent the underlying equitable Founds. "On the other hand, to disallow a division would greatly harm [plaintiff] by making him the victim of corporate formalities. There - - is no alternative adequate remedy. - Fox, 645 P.2d at 936, 39 St.Rep. at 871-72 (emphasis added) . The equitable factors found persuasive in Fox were (1) demonstrated inability of the parties to get along, (2) reasonable expectations of the shareholders, (3) lack of disruption of a going business, (4) lack of injury to the public, (5) harm to shareholders from refusal to liquidate, and (6) lack of adequate alternative remedies. This list is not exhaustive, nor is each of these factors necessarily required in every case. Dissolution actions must be resolved on a case-by-case basis, balancing the underlying equities and eschewing rigid, predetermined rules. This approach is consistent with our prior decisions. As we have noted before in the corporate dissolution context, " [c] ourts of equity are not bound by cast-iron rules. The rules by which they are governed are flexible and adapt themselves to the exigencies of the particular case." Thisted, 147 Mont. at We employed essentially the same flexible approach in Skierka v. Skierka Bros., Inc. (1981) , Mont . , 629 P.2d 214, 38 St.Rep. 754. There we affirmed the District Court's conditional liquidation order, holding that the Court's finding of oppression was clearly supported by the evidence and that fraud and mistake were also present. Applying Thisted, we deferred to the equitable discretion of the District Court. The equities in Skierka clearly supported liquidation. There, due to actions of the controlling shareholder, plaintiff's reasonable expectations were frustrated, plaintiff was effectively excluded from corporate management, and the shareholders were unable to get along. Even though the equities supported the liquidation remedy, the District Court ordered that liquidation occur only if the parties failed to agree on a division of the corporate assets. Skierka, 629 P.2d at 215-17, 38 St.Rep. at 755-58. The equities in this case do not support plaintiff's contention that liquidation of Norman Ranches is the proper remedy. Plaintiff claims to have established statutory grounds for dissolution, but has not demonstrated underlying equities which demand the harsh liquidation remedy. Even assuming misapplication or waste, the record contains substantial evidence in support of the trial court's refusal to liquidate. Norman Ranches appears to be a solvent and going business. Frank Jr. and Gloria would be unjustly harmed by liquidation of assets they have worked long and hard to improve. Together they own over 90% of the corporate shares. Moreover, liquidation would not be likely to benefit Faye in a manner consonant with her apparent expectation to get her money out of the corporation quickly. She clearly does not wish to remain in Montana and participate in the ranch operation. The parties are clearly unable to work together. Liquidation of ranch property might take years and might yield a much less satisfactory result than other available remedies. Alternative remedies exist which would resolve the dispute without the adverse consequences liquidation promises to all concerned. Finally, Faye requested in open court a remedy other than dissolution. We will not disturb the trial court's determination of the dissolution issue unless it is "clearly erroneous." Skierka, 629 P.2d at 222, 38 St.Rep. at 764. We affirm the District Court's refusal to liquidate the assets of Norman Ranches, Inc. Plaintiff challenges the power of the District Court to compel her to sell her stock. She argues that the sole issue before the District Court was whether to dissolve the corporation, but that the Court, in an effort to compromise, imposed an unwanted agreement upon the parties. We reject this argument. Our prior decisions have recognized the general equitable powers of district courts over disputes arising among shareholders of close corporations. Thisted, 147 Mont. at 14-15, 409 P.2d at 820-21; Skierka, 629 P.2d at 221-22, 38 St.Rep. at 764; - Fox, 645 P.2d at 936, 39 St.Rep. at 871-72. In Thisted, we recognized that power to choose from a broad range of equitable remedies is necessary to resolve disputes of this nature: "[bly [their] very nature, intracorporate problems arising in a close corporation demand the unusual and extraordinary remedies available only in a court of equity." 147 Mont. at 14, 409 P.2d at 820. Accordingly, a court sitting in equity is empowered to determine the questions involved in a case and "do complete justice. " Sawyer-Adecor International, Inc. v. Anglin (1982) Mont. , 646 P.2d 1194, 1202, 39 St.Rep. 1118, 1127; Link v. State (1979), 180 Mont. 469, 483, 591 P.2d 214, 222. This includes the power to fashion an equitable result. Rase v. Castle Mountain Ranch, Inc. (1981), Mont. , 631 P.2d 680, 687, 38 St.Rep. 992, 1000. Plaintiff argues that the District Court converted this action to dissolve and liquidate a corporation into something akin to specific performance of a contract contrived by the Court. We do not agree. Although the District Court may have improperly relied upon the settlement figure reached by defendants and Donald, as determinative of the value of plaintiff's 75 shares, the District Court did not make a contract for the parties. Plaintiff cites Horst v. Staley (1936), 101 Mont. 543, 54 P.2d 876, for the rule that courts may not make contracts for the litigants. But in Horst the dispute was whether the parties had made a certain agreement. Plaintiff claimed they had; defendant denied that any agreement had been reached. In attempting to compromise the positions of the parties, the trial court disregarded the allegations and the parties' proof and created an agreement with terms midway between the parties' positions. Horst, 101 Mont. at 548-49, 54 P.2d at 878. Here, plaintiff asked the District Court to order the stock sale. The Court simply assigned a value to the shares that was unsatisfactory to the plaintiff. Although plaintiff's argument begins with the assertion that the District Court is powerless to compel the stock sale, her argument does not address that issue. Instead, it is aimed at undermining the District Court's valuation of her stock. The District Court did not impose a "contrived" contract upon the plaintiff. Although this Court has never ruled directly upon the question, the decisions of other jurisdictions have recognized and approved the fashioning of equitable remedies less drastic than dissolution, including but not limited to ordered sales of stock at a fair price. Fix v. Fix Material Co., Inc. (Mo. 1976), 538 S.W.2d 351, 357; Baker v . Commercial Body Builders, Inc. (Or. 1973), 507 P.2d 387, 395-96; Alaska Plastics, Inc. v. Coppock (Alaska 1980), 621 P.2d 270, 274-75. In Coppock, the plaintiff sought dissolution but the trial court ordered defendants to purchase plaintiff's shares. The Alaska Supreme Court summarized the case law on this issue and restated the rationale supporting the fashioning of equitable remedies less drastic than liquidation: "Liquidation is an extreme remedy. In a sense, forced dissolution allows minority shareholders to exercise retaliatory oppression against the majority. Absent compelling circumstances, courts often are reluctant to order involuntarv 1 dissolution. [citations omitted] As a result, courts have recognized alternative remedyes based upon their inherent equitable powers. Thus in Baker, interpreting a statute substantially similar to AS 10.05.540, the court authorized numerous alternative remedies for oppressive or fraudulent conduct by the majority. Among those would be: 'An order requiring the corporation or a majority of its stockholders to purchase the stock of the minority shareholders at a price to be determined according to a specified formula or at a price determined by the court to be a fair and reasonable price.' (footnote omitted). Baker, 507 P.2d at 396. The same court applied that remedy in Delaney v. Georgia-Pacific Corp., 278 Or. 305, 564 P.23 277, 288-89 (1977) ." Coppock, 621 P.2d at 274-75 (emphasis added). The Court found however that the stock purchase remedy was not appropriate under the facts of that case. The stock purchase remedy was applied in Delaney, where the Oregon court found that remedy appropriate in light of " 'the facts of the case and the nature of the problem involved. . . ' " Delaney, 564 P.2d at 288, quoting Baker, 507 P. 2d at 395. The case was remanded for a proper determination of value. These cases clearly support the power of the District Court on appropriate facts to order the purchase or sale of minority shares. We are persuaded by the rationale and holdings of these decisions. Plaintiff has not cited, nor does our independent research disclose, any authority to the contrary. Indeed, the cases cited do not seriously question that courts have such power, only whether its exercise is appropriate in the particular case. We hold that the District Court had power to order the purchase and sale of Faye's stock. Plaintiff and defendants are clearly unable to cooperate in the management of Norman Ranches. It does not appear from the record that Faye desires any participation in the ranch operation. Faye asked the District Court to award her money and land in exchange for her shares. She has not expressed any desire to remain a shareholder or participate in the ranch operation, except insofar as necessary to withdraw her share from the corporation. Norman Ranches appears to be a successful family ranch and, barring dissolution, is likely to remain so. The stock purchase by defendants allows Faye her rightful share of the corporation. It also allows the ranch to continue operating without unfair interruption. It allows defendants to enjoy the rightful fruits of their labors on the ranch while still allowing a full accounting for corporate funds. In short, the stock sale remedy answers the equities and demands of the case. We affirm the District Court's use of the stock sale remedy in this case. The final issue is whether there was substantial evidence to support the findings of the District Court upon which judgment was entered ordering Faye to transfer her 75 shares of stock in return for $20,000 and 20 acres of land. The record does not show all assets and liabilities of the corporation. While the District Corut found that corporate assets were appraised at $640,000, the record shows that this value is limited to the corporate real property. The record does not disclose the net value of the corporation. Section 35-1-812(6) (c) , MCA, in providing a method for dissenting shareholders to force a purchase of shares, requires as a part of the value determination that the corporation provide a balance sheet showing assets and liabilities. Such information is no less crucial in the present case. Determination of the assets of the corporation also requires an accounting by Frank, Jr. for corporate funds from 1970 to the date of valuation. No accounting is shown of corporate rental income, lease proceeds or loan proceeds. Liabilities of the corporation, if any, must also be shown by appropriate evidence. It may be that defendants have some claim in that regard for labor and improvements. Next, we note that the District Court relied upon defendant's settlement with Donald as determinative of the value of Faye's shares, rejecting the earlier $175,000 valuation by agreement. While the $175,000 agreement lapsed for lack of financing, it does not eliminate that agreed value as a factor to be considered in determining share value. Defendants argue that reliance on Donald's settlement to determine value was proper, relying on cases treating arms-length transactions in the normal course of business as the basic criterion of market value. The record raises a question as to whether or not the settlement with Donald was an arms-length transaction, since it involves a participant in the court action. It appears that the agreed value of $175,000 for all the shares or $87,500 for Faye's shares was evidence which should have been considered by the District Court. Finally, the record fails to show the value of the 20 acres of land ordered to be exchanged. The initial appraisal was based upon a value per acre for an operating 1,140-acre ranch. That appraisal expressly stated that the values were applicable only under the existing program of farm use and were invalid for use in connection with any other appraisal. As a result, the record fails to show the value of the 20 acres which the defendant proposed to transfer along with $20,000 to Faye and also fails to show the value of the lands which Faye proposed to be transferred to her at a value of $87,500. On further consideration, the District Court should require appropriate evidence to establish the value of any land which is ordered to be exchanged. The case is remanded for further proceedings consistent with this opinion. We concur: S'\

September 8, 1983

28c4c6bb-3209-43bd-b05f-62c47fd905a6

LAZETICH v MILLER

N/A

82-295

Montana

Montana Supreme Court

No. 82-295 I N T H E SUPREME COURT O F TEE STATE O F MONTAP*JA 1983 MILANA LAZETICH, PETER LAZETICH and WILLIAM LAZETICH, P l a i n t i f f s and Respondents, LUCILLE MILLER and LORRAINE DALTON, e t a l . , Defendants and Appellants. APPEAL FROM: District Court o f t h e Third J u d i c i a l D i s t r i c t , I n and f o r t h e County of Deer Lodge, The Honorable Douglas G. Harkin, Judge p r e s i d i n g . COUNSEL OF RECORD: For Appellants: Donald G a r r i t y ; G a r r i t y , Keegan & Brown, Helena, Montana For Respondents: Moses Law Firm; Michael Moses, B i l l i n g s , Montana Submitted on B r i e f s : March 4 , 1983 Decided: October 12, 1983 Filed: Q&fT 1 2 7 9 8 3 Mr. Justice Fred J. Weber delivered the Opinion of the Court. Plaintiffs brought this action against the personal representatives of the estate of Mary Lazetich to enforce an oral agreement not to revoke the provisions of a will disposing of family corporation stock. The Third Judicial District Court, Deer Lodge County, ordered enforcement of the agreement, and defendants appeal. We affirm. The issue on appeal is whether there is sufficient evidence to establish that Mary Lazetich orally contracted not to revoke the provision of her May 2, 1966 will directing the disposition of family corporation stock. The dispute involves shares of stock in Lazetich & Sons, a closely-held family corporation. Peter and Mary Lazetich, husband and wife, each owned a one-sixth interest in the stock of the corporation in early 1966. On May 2, 1966, they executed mutual wills with clauses providing that the stock woilld pass to the surviving spouse. Upon the death of the surviving spouse, it would pass to three sons and one grandson, share and share alike. The provision from the will of Mary Lazetich was as follows: "My husband, PETER LAZETICH, has made and executed a Last Will and Testament, the same date as my Will, and in this Will he has provided that his undivided one-sixth of said stock in said corporation [Lazetich & Sons] will go to me in the event he dies before I do. Upon the death of the survivor of myself or husband, the one-third interest that we own in said stock is given and bequeathed to my son, MILAN LAZETICH, to my son, ELI LAZETICH, to my son WILLIAM LAZETICH, and to my grandson PETER LAZETICH, son of WILLIAM LAZETICH, share and share alike." Peter Lazetich predeceased his wife and his May 2, 1966 will was admitted to probate. His undivided one-sixth interest the Lazetich Sons corporate stock was distributed to his wife, Mary Lazetich. In the 1970s Mary Lazetich executed two more wills, the last on November 28, 1978. Upon Mary's death, the November 28, 1978 will was admitted to probate. It did not bequeath the Lazetich & Sons corporate stock in the manner provided in the May 2, 1966 will. The plaintiffs filed claims against the Mary Lazetich estate alleging they were entitled to the one-third stock interest in Lazetich & Sons. Plaintiffs claimed that Peter and Mary Lazetich had entered into an oral contract not to revoke that portion of their mutual 1966 wills relating to the distribution of Lazetich & Sons stock. The defendant personal representatives disallowed the claims of the plaintiffs and this lawsuit followed. The case was heard by the District Court without a jury. Extensive findings of fact and conclusions of law were prepared by the District Court. The attorney who prepared the May 2, 1966 will also prepared the November 28, 1978 will of Mary Lazetich. He was the primary witness at the trial. The findings of the District Court in regard to his testimony are substantially as follows. Previous to execution of the mutual wills and in the presence of their attorney, Mary and Peter Lazetich agreed that upon the death of both parties, their one-third interest in Lazetich & Sons corporate stock would be distributed between their sons and one grandson, share and share alike. Pursuant to that agreement, mutual wills were drawn for Peter and Mary Lazetich and executed on May 2, 1966. When the attorney prepared the November 28, 1978 will for Mary Lazetich, he had forgotten about the May 2, 1966 will. The District Court also found as follows: "Peter and Mary Lazetich were very fond of each other before, on and after May 2, 1966, and they pledged that they would not change their Wills. "There is no evidence that the agreement between Mary and Peter Lazetich was induced by duress, menace, fraud, undue influence or mistake." The District Court's conclusions of law stated that Peter and Mary Lazetich had agreed that upon the death of the first of them the one-sixth stock ownership would pass to the survivor. Upon the death of the survivor, the total one-third stock interest would pass to the designated sons and grandson, share and share alike. In consideration of that agreement, the mutual wills were executed. Based upon these findings and conclusions, the District Court ordered the personal representatives to distribute the stock of Lazetich & Sons in accordance with the May 2, 1966 will. Agreements not to revoke wills are specifically addressed by the Montana Uniform Probate Code (UPC). Section 72-2-105, MCA provides: "(1) A contract . . . not to revoke a will or devise . . . if executed after July 1, 1975, can be established only by: (a) Provisions of a will stating material provisions of the contract; (b) An express reference in a will to a contract and extrinsic evidence proving the terms of the contract; or (c) A writing signed by the decedent evidencing the contract. (2) The execution of . . . mutual wills does not create a presumption of a contract not to revoke the . . . wills." Because the alleged contract was entered into in 1966, the provisions of the UPC do not apply. It is clear that prior to the adoption of the Montana UPC a person could make a valid oral contract to dispose of her property by will. In Conitz v. Walker (1975), 168 Mont. 238, 244, 541 P.2d 1028, 1031, this Court stated: "It is clear that in Montana a person may make a valid contract to dispose of his property by will. Erwin v . Mark, 105 Mont. 361, 73 P.2d 537. - - "This Court in Rowe v . Eggum, 107 Mont. 378, 87 - - P.2d 189, enforced an oral agreement of a decedent not to change a will made in favor of the plaintiff. "The rule of law in Montana is that proof of an oral contract by a deceased to leave property by will: " ' * * * must be clear, cogent, and convincing, and that the making of such an oral contract or agreement must be established by disinterested witnesses. ' - - Cox v. Williamson, 124 Mont. 512, 227 P.2d 614." In Conitz, as here, one party argued there was sufficient evidence to find a contract while the other party argued there was no such evidence and that the contract was "pulled out of the air." In holding that there was such a contract, the Court stated: "Perhaps each item of evidence above standing by itself does not establish a contract between Edward and Leona to make mutual will[s] leaving their property to the other. However, viewed as a whole this Court finds that the oral contract between Leona and Edward has been established in this case by clear, cogent and convincing evidence and by the testimony of disinterested witnesses . 11 . . Conitz, 168 Mont. at 245, 541 P.2d at 1031. The basic rule was restated more strongly in Craddock v. Berryman (1982) , Mont . , 645 P.2d 399, 402, 39 St.Rep. 835, 837. There we stated that "contracts to make wills are looked upon with disfavor because the other contracting party is dead and cannot affirm or deny the making of the contract. The law, therefore, requires clear and convincing evidence." Further, this Court emphasized that it would not "substitute its judgment for that of the lower court on factual issues if there is credible evidence to support the court's findings." Craddock, 645 P.2d at 402, 39 St.Rep. at 838, citing Kearns v. McIntyre Construction Co. (1977), 173 Mont. 239, 567 P.2d 433. There is no significant disagreement between the parties as to the law. However, the defendants contend there is not sufficient evidence to establish that Mary Lazetich orally contracted not to revoke the provisions of her May 2, 1966 will directing the disposition of family corporation stock. In essence, the defendants attack the sufficiency of the testimony of the attorney who prepared the wills in question. The defendants contend that the testimony sets forth only the attorney's conclusion that there was -- in law an agreement between Peter Lazetich and Mary Lazetich, rather than establishing that there was -- in fact such an agreement. On redirect examination, the attorney-witness testified as follows: " Q . . . . [I] n your discussions with Mary and Peter Lazetich prior to the mutual wills, did they freely and mutually between themselves consent and enter into an agreement as to how the shares of stock of Lazetich and Sons, which they held, would be distributed at not only the first one to die but the second one to die? "A. Yes, they had a very specific agreement and they were totally in accord with one another. "Q. Is that agreement as evidenced by their wills of May 2, 1966? "A. Without any question in my mind." On cross examination the attorney-witness testified regarding the question of revocation: "Q. Did you advise them that upon the death of either of them that these wills could not be changed? "A. They understood that. They said that's the way they wanted it to be and pledged that to each other in my presence. "Q. Could you tell us exactly what was said? "A. Did I tell them what? "Q. Could you tell me exactly what was said at that time? "A. There was no question about the fact that they knew this was binding upon each one. They each wanted what the other wanted and as to those two individuals, there was no question as to the fact they would live up to their promises to one another. "Q. You have the well deserved reputation of being a careful lawyer. "A. I like to think I'm a careful lawyer, yes, sir. "Q. You did not specifically point out that upon the death of one, these wills could not be revoked? "A. That was discussed, Mr. Garrity, with both of them and this is what they wanted'. "Q. Why didn't you put it in the will? "A. Why not? It wasn't necessary. I made mutual wills and I don't think that is necessary if the people understand them." The defendants also question the foregoing testimony as being inconsistent with the subsequent drafting of wills for Mary Lazetich which changed the dispositive scheme for the stock. The attorney explained as follows on cross- examination: "Q. And at the time you prepared those wills, were you under the impression that the May 2nd, 1 9 6 6 will of Mary Lazetich was irrevocable? "A. At the time I prepared those wills, I did not have those wills in mind. I was busy in trial practice. I never considered it. I never keep copies of wills in my office. Mary Lazetich was a personal friend of mine. I knew she was having trouble with Eli Lazetich, her son, and I just did it without any special type of consultation with her whatsoever. I may have talked with her for five or ten minutes at the most. "Q. You didn't inquire as to whether she had a will in existence at that time? "A. No, I did not inquire, sir. "Q. You didn't review any previous wills? "A. No, I did not review any previous will. Had I reviewed the previous will, I would have advised her not to make any type of change and under those circumstances I would not have prepared another will for her." Following direct and cross-examination of the attorney, the court inquired as follows: "Q. . . . [Dl o you have a fairly good independent recall of the circumstances existing at the time the 1 9 6 6 will was prepared? "A. Yes, I do. I might say, Your Honor, I've never made up many mutual wills and for that reason I do have an independent recollection of that transaction. "Q. Would you tell me what you can recall concerning the conversations that occurred, I assume in your office, regarding their expectations as far as what would happen with their estate when one would die and what would happen to that estate, what would happen upon the death of the other? "A. Your Honor, I looked at the copies of the two wills. I think their expectations were certainly in conformity with the language of the two documents. They were very close to one another. When they would visit with me, it was more on a -- I suppose a friendship basis than a technical professional basis. And we would sit and visit and enjoy each other's company. They would talk about things. They were proud of what they had accumulated and proud of their family and I was proud of their friendship. I would say there was no formal technical discussion that you might have under certain situations. "Q. You have no notes of the conversations you may have had with them at the time the wills were originally discussed or prepared in 1966? "A. I do not. My method of operation in my practice has been to make notes and I then dictate the will. The will is returned to me, the clients brought in and they look everything over. If they agree, then the notes are discarded or destroyed. As a matter of fact, I still practice that way." This was the essential testimony concerning the existence of the contract between Mary and Peter Lazetich. It is also important to consider the wording of the will of Mary Lazetich, which stated that her husband had executed his will on the same date and which contained the same provision regarding disposition of the stock. While not sufficient in itself to show an agreement not to revoke, this is strong confirmatory proof that such an agreement was made. In Rowe v. Eggum (1938), 107 Mont. 378, 390, 87 P.2d 189, 193, this Court stated: "Where a will is executed in conformity with the alleged oral agreement, it is regarded as strong confirmatory proof that such an agreement was entered into, and the same degree of convincing evidence is not required as where no such will was made. (Worden - v. Worden, 9 6 Wash. 592, 1 6 5 Pac. 501. ) " It is true that the testimony by the attorney-witness does not set forth exactly what was said by Mary and Peter Lazetich. But it is reasonable that without notes the attorney could not recall the specific statements or conversations after a lapse of more than fifteen years. Considering the testimony and the wording of the will itself, we hold that there is sufficient credible evidence to support the District Court's findings and conclusion. We therefore We concur: 4 , w * 4 Chief Justice Justices Justice Morrison deems himself disqualified and did not participate in this decision. Mr. Justice Daniel J. Shea, dissenting: I dissent. I do not believe the testimony of the attorney established the existence of an oral contract not to revoke dispositive provisions of mutual wills by clear, cogent and convincing evid.ence. We recognized oral contracts not to revoke a will before adopting the Montana Uniform Probate Code. Sanger v. Huguenel (1922), 65 Mont. 236, 211 P. 349. However, we have consistently regarded them with disfavor and require proof by clear, cogent and convincing evidence established by the testimony of disinterested witnesses. Other jurisdictions have defined clear and convincing: "Clear and convincing means simply that witnesses to a fact must be found credible; facts to which witnesses testify must be distinctly remembered, details must be narrated exactly and in order, testimony must be clear and direct and weighty and witnesses must be lacking in confusion as to facts at issue. " Schulte v. Franklin (1981), 6 Kan.App.2d 651, 633 P.2d 1151. "The phrase 'clear and convincing' characterizing evidence required to support an oral contract for a devise or legacy serves as a strong a.dmonition to the trier of fact to bear in mind that the deceased is not available and that those supporting the claim are limited only by their own conscience and practiced eye and ear of the trial judge." Edwards v. Sentell (Ala. 19681, 208 So.2d 914. By either of these definitions, the evidence fails to meet the sta.ndard. The trial court refused to grant summary judgment for either party because of concern for the conclusory statements in the drafting attorney's affidavit. The affidavit provides no factual basis to support the assertion of an agreement between Mary and Peter Lazetich not to revoke dispositive provisions of their mutual wills. The hearing failed to resolve the question of exactly what was said nor did it resolve the question of why the attorney prepared and witnessed the later will knowing it was contrary to alleged oral contract. The attorney's testimony at the hearing did not provide clear and convincing answers to these questions. His best answer to the question of exactly what was said was to reply, " [tlhey understood that (the wills could not be changed). They said that's the way they wanted it to be and pledged that to each other in my presence. " The attorney was asked about the agreement several times, and his replies varied in degree of uncertainty. He never made a clear and convincing response to the questions of exactly what was said. Although the attorney's testimony may show some kind of past intention of the parties, it still falls short of clear and convincing evid-ence of the mutual assumption of a contract obligation. The trial judge's finding that an oral agreement was made leaves open the question of the exact terms of the agreement. Although the trial judge enforced only a single clause of Mary Lazetich's 1966 will, we do not know whether the agreement not to revoke was exclusive to justify that provision of the will, or whether she had contracted not to revoke the entire will. An agreement not to revoke the entire will would be unenforceable because no copy of the 1966 will has produced at trial. We have only a single clause of that will as part of the trial and appellate record. In fact, a fair inference from the attorney's testimony (quoted in the majority opinion) is that the entire will was considered irrevocable rather than the one clause at issue here. If this is so, failure to produce full copies of the 1966 will would be fatal to the plaintiffs' case. The attorney testified that he had no notes of his conversations with Peter and Mary Lazetich at the time the wills were discussed and prepared in 1966. He testified from memory that Lazetichs had a specific agreement and were totally in accord with one another. But that testimony is inconsistent with the fact that he personally drafted and witnessed one of Mary Lazetich's later wills. This will changed the dispositive scheme and revoked her 1966 will. A valid oral contract not to revoke the 1966 will would invalidate the later will, yet the attorney prepared and witnessed the will. The attorney did not distinctly remember facts, the details were not exact and in order, and the testimony was not clear and direct. I remain unconvinced that the evidence meets the standard of clear, cogent and convincing. I would rule as a matter of law the evidence is insufficient to establish an oral contract between Mary and Peter Lazetich not to revoke the provision of their 1966 mutual will distributing their stock in the family corporation. I would reverse the trial court.

October 12, 1983

ea2d0036-f8af-4959-b409-f19447cc4043

Sealey v. Majerus

149 Mont. 268, 425 P.2d 70

11232

Montana

Montana Supreme Court

425 P.2d 70 (1967) 149 Mont. 268 Lawrence SEALEY, d/b/a Sealey's Sawmill, plaintiff and respondent, v. Donald W. MAJERUS and Broadmoor Corporation, Defendants and Appellants. No. 11232. Supreme Court of Montana. Submitted February 9, 1967. Decided March 14, 1967. Craig Derry (argued), Billings, for appellants. Thomas M. Ask, Floyd A. Brower (argued), Roundup, for respondent. JAMES T. HARRISON Chief Justice. This is an appeal by defendants from a judgment by default entered against them on September 16, 1966. The plaintiff-respondent is Lawrence Sealey, doing business as Sealey's Sawmill, and will be referred to as plaintiff. The defendants-appellants are Donald W. Majerus and Broadmoor Corporation, a corporation, and will be referred to as defendants. The defendants make five specifications of error. The fifth specification, dealing with the court's order denying the motion for change of venue, is not properly before this court because a timely appeal was not made from that order. Rules 1(b) and 2, M.R.App.Civ.P. The issue presented by this appeal is whether the clerk of the district court was in error in making the entry of default. The facts are these: Plaintiff's complaint was filed on April 19, 1966. Defendants made appearance on May 5, 1966, by making a motion for change of venue, which was denied by the district court on May 12, 1966, and on June 6, 1966, another appearance by making a motion to dismiss, which was denied by the district court on July 1, 1966. Under Rule 12(a), M.R. Civ.P., the defendants had twenty days from July 1, 1966, in which to serve and file a responsive pleading. On the 4th or 5th day of August, 1966, plaintiff's attorney called the attorney for defendants. He informed defendants' attorney that defendants' answer were already two weeks late and that he would enter *71 default in the action if he did not hear from defendants' attorney by Monday, August 8, 1966. No word or answer was received from defendants' attorney by Tuesday, August 9, 1966, on which day, plaintiff's attorney took the following steps: (1) Pursuant to Rule 55(a), he caused entry of default to be entered by the clerk of the district court; and (2) pursuant to Rule 55(b) (2), he filed a notice of motion for default judgment and served a copy of this notice on defendants' attorney by mail. The notice set the day for hearing the motion for default judgment as August 17, 1966. On August 15, 1966, defendants filed answers. The hearing on the motion for default judgment was held by the district court on August 19, 1966, since the district judge was out of town on August 17, 1966. On August 26, 1966, defendants filed an affidavit of disqualification and on August 29, 1966, defendants filed a motion to set aside the default. On September 16, 1966, Judge LeRoy L. McKinnon, who had assumed jurisdiction of the action, held a hearing on the motion to set aside the default, denied the motion, and entered judgment for the plaintiff. Defendants' contentions can be summarized in this manner: (1) Since defendants made appearances by their motions for change of venue and to dismiss, entry of default by the clerk of the district court cannot be made without three days notice to defendants. (2) Answers were filed prior to the hearing on the motion for default judgment, and thus, defendants were not in default at the time of the entry of the judgment by default. (3) Since the entry of default by the clerk was improper, the district court could not take any action on plaintiff's motion for default judgment. Defendants' contentions spring from defendants' misunderstanding of Rule 55 dealing with defaults. Therefore, we will set forth the relevant portions of Rule 55: "(a) Entry. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter his default. "(b) Judgment. Judgment by default may be entered as follows: * * * "(2) By the court. * * * If the party against whom judgment by default is sought has appeared in the action, he (or, if appearing by representative, his representative) shall be served with written notice of the application for judgment at least three days prior to the hearing on such application. * * * "(c) Default; Setting Aside * * * For good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b). * * * In any case if a party in default shall serve and file his appearance, motion, pleading or proceeding prior to application to the clerk for default, then such defaulting party shall not thereafter be considered in default as to that particular appearance, motion, pleading, or proceeding. Thus, under Rule 55, entry of default by the clerk and entry of judgment by default by the district court are two distinctly different acts. Reference to Rule 55(a) clearly points out the error in defendants' contentions 1 and 3. Entry of default by the clerk requires no notice to the party in default. Entry of default IS NOT a judgment. It is only a step in the process of securing judgment by default. Defendants' contention 2 is likewise without merit. Their answers were not filed until they had received notice of plaintiff's motion for default judgment. The provisions of Rule 55(b) (2) would be useless if defendants could remain in default as long as they desired and then prevent the judgment by *72 default by merely filing the proper pleading in the period between the notice and the hearing on the motion for judgment by default. Defendants were given the opportunity to appear at the hearing on the motion for judgment by default and to resist such motion. Under Rule 55(c) defendants were entitled to move to set aside the entry of default for "good cause shown" and to move to set aside the judgment by default under Rule 60(b). Defendants' brief is directed almost entirely to the erroneous contentions that entry of default by the clerk in this case was error. They have offered to this court no other reason why the district court was in error in granting the judgment by default. We have examined each of the specifications of error and find them to be without merit. The judgment appealed from is affirmed. ADAIR, DOYLE, JOHN C. HARRISON and CASTLES JJ., concur.

March 14, 1967

107587f1-1fa4-40b1-ab79-86ba450f4891

MARRIAGE OF C C W

N/A

83-109

Montana

Montana Supreme Court

140. 53-109 IN THE SUPREME COURT O F THE STATE O F MO>ITANA 1983 IN RE THE MARRIAGE O F C.C.W., P e t i t i o n e r and Appellant, and H.M.W., Respondent and Respondent. APPEAL FROM: D i s t r i c t Court o f t h e T h i r t e e n t h J u d i c i a l District, I n and f o r t h e County of Yellowstone, The Honorable William J. Speare, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Keefer, Roybal, Hanson, Stacey & J a r u s s i ; Calvin J. Stacey, B i l l i n g s , Montana For Xespondent: Craig R. Buehler, Lewistown, Montana Zones, Jones & Work, B i l l i n g s , Montana Submitted on B r i e f s : June 30, 1983 Decided: September 8 , 1983 F i l e d : SEP 8 - 1983 Mr. Justice Fred J. Weber delivered the Opinion of the Court. C.C.W. (mother) appeals from the modification award of the District Court of Yellowstone County granting custody of three minor children to H.M.W. (father). Inititally pursuant to agreement, custody of the children had been awarded to the mother. We affirm the District Court. The marriage between husband and wife was terminated by decree of dissolution dated October 18, 1976, incorporating the separation agreement of the husband and wife. Custody of the three minor children, together with a fourth child not involved in this proceeding, was awarded to the mother with reasonable visitation rights to the father. In August 1980, the father filed a motion with the District Court requesting modification of the custody arrangement. Hearing was held on March 12, 1981, a.nd the testimony of a number of witnesses was presented in behalf of both parties. The District Court entered its findings of fact and conclusions of law and determined that custody of the three minor children should be placed with the father. The determination of the District Court was appealed to this Court, which remanded the case to the District Court for the entry of findings of fact sufficient to resolve the conflicts in the evidence. Amended findings of fact and conclusions of law were entered by the District Court on January 18, 1983, based upon the evidence originally submitted in March 1981. The issues are: (1) Did the evidence establish the change in circumstances required under section 40-4-219, MCA? (2) Did the evidence establish that the environment with the mother seriously endangered the physical, mental, moral or emotional health of the children as required under section 40-4-219, MCA? Counsel for mother presents an extensive review of the testimony submitted in behalf of both the mother and the father. In doing so, counsel emphasizes that the witnesses testifying for the mother contradicted the witnesses testifying for the father on a great many essentials necessary to prove the father's case. Because of the conflict in the testimony, mother's counsel suggests that there has been a failure to show the change in circumstances required for jurisdiction. We agree there are many conflicts in the testimony, but disagree with the conclusion on the part of counsel. The standard of review of the evidence by this Court is stated in Jensen v. Jensen (19811, Mont., 629 P.2d 765, 768, "This Court will not substitute its judgment for that of the trier of fact. We will consider only whether substantial credible evidence supports the findings and conclusions. Findings will not be overturned unless there is a clear preponderance of evidence against them, recognizing that evidence may be weak or conflicting, yet still support the findings." The same limited standard of review is set forth in Nicolai v. Nicolai (1981), Mont., 631 P.2d 300, 303, 38 St.Rep. 1100, 1103, where we pointed out that findings of a district court may not be set aside unless they are clearly erroneous under Rule 52 (a) , M.R.Civ.P. We consider only whether substantial credible evidence supports the findings and will not overturn the findings unless there is a clear preponderance of evidence against them. "The trial court's decision concerning child custody will not be disturbed unless there is a clear abuse of discretion." In Re Marriage of McLean (1980), Mont., 609 P.2d 282, 284, 37 St.Rep. 589, 591. The challenged findings of fact are: Since the entry of the prior decree, changes have occurred in the circumstances of the mother in that she does not properly care for the children. The children have been inadequately provided with clothing, endangering their physical health, including not having proper shoes and coats in the winter. The children's emotional, moral and mental health has been endangered by the mother's constant association with several different violent, alcoholic males. VII. The children's physical health is threatened by the lack of cleanliness in the home as well as the mother's failure to keep the children and their clothing clean. VIII. The mother's failure to adequately supervise the children in personal hygiene has resulted in severe tooth decay and other health problems." In addition, the District Court found that the father and his present wife desire the custody of the children and have a stable and comfortable environment. The first issue is whether the evidence established the change in circumstances required under section 40-4-219, MCA. While the findings are not detailed, a significant change is noted in that the mother does not properly care for the children and has inadequately provided them with clothing, endangering their physical health. In addition, change is shown in that the emotional, moral and mental health of the children has been endangered because of the mother's constant association with several different violent, alcoholic males. Last, the lack of cleanliness is an indication of a change from the original agreed capacity of the mother. Considered together, these findings, if supported by the evidence, are sufficient to meet the statutory requirement of change in circumstances. The second issue is whether the present environment endangers the physical, mental, moral or emotional health of the children. Again, while the findings are not detailed, they do contain sufficient facts upon which to base the conclusion reached by the District Court if there is sufficient evidence in the record to sustain the findings. While the record does show contradictory testimony by a number of the witnesses testifying for the mother as compared to the father, it is important to consider the testimony and report of the Yellowstone County social worker involved in this case. She had approximately 15 years of experience. She conducted five personal interviews with the mother, three interviews with the father, interviews with approximately ten of the persons in the schools attended by the minor children, interviews with the family dentist and family doctor, an interview with the counselor who knew both parties, and an interview with personnel in the Sheriff's Department. She was aware that modification of custody could be made only after a showing that the physical, mental, moral or emotional health of the children would be harmed and that the harm caused by the change of environment should be outweighed by the advantages of the change. She prepared a comprehensive and well documented nine-page report and testified extensively on both direct and cross-examination. Her report and testimony clearly established that there had been a change in the circumstances of the mother and that there was a factual basis for findings VI, VII and VIII of the District Court. Her conclusion was that a modification of custody was proper. She recommended that the custody of the three children be changed from the mother to the father. While some parts of the testimony of other witnesses for the father were contradicted in part, there is more than sufficient evidence to establish a factual basis for findings IV and V, that the children lacked proper care and had been inadequately provided with clothing, endangering their physical health. We emphasize the evidence on the part of the social worker because much of her testimony is uncontradicted and forms a solid base for the conclusions reached by the District Court. We need not review the balance of the evidence most favorable to the father. We only point out that there is substantial evidence to support the contentions of the father and the social worker, as well as to support the District Court's findings. Even though parts of that testimony are contradicted by other testimony on the part of the mother, we emphasize that the credibility and weight of such conflicting evidence is within the province of the trier of fact. Matter of Custody of R.L.S. (1981), Mont., 632 P.2d 703, 706, 38 St.Rep. 1328, 1332, citing Rankin v. Ferriter (1969), 76 Wash.2d 533, 537, 458 P.2d 176, 179. We conclude there is substantial evidence to establish a change in circumstances of the children and their custodian, and that the children's environment with the mother seriously endangered their physical, mental, moral or emotional health. We affirm the District Court. We concur: %& & , Q d L 4 @ Chief Justice

September 8, 1983

27b643d4-6487-4e04-bbd3-b82d11460917

LACKEY v WILSON

N/A

83-156

Montana

Montana Supreme Court

No. 83-156 IN THE SUPREME COURT O F TIIE STATE OF M O N T A N A 1953 PAUL L A C K E Y and PHYLLIS LACKEY, P l a i n t i f f s and Appellants, -vs- TONI (NASH) WILSON, Defendant and Kespondent . APFEAL FROM: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Missoula, The Honorable Jack L. Green, Judge p r e s i d i n g . COUNSEL O F RECORD: For Apgellants: Noel K. L a r r i v e e , Missoula, Montana For Respondent: Richard Ranney, Williams Law F i r m , Missoula, Montana Submitted on B r i e f s : May 19, 1983 Decided: September 2 , 1953 C; E P 2 .- 7983 F i l e d : - - . -- Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. This is an appeal from a judgment for plaintiffs in the amount of $795.00, following a special verdict of a six-person jury in the District Court of the Fourth Judicial District of Montana, finding the plaintiff, Phyllis Lackey, guilty of 50% contributory negligence. We affirm the judgment. The sole issue presented on appeal is the sufficiency of the evidence to support the jury's finding of 50% contributory negligence on the part of Mrs. Lackey. This action arose as a result of a collision between vehicles driven by plaintiff Phyllis Lackey and defendant Toni Nash. The accident occurred on Monday morning, July 21, 1980 on Highway 10 West approximately four miles west of Missoula at an unmarked, uncontrolled intersection. The road was straight, flat and dry. The weather was clear. Plaintiff and defendant were traveling in opposite directions on a two-lane highway without left turn lanes. Defendant had stopped at the intersection with her left turn indicator on. A white truck was in front of plaintiff's car and across the intersection from defendant. The truck's left turn indicator signaled. Defendant waited, allowed a car to pass the white truck, then eased into the intersection. She testified that the man in the truck waved his hand indicating to her that she could proceed with her left turn. She eased out slowly, and the next thing she remembered was waking up after the collision. Defendant was cited for and plead guilty to "failing to yield when making a left turn." Plaintiff was traveling at approximately 50 miles per hour at the time of the accident and intended to pass the white truck on the right. Plaintiff testified that the roadway was wide enough for her to pass the truck without leaving the pavement. She further testified that she slowed from 55 to 45 or 50 miles per hour as she approached the intersection; that the white truck in front of her blocked her view of oncoming traffic "at one certain point;" and that she first saw defendant's car as it started to cross into her lane of traffic. Plaintiff admitted she saw defendant's left turn indicator on. The cars struck each other in plaintiff's lane of traffic. The highway patrolman who investigated the accident could not tell which vehicle entered the intersection first. He testified that plaintiff was traveling "at about 50 miles an hour at impact." The speed limit was 55 miles per hour. No motion for a directed verdict was made. Plaintiff allowed the question of her comparable negligence to be submitted to the jury and decided on a special verdict form. Plaintiff's post-trial motion for a new trial, on the ground of insufficiency of the evidence, was denied. The standard for review of sufficiency of the evidence is whether there is substantial evidence to support the jury's verdict. As set forth in Gunnels v. Hoyt (1981), Mont . , 633 P.2d 1187, 1191, 38 St.Rep. 1492, 1495, appellate review of the evidence is governed by the following well-established legal principles: " . . . In considering the sufficiency of evidence, we apply a limited standard of review. Where a fact issue is presented before a court sitting with a jury, and there is substantial evidence to support the jury verdict, the verdict will stand. Matter of Estate of Holm (1979), Mont., 588 P.2d 531, 533, - -- 36 St.Rep. 11, 13 (and cases cited therein). "We review the evidence in a light most favorable to the prevailing party. We will reverse only where there is a lack of substantial evidence to support the judgment. Groundwater v. Wright (1979), Mont., 588 P.2d 1003, 1004, 36 S ~ R ~ P . 41, 42; Holm, 588 P.2d 532, 36 St.Rep. 14. "Evidence may be inherently weak and still be deemed substantial, and substantial evidence may conflict with other evidence. Matter of Estate of - - Holm, supra. "If there is conflicting evidence in the record, the credibility and weight given to such conflicting evidence is the province of the jury and not this Court. Holm; In Re Carroll's Estate (1921), 59 Mont. 403, 4 1 3 , 1 9 7 ~ 7 9 9 6 , 998. "If there is substantial evidence in the record to support the finding of the jury, then we must sustain the trial court's action in denying the plaintiff's motions for a directed verdict. Butler Manufacturinq Co. v. J & L Implement Co. - (1975), 167 Mont. 5 1 9 , 5 2 9 , 545 P.2d 962, 9 6 8 . " In addition, this Court has recognized the constitutional sanctity of jury verdicts. "Motions to set aside jury verdicts as not supported by the evidence are proper only when there is a complete absence of any credible evidence in support of the verdict. All evidence and all inferences drawn therefrom must be considered in a light most favorable to the adverse party. The courts will exercise the greatest self-restraint in interfering with the constitutionally mandated processes of jury decision. l1 Barmeyer v. Montana Power Co. (1983) , Mont . , 657 P.2d 594, 597, 40 St.Rep. 23, 25, citing Jacques v. Montana Nat. Guard (1982), Mont . , 649 P.2d 1319, 1325-1326, 39 St.Rep. 1565, 1573-1574. The jury was instructed as to both parties1 obligations in left turn situations. Jury instruction No. 11 is identical to section 61-8-340, MCA, which provides: "The driver of a vehicle within an intersection intending to turn to the left shall yield the right-of-way to any vehicle approaching from the opposite direction which is within the intersection or so close thereto as to constitute an immediate hazard, but said driver, having so yielded and having given a signal when and as required by this chapter, may make such left turn and the drivers of all other vehicles approaching the intersection from said opposite direction shall yield the right-of-way to the vehicle making the left turn. The provisions of this section shall not be applicable where it is otherwise directed by appropriate signs or signals." The jury was further instructed that all drivers must proceed : ' I . . .in a careful and prudent manner, and at a rate of speed no greater than is reasonable and proper under the conditions existing at the point of operation, taking into account the amount and character of traffic. . .and freedom of obstructions of view ahead.. . . " - - Jury Instruction No. 9 (emphasis added). Jury Instruction No. 10 defined each driver's duty to maintain a lookout for oncoming traffic: "A motorist approaching an intersection is under a duty to be vigilant and to have his vehicle under such control as to be able to stop at the shortest possible notice. The mere fact that a motorist has the right-of-way over another at an intersection does not relieve the motorist thus favored from the duty of exercising reasonable care not to collide with other vehicles. It is especially true where the motorist's view is obstructed by a physical obstacle. The fact that a motorist has the right-of-way at an intersection does not excuse heedless or reckless conduct on his part or exempt him from the duty of keeping a lookout for motorists entering the intersection." Plaintiff argues that defendant's failure to yield at the intersection was the sole cause of the accident. She cites Thibaudeau v. Uglum (1982), Mont . , 653 P.2d 855, 39 St.Rep. 2096 as authority for the position that she had a right to rely on her right-of-way in the intersection. Plaintiff asserts that pleading guilty to the citation for failure to yield conclusively established defendant's culpability for the accident. In Thibaudeau, the drivers approached an intersection from perpendicular directions. Conflicting testimony raised a factual issue for the jury to decide whether defendant entered the intersection first, according him the right-of-way, or whether the vehicles entered the intersection at approximately the same time thereby giving plaintiff the right-of-way. The evidence also raised a jury question as to whether each driver had maintained a proper lookout. We held that a directed verdict is improperly awarded where such conflicts of material fact exist. In a special concurrence, Justice Sheehy concluded that plaintiff, as the driver on the right approaching an intersection at approximately the same time as defendant approached from the left, was correct in assuming the driver to the left would respect his right-of-way. Justice Sheehy reasoned that such reliance was reasonable since: "Whether plaintiff first saw the defendant's vehicle when he was a car length away, 30 feet away, or 50 feet away from the other vehicle, nothing in this record shows that an observation at any of those points would have led plaintiff to believe that the right of way would not be yielded to him in time for him to avoid the collision." Thibaudeau, 656 P.2d 222-223, 39 St.Rep. 2102F. In Thibaudeau, both parties saw the other before reaching the intersection. This case is distinguishable from Thibaudeau on the critical fact that Mrs. Lackey passed the truck in front of her, while traveling 50 miles per hour, even though the truck blocked her view of oncoming traffic and the intersection. The fact that one driver enjoys the right-of-way does not absolve that favored driver of maintaining a proper lookout for oncoming traffic. The speed at which plaintiff entered the intersection and the fact her view was obstructed at the time constitute sufficient evidence to support the jury's finding that plaintiff was guilty of 50% contributory negligence. The district court did not abuse its discretion in denying the motion for new trial. The judgment is affirmed. W e concur: Chief Justice Justices C/

September 2, 1983

5cbfc51f-2058-49d5-b3b9-6898b91d8e68

WELLMAN v WELLMAN

N/A

83-118

Montana

Montana Supreme Court

No. 83-115 Ill THE SUPREME COURT OF THE STATE OF MONTANA 1983 DALTON E. W E L L I b l A N and ANNA FJELLMATJ, husband and wife, Plaintiffs and Appellants, EDGAR G. WELLMAN and JOSIE WELLMAN, husband and wife, Defendants and Respondents. APPEAL FROM: District Court of the Eleventh Judicial District, In and for the County of Flathead, The Honorable Robert C. Sykes, Judge presiding. COUNSEL OF RECORD: For Appellants: E. Eugene Atherton, Kalispell, Montana For Respondents : Warden, Christiansen, Johnson & Berg; Gary R. Christiansen, Kalispell, Montana Submitted on Briefs: June 30, 1983 Decided : .-. 8 1983 Filed: SEP 8 - 1983 - Clerk Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Plaintiffs, the son and daughter-in-law of d.efend.ant, Edgar G. Wellman (deceased) appeal from a judgment issued by the District Court of the Eleventh Judicial District, Flathead County, dismissing their action for an accounting of certain properties owned by both parties. In Wellman v. Wellman (1982), Mont . , 643 P.2d - 573, 39 St.Rep. 752, we decided a similar action brought by the same plaintiffs a.gainst the same defendants. In the prior case, we decided that the plaintiffs1 action was barred by res judicata from a 1971 default judgment. Likewise, the District Court in the case at bar decided res judicata barred the plaintiffs1 present action. The District Court also held that the plaintiffs1 action was barred by the statute of limitations. In 1971, Edgar Wellman brought an action against his son and daughter-in-law to determine ownership of property held by two family corporations. Specifically, rights of ownership were determined to properties the parties refer to as (1) the Madhus property; ( 2 ) Isaac Walton Hotel; (3) Bearcreek Ranch; (4) air-strip property; and (5) Wellman Enterprises, Inc. property. A default judgment was entered against the son and daughter-in-law and a constructive trust was imposed upon the proceeds from the property until plaintiffs received the amounts due to them. The san and daughter-in-law brought a Rule 60(b) (1) motion to set aside the default judgment, which was denied by the court. The present action actually was commenced in Marion County, Oregon, on July 12, 1977. In that complaint the son and daughter-in-law sought an accounting of property interests that ha.d been determined in the 1971 action in addition to several other alleged ownership rights. On March 2, 1981, it was dismissed from the Oregon court by agreement of the parties with the stipulation that the son and daughter-in-law could bring the proceeding to Montana within 90 days (by June 13, 1981). The complaint was refiled in Montana on July 2, 1981. Defendants filed a motion to dismiss arguing the action was barred by res judicata. Meanwhile, this Court was deciding a similar case between the same parties. Wellman v. Wellman, supra. In that action, the plaintiffs had attempted to attack the 1971 defa.ult judgment, claiming the District Court had exceeded its jurisdiction by granting more relief than was sought in the pleadings. We affirmed the District Court determination that res judicata barred the plaintiffs1 action. The case at bar was held in abeyance by the District Court pending our decision in the previous action between the parties. Upon the issuance of our decision that action, defendants renewed their motion to dismiss. The District Court granted the motion stating that the plaintiffs1 action was barred for four reasons: (1) the action was not filed within the time stipulated by the parties in dismissing the Oregon action; (2) the 1971 decision is res judicata to all matters claimed by the plaintiffs; (3) the time allowed for bringing the action under the statute of limitations has expired; and, (4) the doctrine of laches. As a general proposition, we have held: "The doctrine of res judicata states that a final judgment on the merits by a court of competent jurisdiction is conclusive as to causes of action or issues thereby, as to the parties and their privies, in all other actions in the same or any other judicial tribunal or concurrent jurisdiction." Meagher Co. Water Dist. v. Walter (1976), 169 Mont. 358, 361, 547 P.2d 850, 852. The doctrine bars consideration of an action if four elements are present: (1) the subject matter of the action must be the same; (2) the parties or their privies must be the same; (3) the issues must be the same and relate to the same subject matter; and (4) the capacities of the persons must be the same in reference to the subject matter and to the issues between them. Brannon v. Lewis and Clark County (1963), 143 Mont. 200, 207, 387 P.2d 706, 711. Appellants argue that the issues and subject matter of this action are different from the 1971 action because they are claiming rights to property not considered in the 1971 action. Specifically, counsel for appellants asserts in his brief that this action concerns an accounting of proceeds from the disputed properties that the respondents acquired after 1977 and, thus, the doctrine of - res judicata is inapplicable. We hold that the doctrine of res judicata applies and appellants are barred from asserting their claim. This action is clearly an attempt to relitigate issues that were originally considered in the 1971 action. Although appellants argue that the case before us involves an accounting action for events occurring subsequent to July 12, 1977, their complaint does not support that assertion. Indeed, such a cause of action could not have arisen in 1977 since the 1971 judgment had yet to be satisfied. Moreover, the fact that appellants appear to name property not considered in the 1971 action does not preclude application of the doctrine of res judicata. The most important element in sustaining a plea of res judicata is identity of issues. Harris v. Harris (1980), - Mont . - I 616 P.2d 1099, 37 St.Rep. 1696. The 1971 action was for an accounting of properties in dispute between the two parties. Appellants had a full opportunity to litigate any claims they had at that time. Importantly, the doctrine of res judicata is founded upon the widely-recognized public policy that there must be some end to litigation. Wellman v. Wellman, supra. Also, it should be noted that appellants did not specifically indicate the dispute involved different property until the issue of res judicata was asserted by respondents. In addition, we hold that the statute of limitations bars appellants' cause of action. The statute of limitations applies to suits in equity and actions at law. Mantle v. Speculation Min. Co. (1903), 27 Mont. 473, 71 P. 665. Montana's statute in this regard is section 27-2-215, MCA, which provides: "An action for relief not otherwise provided for must be commenced within five years after the cause of action accrues." A cause of action "accrues" when the right to sue has become vested and appellant can show that another has wrongfully infringed upon his liberty or property. Bergin v. Temple (1941), 111 Mont. 539, 111 P.2d 286. Appellants state in their brief that they first became aware of business disputes with respondents upon their remarriage in 1970. The complaint was filed in Oregon seven years later. Moreover, in 1971, appellants did not resist the action brought by respondents for an accounting of the property in dispute. Clearly, the five year period began to run in either 1970 or 1971 and appellants are barred from bringing this action. Appellants' argument that they did not become aware of their cause of action until October 1978 or 1979 is without merit since they filed their action in 1977. In addition to the doctrine of res judicata and running of the statute of limitations, appellants' action is barred by the equitable doctrine of 1a.ches. The doctrine of laches was set forth at some length in Ril.ey v. Blacker (1915), 51 Mont. 364, 370, 371, 152 P. 758, 759, applied in Hynes v. Silver Prince Mining Co. (1929), 86 Mont. 10, 281 P. 548 and Montgomery v. Bank of Dillon (1943), 114 Mont. 395, 136 P.2d 760; and cited in Davis v. Steingruber (19571, 131 Mont. 468, 1 " " 0 311 P.2d 784 and Johnson v. Johnson (19771, 172 Mont. M I 561 "Laches, considered as a bar independent of the statute of limitations, is a concept of equity; it means negligence in the assertion of a right; it is the practical application of the maxim, 'Equity aids only the vigilant'; and it exists when there has been an unexplained delay of such duration or character as to render the enforcement of the asserted right inequitable . . . 'Considerations of public policy and the difficulty of doing justice between the parties are sufficient to warrant a court of equity in refusing to institute an investigation where the lapse of time in the assertion of the claim is such as to show inexcusable neglect on the part of the plaintiff, no matter how apparently just his claim may be; and this is particularly so where the relations of the parties have been materially altered in the meantime.' [Citing cases.] What constitutes a material change of condition has been the subject of much judicial discussion and some judicial dissension; but whatever doubt there may be as to other circumstances, it never has been questioned, to our knowledge, that the death of one of the parties to the transaction is such a change." For the above stated reasons, we affirm the judgment of the District Court. / Justice We concur: % & d l p s b d & Chief Justice

September 8, 1983

990646e6-a2c8-4b1f-b19a-cabacf81af47

HOEHNE v SHERRODD INC

N/A

82-510

Montana

Montana Supreme Court

NO. 82-510 I F J T H E SUPREME C O U R T O F T H E STATE OF MONTANA 1983 I N T H E M A T T E R O F T H E W A G E CLAIM O F PERCY H O E H N E , Claimant and Respondent, SHERRODD, IKC . , Appellant and Respondent. APPEAL F R O M : D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Yellowstone, The Honorable William J. Speare, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Towe, B a l l , Enright & Mackey; N e i l D. E n r i g h t , B i l l i n g s , Montana For Respondent : Radovich & Johnson; George Radovich, B i l l i n g s , Montana Paul Van T r i c h t , Dept. of Labor & I n d u s t r y , Helena, Montana F i l e d : Submitted on B r i e f s : June 2 , 1983 Decided: August 18,1983 Clerk Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Sherrodd, Inc., appeals the Yellowstone County District Court dismissal of its petition for judicial review of the Department of Labor and Industry ruling, awarding Percy Hoehne, respondent and former employee of Sherrodd, overtime compensation plus a penalty. We affirm. Sherrodd was in the business of providing heavy equipment and personnel to operate such equipment to various oil companies. Hoehne was employed by Sherrodd from May 1981 until January 1982 to operate heavy equipment at a rate of $10 per hour. During this period of time Hoehne was a Montana resident and Sherrodd was a Hontana corporation with its principal place of business in Montana. Hoehne sometimes worked in North Dakota but no actual records were kept indicating the amount of work done there. Hoehne claimed that he accumulated many overtime hours but was not paid the overtime rate for such hours. He filed a wage claim with the Labor Standards Division of the Montana Department of Labor and Industry and a hearing was held on June 22, 1982. On July 26, 1982, the Department ruled in Hoehne's favor, finding that he worked 349 overtime hours and awarded him $1,745 in compensated overtime. Further, he was awarded a penalty of $1,745 as the overtime wages had been due in excess of the statutory time period as set forth in section 39-3-206, MCA. Sherrodd timely filed a petition for judicial review of the Department's ruling in Yellowstone County District Court. The Department moved to dismiss the amended petition and on October 29, 1982, the District Court granted the motion on the basis of the agency record. Sherrodd brings t h i s a p p e a l and r a i s e s two i s s u e s f o r c o n s i d e r a t i o n : 1. Did t h e Commissioner of t h e Montana Department of Labor and I n d u s t r y have j u r i s d i c t i o n t o d e c i d e t h e wage c l a i m i n q u e s t i o n ? 2. Is t h e c l a i m a n t estopped from c l a i m i n g o v e r t i m e wages? Sherrodd f i r s t c o n t e n d s t h a t t h e Montana Department o f Labor and I n d u s t r y d i d n o t have j u r i s d i c t i o n t o r u l e on Hoehne's wage c l a i m a s he o f t e n worked i n North Dakota. F u r t h e r , t h e r e was no o f f i c i a l r e q u e s t from North Dakota a u t h o r i z i n g Montana t o p r o c e e d on H o e h n e ' s wage c l a i m p u r s u a n t t o s e c t i o n 39-3-305, MCA. The Department a s s e r t s t h a t it had j u r i s d i c t i o n t o e n f o r c e Montana laws w i t h r e s p e c t t o Hoehne's c l a i m because b o t h t h e employee and t h e employer were r e s i d e n t s o f Montana and S h e r r o d d ' s p r i n c i p a l p l a c e o f b u s i n e s s was w i t h i n Montana. F u r t h e r , t h e employment c o n t r a c t was e n t e r e d i n t o i n Montana and p a r t of t h e work i n q u e s t i o n was performed h e r e . The e m p l o y e r ' s r e c o r d s d i d n o t i n d i c a t e t h e amount o f work done i n each s t a t e . F i n a l l y , Sherrodd was s u b j e c t t o t h e F a i r Labor S t a n d a r d s Act of 1938 (FLSA) and t h e Depart- ment had c l e a r a u t h o r i t y t o e n f o r c e t h e f e d e r a l a c t . The Department of Labor and I n d u s t r y h a s a s t a t u t o r y d u t y t o e n f o r c e Montana wage l a w s a f f e c t i n g Montana c i t i z e n s . S e c t i o n 39-1-102, MCA. The Commissioner of Labor m u s t i n v e s t i g a t e v i o l a t i o n s o f Montana wage l a w s a n d i n s t i t u t e a c t i o n s f o r unpaid wages. S e c t i o n 39-3-209, MCA. The commissioner may t a k e assignments of wage c l a i m s i n t r u s t f o r t h e c l a i m a n t and m a i n t a i n any proceeding t o e n f o r c e such claim. S e c t i o n 39-3-211, MCA. The Department may a l s o e n f o r c e t h e p r o v i s i o n s of t h e FLSA, r e q u i r i n g minimum wages and o v e r t i m e pay. I n S t a t e v. Holman A v i a t i o n Co. ( 1 9 7 8 ) , 176 Mont. 31, 575 P.2d 923, t h i s C o u r t h e l d t h a t t h e Department may i n s t i t u t e a c i v i l a c t i o n on b e h a l f o f employees t o r e c o v e r unpaid o v e r t i m e wages due under t h e FLSA. W e s t a t e d : "The Montana D e p a r t m e n t o f L a b o r was a u t h o r i z e d by b o t h t h e Montana l e g i s l a - t u r e , through s e c t i o n 41-1314.2, R.C.M. (1947) [ s e c t i o n 39-3-202, 211, 2 1 4 ( 2 ) ( 3 ) , MCA], and by t h e United S t a t e s Congress, through t h e FLSA and 29 CFR 515.8, t o i n s t i t u t e c i v i l a c t i o n s o n b e h a l f o f employees . . . t o r e c o v e r unpaid FLSA wages." 176 a t 3 6 , 375 P.2d a t 926. I n t h e p r e s e n t case it is c l e a r t h a t t h e Department was performing its s t a t u t o r y d u t y e n f o r c i n g Montana's wage laws p r o t e c t i n g Hoehne, a Montana r e s i d e n t . Such laws r e g u l a t e Montana c o r p o r a t i o n s , l i k e S h e r r o d d , and r e q u i r e them t o pay minimum and o v e r t i m e wages. Also, t h e FLSA p r o t e c t s a l l c i t i z e n s and t h e Department a c t e d w i t h i n its a u t h o r i t y e n f o r c i n g it h e r e . S t a t e v. Holman A v i a t i o n Co., s u p r a . The Montana Department of Labor and I n d u s t r y a c t e d w i t h i n its j u r i s d i c t i o n i n a d j u d i c a t i n g Hoehne's claim f o r o v e r t i m e wages. W e a l s o n o t e t h a t Rule 4 ( b ) ( I ) , M.R.Civ.P., g i v e s t h e c o u r t s of Montana j u r i s d i c t i o n o v e r a l l p e r s o n s w i t h i n t h e S t a t e o f Montana. T h i s is a c o d i f i c a t i o n of t r a d i t i o n a l c o n c e p t s of j u r i s d i c t i o n t h a t s u b j e c t a l l p e r s o n s w i t h i n a s t a t e ' s b o u n d a r i e s t o t h a t s t a t e ' s j u r i s d i c t i o n . W e h o l d t h a t under t h e t r a d i t i o n a l n o t i o n s of j u r i s d i c t i o n t h e Department p r o p e r l y r u l e d on t h i s claim. A l l p a r t i e s r e s i d e d i n Montana and t h e p r i n c i p a l p l a c e of b u s i n e s s of t h e employer was i n Montana. Accordingly, t h e c o u r t s of Montana have p r o p e r j u r i s d i c t i o n t o h e a r t h i s c a s e . W e a l s o f i n d t h a t when t h e l e g i s l a t u r e d e l e g a t e d j u d i c i a l power t o t h e Department t o d e c i d e wage c l a i m s it i n t e n d e d t h a t t h e Department be bound by j u d i c i a l c o n c e p t s of j u r i s d i c t i o n . To r e q u i r e an employee t o p u r s u e h i s wage c l a i m i n e a c h s t a t e h e w o r k s would u n d u l y b u r d e n a l l p a r t i e s involved. The employee would have t o t r a v e l t o each s t a t e where he worked t o pursue h i s claim. T h i s would l e a d t o a n o p p r e s s i v e burden on both t h e employee and t h e employer i n many c a s e s . For example, where a t r u c k e r h a u l s c a r g o through s e v e r a l s t a t e s t o reach h i s d e s t i n a t i o n , it would r e q u i r e both t h e employer and t h e employee t o go t o each s t a t e t o have a p o r t i o n o f a c l a i m a d j u d i c a t e d . Each p a r t y may a l s o need w i t n e s s e s , which most l i k e l y r e s i d e i n t h e p a r t i e s ' s t a t e of r e s i d e n c e . Furthermore, a s t h e Department p o i n t s o u t , t h i s would f r a c t i o n a l i z e t h e employee's c l a i m t o such a n e x t e n t a s t o make p u r s u i t of it n o t worthwhile. Second, Sherrodd a r g u e s t h a t Hoehne is estopped from c l a i m i n g o v e r t i m e compensation because h e f a i l e d t o r e p o r t accumulated overtime h o u r s and d i d n o t inform Sherrodd t h a t he e x p e c t e d overtime pay. Hoehne contends t h a t o v e r t i m e pay is a s t a t u t o r i l y mandated p u b l i c r i g h t . T h e r e f o r e , it c a n n o t be waived and a n employee c a n n o t be estopped from c l a i m i n g it. T h i s Court h a s h e l d t h a t a person may e i t h e r , by i m p l i c a t i o n o r agreement, waive t h e advantage of a law i n t e n d e d s o l e l y f o r h i s b e n e f i t . E a r l Clack Co. v. S t a u n t o n ( 1 9 3 7 ) , 105 Mont. 375, 72 P.2d 1022; Anaconda Copper Mining Co. v. R a v a l l i County ( 1 9 1 9 ) , 56 Mont. 530, 186 P. 332; Shea v. North-Butte Mining Co. ( 1 9 1 9 ) , 55 Mont. 522, 179 P. 499. Conversely, laws which are intended to protect the public in general cannot be waived privately, section 1-3-204, MCA, by either implication or agreement. Shea, supra. In Kopischke v. First Continental Corp. (1980), Mont. , 610 P.2d 668, 37 St.Rep. 437, we determined that public policy requires a used car dealer to inspect the cars he sells and to make sure they are in safe, working condi- tion. This duty, as an expression of public policy, cannot be waived by the use of an "as is" clause in the sales contract. An employee's right to receive overtime pay is estab- lished in Montana state law as well as federal law. These laws are expressions of public policy created to protect workers, and restraining those from withholding overtime pay is vindication of a public right rather than a private right. Withholding wages due, such as overtime pay, is considered a continuing public offense. Viirtz v. Malthor, Inc. (9th Cir. 1960), 391 F.2d 1, cited in State ex rel. Neiss v. District Court (1973), 162 Mont. 324, 511 P.2d 979. Since overtime premiums are for the protection and benefit of the general public, private waiver is contrary to public policy. Neiss, 162 Mont. at 328, 511 P.2d 981; section 1-3-204, MCA. In Brooklyn Savings Bank v . O'Neil (1945), 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296, the United States Supreme Court interpreted the federal counterpart to the Montana minimum wage and overtime requirements, section 16(b) of the FLSA. The Supreme Court held that the intent of the legis- lature in passing the FLSA was to prevent an employee's contractual waiver of his right to minimum wages and overtime and thereby prevent waiver of liquidated damages for withholding such payments. This, the Court held, would nullify the purposes of the Act. Essentially, this Court came to a similar conclusion in Neiss, supra. In construing Montana's minimum wage requirements we held that: ". . .since we are dealing with a public right, public policy demands the minimum wage shall be paid. Minimum wage provi- sions exist for the benefit of the whole public and a claimant of his own accord may not bargain away his statutory mini- - - mum wage. It is elementary that a law established for a public reason cannot be compromised by private agreement. Section 1-3-209, MCA." (Emphasis added. ) 162 Mont. at 328, 511 P.2d at 981. We believe that allowing a noncontractual or implied waiver of minimum wages or overtime payments would also nullify the purposes of both statutes and would be contrary to public policy. Consequently, we hold that one's failure to assert such rights does not constitute waiver. Nonasser tion could be the result of mere ignorance, which should not legitimize what we consider a continuing public offense or prevent vindication of an important public right. Hoehne is not estopped from claiming overtime pay owed to him from his employment with Sherrodd, Inc. Af f irmed. 3A-44). pd,4 Chief Justice W e concur:

August 18, 1983

7a19b4fb-e139-461d-a9c2-d1b073ea4b8a

GATES v LIFE OF MONTANA INS CO

N/A

82-468

Montana

Montana Supreme Court

No. 82-468 I N THE SUPREME C O U R T O F T H E STATE O F M O N T A N A 1983 M A R L E N E S. GATES, P l a i n t i f f and Appellant, -vs- LIFE O F MONTANA INSURANCE COMPANY, Defendant and Respondent. Appeal from: District Court of t h e Eighteenth J u d i c i a l District, I n and f o r t h e County of G a l l a t i n , The Honorable Jack D. Shanstrom, Judge p r e s i d i n g . Counsel of Record: For Appellant: Wellcome & F r o s t ; Page Wellcome argued, Rozeman, Montana For Respondent: Landoe, Brown, Planalp, Komrners & Lineberger; Gene I. Brown argued, Bozeman, Montana Submitted: June 6 , 1983 Decided: August 5, 1983 Abr"G F i l e d : 5 1983 - Clerk Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Plaintiff brought this action to recover damages for breach of the covenant of good faith and fair dealing implicit in an at-will, employment contract. Summary judgment for defendant was reversed in Gates v. Life of Montana (1982), Mont . , 638 P.2d 1063, 39 St.Rep. 16. The case was remanded for trial and resulted in a jury verdict in favor of plaintiff for $1,891 in compensatory damages and $50,000 in punitive damages. The trial court entered judgment for plaintiff on compensatory damages but entered judgment notwithstanding the verdict in favor of defendant on punitive damages. Plaintiff appeals from the granting of the judgment n.0.v. Appellant commenced employment as a cashier with respondent on July 29, 1976, under an oral contract of indefinite duration. On October 19, 1979, she was called to meet with her supervisor, Roger Syverson, and without prior warning she was given the option of resigning or being fired. She testified that while in a distraught condition and under duress she signed a letter of resignation which was handed to her by Syverson. Appellant stated that she signed the letter of resignation because she thought it would be better for her record and because Syverson told her he would give her a letter of recommendation so that she could be reemployed. Appellant went home and discussed the situation with her husband who advised her to retrieve the letter of resignation and inform her supervisor that she was not resigning. Appellant stated that she immediately called Syverson and demanded the letter be returned and that he promised to do so. Syverson testified that she only requested a photocopy of the letter. Respondent's witnesses testified appellant was discharged for carelessness, incompetency and insubordination. In the first appeal we held there was a submissible jury issue on breach of the implied covenant of fair dealing in that appellant was discharged without warning and an opportunity for hearing. The jury here found that this covenant was indeed breached and awarded damages. On appeal, we are concerned with two issues. First, can punitive damages be awarded for breach of the covenant to deal fairly? Secondly, does the evidence here create a jury issue on punitive damages? In ~ipinski v. Title Insurance Co. (19821, Mont . , 655 P.2d 970, 39 St.Rep. 2283, this Court held that punitive damages could be assessed for bad faith insurance practices in absence of a statutory violation. We said in Lipinski: "Should there be any doubt, we now expressly hold that insurance companies have a duty to act in good faith with their insureds, and that this duty exists independent of the insurance contract and independent of statute. Any statements in our cases, to the extent they may be or appear to be in conflict with this holding, are expressly overruled." Likewise, punitive damages may be assessed for breach of the obligation owed to deal fairly with an employee, if the provisions of section 27-1-221, MCA, are satisfied. That section provides: "In anv action for a breach of an obliaation not - arisini from contract where the defendant has been guilty of oppression, fraud, or malice, actual or presumed, the jury, in addition to the actual damages, may give damages for the sake of example and by way of punishing the defendant." (emphasis added) An action for breach of an implied covenant of fair dealing, at first blush, may sound both in contract and tort. The duty arises out of the employment relationship yet the duty exists apart from, and in addition to, any terms agreed to by the parties. In this respect, the duty is much like the duty to act in good faith in discharging insurance contractual obligations. See Lipinski v. Title Ins. Co., supra. The duty is imposed by operation of law and therefore its breach should find a remedy in tort. Flint and Walling Mfg. C0.v. Beckette (1906), 167 Ind. 491, 498, 79 N.E. 503, 505. Also see W. Prosser, Law of Torts (4th ed. 1971), 592 at 617-618. We hold that section 27-1-221, MCA, only exempts breach of contract actions from its provisions. Breach of the duty owed to deal fairly and in good faith in the employment relationship is a tort for which punitive damages can be recovered if defendant's conduct is sufficiently culpable. We must examine the record in this case to determine whether there is evidence which would permit a jury to find malice, oppression or fraud attributable to the defendant. Motions for judgment notwithstanding the verdict are only to be granted when there is a complete absence of any credible evidence to support the verdict. All evidence and all inferences drawn therefrom must be considered in the light most favorable to this appellant. Barmeyer v. Montana Power Company (1983), Mont . , 657 P.2d 594, 40 St-Rep. 23. "The courts will exercise the greatest self-restraint in interfering with the constitutionally mandated processes of jury decision." Barmeyer at 40 St.Rep. 25; Jacques vs. Montana National Guard (1982), Mont . , 649 P.2d 1319, 1325-26, 39 St.Rep. 1565, 1573-74. With these rules in mind we review the testimony upon which appellant must necessarily rely in her contention that a jury issue was created on the matter of punitive damages. We have divided the testimony which was offered to show that a letter of resignation was coerced by misrepresentation. Secondly, we refer to that testimony bearing upon the issue of whether appellant's supervisor agreed to return the resignation letter and then subsequently failed to do so. With resepect to the conversation surrounding appellant's tendering a resignation letter, appellant testified as follows: "Q. And did he point out to you that he would give you this letter of recommendation? "A. Yes, he did, and he even stated that I was a good worker, he had nothing against me and that he would give me a letter of recommendation. "Q. And did you understand by that that he would give you a positive letter of recommendation? "A. Yes. "Q. Not merely as he has said a statement that you had worked for two or three years? "A. That's right." Syverson, appellant's supervisor, testified that he offered to give appellant a letter of recommendation if she resigned. However, he testified that he only planned to give her a letter which would state that appellant was employed by Life of Montana Insurance Company; he never intended to provide appellant with a favorable letter of recommendation. There was evidence from which the jury might infer that appellant understood she was to receive a favorable letter of recommendation and that Syverson allowed her to resign on this basis. By way of deposition, Syverson testified: "Q. And then I asked you finally, "Question: Don't you think she understood when you said, 'We will give you a letter of recommendation,' that you would give her a favorable letter or recommendation to a subsequent employer? And your answer to that was what? "A. At line 15, Answer: I believe so." From the foregoing the jury could have found that (1) Syverson acting for defendant told appellant if she resigned she would receive a favorable letter of recommendation in order to obtain subsequent employment; (2) appellant reasonably expected to receive a favorable letter of recommendation to assist her in gaining reemployment; (3) appellant relied upon this representation and tendered her resignation; (4) Syverson never intended to give a favorable letter of recommendation to appellant. This evidence was sufficient for the jury to find fraud, oppression or malice. Additional evidence supports appellant's position. After appellant returned home her husband advised her to demand return of the resignation letter. Appellant testified she immediately called Syverson and discussed the resignation letter. Her testimony follows: "Q. And what did you say? "A. I told him that I had discussed this with my husband and that it was my prerogative that I could ask for my letter of resignation back because I had no intentions of resigning. "Q. And what did Mr. Syverson say to you? "A. He indicated to me that he wanted to keep the letter over the weekend and that on Monday he would mail it to me. "Q. He would mail you the letter of resignation? "A. He would mail me the original copy of the letter of resignation. "Q. Now, when we are talking here, are the original and copy two different things? "A. On the original letter? "Q. The original letter that you had signed? "A. Yes. "Q. Did you make clear to%him that that's what you wanted back? "A. Yes, I did. "Q. Because you said you didn't intend to resign? That's right." Appellant testified that Syverson promised to send her the letter of resignation. Appellant's testimony was corroborated by her husband who testified that he heard appellant, in a telephone conversation with Syverson, demand return of the resignation letter. The letter was never returned. Syverson's position at trial was that he only agreed to give appellant a copy of the letter. From this evidence the jury could infer that (1) appellant demanded return of the resignation letter; (2) Syverson acting on behalf of respondent said that the letter would be returned; (3) Syverson never intended to return the resignation letter to appellant. This evidence, when considered with the testimony surrounding the giving of the resignation letter, supports an award of punitive damages. Respondent argues that it should not be liable for punitive damages for terminating appellant without warning because at the time of appellant's termination there was an absolute right to fire without any type of process. Respondent asserts that new legal rights were given to appellant in the first appeal of this case and that respondent could not have known of the duty it owed appellant at the time of her termination. Respondent is not being assessed punitive damages for failing to provide a warning prior to the firing. Rather respondent's conduct in obtaining the letter of resignation and refusing appellant's demand for return forms the basis for a jury finding of fraud, oppression or malice. An employer stands to gain by an employee's resignation and such gain may be at the employee's expense. Resignation, rather than discharge, may protect an employer from immediately becoming liable for unemployment compensation benefits. Furthermore, the employer may, by obtaining a letter of resignation, be insulating itself from a claim of wrongful discharge. The courts must vigilantly assure that employers, as well as employees, are treated fairly. The sting of punitive damages will only be sanctioned where there is evidence that the tort feasor's conduct rose to a level of oppression, fraud or malice. Here we have a close case. However, when the evidence is viewed in a light most favorable to the employee, there is sufficient evidence for a jury to find that employer's conduct rose to the requisite level of culpability. We reverse the granting of judgment notwithstanding the verdict and remand to the trial court with directions to reinstate the award of punitive damages. ! We concur: 2*&$#(&/q,&gq Chief Jus ice Justices Mr. J u s t i c e L . C. Gulbrandson d i s s e n t i n g : I r e s p e c t f u l l y d i s s e n t . I would a f f i r m t h e D i s t r i c t Court s e t t i n g a s i d e t h e award of p u n i t i v e damages. I n t h e f i r s t appeal of t h i s c a s e , G a t e s v. L i f e of Montana, ( 1 9 8 2 ) , 638 P.2d 1063, 39 St.Rep. 1 6 , t h i s Court s t a t e d : "The c i r c u m s t a n c e s of t h i s c a s e a r e t h a t t h e employee e n t e r e d i n t o an employment c o n t r a c t t e r m i n a b l e a t t h e w i l l of e i t h e r p a r t y a t any time. The employer l a t e r promulgated a hand- book of p e r s o n n e l p o l i c i e s e s t a b l i s h i n g cer- t a i n p r o c e d u r e s w i t h regard t o t e r m i n a t i o n s . The employer need n o t have done s o , b u t pre- sumably sought t o s e c u r e an o r d e r l y , coopera- t i v e and l o y a l work f o r c e by e s t a b l i s h i n g uniform p o l i c i e s . The employee having f a i t h t h a t she would be t r e a t e d f a i r l y , t h e n deve- loped t h e peace of mind a s s o c i a t e d w i t h job s e c u r i t y . I f t h e employer h a s f a i l e d t o f o l l o w its own p o l i c i e s , t h e peace of mind of i t s employees is s h a t t e r e d and an i n j u s t i c e is done. "We hold t h a t a covenant of good f a i t h and f a i r d e a l i n g was implied i n t h e employment c o n t r a c t of t h e a p p e l l a n t . There remains a genuine i s s u e of m a t e r i a l f a c t which p r e c l u d e s a summary judgment, i . e . whether t h e respon- d e n t f a i l e d t o a f f o r d a p p e l l a n t t h e p r o c e s s r e q u i r e d and i f s o , whether t h e respondent t h e r e b y breached t h e covenant of good f a i t h and f a i r d e a l i n g . "As t o a l l o t h e r c l a i m s a g a i n s t t h e respon- d e n t , however, summary judgment was p r o p e r l y e n t e r e d . The D i s t r i c t Court c o r r e c t l y concluded t h a t a p p e l l a n t ' s c l a i m i n t o r t f o r wrongful d i s c h a r g e is unsupported by any showing of a v i o l a t i o n of p u b l i c p o l i c y a s r e q u i r e d under K e n e a l l y v. Orgain, s u p r a . "Gates' c l a i m f o r i n t e n t i o n a l in£ l i c t i o n of emotional d i s t r e s s must a l s o f a i l . The u n c o n t r a d i c t e d f a c t s show t h a t she was ' r a t h e r d i s t u r b e d ' and 'kind of i n shock.' Under any known s t a n d a r d t h e s e a l l e g a t i o n s a r e i n s u f - f i c i e n t t o e n t i t l e h e r t o r e c o v e r . K e l l y v. Lowney & W i l l i a m s , I n c . ( 1 9 4 2 ) , 1 1 3 Mont. 385, 126 P.2d 486; Helton v. Reserve L i f e I n s u r a n c e Co. (D.Mont., 1 9 7 5 ) , 399 F.Supp. 1322." 638 P.2d a t 1067, 39 St.Rep. a t 20-21. The m a j o r i t y , i n its v a l i a n t and s u c c e s s f u l e f f o r t t o c l a s s i f y t h e conduct of t h e d e f e n d a n t a s t o r t u o u s , s t a t e s : "Respondent is not being a s s e s s e d p u n i t i v e damages f o r f a i l i n g t o provide a warning p r i o r t o t h e f i r i n g . R a t h e r , r e s p o n d e n t ' s conduct i n o b t a i n i n g t h e l e t t e r of r e s i g n a t i o n and r e f u s i n g a p p e l l a n t ' s demand f o r r e t u r n , forms t h e b a s i s f o r a j u r y f i n d i n g of f r a u d , o p p r e s s i o n , o r malice." I n o t e t h a t j u r y i n s t r u c t i o n twenty-three reads: "You a r e i n s t r u c t e d t h a t t h e l e t t e r of r e s i g n a t i o n dated October 1 9 , 1979, became t h e p r o p e r t y of defendant L i f e of Montana, and d e f e n d a n t L i f e of Montana was under no l e g a l o b l i g a t i o n t o r e t u r n t h e l e t t e r of r e s i g n a t i o n t o t h e p l a i n t i f f . " T h a t was t h e o n l y i n s t r u c t i o n given t h e j u r y where t h e l e t t e r of r e s i g n a t i o n was mentioned. The c a s e was o b v i o u s l y submitted and argued by p l a i n t i f f t o t h e j u r y on t h e b a s i s t h a t l i a b i l i t y a l s o r e s u l t e d from t e r - m i n a t i o n without n o t i c e . (See i n s t r u c t i o n s no. 17, 1 9 , and 21, which g e n e r a l l y s t a t e t h a t l i a b i l i t y can a r i s e from f a i l u r e t o f o l l o w e s t a b l i s h e d company p o l i c y . ) I f t h e j u r y followed i n s t r u c t i o n no. 23 ( n o duty of d e f e n d a n t t o r e t u r n t h e l e t t e r of r e s i g n a t i o n ) and i f , a s t h e m a j o r i t y s t a - t e s , t h e respondent is not being a s s e s s e d p u n i t i v e damages f o r f a i l i n g t o provide a warning p r i o r t o t h e f i r i n g , t h e n t h e award must be based on t h e d e f e n d a n t ' s conduct i n o b t a i n i n g t h e l e t t e r of r e s i g n a t i o n . I n t h a t regard t h e p l a i n t i f f Marlene Gates t e s t i f i e d a s f o l l o w s : "Q. Have you ever considered why you would be g i v e n t h a t o p t i o n , t h e r e s i g n i n g o r being f i r e d ? A. No. "Q. Well, i f he wanted t o g e t r i d of you, it would have been simple enough t o say, 'You're f i r e d , ' wouldn't i t ? A . Y e s . "Q. But he allowed you t o r e s i g n . A . Y e s . "Q. And d i d you think t h a t over? Did you t h i n k over t h a t d e c i s i o n of whether you should r e s i g n or be f i r e d ? A. Yes. "Q. How long d i d you think it o v e r ? A . Well, I s a t t h e r e I suppose it was minu- tes, you know. I t was a f t e r f i v e o ' c l o c k . I was wanting t o g e t home and I ' m s u r e he was wanting t o g e t o u t of t h e o f f i c e , and s e v e r a l t h i n g s went through m y mind, and I had t o make a d e c i s i o n one way or t h e o t h e r . "n. You decided t o r e s i g n . A . T h a t ' s r i g h t . "Q. Why was t h a t ? A. Because I t h o u g h t it would look b e t t e r f o r my r e c o r d , and I ' m s u r e it wouldn't be very good f o r t h e i r record t o be known t o be f i r i n g p e o p l e . "Q. You were concerned about how it would look f o r you? A . Yes. "Q. I f you signed t h e l e t t e r of r e s i g n a t i o n , you could t e l l p e o p l e , ' I r e s i g n e d ,' and you wouldn't have t o say, ' I was f i r e d , ' r i g h t ? A. Right. "Q. And a l s o , when you went o u t t o seek a n o t h e r job, you wouldn't have t o say you were f i r e d from your l a s t one. You could say you r e s i g n e d . A. T h a t ' s r i g h t . "Q. So t h a t was done a s a b e n e f i t t o you, is t h a t r i g h t ? A . Right. "Q. Now, when you went i n t o t h i s meeting w i t h Roger Syverson when you were t e r m i n a t e d , was t h e r e any loud t a l k or loud language? A . No, t h e r e was n o t . "Q. Was t h e c o n v e r s a t i o n calm a nd b u s i n e s s l i k e ? A . Yes. "Q. Were you nervous? A. Y e s . "Q. Was Roger nervous? A . H e appeared t o be very nervous, yes. "Q. Would you t e l l u s which of you were t h e most nervous? A . I d i d n ' t weigh it o u t , no. "Q. A t l e a s t you could t e l l o b v i o u s l y t h a t Mr. Syverson was nervous about t h i s whole s i t u a t i o n ? A . Yes. "Q. Did he i n t i m i d a t e you? A . No. "Q. Did you i n t i m i d a t e him? A . I d o n ' t b e l i e v e I d i d . "Q. Now, when you were asked t o make a deci- s i o n whether you wanted t o r e s i g n o r be f i r e d , you thought t h a t over p r e t t y c l o s e l y ? A . Yes, I d i d . "Q. And your d e c i s i o n was t h a t you p r e f e r r e d t o r e s i g n ? A . Yes. "Q. And you have, a t t h a t t i m e you f e l t t h a t was a good d e c i s i o n ? A . Well, it was t h e b e t t e r d e c i s i o n , yes. "Q. And it was based on your d e t e r m i n a t i o n t h a t w i t h t h e l e t t e r of r e s i g n a t i o n , you would be b e t t e r a b l e t o g e t a job, p l u s it would be e a s i e r t o handle q u e s t i o n s of f e l l o w employees and f r i e n d s ? A. Yes. "Q. Those were your reasons f o r s i g n i n g t h e l e t t e r of r e s i g n a t i o n ? A . Yes. "Q. And when you l e f t t h e o f f i c e t h a t a f t e r - noon, October 1 9 , 1979, you had concluded t h a t t h a t was t h e b e s t t h i n g t o do. A . Y e s . " The m a j o r i t y o p i n i o n s t a t e s : " t h e s t i n g of p u n i t i v e damages w i l l o n l y be s a n c t i o n e d where t h e r e is evidence t h a t t h e t o r t - f e a s o r ' s conduct r o s e t o a l e v e l of o p p r e s s i o n , f r a u d , o r m a l i c e . " I do n o t f i n d t h a t o p p r e s s i v e l e v e l of conduct and n e i t h e r d i d t h e t r i a l judge when s e t t i n g a s i d e t h e award f o r p u n i t i v e damage. H i s memorandum of September 28, 1982, s t a t e d : " i n t h i s c a s e , I f i n d no evidence t h a t t h e d e f e n d a n t knowingly v i o l a t e d any d u t y t o t h e p l a i n t i f f . There is no evidence t h a t t h e defen- d a n t a c t e d m a l i c i o u s l y , i n t e n t i o n a l l y , o r w i l l f u l l y , and there- f o r e t h e c l a i m f o r p u n i t i v e damages must f a i l . " T h i s Court, i n t h e f i r s t G a t e s o p i n i o n , c o r r e c t l y i d e n t i f i e d t h e t h r e s h o l d q u e s t i o n of whether t h e employee's r e s i g n a t i o n was v o l u n t a r y . U n f o r t u n a t e l y , t h e j u r y was not i n s t r u c t e d on t h i s p o i n t and no s p e c i a l v e r d i c t was r e q u e s t e d . I n t h e f i r s t G a t e s d e c i s i o n , t h e Court c i t e d Molinar v. Western E l e c t r i c Company (1st C i r . 1 9 7 5 ) , 525 F.2d 521, cert. d e n . , ( 1 9 7 6 ) , 424 U.S. 978, 96 S.Ct. 1485, 47 L.Ed.2d 748, where t h e c o u r t decided t h e a p p l i c a b l e r u l e t h a t "an employee who v o l u n t a r i l y r e s i g n s cannot m a i n t a i n a cause of a c t i o n f o r wrong- f u l d i s c h a r g e . " The c o u r t t h e r e s t a t e d : "A more d i f f i c u l t i s s u e is whether M o l i n a r ' s l e t t e r of r e s i g n a t i o n r a i s e d a j u r y i s s u e of v o l u n t a r i n e s s . Molinar a r g u e s t h a t he was induced t o r e s i g n by t h e f r a u d u l e n t promise t h a t i f he d i d s o he would r e c e i v e good recommendations. " [where] . . . [a] v o l u n t a r y r e s i g n a t i o n bars a s u i t f o r wrongful d i s c h a r g e , t h e following s t a n d a r d h a s been l a i d down: "'Even where t h e employee is t o l d t h a t he must choose between r e s i g n a t i o n and s e p a r a t i o n , t h e subsequent c h o i c e of r e s i g n a t i o n is n o t coerced u n l e s s t h e employee can show t h a t h i s s u p e r i o r knew or believed t h a t t h e reasons f o r t h e proposed s e p a r a t i o n could n o t be s u b s t a n t i a t e d . . . . 1 11 "Cosby v. United S t a t e s , [ ( I 9 6 9 C t . C l . ) , 417 F.2d 13451 a t 1355. T h i s s t a n d a r d , which w e t h i n k New York would adopt, l i m i t s a c l a i m of d u r e s s t o r e s i g n a t i o n s e x t o r t e d a s a cover f o r wrongdoing, and r e c o g n i z e s t h a t r e s i g n a t i o n s i n l i e u of d i s c h a r g e may i n many o t h e r instan- c e s r e f l e c t a mutually b e n e f i c i a l , good f a i t h composition between an employer and employee having d i f f e r e n t views a s t o what each owes t o t h e o t h e r . Thus, h e r e , f o r M o l i n a r ' s resigna- t i o n t o be t r e a t e d a s coerced and l e g a l l y i n e f f e c t i v e , it must be shown n o t o n l y t h a t t h e p r o j e c t e d d i s c h a r g e would amount t o a l e g a l breach of c o n t r a c t b u t t h a t t h e r e was bad f a i t h , i n t h a t Western E l e c t r i c knew o r b e l i e v e d t h a t t h e d i s c h a r g e could not be s u b s t a n t i a t e d . " I n m y view, t h e m a j o r i t y , by extending t h e o r i g i n a l G a t e s d e c i s i o n , has s e t t h e s t a g e f o r a " j u s t cause s t a n d a r d f o r at- w i l l employees," which I b e l i e v e is a l e g i s l a t i v e r a t h e r t h a n a j u d i c i a l f u n c t i o n . S e c t i o n 39-2-503, MCA, p r o v i d e s t h a t employment, having no s p e c i f i e d term, may be terminated a t t h e w i l l of e i t h e r p a r t y on n o t i c e t o each o t h e r . T h i s s e c t i o n c o d i f i e s t h e long- e s t a b l i s h e d , b u t r e c e n t l y q u e s t i o n e d , " a t - w i l l " r u l e . Although t h i s Court h a s recognized t h a t t h i s r u l e may be o u t d a t e d , we have a l s o recognized t h a t " i t is uniquely a p r o v i n c e of t h e l e g i s l a - t u r e t o change i t . " Reiter v. Yellowstone County ( 1 9 8 1 ) , Mont. , 627 P.2d 845, 849, 38 St.Rep. 686, 690. I n Reiter, w e noted t h a t because of t h e o p e r a t i o n of s e c t i o n 39-2-503, MCA, t h e a t - w i l l employee was not employed on a " d i s c h a r g e f o r cause only" b a s i s . W e s t a t e d , "assuming arguendo t h a t a p p e l l a n t had an implied c o n t r a c t w i t h an implied covenant of good f a i t h , t h e employer d i d not a c t i n bad f a i t h because its conduct was s t a t u t o r i l y p e r m i s s i b l e . " 627 P.2d a t 849-850, 38 St.Rep. a t 690. I n o t h e r words, under s e c t i o n 39-2-503, MCA, an employer o r employee could t e r m i n a t e employment f o r any o r a l l r e a s o n s , pro- v i d e d t h e reasons o r manner of t e r m i n a t i o n d i d not v i o l a t e p u b l i c p o l i c y . See K e n e a l l y v. Orgain ( 1 9 8 0 ) , Mont. , 606 P.2d 127, 37 St.Rep. 154. I n t h e p r i o r d i s c u s s i o n of t h i s c a s e , t h i s Court determined t h a t a covenant of good f a i t h and f a i r d e a l i n g was implied i n t h e p a r t i e s ' o r a l , a t - w i l l , employment c o n t r a c t . The b a s i s f o r t h i s h o l d i n g was t h e employer 's promulgation of an employees' hand- book, two y e a r s a f t e r G a t e s began employment. The handbook pro- v i d e d c e r t a i n g u i d e l i n e s f o r t e r m i n a t i o n of employees. W e s t a t e d t h a t G a t e s had a cause of a c t i o n because " i f t h e employer f a i l e d t o f o l l o w its own p o l i c i e s , t h e peace of mind of its employees is s h a t t e r e d and an i n j u s t i c e is done." 638 P.2d a t 1067, 39 St.Rep. a t 20. W e t h e n found two genuine i s s u e s of m a t e r i a l f a c t : (1) whether respondent f a i l e d t o a f f o r d a p p e l l a n t G a t e s t h e p r o c e s s r e q u i r e d ; and ( 2 ) whether t h e respondent t h e r e b y breached t h e covenant of good f a i t h and f a i r d e a l i n g . The Court had a l s o decided i n t h e p r i o r d e c i s i o n t h a t t h e g u i d e l i n e s i n t h e employer handbook r e g a r d i n g n o t i c e p r i o r t o t e r m i n a t i o n , were not e n f o r c e a b l e a s c o n t r a c t r i g h t s . W e f u r t h e r determined t h a t a p p e l l a n t ' s claim i n t o r t f o r wrongful d i s c h a r g e was p r o p e r l y dismissed because it was not supported by any show- i n g of a v i o l a t i o n of p u b l i c p o l i c y . The m a j o r i t y c i t e s L i p i n s k i v. T i t l e I n s u r a n c e Co. ( 1 9 8 2 ) , ---- Monte ---- , 655 P.2d 970, 39 St.Rep. 2283, f o r t h e a s s e s s m e n t of p u n i t i v e damages i n bad f a i t h c a s e s . I n s u r a n c e c a s e s upholding a breach of t h e implied covenant of good f a i t h and f a i r d e a l i n g d i d not evolve under t h e same con- s i d e r a t i o n s a s c a s e s d i s c u s s i n g a breach of t h e implied covenant i n employment c o n t r a c t s . I n t h e i n s u r a n c e c a s e s , t h e c o u r t s look t o whether t h e i n s u r a n c e company, w i t h m a l i c e , f r a u d o r o p p r e s s i o n , abused its duty t o a c t i n good f a i t h . The "bad f a i t h " employment c a s e s m a i n t a i n a h i g h e r s t a n d a r d i n t h a t t h e c o u r t s g e n e r a l l y look f o r a v i o l a t i o n of p u b l i c p o l i c y on t h e p a r t of t h e employer. See d i s c u s s i o n i n P i e r c e v. O r t h P h a r m a c e u t i c a l Corp. ( 1 9 8 0 ) , 84 N . J . 58, 417 A.2d 505, 1 2 ALR4th 520, and Annot. 1 2 ALR4th 544, ( 1 9 8 2 ) . Most c o u r t s r e c o g n i z i n g a cause of a c t i o n based on a d i s c h a r g e t h a t o f f e n d s p u b l i c p o l i c y have grounded t h a t a c t i o n i n t o r t , while o n l y a few have r e l i e d on an implied c o n t r a c t t h e o r y of recovery. Compare Tameny v. A t l a n t i c R i c h f i e l d Co. ( 1 9 8 0 ) , 27 Cal.3d 167, 610 P.2d 1330, 164 Cal.Rptr. 839, ( r e c o g n i z i n g a t o r t a c t i o n f o r wrongful d i s c h a r g e when employee was terminated because he r e f u s e d t o commit a c r i m i n a l a c t ) ; Nees v. Hooks ( 1 9 7 5 ) , 272 Or. 210, 536 P.2d 512 ( r e c o g n i z i n g a t o r t a c t i o n because an employee was dismissed f o r s e r v i n g j u r y d u t y ) ; and Kelsay v. Motorola ( 1 9 7 8 ) , 74 111.2d 172, 364 N.E.2d 353 ( r e c o g n i z i n g a t o r t a c t i o n when employee was dismissed f o r f i l i n g a workers' compensation c l a i m ) ; w i t h Fortune v. N a t i o n a l Cash R e g i s t e r Co. ( 1 9 7 7 ) , 373 Mass. 96, 364 N.E.2d 1251 ( r e c o g n i z i n g a c o n t r a c t a c t i o n when employee t e r m i n a t e d i n o r d e r not t o r e c e i v e earned bonuses o r commissions ) ; and Monge v. Beebe Rubber Co. ( 1 9 7 4 ) , 1 1 4 N.H. 130, 316 A.2d 549 ( r e c o g n i z i n g c o n t r a c t a c t i o n and l i m i t i n g damages t o those f o r breach of c o n t r a c t when employee t e r m i n a t e d f o r r e f u s a l t o d a t e foreman). For a more complete list, see Smith v. A t l a s Off-Shore Boat S e r v i c e ( 5 t h C i r . 1 9 8 1 ) , 653 F.2d 1057, 1061 N.9. I n t h e p r i o r d e c i s i o n , t h i s Court r e l i e d on Fortune and Monge i n r e c o g n i z i n g t h a t a p p e l l a n t h a s a cause of a c t i o n under an i m p l i e d covenant of good f a i t h and f a i r d e a l i n g . Both Fortune and Monqe grounded t h e i r d e c i s i o n s i n c o n t r a c t , n o t t o r t law. Damages were l i m i t e d t o t h o s e allowed o n l y f o r breach of c o n t r a c t . Moreover, t h e d e c i s i o n i n Monqe - was l a t e r l i m i t e d by t h e N e w Hampshire Supreme Court t o s i t u a t i o n s where t h e t e r - m i n a t i o n v i o l a t e d p u b l i c p o l i c y . See Howard v. Dorr Woolen Co. ( 1 9 8 0 ) , 120 N.H. 295, 414 A.2d 1273. By allowing p u n i t i v e damages i n t h i s c a s e , t h e m a j o r i t y h a s i d e n t i f i e d , and approved, an independent t o r t of bad f a i t h i n a t - w i l l employment c o n t r a c t s . A l l o t h e r j u r i s d i c t i o n s do so o n l y when t h e t e r m i n a t i o n v i o l a t e s p u b l i c p o l i c y . I n o t e f u r t h e r t h a t t h e t e r m i n a t i o n i n q u e s t i o n occurred October 1 9 , 1979. The Reiter d e c i s i o n , s u p r a , acknowledging t h a t " t h e employer d i d n o t a c t i n bad f a i t h because its conduct was s t a t u t o r i l y p e r m i s s i b l e , " was dated May 4 , 1981. The K e n e a l l y d e c i s i o n , s u p r a , was d a t e d J a n u a r y 30, 1980, and t h i s Court, c i t i n g P e r c i v a l v. General Motors Corp. (E.D. Mo. 1 9 7 5 ) , 400 F.Supp. 1322, s t a t e d : "Thus, t h a t c o u r t noted, c o r r e c t l y , t h a t a d i s c h a r g e by an employer i n a c o n t r a c t ter- minable a t w i l l does not g i v e rise t o a c l a i m f o r wrongful d i s c h a r g e i n t h e o r d i n a r y s e n s e , though t h e f i r i n g o r t h e t e r m i n a t i o n may have been u n j u s t i f i e d . I t is o n l y when a p u b l i c p o l i c y has been v i o l a t e d i n c o n n e c t i o n w i t h t h e wrongful d i s c h a r g e t h a t t h e cause of a c t i o n a r i s e s . " 606 P.2d a t 1 2 9 , 37 St.Rep. a t 157. I n view of t h e f a c t t h a t t h e t e r m i n a t i o n i n q u e s t i o n occurred l o n g b e f o r e t h e above two d e c i s i o n s of t h i s Court, I would expect t h i s Court t o a p p l y t h e law a s s t a t e d i n t h o s e d e c i s i o n s t o t h i s c a s e . The G a t e s d e c i s i o n , s u p r a , wherein t h e d o c t r i n e of implied c o v e n a n t of good f a i t h was f i r s t approved, was dated J a n u a r y 5 , 1982. I do not o b j e c t t o t h e a p p l i c a t i o n of t h i s d o c t r i n e r e t r o a c t i v e l y f o r t h e d e t e r m i n a t i o n of compensatory damages, b u t I do n o t a g r e e t h a t it should be t h e b a s i s of p u n i t i v e damages. I n o t e , w i t h a p p r o v a l , t h e c i t a t i o n by t h e t r i a l judge i n h i s memorandum of September 28, 1982, of Nees v. Hooks, s u p r a . I n t h a t c a s e an employee was d i s c h a r g e d f o r missing work t o a t t e n d j u r y d u t y , a c l e a r v i o l a t i o n of p u b l i c p o l i c y . The Oregon c o u r t allowed compensatory damages, b u t would n o t a l l o w t h e awarding of p u n i t i v e damages. The Oregon c o u r t s t a t e d a s follows: "There is one f a c t o r , however, which is p r e s e n t i n t h i s c a s e which h a s n o t been p r e s e n t i n p a s t c a s e s approving t h e submission o f t h e p u n i t i v e damage i s s u e t o t h e jury. I n o u r p a s t c a s e s , t h e d e f e n d a n t knew h i s conduct was regarded a s c u l p a b l e and would g i v e r i s e t o a cause of a c t i o n because of p a s t j u d i c i a l d e c i s i o n s o r l e g i s l a t i o n . For example: An automobile d e a l e r t u r n i n g back t h e odometer t o d e c e i v e t h e p u r c h a s e r , Lewis v. Worldwide Imports, 238 O r . 580, 395 P.2d 922 ( 1 9 6 4 ) ; a f i n a n c e company c o n v e r t i n g an automobile by wrongful r e p o s s e s s i o n , P e l t o n v. Gen. Motors Accept. Corp., 139 O r . 198, 7 P.2d 263, 9 P.2d 128 ( 1 9 3 2 ) ; and a drunken d r i v e r c o l l i d i n g w i t h another c a r , H a r r e l l v. A m e s , 265 O r . 1 8 3 , 508 P.2d 211 ( 1 9 7 3 ) . " U n t i l t h e t r i a l c o u r t ' s r u l i n g i n t h i s c a s e and our a f f i r m a n c e t h e r e was no j u d i c i a l deci- s i o n t h a t an employer was l i a b l e i f he d i s c h a r g e d an employee because she served j u r y d u t y . A s we e a r l i e r s t a t e d , t h e g e n e r a l r u l e known t o employers and lawyers a l i k e is t h a t a b s e n t c o n t r a c t o r s t a t u t e , an employer can d i s c h a r g e an employee f o r any r e a s o n w i t h o u t i n c u r r i n g l i a b i l i t y . " I f w e h e l d t h a t p u n i t i v e damages could be awarded i n t h e p r e s e n t c a s e , w e would be per- m i t t i n g t h e j u r y t o punish d e f e n d a n t s f o r con- d u c t which t h e y could not have determined be£ orehand was even a c t i o n a b l e . The assessment of p u n i t i v e damages h a s some of t h e same f u n c t i o n s a s t h e s a n c t i o n s of c r i m i n a l law. . . . The s a n c t i o n s of t h e c r i m i n a l law cannot c o n s t i t u t i o n a l l y be imposed when t h e c r i m i n a l i t y of t h e conduct is not capable of being known beforehand." 272 O r . 210, 536 P.2d a t 516-17. I would hold t h a t p u n i t i v e damages a r e not a l l o w a b l e where t h e r e h a s been no showing t h a t t h e t e r m i n a t i o n of an a t - w i l l employee v i o l a t e d p u b l i c p o l i c y , u n t i l such t i m e a s t h e l e g i s l a - t u r e r e p e a l s o r amends s e c t i o n 39-2-503, MCA. I concur i n the f o r e g o i n g d i s s e n t of M r . J u s t i c e Gulbrandson: Mr. Justice Fred J. Weber dissents as follows: I join in the dissent of Justice Gulbrandson. In addition I dissent as follows: With regard to the covenant of good faith, the majority opinion holds in part: "Breach of the covenant to deal fairly is, simply stated, breach of a legal duty to deal fairly. Breach of the duty owed to deal fairly in the employment relationship is a tort for which punitive damages can be recovered if defendant's conduct is sufficiently culpable." I am unable to understand how the majority has arrived at that conclusion. The majority refers to section 27-1-221, MCA, which in pertinent part states: "In any action for a breach of an obligation - not arising from contract . . . the jury . . . may give damages for the sake of example and by way of punishing the defendant." (Emphasis added.) The basic question here is whether there is a breach of an obligation not arising from contract. In our original opinion, Gates v. Life of Montana Ins. Co. (1982), Mont . , 638 P.2d 1063 at 1067, we stated the key holding: "We hold that a covenant of good faith and fair dealing was implied in the employment contract of the appellant." In reaching that conclusion, we pointed out that a general principle of good faith and fair dealing has been recognized under the Uniform Commercial Code and also has been recognized in insurance contracts. We also pointed out that recent decisions in other jurisdictions support the proposition that a covenant of good faith and fair dealing is implied in employment contracts. Since we then concluded that in the Gates case a covenant of good faith and fair dealing was implied in the employment contract, it seems clear that such a covenant becomes a part of the employment contract as if it were set forth in writing. An implied covenant can be breached just as a covenant expressly stated in the contract can be breached. The present case is an action for breach of the covenant of good faith and fair dealing, arising from the contract from which -- that covenant is implied. Comparing the contractual covenant of good faith and fair dealing with the punitive damages section, it seems clear that breach of such a contractual obligation does not justify an award of punitive damages under the express terms of the statute. The majority holds that the code section exempts only breach of contract actions from its provisions. Essentially, that is the nature of the present claim for relief. The present holding has little relationship to our original holding in Gates. There we held that a covenant of good faith and fair dealing was implied in the employment contract. We remanded the cause to determine if the employee had been given due process and, if so, whether a breach of the covenant of good faith and fair dealing resulted. If I understand the majority, we now disregard the contractual relationship and its implied covenant, and hold that there is a duty to deal fairly, which apparently -- does not arise from the contract itself, and the breach of such duty is a tort for which punitive damages can be recovered. While I agree that it may be reasonable to amend section 27-1-221, MCA, to allow punitive damages for breach of an obligation arising from contract, we have traveled a long way to arrive at a conclusion which should have been left to the legislature.

August 5, 1983

d409ffaa-e467-43c1-90f3-a8699c1ac13e

GRIMSLEY v SPENCER

N/A

82-417

Montana

Montana Supreme Court

NO. 82-417 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 MAY GRIMSLEY, DAVID GRIMSLEY, EVA OXARART, LILLIAN BOOS, and FAYE SEEL, Plaintiffs and Appellants, ESTATE OF WILLIAM R. SPENCER, Deceased, Defendants, Respondents and Cross-appellants. APPEAL FROM: District Court of the Seventeenth Judicial District, In and for the County of Phillips, The Honorable B. W. Thomas, Judge presiding. COUNSEL OF RECORD: For Appellants: Leaphart Law Firm, Helena, Montana For Respondents: Robert L. Johnson, Lewistown, llontana - - - - - - - -- Submitted on Briefs: June 16, 1983 Decided : :jc 1 \; - $83 Filed: October 6, Clerk Mr. J u s t i c e L.C. Gulbrandson d e l i v e r e d t h e Opinion of t h e Court. T h i s is an a p p e a l from a d e c i s i o n of t h e D i s t r i c t Court of t h e Seventeenth J u d i c i a l D i s t r i c t , P h i l l i p s County, t h e Honorable B. W. Thomas p r e s i d i n g i n h i s c a p a c i t y a s D i s t r i c t Judge and water judge, d e c r e e i n g a f i r s t r i g h t t o t h e p l a i n t i f f s t o t h e u s e of 500 m i n e r ' s i n c h e s o f w a t e r of Dog Creek i n s o u t h e r n P h i l l i p s County and a n easement f o r an i r r i g a t i o n system i n c o n j u n c t i o n w i t h t h a t r i g h t ; denying p l a i n t i f f s a p r e s c r i p t i v e r i g h t t o t h e remaining w a t e r s o f t h e c r e e k ; and d e n y i n g i n j u n c t i v e r e l i e f a g a i n s t t h e d e f e n d a n t s f o r engaging i n c e r t a i n a c t i v i t i e s w i t h r e s p e c t t o t h e c r e e k and p l a i n t i f f s ' i r r i g a t i o n system. P l a i n t i f f s a p p e a l from t h a t p o r t i o n of t h e d e c r e e denying them a p r e s c r i p t i v e r i g h t t o 1,000 miner I s i n c h e s . Defendants c r o s s - a p p e a l f r o m t h e g r a n t o f 500 m i n e r ' s i n c h e s t o p l a i n t i f f s . For t h e r e a s o n s s t a t e d below, we a f f i r m t h e judgment of t h e lower c o u r t w i t h r e s p e c t t o both a p p e a l s . P l a i n t i f f s and d e f e n d a n t s have been embroiled i n a s i x - y e a r l e g a l d i s p u t e over t h e u s e of w a t e r s from Dog Creek, which is l o c a t e d n e a r t h e Sun P r a i r i e community i n s o u t h e r n P h i l l i p s County. The p l a i n t i f f s own a 160 a c r e t r a c t of l a n d , d e s i g n a t e d a s t h e N o r t h e a s t Q u a r t e r o f S e c t i o n 22, Township 24N., Range 3 1 E. M.M. The t r a c t was o r i g i n a l l y owned by William R. Spencer, a r e l a t i v e of d e f e n d a n t s . Spencer e n t e r e d t h e a r e a a s a s q u a t t e r p r i o r t o 1899, made a d e s e r t e n t r y c l a i m on t h e t r a c t i n 1901, and s u c c e s s f u l l y proved-up i n 1905. Spencer remained on t h e l a n d u n t i l 1924, when t h e t r a c t was l o s t i n a f o r e c l o s u r e a c t i o n . The land was s u b s e q u e n t l y purchased by Sherman Grimsley, a r e l a t i v e of p l a i n t i f f s , and h a s been i n t h e i r f a m i l y s i n c e 1924. S u b s t a n t i a l l y a l l of t h e l a n d is i r r i g a b l e , a n d h a y c r o p s h a v e b e e n h a r v e s t e d t h e r e o n c o n t i n u o u s l y s i n c e 1901. Defendants own two t r a c t s of l a n d a d j a c e n t t o t h e p l a i n t i f f 's t r a c t on t h e n o r t h and e a s t . Dog Creek is a n i n t e r m i t t e n t l y flowing s t r e a m a r i s i n g i n t h e Larb H i l l s , l o c a t e d t o t h e e a s t of p l a i n t i f f s ' and d e f e n d a n t s ' l a n d . The w a t e r s of t h e c r e e k flow w e s t e r l y through o r n e a r t h e d e s c r i b e d l a n d s . G e n e r a l l y , t h e c r e e k f l o w s from m e l t i n g snow and e a r l y r a i n s i n March and A p r i l , and a g a i n i n J u n e from r a i n . O c c a s i o n a l l y , it w i l l flow a t o t h e r times d u r i n g t h e y e a r from heavy r a i n s . Its w a t e r s a r e run-off s u r f a c e w a t e r s . On A p r i l 22, 1899, William R. Spencer claimed 500 m i n e r ' s i n c h e s of w a t e r from Dog Creek through t h e u s e of a dam and d i t c h , f o r t h e purpose of i r r i g a t i n g t h e 160 a c r e s o f t h e N o r t h e a s t Q u a r t e r . H e f i l e d a n o t i c e o f a p p r o p r i a t i o n , as r e q u i r e d by law. H i s n o t i c e was f i l e d w i t h t h e c l e r k and r e c o r d e r of V a l l e y County (which a t t h a t t i m e i n c l u d e d t h e a r e a now known as P h i l l i p s County) on A p r i l 22 and was r e c o r d e d i n Book 6 of Water R i g h t s , page 80, r e c o r d s of V a l l e y County. B e proceeded d i l i g e n t l y t o d i v e r t and a p p l y h i s claim t o t h e N o r t h e a s t Q u a r t e r . From t h e e v i d e n c e produced a t t r i a l , it is c l e a r t h a t i r r i g a t i o n of t h e t r a c t h a s c o n t i n u e d v i r t u a l l y w i t h o u t i n t e r r u p t i o n s i n c e 1901. The dam and d i t c h c o n s t r u c t e d by Spencer, and i m p r o v e d and m a i n t a i n e d by Sherman G r i m s l e y a n d t h e p l a i n t i f f s , a r e l o c a t e d on t h o s e t r a c t s owned by d e f e n d a n t s . Defendants a l s o make u s e of t h e waters of Dog Creek, r e l y i n g on c l a i m s f i l e d subsequent t o S p e n c e r ' s i n 1916 and 1920. Although measuring d e v i c e s have never been used on t h e creek, e v i d e n c e p r o d u c e d a t t r i a l s u g g e s t e d t h a t t h e e s t i m a t e d c a p a c i t y o f t h e Dog C r e e k c h a n n e l was a p p r o x i m a t e l y 1,500 m i n e r ' s i n c h e s . A county road r u n s from n o r t h t o s o u t h a l o n g t h e e a s t l i n e o f t h e N o r t h e a s t Q u a r t e r , e f f e c t i v e l y s e p a r a t i n g t h e p r o p e r t i e s of p l a i n t i f f s and d e f e n d a n t s and c u t t i n g a c r o s s Dog Creek a t a b o u t t h e p o i n t where William Spencer and t h e p l a i n t i f f s have d i v e r t e d t h e w a t e r s of t h e creek. For many y e a r s , t h e road j u s t r a n through t h e c r e e k . I n 1954, however, t h e county c o n s t r u c t e d a h i g h g r a d e a c r o s s t h e creek near t h e d i v e r s i o n p o i n t . The county i n s t a l l e d t h r e e c u l v e r t s , one t o h a n d l e t h e Dog Creek channel a t t h e n o r t h end of t h e g r a d e , and two s m a l l e r c u l v e r t s on t h e s o u t h end t o accommodate t h e p l a i n t i f f s ' w a t e r r i g h t . P l a i n t i f f s connected t o t h e s o u t h e r l y c u l v e r t s by a d j u s t i n g t h e i r d i t c h from t h e c r e e k e a s t of t h e h i g h g r a d e toward t h e west t o t h e middle c u l v e r t , and west a g a i n away from t h e c u l v e r t t o t h e N o r t h e a s t Q u a r t e r . Under t h i s system, t h e p l a i n t i f f s a r e s e r v e d by t h e middle c u l v e r t . During times of e x c e s s flow, Dog Creek water f l o w s toward t h e n o r t h c u l v e r t and s p r e a d s o u t , i n p a r t , f l o w i n g s o u t h w e s t toward t h e N o r t h e a s t Q u a r t e r . Between 1 9 2 4 a n d 1 9 4 8 , Sherman G r i m s l e y a n d t h e p l a i n t i f f s c o n s t r u c t e d h o l d i n g and s p r e a d i n g d i k e s t o manage and a l l o c a t e t h e w a t e r s on t h e i r l a n d s . P l a i n t i f f s have always used a l l t h e w a t e r s flowing i n t o t h i s system u n t i l t h e i r needs a r e s a t i s f i e d , a f t e r which any e x c e s s w a t e r s a r e r e l e a s e d and allowed t o flow on t o l a n d s owned by t h e i r n e i g h b o r s , who have come t o depend upon t h e e x c e s s flow. T h i s system, which is a p p a r e n t l y known t o a l l r e s i d e n t s o f t h e Sun P r a i r i e Community, h a s g e n e r a l l y worked w e l l s i n c e W i l l i a m Spencer f i r s t d i v e r t e d Dog Creek o v e r e i g h t y y e a r s ago. The s e e d s of t h e c u r r e n t d i s p u t e appear t o have been p l a n t e d after c o n s t r u c t i o n of t h e h i g h g r a d e i n 1954. A p r o c e s s o f s i l t i n g commenced i n t h e p l a i n t i f f s ' d i t c h on t h e e a s t s i d e of t h e middle c u l v e r t , and weeds e v e n t u a l l y s t a r t e d t o grow i n t h e s i l t e d a r e a . I n 1971, one of t h e d e f e n d a n t s , Vance Spencer, c u l t i v a t e d t h e a r e a t o e r a d i c a t e t h e weeds, and p l a n t e d it wit11 g r a s s and a l f a l f a . H e r e p l a n t e d t h e a r e a i n 1 9 7 2 . U n f o r t u n a t e l y , S p e n c e r ' s e f f o r t s had t h e e f f e c t of d i v e r t i n g w a t e r i n t h e d i t c h northward away from t h e middle c u l v e r t , which s e r v e s t h e p l a i n t i f f s ' t r a c t . D u r i n g t h e p e r i o d 1 9 7 4 t o 1 9 7 6 , p l a i n t i f f s , on a t l e a s t two s e p a r a t e o c c a s i o n s , a t t e m p t e d t o e n t e r t h e a r e a and r e p a i r t h e d i t c h , b u t d e f e n d a n t s d e n i e d them e n t r y . I n l a t e 1976 and e a r l y 1977, t h e p l a i n t i f f s e n t e r e d t h e l a n d d e s p i t e d e f e n d a n t s ' o b j e c t i o n s and r e s t o r e d t h e d i t c h . D e f e n d a n t s d i d n o t r e s i s t t h i s e n t r y o r o t h e r w i s e i n t e r f e r e w i t h t h e work. B e f o r e r e p a i r s were completed, however, t h e run-off w a t e r s had gone down t h e c h a n n e l c r e a t e d by Vance S p e n c e r ' s c u l t i v a t i o n and away from t h e middle c u l v e r t . There was no a d d i t i o n a l run-off and t h e p l a i n t i f f s were unable t o i r r i g a t e and r a i s e t h e i r u s u a l c r o p i n 1976. From e v i d e n c e produced a t t r i a l , it a l s o a p p e a r s t h a t d u r i n g t h e y e a r s between 1972 t o 1976, p l a i n t i f f s t r i e d t o r e s o l v e t h e i r problems by i n s t a l l i n g b a r r i e r s a c r o s s t h e up-stream end o f t h e n o r t h c u l v e r t i n an a t t e m p t t o r a i s e t h e water l e v e l and f o r c e t h e flow back t o t h e middle c u l v e r t . Vance Spencer removed t h e s e b a r r i e r s , b u t d u r i n g t h e same p e r i o d i n s t a l l e d and removed s i m i l a r b a r r i e r s t o t h e c u l v e r t , o s t e n s i b l y t o a p p o r t i o n t h e water between t h e p a r ties. The d i s a g r e e m e n t s between p l a i n t i f f s and d e f e n d a n t s l e d t o t h e f i l i n g of t h i s law s u i t i n 1977. I n t h e i r o r i g i n a l complaint, p l a i n t i f f s s o u g h t t o e n j o i n d e f e n d a n t s from d i v e r t i n g any w a t e r s from Dog Creek and from changing t h e channel of t h e c r e e k . They a l s o s o u g h t a c t u a l and p u n i t i v e damages f o r t h e diminished 1976 hay c r o p and d e f e n d a n t s ' a l l e g e d l y w i l l f u l and o p p r e s s i v e behavior w i t h r e s p e c t t o t h e e x e r c i s e o f p l a i n t i f f s ' w a t e r u s e , b u t t h e c l a i m f o r damages was w a i v e d b e f o r e t r i a l . More i m p o r t a n t l y , p l a i n t i f f s s o u g h t a d e c r e e t h a t t h e y were e n t i t l e d t o 500 m i n e r ' s i n c h e s o f t h e Dog Creek flow, based on William S p e n c e r ' s 1899 c l a i m , and a l l of t h e flow i n e x c e s s of t h a t c l a i m ( a p p r o x i m a t e l y 1,000 m i n e r ' s i n c h e s ) b a s e d on p r e s c r i p t i v e u s e o v e r t h e s t a t u t o r y p e r i o d . P l a i n t i f f s a l s o s o u g h t an easement f o r c o n s t r u c t i o n and maintenance of t h e d i v e r s i o n system l o c a t e d on d e f e n d a n t s ' l a n d . Defendants e v e n t u a l l y f i l e d an answer g e n e r a l l y d e n y i n g a l l t h e a l l e g a t i o n s and c l a i m s made by t h e p l a i n t i f f s . (An amended answer, f i l e d over f o u r y e a r s l a t e r , r a i s e d more s p e c i f i c d e f e n s e s and a s s e r t e d a f f i r m a t i v e c l a i m s , b u t it was d i s a l l o w e d by t h e c o u r t . ) The Department of N a t u r a l Resources and Conservation was i n v i t e d t o i n t e r v e n e , b u t d e c l i n e d and waived r e c e i p t of f u r t h e r p l e a d i n g s , c l a i m i n g no s u b s t a n t i a l i n t e r e s t i n t h e outcome of t h e p r o c e e d i n g s . A f t e r n e a r l y f i v e y e a r s o f a d d i t i o n a l p l e a d i n g , p r e - t r i a l c o n f e r e n c e s , o f f e r s o f s e t t l e m e n t , a n d a n u n s u c c e s s f u l a t t e m p t by d e f e n d a n t s t o o b t a i n summary judgment, t h e case f i n a l l y came t o t r i a l i n March 1982. The c o u r t h e a r d t e s t i m o n y from b o t h s i d e s c o n c e r n i n g t h e n a t u r e of t h e d i s p u t e and p l a i n t i f f s ' claims on t h e w a t e r s . A f t e r a d d i t i o n a l b r i e f i n g , t h e c o u r t e n t e r e d f i n d i n g s of f a c t and c o n c l u s i o n s of law and e n t e r e d a d e c r e e on J u l y 28, 1982. The t r i a l c o u r t d e c r e e d t h a t p l a i n t i f f s had a r i g h t t o 500 m i n e r ' s i n c h e s of Dog Creek water, w i t h a p r i o r i t y d a t e of A p r i l 2 2 , 1899, and a n easement on d e f e n d a n t s ' l a n d t o m a i n t a i n t h e d i v e r s i o n . The c o u r t found t h a t p l a i n t i f f s had n o t a c q u i r e d a p r e s c r i p t i v e r i g h t t o any amount of t h e w a t e r s i n e x c e s s of 500 m i n e r ' s i n c h e s . F u r t h e r , t h e c o u r t concluded t h a t t h e r e was i n s u f f i c i e n t e v i d e n c e t o show t h a t d e f e n d a n t s would i n t e r f e r e w i t h p l a i n t i f f s' r i g h t i n t h e f u t u r e , and t h e r e f o r e d e n i e d t h e r e q u e s t f o r i n j u n c t i v e r e l i e f . I n i t s f i n d i n g s a n d memorandum a c c o m p a n y i n g t h e d e c r e e , t h e c o u r t e l a b o r a t e d on i t s c o n c l u s i o n s w i t h r e s p e c t t o t h e award of w a t e r r i g h t s . The c o u r t concluded t h a t p l a i n t i f f s had f a i l e d t o e s t a b l i s h a l l o f t h e e l e m e n t s o f t h e i r p r e s c r i p t i v e claim. S p e c i f i c a l l y , t h e c o u r t found no e v i d e n c e t h a t p l a i n t i f f s ' use of any e x c e s s waters was h o s t i l e t o t h a t of d e f e n d a n t s ' . P l a i n t i f f s d i d n o t show t h a t t h e y had u s e d w a t e r when d e f e n d a n t s a n d t h e i r p r e d e c e s s o r s had u s e of it; t h a t d e f e n d a n t s ' o r t h e i r p r e d e c e s s o r s ' hay c r o p s s u f f e r e d from any l a c k of water f o r t h e p r e s c r i p t i v e p e r i o d ; a n d t h a t d e f e n d a n t s o r t h e i r predecessors could have maintained a cause of action against plaintiffs for their use of the water. Moreover, the court found no evidence that plaintiffs had put any of the excess water to beneficial use on the land -- an important element of all appropriations, whether by prescription or not. Plaintiffs moved to amend the findings and conclusions and to request a new trial, principally to present new evidence concerning the irrigation needs of the Northeast Quarter. Following a hearing, the court concluded that there was no basis to amend its earlier findings and conclusions and no statutory grounds for a new trial, and denied plaintiffs' motions. On appeal, plaintiffs allege that the trial court erred by denying them a prescriptive right to 1,000 miner's inches of water from Dog Creek. Specifically, they assert that the element of hostility is not required under the allegedly unique facts of this case, and that the evidence before the trial court clearly preponderates in favor of a finding that plaintiffs made beneficial use of all the - waters in Dog Creek. Defendants cross-appeal from the award of the 500 miner's inches, arguing that there is no evidence in the record to support such an award, and requesting that plaintiffs be limited to exactly one miner's inch per acre on their tract, or 160 miner's inches. THE REQUIREMENT OF HOSTILE USE When plaintiffs filed their initial complaint, they followed the theory that their prescriptive claim to the 1000 miner's inches could be granted only upon a successful showing of all the elements of prescription. However, during the course of trial and on this appeal, plaintiffs altered their theory, insisting that proof of all elements -- especially a showing of hostile or adverse user -- is not necessary. To support this proposition, plaintiffs rely exclusively on our decision in Cook v . Hudson (1940), 110 Mont. 263, 103 P.2d 137, wherein, according to plaintiffs, we held that the mere uninterrupted use of water for the statutory period is sufficient to vest clear title in the user, without a showing of hostility. We now turn to our former decision to see if such a holding is readily discernable. In that case, the plaintiff, Cook, filed an action to determine whether he or the defendant Hudson owned prior rights to the waters of Grove Creek in Stillwater County. Hudson answered on several grounds, but most importantly, argued that Cook's title was insufficient by virtue of a break in the claim of title between two of Cook's predecessors in interest. In addition, Hudson claimed a prescriptive right to the waters, predicated upon a showing that he and his predecessors had a record of continuous, notorious, and exclusive use over the statutory period adverse to Cook and his predecessors. Cook, supra, 110 Mont. at 268, 282, 103 P.2d at 139, 144. The trial court, sitting with a jury, indulged a series of presumptions concerning ownership and possession, and concluded that there was no fatal break in the claim of plaintiff's title, and that defendant had not gained a right by prescription. 110 Mont. at 272-83, 103 P.2d at 141-46. With respect to the Cook title, however, plaintiffs in the immediate case point to the following language in the opinion to support their argument concerning hostile use: "On the question of prescriptive right, as applied in favor of the plaintiff's [Cook's] title, it is our opinion that Magee's [Cook's predecessor] undisturbed possession for a period of time in excess of the time necessary to acquire title by prescription, standing alone, was sufficient to vest clear title in him." 110 Mont. at 281, 103 P.2d at 145. (emphasis added) We then cited sections 6817 and 6818, R.C.M. 1935 [now sections 70-19-406 and 70-19-405, MCA], presumably to bolster this conclusion. The former statute provides that occupancy of property for any period confers a title sufficient against all except the state and those who have title by prescription, accession, transfer, will, or succession. The latter refers to obtaining title by prescription to property occupied for the statutory period. With reference to the former statute on simple occupancy, we then had this to say concerning Cook's title to the water rights arising from Grove Creek: "The only vital question that seriously affects plaintiff's title to the prior right initiated by Grant [one of Cook's predecessors] is the break in the record title heretofore mentioned . . . The right gained by Magee by his occupancy of the right to use of the water in accordance with section 6817. [70-19-406, MCA] cannot be successfully challenged after so long a time, and we can disregard any question as to whether Magee acquired [his predecessor's] right grounded on the Grant appropriation and still, within all recognized rules of law and equity, hold that Magee, upon his taking possession of the . . . squatter's claim, . . . using the waters at all times without let or hindrance as shown by the record, and bringing the land on which the water was used to patent, established a first right to the waters of Grove Creek against all others. "The clear preponderance of the evidence is to the effect that no one questioned the exercise of the first right to the waters of the creek by any owner or occupant of the land described in the complaint from and after Grant made the appropriation in 1892, until the defendant invaded the right of the plaintiffs in 1937 which resulted in this lawsuit. " 110 Mont. at 281-2, 103 P.2d at 145-46. From the above language, plaintiffs in the immediate case conclude that they have acquired title to 1,000 miner's inches of Dog Creek by virtue of uninterrupted use of these waters between 1901 -- the time the waters were first put to use -- and the mid-1970's -- the period when plaintiffs and defendants began feuding over the waters. The requirement of hostile or adverse use is mitigated by virtue of the long period of uninterrupted use. We re-emphasize that Cook is the only authority cited by plaintiffs to support their argument. And, at least one commentator has interpreted Cook to establish a new rule permitting a party to gain a prescriptive right. See Note, Water Riqhts: Prescriptive Right to the Use of Water in Montana, 3 Mont.L.Rev. 135, 139 (1942). After carefully considering plaintiffs' argument, the trial court concluded that it did not read Cook to relieve plaintiffs from the burden of establishing hostile use. We concur with the trial court's judgment. We believe that plaintiffs have misconceived the Cook decision both in itself and within the entire context of Montana water law. At the outset, we note that Cook, unlike plaintiffs in the immediate case, never asserted a prior right to the waters by prescriptive use. Rather, he sought to uphold his right only by a showing that he had title to the water right in conjunction with title to his land. See, Cook, supra, 110 Mont. at 268, 103 P.2d at 139. Furthermore, although it is not entirely clear from the opinion, it does not appear that Cook's water right arose on the defendant's land, as is the situation in the case before us. A careful review of the opinion reveals that Cook was found to have title by occupancy and a chain of oral conveyances. Although there was an indication that his water right had not been mentioned in an early conveyance between two of his predecessors in interest, this Court indulged a series of statutory presumptions respecting possession and ownership and held that the water right had always been part of the interest in the land eventually acquired by Cook. See, 110 Elont. at 272-283, 103 P.2d at 141-46. Therefore, we do not believe that Cook can be read to support plaintiff's theory, as neither Cook nor this Court really maintained that he was attempting to preserve his right by a claim by prescription. This observation, however, still does not explain the above-quoted language from Cook suggesting that a plaintiff like Cook could acquire a prescriptive right to the use of water with only a showing of continuous and uninterrupted use. Within the context of the whole opinion, we think the choice of language both unfortunate and confusing, and while there may be a simple explanation for it, we do not feel at liberty to comment on what our brethren really meant by this language forty-three years ago. Such second-guessing would do an injustice to the need for certainty in the law. Instead, we assume, for the purpose of argument, that the language represents a new rule of law concerning prescription. After making such an assumption, however, we reject any such rule as contrary to long-standing precedent both within our jurisdiction and in our sister states that adhere to similar principles of water law. Initially, we note that our decisions concerning acquisition of rights by prescription have always required any party alleging prescription to satisfy every element of the claim, including hostile or adverse user, and that a failure to satisfy any element is fatal to the entire claim. See, e.g., Smith v. Krutar (1969), 153 Mont. 325, 329-30, 457 P.2d 459, 461-62; King v. Schultz (1962), 141 Mont. 94, 100, 375 P.2d 108, 111; Havre Irrig. Co. v. Majerus (1957), 132 Mont. 410, 415, 318 P.2d 1076, 1078; Lamping v. Diehl (1952), 126 Mont. 193, 203, 246 P.2d 230, 235; Irion v. Hyde (1938), 107 Mont. 84, 88, 81 P.2d 353, 355; Verwolf v. Low Line Irrig. Co. (1924), 70 Mont. 570, 577, 227 P. 68, 70; Custer Con. Mines Co. v. City of Helena (1916), 52 Mont. 35, 44, 156 P. 1090, 1094; Smith v . Duff (1909), 39 Mont. 374, 378, 102 P. 981, 982; Bullerdick v. Hermsmeyer (1905), 32 Mont. 541, 544, 81 P. 334, 338; Talbott v. Butte City Water Co. (1903), 29 Mont. 17, 26, 73 P. 1111, 1113. In addition, we note that those western states adhering to the prior appropriation doctrine have also so held. See, e.g., Kountz v. Olson (1934), 94 Colo. 186, 29 P.2d 627; Church v. Stillwell (1898), 12 Colo.App. 43, 54 P. 395; Gilbert v . Smith (1976), 97 Idaho 735, 552 P.2d 1220; Determination of Relative Rights In and To the Waters of Franktown Creek (1961), 77 Nev. 348, 364 P.2d 1069; Hammond v. Johnson (1937), 94 Utah 20, 66 P.2d 894; Campbell v. Wyoming Development Co. (1940), 55 Wyo. 347, 100 P.2d 124, 102 P.2d 745. Thus, any rule relieving plaintiffs of the burden of satisfying any element of the prescriptive claim would be contrary to the weight of precedent in Montana and other western states. The mere fact that the claimant is a plaintiff claiming under a prior right makes no difference with respect to the requirements for satisfying prescription. Montana has not yet squarely addressed the law of prescription under these particular facts, but other prior appropriation states have never held that plaintiffs, claiming under prior right, need satisfy fewer or completely different elements. See, e.g., Campbell, supra, wherein the Wyoming Supreme Court held that: "the mere use of water, however long continued, does not give rise to a title by prescription. The plaintiffs [who were claiming title on the basis of prior rights] were, in addition, bound to show an invasion in a substantial manner of the rights of the [defendant], and the extent of that invasion during a continuous prescriptive period." 55 Wyo. 347, 102 P.2d at 748. The closest this Court has come to a specific consideration of a plaintiff's claim is apparent in O'Connor v. Brodie (1969), 153 Mont. 129, 454 P.2d 920. In that decision, the plaintiff, who had established a prior prescriptive right to waters associated with a ditch in the trial court, did not have to relitigate that claim on appeal, our ruling being confined to a determination of whether plaintiff had established a prescriptive right in the ditch. Nevertheless, in dictum, we said that, "the evidence relative to [proof of a prescriptive right in] the water line and diversion system would amply support specific conclusion [sic] that plaintiffs were owners of the water right by reason of title by prescription." 153 Mont. at 135, 454 P.2d at 924. Because O1Connor was required to prove a prescriptive right in the system by establishing all elements of prescription, we deduce that he would have been required to make a similar showing for the water right itself. To allow a plaintiff, or any party for that matter, the opportunity to obtain title to water rights by a showing of mere uninterrupted use would do a disservice to the sound precepts of western water law. Ideally, all water rights should be obtained in as orderly a manner as is humanely possible. Prescription does not contribute to the maintenance of an orderly system. Stone, Problems Arising Out of Montana's Law of Water Rights, 27 Mont.L.Rev. 1, 17 (1965). Indeed, we recognize that, with respect to water rights based on claims made after July 1, 1973, acquisition of title by prescription is not permitted. See, section 85-2-301, MCA. We think this observation is akin to the time-honored proposition that one claiming title to property under adverse possession must bear a heavy burden to show that his use of the property is continuous, hostile, actual, notorious, and exclusive to the owner of record, for one who has legal title should not be forced to give up what is rightfully his without the opportunity to know that his title is in jeopardy and that he can fight for it. Water rights are much too precious to forego without a showing of hostile or adverse use. No use of water by the plaintiffs in this case can be said to be hostile or adverse to the defendants unless such use actually deprived the defendants of the water when they actually had need of it. Otherwise, the defendants would lose something shared with plaintiffs under conditions where sufficient water was available for everyone ' s use. In summary, we hold that the weight of authority demands that any party attempting to claim title to a water right must satisfy every element of the prescriptive claim. To the extent that Cook may have announced a different rule, then, we expressly disapprove of any language in that opinion or interpretations arising therefrom which would articulate such a different rule. On appeal, plaintiffs have apparently not argued in the alternative that, given a legal requirement to show hostility, sufficient proof of hostile or adverse use was established before the trial court. This being the case, plaintiffs cannot claim a prescriptive right to an additional 1,008 miner's inches of Dog Creek. If plaintiffs wish to claim any or all of these waters, they will have to adhere to the requirements of sections 85-2-301, MCA, et seq., relating to applications for appropriation. THE OUESTION OF BENEFICIAL USE As noted previously, the failure of plaintiffs to establish adverse user defeats their entire claim to the 1,000 miner's inches. Therefore, we need not address the issue of whether plaintiffs proved beneficial use of the same sum. Nevertheless, defendants have cross-appealed as to the award of the first 500 miner's inches from Dog Creek, claiming there is no evidence to support beneficial use of that sum by the plaintiffs. Before turning to this issue, however, we address plaintiffs' argument that defendants are somehow estopped from challenging the award of 500 miner's inches on appeal. Plaintiffs claim that defendants have always recognized the validity of a prior right to 500 miner's inches in plaintiffs, and that a challenge to this right is estopped on appeal. Specifically, plaintiffs refer to certain sections of a motion for summary judgment made by defendants during the course of pre-trial proceedings. In an a£ f idavit supporting the motion, defendant Vance Spencer stated that he "always recognized the prior 500 inch Grimsley right . . ." Similarly, in a memorandum supporting the motion, defendant's attorney stated that, "[dlefendant Vance Spencer's affidavit establishes clearly that plaintiffs have a recorded 500 inch water right in Dog Creek . . . " Finally, plaintiffs point to certain statements in requests for admissions filed by defendant's attorney which impliedly recognize a "recorded 500 inch Grimsley right . . . " Plaintiffs argue that these statements from the pleadings, taken together, indicate recognition of the right and prevent defendants from asserting otherwise on appeal. That a party is bound by his pleadings needs no further elucidation. See, Fey v . A. A . Oil Corp. (1955), 129 Mont. 300, 285 P.2d 578. Upon a thorough examination of all the pleadings, as well as the statements of attorneys at trial, we believe that, contrary to plaintiffs' argument, the 500 inch claim was generally in dispute from the beginning. Defendants' initial answer to plaintiffs' complaint contained a general denial of all of plaintiffs1 claims, which included an assertion of the 500 inch right. Clearly, the claim to that much water was material to the proceedings, and the effect of an answer generally denying the claims of a plaintiff has the effect of putting every material allegation in dispute. Davis v. S u l l i v a n ( 1 9 3 6 ) , 103 Mont. 452, P.2d 1292. r o a Furthermore, p r e - t r i a l memoranda s u b m i t t e d i n d i c a t e t h a t d e f e n d a n t s were w i l l i n g n o t t o c o n t e s t p l a i n t i f f s ' c l a i m t o 500 m i n e r ' s i n c h e s i f p l a i n t i f f s were w i l l i n g t o s e t t l e o t h e r a s p e c t s of t h e l a w s u i t . These s t a t e m e n t s do n o t c o n s t i t u t e admissions. And, d u r i n g t r i a l , d e f e n d a n t s and t h e i r c o u n s e l took g r e a t p a i n s t o r e f e r t o p l a i n t i f f s ' "claim" a s simply t h a t and n o t h i n g more. Moreover, t h e conduct o f p l a i n t i f f s ' a t t o r n e y a t t r i a l and t h e a n a l y s i s of t h e t r i a l c o u r t c o n t a i n e d i n t h e f i n d i n g s o f f a c t f u r t h e r p e r s u a d e u s t h a t d e f e n d a n t is n o t now changing h i s l e g a l t h e o r y o f t h e case. W e n o t e t h a t d e f e n d a n t s ' summary judgment m a t e r i a l s -- t h e f o c u s o f p l a i n t i f f s ' c o n c e r n -- were f i l e d i n e a r l y 1979. P l e a d i n g s s u b m i t t e d and arguments made by d e f e n d a n t s a f t e r 1979 make it a b u n d a n t l y clear t h a t t h e 500 i n c h claim was i n d i s p u t e . Y e t w e f i n d no i n d i c a t i o n i n t h e r e c o r d t h a t p l a i n t i f f s d i d n o t know about d e f e n d a n t s ' arguments. N e i t h e r is t h e r e any i n d i c a t i o n t h a t p l a i n t i f f s e v e r o b j e c t e d t o t h i s a l l e g e d change i n s t r a t e g y . Admittedly, t h e a s s e r t i o n by d e f e n d a n t s t h a t p l a i n t i f f s were n o t e n t i t l e d t o a l l o f t h e 500 i n c h claim w a s p e r h a p s most c l e a r l y s t a t e d i n an amended answer s t r i c k e n by t h e c o u r t a s i m p r o p e r l y f i l e d . But i n its memorandum accompanying its d e c r e e , t h e t r i a l c o u r t s t a t e d t h a t , " e x c e p t f o r t h e a f f i r m a t i v e claim of d e f e n d a n t s t o a p r e s c r i p t i v e r i g h t t o t h e u s e of w a t e r n o t b e n e f i c i a l l y used by p l a i n t i f f s , it a p p e a r s t h a t i s s u e s r a i s e d by d e f e n d a n t s [ i n t h e amended answer] are t r i a b l e under t h e g e n e r a l d e n i a l o f t h e o r i g i n a l answer." W e t h i n k t h i s o b s e r v a t i o n by t h e t r i a l c o u r t c o n s t i t u t e s f u r t h e r e v i d e n c e t h a t d e f e n d a n t s f u l l y i n t e n d e d t o d i s p u t e p l a i n t i f f s ' c l a i m t o t h e f i r s t 500 i n c h e s of water i n Dog Creek. I n any e v e n t , d e f e n d a n t s were n o t i n a l e g a l p o s i t i o n t o admit t h a t p l a i n t i f f s had a " r i g h t " t o w a t e r s i n t h e creek. P l a i n t i f f s had a burden t o p r o v e t h a t t h e y had p u t t h e o r i g i n a l Spencer c l a i m t o a b e n e f i c i a l u s e , and o n l y when t h e t r i a l c o u r t was s a t i s f i e d t h a t p l a i n t i f f s had s u s t a i n e d t h e i r burden would t h e c l a i m e v e r r i p e n i n t o a t r u e r i g h t . Defendants could c e r t a i n l y choose n o t t o c o n t e s t t h e p r i o r i t y of any c l a i m t o t h e w a t e r s , and t h e y c o u l d a l s o o p t n o t t o d i s p u t e t h e g r a n t i n g of 500 m i n e r ' s i n c h e s i n exchange f o r a s e t t l e m e n t , b u t t h e s e o p t i o n s d i d n o t r e l i e v e p l a i n t i f f s of t h e i r burden t o show b e n e f i c i a l u s e t o o b t a i n a r i g h t . C o n s t r u i n g a l l t h e p l e a d i n g s , s t a t e m e n t s of c o u n s e l a t t r i a l , and o b s e r v a t i o n s of t h e t r i a l c o u r t t o g e t h e r , w e f i n d no r e a s o n t o b e l i e v e t h a t d e f e n d a n t s a r e now t a k i n g a p o s i t i o n c o n t r a r y t o t h e i r approach b o t h b e f o r e and d u r i n g t r i a l . Defendants have never d i s p u t e d t h a t p l a i n t i f f s have a p r i o r r i g h t t o some o f t h e w a t e r s of Dog Creek, and t h a t a p p e a r s t o be t h e s u b s t a n c e of t h e d e f e n d a n t s t p o s i t i o n i n t h e motion f o r summary judgment i n 1979. Defendants' a s s e r t i o n t h a t p l a i n t i f f s a r e n o t e n t i t l e d t o t h e sum of 500 i n c h e s of t h e w a t e r s of Dog Creek is n o t a new i s s u e . They a r e e n t i t l e d t o q u e s t i o n now, a s t h e y d i d d u r i n g t r i a l and i n t h e i r subsequent p o s t - t r i a l b r i e f s , t h e award of t h a t sum t o t h e p l a i n t i f f s by t h e t r i a l c o u r t . T h i s is an e q u i t y c a s e . I n examining t h e t r i a l c o u r t ' s d e c r e e , w e a r e e n t i t l e d t o review a l l q u e s t i o n s o f f a c t a r i s i n g upon t h e evidence i n t h e r e c o r d , and d e t e r m i n e t h e same, as w e l l a s q u e s t i o n s of l a w , u n l e s s f o r good c a u s e a new t r i a l o r t h e t a k i n g of f u r t h e r e v i d e n c e i n t h e c o u r t below be o r d e r e d . S e c t i o n 3-2-204(5), MCA. I n s o d o i n g , however, w e have always indulged c e r t a i n presumptions i n f a v o r of .the t r i a l c o u r t ' s d e t e r m i n a t i o n s . W e d o n o t s u b s t i t u t e our judgment f o r t h a t of t h e t r i a l c o u r t ; r a t h e r , w e d e t e r m i n e w h e t h e r t h e r e is s u b s t a n t i a l e v i d e n c e t o s u p p o r t t h e lower c o u r t ' s f i n d i n g s . Bagnell v. Lemery (Mont. 1 9 8 3 ) , 657 P.2d 608, 40 St.Rep. 58; Shanahan v. U n i v e r s a l Tavern Corp. ( 1 9 7 8 ) , 179 Mont. 36, 39, 585 P.2d 1 3 1 4 , 1 3 1 6 . By " s u b s t a n t i a l e v i d e n c e , " w e mean t h a t e v i d e n c e which : " w i l l c o n v i n c e r e a s o n a b l e men and on which such men may n o t r e a s o n a b l y d i f f e r a s t o w h e t h e r it e s t a b l i s h e s t h e p l a i n t i f f ' s case, and, i f a l l r e a s o n a b l e men must c o n c l u d e t h a t t h e e v i d e n c e d o e s n o t e s t a b l i s h such c a s e , t h e n it is n o t s u b s t a n t i a l e v i d e n c e . The e v i d e n c e may be i n h e r e n t l y weak and still be deemed ' s u b s t a n t i a l ' . . . [ c i t a t i o n s o m i t t e d ] . " Olson v. Westfork P r o p e r t i e s , Inc. ( 1 9 7 6 ) , 1 7 1 Mont. 154, 158, 557 P.2d 821, 823. W e w i l l n o t o v e r t u r n t h e t r i a l c o u r t ' s f i n d i n g s u n l e s s t h e r e is a clear preponderance o f e v i d e n c e a g a i n s t them, and w e w i l l review t h e e v i d e n c e i n a l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y . Cameron v. Cameron ( 1 9 7 8 ) , 179 Mont. 219, 228, 587 P.2d 939, 945. C l e a r l y , t h e e v i d e n c e p r e s e n t e d by p l a i n t i f f s t o j u s t i f y a p r i o r r i g h t t o any q u a n t i t y of w a t e r from Dog Creek was, t o s a y t h e l e a s t , v e r y s p a r s e . Y e t t h e t r i a l c o u r t found t h a t 500 m i n e r ' s i n c h e s -- t h e amount s p e c i f i e d i n W i l l i a m S p e n c e r ' s 1899 claim -- was " r e a s o n a b l y r e q u i r e d " f o r i r r i g a t i o n purposes. The c o u r t based i t s d e c i s i o n on t h e f o l l o w i n g "circumstances": " a . That is the quantity for which William R . Spencer filed on April 22, 1899, from which this Court infers that experience as of that date led Spencer to specify that quantity. "b. The soil in the area is permeable to moderately permeable, from which the Court infers that more than the usual one-inch per acre is reasonably required for penetration. "c. The Dog Creek flow comes fast when it comes, and 'dies quick, so that the water must be so used as to give the soil a maximum soaking when the water is available. "d. A strong flow of water is required to cover the 160 acres by means of the dike and ditch system of the Grimsleys." Findings of Fact No. 13. In its memorandum accompanying the decree and findings, the court reiterated these circumstances to justify the award. With respect to the first circumstance, we note initially that this, by itself, does not support the award. Statements made in notices of appropriation, while important to establishing a prima facie case for the sum of water claimed, are not entirely dispositive for the purpose of transforming the amount claimed into a right. Holmstrom Land Co. v. Meagher County Newland Creek Water Dist. (Mont. 1979), 605 P.2d 1060, 1065, 36 St.Rep. 1403, 1408-09, Irion v. Hyde (1938), 107 Mont. 84, 95-96, 81 P.2d 353, 358. Moreover, the trial court's inference is not supported by the evidence. As the court noted in another finding of fact, Spencer did not cultivate hay until 1901, nearly two years after the notice of appropriation was filed. There is no evidence in the record to indicate what experience he had in 1899, and whether he could justify a claim of 500 miner's inches for use on a hay crop that would not even be developed until two years later. Based on the available evidence, however, we cannot say that the remaining circumstances fail to support the trial court's decree. The testimony of the several lay witnesses, although admittedly very general, is not so inherently unreasonable as to warrant reversal. We recognize that a scientific evaluation of the soil and the requirements for cultivation is lacking, but we have often recognized that the claims and observations of those who work the land may be more important than the assessements of expert technicians. As we said in Federal Land Bank v. Morris (1941), 112 Mont. 445, 453, 116 P.2d 1007, 1010, ". . . the testimony of the men on the land, who know the soil, the kind of crops that can be raised on it, and who have spread the water and dug into that soil, and watched the effect during the entire growing season, brings in evidence of considerable weight [as opposed to the opinions of experts]." Here, there is substantial evidence, based on the observations of key witnesses, that the water applied to plaintiffs' land helped produce some of the best blue-joint hay in the Sun Prairie community, and that soil conditions and waterflow patterns warranted application of about 500 miner's inches of Dog Creek water, each time the water was available, in order to insure an annual crop. We are unwilling to disparage these observations, based as they are on years of experience in working and irrigating the land. Defendants have not pointed to anything in the court's findings of fact that is "clearly erroneous" within the meaning of Rule 52(a), M.R.Civ.P., save the facts surrounding the first circumstance for justifying the award. W e find that this error is insignificant in the context of all of the trial court's findings. Accordingly, the judgment of the trial court awarding priority of 500 miner's inches to plaintiffs and denying a prescriptive right to the remaining 1000 m i n e p inches is affirmed. We concur: P, v h ~ Chief Justice Justice & -

October 6, 1983

6ed07522-8937-48d3-969c-e0bca03ec8d7

WILSON v SUN RIVER CATTLE CO

N/A

82-495

Montana

Montana Supreme Court

No. 82-495 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 WILLIAM Iq. WILSON, Claimant and Respondent, -vs- SUN RIVER CATTLE COPIPANY , Employer, and GLACIER GENERAL ASSURANCE COMPANY, Defendant and Appellant. APPEAL FROM: Workers' Compensation Court, Hon. Timothy Reardon, Judge presiding. COUNSEL OF RECORD: For Appellant: Jardine, Stephenson, Blewett & Weaver; K. Dale Schwanke, Great Falls, Montana (~rgued) For Respondent: James M. Regnier, Great Falls, Montana (Argued) Submitted: June 7, 1983 Decided: September 29, 1983 Filed: SEP 2 9 1983 - - . . - - - - - - Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal from an award of medical and temporary total disability benefits to the claimant by the Workers' Compensation Court. The matter was tried before a hearing examiner, whose proposed findings of fact and conclusions of law were adopted by the Workers' Compensation Court. Claimant William W . Wilson is a thirty-nine year old native of Kentucky. His education background is somewhat limited, having taken until age seventeen to complete only eight grades before entering the work force. Several learning disabilities have limited the variety of jobs available to him. Claimant has been in Montana since 1969 working at various jobs in the Great Falls area. On October 21, 1978, claimant was involved in an industrial accident and sustained injury. While working for the Sun River Cattle Company, claimant was feeding hay into a conveyor belt when a stack of hay bales fell, knocking him over the conveyor and onto a concrete slab, breaking his right leg. Claimant was taken to the emergency room at Columbus Hospital in Great Falls and treated by Dr. Thomas C. Power. Surgery was performed immediately and claimant's leg was set in traction. A second surgical procedure was performed November 7, and a long leg cast was thereafter placed on the leg. The leg did not heal properly and surgery was performed a third time on August 7, 1979. Appellant Glacier General Assurance Company (hereinafter appellant), was the Sun River Cattle Company's Workers' Compensation insurance carrier at the time of the accident, and accepted liability for claimant's injury to his leg. Weekly temporary total disability benefits were paid from the time of the accident through December 5, 1980. Claimant resumed work in March 1980, when he was employed by Harris Land and Cattle Company in Highwood. On April 25, 1980, claimant was loading hay bales onto a conveyor belt and while performing this job claimant placed a hay hook in a bale, dragged it about three feet and stopped. As claimant tried to straighten up he began feeling nauseous and experienced severe back pain and had to be driven to the Columbus Hospital emergency room. Dr. Power examined claimant at that time, and hospital records of the examination list the diagnosis as "acute lumbosacral strain." Claimant requested coverage from appellant for the medical costs resulting from this condition, asserting that his back problems stemmed from the October 21, 1978, accident at Sun River Cattle Company. Appellant denied coverage, and claimant filed a petition with the Workers' Compensation Court to resolve the dispute. After hearing the matter, the Workers' Compensation Court found that claimant had given proper and timely notification of the injury to his employer, that claimant injured his back in the scope and course of his employment with the Sun River Cattle Company on October 21, 1978, and that the April 25, 1980, incident at Harris Land and Cattle Company was neither an unusual strain nor a tangible happening of a traumatic nature, and not the proximate cause of claimant's back injuries. The Court further found that claimant's leg injuries had reached a healing plateau, but his back injuries had not and manifested themselves throughout both his back and right leg making a permanent partial disability rating premature. Appellant was to pay for all hospital and medical treatment and chiropractic services for his back injuries from April 25, 1980, to the date of the order, and all future tests and treatments necessary to treat the injury. Appellant was also to pay temporary total disability payments to claimant for the time he was undergoing treatment if the result was a total loss of wages. The court retained jurisdiction over the case until claimant was healed as much as his injuries would permit and a permanent partial disability rating determined. From these findings and the order, this appeal is taken. The issues raised on appeal are: 1. Whether claimant gave due and proper notice of his injuries as required by section 39-71-603, MCA; 2 . Whether the Workers' Compensation Court erred in holding that appellant insurance carrier had the burden of proving that claimant did not injure his back in his industrial accident; 3. Whether the Workers' Compensation Court correctly ruled that claimant injured his back in the October 21, 1978, accident; 4 . Whether the Workers' Compensation Court correctly ruled that the claimant is temporarily totally disabled; and 5. Whether the Workers' Compensation Court erred in neglecting to give the carrier credit for overpayment of compensation. Appellant first contends that claimant did not give proper notice of his back injuries as required by section 39-71-603, MCA. P u r s u a n t t o t h a t s t a t u t e , t o r e c o v e r Workers' Compensation b e n e f i t s t h e r e must be ". . . [N] o t i c e of t h e t i m e and p l a c e where t h e a c c i d e n t o c c u r r e d and t h e n a t u r e of t h e i n j u r y . . . g i v e n t o t h e employer o r t h e e m p l o y e r ' s i n s u r e r . . ." The claim f o r compensation p r e p a r e d by c l a i m a n t a f t e r t h e October 21, 1978, a c c i d e n t gave t i m e l y n o t i c e of t h e a c c i d e n t b u t o n l y r e f e r r e d t o t h e r i g h t knee and l e g i n j u r y . D e s p i t e a p p e l l a n t ' s arguments, t h i s is s u f f i c i e n t n o t i c e o f c l a i m a n t ' s back i n j u r y under Montana l a w . B o t h p a r t i e s c i t e W i g h t v . Hughes L i v e s t o c k Co. (Mont. 1 9 8 1 ) , 634 P.2d 1189, 38 St.Rep. 1632, i n t h e i r b r i e f s and Wight is c o n t r o l l i n g on t h i s i s s u e . I n Wight t h e c l a i m a n t was i n j u r e d when h e was pinned between t h e s t e e r i n g wheel of t h e t r a c t o r he was d r i v i n g and t h e f r o n t end l o a d e r of a n o t h e r . Within t h e p r e s c r i b e d t i m e l i m i t , t h e c l a i m a n t s u b m i t t e d h i s claim s e e k i n g compensation f o r i n j u r i e s t o h i s r i b s a n d c h e s t . The i n s u r e r a c c e p t e d l i a b i l i t y a n d c o m p e n s t i o n w a s made. Two y e a r s l a t e r t h e c l a i m a n t s u b m i t t e d an a d d i t i o n a l claim f o r b e n e f i t s due t o a back i n j u r y which h e a l l e g e d was caused by t h e same a c c i d e n t . By c o n s t r u i n g s e c t i o n 39-71-603, MCA, t h i s C o u r t h e l d f o r t h e c l a i m a n t s t a t i n g : " [ T l h e r e i s n o r e q u i r e m e n t t h a t a n e m p l o y e e m u s t g i v e n o t i c e o f e a c h s e p a r a t e i n j u r y r e c e i v e d i n an i n d u s t r i a l a c c i d e n t p a r t i c u l a r l y w h e r e , a s h e r e , c l a i m a n t was f u n c t i o n a l l y i l l i t e r a t e having t e r m i n a t e d h i s s c h o o l i n g i n t h e t h i r d g r a d e . Wight was i n compliance w i t h t h e s t a t u t o r y n o t i c e r e q u i r e m e n t when h e n o t i f i e d t h e i n s u r e r o f h i s a c c i d e n t and t h e f a c t t h a t h e had been i n j u r e d . " 634 P.2d a t 1191. The f a c t s of Wight a r e on a l l f o u r s w i t h t h o s e of t h e The facts of Wight are on all fours with those of the present case, and our holding is the same. However, this should not be viewed as setting a lower standard of review for a notice given by a relatively uneducated worker. In this case, claimant's notice is sufficient not because of his education level or literacy rate, but because the circumstances of the entire situation apprised the employer of the time and place of the accident and the nature of the injury. As noted in Wight, the purpose of the notice requirement is to give the employee an opportunity for prompt examination of the worker so that proper treatment can be obtained for his injuries. The requirement should not be used to excuse the employer or insurer from liability because imprecise notice was given by the injured worker. The Montana legislature has mandated that the Workers' Compensation Act be liberally construed. Section 39-71-104, MCA. The reasoning behind this Court's liberal construction of the notice requirement becomes evident in a situation such as we have in the case at bar. Claimant did not report every ache, pain, or discomfort he experienced as a result of the industrial accident, in an honest belief and hope that they would dissipate with time. As the evidence adduced at trial tended to show, this belief was fostered through statements made by the attending physician that claimant's back troubles may have been due to tight shorts. The claim form submitted to the insurer provided sufficient information to allow a prompt and complete investigation to determine the extent of claimant's injuries. The purpose of the notice requirement can only be met by holding that claimant, in this case, complied with the notice requirements of section 39-71-603, MCA. The second issue raised on appeal is whether the court erred in concluding that the insurance carrier must shoulder the burden of proving that claimant's back injuries were not caused by the October 21, 1978, accident. Appellant focuses on the trial court's conclusion of law no. 2 which, after stating that the October 21, 1978, accident was the proximate cause of claimant's injuries, states in part: "Assuming, arguendo, that the incident on the Harris Ranch were proven to be an injury as defined in 39-71-119, the case would fall under the rule in Newman v . Kamp, 140 Mont. 487, 374 P.2d 100, (1962), 'where there are two insurers and two accidents, it is incumbent on the insurer seeking to be relieved from liability to establish by a preponderance of the evidence that the claimant's present condition was caused by the accident occurring when the other insurer was at risk.' 140 Mont. at 494. The present defendant has not met that burden. " Appellant's argument is misleading. In its finding of fact no. 24 the court concluded that a "slight preponderance of the medical evidence" shows claimant to have been suffering from lumbosacral strain prior to the incident at the Harris Ranch, and by that statement tacitly acknowledged that claimant held the burden of proving the cause of his injuries and carried that burden. The language from the trial court's order relied on by appellant is clearly surplusage. From conclusion of law no. 2, it appears the trial court would have given appellant the burden of proof had there been two separate injuries. This application was not made, however, as the court found only one incident to be the proximate cause of the back pain. Since it is not at issue, we do not pass on the correctness of the hypothetical application of the Newman v. Kamp rule by the trial court. The third error raised by appellant questions the sufficiency of evidence showing claimant's back injuries to have been proximately caused by the October 21, 1978, accident. Appellant's brief contains a lengthy list of facts which purport to show that the preponderance of evidence in this case goes against the Workers' Compensation Court's ruling. Claimant also cites numerous facts elicited at trial in support of the ruling. Underlying this divergence is the fact that there was a close factual question involved in this case. The trial court acknowledged that there was conflicting medical evidence, by exposing the conflicts in its findings of fact no. Is 24 and 36. Nevertheless, it found that a slight preponderance of the medical evidence showed claimant's injury to have been caused by the October 21, 1978, accident. This Court has long held that great deference should be given to the decision of the trier of facts based on conflicting evidence. This Court does not sit as the trier of fact, but when there is conflicting evidence, only sits to determine if substantial evidence exists to support the trial court's findings. Jensen v. Zook Brothers Construction (1978), 178 Mont. 59, 582 P.2d 1191; Stamatis v. Bechtel Power Co. (Mont. 1979), 601 P.2d 403, 36 St.Rep. 1866. The Workers' Compensation Court rested its decision on claimant's own testimony, histories taken by Dr. Michael Sousa and Dr. Marvin Harris, their testimony concerning the nature and source of compression fractures such as claimant's, and the testimony of Dr. Susan Avery about her examination of claimant prior to the incident at the Harris Ranch. When compared with the evidence cited by appellant, there clearly was substantial evidence presented at trial to support the trial court's findings. The fourth error asserted by appellant is that there was no medical evidence to support a finding that claimant is temporarily totally disabled. The trial court ordered that spinal nerve tests be performed on claimant, and that temporary total disability payments begin when claimant reports for the tests and continue while he is undergoing treatment if he experiences a total wage loss. From its brief, it appears appellant's major concern is that the order will be used by claimant as a vehicle to prove his case; the argument being that there is insufficient medical evidence to find temporary total disability otherwise and these tests may provide it. Temporary total disability exists when an injury results in total loss of wages and continues until the worker is as far restored as the permanent character of the injuries will permit. Section 39-71-116(19), MCA. When the application of a well defined statutory term is involved as in this case, the standard of review is whether, in view of the findings of fact, the court agrees that the conclusion was the most appropriate application of the statutes to the facts. Anderson v. Carlson Transport (1978), 178 Mont. 290, 583 P.2d 440. Since appellant attacks the sufficiency of the medical evidence, the trial court's findings must be tested by the Jensen standard of review. If the Jensen test is met, their application to the statutory definition is then scrutinized. To withstand this Court's scrutiny, the application of the term by the trial court must have been legally correct. In the case at bar, the trial court placed much emphasis on the testimony of Dr. Sousa concerning claimant's condition at the date of the hearing, because of its recency. The next most recent examination was by Dr. Thomas Power, a year prior to Dr. Sousa's examination. As the court noted in finding of fact no. 3 5 , Dr. Power changed his mind as to the original diagnosis in his deposition. This fact, coupled with testimony by claimant and his wife as to communication problems between Dr. Power and claimant, fully justifies the trial court's reliance on Dr. Sousa's testimony. Dr. Sousa testified, and the trial court so found, that the tests were necessary to restore claimant to his best physical condition, and thus he has not reached a healing plateau. There is clearly substantial evidence to support the trial court's finding. Based upon the above facts, the court applied the statutory definition of temporary total disability, and found claimant entitled to appropriate payments for that condition if he experiences a total loss of wages while undergoing treatment. There is clearly no error in the application of the statute to the facts as found by the trial court. The medical evidence about claimant's condition at the hearing date showed him still disabled. While he undergoes treatment, claimant will of necessity experience a total loss of wages. Therefore, the two main prongs of the statutory definition are met; claimant has not been as far restored as the permanent notice of his injuries will allow, and he will experience a total loss of wages. On the facts as found by the Workers' Compensation Court, the application of the statutory term is legally correct. The final issue is whether the Workers' Compensation Court erred by not allowing appellant credit for overpayment of compensation. It was conceded by claimant that he was overpaid a lump sum of $1,500 which must be offset against any award to claimant and we agree. Appellant further concedes that there have been social security benefits in the amount of $4,704.97 which have not been offset. Pursuant to section 39-71-701(2), MCA, this amount must also be offset against any award to claimant. As the Workers' Compensation Court maintained jurisdiction over this case, the appropriate adjustments should be made by that court. Affirmed with modification of the award. N . We concur:

September 29, 1983

57540b07-a7d4-4392-91fd-f40adf6e0fd1

MARTIN v COMMUNITY GAS OIL CO

N/A

83-073

Montana

Montana Supreme Court

Xo. 83-73 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 HOMER V. MARTIN and LORETTA MARTIN, d/b/a IURTIN REALTY, Plaintiff and Appellants, COIIIMUNITY GAS AND OIL COMPANY, INC., Defendant and Respondent. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Ravalli, The Honorable James B. Wheelis, Judge presiding. COUNSEL OF RECORD: For Appellants: Datsopoulos, MacDonald & Lind, Missoula, Montana For Respondent: Boone, Karlberg & Haddon, Missoula, Montana - - Submitted on Briefs: June 2, 1983 Decided: August 24, 1983 Filed: AUG 24 1 9 8 3 Clerk Mr. J u s t i c e L . C. Gulbrandson d e l i v e r e d t h e Opinion of t h e Court. T h i s c a s e comes on appeal from a summary judgment rendered i n t h e District Court of t h e Fourth J u d i c i a l D i s t r i c t , R a v a l l i County. The p e r t i n e n t p a r t i e s t o t h e a c t i o n a r e a p p e l l a n t Martin R e a l t y ( M a r t i n ) and respondent Community Gas and O i l Co., I n c . (Community). For t h e reasons s t a t e d below, w e a f f i r m t h e judgment of t h e D i s t r i c t Court. Martin arranged f o r t h e s a l e of a t r a c t of land from Community t o t h e L i f e E v a n g e l i s t i c ~ s s o c i a t i o n ( L i f e E v a n g e l i s t i c ) f o r a p r i c e of $1,168,926. On October 6 , 1975, Community and L i f e E v a n g e l i s t i c e n t e r e d i n t o a c o n t r a c t f o r deed f o r t h e s a l e of t h e land. The c o n t r a c t f o r deed c a l l e d f o r annual payments according t o a p a r t i c u l a r schedule. I n a d d i t i o n , t h e c o n t r a c t f o r deed contained a "deed r e l e a s e " p r o v i s i o n a l l o w i n g L i f e E v a n g e l i s t i c t o o b t a i n t r a c t s of t e n a c r e s or more upon t h e payment of $1,000 p e r a c r e . The deed r e l e a s e p r o v i s i o n a l s o contained t h e following s e n t e n c e : " I t is s p e c i f i c a l l y understood and agreed t h a t any such payment (deed r e l e a s e ) made t o t h e Escrow Agent s h a l l not r e l i e v e t h e Buyer of t h e o b l i g a t i o n t o make t h e next annual payment on t h e purchase and s a l e p r i c e and of i n t e r e s t a s h e r e i n provided f o r ." On October 8, 1975, Martin and Community executed a w r i t t e n agreement, d r a f t e d by Community, which o u t l i n e d t h e terms of M a r t i n ' s commission i n c i d e n t t o t h e s a l e of land t o L i f e E v a n g e l i s t i c . Because L i f e E v a n g e l i s t i c was unable t o make t h e e n t i r e down payment from which M a r t i n ' s 6 p e r c e n t commission was t o be p a i d , Martin agreed t o payment of t h e commission over a p e r i o d of t i m e . The agreement i n d i c a t e d t h a t r e c e i p t of t h e com- m i s s i o n payments would occur a s each payment under t h e c o n t r a c t f o r deed was made by L i f e E v a n g e l i s t i c . I n p a r t i c u l a r , t h e com- m i s s i o n c o n t r a c t s t a t e d : " I t is s p e c i f i c a l l y understood t h a t Community Gas w i l l n o t be r e s p o n s i b l e t o you f o r any of t h e commission payments s p e c i f i e d above u n l e s s - - and u n t i l t h e Buyer makes t h e payment from -- -- which t h e commission payment is t o be made." (emphasis added ) P u r s u a n t t o t h e s e two documents, L i f e E v a n g e l i s t i c made its f i r s t payment on t h e d a t e t h e c o n t r a c t f o r deed was signed and M a r t i n r e c e i v e d t h e corresponding commission payment. The n e x t two payments were made, although not on t h e d a t e s s p e c i f i e d i n t h e c o n t r a c t f o r deed and t h e commission c o n t r a c t , and M a r t i n r e c e i v e d t h e corresponding commission payments. Community's f i n a l payment t o Martin was t o occur on December 6 , 1978, upon L i f e E v a n g e l i s t i c making a $110,000 payment t o Community. L i f e E v a n g e l i s t i c was unable t o make t h e December 6 payment, a l t h o u g h it d i d make payments f o r deed r e l e a s e s both p r i o r t o and f o r s e v e r a l months following t h e due d a t e . On February 1 5 , 1979, Community and L i f e E v a n g e l i s t i c e n t e r e d i n t o a m o d i f i c a t i o n agreement extending t h e time f o r payment t o J u l y 31, 1979. L i f e E v a n g e l i s t i c paid $25,000 a t e x e c u t i o n of t h e agreement but f a i l e d t o make a payment due on A p r i l 1 5 , 1979. A s a r e s u l t , Community d e c l a r e d t h e c o n t r a c t f o r f e i t e d and c l o s e d t h e escrow. On J u l y 11, 1979, t h e p a r t i e s made a n o t h e r a t t e m p t a t e x t e n d i n g t h e due d a t e . When L i f e E v a n g e l i s t i c missed a payment under t h a t agreement, Community deemed money r e c e i v e d t o be " r e n t " and r e p o s s e s s e d t h e land on August 31, 1979. M a r t i n brought t h i s a c t i o n i n District Court contending t h a t it was e n t i t l e d t o t h e l a s t commission payment because Community a c t u a l l y r e c e i v e d more money from L i f e E v a n g e l i s t i c t h a n was r e q u i r e d t o t r i g g e r t h e f i n a l payment under t h e commission c o n t r a c t of October 8 , 1975. S p e c i f i c a l l y , Martin a s s e r t e d t h a t Community was o b l i g e d t o count t h e money paid f o r " r e n t " and deed r e l e a s e s toward t h e $110,000 amount o r i g i n a l l y due on December 6 , 1978, because a t t h e time of e x e c u t i o n of t h e commission agreement t h e p a r t i e s d i d n o t intend t o exclude t h e s e amounts. Community argued t h a t Martin was paid e v e r y t h i n g due under t h e commission agreement of October 8 , 1975, because, by t h e t e r m s of t h a t agreement, c o n d i t i o n s p r e c e d e n t t o t h e payment of any a d d i t i o n a l commission were not met. B e f o r e commencement of a j u r y t r i a l , t h e c o u r t g r a n t e d Community's motion i n l i m i n e t o exclude a l l evidence a s t o t h e i n t e n t of t h e p a r t i e s t o t h e commission c o n t r a c t e x c e p t t h e com- m i s s i o n c o n t r a c t i t s e l f and c o n t r a c t f o r deed. I n a d d i t i o n , t h e t r i a l c o u r t concluded t h a t although deed r e l e a s e payments f o r l e s s t h a n t e n a c r e s accepted b e f o r e d e f a u l t on t h e c o n t r a c t f o r deed c o u l d be counted towards L i f e E v a n g e l i s t i c 's annual payments, t h o s e amounts were s u b s t a n t i a l l y i n s u f f i c i e n t t o c o n s t i t u t e $110,000 and t h e r e b y t r i g g e r M a r t i n ' s l a s t commission payment. A s a r e s u l t of t h e s e r u l i n g s , t h e t r i a l c o u r t granted Community's motion f o r a summary judgment. M a r t i n now a s s e r t s t h a t t h e t r i a l c o u r t e r r e d i n its r u l i n g t o exclude e x t r i n s i c evidence of t h e i n t e n t of t h e p a r t i e s t o t h e commission c o n t r a c t . S p e c i f i c a l l y , M a r t i n contends t h a t t h e c o n t r a c t f o r deed and commission c o n t r a c t cannot be read t o g e t h e r because i n o r d e r f o r two c o n t r a c t s t o be read a s one, t h e p a r t i e s must be t h e same f o r both. Thus, t h e o n l y agreement t h e t r i a l c o u r t should have considered is t h e commission agreement between M a r t i n and Community which Martin a r g u e s is ambiguous on its f a c e because it does not i n d i c a t e whether t h e p a r t i e s would c o n s i d e r deed r e l e a s e payments o r r e n t towards annual payments under t h e c o n t r a c t f o r deed. T h e r e f o r e , because of t h e a l l e g e d ambiguity, t h e t r i a l c o u r t e r r e d i n d i s a l l o w i n g e x t r i n s i c evidence of t h e p a r t i e s ' i n t e n t a t t h e time of e n t e r i n g i n t o t h e commission c o n t r a c t . G e n e r a l l y , when a c o n t r a c t is reduced t o a w r i t i n g t h a t is p l a i n and unambiguous, t h e i n t e n t of t h e p a r t i e s is t o be a s c e r - t a i n e d from t h a t w r i t i n g a l o n e i f p o s s i b l e . S e c t i o n 28-3-303, MCA; Merritt v. Merritt ( 1 9 7 4 ) , 165 Mont. 172, 526 P.2d 1375. Moreover, t h e p a r o l evidence r u l e p r o v i d e s t h a t t h e terms of a w r i t t e n c o n t r a c t cannot be a l t e r e d o r c o n t r a d i c t e d by e x t r i n s i c e v i d e n c e s u b j e c t t o c e r t a i n recognized e x c e p t i o n s . Ambiguity is a n e x c e p t i o n t o t h e p a r o l evidence r u l e . S e c t i o n 28-2-905, MCA; Payne v. Buechler ( 1 9 8 1 ) , - Mont. ---- , 628 P.2d 646, 38 St.Rep. 799. The t r i a l c o u r t examined t h e commission c o n t r a c t and t h e c o n t r a c t f o r deed and determined t h e c o n t r a c t f o r commission of October 8 , 1975, was not ambiguous. The c o n t r a c t s t a t e d : " I t is s p e c i f i c a l l y understood t h a t Community Gas w i l l n o t be r e s p o n s i b l e t o you f o r any of t h e commission payments s p e c i f i e d above u n l e s s and u n t i l the Buyer makes t h e payment from -- - - - which t h e commission Davment is t o be made." C . ' - - - - ( emphasis added ) C l e a r l y , t h e words of t h e agreement show t h a t it was t h e i n t e n t of t h e p a r t i e s t h a t t h e commission payments be c o n t i n g e n t upon payments owed under t h e c o n t r a c t f o r deed. The commission c o n t r a c t cannot be c o n s t r u e d o t h e r w i s e . Payne v. B u e c h l e r , s u p r a . Ambiguity o n l y e x i s t s when a c o n t r a c t t a k e n a s a whole i n i t s wording o r phraseology is r e a s o n a b l y s u b j e c t t o two d i f f e r e n t i n t e r p r e t a t i o n s . K e i s e r v. S t a t e Bd. of Regents of Higher Educ. (1981) I Mont . , 630 P.2d 194, 38 St.Rep. 674; Williams v. I n s . Co. of North America ( 1 9 6 7 ) , 150 Mont. 292, 434 P.2d 395. Because t h e language of t h e commission c o n t r a c t was c l e a r and unambiguous it was t h e duty of t h e t r i a l c o u r t t o a p p l y t h e language, a s w r i t t e n , t o t h e f a c t s of t h e c a s e and d e c i d e accord- i n g l y . S e c t i o n 1-4-101, MCA; K a r t e s v. K a r t e s ( 1 9 8 1 ) , Mont. , 636 P.2d 272, 38 St.Rep. 1941; Danielson v. Danielson ( 1 9 7 7 ) , 172 Mont. 55, 560 P.2d 893. Thus, t h e t r i a l c o u r t by way o f Communityls motion i n l i m i n e , p r o p e r l y d i s a l l o w e d e x t r i n s i c e v i d e n c e of t h e p a r t i e s ' i n t e n t t h a t would modify, a l t e r , o r c o n t r a d i c t t h e terms of t h e w r i t t e n commission c o n t r a c t . M a r t i n a r g u e s f u r t h e r t h a t because t h e t r i a l c o u r t looked t o t h e c o n t r a c t f o r deed i n making its d e c i s i o n , a d d i t i o n a l e v i d e n c e of t h e p a r t i e s 1 i n t e n t should have been allowed. I n determining t h e terms of a c o n t r a c t , however, t h e c o u r t was allowed t o r e f e r t o t h e c i r c u m s t a n c e s under which it was made and t h e m a t t e r t o which it r e l a t e s . S e c t i o n 28-3-402, MCA; Mathis v. Daines (1982) t Mont . , 639 P.2d 503, 39 St.Rep. 73. A p p l i c a t i o n of t h i s r u l e does not i p s o f a c t o open t h e door t o n o n a p p l i c a t i o n o f t h e par01 evidence r u l e . On t h e c o n t r a r y , it o n l y a i d s t h e c o u r t i n a s c e r t a i n i n g whether t h e r e is an ambiguity i n t h e c o n t r a c t . The c o n t r a c t f o r deed i n paragraph 16 r e l a t i n g t o deed r e l e a s e payments s t a t e s , ". . . t h a t any such payment made t o t h e Escrow Agent s h a l l n o t r e l i e v e t h e Buyer of t h e o b l i g a t i o n t o make t h e n e x t annual payment." Once it was c l e a r t o t h e t r i a l c o u r t t h a t deed r e l e a s e payments made under t h e c o n t r a c t f o r deed were not t o be counted toward t h e annual payments, it p r o p e r l y concluded t h a t t h e com- m i s s i o n c o n t r a c t was not ambiguous and t h a t it governed t h e i n t e n t of t h e p a r t i e s . E x t r i n s i c evidence could o n l y be con- s i d e r e d i f t h e commission agreement had, on its f a c e , appeared t o be ambiguous or u n c e r t a i n . H i l l C a t t l e Corp. v . 79 Mont. 327, 256 P. 497. I n a d d i t i o n , t h e a p p e l l a n t argues t h a t t h e commission agreements could n o t have been considered along w i t h t h e c o n t r a c t f o r deed because t h e p a r t i e s t o t h e two agreements were not t h e same. See 28-3-203, MCA. However, it was not t h e purpose of t h e t r i a l c o u r t t o examine t h e c o n t r a c t f o r deed i n o r d e r t h a t it be t a k e n t o g e t h e r w i t h t h e commission c o n t r a c t a s a s i n g l e agreement. R a t h e r , t h e c o n t r a c t f o r deed was u t i l i z e d t o d e t e r - mine if t h e commission c o n t r a c t was ambiguous, and 28-3-402, MCA, p r o v i d e s t h a t a c o n t r a c t "may be explained by r e f e r e n c e t o t h e c i r c u m s t a n c e s under which it was made and t h e m a t t e r t o which it r e l a t e s . " Although Martin asserts t h a t t h e commission agreement should be construed most s t r o n g l y a g a i n s t Community, it has long been h e l d t h a t t o i n t e r p r e t t h e language of a c o n t r a c t a g a i n s t t h e d r a f t o r , t h e d r a f t o r must c a u s e --- t h e u n c e r t a i n t y . P a r k h i l l v. F u s e l i e r ( 1 9 8 1 ) , Mont. , 632 P.2d 1132, 38 St.Rep. 1424; G l a c i e r Campground v. Wild R i v e r s , I n c . ( 1 9 7 8 ) , 182 Mont. 389, 597 P.2d 689. I n t h e case a t bar t h e t r i a l c o u r t p r o p e r l y h e l d t h a t t h e commission c o n t r a c t lacked any u n c e r t a i n t y . I n h i s r e p l y b r i e f , Martin maintains t h a t , i n any e v e n t , t h e commission agreement does n o t c o n t a i n a v a l i d c o n d i t i o n p r e c e d e n t and, t h e r e f o r e , payment of t h e commission must be made. Martin a r g u e s t h a t t h e c o n t r a c t language p r o v i d i n g t h a t Community would n o t be r e s p o n s i b l e f o r making any commission payments " u n l e s s and u n t i l t h e Buyer [ L i f e E v a n g e l i s t i c ] makes t h e [ c o n t r a c t ] payment . . .I1 e s t a b l i s h e s o n l y a time f o r payment and n o t a c o n d i t i o n p r e c e d e n t t o payment. A p p e l l a n t c i t e s a l i s t of c a s e s from o t h e r j u r i s d i c t i o n s f o r t h e p r o p o s i t i o n t h a t t i m e con- t i n g e n c i e s a l o n e w i l l not excuse payments. S e e , e.g., Mignot v. P a r k h i l l ( 1 9 6 4 ) , 237 O r . 450, 391 P.2d 755. W e do not d i s a g r e e w i t h a p p e l l a n t ' s s t a t e m e n t of t h e law w i t h r e s p e c t t o time c o n t i n g e n c i e s . N e v e r t h e l e s s , we b e l i e v e t h e agreement does e s t a b l i s h a s p e c i f i c and unambiguous c o n d i t i o n p r e c e d e n t . The p a r t i e s agreed t h a t Community would not make com- m i s s i o n payments " u n l e s s and u n t i l " L i f e E v a n g e l i s t i c f u l f i l l e d its d u t i e s under t h e c o n t r a c t f o r deed. The word " u n l e s s " s u g g e s t s t h a t one has a r e s e r v a t i o n or an o p t i o n t o change o n e ' s mind provided a c e r t a i n e v e n t o c c u r s . S e e , B l a c k ' s Law D i c t i o n a r y 1378, ( r e v . 5 t h ed. 1 9 7 9 ) . By use of t h e word " u n l e s s " Community r e s e r v e d t h e r i g h t t o withhold commission payments i n t h e e v e n t t h a t L i f e E v a n g e l i s t i c f a i l e d t o f u l f i l l i t s c o n t r a c t u a l d u t i e s . The time contingency, which a r i s e s from t h e use of t h e word " u n t i l " , does not come i n t o p l a y u n t i l t h e c o n d i t i o n p r e c e d e n t o c c u r s . Cases r e l i e d upon by a p p e l l a n t speak t o c o n t r a c t s c o n t a i n i n g o n l y time c o n t i n g e n c i e s . S e e , e.g., Mignot, s u p r a . Community was a c t i n g w i t h i n c o n t r a c t u a l bounds by w i t h h o l d i n g t h e f i n a l commission payment u n l e s s L i f e E v a n g e l i s t i c came up w i t h t h e f i n a l b u y e r ' s payment. F i n a l l y , Martin a r g u e s t h a t because it d i d not r e c e i v e t h e f i n a l commission payment of $23,378.52 on t o p of t h e $46,757.04 it had p r e v i o u s l y r e c e i v e d , it was somehow s u b j e c t e d t o an " a b h o r e n t " f o r f e i t u r e . I n o r d e r fox a f o r f e i t u r e t o o c c u r , however, t h e p a r t y whose p r o p e r t y is d i v e s t e d must have a r i g h t i n t h a t p r o p e r t y . S e e , Ridgeway v. C i t y of Akron (1940 Ohio C t . App.), 42 N.E.2d 724, 726. Martin cannot c l a i m a r i g h t t o t h e f i n a l commission payment. Any r i g h t he might have obtained was c o n d i t i o n e d on t h e f i n a l payment by L i f e E v a n g e l i s t i c under t h e c o n t r a c t f o r deed. S i n c e t h e r e was no v a l i d c o n t r a c t payment, t h e r e was no e n f o r c e a b l e r i g h t i n t h e commission payment. With no e n f o r c e a b l e r i g h t , Martin cannot make a v a l i d c l a i m t h a t he h a s s u f f e r e d a f o r f e i t u r e . ~7 I n sum, w e f i n d no r e v e r s i b l e e r r o r , and & r e f o r e a f f i r m . I Justice / We concur: /

August 24, 1983

6dee3ee4-606f-4998-b3ac-e7b1e90e6c36

SHANNON v HULETT

N/A

83-101

Montana

Montana Supreme Court

No. 83-101 IN THE SUPREME COIJRT O F THE STATE O F MONTANA 19 8 3 CHARLES SHANNON, P l a i n t i f f and Respondent, DONALD E . HULETT, EAST VALLEY TRUCKING and STEVE LUKSHA, Defendants and Appellants Appeal from: D i s t r i c t Court o f t h e F i f t h J u d i c i a l D i s t r i c t I n and For t h e County o f J e f f e r s o n Honorable Frank D&, Judge p r e s i d i n g . BL+==? t rJ Counsel o f Record: For Appellant : C o r e t t e , Smith, Polhman C , A l l e n , B u t t e , Montana Robert M. Carlson and R , D. C o r e t t e , Argued For Respondent : John L . P e t e r s o n , B u t t e , Montana John L . P e t e r s o n , Argued Submitted: June 6 , 1 9 8 3 Decided: August 1 6 , 1983 M r . Chief J u s t i c e Prank 1. Haswell d e l i v e r e d t h e 3 p i n i o n of t h e Court. Donald H u l e t t , d/b/a E a s t V a l l e y Trucking, and S t e v e n Luksha a p p e a l t h e J e f f e r s o n County D i s t r i c t Court o r d e r g r a n t i n g C h a r l e s Shannon a new t r i a l . W e r e v e r s e . On September 2 2 , 1979, Shannon was d r i v i n g h i s 1966 C h e v r o l e t nortnbound on 1-15 a t a b o u t 35 m.p.h. Luksha was d r i v i n g a 1972 Kenworth t r u c k w i t h a p u p - t r a i l e r , owned by h i s employer H u l e t t , southbound on 1-15 approximately 40 t o 45 n.p.h. Both d r i v e r s were on a two-lane p o r t i o n of 1-15 j u s t s o u t h of Boulder, which i n many p l a c e s was i n poor c o n d i t i o n . The r e c o r d i n d i c a t e s t h a t because of t h e rough shoul- d e r , Luksha was v e r y c l o s e t o t h e c e n t e r l i n e . J u s t a f t e r he e n t e r e d t h e two-lane highway, f i v e oncoming c a r s passed by him, and he checked t h e i r p r o g r e s s i n h i s r e a r v i e w m i r r o r . When he looked forward he saw Shannon c u t t i n g through an approaching c u r v e one o r two f e e t i n h i s l a n e o f t r a v e l . Luksha t e s t i f i e d t h a t lt appeared a head-on c o l l i s i o n was ~ m m i n e n t , s o he swerved h i s t r u c k t o t h e r i g h t . T h i s sudden a c t i o n and t h e rough road caused t h e t r u c k t o l e a n b a d l y and Luksha a l m o s t l o s t c o n t r o l . I t a l s o caused t h e p u p - t r a i l e r t o swing o u t i n t o Shannon's l a n e of t r a v e l . The l e f t s i d e of t h e t r a i l e r c o l l i d e d w i t h t h e f r o n t and t o p of Shannon's v e h i c l e . Shannon s u f f e r e d s e r i o u s i n j u r y . Shannon brought an a c t i o n i n J e f f e r s o n County D i s t r i c t Court a g a i n s t a p p e l l a n t s s e e k i n g damages a r i s i n g from t h e a c c i d e n t . By s p e c i a l v e r d i c t t h e j u r y found a p p e l l a n t s n o t " g u i l t y of n e g l i g e n c e which was t h e proximate c a u s e of t h e claimed damage." T h e r e a f t e r , Shannon moved t h e c o u r t t o s e t a s i d e t h e j u r y v e r d i c t and t o g r a n t a new t r i a l . The D i s t r i c t Court g r a n t e d a new t r i a l w i t h o u t s u p p o r t i n g memorandum. An a p p e a l was brought t o t h i s Court which f i l e d its o p i n i o n on J a n u a r y 1 9 , 1983. T h i s Court d i s m i s s e d t h e a p p e a l w i t h o u t p r e j u d i c e and remanded t h e c a s e t o t h e D i s t r i c t Court f o r r e c o n s i d e r a t i o n and e n t r y of an o r d e r s t a t i n g t h e grounds f o r g r a n t i n g a new t r i a l i n compliance with Rule 5 9 ( f ) , M.R.Civ.P. Shannon v. H u l e t t ( 1 9 8 3 ) , Mont. , 656 P.2d 825, 40 St.Rep. 35. The r e m i t t i t u r was f i l e d i n D i s t r i c t Court on February 1, 1983. On t h a t same day, D i s t r i c t J u d g e s F r a n k B l a i r ( r e t i r e d ) and F r a n k D a v i s complied with t h i s C o u r t ' s o r d e r by f i l i n g memoranda i n s u p p o r t of t h e o r d e r g r a n t i n g Shannon's motion f o r a new t r i a l i n t h e D i s t r i c t Court f o r J e f f e r s o n County. Luksha and B u l e t t a p p e a l t h e o r d e r g r a n t i n g a new t r i a l . They r a i s e two i s s u e s f o r our c o n s i d e r a t i o n : 1. Was t h e D i s t r i c t C o u r t ' s o r d e r and memorandum i n s u p p o r t of o r d e r p r o c e d u r a l l y proper and i n d i c a t i v e of a c t u a l c o n s i d e r a t i o n g i v e n t o its d e c i s i o n ? 2. Did t h e D i s t r i c t Court abuse its d i s c r e t i o n by g r a n t i n g a new t r i a l ? W e r e v e r s e on t h e ground t h a t t h e D i s t r i c t Court abused its d i s c r e t i o n i n s e t t i n g a s i d e t h e j u r y v e r d i c t . The f i r s t i s s u e is t h u s moot, and w e do n o t a d d r e s s it. E s s e n t i a l l y , a p p e l l a n t s contend t h a t a new t r i a l may n o t be g r a n t e d i f t h e r e is s u b s t a n t i a l e v i d e n c e t o s u p p o r t t h e j u r y v e r d i c t . Here, t h e r e a r e s u f f i c i e n t f a c t s t o s u p p o r t t h e j u r y ' s v e r d i c t t h a t Luksha was f r e e from n e g l i - gence, and t h e D i s t r i c t Court abused i t s d i s c r e t i o n i n s e t t i n g a s i d e t h e v e r d i c t . Shannon a r g u e s t h a t t h e r e is no c o n f l i c t i n g e v i d e n c e which can s u p p o r t t h e j u r y d e t e r m i n a t i o n t h a t Luksha was f r e e from n e g l i g e n c e . H e was n e g l i g e n t a s a m a t t e r of l a w when t h e t r a i l e r c r o s s e d i n t o Shannon's l a n e of t r a v e l . S h a n n o n ' s i n l u r i e s were p r o x i m a t e l y c a u s e d by s u c h n e g l i g e n c e . The s t a n d a r d f o r g r a n t i n g a new t r i a l is w e l l e s t a b - l i s h e d i n Montana. I f t h e r e is s u b s t a n t i a l e v i d e n c e s u p p o r t i n g t h e v e r d i c t , a new t r i a l may n o t be g r a n t e d . Srenberg v. Nee1 ( 1 9 8 0 ) , Mont . , 613 P.2d 1007, 37 St.Rep. 1170; Lyndes v. S c o f i e l d ( 1 9 7 9 ) , 180 Mont. 177, 589 P.2d 1000; Kincheloe v. Rygg ( 1 9 6 8 ) , 152 Mont. 187, 4 4 8 P.2d 1 4 0 ; Hinton v. P e t e r s o n ( 1 9 4 6 ) , 118 Mont. 574, 169 P.2d 333. N e i t h e r may a D i s t r i c t Court g r a n t a new t r i a l s i m p l y because it b e l i e v e d one l i n e of t e s t i m o n y d i f f e r e n t frorn t h a t which t h e j u r y b e l i e v e d . Yerkich v. O p s t r a ( 1 9 7 8 ) , 176 Mont. 272, 577 P.2d 857; I n r e E s t a t e of Hardy ( 1 9 5 8 ) , 133 Mont. 536, 326 P.2d 692. When a D i s t r i c t C o u r t d e n i e s a motion f o r a new t r i a l , w e a r e less i n c l i n e d t o d i s t u r b t h a t o r d e r because t h e lower c o u r t h a s i n d i c a t e d f a i t h i n t h e j u r y v e r d i c t . However, when a D i s t r i c t C o u r t is p r e s e n t e d w i t h e v i d e n c e i n f a v o r of t n e v e r d i c t b u t p r o c e e d s t o g r a n t a new t r i a l , it is our d u t y t o test t h e e v i d e n c e a g a i n s t t h e v e r d i c t . Campeau v. L e w i s ( 1 9 6 5 ) , 144 Mont. 543, 549, 398 P.2d 960, 963. W e find t h e r e is s u f f i c i e n t e v i d e n c e t o s u p p o r t t h e j u r y ' s v e r d i c t . The e v i d e n c e is u n d i s p u t e d t h a t Shannon, w h i l e d r i v i n g northbound on 1-15, c u t through a c u r v e i n t h e opposing l a n e . Luksha, approaching Shannon, responded by swerving t o t h e r i g h t t o avoid a head-on c o l l i s i o n . There was no evidence i n d i c a t i n g t h a t Luksha was d r i v i n g u n s a f e l y p r i o r t o observing Shannon o r t h a t he was n e g l i g e n t i n any o t h e r way. By s p e c i a l v e r d i c t t h e j u r y found t h a t n e i t h e r Luksha nor h i s employer were g u i l t y of any n e g l i g e n c e which p r o x i - mately caused t h e claimed damage. C o u r t ' s I n s t r u c t i o n Nos. 3 and 4 s t a t e : "Every p e r s o n is r e s p o n s i b l e f o r i n j u r y t o t h e p e r s o n o r p r o p e r t y of a n o t h e r , caused by want o i o r d i n a r y c a r e o r s k i l l . "When used i n t h e s e i n s t r u c t i o n s , n e g l i - gence means want of such o r d i n a r y c a r e o r s k i l l . Such want of o r d i n a r y c a r e o r s k i l l e x i s t s when t h e r e is a f a i l u r e t o do t h a t which a r e a s o n a b l e and p r u d e n t person would o r d i n a r i l y have done under t h e c i r c u m s t a n c e s of t h e s i t u a t i o n , o r doing what such p e r s o n under t h e e x i s t i n g c i r c u m s t a n c e s would n o t have done." In- s t r u c t i o n No. 3 . "You a r e i n s t r u c t e d t h a t a v i o l a t i o n of law is of no consequence u n l e s s it was a proximate c a u s e of ( o r c o n t r i b u t e d a s a proximate c a u s e t o ) an i n j u r y found by you t o have been s u f f e r e d by t h e P l a i n - t i f f . " I n s t r u c t i o n No. 4. Under t h e f a c t s of t h e c a s e and w i t h i n t h e p a r a m e t e r s of t h e above i n s t r u c t i o n s t h e j u r y could have, f i r s t of a l l , found Luksha committed no n e g l i g e n c e . There was no e v i d e n c e i n d i c a t i n g he was n e g l i g e n t p r i o r t o t a k i n g e v a s i v e a c t i o n . F u r t h e r , Luksha a c t e d a s any r e a s o n a b l e and p r u d e n t p e r s o n would when f a c i n g an imminent head-on c o l l i s i o n - - h e moved o u t o f t h e way. Secondly, t h e f a c t t h a t Shannon w a s d r i v i n g i n t o t h e oncoming l a n e when approaching Luksha f u r t h e r s u p p o r t s a f i n d i n g t h a t s u c h a c t i o n was t h e p r o x i m a t e c a u s e o f Shannon I s i n j u r i e s . W e v a c a t e t h e o r d e r g r a n t i n g a new t r i a l . W e r e i n - s t a t e t h e j u r y v e r d i c t and t h e judgment e n t e r e d t h e r e o n . ~LJk.8 t $ & A , C h i e f J u s t i c e W e concur: Mr. Justice Frank B. Morrison specially concurs as follows: I concur in the result but not in all that is said in the majority opinion. The majority dismisses negligence on the part of the defandant without discussing defendant's statutory violation. Is the majority taking the position that defendant was involuntarily across the centerline in the wrong lane of traffic? If so there is support in the law excusing the statutory violation. However, if the defendant made a calculated judgment to leave his lane of traffic for some reason, a holding that a statutory violation is excused represents new law in Montana. The issue is concluded without discussion. The majority simply states that the defendant's conduct was to be considered by the jury under the "reasonable and prudent person" standard. The defendant's statutory violation is ignored. I would reverse the granting of a new trial and reinstate the defense verdict for the reason that the jury could have found that any negligence on the part of the defendant was not a proximate cause of the accident. The record in this case supports the defense verdict on the basis that plaintiff's conduct, rather than the conduct of defendant, formed the sole proximate cause of the accident and consequent injuries to the plaintiff. Mr. Justice Daniel J. Shea, dissenting: I would affirm the order granting a new trial. The statutory violation of defendant driver is clear--the tail end of his tractor-trailer rig was on the wrong side of the road at the time of collision. I would further hold as a matter of law that at least one proximate cause of the accident was the pup-trailer being on the wrong side of the highway at the time of impact. Regardless of plaintiff's initial negligence, he had a right to expect that when he recovered from his own driving error that his own lane of traffic would be clear. It is not necessary that the driver of the tractor-trailer rig be actively negligent. Here, he may not have been. He swerved his rig to avoid the plaintiff's vehicle which was initially in the wrong lane of traffic. However, the effect of swerving the rig was to swing the pup-trailer into plaintiff's lane of travel. I have no doubt that a contributing proximate cause of the accident was the failure of the defendant driver to have his rig in the proper lane of travel. There being negligence (a statutory violation) and there being negligence which was at least a contributing proximate cause of the accident, the jury could not properly absolve the defendant of all responsibility. Therefore, the trial court was correct in granting a new trial. The distance between the front bumper of the tractor to the rear bumper of the pup-trailer was 73 feet, 6 inches. The pup trailer was hooked to the main trailer with a 15 foot tongue that produced a "swivel at the back of the truck." This combination rig made it an extremely long and dangerous highway vehicle, and the danger was multiplied many times over by the fact that the tractor was pulling 10,000 gallons of gasoline. Plaintiff, an 87 year old man, regardless of his own initial negligence in swerving onto the lane of the tractor-trailer, had a right to assume that once he recovered from his own driving error he would not be confronted with the pup-trailer blocking in part his lane of travel. The extreme length of the tractor-trailer rig made it impossible for the defendant driver to have his rig under control. Although federal and state laws seem to be ever more permissive as to allowable tractor-trailer lengths, the traffic safety laws must also be interpreted to protect the driving public who meet these monsters on the highway. We have failed in that duty here.

August 16, 1983

bb1c68ea-394b-4f85-9501-4e572bd85fbc

MARRIAGE OF SNELL

N/A

82-394

Montana

Montana Supreme Court

No. 8 2 - 3 9 4 I N THE SUPREME COURT OF THE STATE OF 310NTA?IA 1 9 8 3 I i J RE TIJE MARRIAGE OF W. CARTER SNELL, P e t i t i o n e r and R e s p o n d e n t , -VS- HARRIETTE A. SNELL, R e s p o n d e n t and A p p e l l a n t . APPEAL FROM: D i s t r i c t C o u r t of t h e Sixteenth J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of R o s e b u d , T h e I I o n o r a b l e A l f r e d B. C o a t e , Judge p r e s i d i n g . COUNSEL OF RECORD: F o r A p p e l l a n t : 11. D. B u e l o w , M i l e s C i t y , M o n t a n a F o r R e s p o n d e n t : B r o w n and H u s s , M i l e s C i t y , Montana F i l e d : S u b m i t t e d on B r i e f s : June 2 , 1 9 5 3 D e c i d e d : A u g u s t 18, 1 9 8 3 . - c l e r k - Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Harriette A. Snell appeals from that part of a marital dissolution decree of the Rosebud County District Court dividing property and denying her request for maintenance. She argues that the trial court abused its discretion in not including in the marital estate certain gifts of ranch stock to her husband from his parents. She argues that the trial court abused its discretion in distributing the marital estate. Approximately 67 percent of the value was awarded to the husband and 33 percent was awarded to the wife. Finally, she argues that the court abused its discretion in not ordering the husband to pay her maintenance. We affirm. The parties were married in 1945, and the marriage was dissolved in 1982. They moved to Montana in 1948 and the husband was employed as a ranch hand from 1948 to 1951. In March 1951, the husband formed a partnership with his brother and his father, and purchased a 9,500 acre ranch near Jordan, Montana. The husband' s father made the down payment on the ranch and the balance of the purchase price was borrowed. The husband and wife lived and worked on the partnership ranch until 1957 when they purchased a house in Miles City and the wife moved there with their two children. The husband stayed on the ranch and the wife never moved back. The children attended school in Miles City. The husband's pa-rents gifted the down payment for the house and the balance of the purchase price was paid for from the husband's ranch earnings. The wife has been almost continuously employed since leaving the ranch. She worked at Montgomery Ward in Miles City from 1958 through 1963; she worked at the Miles City Star from 1964 through 1978; and she has worked as an assistant and receptionist in a doctor's office from 1978 to the present time. Her take-home pay was $530 per month at the time of the hea-ring. The wife testified that after the children finished school in 1967, her husband would not allow her to return to the ranch. The husband testified that she chose not to return to the ranch, and the trial court so found. Until October 1981, the husband provided the wife with $325 per month for upkeep of the house in Miles City. The wife had been in Miles City for three years when the Snell family ranch was incorporated in 1960. The ranch was incorporated as a family corporation and the trial court found the owners at the time of the trial to be petitioner's mother, M. Gladys Snell, petitioner, and petitioner's brother, James Snell. Respondent relinquished her interest in the ranch real property by quitclaim deed dated January 23, 1960. The husband received 118 shares at the time the ranch was incorporated, and during the 19701s, he received additional shares through a small purchase (5 shares) from his father's estate and through estate planning gifts from his father and mother. At the time of the dissolution, the husband owned less than half (258 of the 555 shares) of the ranch corporation. In determining the marital estate subject to distribution, the trial court did not include the 120 shares the husband had acquired beginning in 1974. Rather, the trial court concluded that the wife did not contribute to the growth of the marital estate after 1969 and, therefore, she had no right to share in increases in the estate since that date. The court did, however, hold that the wife had an interest in 138 shares of stock in the family corporation by 1969 and that she had a right to share in the inflationary growth of the stock to the time of dissolution. The trial court valued the total ma.rita1 estate subject to distribution at $330,514.44. The wife was awarded approximately 33 percent of this value, and the husband was awarded approximately 67 percent of this value. To the wife, the trial court awa.rded all real and personal property in her possession in Miles City -- valued at $57,919, all stock in the public corporations -- valued at $8,012.44, and a cash payment of $44,000 as representing her interest in the family ranch stock. The husband was to pay her $20,000 cash within 60 days of judgment and the remaining $24,000 was to be paid in 60 monthly installments at the rate of $400 per month, the first payment starting on the day of judgment. The total value was $109,931.44. To the husband, the trial court awarded all personal property on the ranch and 138 shares of the family corporation. The personal property was valued at $1,555. The 138 shares of stock were valued at $263,028, but from this value the husband was to make the $44,000 cash payment to the wife for her share in the stock. The total value awarded to the husband was $220,583. The wife first contends that the trial court erred in not including in the marital estate the gifts of ranch stock to the husband from his mother and father. This Court has held, however, that it is not mandatory to include in the marital estate gifted property to one of the parties during the marriage. In re Marriage of Jorgenson (1979), 180 Mont. 294, 590 P.2d 606. The question, of course, is whether there had been an abuse of discretion by not including the husband's gifted stock. We have set forth guidelines for the equitable division of property acquired by gift or bequest to one party to the marriage (In re Marriage of Herron (1980), Mont . , 608 P.2d 97, 37 St.Rep. 387), and we do not find that the trial court violated these guidelines here. The trial court properly exercised its discretion in not including certain gifted shares of stock in the marital estate. Nor do we find an abuse of discretion in the trial court awarding approximately 67 percent of the marital estate to the husband and 33 percent to the wife. The trial court's findings and conclusions are extensive and detailed. Under section 40-4-202, MCA, marital assets can be equally divided, but equal division is not mandated. 'In re Marriage of Kowis (19831, Mont . , 658 P.2d 1084, 1088, 40 St.Rep. 149; Martens v. Martens (1981), Mont. , 637 P.2d 523, 526, 38 St.Rep. 2135. The trial court considered the facts and applied the statute, and we find no abuse of discretion. Finally, the wife argues that the trial court should have ordered the husband to pay maintenance to her. The statute (section 40-4-203, MCA), however, does not mandate maintenance in a.11 circumstances ; rather, it requires maintenance only where the spouse seeking maintenance does not have sufficient property to provide for his or her reasonable needs and the spouse is unable to support himself or herself through "appropriate employment." See section 40-4-203 (1) (b) , MCA. Here, the wife has been employed for the last 25 years, she received a home, $8,000 in public corporation stock, and $44,000 in cash ($20,000 immediately and the remaining $24,000 to be paid over a five year period at the rate of $400 per month). Clearly, the trial court did not abuse its discretion in denying maintenance. The judgment of the District Court is affirmed. We Concur: L A - / \

August 18, 1983

04bceebb-b881-47a0-8431-c7192bb623e3

WALTER v EVANS PRODUCTS COMPANY

N/A

83-098

Montana

Montana Supreme Court

No. 83-98 I N T H E SUPREME COURT O F T H E STATE O F MONTANA 1983 VALENTINE WALTER, Claimant and Respondent, -vs- EVANS PRODUCTS COMPANY, Employer, and E V A N S PRODUCTS C O M P A N Y , Defendant and Appellant. APPEAL F R O M : Workers' Compensation Court, The Honorable Timothy Reardon, Judge p r e s i d i n g . COUNSEL O F RECORD: For Apsellant: Andrew J. Utick, Helena, Montana For Respondent: John Dostal; P a t t e r s o n , M a r s i l l o , Tornabene & Schulyler, Missoula, Montana F i l e d : - Submitted on B r i e f s ; August 25, 1983 ~ e c i d e d : November 23, 1983 NOV 2 3 1983 Clerk Mr. Justice John C. Sheehy delivered the Opinion of the Court. The Workers' Compensation Court on December 22, 1982, awarded to Valentine Walter on his Workers' Compensation claim temporary disability benefits from May 20, 1980, until he reaches maximum healing, medica.1 benefits for his injuries, and ordered a lump sum to be paid to the claimant for his temporary total disability benefits from May 20, 1980 to the date of the judgment in the Workers' Compensation Court. Walter was also awarded reasonable costs and attorneys fees. No penalty was applied by the Workers' Compensation Court. Evans Products Company has appealed from the judgment and decision of the Workers' Compensation Court. We affirm the decision of the Workers' Compensation Court. On or prior to August 1, 1977, Valentine Walter was employed by Evans Products Company at its plant in Missoula. It is uncontested that on August 1, 1977, in the course and scope of his employment, Walter injured his right knee. Medical benefits were paid by Evans Products Company as a result of that injury. Walter filed a claim for compensation benefits on June 6, 1980, and such claim was denied. The Workers' Compensation Court found that the claimant did not lose any wages because of his work-related injury on August 1, 1977 and so did not file his claim for disability benefits. When he did file his claim on June 6, 1980, he did so at the suggestion of George Wood, the manager of Compensation Adjusters, Inc. , which does Workers ' Compensation adjustments for Evans Products Company. However, Wood denied the claimant's initial claim for compensation because it was filed more than a year after August 1, 1977. Claimant then appealed to the Administrator of the Division of Workers' Compensation for a waiver of the one year filing requirement which request was by the Division denied. The Workers' Compensation Court found further that on Ma-y 16, 1980, while the claimant was workinq for Evans as a green chain off-bearer, Walter slipped off a catwalk while stacking a piece of lumber, and struck his right knee below the kneecap on the concrete edge of a recessed floor beneath. He immediately experienced severe pain which forced him to stop work and rest before he could resume stacking lumber. The Workers' Compensation Court also found that one-half hour thereafter claimant notified Roy Newton, ~vans' supervisor on the job. Newton allowed the claimant to leave work before his shift ended and observed claimant limping on May 16, 1980. Newton authored an undated accident report acknowledging that the claimant was unable to work on the green chain because his knee was bothering him so much. In his accident report, Newton reported to Evans that the claimant's knee problem was the result of his August 1977 accident, even though the claimant had asked Newton to report his accident of May 16, 1980. Newton did not report the May 16 incident as the date of claimant's accident because Newton believed "no sudden traumatic incident" had caused the knee pain of which Walter complained. Walter returned to work on May 17, 1980, and worked until May 20, 1980, at which time he ceased working because of the pain. The medical evidence adopted by the Workers' Compensation Court indicated that he suffered an industrial accident on August 1, 1977 with an injury to his right knee, and that in the intervening years his injured condition has continued so that the accident of May 16, 1-980 aggravated the pre-existing condition. The injury is now diagnosed as chrondromalacia patellae which will totally disable him until such time as surgery can be performed to relieve the kneecap problem. On appeal, the Workers' Compensation Court has stayed the payment of the lump sum judgment. Evans raises two issues on appeal: (1) that the Workers' Compensation Court should have reopened the case to permit Evans to introduce additional evidence that would show I that the claimants alleged industrial injury of May 16, 1980 could not have happened as claimant testified and (2) that there is not substantial evidence to support the grant to the claimant of temporary total disability retroactive to May 20, 1980. The post-trial additional evidence offered by Evans would consist of testimony of its industrial relations manager, Lee Mentzer, who would lay the foundation for introduction into evidence of company timesheets covering the claimanqs employment by Evans during 1980. Employer contends that after proper foundation, the timesheets would show that on May 16, 1980, Walter was not working on the green chain when he slipped and struck his knee, rather on a planer, which was in a different part of the plant, involving an entirely different type of job. It further contends that on May 16, 1980, Roy Newton was not the claimant's supervisor. Moreover, the records would show that on May 16, 1980, Walter worked a full eight hour day and was paid for the same. The Workers' Compensation Court denied the motion to allow additional evidence. In its petition for rehearing, Evans alleged that reasonable attempts had been made prior to the original trial to retrieve the subject time records. Evans contended that in the first part of 1980, defendant closed its mill in Missoula and that as part of the closure of the Missoula mill, the records and files in connection with the Missoula plant were physically transferred to Portland, Oregon. Prior to trial, Evans contended, it attempted to locate all the records and files concerning Walters employment, including the timesheets, but that in spite of efforts to locate the same, they were unable to find them until after the trial in this case had occurred. The Workers' Compensation Court denied defendant's petition for rehearing stating that with respect to the offered time records "[tlhe defendant has failed to show that it could not, with reasonable diligence," have discovered or produced the documentary evidence at the time of trial. We note that in its conclusions, the Workers' Compensation Court had determined that the confusion in the case over the date of Walter's industrial accident resulted from Roy Newton's on-the-job evaluation of what kind of an event would warrant liability for Workers' Compensation benefits and that if Newton had reported the accident as claimant had requested him, it is unlikely that confusion over what happened to the claimant and when it happened would have arisen. The standard for determining whether newly discovered evidence is sufficient reason for a new trial is governed by the statute, section 25-11-102 (4) , MCA, which provides that the newly - discovered evidence must be that which the applicant could not with reasonable diligence have discovered and produced at the trial-. Whether to grant or deny a new trial is within the sound discretion of the trial. court. Fredericksen v. Fredericksen (Mont. 19801, 605 P.2d 1135, 1137, 37 St.Rep. 191, 193, and will not be overturned absent a showing of manifest abuse of that discretion. Giles v. Flint Valley Forest Products (1979), 179 Mont. 382, 588 P.2d 535, 538. Every presumption is indulged that the movant for a new trial on the ground of newly-discovered evidence could have secured the testimony for the former trial, and the movant must negative any negligence on his part. In Re Colbert's Estate (1904), 31 Mont. 461, 80 P. 248. The movant must show that such evidence came to his knowledge since the trial and that even through diligence it was not discovered earlier; it must also appear that its materiality will probably produce a different result on trial and it is not merely cumulative or only tending to impeach. State v. Estep (1936), 103 Mont. 78, 61 P.2d 830. In Kartes v. Kartes (1977), 175 Mont. 210, 573 P.2d 3.91, we upheld the denial of a new trial on the ground of new evidence because the new evidence was at all times in the exclusive possession of the movant . Here the evidence sought to be introduced as newly-discovered evidence was at all times in the possession of Evans Products Company, and the purpose of the newly- discovered evidence is to impeach the testimony of the claimant Walter, and Evans' supervisor, Roy Newton. In that situation, Evans has not presented grounds sufficient for a new trial on newly-discovered evidence. In support of the second contention, the sufficiency of the evidence, Evans contends there is no evidence that claimant's lack of formal education (claimant can neither read nor write) makes him susceptible to suggestions of others; that there is no probative credible evidence that he sustained an injury on the green chain on May 16, 1980; that there is no probative credible evidence that he told Roy Newton how the alleged May 16, 1980 accident occurred; that there is no probative credible evidence that he returned to work on May 17 and worked until May 20, 1980, as found by the lower court; that there is no probative credible evidence that claimant had to cease working because of the pain in his right knee. Evans contends that defendant was laid off because of reduction in force as part of the plant closure, that his severance benefits were explained to him, that he signed a form, after it had been read and explained to him, acknowledging receipt of his severance pay, that he had drawn unemployment compensation insurance, and that his doctor thought that the particular knee injury did not indicate a total disability. On deciding the same grounds of obiections, the Workers' Compensation Court, in its decision against rehearing, stated that the contentions on the evidence amounted to a disagreement with the Workers ' Compensation Court regarding the relevance and weight of the evidence introduced at the trial and by deposition, and that those grounds are not sufficient to warrant a new trial under 5 2.52.222 A.R.M. and sections 25-11-102, and -103, MCA. The function of the trial court is to find the facts. Absent a manifest abuse of discretion, or a situation where the findings are clearly erroneous (Rule 52 (a) , M. R.Civ.P. ) , the decision of the trial court on the facts will not he disturbed by this Court. We affirm the decision of the Workers ' Compensation Court. We Concur: 4%- Justice

November 23, 1983

cbb4c4ae-17dd-43d9-81c9-ddf6b7369c39

GENERAL MILLS INC v ZERBE BROTH

N/A

83-035

Montana

Montana Supreme Court

No. 83-35 I N T H E SUPREME C O U R T O F THE STATE O F M O T J T A N A 1983 GENERAL MILLS, IEC. , P l a i n t i f f and Appellant, -vs- ZERBE BROTHERS, I N C . , a Pilont. Corp., e t ax., Defendants and Respondents. APPEAL FROM: D i s t r i c t Court of t h e Seventeenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Valley, The Honorable Leonard H. Langen, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant r J a r d i n e , Stephenson, B l e w e t t & Weaver; K. Dale Schwanke, Great F a l l s , Montana For Respondents: Robert Hurly, Glasgow, Montana Submitted on B r i e f s : September 15, 1983 Decided: November 23, 1 9 8 3 F i l e d : NOV 2 3 1983 P l r . Justice L.C. Gulbrandson delivered the Opinion of the Court. This case comes on appeal from a judgment of the Seventeenth Judicial District Court, Valley County, finding the existence of an oral contract for the sale of 20,000 bushels of wheat and crediting the respondents with two deliveries of wheat rejected by the appellant. Otto (now deceased) and Paul Zerbe were brothers who grew wheat in Lustre, Valley County, Montana, and also owned an implement dealership known as Zerbe Brothers, Inc. On May 29, 1973, an agent for General Mills, Inc., Fred Page, phoned Paul Zerbe to negotiate a grain purchase by General Mills. Both parties acknowledge that an agreement was reached as to a price of $2.56 per bushel and a period for delivery, but the quantity of the purchase is in dispute. At trial, Page testified that Paul Zerbe agreed to sell General Mills 50,000 bushels of wheat, a quantity Page wrote on a confirmation form during the telephone conversation. However, Paul Zerbe testified he only agreed to sell General Mills "up to" 20,000 bushels, and that he did not have 50,000 bushels to sell. Zerbe also testified he never sold 50,000 bushels at one time or a whole crop in one transaction and claimed he never received the confirmation form reflecting the greater quantity. In prior sales transactions between the parties, the Zerbes did not sign confirmation forms or send them back to General Mills. No specific evidence that the confirmation form was mailed or received was presented, however, General Mills did offer testimony that it was its usual and customary business p r a c t i c e t o m a i l t h e c o n f i r m a t i o n forms t o a s e l l e r . Also, t h e Zerbes r e c e i v e d s e t t l e m e n t checks f o r t h e wheat t h e y d e l i v e r e d . Between J u n e 7, 1973 and J u l y 27, 1973, t h e Zerbes d e l i v e r e d a t o t a l of 16,593 b u s h e l s of d a r k n o r t h e r n s p r i n g wheat t o t h e G e n e r a l M i l l s g r a i n e l e v a t o r i n G r e a t F a l l s , Montana. I n a d d i t i o n , t h e Zerbes t e n d e r e d two a d d i t i o n a l l o a d s of wheat t o G e n e r a l M i l l s . One l o a d was t e n d e r e d on J u l y 24, 1973, and c o n s i s t e d of 800 b u s h e l s of wheat. Another l o a d of 800 b u s h e l s was t e n d e r e d on J u l y 28, 1973. Both l o a d s were r e j e c t e d by G e n e r a l M i l l s because t h e y were a l l e g e d l y contaminated by i n s e c t s . However, t h e Zerbes s o l d t h e same l o a d s of wheat t o a n o t h e r e l e v a t o r i n G r e a t F a l l s w i t h o u t d i s c o u n t f o r c o n t a m i n a t i o n . A f t e r r e j e c t i o n of t h e two l o a d s , t h e Zerbes d i s c o n t i n u e d d e l i v e r i e s under t h e c o n t r a c t . On A p r i l 11, 1974, G e n e r a l M i l l s l e a r n e d t h a t t h e Zerbes were n o t going t o make any f u r t h e r d e l i v e r i e s . The market p r i c e f o r d a r k n o r t h e r n s p r i n g wheat i n G r e a t F a l l s on A p r i l 11, 1974 was $4.44 p e r b u s h e l . On J u l y 1 0 , 1975, G e n e r a l M i l l s b r o u g h t s u i t a g a i n s t t h e Z e r b e s a l l e g i n g b r e a c h o f c o n t r a c t and s e e k i n g $61,802.95 i n damages. On November 4, 1982, t h e c a s e was t r i e d b e f o r e t h e D i s t r i c t Court s i t t i n g w i t h o u t a j u r y . A f t e r h e a r i n g t h e e v i d e n c e p r e s e n t e d by t h e p a r t i e s t h e District Court h e l d : (1) t h e o r i g i n a l c o n t r a c t was f o r 20,000 b u s h e l s o f wheat; ( 2 ) t h e d e f e n d a n t s t e n d e r e d o r d e l i v e r e d a t o t a l o f 18,193 b u s h e l s t o p l a i n t i f f , a q u a n t i t y t h a t i n c l u d e d t h e two 800 b u s h e l l o a d s t h e p l a i n t i f f r e j e c t e d on J u l y 24, 1973 and J u l y 28, 1973; ( 3 ) t h e d e f e n d a n t s f a i l e d t o d e l i v e r 1,807 b u s h e l s under t h e terms o f t h e c o n t r a c t ; and ( 4 ) t h e p l a i n t i f f was e n t i t l e d t o a judgment i n t h e amount of 1,807 b u s h e l s times $1.85 which was t h e d i f f e r e n c e b e t w e e n t h e $2.56 p e r b u s h e l t h e d e f e n d a n t s a g r e e d t o a c c e p t f o r t h e wheat and t h e $4.41 p e r b u s h e l m a r k e t p r i c e on A p r i l 11, 1974. The p l a i n t i f f now a p p e a l s c l a i m i n g t h e D i s t r i c t C o u r t e r r e d i n f i n d i n g t h a t t h e o r a l c o n t r a c t was f o r 20,000 b u s h e l s r a t h e r t h a n 50,000 b u s h e l s and c r e d i t i n g d e f e n d a n t s f o r t h e two 800 b u s h e l l o a d s t e n d e r e d on J u l y 24, 1973 and J u l y 28, 1973. S p e c i f i c a l l y , a p p e l l a n t a r g u e s t h e r e is a presumption under Montana law t h a t a m a i l i n g h a s been r e c e i v e d i f customary o f f i c e m a i l i n g p r o c e d u r e s have been f o l l o w e d and r e s p o n d e n t s f a i l e d t o p r o d u c e c r e d i b l e e v i d e n c e t o r e b u t t h a t presumption. I n a d d i t i o n , a p p e l l a n t asserts t h e r e s p o n d e n t s s h o u l d be e s t o p p e d from c l a i m i n g t h e y o n l y a g r e e d t o s e l l up t o 20,000 b u s h e l s o f wheat r a t h e r t h a n t h e T0,000 c l a i m e d by a p p e l l a n t b e c a u s e o f t h e r e s p o n d e n t s ' p a s t p r a c t i c e of n o t s i g n i n g and r e t u r n i n g c o n f i r m a t i o n forms b u t d e l i v e r i n g t h e q u a n t i t i e s o f wheat a g r e e d t o by t h e p a r t i e s . F i n a l l y , a p p e l l a n t c o n t e n d s t h e D i s t r i c t C o u r t e r r e d i n c r e d i t i n g t h e r e s p o n d e n t s w i t h t h e two 800 b u s h e l l o a d s because t h e e v i d e n c e p r e s e n t e d a t t r i a l showed t h e a p p e l l a n t was j u s t i f i e d i n r e j e c t i n g t h e l o a d s a s c o n t a m i n a t e d . Montana law presumes t h a t a l e t t e r m a i l e d i n t h e o r d i n a r y c o u r s e of b u s i n e s s h a s been r e c e i v e d . S e c t i o n 26-1-602(20)(24), MCA. I n t h i s case, w h i l e it is t r u e t h a t t h e r e is no d i r e c t e v i d e n c e o f a c t u a l m a i l i n g o f t h e c o n f i r m a t i o n form, t h e presumption of r e c e i p t n e v e r t h e l e s s a r i s e s . C r i s s e y v. S t a t e Highway Commission ( 1 9 6 6 ) , 147 Mont. 374, 413 P.2d 308. It is enough t h a t t h e r e is a n o f f i c e p r a c t i c e o r custom and t h a t t h i s p r a c t i c e o r custom was c a r r i e d o u t . C r i s s e y , 147 Mont. a t 379. However, i n t h i s c a s e t h e r e s p o n d e n t d e n i e s r e c e i p t o f t h e c o n f i r m a t i o n o r d e r . I n Crissey, w e h e l d t h a t a n a d d r e s s e e ' s p o s i t i v e d e n i a l of r e c e i p t d o e s n o t n u l l i f y t h e presumption, b u t l e a v e s t h e q u e s t i o n f o r t h e d e t e r m i n a t i o n of t h e j u r y , o r t h e c o u r t s i t t i n g w i t h o u t a j u r y , w i t h such weight g i v e n t o t h e presumption a s t h e y t h i n k it is e n t i t l e d t o . C r i s s e y , 147 Mont. a t 379; a l s o see James T a l c o t t , I n c . v. Reynolds ( 1 9 7 4 ) , 165 Mont. 404, 529 P.2d 352 and Renland v . F i r s t N a t i o n a l Bank ( 1 9 3 1 ) , 90 Mont. 424, 4 P.2d 488. The presumption is n o t c o n c l u s i v e and may be c o n t r o v e r t e d by o t h e r e v i d e n c e . S e c t i o n 26-1-602, MCA. Also s e e g e n e r a l l y 31A C.J.S. Evidence, S e c t i o n 136, p. 291. Af t e r c o n s i d e r i n g t h e e v i d e n c e and a s c e r t a i n i n g t h e w i t n e s s e s ' c r e d i b i l i t y , t h e D i s t r i c t C o u r t determined t h a t r e s p o n d e n t d i d n o t r e c e i v e t h e c o n f i r m a t i o n form r e f l e c t i n g t h e 50,000 b u s h e l q u a n t i t y and t h e terms of t h e c o n t r a c t p r o v i d e d f o r d e l i v e r y of 20,000 b u s h e l s . The D i s t r i c t C o u r t p r o p e r l y w e i g h e d t h e p r e s u m p t i o n o f r e c e i p t a g a i n s t r e s p o n d e n t ' s d e n i a l and t h e o t h e r e v i d e n c e p r e s e n t e d a t t r i a l and a r r i v e d a t its c o n c l u s i o n . W e cannot d e v i a t e from our f u n c t i o n a s an a p p e l l a t e c o u r t and r e v e r s e t h e D i s t r i c t C o u r t ' s d e c i s i o n . Our f u n c t i o n s d o n o t i n c l u d e a r e t r i a l of t h e c a s e . W e w i l l n o t s u b s t i t u t e our judgment f o r t h a t of t h e t r i a l c o u r t . W e a r e " c o n f i n e d t o d e t e r m i n i n g whether t h e r e i s s u b s t a n t i a l c r e d i b l e e v i d e n c e t o s u p p o r t t h e f i n d i n g s of f a c t and c o n c l u s i o n s o f law." Cameron v. Cameron ( 1 9 7 8 ) , 179 Mont. 219, 227, 587 P.2d 939, 944; - I n t h e M a t t e r o f t h e E s t a t e of LaTray ( 1 9 7 9 ) , 183 Mont. 141, 598 P.2d 619; Olson v. Westfork Properties, Inc. (1976), 171 Mont. 154, 557 P.2d 821; Hornung v. Estate of Lagerquist (1970), 155 Mont. 412, 473 P.2d 541. We have elaborated on this standard numerous times and several well-settled principles have emerged. We view the evidence in the light most favorable to the prevailing party. Cameron, supra; Olson, supra; Hellickson v . Barrett Mobile Home Transport, Inc. (1973), 161 Mont. 455, 507 P.2d 523. The evidence may be inherently weak and still be deemed "substantial." Campeau v. Lewis (1965) , 144 Mont. 543, 547, 398 P.2d 960, 962. Moreover, Rule 52(a) M.R.Civ.P. provides, in part, that "[£]indings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses." The record before us does not evince a clear error in the District Court's decision to find the parties contract was for 20,000 bushels rather than 50,000 bushels. Likewise, appellant has failed to point out any clear error in the District Court's decision that the respondents be credited with the two 800 bushel loads they tendered to appellant on July 24, 1973 and July 28, 1973. Appellant also asserts that respondents should be estopped from denying the contract was for 50,000 bushels because in prior transactions between the parties the respondents never signed or returned confirmation forms. The essential elements of estoppel are the following: (1)l there must be conduct, acts, language or silence amounting to a representation or concealment of facts; (2) facts must be known to party estopped at the time of his conduct; (3) truth concerning the facts must be unknown to the other p a r t y ; ( 4 ) t h e conduct must be done w i t h t h e i n t e n t i o n t h a t it be a c t e d upon by t h e o t h e r p a r t y o r under c i r c u m s t a n c e s s o t h a t it is b o t h n a t u r a l and p r o b a b l e t h a t it w i l l be s o a c t e d upon; ( 5 ) t h e conduct must i n f a c t have a c t e d upon it t o h i s d e t r i m e n t . I n r e t h e Matter o f Shaw (Mont. 1 9 8 0 ) , 615 P.2d 910, 37 St.Rep. 1480; Kenco v. C a n t r e l l ( 1 9 7 7 ) r 174 Mont. 130, 568 P.2d 1225; Smith v. K r u t a r ( 1 9 6 9 ) , 1 5 3 Mont. 325, 457 P.2d 459. The f a c t s of t h i s case do n o t w a r r a n t an a p p l i c a t i o n of t h e d o c t r i n e o f e s t o p p e l . The r e c o r d d o e s n o t c o n t a i n e v i d e n c e of any conduct o f t h e r e s p o n d e n t t h a t would be c o n s i d e r e d a r e p r e s e n t a t i o n o r concealment t h a t t h e p a r t i e s c o n t r a c t was f o r 50,000 b u s h e l s r a t h e r t h a n 20,000 b u s h e l s . A l s o , t h e D i s t r i c t C o u r t determined t h e e v i d e n c e showed t h e p a r t i e s a g r e e d t o a 20,000 b u s h e l q u a n t i t y on t h i s p a r t i c u l a r o c c a s i o n s o t h e 50,000 q u a n t i t y claimed by a p p e l l a n t c a n n o t be c o n s i d e r e d a " f a c t " w i t h i n t h e knowledge of t h e r e s p o n d e n t s . E s t o p p e l is n o t f a v o r e d and w i l l be s u s t a i n e d o n l y upon a p p e l l a n t ' s showing o f c l e a r and c o n v i n c i n g e v i d e n c e . T r i b b l e v. Reely ( 1 9 7 6 ) , 1 7 1 Mont. 201, 557 P.2d 813. I n sum, we f i n d no r e v e r s i b l e e r r o r and t h e r e f o r e a f f i r m . W e concur: V44A$&&fJgJ Chief J u s t i c e Jqd ices A

November 23, 1983

ef8906ed-f34e-40c1-bdc0-4966d05fa2ca

MARRIAGE OF GLASSER

N/A

83-128

Montana

Montana Supreme Court

No. 23-122 I N THE SUPREME COURT OF TIiE STATE O F MONTATJA 1983 I N RE THE YiRRIAGE O F CARLMA J. GLASSER, P e t i t i o n e r and Xespondent, -vs- WILLIAM B . SLASSER, Respondent and Appellant. APPEAL FROM: D i s t r i c t Court of t h e F o u r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Feagher, The Honorable N a t Allen, Judge p r e s i d i n g . COUiqSEL O F RECORD. For Appellant: John V. P o t t e r , J r . , White Sulphur S p r i n g s , Montana For Respondent: G a l t & Swanberg: Robert F. Swanberg, Helena, Plontana F i l e d : -- ----- . . - . - -- - - Submitted on B r i e f s : June 30, 1983 Decided: September 29, 1983 -- Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal by William B. Glasser on the amended findings of fact and conclusions of law from the judgment in a dissolution proceeding. His wife, respondent, Carma Jean Glasser, brought an action for dissolution and division of the couple's property in the District Court of the Fourteenth Judicial District In an For the County of Meagher . The procedural facts in this case, are that the case was heard July 6, 1982, by the District Court sitting without a jury. On September 16, 1982, the court filed findings of fact and conclusions of law and on October 6, 1982, entered a decree of dissolution and property division. The Wife filed a motion to amend the findings of fact and conclusions of law. The Husband filed a notion to correct a clerical mistake in the findings, in the alternative to amend findings, and to amend the judgment. Both Husband and Wife agree that the court was in error in stating the value of some of the property. After delays by the court, hearing was held November 16 on the above motions. On November 18, the court granted the Wife's motions to amend the findings and denied the Husband's motions. On November 20, the Wife filed a motion to appeal in order to preserve the right of appeal. The court thereafter entered an amended decree of dissolution and property settlement on November 26. Husband appealed from that decree, from the amended findings of fact and conclusions, and from the amended decree. BY stipulation, the parties agreed to name the Husband as the appellant and the Wife as the respondent. The parties were married in Butte, Montana, on September 8, 1955. During the years of the marriage, the Husband worked at various jobs and employment such as plumbing assistant, sawmill work, butcher, carpentery work and for a period of time was a partner in a building contractor business. At the time of this action the Husband worked for a school system performing maintenance work. The Wife, during the early years of the marriage, primarily reared their children and occasionally held part-time or temporary employment. In 1973 the wife secured full-time employment at the First National Bank at White Sulphur Springs. She remains employed there at the time of this action with an annual salary of $11,000 per year, plus fringe benefits that include a retirement employer profit-sharing plan. During the course of the marriage, the Wife's father, Alfred M. Edward, provided financial assistance to the Glassers. He permitted them to live at his residence for about a year, rent free. In 1970, he deeded a cinderblock house to Wife. The Glassers lived there until 1978; since that time they used the house for rental purposes. In 1974, Edwards established a ten-year reversionary trust, naming the Wife as beneficiary to the income from the trust. This trust income increased from a yearly amount of approximately $4,000 in 1974, to over $6,000 at the time of this action. The Wife used this money for vacations, investments, and as a primary source for paying expenses on a house the Glassers began building in 1978. There are three children of this marriage, all of whom have reached the age of majority prior to the date of commencement of this action. In 1958 the Husband purchased a small trailer home. In 1960, he traded it for a larger mobile home that cost $7,200 on an installment contract. In 1962, they purchased a lot located in White Sulphur Springs for $800 and maintained the mobile home on that lot. In 1970-1978, as mentioned, they moved into the cinderblock house that was given to the Wife by Edwards. During this period, Husband made repairs and improvements on the house. In 1978, they built a new principal family house on the lot that was purchased in 1962. At the time of the construction of that house, Husband was a partner in a constuction firm. The firm built the house. Husband donated his time towards the construction and was able to purchase housing materials through the firm at a discount. Husband, in 1979, purchased a house in the "Skunk Hollow Addition," [the title description lists this property in the Higgins Addition], in White Sulphur Springs, with an alleged partner, Lawrence Johnson. However, the deed reflects that Husband owns the property fee simple. This appeal arises over a dispute over the findings and conclusions on the following property: 1. The cinderblock house located in White Sulphur Springs; 2 . The recently constructed principal family house located in White Sulphur Springs; 3. The "Mulski" house, located in Skunk Hollow Addition; 4. A coin collection valued at approximately $2,300. 5. Wife's interest in a profit sharing plan that was 60 percent vested at the date of this action with a value of $10,470 if entirely vested. The appellant raised two issues before this Court: 1. Can the court, by motion to amend, make a wholesale adoption of findings of fact and conclusions of law submitted by respondent's counsel. 2 . Are the findings of fact and conclusions of law sufficiently supported by the evidence and thereby support the property division reached by the court. Husband first objects, that his motion for clerical corrections or amended findings and conclusions must be granted, because of the blatant errors in the original findings and conclusions. The court, in adopting Wif e' s amended findings and conclusions, made the necessary clerical corrections set forth to Husband. The court was also within its discretion to deny the Husband's amendments to the findings and conclusions. Therefore, we find no merit in this objection by the Husband. The Husband argues that the court was in error by "wholesale adoption" of the amendments proposed by the Wife. Appellant cites In Re the Marriage of Beck (Mont. 1981), 631 P.2d 282, 38 St.Rep. 1054, for rejecting the courts "wholesale adoption" of one parties proposed findings of fact and conclusions of law proposed by Wife's counsel. This Court admonished the trial court's practice of rubberstamping the proposed findings of fact and conclusions of law given by one counsel, and not doing their own work. There, this Court found the findings to be clearly erroneous and therefore set aside the judgment. In Tomaskie v . Tomaskie (Mont. 1981), 625 P.2d 536, 38 St.Rep. 416, the court vacated a judgment that was based on the Husband's proposed findings and conclusions adopted verbatim. Those findings and conclusions failed to provide the necessary information as specific in the statute, in which to base a proper judgment. The Court warned, "[i] t is becoming increasingly apparent to this Court, however, that the trial courts rely too heavily on the proposed findings of fact and conclusions submitted by the winning party. That is wrong!" Tomaskie, supra, 625 P.2d at 539, 38 St.Rep. In both of those cases, the findings and conclusions were either clearly erroneous or insufficient. But, the fact that the trial court adopted one side's proposal was not in itself reason for vacating the judgment. Kowis v. Kowis (Mont. 1983), 658 P.2d 1084, 40 St.Rep. 149, the court made "wholesale adoption" of findings and conclusions. However, in that case the findings and conclusions were "extensive and detailed [and] the court painstakingly explained its reasons for distribution." Kowis, supra, 658 P.2d at 1087, 1088, 40 St.Rep. at 153. This Court refused to overturn the trial court base solely upon "wholesale adoption ," " [w] here, as here, findings and conclusions are sufficiently comprehensive and pertinent to the issue to provide a basis for a decision, and are supported by the evidence. They will not be overturned simply because the court relied upon proposed findings and conclusions submitted by counsel." Kowis, supra, 658 P.2d at 1088, 40 St.Rep. at 154. In Speer v. Speer (Mont. 1982), 654 P.2d 1001, 1002, 39 St.Rep. 2204, 2205, this Court said: "This Court has discouraged District Courts from the practice of adopting the prevailing party Is proposed findings of fact and conclusions of law virtually verbatim. . . . Such practice may lead to error. . . once findings and conclusions are adopted by the District Court, however, the 'clearly erroneous standard at Rule 52(a) supports them on appeal.'" In this case, the Court drafted the original findings and conclusions, but they contained some inaccuracies and clerical mistakes. When both Husband and Wife submitted amended findings and conclusions, the court adopted the amendments submitted by the Wife. These amendments substantially changed the original decreed property distribution. Without a showing that the amended findings and conclusions are clearly erroneous (see Rule 52(a), M.R.Civ.P.) then they will stand despite "wholesale adoption." Therefore, the findings and conclusions must be examined in light of the evidence to determine if the findings and conclusions were clearly erroneous. Husband claims the amended findings and conclusions regarding Wife's profit-sharing retirement plan were clearly erroneous. Husband asserts that, "[c]ontributions to the plan were made by Wife's employer during the marriage and were part of "employee benefits," and therefore part of the marital property. The court, however, found the "[plrofit-sharing program incidental to her employment at the bank . . .I1 and therefore the Wife's separate property. We find the trial court erred in its finding the profit-sharing plan to be the Wife's separate property. The president of the First National Bank of White Sulphur Springs, Michael Grove, explained this profit-sharing program as follows: "Q. Okay. Maybe I would be more correct in saying it is an incentive program because it is based on profits. If the bank is profitable, if the employees work well, they receive additional compensation in the form of a profit-sharing plan from the bank; would that be true? A. That's true, and in addition to that it is an incentive program to retain with the Bank. The longer they stay--that's the reason it is vested. The longer they are there, the more reason they have to be there, hoping that their-- "Q. So this is really money Mrs. Glasser has earned, by being a good and faithful employee, and working with others to insure the Bank a profit; wouldn't that be true? A. I would say. It has been contributed to the plan for her. She won't earn it, or it is not, I guess earned income that is available to her benefit, as you would say, until retirement age I hope." This line of testimony clearly indicates that the profit-sharting program is more than incidental to employment, it is a form of deferred compensation and should be treated in the same manner as retirement benefits (fnt. #2). The Internal Revenue Service permits companies to establish profit sharing plans for their employees that provide certain tax benefits. Internal Revenue Code Section 401 et. seq.: "A profit-sharing plan within the meaning of 401 is primarily a plan of deferred compensation, * * *.I1 Federal Tax Regulation Section 1.401-l(b)(). In Kis v. Kis (1982), 639 P.2d 1151, 39 St.Rep. 119, we found that the husband's retirement benefits in the game warden's retirement fund were marital property and thereby subject to property distribution. Wife argues, if the profit-sharing plan is considered marital property and should be divided, then Husband would be entitled to one-half of the present value of her vested interest. We agree. In - Kis, supra, we stated that, " [plresent value is the 'proper test' for determination of marital interest. However, further evidence may demonstrate the value 'might be affected by the contingency of the retirement benefits failing to reach levels used by the court. I' Kis, 639 P.2d 1153, 39 St.Rep. at 123. In Kis, the Husband was vested in his retirement fund and therefore the court could use the entire amount of the present value of his retirement funds. Other states distribute retirement funds for property settlement purposes in different ways depending upon if the interest is vested, unvested, matured or not matured. In the Matter of the Marriage of Rogers and Rogers (1980), 45 0r.App. 885, 609 P.2d 877, a case involving an appeal by the Husband of the awarding of part of the retirement to the Wife, the court reviewed cases from different states involving property distribution retirement benefits and set forth the following guidelines: "For example: (1) The distribution should generally be based on the contributions made during the marriage. (2) The courts should continue to strive to disentangle the parties as much as possible by determining, where equitable, a sum certain to be paid rather than a percentage based upon expected future contingencies. (3) In determining whether a lump sum award is appropriate, courts should consider the burden it would place on the paying spouse in view of required child support, spousal support, and other property distribution. (4) Where courts determine that the parties will share in the benefits on a proportional basis, the parties should also share the risks of future contingencies, e.g., death of the employe spouse or delayed retirement of the employe spouse, and payment should be to the receiving spouse as the employe spouse receives the retirement pay. (5) Courts should consider, where appropriate, an award of a portion of retirement benefits where other property awarded is not adequate to make an equitable distribution." 609 P.2d at 882, 883. It should be noted that in some cases federal statutes preempt the distribution of retirement benefits in a property division. For example, in Re Marriage of Knudson (Mont. 1980), 606 P.2d 130, 37 St.Rep. 147, the Court found that pension benefits under the Railroad Retirement Act may not be included in property distributions. However, where federal statute does not preempt, the retirement benefits should be considered part of the marital property. In this case, evidence was introduced that at the time of the hearing Wife had worked at the bank for nine years and was vested at 60 percent of her share with a present value interest of $10,470. Therefore, the amount of retirement benefit attributed to the marital property should be 60 percent of $10,470. The Husband next contends that the court erred in it's findings and conclusions regarding the real property acquired during the marriage. The court found that the cinderblock house was the Wife's separate property, the "Mulski" house the Husband's separate property and the new family residence to be 71.939 percent Wife's share and 28.060 percent Husband's share. Husband objects to the cinderblock house being found to be the Wife's separate property. Although Edwards (Wife's father) gave the house to Wife, the Husband contends that his continued maintenance on the house during the eight years they lived there brings this property into the marital share. Husband relies upon Herron v . Herron (Mont. 1980), 37 St.Rep. 387, 608 P.2d 97, to support his argument. In Herron, supra, the wife received gifted property from the wife's father. Both parties contributed to the maintenance of the property. The property appreciated in value. This Court held that " [bloth parties should share equally in the portion of the value of the gift property attributable to contributions from marriage and appreciation during the marriage." See also, In Re the Marriage of Balsam (1979), 180 Mont. 129, 589 P.2d 652. It is not error for the court to give the Wife the entire amount of this property. This is within the discretion of the trial court. While we may disagree with the findings of the trial court; the Husband did not present sufficient contrary evidence to the record for these findings to be reversed. Husband next objects to the findings and conclusions regarding the new residence property distribution. He contends that the court should not have found Wife to have contributed a greater percentage to the value of the new residence. He argues that the money from the Wife's trust fund no longer was traceable after it was deposited in their joint bank account and therefore cannot be attributed as added value of the new residence. He relies on Metcalf v. Metcalf (1979), 183 Mont. 266, 598 P.2d 1140. In Metcalf, this Court expressed the view that if inheritance funds are not traceable, then they may not be considered as separate property of the spouse. In that case, the appellant inherited $5,000 and used it on expenses and assets of the marriage, and thereby making it impossible to trace the funds. I n Herron, s u p r a , t h i s Court p e r m i t t e d t h e t r i a l c o u r t t o f i n d a g i f t t r a c e a b l e , when it was o r i g i n a l l y a p p l i e d t o a down payment on a house i n S e a t t l e . Then, t h e S e a t t l e house was s o l d and t h e proceeds used f o r a house i n C o n n e c t i c u t . T h a t house was s o l d i n a s i m i l a r arrangement f o r a house i n New York. F i n a l l y , t h e proceeds of t h e s a l e of t h e N e w York house were a p p l i e d t o t h e p u r c h a s e of F l a t h e a d Lake p r o p e r t y . I n t h e c a s e a t hand, t h e t r u s t e e p a i d income from t h e "Edwards" r e v i s i o n a r y t r u s t t o t h e Wife beginning i n 1974. Wife p l a c e d t h i s money i n c e r t i f i c a t e s o f d e p o s i t s ( C D 1 s ) . These C D ' s were cashed i n and p l a c e d i n s a v i n g s o r checking a c c o u n t s and used f o r payments f o r c o s t s i n c u r r e d on t h e c o n s t r u c t i o n of a new r e s i d e n c e . There is s u f f i c i e n t e v i d e n c e t o s u p p o r t t h e c o u r t ' s f i n d i n g s . T h e r e f o r e , w e w i l l n o t d i s t u r b t h e c o u r t ' s f i n d i n g s on t h e new r e s i d e n c e . Husband o b j e c t s t o t h e c o u r t ' s f a i l u r e t o f i n d a c o n t r i b u t i o n of a d d i t i o n a l h o u r s worked, beyond t h e h o u r s 0 recorded f o r b u s i n e s s purposes, f o r h i s c o n t r i b u t i o n t o t h e new r e s i d e n c e . Husband c l a i m s he worked weekends, and a f t e r b u s i n e s s hours. H e c l a i m s t h a t t h e b u s i n e s s r e c o r d s i n t r o d u c e d d o n o t r e f l e c t t h i s c o n t r i b u t i o n . W e may d i s a g r e e w i t h t h e c o u r t ' s f i n d i n g s , b u t w e w i l l n o t o v e r t u r n it. W e see no abuse by t h e c o u r t i n r e a c h i n g t h i s f i n d i n g . Husband o b j e c t s t o t h e f i n d i n g by t h e c o u r t t h a t t h e "Mulski" house is e n t i r e l y w i t h i n h i s ownership. Husband t e s t i f i e d a t t h e h e a r i n g t h a t h e owns t h e p r o p e r t y i n p a r t n e r s h i p w i t h a Lawrence Johnson. However, t h e e v i d e n c e i n t r o d u c e d i n d i c a t e s o t h e r w i s e . A copy o f t h e deed t o t h e property named Husband as the sole owner of the property. Husband objects to the court's findings and conclusions regarding "other property." Except for the "coin collection," we find no error in the findings. However, findings and conclusions regarding the "coin collection" appear contradictory. The court, in finding no. 16 states: "the coins were acquired with Wife's wages during the marriage and therefore constitute marital property subject to division." However, in amended finding no. 30, the court failed to include the value of the coin collection as part of the list of property subject to division. Then, in the amended decree at dissolution and property division, the court awarded the coin collection to the Wife. Clearly, there was error in awarding the coin collection to the Wife without first including its value in the marital property and adjusting the property division accordingly. The amended decree should be vacated and this case is remanded for further action consistent with this Opinion. We concur: U 9 4 d u , Chief Justice

September 29, 1983

6a0e3486-6e69-43d2-84c4-154c9ef9b9f5

CONWAY v BLACKFEET INDIAN DEVELOP

N/A

82-483

Montana

Montana Supreme Court

NO. 8 2 - 4 8 3 I N THE SUPFEME COURT OF THE STATE OF MONTANA 1 9 8 3 FREDERICK CONb7AY , C l a i m a n t and R e s p o n d e n t , BLACKFEET INDIAN DEVELOPERS I INC., E m p l o y e r , and MISSOULA SERVICE CO., D e f e n d a n t and A p p e l l a n t . APPEAL FROM: Workers' C o m p e n s a t i o n C o u r t , T h e H o n o r a b l e T i m o t h y R e a r d o n , Judge presiding. COUNSEL OF RECORD: For A p p e l l a n t : Jardine, Stephenson, B l e w e t t & Weaver; D a l e S c h w a n k e , G r e a t F a l l s , Montana For R e s p o n d e n t : D o n a l d R. M a r b l e , C h e s t e r , Montana N o r m a n H. G r o s f i e l d , H e l e n a , M o n t a n a S u b m i t t e d on B r i e f s : June 1 6 , 1 9 8 3 D e c i d e d : S e p t e m b e r 2 , 1 9 8 3 F i l e d : SEP 2 - 1983 Mr. Justice John C. Sheehy delivered the Opinion of the Court. Missoula Service Company, as adjuster for the insurance carrier of the employer, Blackfeet Indian Developers, Inc., appeals from a judgment of the Workers' Compensation Court awarding the claimant, Frederick Conway, permanent total disability benefits. The Workers' Compensation Court concluded that the injury which the claimant received in an industrial accident caused the claimant's multiple sclerosis to become symptomatic; and that therefore the claimant's subsequent disability from MS was a compensable injury under the Workers' Compensation Act. On July 30, 1976, the claimant was operating a backhoe for the Blackfeet Indian Developers, Inc. as part of a sewer line construction project in the Heart Butte area. It was raining and windy that day making it impossible for the workers to measure accurately the depth of the sewer line ditch with the string lines. Therefore, the claimant and his co-workers decided to stop work for the day. In exiting the backhoe, the claimant placed his left hand on the left door of the cab and his right hand on the handhold on the right side of the left door and pushed open the door. When the door opened, the wind caught it and jerked the claimant forward. The sudden jerk and the claimant's rea.ction caused the claimant's right hand to slip into the handhold. As the claimant dropped from the cab, his hand remained in the handhold and he was left dangling by his right hand for several seconds before he finally dropped to the ground. Because the stabilizers which lift and support the backhoe in its normal operation were extended, the floor of the cab was approximately 5 1/2 feet off the ground and the handhold on the cab was approximately 8 1/2 feet off the ground. Before the claimant fell to the ground, he shouted for help. A co-worker heard the shout and turned to see the claimant dangling from the cab. Later that afternoon, the claimant began to experience pain and soreness in his right arm, shoulder and neck area. The claimant continued to experience pain and soreness through the weekend and therefore did not report to work the following Monday and Tuesday. Approximately nine days later, the claimant began to experience numbness in his right thumb. Soon after that, on August 10, 1976, the claimant sought medical attention for his pain and numbness. The numbness eventually expanded to his fingers, arms and toes over a period of two months. By December 1976, the claimant began to experience weakness in his left side. The source of the claimant's continuing numbness and weakness was diagnosed as multiple sclerosis sometime in 1977. The claimant filed his claim for benefits under the Workers' Compensation Act. The claim was denied by Missoula Service Company on December 22, 1977. Claimant requested benefits three more times on June 15, 1978, August 28, 1978, and December 11, 1978. His request was denied each time. A petition for hearing before the Workers' Compensation Court was filed in April 1979. After a trial before the Hon. William E. Hunt, a decision was rendered by the Hon. Timothy W. Reardon on September 15, 1982, ordering Missoula Service Company to pay the claimant permanent total compensation benefits and also medical benefits. A stay pending appeal was granted on November 3, 1982, and the notice of appeal was filed by Missoula Service Company on December 1, 1982. Appellant raises the following issues on appeal: 1. Whether there is substantial, credible evidence to support the findings of fact of the Workers' Compensation Court. 2 . Whether the findings of the Workers' Compensation Court are sufficient to support the conclusions of law based thereon. The issue is essentially over the finding by the Workers' Compensation Court that the claimant's industrial accident caused the onset of disabling MS symptoms. The insurer argues that because the medical community cannot determine with any degree of certainty what factors may precipitate an onset of MS symptoms, there is not substantial evidence that the trauma from the claimant's injury could cause the claimant's MS to become symptomatic. The findings of the Workers' Compensation Court in this case come to us in an unusual stance. Rule 52(a), M.R.Civ.P. instructs that findings of a District Court shall not be set aside unless erroneous. We have extended this rule to findings made by the Workers' Compensation judge, McGee v. Bechtel Corp. (1979), 182 Mont. 149, 154, 595 P.2d 1156, 1159, but we are also usually careful to say that the Supreme Court in reviewing findings of the Workers' Compensation Court will look to the record to determine if there is substantial evidence to support the findings. Steffes v. 93 Leasing Co., Inc. (1978), 177 Mont. 83, 86, 580 P.2d 450, 452-453. If there is substantial evidence to support the findings and conclusions, we have said we are without power to overturn the result in that court. Head v. Missoula Service Company (1979), 181 Mont. 129, 592 P.2d 507; Close v. St. Regis Paper Company (1977), 175 Mont. 158, 573 P.2d 163. The question in this case is one of proximate cause. Did the injury sustained by the claimant cause MS or precipitate or aggravate an underlying but present MS condition? One doctor testifying for the employer said there is no causal, precipitative, or aggravating effect upon MS a.rising from injury of the type here, which he considered minor. Another doctor, testifying for the employer, felt the injury was of no significance because claimant, whose medical history indicated he was quick to seek medical help in other instances, waited 12 days before seeking help here, so that the injury must have been minor. A third doctor testifying for the claimant, stated his opinion that the injury described by claimant "precipitated" the outward symptoms of an underlying MS condition in the claimant. All the medical persons agree: (1) claimant does indeed suffer from MS (rare among American Indians) and is disabled; (2) he will not recover from the active MS condition; (3) MS is a disease wherein the insulating substance covering nerve fibers in the central nervous system (myelin) is attacked, causing demyelinating lesions; (4) there is no known cause, only high probabilities; (5) some authorities believe in viral causation, others think the disease results from a defect in the body's immune system; (6) for unknown reasons, MS features remissions and exacerbations, and sometimes completely asymptomatic conditions of MS. Medical authorities on causation run the stretch from "do not deny" that trauma can cause, precipitate, or aggravate MS to "peripheral trauma appears" to be a precipitating factor in MS. Against this background, the Workers' Compensation Court found that the "claimant's industrial accident proximately caused his MS to become symptomatic and disabling." In making its finding, the Workers' Compensation Court did not agree with the "aggravation principle" of underlying or pre-existing diseases, nor did he accept without more the testimony of the claimant's medical doctor that the injury caused claimant's MS to become symptomatic. The court's rationale is best explained by its own words: "Given that the claimant's MS was pre-existing but asymptomatic prior to July 30, 1976, it would appear that the claimant's case is one of an aggravation of a pre-existing disease. Under this theory, the claimant could satisfy his burden of proof regarding proximate causation by evidence that it was medically possible that his July 30, 1976, accident made his MS symptomatic. "This Court does not find the theory of aggravation of a pre-existing condition applicable in this case. Although the claimant ' s MS , while asymptomatic, pre-existed his July 30, 1976, traumatic accident and although Dr. Nelson stated that trauma could have caused the claimant's MS to become symptomatic, the weight this Court can give Dr. Nelson's statement is severely limited because of the medical community's lack of knowledge regarding the cause and development of MS. "The extensive medical testimony elicited by both counsel can be reduced to two statements: (1) the cause of MS is unknown; (2) evidence regarding what may cause MS to become symptomatic is at best extremely tentative and at worst entirely speculative. "Against this background, Dr. Nelson's statement can be seen for what it is -- a concession to medical ignorance. Because the medical community cannot disprove that trauma may cause MS to become symptomatic, it does not follow that this failure is affirmative evidence of causation. For example, simply because one cannot conclusively disprove that there is intelligent life in distant galaxies, it does not follow that this failure is somehow proof of their existence. The failure merely leaves the field clear for an argument that will affirm or refute the proposition. "Similarly, Dr. Nelson' s statement merely recognizes that current medical knowledge has not foreclosed the possibility that trauma can cause MS to become symptomatic. Although Dr. Nelson cited several articles in medical journals as the basis for his conclusion that trauma may cause MS in a person to become symptomatic, these articles also discuss causation only in terms of statistical correlations and tentative, inchoate possibilities. Those who investigate the cause of MS and what causes it to become symptomatic are at the frontier of medical science; until they have explored further no one will have affirmative evidence of what may cause MS to become symptomatic. "This leaves the claimant in the seemingly impossible position of being required to prove proximate causation when there is no direct medical evidence on this point." For his guidance and authority in deciding this case, the Workers' Compensation judge looked to the decision in Moffett v. Bozeman Canning Co. (1933), 95 Mont. 347, 26 P.2d 973. Moffett, a young man of 24 in good health, expecting to lift a 40 pound case of tins, lifted 80 pounds, and immediately felt pain in his right side and back at the top of his hip bone, and was unable to continue his work. The next day in the doctor's office, he was more nervous than is usual for a patient in the office; within three weeks he had a pronounced tremor in his left foot which spread to both legs, his tongue a.nd his head. The medical witnesses agreed that the claimant was suffering from Parkinson's disease or a Parkinsonian syndrome. In Moffett, as in this case, two doctors testified that the lifting of the cases of tins could not have caused the Parkinsonian syndrome. One doctor testified that in his opinion Moffett's condition was caused by the lifting. Medical science at the time knew little of Parkinson's disease or Parkinsonian syndrome, and this Court found that the testimony of the experts was more in the nature of surmises based upon the pathology of the disease rather than upon facts upon which a true hypothetical question as to the theoretical cause of the claimant's condition could be founded. This Court in Moffett went on to say with respect to the burden of proof imposed on the injured employee: "The record contains no direct evidence from which it can be said the injury was the proximate cause of claimant's present condition; this, not because of failure on the part of claimant properly to present his case, but because, on the frank admission of the doctors, no man on earth knows positively the exact cause of such an affliction in any given case; medical science has not advanced to a point where it can positively trace back from the effect and declare the cause of the disease in a given patient, but this fact alone need not bar the claimant from recovery, if, on the record, it can be said that he is entitled thereto. "The reasonable deductions from the record are as follows: Carl Moffett, a strong, healthy young man, suffered a traumatic injury arising out of and in the course of his employment, against the effect of which he was duly insured. He was thereafter never in condition to follow his vocation. His physical deterioration commenced with the injury and followed the usual course of the affliction from which he now suffers until he was totally and permanently disabled." 95 Mont. at 358, 359, 26 P.2d at 977, 978. This is the Moffett rationale which was used by the Workers' Compensation judge in the case at bar to find in favor of the claimant: "Undeniably the Moffett court at several places expresses itself in language that strongly suggests that the theory on which the claimant was entitled to recover was that of an aggravation of a pre-existing condition. But the Moffett court never overcame the absence of affirmative evidence of causation; it merely recognized the absence of medical evidence and accepted as sufficient the coincidence between the claimant's trauma and the manifestation of Parkinson's disease and similar coincidences observed by persons the court could only bring itself to label as 'authorities. ' But coincidence is not causation; an event following another event does not of itself establish causation. At most it may suggest a causal relationship, and it is this suggestion, ultimately, and the purpose behind the Workers' Compensation Act, on which the Moffett court relied in finding the claimant's Parkinson's disease compensable." Following that rationale, the Workers' Compensation judge applied the facts here and determined a "causal relationship" between Conway's injury from the handhold of the backhoe and the lighted-up symptoms of his MS: "There is indirect evidence, i.e., a strong suggestion, that the claimant's traumatic accident caused the claimant's MS to be symptomatic. The claimant, while a healthy man, suffered a traumatic injury on July 30, 1976. Almost immediately thereafter he began to experience the numbness, and months later, the weakness which doctors later diagnosed as caused by his MS. On the basis of these events, the purpose of the Act and the medically undemonstrable proposition that trauma possibly causes MS to be symptomatic, this Court is left with the conviction that the claimant's traumatic injury proximately caused the claimant's MS to become symptomatic; the claimant's disability resulting from MS is, therefore a compensable injury." The insurer in this case quarrels with the finding of the Workers' Compensation judge that prior to July 30, 1976, the claimant had no serious illnesses or injuries which required him to miss work for any significant period of time and that he had no MS symptoms before his accident of July 30, 1976. The insurer contends that there were two earlier manifestations of MS, one in May 1973, when he was seen at the Indian Health Service complaining of an inability to extend his right little finger which had not been injured. Another was in 1965, when the claimant was evaluated for possible rheumatoid arthritis and tingling and numbness in his feet. The Workers' Compensation Court found that claimant had MS, but had no symptoms of MS before his accident on July 30, 1976. On this finding, we can state that the Workers' Compensation Court was not clearly erroneous since the two claimed instances were not diagnosed as MS at the time, each several years prior to the manifest symptoms that occurred following the July 30, 1976, incident. The insurer also maintains that the injuries suffered by the claimant here were not of sufficient magnitude either to aggravate his MS or to precipitate an onset of MS symptoms. The insurer also claims that Moffett should not apply here because in Moffett the medical authorities agreed that trauma could cause an onset of Parkinson's disease and all of the medical doctors were of the opinion that trauma precipitated the onset of such symptoms. The contentions of the insurer are merely argumentative, and are the same as those contentions which were urged upon and rejected by the Workers' Compensation judge. The basic issue for us to decide in this case is whether we should in effect overrule the holding in Moffett to the effect that where medical science is unable to provide definitive answers, the Workers' Compensation Court should look to indirect evidence to establish causation. We hold that the Moffett rationale is valid in cases where medical science is powerless to be of direct aid, and is especially applicable in this case. The indirect evidence of causation here is too strong to admit of cavil, or to be ignored. Here the wind, catching the opening door of the backhoe, jerked the claimant out of his cab with his hand caught in the handhold, and he was left dangling for some seconds before he was able to drop to the ground from a handhold height of about 8 1/2 feet. In the later afternoon, he complained of soreness to his right arm, shoulder and chest. Within a few days, he developed a numbness on his right thumb and had a slight bruise on his right thumb. Within 12 days he was in the doctor's office complaining about a spread of the symptoms. His condition gradually deteriorated. There is no other conclusion to be made but that the onset of the symptoms began when he was jerked out of the backhoe cab. There is no other credible evidence but that prior to the July 30, 1976, incident, there was no outward manifestation of MS symptoms. It is entirely proper, as the Workers' Compensation Court found, that on the basis of these events, and considering the purpose of the Workers' Compensation Act, and the medically undemonstrable proposition that trauma does or does not cause MS to become symptomatic, there is nevertheless a conviction that the claimant's traumatic injury proximately caused his MS to become symptomatic and that therefore he suffered a compensable injury. We therefore affirm the Workers' Compensation Court on that point. The Workers' Compensation Court did not apply the 10 percent penalty provided in section 39-71-2907, MCA, a point on which we further agree. And now something further need be said to alert the legislature to the dreadful economic effect upon this claimant in pursuing his Workers' Compensation claim. He was injured on July 30, 1976. Through the administrative procedures before the Workers' Compensation Division and the eventual progress of the case through the Workers' Compensation Court, and this Court, more than 7 years have elapsed since claimant became disabled. In this case, the Workers' Compensation Court stayed the execution of his judgment pending appeal, which means that claimant has been without payments of compensation benefits. Although some inherent institutional delay may be expected as a claim lumbers through the claims process, it is clear as day that a 7-year case time is intolerable to a worker. The blame rests squarely on the legislature. It has treated the Workers' Compensation Court as an orphan, leaving it understaffed, underfinanced and underquartered. It has practiced a false economy, because the burden of financing the Workers' Compensation Court is upon industry and those who suffer most from underfinancing are the helpless and the injured. If this case does not shake some legislator's conscience, perhaps nothing will. Af firmed. We Concur:

September 2, 1983

3534e93e-b382-426f-91d2-4db7f33fce87

MARTINSON v THOMPSON

N/A

82-478

Montana

Montana Supreme Court

No. 82-478 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 RICHARD S. MARTINSOPJ & BETTY L. ilrnRTINSON f Plaintiffs and Appellants, -vs- ROBERT THOMPSON & BEVERLY TIIOMPSON, Defendants and Respondents. APPEAL FROM: District Court of the Sixteenth Judicial District, In and for the County of Rosebud, The Eonorable Alfred R . Coate, Judge presiding. COUNSEL OF RECORD: For Appellant: Gary L. Beiswanger, Billings, Montana S. Charles Sprinkle, co-counsel, Forsyth, Montana For Respondent: William F. Meisburger, Forsyth, Montana Submitted on Briefs: May 19, 1983 Decided: August 4, 1983 Filed: ALE 4 1 9 8 3 Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Judgment was entered July 27, 1982, in the District Court of the Sixteenth Judicial District, Rosebud County, denying Richard and Betty Martinson's action to terminate Robert and Beverly Thompson's lease of the Oak Room Bar and Lounge. Martinsons are appealing that judgment. We affirm. In 1977, Richard and Betty Martinson (Martinsons) purchased the Choisser Building in Forsyth, Montana. A portion of the street level of the building was then being operated by Lewellyn Dalby and Dom DeSocio as the Oak Room Bar and Lounge. On January 23, 1978, Martinsons leased the Oak Room Bar to Keith and Roxane Gilje. The lease was to run for six years: March 1, 1978 to February 29, 1984. The Giljes assigned their lease of the bar to Robert and Beverly Thompson on September 10, 1979. The second and third floors of the Choisser Building are used as a hotel. After remodeling one of the hotel's apartments for their own use, the Martinsons moved from Billings to their hotel in June of 1980. The noise and music from the Oak Room Bar allegedly kept the Martinsons and some of the guests at the hotel from sleeping. The Martinsons sent a demand letter to the Thompsons on February 27, 1981, requesting that they reduce the level of noise emanating from their bar or face legal action. The noise allegedly continued, so on June 17, 1981, the Martinsons sent the Thompsons a notice of eviction stating that the lease would terminate on July 20, 1981. The Thompsons refused to surrender possession of the bar. Therefore, the Martinsons filed a complaint August 5, 1981, requesting that: 1. The lease be terminated as of July 20, 1981; 2 . Possession of the premises be awarded Martinsons; 3. Thompsons be required to pay to Martinsons $45.00 per dav as treble rent for each day after July 20, 1981, that Thompsons retain possession of the bar; and 4 . Martinsons be awarded reasonable attorney's fees and costs. Thompson's motion to dismiss was denied October 21, 1981. Thereafter, Thompsons filed an answer and counterclaim November 9, 1981, denying that the noise from the bar was of a level which would constitute a nuisance and alleging damages for Martinsons' failure to supply reasonable heat to the bar in an effort to "freeze-out" Thompsons. The actions were consolidated and a bench trial was held June 24 and 25, 1982. Martinsons' theory was that they had the right to terminate Thompsons' lease because Thompsons violated an implied covenant not to operate their bar in such a manner as to create a nuisance. The Martinsons presented evidence at trial in an effort to prove that the bar was being operated as a nuisance. Since Thompsons refused to acknowledge termination of the lease and to surrender possession of the premises, Martinsons contend that on July 20, 1981, Thompsons were in violation of the unlawful detainer statutes, Chapter 27, Title 70 of the MCA. The Thompsons presented substantial evidence to prove that the bar was not being operated as a nuisance and that the Martinsons were not providing reasonable heat to the bar. Thompsons also presented evidence of the economic damages they suffered because of Jlartinsons' actions. Findings of fact and conclusions of law were issued July 15, 1982, and a judgment was rendered July 27, 1982. The trial judge held that Martinsons could not terminate their lease with Thompsons because Thompsons had violated no covenant contained within the lease. Further, the trial judge stated that the lease could not be cancelled under any theory of nuisance because the Thompsons were simply doing what they had a right, under the lease, to do - operate a bar. Finally, the trial judge concluded that, although Thompsons were entitled to damages for a breach of their lease, no damages would be awarded because Thompsons' evidence of damages was too speculative. Martinsons raise a number of issues in their appeal of the findings, conclusions and judgment. They can be summarized as follows: 1. Can a lease be terminated, under the unlawful detainer statutes, for violation of an alleged implied covenant not to operate the leased premises so as to create a nuisance? 2 . Is there substantial credible evidence to support the trial court's finding that there was no nuisance? We find issue two to be dispositive. Martinsons filed an unlawful detainer action at the trial court level. Section 70-27-108, MCA, states that unlawful detainer occurs when a tenant of real property for a term less than life 1) holds over after the expiration of the term; 2) continues in possession after defaulting in the payment of rent and after three days written notice demanding payment; or 3) continues in possession after neglecting or failing to perform conditions or covenants of the lease and after three days written notice demanding performance of the conditions or covenants. The Eighth Circuit Court of Appeals stated in Mosby v. Manhattan Oil Co. (8th Cir. 1931), 52 F.2d 364 at 369: "One of the implied obligations of a lessee is that he shall so use the leased premises as not to injure his lessor by a nuisance thereon." Citing Mosby, Martinsons allege that their lease with Thompsons should be terminated because Thompsons violated an implied-in-law obligation to use their leased property in such a manner as not to create a nuisance. We need not decide this question because there is substantial credible evidence to support the District Court's finding that the bar was not being operated as a nuisance. Numerous individuals testified at trial that the bar was no noisier than any other bar they had frequented. The Thompsons testified that they had greatly reduced the number of live bands playing at the bar. Thompsons hired bands to play on seventeen occasions from January to June, 1980; on eight occasions from July to December, 1980; and on four occasions during the entire 1981 year. As of June 25, 1982, no bands had played at the Oak Room Bar in 1982. The trial judge held that the lease could not be cancelled on any theory of nuisance because the Thompsons were doing only that which their lease entitled them to do - operate a bar. The finding that this operation was not a nuisance is supported by the record. The judgment of the Distri We concur: 3 ~ 4 ~ ~ ~ 4 Chief Justice Justices E

August 4, 1983

2237996d-dad7-4e92-82db-fe62905e66be

GRIFFEL v FAUST

N/A

82-145

Montana

Montana Supreme Court

No. 82-145 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 WILLIAM C. GRIFFEL, Plaintiff and Appellant, CHESTER FAUST, BAXT EISELE, et al., Defendants and Respondents. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Nilliam J. Speare, Judge presiding. COUNSEL OF RECORD: For Agpellant: John J. Cavan; Sandal1 & Cavan, Billings, Montana For Respondents: Laurence R . Martin, Billings, Montana William S. Mather; Moulton, Bellingham, Longo & Mather, Billings, Montana -- Submitted on Briefs: May 19, 1983 Decided: August 24, 1983 Filed : UirG 2 4 1983 Clerk Mr. J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion of t h e Court. P l a i n t i f f brought t h i s a c t i o n i n t h e D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Yellowstone County, seeking damages f o r p e r s o n a l i n j u r y and p r o p e r t y damage. Defendants counter- claimed f o r p r o p e r t y damage. A f t e r a j u r y t r i a l , t h e j u r y r e t u r n e d a v e r d i c t i n f a v o r of d e f e n d a n t s and awarded them $9,055.97 f o r p r o p e r t y damages. P l a i n t i f f appeals. On December 1 8 , 1979, d e f e n d a n t R i c k E i s e l e , an employee of d e f e n d a n t C & B Haygrinders, was g r i n d i n g hay a t t h e P a t t e n Davidson F e e d l o t , west of Park C i t y , Montana. A t approximately 6:00 p.m., R i c k hooked h i s pickup t o t h e haygrinder and proceeded t o p u l l t h e haygrinder onto t h e f r o n t a g e road f o r t r a n s p o r t t o 0 Bar Feeders, e a s t of L a u r e l , Montana. A f t e r d r i v i n g a s h o r t d i s t a n c e , R i c k n o t i c e d t h e pickup l i g h t s began t o dim. R i c k con- t i n u e d on t h e f r o n t a g e road f o r approximately 200 y a r d s when t h e pickup l i g h t s went o u t completely, and t h e pickup engine d i e d . R i c k p u l l e d t h e pickup and haygrinder t o t h e s i d e of t h e road. R i c k e s t i m a t e d t h e l e f t s i d e of h i s v e h i c l e s came t o a rest approximately f i v e f e e t from t h e c e n t e r l i n e of t h e highway. R i c k had no f l a r e s or warning d e v i c e s so he turned on four w h i t e f l o o d l i g h t s which a r e a t t a c h e d t o t h e r e a r of t h e h a y g r i n d e r . The f l o o d l i g h t s s h i n e backwards from t h e r e a r of t h e haygrinder f o r n i g h t o p e r a t i o n . R i c k then l e f t t h e v e h i c l e s and c r o s s e d t h e f r o n t a g e road and I n t e r s t a t e 90 t o find a farmhouse from where he could c a l l f o r help. A s R i c k returned he noticed t h e p l a i n t i f f ' s t r u c k and t r a i l e r proceeding on the f r o n t a g e road toward t h e d i s a b l e d pickup and haygr i n d e r . G r i f f e l observed t h e f l o o d l i g h t s approximately one-half m i l e from where t h e pickup and haygrinder were parked. G r i f f e l t h o u g h t t h e l i g h t s were on some kind of farm implement and because t h e l i g h t s were white he assumed t h e v e h i c l e was coming toward him. G r i f f e l p u t on h i s jake brake t o slow h i s t r u c k u n t i l t h e l i g h t s became so b r i g h t he was blinded. A t t h a t p o i n t , G r i f f e l s e t h i s brakes and turned s h a r p l y t o t h e l e f t . The r i g h t s i d e of h i s t r u c k and t r a i l e r s t r u c k t h e l e f t s i d e of t h e haygr i n d e r . Both v e h i c l e s were damaged. G r i f f e l ' s v e h i c l e came t o r e s t i n t h e d i t c h d i r e c t l y a c r o s s from t h e haygrinder. G r i f f e l s u s t a i n e d i n j u r i e s t o h i s r i b s and h i s r i g h t arm. Robert K e t t e n r i n g , t h e i n v e s t i g a t i n g highway patrolman, found no evidence t h a t G r i f f e l had been speeding p r i o r t o impact. On September 1 6 , 1980, G r i f f e l f i l e d a complaint i n t h e D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l District , Yellowstone County, s e e k i n g damages f o r p r o p e r t y damage t o h i s t r u c k and t r a i l e r and p e r s o n a l i n j u r y . Defendants counterclaimed seeking damages f o r p r o p e r t y damage t o t h e pickup and h a y g r i n d e r . A f t e r a j u r y t r i a l t h e j u r y r e t u r n e d a v e r d i c t f i n d i n g d e f e n d a n t s were 0 p e r c e n t n e g l i g e n t and p l a i n t i f f was 100 p e r c e n t n e g l i g e n t . The j u r y awarded d e f e n d a n t s $9,055.95 f o r p r o p e r t y damage t o t h e pickup and haygrinder. G r i f f e l a p p e a l s . The i s s u e s r a i s e d on appeal a r e : 1. Whether t h e j u r y v e r d i c t is supported by s u b s t a n t i a l c r e d i b l e evidence; and 2. Whether t h e D i s t r i c t Court e r r e d i n r e f u s i n g t o g i v e p l a i n t i f f ' s o f f e r e d i n s t r u c t i o n no. 38. P l a i n t i f f f i r s t contends t h e r e is not s u b s t a n t i a l evidence n e c e s s a r y t o support t h e j u r y v e r d i c t . The jury found f i r s t , d e f e n d a n t s were 0 p e r c e n t n e g l i g e n t , second, p l a i n t i f f was 100 p e r c e n t n e g l i g e n t , and t h i r d , p l a i n t i f f ' s negligence was t h e proximate cause of p r o p e r t y damage t o d e f e n d a n t s ' v e h i c l e s . W e must determine whether t h e evidence p r e s e n t e d a t t h e t r i a l is s u f f i c i e n t t o s u p p o r t t h e s e f i n d i n g s . I n c o n s i d e r i n g t h e suf- f i c i e n c y of evidence, we apply a l i m i t e d s t a n d a r d of review. Where a f a c t i s s u e is presented b e f o r e a c o u r t s i t t i n g w i t h a j u r y , and t h e r e is s u b s t a n t i a l evidence t o support t h e j u r y ver- d i c t , t h e v e r d i c t w i l l s t a n d . Solberg v. County of Yellowstone (1983) I Mont . , 659 P.2d 290, 40 St.Rep. 308. Only when t h e r e is a complete absence of p r o b a t i v e f a c t s t o s u p p o r t t h e v e r d i c t does e r r o r o c c u r . S t r o n g v. S t a t e ( 1 9 7 9 ) , ---- Mont. P l a i n t i f f a r g u e s t h e r e is not s u b s t a n t i a l evidence t o s u p p o r t t h e j u r y ' s f i n d i n g of no n e g l i g e n c e on d e f e n d a n t s ' p a r t . P l a i n t i f f c o n t e n d s he proved d e f e n d a n t s were n e g l i g e n t per s e f o r t h e i r v i o l a t i o n of s e c t i o n s 61-8-353, 61-9-201 and 61-9-217, MCA. T h i s Court addressed t h i s same i s s u e i n Gunnels v. Hoyt ( 1 9 8 1 ) , ---- Mont . ---- , 633 P.2d 1187, 1192, 38 St.Rep. 1492, 1496, a c a s e i n v o l v i n g a s t r i k i n g l y similar f a c t s i t u a t i o n . W e s t a t e d : " I n o r d e r t o prove n e g l i g e n c e per s e , t h e p l a i n t i f f was r e q u i r e d t o prove t h a t t h e d e f e n d a n t s n e g l e c t e d a duty imposed upon them by s t a t u t e . W i l l i a m s v. Maley ( 1 9 6 7 ) , 150 Mont. 261, 267, 434 P.2d 398, 401; Conway v. Monidah T r u s t Co. ( 1 9 1 3 ) , 47 Mont. 269, 278, 1 3 2 P. 26, 27. I n p e r t i n e n t p a r t , s e c t i o n 61-8-353, MCA, p r o v i d e s t h a t no p e r s o n s h a l l s t o p or l e a v e s t a n d i n g any v e h i c l e upon t h e main t r a v e l e d p a r t of t h e highway when it is p r a c t i c a l t o s t o p or l e a v e such v e h i c l e o f f of such p a r t of s a i d highway. What is " p r a c t i c a l " i n any s i t u a t i o n c l e a r l y depends upon a l l of t h e s u r r o u n d i n g f a c t s and cir- cumstances. S e e Lyndes v. Scof i e l d ( 1 9 7 9 ) , Mont. ---- , 589 P.2d 1000, 1002, 36 St.Rep. 185, 188. Q u e s t i o n s of f a c t a r e f o r t h e j u r y t o r e s o l v e , and should n o t be t a k e n from t h e j u r y when r e a s o n a b l e men might draw d i f f e r e n t c o n c l u s i o n s from t h e e v i d e n c e . Heen v . Tiddy ( 1 9 6 8 ) , 1 5 1 Mont. 265, 269, 442 P.2d 434, 436. I n looking a t t h e e v i d e n c e i n t h e l i g h t most f a v o r a b l e t o t h e d e f e n d a n t , we f i n d t h a t t h e d e f e n d a n t s could have stopped t h e Volkswagen c l o s e r t o t h e r i g h t edge of t h e pavement and f u r t h e r o f f t h e main t r a v e l e d a r e a ; b u t we a l s o f i n d t h a t t h e weather con- d i t i o n s , t h e d a r k n e s s , t h e h i l l , t h e absence of w h i t e l i n e s , head l i g h t s and t a i l l i g h t s , and t h e use of t h e f l a s h l i g h t by t h e d e f e n d a n t t o warn approaching d r i v e r s , a l l bear upon t h e q u e s t i o n of p r a c t i c a l i t y . T h i s Court w i l l not d i s t u r b t h e j u r y ' s d e t e r m i n a t i o n i f t h e evi- dence f u r n i s h e s r e a s o n a b l e grounds f o r d i f - f e r e n t c o n c l u s i o n s . Payne v. Sorenson (1979), Mont . , 599 P.2d 362, 365, 36 St.Rep. 1610, 1%r3:- W e do not f i n d a v i o l a - t i o n of s e c t i o n 61-8-353, MCA, as a m a t t e r of law. " T h i s r a t i o n a l e a p p l i e s t o a l l t h r e e of t h e a l l e g e d s t a t u t o r y v i o l a t i o n s . I t is not t h e f u n c t i o n of t h i s Court t o a g r e e o r d i s a g r e e w i t h t h e j u r y v e r d i c t . W e s e a r c h o n l y f o r s u f f i c i e n t e v i d e n c e and where we have such evidence i n t h e r e c o r d , our job is complete. T h i s C o u r t , i n a r e c e n t o p i n i o n , Solberg v. County of Yellowstone ( 1 9 8 3 ) , Monte ---- , 659 P.2d 290, 40 St.Rep. 305, noted t h a t i n t e s t i n g t h e p r i n c i p l e s above s e t f o r t h on t h e weight of t h e evidence i n c l u d i n g " h i n d s i g h t " it may be tempting t o conclude i n t h e manner c o n t r a r y t o t h e c o n c l u s i o n of t h e jury. B u t , " o n l y when t h e r e is a complete absence of p r o b a t i v e f a c t s t o s u p p o r t t h e v e r d i c t does t h i s occur ." Here, n o t o n l y d i d t h e j u r y speak i n t h e form of its v e r d i c t i n favor of t h e d e f e n d a n t s , b u t p l a i n t i f f , i n moving f o r a new t r i a l , a s s e r t e d t h a t t h e v e r d i c t of t h e j u r y a s it r e l a t e s t o q u e s t i o n 1 o f t h e s p e c i a l v e r d i c t , f i n d i n g no n e g l i g e n c e on d e f e n d a n t ' s p a r t , was c o n t r a r y t o t h e g r e a t weight of t h e evi- dence and t o t h e i n s t r u c t i o n s of t h e c o u r t . T h i s motion was b r i e f e d and heard by Judge S p e a r e who r u l e d a g a i n s t t h e p l a i n - t i f f s . T h i s Court, i n S t r o n g v. Williams ( 1 9 6 9 ) , 154 Mont. 65, 460 P.2d 90, held t h a t t h e e f f e c t of t h e d e n i a l of a new t r i a l motion is p a r t i c u l a r l y a p p o s i t e t o t h i s appeal. I n a d d i t i o n , w e noted i n a n o t h e r c a s e , Fordyce v. Hansen ( 1 9 8 2 ) , Mont. , "Once a District Court has considered and d e n i e d a motion f o r new t r i a l , t h i s Court w i l l n o t l i g h t l y d i s t u r b t h a t r u l i n g a b s e n t evi- dence t h a t it is c l e a r , convincing and par- t i c u l a r l y f r e e from doubt of t h e t r i a l c o u r t ' s e r r o r . Schomyer v. Bourdeau ( 1 9 6 6 ) , 148 Mont. 340, a t 343, 420 P.2d 316, 317-18. No such showing was made h e r e ." P l a i n t i f f ' s argument is d i r e c t e d a t t h e d e c i s i o n s made by d e f e n d a n t E i s e l e a f t e r t h e v e h i c l e he was d r i v i n g l e f t t h e feed l o t . The evidence on t h e d r i v i n g and t h e argument a s t o t h e n a t u r e of t h e s e d e c i s i o n s was p r e s e n t e d t o t h e jury by both par- ties. The v e r d i c t s i g n i f i e s t h a t t h e j u r y concluded t h a t t h e d e f e n d a n t made r e a s o n a b l e d e c i s i o n s under t h e c i r c u m s t a n c e s and i n l i g h t of t h e i n s t r u c t i o n s , and t h a t t h e d e f e n d a n t d i d what a r e a s o n a b l e and p r u d e n t person would have done under t h e cir- cumstances. Concerning t h e f l o o d l i g h t s , p l a i n t i f f a r g u e s t h a t t h e defen- - 5 - d a n t was n e g l i g e n t because t h e f l o o d l i g h t s deceived t h e p l a i n t i f f i n t o t h i n k i n g t h e r e was an oncoming v e h i c l e i n t h e westbound l a n e of t r a f f i c i n s t e a d of t h e v e h i c l e parked i n h i s own l a n e of t r a f - f i c . Such testimony was c o n t r a d i c t e d by t h a t of t h e deputy s h e r i f f and highway p a t r o l o f f i c e r , both of whom r e p o r t e d t h a t t h e p l a i n t i f f had admitted s e e i n g t h e l i g h t s ahead of him a p p r o x i m a t e l y one-half mile away from t h e impact and i n h i s own l a n e . The evidence a l l o w s a r e a s o n a b l e c o n c l u s i o n t h a t t h e p l a i n t i f f , i n s p i t e of s e e i n g t h e l i g h t s , f a i l e d t o slow down and keep h i s v e h i c l e under c o n t r o l so a s t o keep from s t r i k i n g t h e parked u n i t . P l a i n t i f f a r g u e s t h a t d e f e n d a n t was n e g l i g e n t p e r se, a s a m a t t e r of law under j u r y i n s t r u c t i o n 15. T h a t i n s t r u c t i o n s t a t e d t h a t a v i o l a t i o n of t h e law is of no consequence u n l e s s it is t h e proximate cause of t h e a c c i d e n t . Under t h e s p e c i a l v e r d i c t , t h e j u r y concluded t h a t t h e d e f e n d a n t s were not n e g l i g e n t and t h a t t h e r e was no n e g l i g e n c e on t h e p a r t of t h e d e f e n d a n t s which was a p r o x i m a t e cause of t h e a c c i d e n t . T h i s d i s p o s e s of p l a i n t i f f ' s argument. P l a i n t i f f f u r t h e r a r g u e s t h a t s e c t i o n 61-9-217, MCA, was v i o l a t e d and t h a t p l a i n t i f f ' s i n s t r u c t i o n 38 which was r e f used, s h o u l d have been given by t h e c o u r t . W e f i n d t h e i n s t r u c t i o n i n a p p l i c a b l e . On its f a c e t h e i n s t r u c t i o n r e f e r s t o t h e duty of a d r i v e r of a motor v e h i c l e w i t h r e s p e c t t o " s p o t lamps" and n o t t h e t y p e of l i g h t s which were on t h e v e h i c l e h e r e i n q u e s t i o n . The s t a t u t e r e q u i r e s such " s p o t lamps" t o be turned o f f upon approaching a n o t h e r v e h i c l e from e i t h e r d i r e c t i o n . T h a t is not t h e f a c t u a l c a s e h e r e involved where t h e haygrinder was s t a - t i o n e r y . Here, t h e j u r y c l e a r l y found t h a t t h e d e f e n d a n t ' s conduct was n o t t h e proximate cause of t h e a c c i d e n t . Q u e s t i o n 2 of t h e spe- c i a l v e r d i c t asked, "Was t h e d e f e n d a n t ' s n e g l i g e n c e , i f any, a p r o x i m a t e cause of t h e a c c i d e n t ? " The j u r y answered "No." Q u e s t i o n 5 a s k e d , "Was t h e p l a i n t i f f William C. G r i f f e l ' s n e g l i - gence, if any, a proximate cause of t h e a l l e g e d damages?" The j u r y answered "Yes." W e f i n d s u b s t a n t i a l evidence upon which t h e j u r y could have based its c o n c l u s i o n . The judgment is a f f i r m e d . We concur:

August 24, 1983

9e6470a7-d1ae-46f4-b0c8-8226931c6f71

WALTERS v CAMPEAU

N/A

82-377

Montana

Montana Supreme Court

No. 82-377 & 82-378 IN THE SUPREME COURT OF THE STATE OF MONTANA M. E. WALTERS , Plaintiff, PAUL CAMPEAU, Defendant and Appellant, FRED G. CARL AND JOAN A. CARL, Defendants and Respondents, and WILLIAM P. CHILCOTE, Petitioner and Ap2ellant. ORIGINAL PROCEEDING : & APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable Jack L. Green COUNSEL OF FGCORD: For Petitioner/Appellant: James J. Benn; Boone, Karlberg & Haddon, Missoula, Montana (argued) For Respondents: Moses Law Firm; Charles Moses (argued), Billings, Montana McChesney and Borg, Missoula, Montana William R. Baldassin, Missoula, Montana - - - - - - - - - Submitted: MaY 311 1983 Decided: September 2, 1983 Filed: SEP 2 - 1 9 8 3 ---- Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. William P. Chilcote (Chilcote) , not a party to the original action, seeks a Writ of Review and appeals from the determination by the District Court of the Fourth Judicial District, Missoula County, that Chilcote was in contempt of court, and that Fred G. Carl and Joan A. Carl (Carls) should therefore have judgment against him for $40,350. We reverse the judgment of the District Court. While a number of issues have been stated by the parties, we restate the controlling issue: Does the evidence support the findings of the District Court, its conclusion of contempt by Chilcote, and its judgment of $40,350 against Chilcote? The Carls entered into a contract for the construction by Paul Campeau (Campeau) of four duplexes in Missoula, Montana. During construction, a mechanic's lien was filed by plaintiff Walters. Walters obtained summary judgment against Campeau and is no longer a party to the controversies between Campeau and Carls. After trial of the claims for relief by Carls against contractor Campeau, the Carls obtained judgment against Campeau on April 27, 1981 for breach of contract. The District Court ordered that the necessary repairs be made to correct substantial defects in the four duplexes, Campeau was ordered to pay to Carls the cost of the correction, repairs and related expenses, the total of which was not to exceed $30,000 per unit, i.e. $120,000. Campeau failed to complete the improvements or payments. Carls recorded their $120,000 judgment against Campeau in Richland County, Montana. Campeau and Chilcote were engaged in a joint venture in Richland County where they were constructing and selling residences. The Campeau-Chilcote joint venture had nothing to do with the Missoula County construction contract, and Chilcote d.id not in any way participate in the construction of the Carls' Missoula County duplexes. In order to obtain title insurance required for the sale of the Richland County houses, Chilcote personally borrowed $120,000 from First National Bank in Missoula and deposited that $120,000 in Richland National Bank of Sidney, pursuant to a written agreement between the title and abstract companies and the bank whereby the $120,000 would protect the title to the Richland County properties against the Carls' judgment. That agreement provided that Chilcote was to be treated as the sole owner of the fund and that all funds were to be returned to Chilcote upon termination of the trust account. Next the Carls moved the District Court to force Campeau's compliance with the April 27, 1981 court order. A hearing was held. The District Court issued an order on November 4, 1981, allowing Campeau to complete the repairs to the duplex under supervision of designated architects. Security for payment of materialmen and subcontractors was ordered in the form of an interest-bearing account established in the amount of $60,000. Campeau's attorney, William Baldassin, was to maintain the account in the name of William Baldassin, Trustee, to be used to pay materialmen and subcontractors. That order also required the Carls to release the property in Richland County from the lien of the April 27, 1981 judgment, so that "the defendant Campeau's funds can be released from the sale of the residences and be transmitted to Mr. Baldassin as Trustee." The order did not name Chilcote in any manner and did not require or prohibit any conduct on his part. Pursuant to the November, 1981 order, Carls executed partial releases of judgment on the Richland County properties. The releases were forwarded by Carls' counsel to Mr. Baldassin, Campeau's counsel. Campeau's counsel forwarded the releases to the abstract company in Sidney. In his letter forwarding the releases, Baldassin asked the abstract company to "notify the bank that the judgments have been released and that they [the bank] can release all monies held in the Chilcote account to me for deposit in my trust account. I' At this point the testimony and understanding of Campeau's attorney, the abstract company and the bank is at variance. The attorney's letter to the abstract company did not condition recording of the releases upon the receipt by the attorney of the $60,000, but instead requested notification of the bank that it "can release" all monies held in the Chilcote account for deposit in the attorney's trust account. The attorney testified that he understood that he was to receive the $60,000 in return for the releases, and that he was not aware of any misunderstanding on this point between the officers of the abstract company or the bank and himself. In contrast, the officer of the abstract company testified that he did not understand this to be a conditional delivery of the releases, and he therefore recorded the releases, advised the bank of that recording, and furnished them a copy of the attorney's letter. In turn, the bank officer testified that he contacted his legal counsel, who advised him to return the $120,000 to Chilcote, which he did. The sales of the Richland County houses were completed and Chilcote received the net sales proceeds, as well as the balance of the $120,000 deposit in the Richland Bank. Chilcote repaid his $120,000 personal loan to the Missoula bank. On November 23, 1981 he paid $60,000 to Campeau as Campeau's share of their joint venture profits in Richland County. This is the action which the District Court found to be contemptuous in that it frustrated the November 4, 1981 order of the court requiring that $60,000 be held in a trust account with Mr. Baldassin as trustee. While Chilcote was not involved in the Missoula County construction, the contract problems or the court action between the Carls and Campeau, Chilcote was aware of the plan for a $60,000 trust account with Mr. Baldassin as trustee. Chilcote's testimony with regard to his $60,000 payment to Campeau is as follows: "Q. You had some awareness of the supplementary hearing in October, did you not? A. Yes. "Q. And you know that Mr. Baldassin wanted $60,000? A. Yes. "Q. But did you have any knowledge that anyone had required you to provide that $60,000 to any of them? A. No. "Q. What did you do with the money that Mr. Campeau had coming out of the proceeds of the sale? A. In November, you mean? "Q. Yes. A. I paid it to him. He's got all the money. "Q. At the time you paid it to him because you knew generally what was going on, did you tell him? A. I told him he better get that money down and - - - - -- ive it to Bill Baldassin, right, Bill? L--- "Q. Did he acknowledge to you that he would do that? A. He said he wasn't going to get me in trouble. "Q. That didn't prove to be accurate, did it? A. No." (emphasis added) Campeau paid $2,650 to the Carls and $17,000 to Baldassin, which was deposited in the trust account. Campeau then disappeared and none of the parties were able to bring him before the court during the balance of the proceedings. At oral argument counsel advised the court that Campeau apparently was in Australia. On December 30, 1981, Carls petitioned the District Court to find Baldassin, Campeau and Chilcote guilty of contempt for failure to obey the supplemental order. By order filed August 2, 1982, the District Court concluded that Chilcote "frustrated the order of this Court and prevented its execution and should be held in contempt of this Court and required to comply with the order . . . dated November 4, 1981. " Judgment in favor of Carls was entered on August 10, 1982 against Chilcote in the amount of $40,350, together with costs of suit. Chilcote then petitioned for a Writ of Review and also appealed. This consolidates challenges to the finding of contempt and to the money judgment. Does the evidence support the holding of contempt by the District Court? The rule with regard to our review of contempt proceedings is well stated in our opinion in Matter of Graveley (1980), Mont . , 614 P.2d 1033, 1039, 37 St.Rep. 1261, 1267, as follows: "It is the rule that on review of contempt proceedings, the Supreme Court determines only whether the District Court acted within jurisdiction, and whether or not the evidence supports the finding and order. State - v . District Court of Twelfth Judicial Dist. (1968), 151 Mont. 41, 4 3 7 438 P.2d 563; State v . Second Judicial Dist. Court (1935), 99 Mont. 209, 41 P.2d 1113." Chilcote does not contend that the court does not have jurisdiction because he is not a party to the proceeding between the Carls and Campeau. Graveley establishes there is no such limitation in Montana. In that case, the sheriff who was neither a party nor otherwise present in the courtroom was nonetheless found guilty of contempt for his disobedience of the order of the court. The specific statute which applies is section 3-1-501, MCA, which in pertinent part states: "(1) The following acts or omissions in respect to a court of justice or proceedings therein are contempts of the authority of the court: " (e) disobedience of any lawful judgment, order, or process of the court; "(i) any other unlawful interference with the process or proceedings of a court;" The pertinent portions of the District Court's August 2, 1982 findings of fact are as follows: XIV. "However the court finds that Mr. William Chilcote knew of the order of this Court and the requirements thereof through his attorney, through conversations and agreements with Mr. Campeau and through conversations with Mr. William Baldassin; . . . The Court further finds that Mr. Chilcote paid to Mr. Campeau two checks in the amounts of $45,000 and $15,000, making a total of $60,000, from the sale of said residences; "That William Chilcote not only knew of the order of this Court and the requirements of said order, but contrary to such order did the things and performed the acts as herein described, frustrating the Court's order and enabling Mr. Campeau to not perform the improvements upon the premises, and prevented the delivery of $60,000 to be placed in trust as required by the order." Section 3-1-501, MCA requires that there be a disobedience of a judgment, order or process, or other unlawful interference with process or proceedings. There was no judgment, order or process in any manner directed to Chilcote individually, and in the absence of any finding by the court that there was a disobedience of a judgment, order or process, it is clear that the facts do not substantiate a finding of contempt under section 3-1-501(l)(e), MCA. Therefore, we must conclude that the court found Chilcote guilty of contempt under subparagraph (i) , by some unlawful interference with the process or proceedings of the court. There is nothing in the findings or in the evidence which shows any unlawful interference on the part of Chilcote with the process or proceedings, unless the facts can be stated in such a manner as to show that Chilcote in some manner interfered with the deposit of the $60,000 in Mr. Baldassin's trust account. We here make reference to the above-quoted testimony on the part of Chilcote. There is no evidence to contradict his testimony that he told Campeau that "he better get that money down and give it to Bill Baldassin." Campeau advised Chilcote he would not get him in trouble, which is of course exactly what he did. In analyzing the evidence and the findings, we do find evidence to sustain the conclusion of the District Court that Chilcote knew of the requirement for the $60,000 deposit with Mr. Baldassin. The facts also show that there was no requirement by order, instruction or otherwise, that Chilcote deliver the $60,000 to Campeau's attorney, rather than to Campeau himself. There are no facts to support the conclusion of the District Court that Chilcote frustrated the court's order and prevented the $60,000 from being placed in trust. The facts only show that Chilcote delivered the $60,000 to Campeau with instructions to deliver the same to his own counsel, Mr. Baldassin. Unfortunately, Chilcote trusted Campeau when Campeau was not worthy of that trust and "left the country." In a similar manner, the Carls, their attorney and the District Court also extended trust to Campeau, believing that he would complete the construction according to his obligations and make payments as required. Unfortunately he proved unworthy of that trust. We can understand and sympathize with the sense of frustration on the part of the District Court, which devoted so much time and effort to work out a just solution of the controversies between the Carls and Campeau, and concluded with the unfortunate result that by court order the liens on the Richland County property had been released and yet the $60,000 had not been deposited in trust for the protection of the Carls. It is clear that there was a frustration of that order of the District Court. The facts show that it was Mr. Campeau (and not Mr. Chilcote) who frustrated the court's order and failed to deliver the entire $60,000 as he was required to do. Clearly Campeau was in contempt of the court. Clearly Chilcote did not prevent the payment by Campeau of the $60,000 into trust by his delivery of the funds to Campeau with instructions they be delivered to Campeau's own attorney. We therefore hold that there is not sufficient evidence to support the finding and order of contempt. As a result, the judgment for $40,350, together with costs of suit, must fall. Having reached this conclusion, there is no need to address the other issues raised by the parties. We reverse the finding and order of contempt on the part of Chilcote, reverse the judgment entered for the Carls against Chilcote, and remand for appropriate action by the District Court. We concur: a u . @ a d Chief Justice Justices Mr. Justice John C. Sheehy dissenting: I dissent. In this case, Chilcote, knowing of the existence and provisions of the District Court order, is guilty of an unlawful interference with , . the proceedings of the District Court. Section 3-1-50 (i) , MCA. For such contempt, he is k) liable to the power of the District Court, even though he is not a party to the underlying action. The power of the District Court reaches to any person or officer who is in contempt of the authority of the court by misbehavior in office or by any other unlawful interference with the process of proceedings of the court. See McPartlin v. Fransen (1978), 178 Mont. 178, 582 P.2d 1255. This Court is failing to recognize that a district court has the power to enforce its order by contempt proceedings. Our statutes recognize this, when they include: "Section 3-1-520. Imprisonment to compel perform- ance. When the contempt consists in [sic] the omission to perform an act which is yet in the power of the person to perform, he may be imprisoned until he shall have performed it. In that case, the act must be specified in the warrant of commitment." What the District Court was doing in this case was attempting to follow the provisions of our statutes with respect to its power. We should modify the order of the District Court in this case so that a fine is levied against Chilcote for his past contempt in frustrating the lawful order of the court, and imprisonment ordered until he performs the act which the District Court had decreed in its order, unless it is now beyond his power to do so. In a civil contempt proceeding, a fine is imposed as punishment for past contemptuous conduct and imprisonment is ordered where the defendant refuses to do an affirmative act required by an order mandatory in its nature. See U. S. v. Montgomery (D. Mont. 1957), 155 F.Supp. 633. One who refuses to perform a judicial order which he is able to perform may be imprisoned until he complies with such order. State ex rel. Lay v. District Court, Fourth Judicial District in and for Ravalli County (1948), 122 Mont. 61, 198 P.2d 761. The only question before this Court is the propriety of the District Court order holding Chilcote in contempt. He is in contempt as long as he does not deposit with the trustee named in the order the sum of $60,000. Whether eventually he may be liable for the full amount of $60,000 to the remaining parties is a matter of a future determination after trial by a court. But, at this juncture, the question before this Court and before the District Court, is, should Chilcote have been required to place in deposit with the trustee the sum of $60,000? The majority opinion goes afield from this question and raises complications which are unnecessary to its decision. All we have to decide here is whether Chilcote, a nonparty, is subject to the contempt jurisdiction of the District Court. In this case, all of us seem to recognize that he is. Since he is subject to the contempt power of the court, the lawful order of the court, which otherwise appears proper, ought to be permitted. Otherwise, the District Court is powerless to enforce its orders. I would, therefore, modify the judgment of the District Court to require that Chilcote follow the order by depositing $60,000 with the trustee; and, unless it is beyond his power to do so, I would enforce the order through the permitted fine, and to such jail time as is necessary to bring about compliance with the court's order. Section 3-1-520, MCA. Once the money is on deposit with the trustee, the remaining questions as to the extent of Chilcote's liability could be litigated.

September 2, 1983

7681c14b-75ce-4204-8f39-9d336ad4b4a5

STATE v YOUNG

N/A

83-231

Montana

Montana Supreme Court

NO. 83-231 IZJ T H E SUPREI4l3 COURT O F T H E STATE O F MONTANA 1983 STATE O F M O N T A N A , P l a i n t i f f and Respondent, -vs- RICKY LEE YOUNG, Defendant and Appellant. APPEAL FROM: D i s t r i c t Court of t h e Twelfth J u d i c i a l D i s t r i c t , I n and f o r t h e County of H i l l , The Honorable J. Chan E t t i e n , Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Mark A. Suagee, Havre, Montana For Respondent : lion. Mike Greely, Attorney General, I-lelena, Montana Ronald W. Smith, County Attorney, Havre, Montana Submitted on B r i e f s : J u l y 2 1 , 1983 Decided: September 1 5 , 1983 F i l e d : SEP ! . 5 1983 Clerk Mr. Justice John C. Sheehy delivered the Opinion of the Court. Ricky Lee Young appeals from a judgment of conviction against him of felony theft. He was tried in the District Court, Twelfth Judicial District, Hill County. We reverse and remand for a new trial. Young was charged with the felony theft of a Hondo-180 acoustic guitar with strap and case, with a manufacturer's suggested retail price of $183, from Village Music store in Havre, operated and owned by Roger Beck. Young was not a regular employee of the store, but had previously done work for Beck on a commission basis. Young was in the store when Duane Stephenson of Fort Benton came to the store. Since Beck was busy, Young discussed with Stephenson the purchase of the guitar. Stephenson did not buy the guitar at the time because he wanted both of his daughters to take guitar lessons, and if either maintained a . n interest in the lessons, he would then buy a guitar. Young went to Beck after his conversation with Stephenson and asked if he could take the guitar home in order to get it ready to sell to Stephenson. Beck agreed, and Young took the guitar home. A week or two later, Beck saw Young and asked whether Stephenson had purchased the guitar. Young replied that there had been no purchase and that he had returned the guitar to the store. Later Beck took an inventory and discovered that the guitar was missing. In the meantime, Young was using the guitar to give lessons to one of Stephenson's daughters. On March 11, 1982, Stephenson entered into a deal with Young whereby Young purchased from Stephenson beauty supplies and cleaning products for $106.54. In return, Stephenson purchased the guitar from Young for $149.95. Stephenson delivered a check to Beck for the difference over the cost of the goods purchased by Young in the sum of $43.46. Although Young contended that the full amount of $149.95 (the Stephenson check for $43.46, plus a check from Young for $106.54) was attempted to be delivered to Beck, Beck testified no such attempts were made. In May 1982, Stephenson came to the Village Music store looking for Young. There Beck, questioning Stephenson, learned that Young had sold the guitar to Stephenson. The criminal charges against Young ensued. Young raises two issues on appeal: (1) That the jury should have been instructed as to the lesser-included offense of misdemeanor theft; and, (2) that the evidence for the jury to find a value of the guitar, strap and case in excess of $150.00 was insufficient to justify the verdict. We dispose of this case on the ground that the District Court should have instructed the jury on the lesser-included offense of misdemeanor theft. We summarize the evidence on the value of the guitar, strap and case as follows: The manufacturer's suggested retail price of the guitar, strap and case was $183.00. When Beck made sales through employees, those sales were made on a commj-ssion basis. The employees had a 20 percent discount from list price within which to make a sale. The difference between the 20 percent discount price and the final purchaser's price was the employee's commission. Thus, in this case, Beck would. have ratified any sale made by Young less than $36.60 from the suggested retail price. If Young had an offer to sell the materials at less than 20 percent discount, he had to have the approval of Beck. Young actually sold the guitar to Stephenson for $149.95, within the discount range. The replacement cost of the guitar, strap and case to Beck was approximately $100.00. At the time for settlement of the instructions during the trial, defendant Young offered his instruction no. 10 which would have instructed the jury that if there was reasonable doubt as to whether he wa.s guilty of a given offense or one or more lesser-included offenses, Young could only be convicted of the greatest-included offense about which there was no reasonable doubt. Section 46-16-602, MCA. When this instruction was offered, the following colloquy between court and counsel occurred: ". . . I am going to refuse number 10 because there was no greater or lesser included in this. It's either a felony or it's nothing. "MR. DRIVENESS: [Counsel for the State] Well, Your Honor, we have talked about that. It's my opinion that there is an element that is not listed in the offense, but it is in the whole statute, and that's the value, and I think it's a jury question for them to determine the value. Therefore it's a lesser included offense. "THE COURT: The way the State has brought the prosecution, you have prosecuted a felony over a hundred. and fifty (150) . You have to prove that. If you don't prove it, it fails. It's up to the jurv. If the jury finds it' s less than a hundred or a hundred and fifty or less, then they are going to acquit. If you wanted a misdemeanor, you should have charged the guy with a misdemeanor. "MR. DRIVENESS: We couldn't charge him with both, could we? "THE COURT: Not in District Court. No. "MR. DRIVENESS: Then we are foreclosed from having a finding that he is guilty of a misdemeanor? "THE COURT: That's right. You have alleged a felony and I don't consider that a misdemeanor is a lesser included under the circumstances because the cutoff is a hundred and fifty (150) or less for a misdemeanor, and your obligation is to prove that it was over a hundred and fifty (150). That's the way I am looking at it. It will go straight on a felony. He is either convicted or acquitted. Okay.. . . I' Young contends that under the evidence on value in this case the jury could rationally have found that the value of the guitar, strap and case did not exceed $150.00 and in that situation, the jury should have been allowed to consider whether he committed the crime of misdemeanor theft. Young relies on Keeble v. United States (1973), 412 U.S. 205, 93 S.Ct. 1993, 36 L.Ed.2d 844; Sansone v. United States (1965), 380 U.S. 343, 349, 85 S.Ct. 1004, 13 L.Ed.2d 882; Berra v. United States (1956), 351 U.S. 131, 134, 76 S.Ct. 685, 100 L.Ed. 1013, to the effect that the defendant is entitled to instruction on a lesser-included offense if the evidence would permit a jury ra.tionally to find him guilty of the lesser offense and acquit him of the greater. Keeble, supra, 412 U.S. at 208, 93 S.Ct. at 1995, 36 L.Ed.2d at 847. Young further relies on our decisions in State v. Taylor (1973), 163 Mont. 10 515 P.2d 695; State v. Buckley (1976), 171 Mont. 233, 557 P.2d m; State v. Radi (1978), 176 Mont. 451, 578 P.2d 1169; and State v. Jackson (1979), 180 Mont. 1-95, 589 P.2d 1009. He cites Taylor, supra, to the effect that the District Court is bound to instruct the jury on the lesser-included offense since the weight to be given the evidence is a question for the jury. Taylor, supra, 163 Mont. at 115, 515 P.2d at 701. The State responds that the evidence in this case is that the guita.r, strap and case had a value in excess of $150.00, namely $183.00, and that the conviction cannot be overturned in the light of that evidence. The State further contends that at the time that defendant offered proposed instruction no. 10 and it was rejected by the trial court, Young shou1.d have then made further objections or offered further instructions. It is evident from the foregoing colloquy between court and counsel at the time Young's instruction no. 10 was offered that the court assumed that if the value of the items did not exceed $150.00, beyond a reasonable doubt, the jury would acquit the defendant, and thus the defendant was not entitled to instructions on lesser-included offense. This assumption, however, was answered in Keeble, supra, with the Supreme Court saying: ". . . A defendant is entitled to a lesser offense instruction . . . precisely because he should not be exposed to the substantial risk that the jury's practice will diverge from theory." 412 U.S. at 212, 93 S.Ct. at 1998, 36 L.Ed.2d at 850. Section 46-16-602, MCA, provides: "When it appears beyond a reasonable doubt that the defendant has committed an offense but there is reasonable doubt as to whether he is guilty of a given offense or one or more lesser included offenses, he may only be convicted of the greatest included offense about which there is no reasonable doubt. " Under our statutes, a person who commits the offense of theft of property commits a felony if the property exceeds $150.00 in value, but a misdemeanor if the property is valued at $150.00 or less. Section 45-6-301(5), MCA. "Value" is defined as "the market value of the property at the time and place of the crime, or if such cannot be satisfactorily ascertained, the cost of the replacement of the property within a reasonable time after the crime." Section 45-2-101 (69) (a), MCA. Since value is an element of the crime of theft, and is a fact question, the question of value must be decided by the jury. Section 46-16-103 (2), MCA. Even though the District Court here may have considered the evidence of value less than $150.00 weak and inconclusive, it was still bound to instruct the jury on the lesser-included offense of misdemeanor theft, since the weight to be given to the evidence is a question for the jury. State v. Taylor, supra, 163 Mont. at 115, 515 P.2d at 701. The Sta.te further contends that Young's counsel did not object to the refusal of instruction no. 10 and therefore may not raise the issue on appeal. That is not a correct interpretation of criminal procedure. It is, of course, the duty of counsel for the parties to object with specificity to instructions which are offered by the other side in criminal cases. Section 46-16-401 (4) (b) , MCA. When, however, a party's offered instructions are refused by the court in criminal cases, there is no duty on the part of that party's counsel to make further objections for the record. No exceptions are necessary to the rulings of the court on the settlement of instructions. Section 46-16-402(4)(c), MCA. Young's counsel did not offer any further instruction to the District Court on the lesser-included offense of misdemeanor theft. It is apparent, however, that the District Court would have refused such instructions. On the basis therefore, that under the evidence of this case the defendant was entitled to instructions on the lesser-included offense of misdemeanor theft, we reverse the conviction of the defendant for felony theft and remand the case for a new trial. We Concur:

September 15, 1983

f032a7ec-3321-44d4-a9ad-162582d68fc9

MATTER OF G L O C

N/A

82-239

Montana

Montana Supreme Court

NO. 82-239 I N T H E SUPREME COURT O F TEE STATE O F MONTANA 1983 IN T H E M A T T E R O F : G. L. 0. C , T. J .X. , e t a l . , Youth i n Xeed o f Care. APPEAL FROM: D i s t r i c t Court o f t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Yellowstone, The Honorable Diane G. Barz, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Megan Combs & D. Michael Eakin argued, B i l l i n g s , Montana For Respondent: Urban J. Bear Don't Walk, B i l l i n g s , Montana Harold F. Hanser argued, County Attorney, B i l l i n g s , Montana Submitted: A p r i l 2 2 , 1983 Decided: August 1 3 , 1983 F i l e d : A liG 1 3 1983 P Clerk Mr. Justice Daniel J. Shea delivered the Opinion of the Court. The father of the children involved in this proceeding, a non-Indian, appeals an order of the Yellowstone County District Court that deprived him of the right to have a hearing and to have counsel before the cause was transferred to the Crow Indian Tribal Court under the provisions of the Indian Child Welfare Act, 25 U.S.C. § 1901, et seq. Before the District Court ordered the transfer pursuant to the Crow Tribe petition, the father had filed a request for appointment of counsel because he was indigent. The father, at the same time, did not expressly declare he would contest the transfer of the children to the jurisdiction of the Crow Tribe. Without acting on the father's request for counsel, the court simply ordered the transfer. The father, through the Yellowstone County Legal Services, filed a request for reconsideration. The trial court denied this, however, on the ground that it was too late to do anything about it--the court had already entered the transfer order. The Crow Tribe, however, did not actually take custody of the children. The children are still in the care of a foster home in Yellowstone County pending the outcome of this appeal. The father, after the District Court refused to reconsider its transfer order, filed an appeal to this Court. The father raises two issues. First, the father argues that the trial court erred in transferring the proceeding to Crow Tribal Court without giving him an adequate opportunity to be heard. Second, the father argues the trial court erred by failing to appoint counsel for him. We vacate the transfer order and remand to the District Court for further proceedings. After the trial court had entered its transfer order, and before it had acted on the father's request for reconsideration, the Yellowstone County Attorney's office urged the court to deny the father's request. The brief of the county attorney also takes this position. However, in oral argument, the Yellowstone County Attorney backed away from this position and simply took the position that the trial courts need guidance in this area and agreed that appointment of counsel was necessary for one to effectively assert his legal rights. The Crow Tribe, which did not appear for oral argument, argues in its brief that because the father did not actually object to the transfer, the trial court had a duty to transfer the matter to the tribe. On the counsel issue, the Crow Tribe argues that because the action in the trial court did not involve an action for removal, placement, or termination of parental rights, appointment of counsel was not required. We reverse the trial court and hold that before the trial court could transfer jurisdiction, a hearing was required. Further, because the request for appointment of counsel is so inextricably connected with asserting the rights of one who may object to a transfer, we hold that the trial court first had to determine whether the father was entitled to court-appointed counsel before it could proceed with a hearing and enter an order on the transfer question. The tragic backgrounds of these children's lives only emphasizes the need for procedural fairness in determining whether Indian children should be transferred to the jurisdiction of a tribe upon that tribe's removal request pursuant to the Indian Child Welfare Act. The procedural fairness was not granted here. The three children involved are aged 3, 7 and 8. All three children are enrolled members of the Crow Tribe. Before any legal action was started, they were living off the reservation with their mother who is a full-blooded Crow Indian. There is some question as to whether the father is actually the father of all three children, although that determination is not essential to our holding in this case. It is undisputed that he is the father of at least one of the children. The children's young lives are fraught with misfortune. While the young children were living with their mother, the father was in prison in Deer Lodge. After reports that the mother abused and neglected the children, the State of Montana filed a petition for temporary investigative authority on June 17, 1981, in District Court. The court granted the petition for 90 days, and on September 11, 1981, after the 90 day period had expired, the court placed the children in temporary foster care in Yellowstone County. They have been in temporary foster care ever since. Less than a month later, while the father was still in prison, the children's mother was murdered. The State then filed on October 9, 1981, a second petition for temporary investigative authority, and the children remained in a foster home. The father had by then been paroled from state prison and while he was at the Yellowstone County Sheriff's office, the State served him with a copy of the second petition for temporary investigative authority. The trial court granted this second petition and extended it twice. While these extensions were in effect, the father visited the children at the foster home from time to time. Later, acting in accordance with the Federal Indian Child Welfare Act of 1978 (25 U.S.C. S 1901, et seq.), the State notified the Crow Tribe of the Youths in Need of Care proceedings pending in the state District Court. A couple of months later, on April 6, 1982, the Crow Tribe responded by petitioning the state District Court for a transfer of the proceedings to Tribal Court pursuant to 25 U.S.C. § 1911 (b) of the Indian Child Welfare Act. The Tribe served copies of the petition on all attorneys of record and also served the father with a copy. On April 13, 1983, the father petitioned the District Court for appointment of counsel on the grounds that he was indigent. However, the court did not act on this petition. Rather, on April 14, 1982, without even acknowledging the father's petition or giving the father a chance to object to the transfer of jurisdiction, the court ordered a transfer of jurisdiction to the Crow Tribal Court. The father then obtained the services of Montana Legal Services and petitioned the court to reconsider its order on the grounds that he had not received adequate notice and had been unable to find an attorney to represent him. The court held a hearing, but on June 1, 1982, ruled that the transfer to Crow Tribal Court would remain in effect because the court had lost jurisdiction to reconsider its transfer decision. This appeal followed. We are at a loss in trying to understand why the trial court ignored our opinion in In Re the Matter of M.E.M. (19811, - Mont . - , 635 P.2d 1313, 38 St.Rep. 1895. There we held that the express language of the Indian Child Welfare Act requires appointment of counsel for an indigent parent or Indian custodian. The statute declares that: "In any case in which the court determines indigency, the parent or Indian custodian shall have the i t to court-appointed counsel in any -- removal, place men^, or termination proceeding. The court may, in its discretion, appoint counsel for the child upon a finding that such appointment is in the best interest of the child . . . (Emphasis added.) 25 U.S.C. S 1912(b)." In the Matter of M.E.M., 635 P.2d at 1316, 38 St.Rep. at 1898. Based on this statute, we held that indigency status required appointment of counsel. M.E.M., 635 P.2d at 1317, 38 St.Rep. at 1899. In requesting appointment of counsel based on indigency status, the father, along with his petition, filed an affidavit setting forth his indigency status. His status as an indigent was never questioned. Yet the trial court proceeded to rule as though the petition had never been filed. Nor can we understand how the trial court avoided a hearing on the question of whether jurisdiction should be turned over to the Crow Tribe. We also held in M.E.M., 635 P.2d at 1317, 38 St.Rep. at 1900, that under the Indian Child Welfare Act, a jurisdictional hearing is required before the court can enter an order either granting or denying a request for the transfer of jurisdiction of Indian children to tribal custody. Such a hearing is required whenever the Indian children live outside of a reservation. Here no hearing was held, and the trial court simply entered an order transferring jurisdiction to Tribal Court. This order was in flat contravention of our holding in M.E.M. The trial court must have known that a hearing was required and appointment of counsel for an indigent was required--for the trial judge presiding here also presided in M.E.M. Nonetheless, the trial court proceeded in flat contravention of our holding in M.E.M. on the hearing requirement and on the appointment of counsel requirement. To avoid a hearing and the appointment of counsel to make that hearing meaningful by the expedient of transferring jurisdiction in an effort to divest itself of jurisdiction would defeat one of the purposes of the Indian Child Welfare Act--that of granting due process to those involved in the process. As we recognized in M.E.M., 635 P.2d at 1316, 38 St.Rep. 1897, the Indian Child Welfare Act has an underlying thread of preventing the removal of Indian children from their Indian parents and culture. But that objective must be achieved in a manner that comports with due process for all those concerned. We cannot ignore here that at least one of the children, and perhaps all of them, have a mixed ancestry. The mother, who was Indian, was dead, but the father of at least one of the children, and possibly two of the children, was of Caucasion ancestry. He also claimed stepfather status of the third child. The father apparently wanted the state courts to retain jurisdiction. The children resided outside the reservation and may have been totally divorced from Indian culture and have established social and other ties completely divorced from tribal life. A transfer of jurisdiction to a Tribal Court, without giving a parent the right to object to a transfer of jurisdiction, may have the effect of plunging the children into circumstances that are traumatic or otherwise not in their best interest. That is precisely why a jurisdictional hearing is required before a transfer order is entered, and a hearing can in many instances be meaningless if an indigent parent is deprived of the right to have counsel appointed. Certainly one of the purposes of the Indian Child Welfare Act is to give due process to all those involved. There can be no due process where no hearing is held and a legitimate request for appointment of counsel is ignored. The order of the District Court is vacated, and this cause is remanded for proceedings consistent with this opinion. We Concur:

August 18, 1983

6a51f1c8-4a73-4fee-8441-15ae46501848

JEPPESON v DEPT OF STATE LANDS

N/A

83-071

Montana

Montana Supreme Court

NO. 83-71 I N T H E SUPREME COURT O F THE ST.ATE O F MONTANA 1983 K A R L G R A N T JEPPESOIJ, P l a i n t i f f and Appellant, STATE O F M O N T A N A , DEPAXTMENT O F STATE LANDS, Defendant and Respondent. APPEAL F R O M : D i s t r i c t Court of t h e Twelfth J u d i c i a l District, I n and f o r t h e County of L i b e r t y , The Honorable B. W. Thomas, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: John E. S e i d l i t z , Jr., Chester, Montana For Respondent: David Woodgerd & Lyle Xanley, Dept. of S t a t e Lands, Helena,. Montana Submitted on B r i e f s : May 2 6 , 1983 Decided: August 4, 1993 F i l e d : A ~ G 4 1983 Clerk Mr. J u s t i c e L . C. Gulbrandson d e l i v e r e d t h e Opinion of t h e Court. T h i s is an appeal from a d e c i s i o n of t h e District Court of t h e Twelfth J u d i c i a l D i s t r i c t , L i b e r t y County, t h e Honorable B. W. Thomas p r e s i d i n g , denying i n j u n c t i v e and mandamus r e l i e f t o t h e a p p e l l a n t , Karl G r a n t Jeppeson, and g r a n t i n g summary judgment t o t h e respondent, Department of S t a t e Lands. The following f a c t s a r e taken from t h e D i s t r i c t C o u r t ' s find- i n g s of f a c t and a r e not i n d i s p u t e . The S t a t e of Montana owns a p a r c e l of g r a z i n g land i n L i b e r t y County, Montana. The land is now and h a s been administered by t h e respondent Department. I n 1950, t h i s p a r c e l was leased by t h e respondent t o t h e a p p e l l a n t ' s f a t h e r , Karl H . Jeppeson. The l e a s e was renewed t o t h e f a t h e r ' s e s t a t e i n 1960. Ten y e a r s l a t e r , t h e l e a s e was changed t o the name of t h e a p p e l l a n t . The a p p e l l a n t has had more than a l i t t l e t r o u b l e maintaining h i s l e a s e s i n c e 1970. H e was l a t e w i t h h i s annual r e n t a l payment t o t h e department f o r t h e l e a s e h o l d i n 1973, and f a i l e d t o pay t h e r e n t i n 1974. Pursuant t o s e c t i o n 81-412, R.C.M., 1947, (now s e c t i o n 77-6-506, MCA) , t h e l e a s e was canceled e f f e c t i v e J u n e 7 , 1974. The land went unleased f o r two y e a r s , a f t e r which t h e department l e a s e d t h e land t o another p a r t y i n 1976. S h o r t l y t h e r e a f t e r , t h e p a r t y assigned h i s l e a s e t o t h e a p p e l l a n t . I n 1977, a p p e l l a n t was a g a i n l a t e i n making h i s r e n t a l payment. H e l o s t t h e l e a s e i n 1978 a f t e r another f a i l u r e t o make t i m e l y payment, b u t t h e l e a s e was r e i n s t a t e d based upon a p p e l l a n t ' s af f i d a v i t s t a t i n g t h a t h i s payment had been made by t h e s t a t u t o r y d e a d l i n e . N e v e r t h e l e s s , i n 1980, t h e r e n t was not r e c e i v e d a t a l l , and t h e l e a s e was canceled a g a i n . The p a r c e l remained unleased u n t i l 1981, when a new l e a s e was i s s u e d t o Adrian and J a n e t Hawks. The a p p e l l a n t had run h i s l i v e s t o c k on t h e p a r c e l up t o t h a t time, and ref used t o remove them, arguing t h a t he was e n t i t l e d t o compensation f o r c e r t a i n improvements made on t h e p a r c e l . A f t e r lengthy n e g o t i a t i o n s , t h e Hawks decided t o a s s i g n t h e i r l e a s e t o t h e a p p e l l a n t f o r t h e sum of $1,500. The assignment was made on forms provided by t h e depart- ment f o r such a t r a n s a c t i o n , and was received by t h e department on J a n u a r y 29, 1982. Because of workload problems, department employees were unable t o approve t h e proposed assignment immediate1 y. I n addi- t i o n , t h e department was h e s i t a n t t o approve t h e assignment i n view of a p p e l l a n t ' s h i s t o r y of l a t e payments. A l e t t e r e x p r e s s i n g t h e s e concerns was s e n t t o a p p e l l a n t on March 23, 1982. I n t h e l e t t e r , t h e department i n d i c a t e d it would not approve t h e assignment u n t i l t h e a p p e l l a n t could e x p l a i n why h i s 1980 payment was l a t e , and why he could not be reached i n 1980 i n r e g a r d t o t h e l a t e payment. A copy of t h i s l e t t e r was mailed t o t h e Hawks. A p p e l l a n t d i d not respond t o t h e l e t t e r u n t i l A p r i l 23, 1982. However, t h e A p r i l 1 d e a d l i n e f o r making payment, required by s e c t i o n 77-6-506, MCA, had passed, and on A p r i l 22, t h e depart- ment canceled t h e l e a s e f o r f a i l u r e t o r e c e i v e payment, and n o t i f i e d t h e Hawks of t h e c a n c e l l a t i o n . A s t h e department was p r e p a r i n g t o a d v e r t i s e t h e p a r c e l f o r a new l e a s e , t h e a p p e l l a n t f i l e d a motion i n D i s t r i c t Court f o r a p r e l i m i n a r y i n j u n c t i o n t o r e s t r a i n t h e department from l e a s i n g t h e p a r c e l . A p p e l l a n t sub- s e q u e n t l y modified h i s complaint t o r e q u e s t both p r e l i m i n a r y and permanent i n j u n c t i o n s preventing t h e department from l e a s i n g , and r e s t r a i n i n g it from denying assignment of t h e Hawks l e a s e t o him. I n a d d i t i o n , a p p e l l a n t requested a w r i t of mandamus compelling t h e department t o approve t h e assignment. A hearing was held on J u n e 24, 1 9 8 2 . The t r i a l c o u r t denied t h e motion f o r a p r e l i m i n a r y i n j u n c t i o n on August 4 , 1982. Afterwards, t h e p a r t i e s e n t e r e d i n t o a s t i p u l a t i o n t h a t t h e r e were no f a c t u a l d i s p u t e s , and t h a t t h e above-stated f a c t s and e x h i b i t s introduced a t t r i a l , along w i t h t h e d e p a r t m e n t ' s A p r i l 22 l e t t e r t o t h e Hawks, comprised t h e r e l e v a n t f a c t s f o r t h e c a s e . The p a r t i e s then submitted c o n c u r r e n t motions f o r summary judgment. The D i s t r i c t Court granted t h e respondent d e p a r t m e n t ' s motion f o r summary judgment on November 1, 1982. The a p p e l l a n t c o n t e s t s t h i s d e c i s i o n and c o n t i n u e s t o p r e s s f o r i n j u n c t i v e and mandamus r e l i e f . The a p p e l l a n t b e l i e v e s he is e n t i t l e d t o r e l i e f because t h e t r i a l c o u r t a l l e g e d l y e r r e d i n not f i n d i n g t h a t t h e department a c t e d a r b i t r a r i l y and c a p r i c i o u s l y when c o n s i d e r i n g t h e assign- ment of t h e Hawks l e a s e . S p e c i f i c a l l y , a p p e l l a n t contends t h a t t h e department had t o a c t upon t h e assignment w i t h i n a s p e c i f i c p e r i o d of time, and t h a t by not adhering t o t h i s l i m i t a t i o n , it abused its d i s c r e t i o n with r e s p e c t t o handling t h e assigment. I n t h e a l t e r n a t i v e , a p p e l l a n t argues t h a t even i f t h e department d i d n o t have a p r e s c r i b e d time l i m i t f o r a t t e n d i n g t o t h e m a t t e r , t h e mere l a c k of such a l i m i t is i t s e l f an a r b i t r a r y and c a p r i c i o u s a c t . Furthermore, a p p e l l a n t i n s i s t s t h a t t h e department was l e g a l l y bound t o approve t h e assignment i n any e v e n t . The a p p e l l a n t a l s o m a i n t a i n s t h a t t h e department acted wrong- f u l l y by f a i l i n g t o n o t i f y him of t h e r e n t due on t h e l e a s e , and by w a i t i n g f o r t h e l e a s e t o be canceled so t h a t t h e assignment would be a moot i s s u e . F i n a l l y , t h e a p p e l l a n t contends t h a t department added c o n d i t i o n s f o r approval of t h e assignment t h a t a r e c o n t r a r y t o s t a t u t e . For t h e r e a s o n s s t a t e d below, we r e j e c t a p p e l l a n t ' s arguments and a f f i r m t h e d e c i s i o n of t h e t r i a l c o u r t . I n i t i a l l y , we c o n s i d e r t h e r e q u e s t f o r i n j u n c t i v e r e l i e f . The t r i a l c o u r t c o r r e c t l y h e l d t h a t t h e l e a s e i n q u e s t i o n was a u t o m a t i c a l l y canceled by o p e r a t i o n of law when t h e r e n t was not p a i d by t h e s t a t u t o r y d e a d l i n e . S e c t i o n 77-6-506, MCA, p r o v i d e s , i n p e r t i n e n t p a r t , t h a t " [ t l h e r e n t a l f o r each succeeding y e a r on l e a s e s h e r e a f t e r i s s u e d . . . is due and payable b e f o r e March 1, and i f n o t paid by A p r i l 1 t h e l e a s e is canceled." The same s t a - t u t e r e q u i r e s t h e department t o n o t i f y t h e l e s s e e of t h e can- c e l l a t i o n . The land is t h e n open t o l e a s e t o o t h e r i n t e r e s t e d p a r t i e s . S e c t i o n 77-6-506, MCA. Thus, t h e department was l e g a l l y o b l i g a t e d t o c a n c e l t h e Hawks l e a s e and undertake con- s i d e r a t i o n of new a p p l i c a n t s and t h e i r b i d s , r e g a r d l e s s of any a c t i o n r e s p e c t i n g t h e a p p e l l a n t ' s assignment. The r e q u e s t f o r an i n j u n c t i o n t o e n j o i n t h e respondent from i s s u i n g a new l e a s e and denying t h e assignment cannot be g r a n t e d . S e c t i o n 27-19-103 ( 4 ) , MCA, p r o v i d e s t h a t an i n j u n c t i o n may not i s s u e " t o p r e v e n t t h e e x e c u t i o n of a p u b l i c s t a t u t e by o f f i c e r s of t h e law f o r a p u b l i c b e n e f i t . " I f g r a n t e d , t h e i n j u n c t i o n would p r e v e n t t h e department from c a r r y i n g o u t t h e r e q u i r e m e n t s of t h e c a n c e l l a t i o n s t a t u t e . The use of an i n j u n c t i o n t o compel t h e department t o i s s u e t h e l e a s e i n a p p e l l a n t ' s name would a l s o v i o l a t e s e c t i o n 27-19-103 ( 6 ) , MCA, which f o r b i d s i s s u a n c e of an i n j u n c t i o n " t o p r e v e n t t h e e x e r c i s e of a p u b l i c o r p r i v a t e o f f i c e , i n a l a w f u l manner, by t h e person i n p o s s e s s i o n . " Here, an i n j u n c t i o n would p r e v e n t t h e department from cancel l i n g t h e l e a s e f o r nonpayment of r e n t and p u t t i n g t h e l e a s e up f o r bid a s r e q u i r e d by s e c t i o n 77-6-506, MCA. I n j u n c t i v e r e l i e f is a l s o i n a p p r o p r i a t e on a n o t h e r ground. I t is an o l d r u l e i n Montana t h a t t i t l e t o , o r p o s s e s s i o n o f , a r e a l e s t a t e i n t e r e s t may not be l i t i g a t e d i n a s u i t f o r an i n j u n c t i o n . Davis v. Burton ( 1 9 5 2 ) , 126 Mont. 137, 246 P.2d 236; Union C e n t r a l L i f e I n s . Co. v. Audet ( 1 9 3 3 ) , 94 Mont. 79, 2 1 P.2d 53; National Bank of Montana v. Bingham ( 1 9 2 8 ) , 83 Mont. 21, 269 P. 162. An i n j u n c t i o n is an e q u i t a b l e remedy, and when a p a r t y i s seeking t o e n f o r c e a l e g a l i n t e r e s t i n r e a l p r o p e r t y , t h e n t h e remedy is not a v a i l a b l e u n l e s s f a c t s and circumstances i n d i c a t e t h a t t h e p a r t y ' s l e g a l remedies, a c t i o n i n e j e c t m e n t , are i n a d e q u a t e . See S t a h l v. 155 Neb. 412, 52 ' n N.W.2d 251; Vance v. Henderson ( 1 9 4 2 ) , 1 4 1 Neb. 766, 4 N.W.2d 833. Even though an i n j u n c t i o n i n t h i s case would not automati- c a l l y v e s t t i t l e t o t h e l e a s e h o l d i n t e r e s t i n the a p p e l l a n t , it would have t h e p r a c t i c a l e f f e c t of doing s o . And, where t h e p r a c t i c a l e f f e c t of an i n j u n c t i o n is t o o u s t one p a r t y from p o s s e s s i o n of a r e a l p r o p e r t y i n t e r e s t and v e s t it i n a n o t h e r , t h e remedy is still not a v a i l a b l e . B l i n n v. H u t t g r i s c h e S o c i e t y ( 1 9 2 0 ) , 58 Mont. 542, 194 P. 140; 43A C.J.S. I n j u n c t i o n s 561 ( 1 9 7 8 ) . The a p p e l l a n t has not demonstrated t h a t h i s l e g a l remedies a r e i n a d e q u a t e . And, he h a s not proved t h a t h i s c a s e f a l l s w i t h i n one of t h e e x c e p t i o n s t o t h e g e n e r a l r u l e . The l e a s e h o l d i n t e r e s t does not i n v o l v e a cropping agreement w i t h t h e s t a t e , s e e Davis v. Burton, s u p r a , and it has not been v i o l a t e d by a s i m p l e t r e s p a s s , s e e T a y l o r v. Nix ( 1 9 3 8 ) , 185 Ga. 536, 195 S.E. 416. T h e r e f o r e , a p p e l l a n t ' s r e q u e s t f o r i n j u n c t i v e r e l i e f must be d e n i e d . The f a c t s of t h i s c a s e and weight of l e g a l a u t h o r i t y do not s u p p o r t a p p e l l a n t ' s p r a y e r f o r a writ of mandamus t o compel assignment of t h e l e a s e . While t h e w r i t may i s s u e " t o compel t h e performance of an a c t which t h e law s p e c i f i c a l l y e n j o i n s a s a d u t y . . .," s e c t i o n 27-26-102(1), MCA, it w i l l not i s s u e t o com- p e l performance of a d i s c r e t i o n a r y f u n c t i o n . S t a t e ex rel. B u t t e Youth Serv. Center v. Murray ( 1 9 7 6 ) , 170 Mont. 171, 551 P.2d 1017. A major crux of t h i s c a s e , t h e n , is whether t h e department was under a l e g a l o b l i g a t i o n t o approve t h e assignment. I t is w e l l s e t t l e d t h a t t h e l a n d s g r a n t e d by t h e f e d e r a l government t o t h e s t a t e s f o r t h e s u p p o r t of p u b l i c s c h o o l s c o n s t i t u t e a t r u s t , and t h e s t a t e is t r u s t e e of t h o s e l a n d s . S t a t e ex r e l . Thompson v Babcock ( 1 9 6 6 ) , 147 Mont. 46, 409 P.2d 808; Toomey v. S t a t e Board of Land Comm'rs ( 1 9 3 8 ) , 106 Mont. 547, 8 1 P.2d 407. Thus, a f i d u c i a r y d u t y is placed upon t h e Board of Land Commissioners and t h e Department of S t a t e Lands t o manage t h e t r u s t according t o t h e h i g h e s t s t a n d a r d s . S e c t i o n 77-1-202, MCA, f o r example, p r o v i d e s t h a t t h e board " s h a l l ad- m i n i s t e r t h i s t r u s t t o s e c u r e t h e l a r g e s t measure of l e g i t i m a t e and r e a s o n a b l e advantage t o t h e s t a t e . " The department, under t h e d i r e c t i o n of t h e board, has r e s p o n s i b i l i t y f o r l e a s i n g , managing, and o t h e r w i s e d i s p o s i n g of t h e s e l a n d s , s e c t i o n 77-1-301, MCA, s u b j e c t t o t h e t r u s t g u i d e l i n e s . The n a t u r e of t h e d e p a r t m e n t ' s power when a d m i n i s t e r i n g t h e t r u s t h a s a l r e a d y been c o n s i d e r e d . I n Thompson, -- t h e r e l a t o r sought a w r i t of mandamus t o compel t h e board and t h e department t o i n v a l i d a t e c e r t a i n l e a s e s on school t r u s t l a n d s and t o i s s u e l e a s e s t o him. The D i s t r i c t Court denied t h e w r i t , and t h e d e n i a l was upheld by t h i s Court. More s p e c i f i c a l l y , t h i s Court emphasized t h a t : " [i] f t h e ' l a r g e s t measure of l e g i t i m a t e and r e a s o n a b l e advantage from t h e use of s t a t e l a n d s is t o a c c r u e t o t h e s t a t e , t h e n t h e S t a t e Land Board must, n e c e s s a r i l y , have a l a r g e d i s c r e t i o n a r y power. Every f a c e t of t h e B o a r d ' s a c t i o n c a n n o t , and is n o t , e x p l i c i t l y l a i d o u t i n t h e s t a t u t e s o r S t a t e C o n s t i t u t i o n . T h i s view was con£ irmed by J u s t i c e Sanner i n S t a t e ex rel. Gravely v. S t e w a r t , 48 Mont. 347, 349, 137 P. 854, 855 ( 1 9 1 3 ) , where he s a i d , 'The g r a n t of l a n d s f o r s c h o o l - purposes by t h e f e d e i a l government t o t h i s s t a t e c o n s t i t u t e s a t r u s t [ C i t i n g c a s e s . I and t h e s t a t e board of land commissioners, a s t h e i n s t r u m e n t a l i t y c r e a t e d t o a d m i n i s t e r t h a t t r u s t , is bound, upon p r i n c i p l e s t h a t a r e ele- mentary, t o so a d m i n i s t e r it a s t o s e c u r e t h e l a r g e s t measure of l e g i t i m a t e advantage t o t h e b e n e f i c i a r y of it. To t h a t end, and of n e c e s s i t y , t h e board must have a l a r g e --- d i s c r e - t i o n a r y ~ o w e r ---- over t h e s u b j e c t of t h e -- t r u s t ; and t h e r e f o r e it has been expressTy given ' t h e d i r e c t i o n , c o n t r o l , l e a s i n g and s a l e ' of t h e s e l a n d s , under such r e g u l a t i o n s and r e s t r i c t i o n s a s may be p r e s c r i b e d by law. [ c i t a t i o n o m i t t e d ] . " (emphasis i n o r i g i n a l . ) 147 Mont. a t 51-52, 409 P.2d a t 811. A p p e l l a n t i n s i s t s t h a t t h e department is bound t o approve assignments made by l e a s e h o l d e r s . T h i s p o s i t i o n is incons i s t e n t w i t h t h e broad d i s c r e t i o n a r y a u t h o r i t y vested i n a f i d u c i a r y l i k e respondent and c o n t r a r y t o s t a t u t o r y p r o v i s i o n s governing assign- ment. S e c t i o n 77-6-208 p r o v i d e s o n l y t h a t "no assignment is b i n d i n g on t h e s t a t e u n l e s s . . . approved by [ t h e department] ." A p e r t i n e n t r e g u l a t i o n echoes t h i s d i s c r e t i o n a r y a u t h o r i t y . See A.R.M. s e c t i o n 26.3.121(1). Nowhere i n t h e body of f i d u c i a r y p r i n c i p l e s , s t a t u t e s , o r r e g u l a t i o n s can t h e r e be found anything t o s u g g e s t t h a t t h e d e p a r t m e n t ' s a u t h o r i t y over approval of assignments is anything b u t d i s c r e t i o n a r y . The department had t h e o p t i o n of withholding approval on a p p e l l a n t ' s assignment u n t i l it had c a r e f u l l y examined h i s p a s t s t a t u s a s a l e a s e h o l d e r . U n t i l t h e assignment was approved, t h e Hawks were s t i l l t h e l e s s e e s . Respondent's o n l y l e g a l duty was t o p r o c u r e payment of t h e y e a r l y r e n t a l from t h e Hawks, and t h i s it c e r t a i n l y attempted t o do. Indeed, t h e a p p e l l a n t ' s r e q u e s t f o r mandamus asks t h a t t h e department r e s c i n d its p r i o r a c t i o n s w i t h r e s p e c t t o t h e l e a s e and g i v e t h e l e a s e new l i f e . Mandamus w i l l not l i e t o c o r r e c t o r undo an a c t a l r e a d y performed, however e r r o n e o u s t h e a c t may have been. Melton v. Oleson ( 1 9 7 4 ) , 165 Mont. 424, 432, 530 P.2d 466, 470; Thompson, s u p r a , 147 Mont. a t 50, 409 P.2d a t 810. A s w i t h t h e r e q u e s t f o r i n j u n c t i v e r e l i e f , mandamus would seem i n a p p r o p r i a t e i n t h i s c a s e . N e v e r t h e l e s s , t h e a p p e l l a n t c l a i m s he is e n t i t l e d t o r e l i e f on t h e grounds t h a t t h e d e p a r t m e n t ' s a c t i o n s were a r b i t r a r y and c a p r i c i o u s and amounted t o an abuse of d i s c r e t i o n . According t o t h i s argument, injunc- t i v e r e l i e f is a v a i l a b l e because t h e r e s p o n d e n t ' s a c t i o n s w i t h r e s p e c t t o t h e assignment and underlying l e a s e were unlawful; t h e department c a n n o t , t h e r e f o r e , c l a i m exemption under t h e provi- s i o n s of s e c t i o n s 27-19-103(4) and ( 6 ) , MCA. S i m i l a r l y , a p p e l l a n t a r g u e s t h a t , i n t h i s i n s t a n c e , t h e a c t i o n of t h e department c o n s t i t u t e d such an abuse of d i s c r e t i o n a s t o amount t o no e x e r c i s e of d i s c r e t i o n a t a l l . When such abuse is e s t a b l i s h e d , t h i s Court has held t h a t mandamus w i l l l i e t o compel t h e proper e x e r c i s e of d i s c r e t i o n a r y powers. Cain v. Dept. of H e a l t h ( 1 9 7 8 ) , 177 Mont. 448, 451, 582 P.2d 332, 334; Barnes v. Town of Belgrade ( 1 9 7 4 ) , 164 Mont. 467, 470, 524 P.2d 1112, 1113. There is some p r e c e d e n t r e q u i r i n g t h e s e t - a s i d e of a l e a s e - h o l d i n t e r e s t i n s t a t e l a n d s when t h e p r o c e d u r e s f o r g r a n t i n g t h e i n t e r e s t have been found unlawful. S e e , e . g . , Jerke v. S t a t e Dept. of Lands ( 1 9 7 9 ) , 182 Mont. 294, 597 P.2d 49. S i n c e t h e a p p e l l a n t ' s r e q u e s t f o r i n j u n c t i v e and mandamus r e l i e f r e s t s on e s s e n t i a l l y t h e same a l l e g e d wrongful a c t s by t h e department, t h e f o l l o w i n g d i s c u s s i o n a p p l i e s w i t h equal f o r c e t o t h e j u s t i f i c a - t i o n f o r e i t h e r remedy. A t t h e o u t s e t , we reemphasize t h a t t h e d i s c r e t i o n a r y powers v e s t e d i n t h e respondent department a r e broad i n scope. Abuse of d i s c r e t i o n , on t h e o t h e r hand, is not s u b j e c t t o a s broad an i n t e r p r e t a t i o n . T h i s Court has held t h a t abuse of d i s c r e t i o n i n v o l v e s : " n o t merely an e r r o r i n judgment, b u t perver- s i t y of w i l l , p r e j u d i c e , p a s s i o n , o r moral d e l i n q u e n c y [ c i t a t i o n s o m i t t e d ] , but it does n o t n e c e s s a r i l y imply wrong-doing o r a breach of t r u s t , o r import bad f a i t h [ c i t a t i o n s o m i t t e d ] ; it conveys, r a t h e r , t h e i d e a of a c t i n g beyond t h e l i m i t of d i s c r e t i o n [ c i t a t i o n s o m i t t e d ] ; t h e d i s r e g a r d of t h e evi- dence adduced [ c i t a t i o n o m i t t e d ] ; t h e basing a d e c i s i o n upon incompetent or i n s u f f i c i e n t evi- dence [ c i t a t i o n omitted] ; an e x e r c i s e of d i s c r e t i o n t o an end o r purpose not j u s t i f i e d by, and c l e a r l y a g a i n s t , reason and evidence [ c i t a t i o n s o m i t t e d ] ; a c l e a r e r r o r i n law i n t h e circumstances [ c i t a t i o n s omitted . I " Taylor v. County Comm'rs ( 1 9 5 4 ) , 128 Mont. 102, 111-12, 270 P.2d 994, 999, quoting Grant v. Michaels ( 1 9 3 3 ) , 94 Mont. 452, 459-60, 23 P.2d 266, 269. E s p e c i a l l y with r e s p e c t t o mandamus, abuse of d i s c r e t i o n cannot be s a i d t o e x i s t without a c l e a r showing t h a t t h e e n t i t y being challenged f a i l e d t o render a f a i r and h o n e s t judgment i n t h e m a t t e r b e f o r e it. See S t a t e ex r e l . S c o l l a r d v. Board of Examiners f o r Nurses ( 1 9 1 6 ) , 52 Mont. 91, 98, 156 P. 124, 126. The burden is on t h e p a r t y a t t a c k i n g t h e b o a r d ' s or d e p a r t m e n t ' s a c t i o n s t o prove such an abuse of d i s c r e t i o n . S c o l l a r d , s u p r a . -- The a p p e l l a n t m a i n t a i n s t h a t t h e department abused i t s d i s c r e t i o n i n t h r e e ways: (1) by f a i l i n g t o a c t upon t h e assign- ment i n a t i m e l y manner; ( 2 ) by adding c o n d i t i o n s f o r approving t h e assignment t h a t do not appear i n s t a t u t e ; and ( 3 ) by f a i l i n g t o n o t i f y t h e a p p e l l a n t t h a t t h e r e n t on t h e land was due and payable. With r e s p e c t t o t i m e l i n e s s , a p p e l l a n t a c t u a l l y makes two arguments. F i r s t , he s e i z e s upon a s t a t e m e n t made by one of t h e r e s p o n d e n t ' s employees t h a t most assignments were acted upon w i t h i n two weeks of r e c e i p t . A p p e l l a n t argues t h a t t h i s is a hard-and-fast r u l e , and t h a t by f a i l i n g t o a c t w i t h i n two weeks of r e c e i p t of t h e assignment on J a n u a r y 29, 1982, t h e department abused its d i s c r e t i o n . I n t h e a l t e r n a t i v e , t h e a p p e l l a n t argues t h a t even i f t h e department d i d not have a s t r i c t time l i m i t r u l e f o r a c t i n g upon assignments, t h e mere l a c k of such a r u l e would amount t o an abuse of d i s c r e t i o n . W e r e j e c t both arguments. I n t h e f i r s t i n s t a n c e , it was never s t i p u l a t e d by e i t h e r p a r t y t h a t respondent had a " r u l e " r e q u i r i n g a two week turnover on assignments. I n f a c t , t h e employee r e s p o n s i b l e f o r i n i t i a l review of assignments s t a t e d t h a t t h e "two week review" p r o c e s s was a s p i r a t i o n a l and n o t always a c h i e v a b l e , depending on t h e time taken by h i s s u p e r i o r s i n t h e department f o r f i n a l approval. Furthermore, t h e depart- ment had a heavy workload during t h e p e r i o d t h e assignment was r e c e i v e d , and, i n a d d i t i o n , needed more time t o c o n t a c t t h e a p p e l l a n t and determine what excuses he had, i f any, f o r h i s h i s t o r y of l a t e payments. T h i s Court w i l l n o t d i s a g r e e with t h e p r o p o s i t i o n t h a t t h e department should a c t a s p r u d e n t l y a s p o s s i b l e w i t h r e s p e c t t o t h e handling of l e a s e assignments. But w e f i n d no evidence s u g g e s t i n g even a h i n t of a r b i t r a r y and c a p r i c i o u s behavior on t h e p a r t of respondent o r i t s employees. Furthermore, t h e i n s i s t e n c e on an a b s o l u t e time l i m i t f o r a c t i n g upon assignments is unwarranted and is c o n t r a r y t o t h e t r u s t e e ' s need t o e x e r c i s e broad d i s c r e t i o n with r e s p e c t t o d i s p o s i t i o n of school l a n d s . I f adopted, an a b s o l u t e r u l e would soon run up a g a i n s t t h e r e a l i t i e s of t i g h t agency budgets, s t a f f s h o r t a g e s , and time c o n s t r a i n t s . Respondent is c o r r e c t i n a s s e r t i n g t h a t " [t] h e r e is no way t h a t s u f f i c i e n t r u l e s could be d r a f t e d i n a n t i c i p a t i o n of every contingency." W e a l s o r e j e c t a p p e l l a n t ' s argument t h a t t h e respondent r e l i e d on t h e l a c k of a time l i m i t t o a l l o w e x p i r a t i o n of t h e u n d e r l y i n g l e a s e , t h u s rendering t h e assignment a moot i s s u e . There was no evidence of such r e l i a n c e p r e s e n t e d a t t h e D i s t r i c t Court h e a r i n g , and we r e f u s e t o i n f e r such r e l i a n c e now. A p p e l l a n t ' s argument concerning a d d i t i o n a l and unlawful con- d i t i o n s a t t a c h e d t o approval of t h e assignment must a l s o be d i s m i s s e d . I t seems w e l l w i t h i n t h e r e s p o n d e n t ' s d i s c r e t i o n a r y a u t h o r i t y a s a t r u s t e e t o examine t h e a p p e l l a n t ' s record a s a l e a s e h o l d e r and determine whether or not approval of t h e assign- ment would " s e c u r e t h e l a r g e s t measure of l e g i t i m a t e and reason- a b l e advantage t o t h e s t a t e . " Simply because t h e s t a t u t e and r e g u l a t i o n d i d not i n c l u d e p r o v i s i o n s r e s p e c t i n g t h e e v a l u a t i o n of a p a r t y ' s w i l l i n g n e s s and a b i l i t y t o make t i m e l y payments does n o t remove them from t h e list of c r i t e r i a t h a t a f i d u c i a r y could c o n s i d e r when a c t i n g upon a proposed assignment. Admittedly, t h e a p p e l l a n t p r o b a b l y does not l i k e t h e s e c o n d i t i o n s , b u t t h i s Court w i l l n o t compel a s t a t e agency t o make a p a r t i c u l a r d e c i s i o n w i t h r e s p e c t t o a m a t t e r when t h a t agency e x e r c i s e s its own judgment and d i s c r e t i o n , and has not v i o l a t e d any s t a t u t o r y p r o v i s i o n s o r engaged i n f r a u d u l e n t a c t i o n . See S t a t e v. S t a t e Board of E q u a l i z a t i o n ( 1 9 2 0 ) , 56 Mont. 413, 450, 454, 185 P. 708, 186 P. 697, 699, c i t e d a p p r o v i n g l y i n -- Thompson, s u p r a , 147 Mont. a t 50, 409 P.2d a t 810. A p p e l l a n t ' s argument w i t h r e s p e c t t o n o t i c e is a l s o w i t h o u t m e r i t . A s a p r i o r l e s s e e , he knew o r should have known about t h e s t a t u t o r y d e a d l i n e s r e g a r d i n g payments. Moreover, t h e department was under no l e g a l duty t o g i v e n o t i c e t o t h e a p p e l l a n t , a s he was not t h e holder of record. The r e a l h o l d e r s , t h e Hawks, were n o t i f i e d and were aware of t h e r e n t due. The a p p e l l a n t o r t h e Hawks could have p a i d t h e r e n t b e f o r e A p r i l 1 and t h e r e b y k e p t t h e l e a s e a l i v e while awaiting f i n a l a c t i o n by t h e department on t h e assignment. C l e a r l y , t h e department f u l f i l l e d its l e g a l o b l i g a t i o n s . The a p p e l l a n t f a i l e d t o e x e r c i s e t h e r e a s o n a b l e o p p o r t u n i t i e s open t o him f o r o b t a i n i n g l a w f u l p o s s e s s i o n of t h e l e a s e h o l d . I n sum, we f i n d no evidence of a r b i t r a r y and c a p r i c i o u s a c t i o n on t h e p a r t of t h e department so a s t o j u s t i f y t h e e x t r a o r d i n a r y r e l i e f requested by t h e D i s t r i c t Court is a f f i r m e d . We concur:

August 4, 1983

edb48cd7-4174-4419-9c49-2418e735cc9f

WHALEN v SNELL

N/A

83-160

Montana

Montana Supreme Court

NO. 83-160 IN THE SUPREME COrTRT OF THE STATE OF MONTANA 1983 MICHAEL J. WHALEN, Plaintiff and Appellant, VS . W. CARTER SNELL, Defendant and Respondent . Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone Honorable William Speare, Judge presiding. Counsel of Record: For Appellant: Whalen & Whalen, Billings, Pflontana For Respondent : Brown and Huss, Miles City, Plontana Submitted on briefs: June 9, 1983 Decided : August 4, 19 9 3 Filed: IUI; 4 1983 Mr. Justice Frank R . Morrison, Jr. delivered the Opinion of the Court. Appeal is taken from an order of the District Court the Thirteenth Judicial District, County of Yellowstone, granting change of venue to Garfield County. We reverse. Defendant W. Carter Snell (Snell) is a resident of Garfield County, Montana. Plaintiff Michael J. Whalen (Whalen) is an attorney with law offices in Billings, Yellowstone County, Montana. In November, 1980, Snell retained Whalen to provide legal services and represent him in a marriage dissolution. After meeting with Snell and his former wife, Whalen prepared a proposed property settlement agreement. Negotiations proved fruitless, and with the approval of Snell, an action for dissolution and property settlement was brought in Rosebud County, Montana. The parties apparently agreed that the legal services would be billed at the rate of $75.00 per hour with consideration to be given to the results obtained. On June 15, 1982, Whalen billed Snell, for legal services performed, in the amount of $12,322.01. Snell made payments of $1,000 and $2,000 in June and July of 1982. Allegedly, Snell repudiated his obligation to pay Whalen the balance of the bill on August 16, 1982. Thereafter, Whalen brought this action in Yellowstone County, alleging the following all in one claim: "1. Defendant owes plaintiff Nine Thousand, Three Hundred Twenty-two and 01/100 Dollars ($9,322.01) according to the account hereto annexed as Exhibit 'A' and by this reference incorporated herein. "2. The balance hereinabove recited, arises out of the employment of the plaintiff by the defendant, at defendant's special instance and request to represent him in connection with a marriage dissolution which became Cause No. 9177 in the District Court of the Sixteenth Judicial District of the State of Montana in and for the County of Rosebud, wherein judgment was entered on June 17, 1982. "3. After acknowledging existence of said account, and making partial payments thereon, the defendant repudiated his obligation thereon on or about August 16, 1982. The actions of the defendant in seeking and accepting the legal services of the plaintiff and then repudiating his obligation to pay for the same after the services were rendered, were and are oppressive, fraudulent and ma.licious and amount to a breach of good faith and fair dealing as is implied-in-law and amount to the tort of bad faith." Whalen prayed for $9,322.01 in compensatory damages and $10,000 in punitive damages. Snell filed a motion for change of venue, claiming that the action must be brought in the county in which the defendant resides. Whalen filed an affidavit in opposition to the motion; no affidavit or testimony was presented by Snell. After oral argument, the Court granted the motion and ordered that the case be transferred to Garfield County. Appeal was taken to this Court. The general rule governing venue of civil actions is that the action shall be tried in the county in which the defendant resides. Foley v. General Motors Corporation (1972), 159 Mont. 469, 499 P.2d 774; section 25-2-108, MCA. Permissive statutory exceptions to this general rule include provisions that contract actions may be tried in the county in which the contract was to be performed, and torts may be tried in the county where the tort was committed. Sections 25-2-101,102, MCA. Both parties argue that venue should be determined by the place of performance of the contract; Whalen argues performance was in Yellowstone County while Snell argues it was not. However, it does not appear from the face of the complaint that the action sounds in contract at all. Instead, Whalen has merely pled a claim of bad faith in tort. The rule for venue of this action is therefore found in section 25-2-102, MCA, which provides that a tort action may properly be brought in the county where the tort was committed. For the purposes of venue, a tort is committed where there is a concurrence of breach of obligation and the occassion of damages. The obligation which gives rise to Whalen's cause of action is Snell's duty to deal fairly and in good faith in paying the agreed rate for attorney fees. This obligation was breached, if at all, where payment was to be made. From the uncontroverted facts in Whalen's affidavit it is clear that Snell came from Garfield County to Whalen's office in Billings, and entered into an agreement with Whalen at that place. It is also clear from the nature of an attorney's business that payment is to be made at the attorney's office, his place of work and business. A lawyer is not a peddler selling his services door-to-door, or delivering his product to a distant location. Since payment was to be made at Whalen's office any damages which are incurred as a result of the alleged tort, occurred at Whalen's office also. Even if Whalen had pled both a tort and contract claim, the result reached here would not change. Under section 25-2-101, MCA, an action upon a contract may be brought in the county in which the contract was to be performed. Place of performance of a contract is the place where the obligation being sued upon was to be performed. It makes little difference where Whalen tried the divorce action since the manifest intention of the parties was that Snell's performance, that is payment, was to be at Whalen's office in Yellowstone County. Likewise, the interrelated tort action would also occur at the place of Snell's performance. Acc. Slovak v. Kentucky Fried Chicken (1973), 164 Mont. 1, 518 P.2d 791. Therefore, any future amendment to include a contract claim would not affect venue. This action was properly brought in Yellowstone County, and the motion for change of venue should have been denied. Reversed. We concur: ~ L X & ~ + Chief Justice

August 4, 1983

b3460463-8854-4cb9-b8b3-4216bce8f604

KRONE v MCCANN

N/A

83-005

Montana

Montana Supreme Court

NO. 83-05 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 MAXINE KRONE, individually and as Guardian Ad Litem for BRYAN KRONE, a minor, and CRAIG KRONE, plaintiff and Respondent, REX T. McCANN, DOROTHY G. I J I c C A I J N , and SUPERIOR HOMES, INC., Defendants and Appellants. Appeal from: District Court of the Fourteenth Judicial District, In and for the County of Musselshell, The Honorable LeRoy McKinnon, Judge presiding. Counsel of Record: For Appellants: Hibbs, Sweeney, Colberg, Jensen & Koessler; William N. Jensen, Billings, Montana For Respondent : Craig R. Buehler, Montana Legal Services, Lewistown, Montana Submitted on Briefs: April 15, 1983 Decided: July 21, 1983 Filed: JUL 2 1 1983 t C Clerk Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Defendants Rex T. McCa.nn, Dorothy G. McCann and Superior Home, Inc., appeal the amount of the attorney fee award they received in Musselshell County District Court after the case was remanded by this Court. See Krone v. McCann, No. 7534 (Musselshell County, October 28, 1982). The sole issue is whether the District Court erred in awarding defendants $7,500 in attorney fees instead of the $17,759.50 prayed for. We vacate and remand for another hearing in the setting of attorney fees. On June 2, 1982, the District Court held a hearing on attorney fees. Defense counsel summarized the fee charged, which ranged from $50 per hour to $65 per hour which was multiplied by the number of hours expended, 372.7 hours. Plaintiffs' testimony at the hearing essentially consisted of testimony as to their inability to pay attorney fees. The trial court issued the following order on costs and attorney fees: "The Court finds: "1. That the Plaintiff herein qualified for an attorney from Montana Legal Services; that no authority has been presented authorizing consideration of the ability to pay of a party. "2. That the Court has no dispute with the amount and character of the services rendered by the attorney. "3. That the hourly fee cha.rged is probably in accord with the fees charged in the Billings area, but is somewhat in excess of the fees charged in the Roundup area. "4. That there is no dispute as to the costs involved. "IT IS, THEREFORE, ORDERED That the Defendant recover costs herein in the amount of $1,457.40, and attorney fees in the amount of $7,500.00." Setting of an attorney fee must, of course, be based upon competent evidence. Petritz v. Albertsons, Inc. (1980), Mont. , 608 P.2d 1089, 1094, 37 St.Rep. 677, 682. First Security Bank of Bozeman v. Tholkes (1976), 169 Mont. 422, 429, 547 P.2d 1328, 1331; Crncevich v. Georgetown ~ecreation Corp. (1975), 168 Mon. 113, 120, 541 P.2d 56, 59. In Petritz, this Court in remanding an attorney fee award stated: The record does not reveal whether plaintiff disputed the amount or descriptions of the services and expenses. Nor does there appear any rationale by the trial court for the award or any consideration of plaintiff's financial ability to pay. The award appears to be nothing more than an arbitrary figure that the District Court selected. The only testimony of the plaintiffs during the hearing was that they could not afford the fees requested after they lost the case and were contractually obligated to pay one attorney fees. The trial court stated that we did not consider defendant's inability to pay. The trial court, with no evidentary foundation, concluded that the hourly fee in Billings is higher than that charged in Roundup (the situs of the action). However, no evidence was presented as to what a similar attorney in Roundup would have charged. The attorney fee awarded appears to be nothing more than an arbitrary figure the trial court selected. This Court has set forth criteria for the award of attorney fees. See, First Nat. Bank in Eureka v. ~eckstrom - (1982), Mont., 651 P.2d 45, 47, 39 St.Rep. 1778, 1780-81; Crncevich, 168 Mont. at 120, 541 P.2d at 59. Carkeek v. Ayer (1980), Mont., 613 P.2d 1013, 1015, 37 St.Rep. 1274, The attorney fee award is vacated and we remand the cause to the District Court for a determination of an a t t o r n e y f e e based on t h e c r i t e r i a w e have set f o r t h i n c a s e law. W e Concur:

July 21, 1983

14dda31e-05eb-4fc9-911e-a1a92fecb59a

LACEY v HERNDON

N/A

82-517

Montana

Montana Supreme Court

1 1 0 . 82-517 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 RUSSELL LACES and ROBERTA LACEY, Plaintiffs and Appellants, -VS- JOHN C. HERNDON and BLAINE COUNTY, Defendants and Cross-Plaintiffs and Respondents, -vs- LEO KRAFT, Cross-Defendant. APPEAL FROM: District Court of the Twelfth Judicial District, In and for the County of Blaine, The Honorable B. W. Thomas, Judge presiding. COUNSEL OF RECORD: For Appellants : Moses Law Firm; Michael G. Moses, Billings, Montana For Respondents: Smith, Baillie & Walsh, Dennis P. Clarke, Great Falls, Montana J. Chan Ettien, Havre, Montana Submitted on Briefs: April 8, 1983 Decided: August 24, 1983 Filed : AUG 2 4 1983' L- - Clerk Mr. Justice Fred J. Weber delivered the Opinion or the Court. This is an appeal from a judgment of the District Court of the Twelfth Judicial District, Blaine County, against plaintiffs, Russell Lacey and Roberta Lacey, and in favor of defendants, Blaine County and John C. Herndon, Blaine County Sanitarian. We affirm the judgment. The Plainsman Bar is located in Chinook, Montana. Defendant Leo Kraft was the owner of the property, which consisted of a building, personal property located in it, a tract of land, and a Montana liquor license authorizing operation of a 50-seat bar. Les Stevenson, who contemplated purchasing the Plainsman Bar from Leo Kraft, began operating the business in November, 1978. The Blaine County Sanitarian, John C. Herndon, inspected the bar. He told Stevenson that engineering plans to expand the sewer system would have to be submitted before expansion of the business would be approved. Stevenson experienced sewer backup in the bar and problems with the water pressure from the well. On November 30, 1978, Herndon reported by letter to the Chief of the Department of Revenue, Liquor Control Board and the Chief of the State Board of Health that the Plainsman Bar water supply was inadequate and that the liquor license transfer should not be granted. Herndon noted that Stevenson's proposed addition of a kitchen and steakhouse in the same building would completely deplete the existing water supply He reported that the sewage treatment system consisted of a 1,500-gallon septic tank and a surface drainfield of 800 square feet, capable of disposing of sewage from the bar and one trailer house. Herndon concluded that an engineering study should be conducted and an additional disposal system installed before a restaurant could be licensed on the premises. Copies of the Herndon letter were mailed to Les Stevenson, his attorney, and Leo Kraft's attorney. Acting on behalf of Stevenson, attorney Ted Thompson obtained a release from the sales agreement between Stevenson and Kraft. During the period that Stevenson operated the Plainsman Bar, Stevenson did not tell John Herndon about the sewer and water problems he experienced. On March 7, 1979, Leo Kraft listed the Plainsman Bar for sale with Flynn Realty. Appellant Russell Lacey, a retired ironworker from Anchorage, Alaska, had been looking for a bar and restaurant business in the western United States. Lacey inquired at Flynn Realty and was told about the Plainsman Bar. Relying on telephone conversations about the bar, Mr. Lacey traveled from Anchorage to Havre to view the Plainsman property. Two agents of Flynn Realty represented to Lacey that the building itself was suitable for conversion to a 250-person restaurant and that the septic tank was large enough to handle such a restaurant. The listing agreement with Flynn Realty contained no information regarding the actual capacity of the septic tank, nor mention of the fact that the liquor license authorized only a 50-person bar. Based upon identical representations made in a long-distance telephone conversation with Flynn Realty agents, Roberta Lacey and her son-in-law traveled from Anchorage to Havre to inspect the Plainsman property. Plaintiffs became interested in the Plainsman property because they thought they could operate it as both a bar and a restaurant. The floor space of the Plainsman would accommodate 200 bar patrons. A partially equipped kitchen had been operated as a sandwich and buffet facility. Plaintiffs knew they would have to purchase additional equipment to operate a full-service restaurant. The Flynn Realty agents were aware of plaintiffs' plan to expand the existing facilities. Kenneth R. Flynn confirmed his agents' representations that the Plainsman had a 4,000 gallon septic tank sufficient to handle a 250-person bar and restaurant. During one of plaintiffs' visits to the Plainsman Bar, plaintiffs and Flynn Realty agents observed a plumber's snake and debris lying near a drain. The Flynn Realty agents assured plaintiffs that the sewer problem would be corrected and added a provision to the buy-sell agreement that the plugged drain would be opened and the sewer would be in "good, workable condition." On April 9, 1979, plaintiffs executed a "Receipt and Agreement to Sell and Purchase" in which they agreed to purchase the Plainsman Bar from Leo Kraft. On May 9, 1979, agents of Flynn Realty escorted Russell Lacey to attorney Thompson's office. They explained that the buy-sell agreement had been signed, that the terms and conditions of the sale were already set, and that they would like Thompson to review the contract for sale, which Leo Kraft's attorney had prepared. Thompson agreed to represent the Laceys and advised them of the existence of John Herndon's November 30, 1978 letter, regarding sewer and water problems at the Plainsman Bar. Testimony regarding the extent to which Thompson explained the contents of Herndon's letter to the Laceys is contradictory. Thompson testified that he went over the letter sentence by sentence. Roberta Lacey testified that Thompson did not tell them about Herndon's reference to the 1,500-gallon septic tank or the need for an engineering study and expanded sewer system. Russell Lacey could not recall specifically what Thompson discussed relative to the letter, but testified that Thompson "checked with John Herndon to see if this had been corrected." Roberta Lacey also testified that Thompson called Herndon to make sure the sewer problems had been corrected before they signed the contract for sale. Some time after his May 9, 1979 meeting with the Laceys and the Flynn agents, Thompson telephoned Herndon to find out whether the conditions outlined in Herndon's November 30, 1978 letter still existed. Thompson testified that Herndon assured him that the water supply was adequate for a restaurant and bar with an occupancy load of 250 people; that the sewer system problems had been corrected; and that Herndon would check again to make certain there were no sewer problems more serious than the minor blockage, evidenced by the sewer snake the Laceys had seen. Herndon told Thompson "he would check his file to see if there were any problems other than a minor stoppage. " Thompson admitted that he did not discuss the size of the septic tank with Herndon or whether the sewer system had been enhanced since 1978. Herndon testified that he was unable to contact Les Stevenson, but that he talked to the Plainsman Bar manager and plumbers, who reported that the problems had been corrected. Herndon relayed this information to Thompson on May 18, 1979. Thompson testified he advised plaintiffs to wait until the food purveyor's license was issued before signing the contract for sale. Contrary to Thompson's advice, plaintiffs executed the contract for sale of the Plainsman property with Leo Kraft on May 18, 1979. Plaintiffs made a $35,000 downpayment and contracted to pay $135,000 in monthly payments. The contract for sale was contingent upon transferability of the Montana Retail Beer and Liquor License, but no conditions regarding capacities of the water or sewer systems were expressed. The agreement also provided that plaintiffs had entered into the agreement in full reliance on their independent investigation. On June 20, 1979, the State Department of Health & Environmental Sciences issued a food purveyor's license to plaintiffs. Herndon testified that the license was issued so that plaintiffs could sell "knick knack foods" from the bar as Kraft had. According to Russell Lacey's testimony, the bar was opened in July, kitchen equipment was installed, and the restaurant opened in August. Roberta Lacey testified the restaurant opened in October. The Laceys did not seek formal approval from the State before installing the kitchen equipment. Herndon conducted a fire inspection of the new kitchen equipment. Plaintiffs experienced a serious backup problem the first day the restaurant opened and requested that Herndon inspect their sewage system. Herndon did so and several meetings between Herndon, Kraft and plaintiffs took place. Plaintiffs continued to report sewer problems to Herndon. Herndon informed plaintiffs by letter dated January 22, 1980 that the sewage system was "a complete failure." Copies of this letter were forwarded to attorney Thompson, the State Food & Consumer Safety Bureau, the State Liquor Control Board, and the engineering firm whose construction plans had not been adhered to when the Plainsman Bar was built. Herndon recommended that in order for the Plainsman Bar "to comply with the Montana State Health Codes for a Bar and Steakhouse, it will be necessary to revamp the entire sewage system." He noted that review of engineering plans and specifications for design, as well as approval of the facility had to be completed before a license would be granted for an eating establishment. By letter dated January 29, 1980, the Liquor License Bureau informed plaintiffs that their health permit was in jeopardy of being revoked unless they corrected the sewage system deficiency. On February 8, 1980, John Herndon wrote the Liquor License Bureau Chief that the sewage disposal system of the Plainsman Bar did not comply with the minimum standards of the State Department of Health & Environmental Sciences. On February 14, 1980, James Peterson of the Food & Consumer Safety Bureau of the Department of Health and Environmental Sciences informed Russell Lacey by letter that the sewage system was approved for a 50-seat bar operation only. Peterson noted that the installed system was "not entirely as submitted and approved" and requested that Mr. Lacey furnish "as-built" data on the existing sewer system. Copies of Peterson's letter were forwarded to John Herndon and the Liquor Control Division. Herndon outlined a list of 13 violations in the Plainsman Bar and steakhouse in a letter dated March 17, 1980 to Lee FJilliams of the Liquor Control Division and James Peterson of the Department of Health and Environmental Sciences. Plaintiffs failed to correct the violations. Plaintiffs sued a number of parties. Nault Plumbing & Heating, James M. Peterson and State of Montana were granted summary judgments in their behalf. Plaintiffs, Leo Kraft and Flynn Realty stipulated that the claims had been fully settled by an agreement under which the plaintiffs received $47,500 and returned the bar to Leo Kraft. Following the dismissals with prejudice, plaintiffs' remaining claim for relief was against John Herndon and Blaine County, for fraud in the inducement and negligent misrepresentation. After trial, the district court concluded that plaintiffs' failure to argue the theory of negligent misrepresentation indicated to the court an intention to abandon that theory. Judgment in favor of Herndon and Blaine County was entered. The issues presented on appeal are: (1) Are the findings of fact, conclusions of law, and judgment supported by substantial evidence? (2) Are the findings of fact, conclusions of law, and judgment clearly erroneous? Plaintiffs challenge 8 of the district court's 38 findings of fact and 1 conclusion of law. Plaintiffs contend that, in viewing the entire record, the findings of fact are clearly erroneous and not supported by substantial, credible evidence. Defendants contend that plaintiffs have not shown abuse of discretion merely by quoting favorable portions of conflicting testimony. The challenged conclusion of law states: "Plaintiffs have failed to prove their claims of fraud and negligent misrepresentation against defendants John Herndon and Blaine County." We look to the evidence and the findings of fact to determine whether this conclusion is supported by substantial credible evidence. On appeal, we will not disturb findings of fact that are based on substantial evidence. "The evidence may be inherently weak and still be deemed 'substantial' and substantial evidence may conflict with other evidence presented." Cameron v. Cameron (1978), 179 Mont. 219, 228, 587 P.2d 939, 945. Rule 52(a), M.R.Civ.P. states in part: "Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." In reviewing findings of fact in a civil action tried without a jury, this Court may not substitute its judgment in place of the trier of facts. Our function is confined to determining whether there is substantial credible evidence to support the court's findings. We view the evidence "in a light most favorable to the prevailing party, recognizing that substantial evidence may be weak or conflicting with other evidence yet still support the findings." Wallace v. Wallace (1983), Mont . , 661 P.2d 455, 457, 40 St.Rep. 430, 433, citing In Re Marriage of Bosacker (1980), Mont . , 609 P.2d 253, 256, 37 St.Rep. 469, 471. It is the duty of the trial court to resolve such conflicts. Applying the above rules of review, we turn first to the question of the sufficiency of evidence supporting each challenged finding of fact. Plaintiffs allege findings of fact 21, 22, 24, 31, 32, 33, 35 and 37 are clearly erroneous. Findings 21 through 24 concern discussions between attorney Thompson and sanitarian Herndon. Finding of Fact 21 states: "Thompson and Herndon did have at least two discussions relating to the Plainsman Bar. One occurred on May 9, 1979, and another on May 18, 1979, the date when the final agreement was entered into by plaintiffs. In those conversations, Herndon was discussing the facility as it existed at that time, served by a 1,500 gallon septic tank and licensed for a 50-seat bar. However, he did not advise Thompson of that license restriction, nor did Thompson inquire about any restriction." In substance, Thompson testified that Herndon represented to him that the sewer system would handle the expanded facility, but admitted that he did not discuss the septic tank size or ask whether the original tank had been replaced. Herndon testified he was referring to existing conditions when he advised Thompson that he saw no problem in issuing a license on the (50-seat) bar. The finder of fact chose to believe Herndon's testimony regarding the misunderstood communication. There is sufficient evidence to support finding of fact 21. Finding of Fact 22 states: "In the conversations mentioned in Finding 21, some of the problems set out in Herndon's November 30, 1978 letter were discussed. Herndon stated the well problems had been fixed and that there was an adequate water supply. Ted Thompson did not discuss the fact that the letter said the bar had a 1,500 gallon septic tank or have any discussion with John Herndon regarding the size of the existing septic tank or any discussion that the existing septic tank had been replaced. John Herndon told Ted Thompson that an engineering study was not necessary. Herndon said this because he was referring to an existing facility. Ted Thompson assumed the existing facility had been expanded but was not told this by Herndon. Thompson knew an engineering study had not been filed with the Liquor Division but did not inquire further. " Again the evidence is directly contradictory. Thompson testified he reviewed the letter of November 30, 1978 with Herndon sentence by sentence. Herndon denied this and testified that they discussed such things as the food purveyors' license and the water and sewer problem of May 9. Herndon contacted the manager and plumbers to see if the backup problem had been corrected and reported what he had learned to attorney Thompson. A finding is not clearly erroneous because one witness testifies to the contrary. There is substantial evidence to support the court's finding. Finding of Fact 24 states: "In response to an inquiry from Thompson, Herndon told Thompson that the bar had a capacity of 250 persons. By that, he had in mind that the place had a floor or load capacity of 250 persons. He did not understand from his conversations with Thompson that the Laceys planned to expand the bar to a restaurant operation for 250 persons. The evidence is insufficient to find that Herndon represented to Thompson that the existing sewer system had the capacity to handle a 250-person restaurant, although Thompson may have understood him to so state." In substance, Thompson testified that Herndon represented to him that the sewer system and water would handle the expanded facility, although he admitted he did not inquire whether the existing sewer system had been expanded. Herndon's testimony, on the other hand, established that he told Thompson that the bar had the floor space for 250 people, but that he had received no plans for expansion of the existing facility. Plaintiffs contend that the following testimony constitutes an admission by Herndon that he told Thompson the sewer system could handle a 250-person facility: "Q. Did you advise him as you testified on your direct examination that this facility had a capacity of 250 people? A. I had it that --- "Q. Did you say that? A. No. "Q. So -- didn't you say on direct examination that you told Mr. Thompson that it had a capacity of 250 people? A. No, I did not. I said it had the floor capacity. "Q. For what, for how many people? A. For 250. "Q Then there would be no question that you told him that this place had a capacity of 250 to 300 people and that the sewer system was satisfactory? "MR. CLARK: I don't believe that is his testimony. "Q. I don't know if that is his testimony or not, I am asking him if that is his testimony? A. I was more or less -- he was more or less licensed to set up for the existing set up. The sewer had the capacity and the floor space for that. "Q. But you did tell Mr. Thompson those two things? A. I must have." Taken in context, the alleged admission that Herndon "must have" told Thompson that the sewer had the capacity for 250 people could also be interpreted as a statement that the sewer and floor space were adequate "for the existing set This interpretation consistent with the rest Herndon's testimony. Plaintiffs assert the fact that Herndon issued a license to them is evidence of Herndon's knowledge of their restaurant expansion plan. However, a food purveyor's license was required in order for the Laceys to continue to sell sandwiches as their predecessors had. Issuance of the license fails to show that Herndon had knowledge of plaintiffs' plan to expand the bar to a restaurant of 250 person capacity. We conclude that the evidence is insufficient to show that Herndon represented that the existing system had a capacity to handle a 250 person restaurant, even though Thompson may have so misunderstood him. Finding of Fact 31 states: "No evidence was presented that defendant John Herndon intentionally made any representations to plaintiffs or their attorney which were false." Plaintiffs assert that Herndon intentionally made false representations to Thompson regarding the capacity of the bar and of the sewer system. Herndon's testimony is replete with references to his understanding that his discussions concerned the existing facility and not a proposed plan for expansion. We will not burden this opinion with an extensive review of all of the testimony. There is clearly sufficient evidence to support the court's finding. In addition, according to James Peterson, sanitarian with the State Department of Health and Environmental Sciences, Herndon lacked authority to inspect sewer systems to determine compliance of proposed plans with code requirements. Thompson's testimony as to his understanding that Herndon agreed to inspect the system does not constitute a clear preponderance of evidence that Herndon intentionally made false representations. Finding of Fact 31 is adequately supported. Finding of Fact 32 states in part: " . . . John Herndon first learned of the kitchen installation plans in late summer of 1979." Plaintiffs argue that this finding is contrary to Thompson's testimony and to Herndon's issuance of a food purveyor's license on June 20, 1979. Herndon testified that the initial license was issued based on the assumption that the Plainsman kitchen would continue to serve sandwiches. He testified that he did not know until after the issuance of that license that the plaintiffs planned a full restaurant. The testimony is sufficient to support Finding of Fact 32. Finding of Fact 33 states: "Plaintiffs experienced no serious trouble with the sewer system until October, 1979 when the restaurant was opened and the sewer backed up and flooded parts of the Plainsman building." Plaintiffs challenge this finding on the basis of Russell Lacey's testimony that the Plainsman Bar flooded August 3, 1979. However, Roberta Lacey characterized the August backup problem as minor and testified that serious trouble began in October: "Q. You had a major backup in August, is that right. A. It wasn't a major one. The major one was in October." Again, there is substantial evidence to support the finding. Find of Fact 35 states in part: " . . . After the Laceys discovered the facts set out in Finding Number 32, Herndon was asked by Russell Lacey to write letters which would help his case against Leo Kraft." Plaintiffs assert this finding is clearly erroneous because it includes a statement which was stricken from the record on the first day of trial. However, on the third day of trial, Herndon was asked essentially the same question and his answer remains part of the record. Herndon's testified that a request was made of him to write letters which would help the Laceys make a case against Leo Kraft. A review of the evidence shows that plaintiffs were anticipating suing Leo Kraft at the time Lacey asked Herndon to write the letters. There is substantial evidence to support the finding. Finding of Fact 37 states: "The damages sustained Sy plaintiffs according to admissible evidence, relevant to any statements made by John Herndon, are as follows: (a) Future Electric Company for the installation of wiring for kitchen equipment - $681.47; (b) Equipment purchased for the installation of the kitchen (purchase price of $9,380.58 less current value of $4,500.00 =) $4,880.58; (c) Printing menus - $50.00." As we review the evidence, we do find indications that additional damages may have been adequately proved by the plaintiffs. However, we note that in its pre-trial order, the trial court ruled that the Laceys had to prove damages in excess of the $47,500 settlement received from Kraft and Flynn Realty. The evidence does not show that plaintiffs met that burden. We will, therefore, not review the damage evidence in detail. We hold there is substantial evidence to support the conclusion of the district court. "This Court will not reverse or remand a decision of the District Court when the eventual result in the District Court must be the same. " Kirby Co. of Bozeman v. Employment Sec. (1980) , 614 P.2d 1040, 1043, 37 St.Rep. 1255, 1258, citing Green v. Green (1978), 176 Mont. 532, 579 P.2d 1235. Finally, plaintiffs challenge Conclusion of Law 3, which states: "Plaintiffs have failed to prove their claims of fraud and negligent misrepresentation against defendants John Herndon and Blaine County." There was a plethora of evidence proving misunderstanding between Herndon and Thompson, but like the trial court, we find no evidence that John Herndon made false representations upon which he intended the Laceys to rely. Thus, plaintiffs failed to prove their claim of fraud. Plaintiffs argue that even if the court determined that Herndon's representations were not sufficient to constitute fraud, they were clearly negligent. As previously mentioned, the district court concluded that plaintiffs' failure to argue the theory of negligent misrepresentation indicated an abandonment of that theory. We also note that plaintiffs proposed no finding of fact or conclusion of law regarding negligent misrepresentation to the district court. This Court will not review a matter to which no argument has been directed at the lower court level. Sands v. Nestegard (19821, Mont . , 646 P.2d 1189, 1193, 39 St.Rep. 1101, 1105. The court found no false misrepresentation had been proved. There is substantial evidence to support the conclusion on the part of the district court. A careful review of the evidence has resulted in our conclusion that the findings of fact, conclusions of law and judgment of the district court are supported by substantial evidence and are not erroneous. Affirmed. We concur: Sf;e.&J; Rd& Chief Justice L

August 24, 1983

f21bc372-7b09-4e76-bc4e-3e4575c0d716

STATE DEPT OF REVENUE v PAXSON

N/A

83-045

Montana

Montana Supreme Court

NO. 83-45 I N T H E S U P F U 3 M E COURT O F THE STATE O F M O N T A N A 1 9 8 3 TIIE DEPARTMENT O F REVENUE O F T H E STATE O F M O N T A N A , Appellant, SHIRLEY PAXSON, Respondent. Appeai from: D i s t r i c t Court of t h e Second J u d i c i a l District, I n and f o r t h e County of S i l v e r Bow, The Bonorable Mark P. S u l l i v a n , Judge p r e s i d i n g . Counsel of Record: For Appellant: Larry G. Schuster, Dept. of Revenue, Helena, Montana For Respondent : James E. P u r c e l l ; Benningsen, P u r c e l l l & Genzberger, Butte, Xoritana Filed: Submitted on B r i e f s : March 31, 1 9 8 3 Decided: July 211 1983 JUL 2 "1983 Clerk Mr. Justice Daniel J. Shea delivered the Opinion of the Court. The Department of Revenue (DOR) appeals from an error of the Silver Bow County District Court that set aside the order of the State Tax Appeal Board relating the taxable valuation of 6 lots in Silver Bow County owned by the plaintiff, Shirley Paxon. The plaintiff had argued to the trial court that a 20 percent reduction in the assessed valuation of her property because the property was partly in a flood plain, was insufficient. The trial court agreed, and not only set aside this 20 percent reduction as unsupported by the record, but also set the tax by applying the taxpayer's theory of tax reduction and the exact figures she had presented to the State Tax Appeal Board and before that, the Silver Bow County Tax Appeal Board. We affirm that part of the order setting a s i d e the 20 percent reduction. Clearly, not only was there no substantial credible evidence to support this figure, there was no evidence. However, we vacate that part of the order which also determined that the tax should be based solely on the taxpayer's theory of reduction and the taxpayer's estimates of taxable value. We cannot say as a matter of law that the administrative bodies charged with sett-ivq the taxable valuations were bound to accept either the taxpayer's theory or the taxpayer's figures for the tax reduction. The trial court clearly overstepped its bounds when it usurped the function of the administrative bodies charged with the responsibility of finding the facts and arriving at the proper taxable valu-ation. The a.ssessment of the taxpayer's property is part of the continuing state-wide reassessment of real property in this state mandated by the 1972 Montana Constitution. The taxpayer's land, before the new assessment, was assessed at $10,425. However, the DOR's new assessment was $146,245 and taxes were to be based on this figure. The taxpayer filed a request for review with the county tax appeal board, cortending that the property was overvalued because parts of her property taxed were within a flood plain and therefore, that her property had less value than comparable property not wlthin the flood plain. At the heari-nq before the county tax appeal board, the taxpayer presented evidenc~ 7 a contractor that it would cost $87,294.60 to haul fill onto the lots to build them up so that they would not be within the flood plain. The "Laxpayer, therefore, argued that the $146,245 valuation set by the Department of Revenue should be reduced by $87,294 leaving a taxable value at $58,951. The county tax appeal board provides a form specifying the action the board took on the taxpayer's request, and this form also provides language indicating that the board is to glve reasons for its action taken. However, with no reasons given, the county tax appeal board simply entered a one-line order stating that a 20 percent reduction of the t a : : a h l - e valuation would be granted because of terrain factors. No oile knows 1 ~ 7 h y the 20 percent figure was chosen. The taxpayer then 3ppealed this decision to the State Tax Appeal Board, and this board held another hearinq. The board heard additional testimony and took judicial notice of evidence relating to other properties in the same vicinity as the taxpayer's property. In addition, the DOR, apparently at the board's request, submitted a list of comparable property valuations. Althouvh the 20 percent reduction figure was referred to by one of the witnesses, no indication appears the record why this figure was chosen as the appropriate reduction factor. The state board denied the taxpayer's appeal and affirmed the county board's decision. In its order the state board noted that a 20 percent reduction figure for terrain features was a proper figure to use in reducing the taxable valuation of the taxpayer's property. This order also failed to explain how the 20 percent figure was reached. The taxpayer then appealed this order to the District Court, the scope of review being limited by the Montana Administrative Procedures Act (sections 15-2-301 through 15-2-304, MCA). After the notice of appeal was filed, the trial court apparently held a pre-trial conference, althouah what took place is not revealed in the record. However, no hearing was held and. the parties did not file briefs. Whether the parties expected that a hearing would be held before the decision, or at least that briefs would be filed before the decision, is also not revealed by the record. In any event, the trial court simply reviewed the record on file and granted all the relief the taxpayer requested. In its order of May 13, 1982, the trial court ruled that the 20 percent figure was supported by no evidence and that no reasons were given for adoption of that figure by the tax appeal board. The court concluded this figure was arrived at in an arbitrary and capricious manner and set the board's order aside. We affirm this part of the trial court's order. But, the trial court went an additional step and ruled that the State Tax Appeal Board should have accepted and adopted the taxpayer's theory of reduction and the taxpayer's figures. The court, therefore, set the taxable value of the taxpayer" property for the years 1980, 1981, and 1982, at $58,951. This ruling exceeded the powers of the trial court sitting as a reviewing court and it is reversed. The focus of the Department of Revenue's appeal is simply a contention that the trial court had no right to set aside the 20 percent figure arrived at by both tax appeal boards, the contention being that substantial evidence supported this figure and the trial court had no riqht to set it aside. However, substantial evidence did not support this figure; no evidence supported this figure. The trial court was clearly correct in setting it aside. On the other hand, we cannot ignore the fact that the trial court became the finder of fact by determining what the proper tax should be, and that is not the function of the trial courts sitting as reviewing courts. The effect of the trial court's order is that the county and state boards were required to accept and adopt that precise theory and figures urged by the taxpayer as to what the tax should be. That is not the law. Although, the county and state boards should have considered the theory and the figures offered by the taxpayer and given some indication of why they did not adopt this approach, it does not follow that these boards were bound to adopt the theory and figures offered by the taxpayer. Because the boards were wrong in adopting the 20 percent reduction figure without an evidentiary foundation, it does not follow that the taxpayer was riqht in contending that the taxable valuation must be reduced by the cost required to build the land up to a level that would take it out of the flood plain. This function is initially one for the administrative agencies or boards, and not one for the courts. We must rerr~a.nd this case for further hearings because the 20 percent reduction figure adopted by th.e tax appeal b0ard.s was not supported by any evidence, let alone substantial evidence. It appears, however, that it would be too time consuming to remand it to the county tax appeal board to start the process all over again. Because the State Tax Appeal Board not only has review authority, but also can reopen the case to take additional evidence (section 15-2-301 ( 2 ) , MCA) , it is proper that the state board again hear this case to determine the proper valuation of the taxpayer's property. We affirm in part and reverse in part, with directions that the District Court remand this cause t . o the State Tax Appeal Board for further proceedings We Concur: k d - 4 Chief ~dstice

July 21, 1983

c40823fc-5992-4a6d-85c1-6aaca25ab8a5

PACIFIC METAL CO v NORTHWESTERN B

N/A

83-027

Montana

Montana Supreme Court

No. 83-27 I N T H E SUPREME COU'RT O F THE STATE O F MONTANA 1983 PACIFIC BETAL COMPANY, P l a i n t i f f and Appellant, NORTHWESTERN BANK O F HELENA, a corp. , Defendant and Respondent. APPEAL FROM: District Court of t h e F i r s t J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Lewis & Clark, The Honorable P e t e r G. Meloy, Judge p r e s i d i n g . C O U L d S E L O F %CORD: For Appellant: P h i l i p W. S t r o p e , Helena, Montana For Respondent: P a t r i c k MelSy, E!elena, Montana Submitted on G r i e f s : A p r i l 2 8 , 1983 Decided: August 5 , 1-953 ;\sb F i l e d : 5 '1983 Mr. Justice Fred J. Weber delivered the Opinion of the Court. This is an appeal from a summary judgment in favor of respondent, Northwestern Bank of Helena (Northwestern Bank). We affirm the holding of the District Court of Lewis and Clark County that the Carson Company building is personal property to which a judgment lien of appellant, Pacific Metal Company (Pacific Metal), does not attach. The issue is whether a building that was constructed on leased real property, pursuant to a lease which required the lessee to remove the building upon termination of the lease, is real or personal property. Burlington Northern Inc. (Burlington Northern) leased a portion of its right-of-way to Carson Heating & Ventilating, Inc. (Carson Company) on November 1, 1975. The lease authorized Carson Company to construct, maintain and operate a warehouse and office on the leased property. The lease term was indefinite, but the lease provided that either party could terminate the lease at any time upon giving 30 days written notice of termination to the other party. Paragraph 14 of the lease required Carson Company to remove from the leased premises, prior to the date of termination of the lease, all structures not belonging to the lessor and to restore the premises to substantially their former state. Pursuant to the stated purpose of the lease, Carson Company constructed a 180' by 55' warehouse and office building on the leased property. The building was affixed to the land by a cement foundation and abutted by cement loading docks. Commencing in 1971, Northwestern Bank advanced funds to Carson Company and secured its loans with a series of five security agreements, the last of which was dated December 15, 1980. Northwestern Bank perfected its security interest in the building covered by the security agreements by filing a series of financing statements, the last of which was filed January 8, 1981. As additional security for the bank, on November 1, 1975, Carson Company, Burlington Northern and Northwestern Bank entered into a collateral security agreement by which Burlington Northern consented to an assignment of the lease to Northwestern Bank. The collateral security agreement provided that should title to the chattels and improvements upon the leased premises be taken over by Northwestern Bank in collection proceedings against Carson Company, Northwestern Bank would be bound by all the terms and conditions of the lease. On June 1, 1981, Pacific Metal obtained a judgment against Carson Company in the sum of $16,232.63. The judgment became a lien upon all real property owned by Carson Company in Lewis and Clark County. Carson Company transferred its interest in the building to Northwestern Bank by a bill of sale on October 31, 1981. The Carson Company building, which is located at 1930 Brady Street, Helena, Montana, was carried on the real property assessment list of the Lewis and Clark County Appraisal Office both before and after it was transferred to Northwestern Bank. On June 11, 1982, Pacific Metal initiated a declaratory judgment action against Northwestern Bank seeking a district court judgment declaring that the Carson Company building was real property, that Northwestern Bank did not create a security interest in the building, and that Pacific Metal's judgment lien took priority over liens or security interests recorded after June 1, 1981. Upon both parties1 motions for summary judgment, the District Court determined that the building was personal property and that Pacific Metal had no property interest in the building since its judgment lien attached only to real property owned by Carson Company. The District Court granted summary judgment in favor of Northwestern Bank. We affirm. Montana law defines real property as: "(1) land; (2) that which is affixed to land; (3) that which is incidental or appurtenant to land; (4) that which is immovable by law." Section 70-15-101, MCA. A fixture is a thing affixed to the land when it is: " (1) attached to it by roots, as in the case of trees, vines, or shrubs; (2) imbedded in it, as in the case of walls; (3) permanently resting upon it, as in the case of buildings; or (4) permanently attached to what is thus permanent as by means of cement, plaster, nails, bolts, or screws. " Section 70-15-103, MCA. While these two statutes appear to define all buildings resting upon land as fixtures, it is possible for parties to agree that a building is personal property even though it is attached to and resting upon land. Section 70-18-101, MCA provides in pertinent part: "When a person affixes his property to the land of - - - - another, without an agreement permitting him to remove it, the thing affixed . . . belongs to the owner of the land unless he chooses to require the former to remove it." (emphasis added) When additions are affixed to property by a tenant without an agreement allowing him to remove those additions or fixtures, they may not be removed if their removal will damage the premises. Section 70-18-102, MCA; Sanders v. Butte Motor Company (1963), 142 Mont. 524, 385 P.2d 263. Here, an agreement exists specifically authorizing the tenant to construct a warehouse and office building on the premises, and requiring removal of "all structures upon termination of the lease." The terms of the agreement are clear and unambiguous. Unlike in St. Paul Fire & Marine Insurance Co. v . Cumiskey (19831, Mont . P.2d I 40 I St.Rep. 891, here no conflict in the lease provisions exists. In Shipler v . Potomac Copper Co. (1923), 69 Mont. 86, 95, 220 P. 1097, 1100, this Court noted: "The presumption declared by the [fixture] statute is a disputable one, and may be overcome by evidence which discloses that the building was constructed in such a manner or under such circumstances as to preclude the idea that it was intended to become a part of the realty." In Shipler, there was a written contract providing that permanent improvements, other than machinery, would become property of the lessor upon relinquishment of the lease. This Court concluded that railroad tracks affixed to the land by the lessee were real property. Lessee failed to overcome the statutory presumption by proving that the parties intended the railroad track improvements should retain their character as personalty. Unlike the Shipler contract, the Burlington Northern-Carson Company lease clearly authorizes the lessee to remove all structures. Paragraph 14 provides: "Upon the date of termination of this lease by notice as aforesaid, or otherwise, Lessee shall surrender said premises to Lessor, and, if not in default hereunder, shall prior to date of termination remove from said premises all structures and property not belonging to Lessor and restore said premises to substantially their former state, and in case of failure so to do, any such structures and property shall become the property of Lessor, or Lessor may dismantle and remove the same and restore said premises to their former state at the expense of Lessee without incurring any liability therefor." Pacific Metal argues that paragraph 14 gave the Carson Company only a conditional right of removal, and that the character of the structure and the manner in which it was affixed to the land require the court to conclude that the parties contemplated that the Carson Company warehouse would become real property of the lessor. The statutory definition of fixtures is "merely a rule for general guidance concerning itself more with ultimate than with probative facts. " Pritchard Petroleum Co. v. Farmers Co-op, Etc. (1945), 117 Mont. 467, 474, 161 ~ . 2 d 526, 530. This Court has set forth a three-pronged test to determine the status of structures such as the Carson Company building. The character of the structure and the manner in which it is annexed to the realty are factors of lesser weight than evidence of the parties' intent. As held in Grinde v. Tindall (1977), 172 Mont. 199, 201-02, 562 ~ . 2 d "This Court's cases hold the proper test for determining whether a particular object has become a fixture or not, is said to comprise (1) annexation to the realty, (2) an adaption to the use to which the realty is devoted and (3) intent that the object become a permanent accession to the land. Of these three, the intent of the parties has the most weight and is the controlling factor." In landlord-tenant situations, whether an improvement is personal property or part of the realty is to be determined by the intention of the parties, as expressed in the lease. Rights between a landlord and tenant with respect to fixtures may be modified, restricted or extended by agreement. 36A C.J.S. Fixtures 515 (a) (1961). Paragraph 14 of the lease agreement constitutes probative evidence that the parties intended the warehouse to retain its character as personalty belonging to the lessee, subject only to the condition precedent that the structure not be removed if lessee were in default under the lease. Although this condition restricts lessee's right of removal, it does not vitiate the parties' express agreement that, absent default, ownership of the structure was to remain in the lessee. The removal provision also evidences the parties' agreement that the warehouse was not to be considered as permanently affixed to the lessor's realty. The record includes an affidavit of Russell G. Hyatt, Appraisal Supervisor of the Lewis and Clark County Appraisal Office of the Montana Department of Revenue. Mr. Hyatt stated that all buildings, structures, fixtures and improvements erected upon or affixed to land are included on the Real Property Assessment List "without regard to ownership of the improvements, the contractual relationships between the owner of the land and the person placing the improvement upon the land, or whether the improvement becomes part of the realty or remains personalty under the common law." However, Mr. Hyatt explained, when an improvement is owned by a person other than the owner of the land upon which it is situated, the Appraisal Office does not use the legal description of the land, but lists the improvement as it did the Carson Company Building: "NO TITLE MILL BLDG. ON N.P.R.R. R/W, Sec. 23, T. 1 0 N., R 4 W." Such a listing indicates that the building situated on the Northern Pacific Railroad property is owned by another. The method by which the property is assessed for purposes of taxation has no bearing on whether the structure is real or personal property. Section 15-7-101, MCA requires the Department of Revenue to maintain classifications and to (J) m: appraise all improvements. Section 15-1-10 (e), MCA defines h "improvements" as including "all buildings, structures, fixtures . . . and improvements situated upon, erected upon, or affixed to land." Neither the rules of the common law governing the relationship between the owner of the land and the lessee, nor the intention of the parties as expressed in their contract are controlling in the field of taxation. Annot., 154 A.L.R. 1309, 1323-24 (1945). This is not a taxation case. The law regarding fixtures, rather than tax law, applies. The District Court properly focused its findings of fact, conclusions of law and order on the fixture issue, relying on the rule stated in Grinde that the intention of the parties is controlling. The Court's finding that the intent of the parties was that the building would be removed whenever the lease was terminated and that, absent default, the building was to retain its character as personalty of the lessee is supported by the substantial evidence of the lease provisions. Appellant argues that section 30-2-107, MCA requires the owner of a structure situated upon land of another to use the realty recording system so that third parties are not misled. His briefs are not specific as to which contract he believes this section required to be recorded. Section 30-2-107, MCA permits recording of certain contracts of sale in the realty records. It provides: "(1) A contract for the sale of timber, minerals or the like or a structure or its materials to be removed from realty is a contract for the sale of goods within this chapter if they are to be severed by the seller but until severance a purported present sale thereof which is not effective as a transfer of an interest in land is effective only as a contract to sell. "(3) The provisions of this section are subject to any third-party rights provided by the law relating to realty records, and the contract for sale may be executed and recorded as a document transferring an interest in land and shall then constitute notice to third parties of the buyer's rights under the contract for sale." The recording provision in subsection (3) provides a means of preserving the buyer's rights under such a contract of sale. Section 30-2-107, MCA does not apply to the railroad right-of-way lease because the lease is not a contract for sale as defined by section 30-2-106(l), MCA. The contract for sale of the building between the Carson Company and Northwestern Bank is not a part of the record in this case. As a result, this Court will not speculate as to whether that agreement falls within the purview of the recording statute. We hold that the building was intended by the parties to be personal property, that the building remained personal property, and that the judgment lien did not constitute a lien upon that property. We affirm the judgment of the District Court. f l A Q & W - i l -- h Justic We concur: 8~44- Q & & J ) Chief Justice

August 5, 1983

73bd1c49-a565-4c3f-81f9-5652a8f4913f

WILKINSON v STATE

N/A

83-041

Montana

Montana Supreme Court

NO. 83-41 I N T H E S U P R E M E C O U R T O F T H E STATE O F M O N T A N A 1983 K A T H L E E N R A C H E L WILKINSON, Defendant and Appellant, vs . STATE O F M O N T A N A , P l a i n t i f f and Respondent. Appeal from- D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Missoula Honorable Jack L. Green, Judge presidin*. Counsel of Record: For Appellant: Nick A. Roterinq argued, Special Assistant Attorney General, Helena, Montana For Respondent: Mike Greely, Attorney General, Helena, Xontana Robert L. Deschamps 111, County Attorney, Missoula, Montana Karen S. Townsend, Deputy County Attorney, arqued. Missoula, Montana Submitted- June 2 , 198 3 Decided- August 1, 1983 Clerk Mr. J u s t i c e L. C. Gulbrandson d e l i v e r e d t h e Opinion of t h e Court. The Department of I n s t i t u t i o n s of t h e S t a t e of Montana a p p e a l s from an o r d e r by t h e District Court of t h e F o u r t h J u d i c i a l D i s t r i c t , Missoula County, d e c l a r i n g t h e Department f i n a n c i a l l y r e s p o n s i b l e f o r c o s t s i n c u r r e d a s a r e s u l t of t h e b i r t h of d e f e n d a n t ' s baby. On September 10, 1982, d e f e n d a n t e n t e r e d a g u i l t y p l e a t o t h e c h a r g e of n e g l i g e n t homicide. The D i s t r i c t Court sentenced d e f e n d a n t t o t e n y e a r s w i t h two y e a r s suspended, t o be served a t a women's c o r r e c t i o n a l f a c i l i t y chosen by t h e Department of I n s t i t u t i o n s . Because d e f e n d a n t was soon t o g i v e b i r t h and because testi- mony a t t h e s e n t e n c i n g h e a r i n g i n d i c a t e d t h a t she had a s t r o n g medical r e l a t i o n s h i p w i t h h e r p h y s i c i a n , t h e District Court allowed her t o remain a t t h e Missoula County j a i l u n t i l a f t e r t h e b i r t h of her c h i l d . She was remanded t o t h e c u s t o d y of t h e Missoula County s h e r i f f and s u b s e q u e n t l y gave b i r t h t o h e r c h i l d a t t h e Missoula Community H o s p i t a l . On October 28, 1982, she was t a k e n t o t h e Women's C o r r e c t i o n a l C e n t e r a t Warm S p r i n g s , Montana. The Department of I n s t i t u t i o n s r e f u s e d t o pay t h e medical expenses of t h e b i r t h . Missoula County moved f o r an o r d e r from t h e District Court d e c l a r i n g t h a t t h e Department pay t h e medical expenses. A f t e r a show-cause h e a r i n g , t h e District Court made t h e f o l l o w i n g f i n d i n g s , c o n c l u s i o n s , and d e c r e e : "FINDINGS OF FACT "1. The Defendant, K a t h l e e n Rachel Wilkinson, was found g u i l t y by a p l e a of g u i l t y t o t h e o f f e n s e of N e g l i g e n t Homicide, a f e l o n y , and s e n t e n c e d on t h e 1 0 t h day of September, 1982 t o a term of t e n ( 1 0 ) y e a r s a t Montana S t a t e P r i s o n w i t h two of t h o s e y e a r s suspended. "2. The Defendant, on September 1 0 , 1982, was o r d e r e d t o s e r v e her time a t t h e women's p r i - s o n f a c i l i t y a t Warm S p r i n g s S t a t e H o s p i t a l . " 3 . The Defendant was ordered r e t a i n e d i n t h e Missoula County J a i l u n t i l a f t e r t h e b i r t h of h e r c h i l d s o t h a t her o b s t e t r i c i a n could con- t i n u e t o c a r e f o r h e r . "4. The Defendant was ordered t o remain i n Missoula County and not be t r a n s f e r r e d t o Warm S p r i n g s S t a t e H o s p i t a l u n t i l her d o c t o r d e t e r - mined t h a t it would not be d e t r i m e n t a l t o her i n t e r e s t s o r t h e i n t e r e s t s of her c h i l d t o be t r a n s f e r r e d . "5. The Defendant was t a k e n t o Missoula Community H o s p i t a l f o r t h e b i r t h of h e r c h i l d on October 23, 1982. "6. Expenses f o r medical and s e c u r i t y c o s t s i n t h e amount of Three Thousand Four Hundred Eighty-two and 47/100th D o l l a r s ($3,482.47) were i n c u r r e d a s a r e s u l t of t h e b i r t h of t h e D e f e n d a n t ' s son. "7. The Defendant was t r a n s f e r r e d t o t h e women's p r i s o n f a c i l i t y on t h e 2 8 t h day of O c t o b e r , 1982 a f t e r her p h y s i c i a n s t a t e d s h e c o u l d be t r a n s f e r r e d . "CONCLUSIONS O F L A W "1. The Defendant became a s t a t e p r i s o n e r on t h e 1 0 t h day of September, 1982 upon passing o f s e n t e n c e . "2. The D e f e n d a n t ' s s t a y i n t h e Missoula County J a i l and o r t h e Missoula Community H o s p i t a l from September 1 0 , 1982 u n t i l October 28, 1982, was a temporary s t a y f o r a state p r i s o n inmate. "3. The Montana Department of I n s t i t u t i o n s is f i n a n c i a l l y r e s p o n s i b l e f o r t h e medical and s e c u r i t y c o s t s i n c u r r e d as a r e s u l t of t h e b i r t h of t h e D e f e n d a n t ' s c h i l d . "ORDER "The Montana Department of I n s t i t u t i o n s is h e r e b y ordered t o assume t h e f i n a n c i a l respon- s i b i l i t y f o r a l l medical and s e c u r i t y c o s t s i n c u r r e d a s a r e s u l t of t h e b i r t h of t h e son o f K a t h l e e n Rachel W i l kinson. "The Department is f u r t h e r ordered t o r e m i t t o Missoula Community H o s p i t a l t h e sum of Two Thousand Eighty-f i v e and 87/100ths D o l l a r s ($2,085.87); t o D r . Thomas A. Baumgartner t h e sum of Four Hundred and S i x t y D o l l a r s ($460.00); and t o Missoula County (Guards) t h e sum of Nine Hundred F i f t y - f o u r d o l l a r s ($954.00). The s o l e i s s u e on a p p e a l is whether t h e Department of I n s t i t u t i o n s is r e s p o n s i b l e f o r t h e medical and s e c u r i t y c o s t s i n c u r r e d a s a r e s u l t of t h e b i r t h of t h e d e f e n d a n t ' s baby, d e s p i t e t h e f a c t t h a t s h e was n o t d e l i v e r e d t o t h e Women's C o r r e c t i o n a l C e n t e r a t Warm S p r i n g s p r i o r t o t h e b i r t h . The l a w of Montana is c l e a r t h a t " [ o l n c e a v a l i d s e n t e n c e is imposed, t h e c o u r t l a c k s j u r i s d i c t i o n t o v a c a t e o r modify it u n l e s s s p e c i f i c a l l y a u t h o r i z e d by s t a t u t e . S t a t e v. P o r t e r ( 1 9 6 4 ) , 1 4 3 Mont. 528, 540, 391 P.2d 704." S t a t e v. Downing ( 1 9 7 9 ) , 1 8 1 Mont. 242, 593 P.2d 43, 44. Here t h e c o u r t , i n i t s judgment, committed t h e d e f e n d a n t t o t h e Montana Department of I n s t i t u t i o n s . From t h i s it is c l e a r t h a t t h e d e f e n d a n t was t h e r e s p o n s i b i l i t y of t h e S t a t e as t h e r e is no way f o r t h e judge t o change h i s d e c i s i o n , a f t e r t h e f i l i n g of t h e judgment. T h i s p o i n t is i l l u s t r a t e d most v i v i d l y by a l i n e of Washington cases where it h a s been s t a t e d t h a t : " T h i s c o u r t s a i d i n J a n u a r y v. P o r t e r , 75 Wash.2d 768, 453 P.2d 876 ( 1 9 6 9 ) , t h a t upon t h e e n t r y o f a f i n a l -- judgment and s e n t e n c e of imprisonment, l e g a l --- a u t h o r i t y o v e r t h e a c c u s e d passes b x o p e r a t i o n o f law t o t h e Department - o f I n s t i t u t i o n s (now the-tmxt o f S o c i a l - - -- and H e a l t h S e r v i c e s ) ---- and t h e Board o T - P r i s o n Terms and P a r o l e s , and t h a t t h o s e a g e n c i e s of t h e e x e c u t i v e branch bear f u l l r e s p o n s i b i l i t y f o r e x e c u t i n g t h e judgment and s e n t e n c e o r g r a n t i n g p a r o l e . " (Emphasis added ) Kanekoa v. Washington S t a t e Department of S o c i a l and H e a l t h S e r v i c e s ( 1 9 8 1 ) , 95 Wash.2d 445, 626 P.2d 6, 7 (see a l s o I n Re Bush ( 1 9 8 0 ) , 26 Wash.App. 486, 616 P.2d 666, I n R e t h e Welfare o f Lowe ( 1 9 7 8 ) , .2d 824, 576 P.2d 6 5 . ) S i m i l a r l y , because of c i r c u m s t a n c e s i n t h i s p a r t i c u - l a r c a s e , t h e Department of I n s t i t u t i o n s must bear t h e medical c o s t s f o r t h e b i r t h of d e f e n d a n t ' s c h i l d . I t must be noted t h a t our h o l d i n g h e r e a p p l i e s s o l e l y t o t h e p a r t i c u l a r expenses i n q u e s t i o n . W e a r e n e i t h e r s e t t i n g nor s u g g e s t i n g a g e n e r a l method f o r d e t e r m i n i n g f i n a n c i a l respon- s i b i l i t y of state p r i s o n e r s . T h a t is a l e g i s l a t i v e a t t e r . d For t h e r e a s o n s s t a t e d above, t h e o u r t ' s judgment is a f f i r m e d . W e concur: / %-RJ t . Q w ( & & J Y Chief J u s t i c e Justices Mr. Justice Daniel J. Shea dissenting: I dissent. I would hold that Missoula County is responsible for the expenditures. The unfortunate result here is that the Department of Instituti,ons, without even having been notified of the District Court decision in time to object, has been saddled with paying the costs of hospitalization and cost of providing guards at the hospital. The result not only is unfair it is papered over with citations and quotations of authority that have no application to the questions presented to the District Court and to this Court. At the sentencing hearing it was the defense attorney and the deputy county attorney who requested the District Court to take the action it did. The District Court did so without ever conferring with anyone from the Department of Institutions. Had the Department of Institutions been notified of the contemplated action rather than the completed action, it is possible that it could have made other and satisfactory arrangements for care of the mother and the baby through the time of delivery. The authority cited by the ma:jority has no application to the facts presented here. Here the District Court committed the defendant to the Department of Institutions. This should have meant that the defendant was in the custody and control of the Department and that the Department could have made appropriate arrangements itself for the proper care of the mother and expected child. The question here is not whether custody passed by operation of law to the Department of Institutions upon the passing of sentence of imprisonment. The question is whether the District Court had the authority to grant custody and control of defendant to the Department on the one hand, but on the other to take it away by never notifing the Department that it had made arrangments for the custody of the defendant up to the time that the baby was delivered. By the action it took, the District Court deprived the Department of any meaningful opportunity to object to the Court's decision. In later ruling that the Department must bear the hospitalization and guard expenses the District Court simply sanctified the time-honored rule that if possible make the State pay rather than the local unit of government, a governmental application of the deep pocket theory. This Court has of course, ratified that action by approving the ruling that the State rather than the county must pay. Here the District Court made a mistake and I have no doubt it had the authority to correct its own mistake by a ruling that truly passed the custody and control of defendant to the Department of Institutions. Had the Department been timely notified of the decision it could have objected and the District Court could have amended its decision to truly turn custody and control of defendant over to the Department of Institutions. I doubt that the Department would have been so callous as not to take care of the real needs of the expectant mother, but it was never given the opportunity to act. The county, not the State, should pay.

August 1, 1983

070c42fc-ef49-4116-908d-fa7535e1c1c1

STATE v WEINBERGER

N/A

82-180(B)

Montana

Montana Supreme Court

170. 82-180 (l3) I N T H E SUPREPlE C O U R T O F THE STATE O F MONTAMA 1983 STATE O F MONTANA, P l a i n t i f f and Respondent, -vs- ADAM WEITJBERGER, Defendant and Appellant. A ~ p e a l from: District Court of t h e F i f t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Roosevelt, The Honorable M. James S o r t e , Judge p r e s i d i n g . Counsel of Record: For A j p e l l a n t : Piloses Law Firm; Stephen Moses argued, B i l l i n y s , 14ontana For Res2ondent: Eon. Mike Greely, Attorney General, Helena, P,llontana Chris Tweeten argued, A s s t . Atty. General, Eelena James McCann, County Attorney, Wolf P o i n t , Montana Submitted: May 12, 1983 Decided: October 6 , 1983 F i l e d : OCT 6 - 'I983 - - - 7 Clerk Mr. Justice John C. Sheehy delivered the Opinion of the Court. Adam Weinberger appeals to this Court from a judgment of conviction against him of deliberate homicide based on jury verdict, the judgment having been entered in the District Court, Fifteenth Judicial District, Roosevelt County. We reverse his conviction for the reasons hereafter stated. Adam Weinberger was charged in District Court with two counts of deliberate homicide. In count one, he was charged with aiding or abetting Arrow Weinberger in causing the death of Floyd Azure in violation of sections 45-5-102(1) (a) and 45-2-302 ( 3 ) , MCA. In count two, he was charged with felony murder, in that the death of Floyd Azure was caused while Adam Weinberger attempted the crime of aggravated assault, a felony, in violation of sections 45-5-102(1)(b), 45-4-103 and 45-5-202 (1) (c) , MCA. The jury returned a verdict of guilty against Adam Weinberger under count two, the felony-murder charge. The jury returned an inconclusive verdict as to count one, finding Adam neither guilty or not guilty of the charge of aiding and abetting Arrow Weinberger in the death of Floyd Azure. Because the jury failed to find Adam guilty on count one, we regard the inconclusive verdict as one of not guilty on that count. It has so been treated by the parties. We reverse the conviction in this case because we find that the evidence is insufficient as a matter of law to support the judgment and conviction of felony-murder. Before we review the evidence, it is well to set out the applicable requirements for conviction for felony-murder, where the defendant is not the actual killer, but is charged with felony-murder because he is engaged in committing a felony in conjunction with the actual killer so as to cause of death of the victim. In State ex rel. Murphy v. McKinnon (1976), 171 Mont. 120, 126, 556 P.2d 906, 910, we said: " [W] e note with approval the following guidelines as to the applicability of the felony-murder rule stated in 1 Wharton's Criminal Law and Procedure (Anderson) section 252, P. 543: "'For the felony murder rule to apply, it is necessary that the homicide be a natural and probable consequence of the commission or attempt to commit the felony; that the homicide be so closely connected with such other crime as to be within the res gestae thereof; or the natural or necessary result of the unlawful act; or that it be one of the causes.. . . "Something more than a mere coincidence of time and place between the wrongful act and the death is necessary. It must appear that there was such actual legal relation between the killing and the crime committed or attempted that the killing can be said to have occurred as a part of the perpetration of the crime, or in furtherance of an attempt or purpose to commit it.'" "Thus for the felony-murder rule to apply a causal connection between the felonious act and the death must be present. (Citing cases.)'' (Emphasis added.) 1n State v. Close (1981) I - Mont . , 623 P.2d 940, - 38 St.Rep. 177, we held that felony-murder and the underlying felony charge do not merge, and sustained convictions as to both criminal charges. It should be recognized that all who participate in a crime or an attempted crime during which a homicide is committed are guilty of deliberate homicide, irrespective of which one of the participants fires the fatal shot, State v. Miller (1932), 91 Mont. 596, 9 P.2d 474 (construing earlier statutes). All conspirators in a plot to commit a crime are equally guilty of deliberate homicide if during the course of the commission of the crime a death results which is directly attributable to the plot to commit the crime. State v. Morran (1957), 131 Mont. 17, 306 ~ . 2 d 679. By statutory defini-tion, felony-murder is a deliberate homicide which is committed while the offender is engaged in the commission of an enumerated £el-ony, or "any other felonv which involves the use or threat of physical force or violence against any individual." Section 45-5-102(1) (b), MCA . It follows, therefore, that if the proof of the commission of the underlying felony fails, the purported offender is not guilty of felony-murder. The underlying felony with which Adam is charged in this case is the offense of attempted aggravated a.ssault. Aggravated assault in this case, excluding portions of the statute not applicable here, would be upheld if the State proved : " [the defendant committed] the offense of aggravated assault if he purposely or knowingly causes: "(c) reasonable apprehension of serious bodily injury in another by use of a weapon." Section 45-5-202 (1) (c) , MCA. He committed the offense of attempted aggravated assault, if, with the purpose to commit that specific offense, he did any act toward the commission of that offense, section 45-4-103, MCA. As we stated in State ex rel. Murphy v. McKinnon, supra, there must be a causal connection between the felonious act and the death. Our statutes define causal relationship in section 45-2-201, MCA. Conduct, under that statute, is the cause of a result if without the conduct the result would not have occurred. In capsule, then, in order for the State to convict Adam Weinberger of deliberate homicide under the felony-murder rule, it was the duty of the State to prove (1) that Adam Weinberger acting in concert with Arrow Weinberger knowingly or purposely attempted an aggravated assault upon Scotty Azure; or (2) that Adam and his father, Arrow Weinberger, had a pact, design or common plan to commit an aggravated assault or homicide upon Scotty Azure, and that Scotty died as a result of their execution of such common plan. In either case, it was the duty of the State to prove that Ada.mls attempted aggravated assault caused the death of Scotty Azure, without which cause Scotty's death would not have occurred. "It is not the purpose of the felony-murder rule to foist authorship of a homicide upon a felon; the purpose is merely to clothe the felon's act of killing with malice." 2 Wharton's Criminal Law (14th ed.) 221, S 149. Under Montana codes, we would substitute "knowledge or purpose" for the word "malice. " Section 45-2-103, MCA. The Pennsylvania Supreme Court noted in Commonwealth v. Redline (1958), 137 "In adjudging a felony-murder, it is to be remembered at all times that the thing which is imputed to a felon for a killing incidental to his felony is malice and --- not the a 6 t of killing. The mere coincidence of homicide and-felony is not & enough to satisfy the requirements of the felony-murder doctrine. 'It is necessary . . . to show that the conduct causing death was done in furtherance of the design to commit the felony. Death must be a consequence of the felony . . . and not merely coincidence.' (Citing authority.)" (Emphasis in original.) Against this backdrop of applicable law, we now advert to the facts in this case, regarding them in the light most favorable to the State. Floyd "Scotty" Azure was shot to death by Adam's father, Arrow Weinberger, during the confrontation at a gas station in Culbertson, Montana, on December 5, 1981. Scotty Azure and his wife, Gloreen, were the parents of a 17 year old daughter, Luanne, who had developed a relationship with Adam Weinberger in June 1981. The parents did not approve of this relationship and actively discouraged it because of the difference in age between Adam and Luanne and because of Adam's failure to "act like a gentleman." Despite the parents' objections, however, the relationship between Adam and Luanne continued. In early November 1981, Luanne left home with a friend and went to Havre, Montana. She there planned to and later did meet with Adam in Williston, North Dakota. During the two days of her absence, Luanne's parents searched the Poplar area for her without success. On November 12, 1981, the parents went to Williston to look for Luanne. There they found Adam who told them he had not seen Luanne and thought she was in Havre, Montana. The Azures later found Luanne in Williston and learned she had, in fact, been with the defendant. After this incident the parents began to watch Luanne very closely because they did not want her around Adam Weinberger at all. On December 1, 1981, Luanne ran away from home. The Azures were convinced she had again run away with the defendant based on the prior incident in Williston, and they began to search for Adam, enlisting the aid of local law enforcement officers. At the request of the Azures, the police stopped the father's automobile to look for Luanne. The father and son later visited the Azures to register their displeasure at being stopped. Arrow Weinberger, the father, was upset and told the Azures he did not like to get upset because "when I get upset I stay upset." Two days later, Luanne had not been found. The Azures continued to look for her and on the second day found Adam in the company of Maybell Archambeau, an 18 year old girl. The Azures asked Maybell if she was permitted to talk to Adam. Adam used a profane expression in telling the Azures to get out of there. That evening, the Azures contacted Roy Trottier, a federal Indian police officer, and sought his help. The next morning, Scotty Azure learned that Luanne had been seen with the defendant on December 1, 1981. The Azures immediately found Trottier and told him that if they found the defendant they would report his whereabouts to the police and then if they found Luanne they would bring her to the police. Trottier approved of the plan. The Azures then began a search for Adam's car, enlisting the aid of Carol Lee Azure, who was Gloreen Azure's sister, and Rodney Azure, Carol Lee's husband and a cousin of Scotty Azure. Carol and Rodney found Adam' s car in Brockton that afternoon and notified the police. The police, however, were unable to locate Adam. Carol and Rodney then attempted to locate Gloreen and Scotty. They met the parents' car following Adam's car on the Fort Kipp Road and turned around to follow. After the cars turned toward Culbertson, the entourage was passed by the father's (Arrow Weinberger) white Cadillac. At a signal from Adam, Arrow pulled off to the side of the road to stop and talk to Adam. The two Azure cars proceeded past the two stopped cars into Culbertson where they stopped at the Standard gas station. When the Weinberger cars stopped at the side of the road, there were four occupants of the cars. Arrow Weinberger, the father, was accompanied by his brother Frank. Adam was accompanied by a hitchhiker named Thomas Hanzlick. Hanzlick remained in the defendant's car as Adam went over to talk with Arrow Weinberger. Frank Weinberger who was apparently intoxicated, had no recollection of the stop. Hanzlick testified at the trial that when Adam returned to his car from talking with Arrow, Adam told Hanzlick that Arrow Weinberger was going to talk to the Azures. Hanzlick concluded there "might be a fight." Lenny Barkie, a passing motorist, saw the cars pull away from the shoulder at a high rate of speed and testified that the occupants of the father's car (Arrow Weinberger) were "laughing to beat heck." At the gas station in Culbertson, Scotty Azure parked his car facing the side of the building to the right of a red pickup truck. Rodney Azure parked some distance behind the pickup. Gloreen and Carol Lee Azure proceeded to the front of the gas station while Rodney and Scotty Azure remained outside. As this was occurring, Arrow Weinberger's Cadillac was driven up and parked directly behind Scotty Azure's car, blocking it in. Adam followed and parked at an angle to the right of Azure's car. The testimony of what happened next is in conflict. The State's witnesses, Gloreen, Carol Lee, and Rodney Azure all testified that Scotty Azure stood between his car and the pickup as Arrow Weinberger, the father, got out of his car. They testified that Adam then crossed between the Azure car and Arrow Weinberger's car toward the pickup saying "get your bat out, Azure." The witnesses saw Adam reach into the back of the red pickup and grab a large chain lying there. The State contends that the evidence shows that Adam doubled the chain over and threw it at Scotty Azure; that Scotty Azure had procured a baseball bat from his car, and he used it to deflect the chain; that Arrow, the father, then drew a .25 caliber pistol and shot Scotty Azure once in the chest, who died instantly. After the shooting, the defendant, Adam, entered the station building and spoke with Gloreen, telling her, "I hope you are satisfied, you caused all of this trouble." Later Adam and his father were transported to the sheriff's office for questioning. Adam was seated in the front seat of the car while Arrow sat between two other persons in the back. At one point in the trip, Adam turned around and stated "that's one and four to go," (Scotty and Gloreen Azure had four sons). At the station, Hanzlick was interviewed after the Weinbergers. After his interview, he sat down next to Adam, who asked him what he had told the police. When Hanzlick told the defendant that his story was consistent with the Weinbergers, Adam smiled, laughed, and said "all right. I ' The foregoing are the facts essentially upon which the State claims that Adam committed the underlying offense of attempted aggravated assault. We have reserved, however, from the foregoing statement the testimony of the witnesses respecting the incident with the chain, because it is upon that evidence that the commission of the underlying felony depends, and because the evidence does not measure up to the State's claims. The first witness was Gloreen Azure, the widow of the victim and the mother of Luanne, who observed the actual shooting through the windows of the gasoline station. In her testimony she mentioned nothing that connected Adam to the confrontation except that he was there. Rodney Azure, the cousin of the victim, was standing beside the box of the red pickup to the right of the Azure vehicle when Adam came to the back of the pickup. He was the person closest to Adam Weinberger during the incident, and his testimony is pertinent. He stated: "Q. When did the car driven by Adam Weinberger pull in there then? A. Just a little while after his father pulled in. "Q. Was he out of the car at the time Arrow Weinberger told Scotty to leave his son alone? A. I don't know, I didn't at the time pay any attention. "Q. Did you see Adam Weinberger get out of his car? A. He walked up to where we were. "Q. Excuse me? A. He walked to where we were. "Q. Was that before or after Arrow Weinberger told Scotty to leave his kid alone? A. After. "Q. Did he say anything as he was walking up to where you were? A. He was walking and he told Floyd to 'Get your bat now, Azure.' "Q. And where did Adam Weinberger go? A. To the back of the red pickup. "Q. What did he begin to do? A. Looking around. "Q. Did he find anything, or attempt to remove anything from the pickup? A. Yes, he tried to pull a chain out of the back of the pickup, over the end gate. "Q. Did he actually get ahold of the chain? A. Yes he did. "Q. What did he do with the chain? A. He pulled it out of the pickup and was going to use it as a weapon or something. "Q. Rodney, where were you standing when Adam came over to the back of this pickup? A. Right beside the box of the pickup. " Q . And in relationship to the rear wheel where were you? A. Someplace close to it. "Q. And where was the defendant Adam Weinberger standing as he was reaching for the cha.in? A. He was at the back end of the pickup. " Q . Was Scotty in front of you or behind you? A. Behind me. "Q. And was Arrow Weinberger behind Adam or in front of him? A. Behind him. Q . And where wa.s he standing? A. By the car. "Q. Wha.t part of the car? A. By the front wheel. "Q. Now did Adam Weinberger retrieve all of the chain out of the pickup? A. No. "Q. How much of it? A. I would say he pulled it three or four feet. "Q. Now would you come down here and show me how much he pulled it? A. (Witness complies) Something like this. "MR. RACICOT: Let the record reflect that approximately three feet of the chain, doubled over and hanging from the witness's hand. " Q . What did he do with it? A. Well I thought that he was trying to throw it. "Q. Underhand style? A. No, to the side, like this. "Q. Swinging it? A. Yes. "Q. At who? A. Scotty, I guess. "Q. Did you see a.nybody put the -- wa.s he swinging it like this? (Demonstrates) A. No. "Q. Was it in a round about motion like this? A. Yes. "Q. What were you doing? A. Oh I tried to get ahold of part of the chain, and I think I got ahold of part of it, on the back end of it, but I can't tell you how many feet. "Q. Okay, YOU can be seated. (Witness sits down) id the chain go towards Scotty? A. As far as I know it did. I don't know for sure: I didn't see what was hit. "Q. Okay, did you see Scotty swinging the bat at any time at Adam Weinberger? A. No I didn't. "Q. Did you see him swinging it at any time at Arrow Weinberger? A. No I didn't. "Q. And when, did you see him do at that time, Sir? A. Grabbed for the chain. "Q. Grabbed the chain? A. Yes. "Q. What was he doing when he grabbed the chain? A. He pulled it out of the pickup. "Q. One end pulled out of the pickup? A. He had more then one end, he just grabbed a whole bunch of it. "Q. And then what did you do? A. I tried to reach for the chain, and -- "Q. Now just a second. We have still got you up here -- A. Well I moved over towards that pickup again, when he started moving. "Q. When Adam started towards the pickup, you headed towards the pickup again? A. Well I went over to see what he was looking for. "Q. He did not have a weapon that you knew of then? A. NO, not then he didnl t, that I knew of. "Q. And did you know what Scotty was doing? A. No I didn't see Scotty. "Q. You had your back towards Scotty? A. Yes. "Q. Now, Adam was standing here, and you're standing just about where the wheel wells were, is that right? A. Somewheres in that vicinity. "Q. And he was pulling this chain out, this particular chain out of the back of the pickup and you grabbed one end of it, is that right? A. Yes. "Q. And he was trying to pull it out of the back end of the pickup and you got ahold of that other end? A. Well I more or less pulled it -- as he was pulling on it, I more or less just lifted it, you know, and then he jerked it away from me. "Q. Well what was Adam doing with this chain, he has the chain and you say you were kind of lifting your end of it up, and he was pulling on the other end of it, wha.t did Adam do with this chain? A. Took it away from me. "Q. And so then when he had it out, he had a.bout so much of the chain? (Demonstrates) A. I would say a little less then that. "Q. About that much then? A. Yes about that. "Q. And what did he do with it then? A. Threw it. - "Q. He is standing there facing the pickup -- A. Well he had moved back away from the pickup by then, a little bit. "Q. How far? A. I don't remember how many feet, I didn't notice how many feet. "Q. Well did he move a short distance or a long distance? A. A short distance I would say. "Q. Short distance, say a couple of feet? A. Oh maybe a little more then that. "Q. Maybe three or four feet? A. Maybe. "Q. Okay, and do you still have a hold of the chain yet? A. Well I moved toward the end there. "Q. Okay, and then what did he do with the chain, with this couple of feet? A. Threw it. "Q. Where did he throw it? A. Behind me someplace. "Q. Behind you someplace? A. Yes. At an angle. "Q. He just sort of pivoted like this and gave a toss that way? A. Well I think he had it bunched up in his hand a little more than that. "Q. Well what do you mean, by bunched up? A. Like this. (Witness comes off the witness stand and demonstrates.) "Q . Okay, and then he threw it someplace? A. Someplace. "Q. I take it at this time, you were still on this side of the pickup holding on to the chain? A. No I was standing like this to him, and I had ahold of the chain like this. "Q. Okay, should we put the pickup here then, this way, the pickup be here? A. Well -- "Q. Well the fact of it is here the chain is still coming out of the back of the pickup, and you were on the other end of it and started liftinq it up, - - is that right? A. Yes. "Q. So that you were facing into the pickup? A. I was facing the side of the pickup, facing towards the back. "Q. This way, something of this nature, right? (Demonstrates) A. Yes. "Q. And Scotty was someplace over in here? A. Yes. "Q. And then he threw the chain? A. Yes. "Q. And what did you do? A. I had a hold of the chain, I heard this shot and dropped it and took off. - "Q. You had ahold of the chain, he threw the chain, out to here someplace, the shot was fired, and you dropped the chain? A. Yes, I had it in my hands like this. (Demonstrates) " (Emphasis added. ) The next witness was Carol Azure, the wife of Rodney. She was standing on the sidewalk between Scotty Azure's vehicle and the red pickup, facing the actors. With respect to Adam, she testified: "Q. And did you see Adam Weinberger at that point? A. Yes I did. "Q. And where was he? A. He was coming towards the pickup. "Q. From where? A. From his car. "Q. And how fast was he moving? A . I don't know if he was moving so fast, but he was shaking, like he was mad or scared, I don't know. "Q. What did he say? A. All right, get your bat now. "Q. And where did he go? A. To the back of the pickup. Q . Now where was Scotty during all of this? A. Scotty was standing by the cavity of his door. "Q. Was the door open? A. At that point I don't know, I was watching Adam. "Q. Okay, was the door open when you first went up to the sidewalk to enter the station? A. Yes it was. "9. Was it at any point closed, to the best of your recollection? A. Not to the hest of my knowledge. "9. Okay. Now after Adam walked -- did he walk between the white Cadillac and the blue car? A. Right. "Q. And said, 'come on, Azure, get your bat now?' A . Yes. "Q. After he said that, what did you next see? A. I was watching him and he grabbing a chain out of the pickup; and I don.'t know when Scotty got the bat, but I seen Adam with the chain, he swung the - - - - - - chain, I looked at Scotty and Scotty h a d --- the bat and he zit the c a y and I never seen the chain hit ------- -- Scotty, _ I r just seen the bat hit the car. ------ "Q. And where wa.s Rodney, your husband? A. (No response) . " 9 . When Adam went to the back of the pickup, and got the chain and threw it, where was Rodney? A. It seems like he was right, maybe four feet away from Scotty and Adam was on this side. "Q. Okay, so as far as people being closest and furtherest away from you, who was the closest to you? A. They looked to me like they were about the same distance. "Q. Who did? A. Rodney and Adam. They were at a different angle and it seemed like they were right there. "Q. And who was the closest person, between Scotty, your husband, Rodney, Adam Weinberger and Arrow Weinberger? A. Who was the closest to Scotty? "Q. Who was the closest to you? A. I would say that Scotty was the closest. "Q. And then who? A. And then Rodney. "Q. And then who? A. Then Adam. "Q. And then who? A. Arrow. 'Q. And did you see any struggle with the chain between your husband and Adam Weinberger? A. I seen his hand on the cha-in, but I don't know about any struggle. "Q. Did you see Adam Weinberger withdraw that chain from the back of the pickup? A. I didn't see him pull it out, I seen. him make a grab for it. " 8 . Did you see him with any of that chain in his hands? A. Yes I did. "Q. How much? A. Three feet, I don't know. "Q. Did you know -- or notice whether or not it was doubled over was it just one single link? A. I noticed that it was doubled. "Q. And what did he do with that amount of chain that he had in his hand? A. He swung it. ' I Q . And by that what do you mean? A. He just swung it. ' I Q . And did you see where it went? A. It went toward where Scotty was standing and I seen Scotty hit the car with the bat. "Q. And Scotty was holding the bat? A. Right. "Q. And the bat did hit the car? A. Yes. "Q. And the chain? What happened to the chain? A. I don't know. "Q. Then after the chain had been hurled at Scotty and the bat hit the car, what did you next see? A. I heard the shot.. . ." On cross-examination, Carol testified: "Q. And what did Adam do with this chain? A. I seen him swing it. "Q. How did he swing it? A. He just swung it. "Q. Just like this? (Witness observes counsel swinging the chain) A . Yes. "Q. Like this out in front of him? A. Yes. "Q. Did he swing at your husband? A. I don't think so, no. "Q. Did he swing at Scotty? A. I don't know. "Q. And this distance you say of three or four feet was Scotty right there? A. Yes. "Q. Right about here? A. Yes. "Q. Standing right there, within three or four feet was your husband? A. Yes, but he was behind my husband. . How far behind Rodney? A. I don't know exactly three or four feet I suppose. "Q. Let me straighten this out a little bit on this drawing here. Adam was standing back here by the back end of this pickup? A . Yes. "Q. And Rodney then was three or four feet this way, by the wheel well, is that right? A. Seems like they were closer together when I seen them. "Q. Right -- A. Not right together, but closer. "Q. Rodney was up here? A. Yes. "Q. Closer to the very back end of this pickup? A. Yes. "Q. And where was Scotty? A. By his car door. "Q. He was back by his car door? A. Yes. "Q. And from State's Exhibit Number 7, it shows it is nine foot six inches away, is that right? A. Yes. "Q. So that Scotty wasn't where he could get hit by Adam swinging that chain that way, could he? A. I don't know." On redirect examination, Carol testified: "Q. What happened when he swung the chain? A. I seen the chain swung, and I couldn't see where it hit, -- "Q. Well what I am getting at, Carol did the defendant, Adam Weinberger, or did he not, release the chain when he swung it? A. I don't know. "Q. Did the chain go anyplace? A. I don't know that. "Q. You didn't see the chain go like this? (Counsel throws the chain its full length on the courtroom floor) "MR. S. MOSES: Objection, Your Honor, the witness has already testified. "Q. You didn't see that occur? A. No." (Emphasis added. ) Dr. Robert Bell was an eyewitness to the incident. His testimony respecting Adam is as follows: 'I. And around 2:20 in the afternoon, P.M., can you tell us what you were doing? A. Well I come out of my house to get a tape measure out of my pickup. "Q. On your way out, did you hear anything? A. Yes, I heard a chain rattling -- somebody was getting a chain out of a pickup. "Q. Did that call your attention to where that sound was coming from? A. When I heard the noise I looked over to see what was going on and there were two people in the vicinity of the back of the pickup and they were getting a chain out of the pickup. "Q. And by the pickup, again in reference to State's Exhibit No. 17, could you indicate if that vehicle is on that diagram? A. Yes, it would be where that red vehicle is indicated. "Q. And you saw two people at that vehicle, and where? A. At the northeast corner of it. "Q. It would be to the right and to the top of that picture. A. Yes, right. "Q. And what did it appear to you that they were doing? A. My first impression was that somebody had gotten stuck and somebody was getting a chain out of a pickup to pull them out. "Q. Did it appear that both people were trying to get the chain out? A. Yes. "Q. How many people were leaning over the edge of the pickup grabbing the chain? A. I think there were two. "Q. Did you watch those two people? A. Briefly. It is not unusual for me to come out of my house and see or hear some sort of activity at the service station there. "Q. And the man that was shot, did you see him with the bat? A. I did not see a baseball bat a.t any time until after the shooting. "Q. Did you see him wield the bat at the man that was doing the shooting? A. No I did not. "Q. Did you see him threaten him in any way? A. No I did not. "Q. If I understand your testimony right, when you came out of the house, you saw two fellows at the back end of this pickup? A. Correct. " Q . Trying to lift out a chain? A. Trying to get this chain, right. "Q. And that they were apparently having some trouble getting the chain over the back end of this pickup? A. I would not characterize that as trouble. I think that is a normal occurrence taking a chain out of a pickup. "Q. But the chain was running down out of the back end of the pickup? A. I said it was rattling. "Q. Oh, okay, it was rattling over the end of the pickup? A. Right, I don't know if it was rattling down or if they were backing up and pulling it out. "Q. Did you ever see anybody swinging that chain at anybody else? A. No I did not. I did not continue to watch them with the chain. "Q. All right. Were you watching this chain quite intentively? A. Not at that time, no. As I stated before, it is not unusual to have that kind of activity at the service station there. "9. So that you -- A. It is quite normal to see people taking something like a chain or something else out of a pickup, there at the station. "Q. All the time? Every day you would see a chain -- A. No, not all the time. But that day I saw two people taking a chain out of a pickup." (Emphasis added.) Thomas Hanzlick, a passenger in Adam's automobile prior to the incident, and a witness at the time of the incident, testified with respect to Adam: "A. And Mr. Azure was on the back swing, I believe, I am not sure, I believe he was on the back swing like this here (demonstrates) and he was coming back towards Adam. "Q. He was swinging now at Adam? A. I am not sure. "Q. And where did the swing go, do you know? A. It was pretty close to Adam. "Q. Do you know if he hit Adam? A. No I don't. "Q. What happened to the chain? A. I am not sure, the next of the chain that I saw it was lying on the ground. "Q. Did you ever see Adam Weinberger swing or throw the chain? A. No sir. "Q. Did you ever see him swing it or throw it towards Mr. Azure? A. No sir. "Q. Did you ever see him get it all the way out of the pickup? A. No I think it was still partly in." (Emphasis added.) There is not an iota of evidence in the record that Adam knew before the shot was fired that Arrow had a gun :. ~ s available. Adam Weinberger and Arrow Weinberger were tried together in the same case. Arrow Weinberger testified as a defendant in the case. Adam Weinberger did not testify. Nothing in Arrow's testimony is informative as to what Adam may or may not have done regarding the chain. From the foregoing, it is clear: (1) the evidence fails to show that Adam swung the chain at or toward Scotty on testimony beyond a reasonable doubt; (2) there is no evidence that Scotty suffered serious bodily injury, or bodily injury as a result of Adam using a weapon; (3) there is no evidence from testimony or otherwise, that Scotty entertained a reasonable apprehension of serious bodily injury from the use of a weapon. These are the essential elements of an aggravated assault. Section 45-5-202, MCA. We will assume in these conclusions, that the chain here may be considered a "weapon," in the terms of the statute, since neither side contests the point. The evidence completely fails to establish an aggravated assault. However, Adam was convicted of attempted aggravated assault. The State contends his conviction must be upheld if beyond a reasonable doubt he purposely and knowingly committed any act toward the commission of aggravated assault, section 45-4-103, MCA. The State had originally charged Adam with aggravated assault. It is a mystery why at the close of all the evidence, it moved the court for an order submitting to the jury the case against Adam on attempt, rather than aggravated assault. Undoubtedly, the State felt that it could not show serious bodily injury or bodily injury from the use of a weapon, two of the elements that constitute aggravated assault. Section 45-5-202, MCA. The State must also have felt that it failed to establish in Scotty a reasonable apprehension of serious bodily injury from the use of the chain as a weapon. There is no proof in the record of what Scotty may have apprehended from Adam's use of the chain. If there was proof in this case of reasonable apprehension by Scotty beyond a reasonable doubt, the crime of aggravated assault, itself would have been proven and there would be no need for the State to change the charge to an attempt. The question becomes, can the State charge a crime of attempted aggravated assault, there being no proof of serious bodily injury from the use of a weapon, or reasonable apprehension on the part of the assaulted person of serious bodily injury from the use of the chain as a weapon? There may be doubt that in the circumstances of this case that there ca-n be such a crime as attempted aggrava-ted assault. Our aggravated assault statute, section 45-5-202, MCA, combines former statutes that related to the crimes of assault and battery. Under the common law, battery was the unlawful infliction of physical harm upon a victim. An assault was the attempt to inflict serious physical harm upon a victim. Thus to some theorists, a charge of attempted aggravated assault would be an absurdity, a charge of an attempt to attempt. In California and Colorado, there is no - such crime as attempted assault or attempted aggravated assault. In re James M. (Cal.App. 1973), 510 P.2d 33; People v. Gordon (Colo. 1972), 498 P.2d 431; Allen v. People (Colo. 1971), 485 P.2d 886, 888. In Oregon and in Florida, however, the crime of attempted aggravated assault is recognized. State v. Wilson (Ore. 1959) , 346 P. 2d 115; Hall v. State (Fla. ApP4 1978), 354 So.2d 914. And see People v. O'Connell (1891), 14 N.Y.S. 485. In Montana, it has been held that if a defendant pointed a gun at a victim which the defendant knew to be unloaded, and the victim was put into fear and alarm because the gun appeared to him to have the capacity to inflict physical harm, an assault (not an attempt) was committed. It is the object of the law to prevent such fear and alarm on the part of the person assaulted. State v. Herron (1892), 12 Mont. 230, 235, 29 P. 819, 821. There the defendant did not have the capacity to inflict physical harm upon the victim; yet the proof showed the apprehension of the victim. Missing in Adam's case is any proof of fear or apprehension on Scotty's part from the actions of Adam in this incident. If it were to be conceded that in Montana a knowing or purposeful attempt by Adam to cast a chain at Scotty so as to cause him bodily injury, or to raise in Scotty a reasonable apprehension of serious bodily injury, would constitute the crime of attempted aggravated assault, the proof here still fails even in those respects. Under the felony-murder rule, Adam's purpose and knowledge to commit felony-murder would be presumed if in committing an underlying felony involving the use or threat of force or violence, he caused the death of Scotty. Section 45-5-102, MCA. Here the State recognized during trial that the jury could not convict Adam of both the crime of aiding and abetting Arrow in the homicide and the crime of attempted aggravated assault. The District Court agreed. It instructed the jury that as to Adam, if he were to be convicted, it must be on one count or the other. The jury failed to convict Adam on the count that he aided and abetted Arrow. In other words, the jury seems to have found that there was no common plan or design between Adam and Arrow to make Adam an accomplice, an aider or abettor under count one. We find as a matter of law that the evidence is insufficient to show a common plan or design between Adam and Arrow under count two. Since the evidence is insufficient to establish the underlying felony of attempted aggravated assault, Adam's purpose and knowledge may not be presumed as to the charge of felony-murder. There is no other proof than that which we have shown above in the record from which Adam's purpose and knowledge may be inferred in connection with his actions during the incident. Further, in order for the felony-murder rule to apply, the State must prove that the underlying felony was the cause of Scotty's death. Adam's conduct can be the cause of Scotty's death only if without Adam's conduct the result would not have occurred. Section 45-2-201(a), MCA. Here again, the case against Adam fails completely. It is as compatible with the record to find that Arrow acted completely independently of Adam in firing the fatal shot. We therefore conclude that the conviction of Adam Weinberger under the felony-murder rule for deliberate homicide cannot be sustained. We reverse the conviction of Adam and remand the cause to the District Court with instructions to dismiss the charges against Adam Weinberger. We Concur: Chief Justice Justices I join in-Dhe,ppinion reversing the conviction and ordering a dismissal. However, I have a separate concurring opinion which will follow shortly. Mr. Chief Justice Frank I. Haswell, dissenting: I would affirm Adam Weinberger's conviction of deliberate homicide in the killing of Floyd Azure. The charge of which Adam Weinberger was convicted was Count I1 of the amended information. In pertinent part, the charge reads as follows: ". . . the defendant committed the offense of deliberate homicide . . . in that the death of Floyd Azure was caused while . . . the defendant, Adam Weinberger, was purposely and knowingly engaged in the attempted commission of the crime of aggravated assault, a felony, which involves the use or threat of physical force or violence upon Floyd Azure in violation of section 45-5-102(1)(b), MCA 11 . . . Montana law defines deliberate homicide as criminal homicide "committed while the offender is engaged in . . . any . . . felony which involves the use or threat of physical force or violence against any individual." Section Attempted aggravated assault is a felony under Montana statutes. A felony is defined as "an offense in which the sentence imposed upon conviction is death or imprisonment in the state prison for any term exceeding 1 year." Section 45-2-101 (21) , MCA. Aggravated assault is punishable by imprisonment in the state prison "for a term not less than 2 years or more than 20 years" plus a permissive fine of not more than $50,000. Section 45-5-202(2), MCA. An attempt is punishable "not to exceed the maximum provided for the offense attempted." Section 45-4-103(3), MCA. In my view the record discloses substantial evidence that Adam Weinberger was engaged in attempted aggravated assault involving "the use or threat of physical force or violence" against Floyd Azure when Arrow Weinberger shot Azure. The facts set forth in the majority opinion demonstrate a conflict, if not an animosity, between the two Weinbergers on the one hand and the victim and his wife on the other over the developing relationship between the Azures' daughter and Adam Weinberger. These facts show an attempt by the parents to locate the Weinbergers and through them to ascertain the whereabouts of their daughter. They observed Adam on the Fort Kipp Road and attempted to follow him and stop him in a high speed chase but were unable to do so because Adam pulled into the passing lane and would not let them pass. Immediately thereafter, Adam was observed standing beside Arrow's car talking to him. The hitchhiker, Hanzlick, testified that Adam, after talking to Arrow, said there might be a fight. The victim pulled into the gas station in Culbertson. Arrow and Adam followed him and blocked him in. Adam got out of his car and told the victim to get his bat as Adam crossed to the pickup and grabbed the logger's chain. Viewed in the light most favorable to the State, as we must when reviewing a conviction, the testimony of Rodney Azure indicates that Adam started swinging about three feet of doubled over chain "towards Scotty [the victim] I guess" but was prevented from hitting the victim by Rodney who was holding the other end of the chain. At that point Arrow Weinberger shot the victim in the heart area from a policeman's stance. Following the shooting, Adam said, "What do you expect? They were tailgating us." In the deputy sheriff's car after the shooting, Adam said, "that's one and four to go" apparently referring to the victim and his four sons. The Montana statute on attempts provides that "[a] person commits the offense of attempt when, with the purpose to commit a specific offense, he does any act toward the commission of such offense." Section 45-4-103 (1) , MCA. Adam's purpose to commit an aggravated assault is proven by circumstantial evidence, viz., the conflict between Adam and the victim over Adam's relationship with the victim's daughter, the actions of Adam and Arrow Weinberger in following the victim into the service station and blocking his car from leaving the service station, Adam's invitation to the victim to get out his bat, Adam's attempt to use the doubled up logging chain as a weapon against the victim, Adam's remark at the service station following the shooting, and his statement "that's one and four to go" in the deputy sheriff's vehicle. The statutes defining aggravated assault as applied to this case provides: "A person commits the offense of aggravated assault if he purposesly or knowingly causes: " (c) reasonable apprehension of serious bodily injury in another by the use of a weapon; " Section 45-5-202 (1) (c) , MCA. The jury apparently considered that Adam purposely and knowingly caused a reasonable apprehension of serious bodily injury in the victim when Adam attempted to use a doubled up section of logging chain against the victim. The foregoing evidence is sufficient to establish a purposeful and knowing attempt by Adam to commit aggravated assault on the victim in my view. It is likewise sufficient to show Adam's acts toward the commission of an aggravated assault within the purview of the attempt statute. The foregoing evidence is likewise sufficient to show that the victim met his death as a result of the conduct of both Adam and Arrow acting in concert within the meaning of State ex rel. Murphy v. McKinnon, quoted by the majority, and the guidelines set forth therein concerning the felony murder rule. The totality of the evidence in this case indicates to me a purposeful and knowing cold-blooded murder by Adam and Arrow acting in concert. For the foregoing reasons I would affirm the verdict of the jury and the judgment entered thereon. 7i-uudaq Chief Justice We concur in the foregoing dissent by the Chief Justice.

October 6, 1983

62f8a1cc-0875-4231-9580-6ac5ec42af16

STATE v BENNETT

N/A

83-067

Montana

Montana Supreme Court

No. 8 3 - 6 7 IN THE SUPREME COURT OF THE STATE O F MONTANA 198 3 STATE O F MONTANA, P l a i n t i f f and Respondent LARRY BENNETT, nefendant and Appellant Appeal from: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t I n and For t h e County of Yellowstone Honorable Diane G . Barz, Judge p r e s i d i n g . Counsel o f Record: For Appellant: Towe, B a l l , E n r i g h t 6 Mackey, B i l l i n g s , Montana Gregory R . Todd, Argued For Respondent: Honorable Mike Greely, Attorney General, Helena.,Montana Harold F. Hanser, Argued, County A t t o r n e y , B i l l i n g s , Montana Submitted: May 3 1 , 1 9 8 3 Decided: J u l y 1 4 , 1 9 8 3 F i l e d : Mr. Justice John C. Sheehy delivered the Opinion of the Court. Defendant, Larry Bennett, appeals an order of the District Court of the Thirteenth Judicial District denying his motion to suppress dated October 28, 1982, and the district court's order finding Bennett guilty of criminal possession of dangerous drugs. On August 5, 1982, Deputy Sheriff George Jensen received any anonymous tip that Bennett was growing marijuana in his garden. At 6:00 a.m. on August 6, 1982, Jensen drove to Bennett's house. From a county road adjacent to Bennett's property, Jensen put a 60 power scope on the top of his truck and spotted marijuana plants growing in Bennett's garden. Bennett owned 19.7 acres of property. Bennett's house, garage and garden were adjacent to the county road and bounded by a barbed wire fence. The fence extended 175 feet from north to south and 228 feet from east to west. No evidence was presented to indicate the distance from the garden to the buildings. The area surrounding the fenced portion of Bennett's property was open fields. Jensen testified that he was standing on the county road about 60 meters from the marijuana when he used the spotting scope. While he could not identify the substance as marijuana without the scope, he could see the~garden from the county road with his naked eye and determined that, ". . . they did observe to have some qualities of wha.t a marijuana plant may look like. But I couldn't say for certain if they were or not." Thereafter, Jensen applied for and received a search warrant. On the afternoon of August 6, Jensen and two other detectives went to Bennett's home to conduct the search. No one answered the doors. One of the detectives heard a noise and investigated the house. From a basement window in Bennett's house they saw what they believed to be marijuana growing in a pot in the basement. A second warrant was obtained permitting a search of the basement. When the search was executed the officers seized about 600 grams of marijuana from both locations. In August of 1982, Bennett was charged with criminal possession of dangerous drugs, section 45-9-102, MCA. Pursuant to section 46-13-302, MCA, he moved for suppression of all evidence seized in connection with the charge. The District Court denied Bennett's motion. After a nonjury trial, the District Court found him guilty of criminal possession of dangerous drugs and ordered a two-year suspended sentence. Bennett appeals the order denying his motion to suppress and the district court's order finding him guilty of the charged crime. We affirm both orders of the District Court. The issue presented for review in this case is whether the use of a spotting scope to identify marijuana growing in Bennett's garden violates his reasonable expectation of privacy. The State concedes that should the first warrant be struck, the subsequent warrant would be invalid. Should the first warrant be sufficient, the evidence seized pursuant to that warrant is sufficient to sustain the felony conviction without examination of the second warrant. Therefore, we need only address the sufficiency of the first warrant. Bennett asserts the State violated the Fourth Amendment of the United States Constitution and Article 11, Section 11, of the Montana Constitution which mandates that law enforcement have probable cause to search. We have held that a warrantless search is per se unreasonable, unless it falls within one of the defined exceptions to the warrant requirement. State v. Hyem (1981), Mont . , 630 P.2d 202, 205, 38 St.Rep. 891, 893. However, when the State does not violate an individual's legitimate expectation of privacy, an unreasonable search has not taken place. United States v. Knotts (1983), U.S. , 103 S.Ct. 1081, 75 L.Ed.2d 55; State v. Charvat (1978), 175 Mont. 267, 269, 573 P.2d 660, 661-2. In 1967 the United States Supreme Court determined that application of the Fourth Amendment depends on whether the person invoking its protection can claim that government activities "violated the privacy upon which he justifiably relied." Katz v. United States (1967), 389 U.S. 347, 353, 88 In Smith v . Maryland (19791, 442 U.S. 7351 99 S-Ct- 2577, 61 L.Ed.2d 220, the United States Supreme Court further explained these principles: "Consistently with Katz, this Court uniformly has held that the application of the Fourth Amendment depends on whether the person invoking its protection can claim a ' justifiable, ' a 'reasonable,' or a 'legitimate expectation of privacy' that has been invaded by government action. [Citations omitted.] This inquiry, as Justice Harlan aptly noted in his Katz concurrence, normally embraces two discrete questions. The first is whether the individual, by his conduct, has 'exhibited an actual (subjective) expectation of privacy,' 389 U.S. at 361--whether, in the words of the Katz majority, the individual has shown that 'he seeks to preserve [something] as private.' Id., at 351. The second question is whether the individual's subjective expectation of privacy is 'one that society is prepared to recognize as 'reasonable,' Id., at 361--whether, in the words of the Katz majority, the individual's expectation, viewed objectively, is 'justifiable' under the circumstances. [Citations omitted.]" Smith, 442 U.S. at 740-741 (footnote omitted). This Court has affirmed this analysis. State v. Hyem (19811, Mon t . , 630 P.2d 202, 38 St.Rep. 891. Courts have consistently held that there is no legitimate expectation of privacy in "open fields." In Hester v. United States (1924), 265 U.S. 57, 44 S.Ct. 445, 68 L.Ed. 898, the United States Supreme Court held that the special protection accorded by the Fourth Amendment to the people in their "persons, houses, papers and effects" is not extended to open fields stating that the distinction between an open field and a house is as old as common law. This Court has had several occasions to recognize this doctrine. State v. Perkins (1969), 153 Mont. 361, 366, 457, P.2d 465; State v. Johnson (1967), 149 Mont. 173, 179, 424, P.2d ; State v. Arnold (1929), 84 Mont. 348, 358, 275 P. 757; State v. Ladue (1925), 73 Mont. 535, 539, 237 P. 495. In Perkins we stated: ' ' I n our view the District Court was correct. There was no search, the calves were in a corral in open sight. A corral can be likened to an open field. . . Thus evidence obtained from viewing a corral may be used as direct evidence in a prosecution. [Citations omitted] .I1 Perkins, 153 Mont. at 366, 457 P.2d at 467-468. We have further held that: ". . . evidence obtained from an open field, farmland, or a corral may be used as direct evidence in a prosecution." Charvat, 175 Mont. at 269, 573 P.2d at 661. Where no reasonable expectation of privacy exists, there is neither a "search" nor a "seizure" within the contemplation of the Fourth Amendment of the United States Constitution or Article 11, Section 11 of the Montana Constitution. Id. at 269. Similarly, in the present case, the marijuana was in an open field. Therefore, there was no search and the evidence obtained was properly used as direct evidence in this prosecution. In a recent case the United States Supreme Court held that a beeper device, planted in a container of chloroform, used to track the activities of the defendant, did not invade any legitimate expectation of privacy a.nd thus there was neither a "search" nor a "seizure" within the contemplation of the Fourth Amendment. Knotts, 1 0 3 S.Ct. at 1087. The Court determined: "Nothing in the Fourth Amendment prohibited the police from augmenting the sensory faculties bestowed upon them at birth with such enhancement as science and technology afforded them in this case. . . Insofar as respondent's complaint appears to be simply that scientific devices such as the beeper enabled the police to be more effective in detecting crime, it simply has no constitutional foundation. We have never equated police efficiency with unconstitutionality and we decline to do so now." Knotts, 1 0 3 S.Ct. at 1 0 8 6 . In Knotts, the container of chloroform was placed in an automobile and eventually used to manufacture a controlled substance. The detectives tracked the automobile to defendant's cabin where the drugs were being manufactured. The United States Supreme Court determined that the use of the beeper, even when the automobile was out of sight, was legitimate. Similarly, the use of the scope to detect marijuana that may have been difficult to see from the county road was not improper. The use of binoculars a . n d other visual enhancement devices has been determined to be legitimate: ". . . the police may observe people or places aided through use of a variety of tools which materially enhance or assist the senses, without first having to secure a search warrant . . . 'Binoculars. . . contribute to surveillance without violation of the Fourth Amendment in the usual case. " United States v. Dubrofsky (9th Cir. 1978), 581 F.2d 208, 211. United States v. Allen (9th Cir. 1980), 675 F.2d 1373, 1380. In United States v. Lee (1927), 274 U.S. 559, 47 sect. 746, 71 L.Ed. 1202, the United States Supreme Court stated: "But no search on the high seas is shown. The testimony of the boatswain shows that he used a searchlight. It is not shown that there was any exploration below decks or under hatches. For aught that appears, the cases of liquor were on deck and, like the defendants, were discovered before the motor boat was boarded. Such use of a searchlight is comparable to the use of a marine glass or a field glass. It is not prohibited by the Constitution." 274 U.S. at 563. Bennett voluntarily exposed the marijuana to public viewing by growing it in a garden near a county road open to scrutiny. Bennett argues that he had a subjective expectation of privacy because he placed corn in an L-shape tract around the marijuana and because the marijuana could only be seen with the aided eye. We find no merit to this contention. Bennett may or may not have had a subjective expectation of privacy, but we are not convinced that his subjective expectation of privacy is one that society is prepared to recognize as reasonable. The corn did not obstruct Jensen's view of the marijuana; the plants were stationary and open to public viewing anytime of the day or night; his garden was surrounded by open fields; Bennett had merely strung a barbed wire fence around the area and Jensen was able to view the marijuana from a county road. The plants wre not in an area where an expectation of privacy exists. Therefore, a search warrant was not required in this case. We affirm the conviction of Larry Bennett. ,/3" & . 2 & * 3 , Justice We Concur: 3 A H . e c 4 . Chief Justice

July 14, 1983

aaaed14e-f3f2-4894-895e-8c686b672130

ESTATE OF UNRUH

N/A

83-046

Montana

Montana Supreme Court

NO. 93-46 I N THC SUFREbE COURT OF THE STATE OF YONTANA 1983 ILJ TEE 3iATTER OF TEE ESTATE OF A U G U S T UiJRUH, Deceased. Appeal from: D i s t r i c t Court of t h e Seventh J u d i c i a l D i s t r i c t , I n and f o r t h e County of Dawson, The Honorable L. C. Gulbrandson, Judge p r e s i d i n g . Counsel of Record: For Appellant: William B. Sherman, Conrad, Montana For Respondent: @ & + m m ! i ; & . & n - Glendive, P40ntana 'LC% { 5 ; m c n t c n / p ~ , Submitted on B r i e f s : Xay 2 6 , 1 9 8 3 Decided: June 3 0 , 1 9 8 3 ~ i l e d : JUN 3 0 1983 Clerk Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. T h i s appeal comes from t h e District Court of t h e Seventh J u d i c i a l D i s t r i c t , County of Dawson. W e a r e asked t o review an o r d e r denying p r o b a t e of c e r t a i n papers a l l e g e d t o c o n s t i t u t e a h o l o g r a p h i c w i l l . August Unruh d i e d i n February 1981. A f t e r h i s d e a t h , h i s deceased w i f e ' s b r o t h e r , Raymond Johnson, found an envelope among h i s p e r s o n a l belongings. The envelope was s e a l e d and contained f o u r p i e c e s of paper. On t h e o u t s i d e of t h e envelope, t h e s e words were w r i t t e n ; "names and a d d r e s s e s of those t o be named i n w i l l . " my - Under t h e s e words t h e s i g n a t u r e of August Unruh a p p e a r s . On each of t h e four p i e c e s of p a p e r , v a r i o u s names and a d d r e s s e s a r e l i s t e d . I t is a p p a r e n t t h a t t h e r e a r e two lists; one list c o n t a i n i n g names and a d d r e s s e s of Mr. Unruh's s i d e of t h e family, and t h e o t h e r c o n t a i n i n g names and a d d r e s s e s of h i s w i f e ' s s i d e of t h e family. On August 9 , 1982, Raymond Johnson f i l e d an amended applica- t i o n f o r formal p r o b a t e of w i l l and appointment of p e r s o n a l r e p r e s e n t a t i v e . I n t h e a p p l i c a t i o n , Mr. Johnson s t a t e d t h a t he had been unable t o l o c a t e a f o r m a l l y executed w i l l and t h e r e f o r e he requested t h e c o u r t t o e n t e r an o r d e r allowing p r o b a t e of t h e envelope and t h e accompanying four p i e c e s of paper. A hearing was held a f t e r which t h e c o u r t e n t e r e d its o r d e r denying t h e a p p l i c a t i o n . W e a f f i r m . A p p e l l a n t contends t h a t t h e w r i t i n g s met t h e s t a t u t o r y r e q u i r e m e n t s of a holographic w i l l , and any q u e s t i o n concerning Mr. Unruh's i n t e n t could be proved by o r a l evidence. A h o l o g r a p h i c w i l l is one t h a t f a i l s t o meet t h e formal r e q u i r e - ments of s e c t i o n 72-2-302, MCA. A w r i t i n g " i s v a l i d a s a h o l o g r a p h i c w i l l , whether o r not w i t n e s s e d , i f t h e s i g n a t u r e and t h e m a t e r i a l p r o v i s i o n s a r e i n t h e handwriting of t h e t e s t a t o r . " S e c t i o n 72-2-303, MCA. The District Court concluded t h a t t h e r e were simply no t e s t a m e n t a r y p r o v i s i o n s . W e agree. The papers a r e only lists of v a r i o u s i n d i v i d u a l s . A w i l l is an " i n s t r u m e n t by which a person makes a d i s p o s i t i o n of h i s p r o p e r t y , . . . a l e g a l d e c l a r a t i o n of a man's i n t e n t i o n , which he w i l l s t o be per- formed a f t e r h i s d e a t h . . ." B a l l e n t i n e s Law D i c t i o n a r y , 1371 ( 3 r d Ed. 1969). Here t h e r e is no d i s p o s i t i o n of p r o p e r t y . A p p e l l a n t a l s o a r g u e s t h a t testimony from people who knew Mr. Unruh should have been admitted t o show t h a t he intended a l l t h o s e persons l i s t e d t o s h a r e e q u a l l y . However, a v a l i d w i l l m u s t e x i s t b e f o r e it can be construed o r i n t e r p r e t e d . I n Re E s t a t e of Gudmunsen ( 1 9 7 6 ) , 169 Mont. 53, 545 P.2d 146. The envelope and t h e four papers do not c o n s t i t u t e a v a l i d w i l l . The judgment of t h e D i s t r i c t Court is a f f i r m e d . W e concur: Ph-4 4qpcAdlccQJJ Chief ~ u s t i c e "

June 30, 1983

7e176f36-fe02-4cb1-9354-72bf08c559ad

STEVENS v CITY OF MISSOULA

N/A

83-063

Montana

Montana Supreme Court

No. 83-63 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1983 JEFFERY STEVENS, e t a l , P l a i n t i f f s and Appellants, -vs- C I T Y O F MISSOULA, e t a l . , Defendants and Respondents. APPEAL F R O M : District Court of t h e Fourth J u d i c i a l District, I n and f o r t h e County of Missoula, The Honorable James B. Wheelis, Judge presiding. C O U N S E L O F RECORD: For Appellants: Deirdre Boggs, Flissoula, Montana (argued) For Respondents: Mae Nan Ellingson, Deputy City Atty., Missoula, Montana (argued) Milodragovich, Dale i s Dye, E4issoulat Montana - - - * - --- Submitted: June 10, 1983 Decided: August 4, 1 9 8 3 Filed: Ft UG 4 1983 Mr. Justice Frank R. Morrison, Jr. delivered the Opinion of the Court. This is an appeal from an order of the Fourth Judicial District Court, Missoula County, Montana, wherein injunctive and declatory relief was denied to plaintiffs who challenged the validity of Special Improvement District No. 470 (SID 470). SID 470 was created by the City of Missoula, acting through its City Council, to expand off-street parking in downtown Missoula. SID 470 evolved from parking studies and plans developed by the Missoula Parking Commission and evaluated by the Missoula Redevelopment Agency. Plaintiffs own properties which lie within the boundaries of SID 470 and are subject to special assessment levies for the parking facilities to be constructed. On February 2, 1981 the Missoula Parking Commission presented a proposed parking plan to the Missoula City Council during its regular meeting. The plan included two proposals for downtown, off-street parking improvements. The first proposal, sometimes referred to as alternative or phase one, called for the addition of 223 parking spaces on three separate surface lots. Alternative or phase two provided for 113 parking spaces on two surface lots and a 400-space parking garage on a third site. Both proposals entailed acquisition of the same parcels of land. Financing for the improvements included special assessment levies within a special improvement district, the suggested area for which was smaller than, and completely enveloped by, a 500-acre Urban Renewal District created in 1978. Financing also included revenues from parking facilities, a pledge of tax increment money from the Missoula Redevelopment Agency, which administers the Urban Renewal District, and possibly a "matching funds" grant from the federal Economic Development Administration (EDA) . Alternative two was presented as being contingent on a grant of monies from the EDA. It was also the alternative preferred by various city officials in later discussions and meetings with property owners, including some of the instant plaintiffs. At that same meeting, the Missoula City Council passed Resolution No. 4107, entitled "A Resolution of Intention to Create Special Improvement District Number 470 for the Purpose of Providing Off-Street Parking Improvements." The resolution essentially adopted the proposals offered by the Parking Commission. Pursuant to section 7-12-4104, MCA, the resolution contained a legal description of the area to be included in the special improvement district (Section 11) and an explanation of the general character of the improvements, stated in the alternative (Section 111) . Sections IV and V provided as follows: SECTION IV "Approximate Estimated Cost of Improvement. That the approximate estimated cost to be assessed against property within District Number 470 for making the off-street parking improvements described in Section I11 is as follows: 1. $1,386,000.00, such amount to pay for all improvements enumerated in alternative number 1; or 2. $1,900,000.00 for alternative number 2, of this amount $1,300,000.00 shall be used for the acquisition of two surface lots and installation of 113 parking spaces and $600,000.00 shall be used as matching funds for an EDA Grant of $1,300,000.00 to construct the parking garage. SECTION V "Determination of Alternative to be Adopted and Cost to be Assessed. In no event shall the costs to be assessed within Special Improvement District Number 470 exceed $1,900,000.00. In the event the City of Missoula's EDA Grant application to partially fund the construction of a parking garage is denied, the City will pursue alternative Number 1 at a cost of $1,386,000.00 to be assessed pursuant to the provisions of this Resolution." Additionally, section VII included a finding by the City Council that the parking improvements are "of more than local ordinary benefit" as they would specially benefit each lot or parcel located within the contemplated boundaries of SID 470. All but two of the instant plaintiffs filed written protests against the proposed district. Many spoke in opposition at the March 2, 1981 public hearing. Nevertheless, on March 16, 1981 the City Council adopted Resolution No. 4123, creating SID 470. Again, the general character of the improvements to be made was framed in the alternative. On August 23, 1982 plaintiffs filed suit against the above-named defendants, respondents herein, alleging, inter alia: (1) they were denied proper notice of the proposal and its cost because the resolution of intent for SID 470 was misleading in that it set forth the number of proposed parking spaces and the costs in the alternative; (2) benefits, if any, to be derived from provision of additional metered parking spaces were of a general government nature, rather than any special benefit to property within the boundaries of SID 470 and (3) the defendants arbitrarily and mistakenly included various properties within the proposed SID boundaries that cannot be specially benefited thereby and arbitrarily and mistakenly excluded other properties that may be specially benefited thereby. The parties stipulated that a preliminary injunction would not be necessary and that the proceeding should be expedited. The matter went to trial on September 20, 1982. Several plaintiffs and various persons involved with the development or implementation of SID 470, testified. Final judgment, together with an opinion and order denying plaintiffs all relief, was entered October 12, 1982. The trial court denied plaintiffs' motion for reconsideration or new trial by opinion and amended order, and this appeal followed. F 7 e affirm. Three issues are presented for review: 1. Whether Resolutions No. 4107 and No. 4123 provided adequate notice of the nature and cost of the actual improvements to be made in S I D 470? 2. Whether the District Court properly upheld the City Council's determination as to what properties would be specially benefited by S I D 470? 3. Whether plaintiffs1 suit filed seventeen months after creation of S I D 470 was subject to bar under the equitable doctrine of laches? Plaintiffs contend that, because of their alternative structure, Resolutions No. 4107 and 4123 were unclear and ambiguous and failed to provide sufficient notice of the nature and cost of the improvements. This contention lacks merit. The primary purpose of a resolution of intention is to apprise property owners of the cost and nature of a proposed improvement so as to allow the property owner to determine whether he will acquiesce in or protest the proposition. Evans v. City of Helena (1921), 60 Mont. 577, 589, 199 P. 445, 447. The resolutions at issue fulfill that purpose. Testimony from plaintiffs confirms that they fully understood the nature of the improvement options. Nor were they misled by the alternative form of the S I D . Plaintiffs being fully informed of the S I D proposals, the argument against alternative descriptions becomes only technical. We conclude that section 7-12-4104, MCA, does not preclude use of the alternative form. Section 7-12-4104, MCA, provides: "Resolution of intention to create special improvement district. (1) Before creating any special improvement district for the purpose of making any of the improvements or acquiring any private property for any purpose authorized by this part, the city council shall pass a resolution of intention to do so, " (2) The resolution shall designate the number of such district, describe the boundaries thereof, and state therein the general character of the improvement or improvements which are to be made and an approximate estimate of the cost thereof. When any improvement is to be made in paving, the city or town council may in describing the general character of the same describe several kinds of paving. " The 1972 Montana Constitution specifically provides that the powers of incorporated cities shall be liberally construed. We recognized that mandate in Tipco Co-op, Inc. v. City of Billings (1982), Mont . , 642 P.2d 1074, 39 St.Rep. 600, which involved the powers of a home rule municipality. A local government with general powers is entitled to the same liberal construction. The fact that the statute expressly provides for use of alternatives for different paving materials does not mean that paving materials are the only proposals that may be proposed in the alternative. The rule of negative implication should not apply to language which may clearly comprehend many different instances, some of which are mentioned by way of example. Johnson v. General Motors Corp. (1976), 199 Kan. 720, 433 P.2d 585, 589. Plaintiffs also challenge the City Council's determination of special benefit and creation of district boundaries. The well established rule is that the City's judgment is conclusive absent proof of fraud or mistakes which preclude the exercise of sound judgment. Schumacher v. City of Bozeman (1977), 174 Mont. 519, 526, 571 P.2d 1135, 1139. Neither this Court nor the trial court should substitute its judgment for a rational determination of the City. Boundary lines should be drawn in such a way that the improvement brings a benefit to the included properties and that the benefit is substantially more intense than that which is realized by the properties outside of the district boundaries. 2 Antieau, Municipal Corporation Law, S14.24, p. 14-46. The fact that outside property derives some general benefit should not affect the special benefit afforded the district properties. Moreover, since properties within the district will Sear the cost of the improvements in proportion to the special benefit received, it would be very difficult to say that borderline properties have been unfairly burdened by their inclusion in the District. Thus greater scrutiny should not be required of such SIDs though they may be extended in nature. Since plaintiffs' case is disposed of on its merits, it is unnecessary to reach the laches issue. The judgment of the Distri rt is affirmed. We concur: DO Chief Justice

August 4, 1983

89f827fb-c659-460c-baed-df8e95c054a3

SHULTZ v SHULTZ

N/A

81-557

Montana

Montana Supreme Court

No. 8 1 - 5 5 7 IN THE SIJPREIIE COIJRT O F THE STATE OF MONTANA 1953 LYNN G . SHITLT Z , P l a i n t i f f and A p p e l l a n t , VS . BERTON N. SHULTZ, Defendant and Respondent. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t I n and f o r t h e County of Missoula Honorable John S. Henson, Judge p r e s i d i n g . Counsel o f Record: For Appellant : Milodragovich, Dale 6 Dye, Missoula, Montana M . J . Milodragovich, Argued For Respondent: Datsopoulos, Macnonald 4 Lind, Missoula, Montana Milton Datsopoulos, Argued Submitted: March 4 , 1 9 8 3 Decided: J u l y 2 7 , 1 9 8 3 F i l e d : JuL 2 7 1983 F & r - Clerk Mr. Justice Fred J. Weber delivered the Opinion of The Court. This is an appeal from a Fourth Judicial District Court judgment terminating respondent's maintenance and insurance obligations under a marital and property settlement agreement, which was incorporated by reference into the 1973 dissolution decree. The issue is whether the District Court erred as a matter of law in modifying maintenance and insurance terms under the agreement and decree. We affirm the judgment of the district court in part and remand for further proceedings. Appellant contends that the district court lacked the power to modify the maintenance and insurance terms because they were an integral part of an agreement negotiated by the parties' counsel and signed by the parties. It is appellant's position that such terms are not modifiable under section 40-4-208(2) (b), MCA, but can be altered only by consent of the parties, pursuant to subsection (3) (a) of the same statute. As support for this position, appellant relies on a line of cases following Washington v. Washington (1973), 162 Mont. 349, 512 P.2d 1300. In Washington, this Court held that alimony payments were not subject to modification because they constituted an integral part of an agreement fully supported by consideration. Labels such as "alimony" or "maintenance" were found to be inconclusive indicators of the parties' intent under a marital and property settlement agreement. Factors which proved to be determinative included the recitation in the agreement that the wife had given up rights to future support, relinquished her interests in the husband's separate property, and agreed to be responsible for all her future obligations and a portion of her husband's existing obligations in return for monthly payments of $750.00 until her death, irrespective of remarriage. We concluded in Washington that the support provision could not be severed from the agreement and modified without destroying the parties' contract. Shortly thereafter, this Court had another opportunity to review a marital and property settlement agreement in light of a maintenance modification petition. In Movius v. Movius (1974), 163 Mont. 463, 517 P.2d 884, we held that modification of maintenance was permissible because the maintenance and property division provisions were not interrelated. Unlike Washington, the agreement in Movius provided that the wife's maintenance payments were automatically terminated upon her marriage and that the wife's receipt of maintenance was not conditioned upon her relinquishment of a more favorable property division or an assumption of pre-existing indebtedness. We concluded that absent mutual interdependence of provisions pertaining to alimony and property division, a maintenance award is subject to modification by a court on a proper showing of changed circumstances. The Shultz property settlement agreement was executed on August 6, 1973 and was incorporated into the court's dissolution decree that same date. The Uniform Marriage and Divorce Act (UMDA) was ena.cted in 1975. Both Washington and Movius were decided before Montana adopted the UMDA. Unlike Washington and Movius, the Shultz case placed the district court in the peculiar situation of interpreting a 1973 agreement under uniform law enacted in 1975. For this reason, a comparison of the current and former divorce law pertaining to maintenance may be helpful. Under both the old and new law, parties can agree to a support provision in their separation agreement. In pre-UMDA cases where the parties did not so agree, the court could award support only if the divorce was granted "for an offense of the husband." Section 21-139, R.C.M. 1947. This condition having been met, the court had discretion to award "such suitable allowance to the wife for her support during her life or for a shorter period, as the court may deem just, having regard to the circumstances of the parties respectively." Section 21-139, R.C.M. 1947. Absent agreement of the parties, an award for support was thus dependent upon the court's determination of fault and what was just under the circumstances. The court had discretion to withhold allowance of support if the wife had a "separate estate sufficient to give her proper support." Section 21-141, R.C.M. 1947. The court's discretion was not limited by any statutory definition of proper support. The standard for a court decree of maintenance under the UMDA is slightly different. The parties may still agree upon a support provision in their separation agreement. However, absent such provision, the court may order support only if the spouse seeking maintenance "(a) lacks sufficient property to provide for his reasonable needs; and (b) is unable to support himself through appropriate employment . . .". Section 40-4-203 (1) , MCA. Whereas support under the old law was determined on the basis of fault and what the court deemed just and proper, support under the UMDA is dependent upon a showing of need. The standard for modifying maintenance awa.rds also differs. Under UMDA, the court may modify its support decree only " (i) upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable; or (ii) upon written consent of the parties." Section 40-4-208 (2) (b) , MCA. The unconscionability test presents a stricter standard for modification than the broad discretion formerly afforded district courts. Former law gave the trial court power to modify its orders "from time to time," but specified that support must terminate upon the wife's remarriage. Section 21-139, R.C.M. 1947. Unless otherwise expressly agreed by the parties, support terminates under present law upon the death of either party or the remarriage of the party receiving maintenance. Section 40-4-208 (4), MCA. The parties can preclude or limit modification of maintenance terms set forth in the decree if their separation agreement so provides. Section 40-4-201(6), MCA . No such option to extend support payments past remarriage existed under former law. Thus, a pre-1975 provision for "support" after remarriage was stronger evidence that the parties intended to create a contractual obligation, than such a provision would be under post-UMDA law. In both instances provision for "maintenance" after remarriage is a factor in determining whether the parties intended to create a modifiable support provision or a non-modifiable contractual obligation. Provisions must be interpreted in historical perspective. In Washington, a pre-UMDA case, monthly payments were to continue irrespective of remarriage. In Movius, another pre-UMDA case, payments were automatically terminated upon the wife's remarriage. The 1973 Shultz agreement did not specify when the monthly payments would terminate. Neither the decree nor the separation agreement precluded or limited the court's power to modify the "support" provision. The marital and property settlement agreement executed by the Shultzes upon termination of their eighteen year marriage contained thirteen separate provisions regarding child custody, tax exemptions, special education expenses, existing indebtedness, moving costs, attorneys' fees, property distribution, support for the children and for appellant, medical and hospital care, and life insurance. By the terms of the latter three provisions, respondent agreed (1) to pay to appellant "the sum of $450.00 per month as and for alimony for her care, support and maintenance," such amount to be increased by ten percent on the fifth anniversary of the agreement; (2) to provide sufficient medical and hospital insurance coverage for appellant until she remarried or until further court order; and (3) to provide life insurance with appellant named as owner and beneficiary. It is not evident from the face of the agreement that the maintenance and medical insurance provisions were dependent upon or related to the property division or other sections of the agreement. The agreement specifies that the monthly payments were to provide for appellant's "care, support and maintenance." The parties recognized the court's power to retain jurisdiction and to modify the medical insurance term. The medical and hospital insurance provision specifically refers to continuation of benefits until appellant's remarriage or "further order of the Court." The life insurance provision differs from the medical and hospital insurance provision in two respects. No contingency for termination or modification by the court is specified in the life insurance provision. Secondly, the wife was to be named as the owner as well as the beneficiary of the life insurance policy. The fact that Mrs. Shultz was to be the policy owner is significant. Pursuant to the 1973 dissolution decree, she was to enjoy not only equitable rights to future proceeds as the policy's named beneficiary, but also vested ownership rights in the policy. Had Mrs. Shultz been named as the policy owner as directed by the 1973 decree, it is likely that the company would have given her the option to maintain the policy by paying the premiums herself once the court modified the husband's obligation to pay premiums. During oral argument before this Court, counsel indicated that the policy was still in force and that the partiest children had been named beneficiaries. There is no other evidence in the record explaining what happened to the policy. When asked at the 1981 modification hearing whether the life insurance policy was still in effect and whether she had received any notifications or correspondence about it, Mrs. Shultz answered, "Never, no. I don't know anything about that." There is no other evidence pertaining to the life insurance policy. Evidently the district court's modification order not only relieved Mr. Shultz of his obligation to pay insurance premiums, it also divested Mrs. Shultz of her property rights in the policy. Because of (1) the lack of evidence regarding management of the policy, (2) the fact that no purpose for the life insurance provision was stated in the 1973 separation agreement, ( 3 ) the absence of a finding of fact stating that purpose, and (4) the absence of a conclusion of law that the life insurance provision was severable from the property settlement contract, we hold that the husband's obligation to maintain a life insurance policy, naming his wife as owner and beneficiary, was improperly terminated. We reverse as to that part of the district court's judgment and remand for such further proceedings as are necessary to determine the ownership and status of the policy, the extent to which the life insurance provision is severable from the settlement agreement, and a determination consistent with this decision. Regarding the maintenance and medical insurance provisions, the undisputed testimony at the hearing was that appellant was unemployed in 1973 and unable to support herself. Though she had a teaching degree, she lacked current certification and was, therefore, unable to seek employment in her field. Both parties stated that it was their understanding that the maintenance provision was intended to address appellant's basic living expenses. Since the dissolution, appellant has received her teaching certification and has been employed in the Minnesota school system since 1976. As a teacher, appellant is provided with medical and dental insurance, although the coverage arguably is not as extensive as the policies maintained by respondent. Appellant also has held a job in private business. During the four years preceding the modification hearing, the combined total of her adjusted gross income, excluding maintenance payments, increased from $17,000 to $30,000. While appellant testified that she accepted maintenance in lieu of pursuing any interests she could assert to respondent's business properties, respondent testified that the maintenance and property division provisions were not reciprocal. We find substantial credible evidence in the record to support the district court's conclusion that the maintenance and medical insurance provisions are not integral to the parties' property settlement agreement and are, therefore, subject to modification upon a proper showing. The treatment by the district court of the new modification statute, section 40-4-208, MCA, in its findings of fact, conclusions of law and order was excellent. We affirm and ratify the severability principles of Washington, but we distinguish the terms of this agreement. Absent a clear and undisputed interrelationship between property distribution and "maintenance" provisions, modification is permissible upon a proper showing of changed circumstances and unconscionability. We remand for further proceedings with regard to the life insurance policy and with that exception affirm the We concur: h k ~ ~ d - \ n b & A lcMvL

July 27, 1983

72b541df-7cc7-4036-9386-ec571bdcd67c

STATE v HINTZ

N/A

83-125

Montana

Montana Supreme Court

NO. 83-125 I N T H E SUPREPIE C O U R T O F T H E STATE OF M O N T A N A 1383 STATE O F M O N T A N A , P l a i n t i f f and Respondent, VS . H A R V E Y HINTZ and K E N N E T H SCHAFER, Defendants and. Appellants. Appeal from: D i s t r i c t Court of t h e Second J u d i c i a l D i s t r i c t , I n and f o r the Countv of S i l v e r Bow Honorable Mark Sullivan, Judqe presidina. Counsel of Record: For Appellants: Harvey Hintz, Pro Se, Deer Lodoe, Montana Kenneth Schafer, Pro Se, Deer Lodse, Montana For Respondent : EIon. Mike Greely, Attorney General, Helena, Montana Robert McCarthy, County Attorney, Butte, Montana Submitted on b r i e f s - June 10, i98j Decided- August 4 , 1 9 5 3 Filed: Abi; 4 1983 Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e C o u r t . T h i s is an appeal p r o se from an o r d e r d i s m i s s i n g a p p e l l a n t s 1 p e t i t i o n f o r p o s t - c o n v i c t i o n r e l i e f e n t e r e d i n t h e D i s t r i c t Court o f t h e Second J u d i c i a l District, County of S i l v e r Bow. On November 28, 1974, Raymond J o s e p h Merrick was s h o t and k i l l e d d u r i n g a robbery of t h e Community Gas S t a t i o n , l o c a t e d on F r o n t and Main S t r e e t i n B u t t e , Montana. The a p p e l l a n t s were a r r e s t e d on t h e same day and each charged w i t h one count of d e l i - b e r a t e homicide and one count of robbery t o which they pled "not g u i l t y . " Bond was set i n t h e amount of $75,000 f o r each defen- d a n t . Defendants could not p o s t bond and both were h e l d i n t h e S i l v e r Bow County j a i l f o r a p e r i o d of approximately one y e a r . During t h a t year p s y c h i a t r i c and p s y c h o l o g i c a l e v a l u a t i o n s were made of t h e d e f e n d a n t s a t Warm S p r i n g s S t a t e H o s p i t a l . A r r e s t e d w i t h t h e d e f e n d a n t s was one Mary J e a n Munson who p l e d not g u i l t y and was l a t e r t r e a t e d a s a s e p a r a t e d e f e n d a n t and p l e a bargained w i t h t h e S t a t e . On December 1 3 , t h e day s e t f o r a p l e a , Kenny S c h a f e r and Mary J e a n Munson appeared w i t h counsel M. P. S u l l i v a n , and Hintz appeared w i t h o u t counsel. On December 1 7 , Hintz appeared, repre- s e n t e d by counsel S u l l i v a n , and made a p p l i c a t i o n f o r p s y c h i a t r i c e v a l u a t i o n . I n l a t e J a n u a r y , a change of counsel occurred and H i n t z o b t a i n e d , by appointment, Michael McKeon of Anaconda t o a c t a s c o u n s e l . S c h a f e r continued t o be r e p r e s e n t e d by M. P. S u l l i v a n and J. J. P a r k e r . On J a n u a r y 28, p l e a s of not g u i l t y were e n t e r e d t o t h e i n f o r m a t i o n . On March 29, M. P. S u l l i v a n withdrew a s counsel f o r S c h a f e r and R. M. McCarthy was appointed a s S c h a f e r l s counsel. On t h e following day, James E. P u r c e l l was a p p o i n t e d co-counsel f o r S c h a f e r and t h e t r i a l d a t e was s e t f o r A p r i l 1 5 , 1975. During t h e n e x t s e v e r a l months a number of e x t e n s i o n s were g r a n t e d and c o n t i n u a n c e s were allowed f o r purpose of mental examinations. On J u n e 4 , 1975, t h e Honorable Arnold O l s e n , having been d i s q u a l i f i e d , c a l l e d i n t h e Honorable James D . Freebourn t o handle a l l f u r t h e r m a t t e r s . On September 29, 1975, t r i a l was set f o r Tuesday, November 4 , 1975, and t h e r e a f t e r a number of defense motions were f i l e d . On November 1 2 , 1975, t h e two d e f e n d a n t s e n t e r e d p l e a s of g u i l t y t o t h e charge of d e l i - b e r a t e homicide. The Honorable James Freebourn immediately sen- tenced each defendant t o 100 y e a r s i n t h e Montana S t a t e P r i s o n . A t t h e t i m e of s e n t e n c i n g no pre-sentence i n v e s t i g a t i o n r e p o r t s were ordered nor made. Seven y e a r s l a t e r , on September 20, 1982, t h e d e f e n d a n t s f i l e d a p r o s e p e t i t i o n f o r p o s t - c o n v i c t i o n r e l i e f i n t h e D i s t r i c t Court of S i l v e r Bow County, a l l e g i n g t h a t " i n l i g h t of t h e f a c t t h a t no pre-sentence i n v e s t i g a t i o n r e p o r t was made and no reasons were a r t i c u l a t e d f o r t h e l e n g t h y s e n t e n c e s , it is p o s s i b l e t h a t t h e s e n t e n c i n g judge d i d not have s u f f i c i e n t i n f o r - mation upon which t o base a s e n t e n c e . . . . " A f t e r t h e S t a t e f i l e d its response, t h e Honorable M. P. S u l l i v a n , D i s t r i c t J u d g e , denied t h e d e f e n d a n t s r e q u e s t f o r p o s t - c o n v i c t i o n r e l i e f . T h e r e a f t e r t h e y f i l e d a p e t i t i o n f o r r e h e a r i n g , which was a l s o d e n i e d . T h i s pro s e appeal follows. The a p p e l l a n t s a l l e g e t h a t s e r i o u s e r r o r was committed i n t h e D i s t r i c t C o u r t ' s f a i l i n g t o p r o p e r l y i n v e s t i g a t e t h e f a c t s and c i r c u m s t a n c e s of t h e c a s e p r i o r t o imposing a s e n t e n c e . The p e t i t i o n e r s a l l e g e t h a t t h e c o u r t r e c o r d s c o n t a i n no s t a t e m e n t s from e i t h e r of them i n which t h e D i s t r i c t Court could have known t h a t t h e s h o o t i n g was an a c c i d e n t . They argue t h a t i f t h e D i s t r i c t Court had taken t h e time t o read t h e f i l e s , they would have learned t h a t one w i t n e s s t o t h e i n c i d e n t who had been o r i g i - n a l l y charged a s a d e f e n d a n t , Mary Munson, had signed a s t a t e m e n t i n which she t o l d t h e county a t t o r n e y ' s o f f i c e t h a t t h e shooting was a c c i d e n t a l . They argue t h a t had t h e District Court i n q u i r e d from them when a c c e p t i n g t h e change of p l e a s a s t o what a c t u a l l y o c c u r r e d a t t h e time of t h e robbery, t h e t r u t h would have been known and, i n a d d i t i o n , t h e c o u r t could have obtained t h a t i n f o r - mation i n a pre-sentence r e p o r t had it been f u r n i s h e d t o t h e c o u r t . They a l l e g e t h a t during t h e course of t h e robbery they s h o t t h e a t t e n d a n t Ray Merrick a c c i d e n t a l l y , when t h e deceased, Merrick, while s t a n d i n g on an e l e v a t e d p l a t f o r m b e s i d e t h e c a s h r e g i s t e r , s l i p p e d and f e l l a g a i n s t p e t i t i o n e r S c h a f e r 's arm t h a t was holding t h e gun. They argue t h a t t h i s caused t h e weapon t o a c c i d e n t a l l y d i s c h a r g e , s t r i k i n g t h e deceased under h i s o u t s t r e t c h e d arm under t h e a r m p i t causing immediate d e a t h . P e t i t i o n e r s argue t h e District Court d i d not f o l l o w t h e a p p l i - c a b l e s t a t u t e s a t t h e time of t h e i r s e n t e n c i n g . S e c t i o n s 95-2201, 2202, 2203, RCM, 1947. The c o n t r o l l i n g i s s u e is whether t h e District Court committed e r r o r by n o t c a l l i n g i n a n o t h e r judge t o h e a r t h e case a f t e r having been involved i n t h e case a s defense counsel. The s t a t u - t e s of Montana r e q u i r e t h a t under c e r t a i n circumstances t h e judge must be d i s q u a l i f i e d and p r o v i d e s f o r t h e s u b s t i t u t i o n of judges under t h i s d i s q u a l i f i c a t i o n s t a t u t e . S e c t i o n 3-1-802, MCA, pro- v i d e s f o r t h e d i s q u a l i f i c a t i o n s of judges- The p r e s i d i n g judge i n t h e p o s t - c o n v i c t i o n r e l i e f proceedings should have d i s q u a l i f i e d himself p u r s u a n t t o t h e above p r o v i s i o n s and c a l l e d i n another judge. I n view of t h e f a c t t h a t it was e r r o r on h i s p a r t not t o do s o , t h e o r d e r of t h e D i s t r i c t Court denying p o s t - c o n v i c t i o n r e l i e f is vacated and t h e cause is remanded t o t h e District Court f o r a p o s t - c o n v i c t i o n hearing b e f o r e a n o t h e r District Judge. We concur: pA4&&L$w4q Chief J u s t l c e

August 4, 1983

623e7058-ebb2-4629-9ce2-cc1b11789150

JACKSON v BURLINGTON NORTHERN IN

N/A

83-087

Montana

Montana Supreme Court

NO. 83-87 I N T H E S U P R E M E C O U R T O F T H E STATE O F Y O N T A N A 1983 ALICE E. JACKSON, e t a l . , P l a i n t i f f s and Respondents, VS . BURLINGTON N O R T H E R N I N C . , e t a l . , Defendant and Appellant, and T H E STATE O F M O N T A N A , Intervenor and Respondent. Appeal from: D i s t r i c t Court of the Seventh J u d i c i a l D i s t r i c t , I n and f o r t h e County of Richland Honorable R. C. McDonouah, Judge presiding. Counsel of Record: For Appellant: Gary H. Peterson argued, Enqlewood, Colorado For Respondents: Habedank, Cumminq & Best, Sidney, Montana - Thomas R. Balvorson argued, S i d e q , Montana For Intervenor: David Woodgerd, Special Assistant Attorney General, argued Helena, Montana Submitted: June 3 , 1 9 8 3 ~ e c i d e d - J u l y 21, 1 9 8 3 Filed: JUL 21 1983 5 - df " L a i','& L ~ , , : , - L ' L - H j4.d - Clerk Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. The Seventh Judicial District Court, in and of the State of Montana, entered an order quieting title to certain property situated in Richland County, Montana, in plaintiffs, Alice E. Jackson, et al., (the Jacksons) . Defendant Burlington Northern, Inc., (BN) appeals. We affirm. A question of first impression is presented to this Court, viz., whether a severed mineral estate bordering a navigable waterway is subject to the doctrines of accretion and/or erosion? The term "accretion" describes (1) a process by which land is formed by imperceptible degrees upon the bank of a river or stream, either by accumulation of material or by recession of the stream, (also called reliction) and (2) a rule of law which establishes that lands created by such process belong to the owner of the bank, sometimes referred to as the riparian owner, or his grantee, absent exception or reservation. 7 Powell on Real Property, 607-611; 78 Arn.Jur.2dI Waters, $$406,411. Erosion is the process by which the action of water gradually washes away land bordering on a stream; the doctrine of erosion recogizes that a riparian owner loses title to lands subjected to such a process. Ibid. BN's predecessor in interest received a patent from the United States Government in 1864 which included Lots 1-5 and the E$ of Section 25, Township 23 North (T23N), Range 59 East (R59E) , M.P.M., Richland County, Montana. This grant represented all of Section 25 but the bed of the Yellowstone River which traversed its western edge. In 1905, Lot 5, which then consisted of 1.81 acres located west of the Yellowstone River, was transferred to William and John Meadors, with a reservation of coal and iron interests. In 1918 the reserved mineral interests were quitclaimed to the Meadors. The Jacksons succeeded to the Meadors' interest in Lot 5. Surface ownership of Lots 1-4 was transferred by three deeds in 1938 to three separate groups of grantees; mineral rights were expressly excepted and reserved by BN's precedessors in interest. Thus, the mineral estate for Lots 1-4 was effectively severed from the surface estates. Later BN acquired ownership of the severed mineral estate. Since 1884, when the original survey of Sections 25 and 26, T23N, R59E, was done, the Yellowstone River has become narrower and has moved eastward. Exhibit J, a rendition of which is included in Appendix I, depicts that movement by detailing a composite of the 1884 survey and a 1975 survey of those sections. As a result of the River's movement, there are now approximately 159 acres lying west of the River in Section 25. (See Diagram, Appendix I) On August 16, 1979, the Jacksons commenced this action to quiet title to that part of Section 25 which lies west of the Yellowstone River. They specifically claimed ownership in Lot 5 and the accretion thereto. BN claimed ownership of all mineral interests in Section 25, excepting Lot 5 and the bed of the Yellowstone River as surveyed in 1884. Thus, both parties claimed ownership of the mineral interests underlying the cross-hatched area on Exhibit J. (Appendix I) The State of Montana intervened when it determined that its interests would be adversely affected were the court to adopt BN's theory that severed mineral estates bordering navigable waterways are not subject to accretion or erosion. The State claims ownership of the riverbed adjacent to the subject property. Further explanation of the interests claimed by the remaining parties is not essential. It will suffice to note that (1) Holly Sugar Corporation owns 2/33rd interest in the mineral rights on Lot 5; (2) Shell Oil Company holds exploration and development rights in Section 25 by virtue of several leases with the parties and the State of Montana; and (3) on April 20, 1976, Shell Oil brought in a producing oil well on the Northwest quarter (NW%) of Section 25, east of the Yellowstone River. In the first instance, BN filed a motion for summary judgment, which was denied. BN appealed, and this Court dismissed the appeal without prejudice. Jackson v. Burlington Northern, Inc. (1982), Mont . , 652 P.2d 223, 39 St.Rep. 1998. The cause was returned to the District Court, whereupon motions for summary judgment were filed by the Jacksons and Holly Sugar Corporation. Additionally the parties stipulated: "(1) That the Yellowstone River in Section 25, Township Twenty-three North (T23N), Range Fifty-nine East (R59E), M.P.M., Richland County, Montana, is a navigable river. "(2) That the movement of the Yellowstone River in Section 25, T23N, R59E, MPM, Richland County, Montana, during all times material to this cause of action, was accretive in nature." On January 14, 1983, the District Court entered its findings of fact, conclusions of law, opinion, and order granting summary judgment in favor of the Jacksons and Holly Sugar Corporation. Judge McDonough concluded that: (1) the movement of the Yellowstone River at all times material was accretive rather than avulsive in nature; (2) a riparian owner has a vested right to accreted and future accreted land, inherent in his ownership of his original property; (3) a riparian owner cannot be divested of such right as to minerals situated within the accreted land by reason of a prior exception of minerals by the owner across the river. e In part, Judge McDonough relied on Nilsgn v . Tenneco Oil Co. (Okla. 1980) , 614 P. 2d 36, which held that a severed mineral estate could be increased by accretion and diminished by erosion. e Apparently Nilsgn is the only case that expressly decides the issue before this Court. e BN contends that we should reject the rule of Nilsyn and hold that the boundaries of a severed mineral estate bordering a navigable stream become fixed as of the date of severance. Thus, whatever impact may be had on a surface estate, a severed mineral estate could be neither increased or decreased as a result of processes of accretion or erosion. We expressly reject the rule proffered by BN and adopt e the rule of Nils$n. In 1895 the rule established by both the Legislature and this Court, was that the State owned the land below navigable waterways. Sec. 1091, Civ. C. 1895, re-enacted at Section 70-1-202, MCA, (1981) ; Gibson v. Kelly (1895), 15 Mont. 417, 39 P. 517. Having recognized the word "land" includes not only the surface but also everything under it and over it, Gas Products Co. v. Rankin (19221, 63 Mont 372, 389, 207 P. 993, 997, it necessarily follows that the State owns the mineral rights below navigable steams. Were this Court to adopt the rule proposed by BN, the State's ownership interests would not correspond to gradual changes in the course of a waterway but be subject to the caprice of a riparian owner who opts to sever his surface estate from his mineral estate. Under BN's rule the perimeters of state ownership would be necessarily constricted as of any particular severance date. Furthermore, development of privately owned minerals underlying navigable waterways could interfere with the public's right to navigate, whether for commercial or recreational purposes. An illustration employed by the States' counsel during oral argument ably reveals the consequences of adopting BN's e rule, as opposed to the rule of ~ i l s ~ n . The following diagram depicts a change of course in a navigable stream whereby the stream gradually moves toward the bank of a severed mineral owner and away from the bank of a non-severed mineral owner. (See illustration below) Under BN's proposed rule, the boundary of the severed mineral estate would be fixed in accordance with the low water mark along the western edge of the old stream channel. The western boundary of the non-severed mineral estate would initially coincide with the low water mark on the east bank of the stream. As the stream moved westward over time, the western boundary of the non-severed mineral estate would correspondingly shift, until such point the east bank of the new stream channel intersected the west bank of the old stream channel. At that point, the common boundary between the severed and non-severed mineral estates would coincide with the west bank of the old stream channel. Consequences of such a rule are manifest. First, the non-severed mineral owner would hold incongruent surface and mineral estates, despite his intentions or the intent of his grantors. In accordance with the doctrine of accretion, recognized in Montana by statute and case law, section 70-18-201, MCA, and the cases following Bode v. Rollwitz (1921), 60 Mont. 481, 491, 199 P. 688, 691, the surface estate would extend to the eastern bank of the new stream channel; however, the non-severed mineral estate would only extend to the west bank of the old stream channel. Furthermore, the resulting incongruity would not be evident from examination of the chain of title to the affected properties. Secondly, the State would be divested of its ownership in the land underlying that part of the new stream channel which lies west of the boundary line for severance purposes. Such a result is clearly contrary to the mandate of Section 70-1-202, MCA, (1981). Additionally, under BN1s rule, mineral estate boundaries would be difficult to determine. Critical to application of the proposed rule would be establishment of the course of a navigable waterway as of the date a mineral estate is severed from a surface estate. Such information may not be accessible. The instant matter provides a good example of the difficulty inherent in such a rule. As shown by Exhibit J, BN claims ownership of a mineral estate which includes that portion of the W+ of Section 25 which lay east of the Yellowstone River as it flowed in 1884. The record is devoid of any evidence tending to prove the course of the Yellowstone River as of the date(s) BN1s predecessor in interest severed the mineral estate from the surface estate. According to BN's brief, severance occurred September, 1938. Thus, BN propounds a rule which defies application given the state of the record at the time of the various motions for summary judgment. We would surmise that a 1938 survey of the subject properties was not readily available, and that other owners of severed mineral estates might have like difficulties locating surveys which correspond with pertinent severance dates. We believe the District Court acted wisely in adopting e the rule of Nilsgn. We hold that a severed mineral estate is subject to the doctrines of accretion and erosion, and that prior exception by a riparian owner on one side of a navigable waterway will not work to divest either the State or another riparian owner of its (his) ownership in lands underlying navigable waterways or minerals situated in accreted lands. Affirmed. We concur: Chief Justice \ Hon. Frank Davis, District Judge, sitting in place of Mr. Justice L.C. Gulbrandson HON. FRANK DAVIS, D i s t r i c t Judge, s i t t i n g i n place of MR. JUSTICE L. C. GULBRANDSON, DISSENTS. I dissent. This case i s not only one of f i r s t impression i n Montana; it apparently is only one of two i n t h e e n t i r e scope of Anglo-American law. The majority opinion has disposed of t h i s important case primarily on a r e a l and an imaginative peripheral i s s u e r a i s e d by t h e Intervenor S t a t e , e.g., t h e ownership of t h e stream bed of a navigable stream. I say "imagined" because t h e opinion a c t u a l l y i n j e c t s a r e c r e a t i o n a l concept of naviga- b i l i t y which, a t l e a s t up u n t i l now, has never been determined by t h i s Court. I t seems t o m e t h a t it is t h e duty of t h i s Court t o balance t h e admitted i n t e r e s t of the S t a t e with t h e more fundamental i s s u e of t h e long held concept of t h e nature of a severed mineral i n t e r e s t . That concept i s so well s e t t l e d t h a t it i s not going t o disappear because t h e majority has f a i l e d t o address it. Instead, t h i s decision, i n m y opinion, w i l l have a devastating impact on e x i s t i n g contractual obliga- t i o n s involving severed mineral i n t e r e s t s . The problems a r e going t o be unending. This Court is losing t h e opportunity t o e s t a b l i s h a needed precedent i n an area so v i t a l t o t h i s S t a t e ' s important mining industry and the thousands of land- owners who have opted, a s has t h e Defendant here, t o r e t a i n a valuable property r i g h t by severance. I t has long been t h e law i n t h i s S t a t e t h a t mineral i n t e r e s t s of a l l types could be segregated, both i n whole and i n p a r t , from t h e f e e simple e s t a t e . The p r a c t i c e i s a common one, a valuable property r i g h t , and t h e subject of thousands of c o n t r a c t s , l e a s e s and r e l a t e d agreements. Johnson v. Unknown Heirs, 1 4 0 Mont. Stokes v. Tutvet, - - 134 Mont. 250, 328 P.2d 1096 (1958); Voyta v. Clonts, 134 Mont. 250, 328 P.2d 655 (1958); I n r e Hume's E s t a t e , 128 Mont. 223, 272 P.2d 999 (1954); R i s t v . Toole County, 117 Mont. 426, 159 P.2d 340 (1945); Krutzfeld v. Stephenson, 86 - Mont. 463, 284 P. 553 (1930); Broderick v. Stephenson Consolidated O i l Co., 88 Mont. The majority i s adopting as t h e -law of t h i s S t a t e , a divided C o u r t ' s decision from Oklahoma (Nilsen v. Tenneco O i l Company, 614 P.2d 36, 1980). I n m y judgment, t h i s precedent is a weak reed f o r t h i s Court t o r e l y upon. The t r i a l Court i n Oklahoma had held t h a t once a mineral e s t a t e had been severed, t i t l e t o t h a t e s t a t e could not be l o s t by a c c r e t i o n . The t r i a l Court was reversed; b u t i n a well reasoned, s c h o l a r l y d i s s e n t by two J u s t i c e s , t h e d i s s e n t e r s had t h i s ' t o say, which i s most applicable t o t h i s Montana case: "These e s t a t e s a r e a s s e p a r a t e a s t h e f i n g e r s of t h e hand, o r a s two p a r c e l s of land. (Emphasis supplied.) I would not do violence t o t h e common law d o c t r i n e of a c c r e t i o n . I t p r o t e c t s t h e r i g h t of t h e r i p a r i a n o r l i t o r a l owner t o t h e accumulation of precious metals o r stones on t h e bank of t h e stream a s well a s h i s r i g h t t o t h e a l l u v i a l s o i l i t s e l f . But not so, separate mineral e s t a t e s such a s o i l and gas t h a t a r e locked deep i n t h e bowels of t h e e a r t h , f o r they a r e s e p a r a t e f i n g e r s , p a r c e l s o r e s t a t e s i n t h e land. I would a l s o make it c l e a r t h a t severed mineral i n - t e r e s t s may never increase t h e i r i n t e r e s t by t h e process of accretion." The Nilsen r a t i o n a l e which t h i s Court i s adopting was r e - jected by t h r e e o t h e r Oklahoma J u s t i c e s i n t h e l a t e r case of E l l i s v. Union O i l Company of Cal., (Oklahoma 1981). This l a t e r case involved o t h e r i s s u e s , b u t when it r e f e r r e d t o t h e Nilsen decision, t h r e e of t h e J u s t i c e s could not r e s i s t t h e opportunity t o c r i t i c i z e it, a s they should have. I t should a l s o be pointed o u t t h a t t h e r e i s an unaddressed i s s u e i n t h e case a t bar t h a t was not before t h e Oklahoma Court i n Nilsen. Montana has long recognized t h a t while un- e x t r a c t e d minerals a r e n o t taxable, t h e r e s e r v a t i o n of a r i g h t t o e n t e r upon t h e surface t o explore i s a taxable i n t e r e s t . Hurley v. Northern P a c i f i c Railway C o . , 153 Mont. 199, 455 P.2d 321 (1969); Lehfeldt v. Adams, 130 Mont. 395, 303 P.2d 934 (1956); Cranston v. Musselshell County, 156 Mont. 288, 483 P.2d 289 (1971); Northern P a c i f i c Ry. Co. v. Musselshell County, 54 Mont. 9 6 , 169 P. 53 (1917). The Defendant, Burlington Northern, and i t s predecessors have paid such taxes on t h e property involved i n t h i s a c t i o n . This Montana r u l e of a s e p a r a t e taxable e n t i t y seems t o confirm t h e long held s e p a r a t e and d i s t i n c t e s t a t e concept and, i n m y opinion, should have been considered by t h i s Court. F i n a l l y , t h e Nilsen r a t i o n a l e should be viewed i n t h e l i g h t of a decision from a s a t e l l i t e c r a d l e of Anglo-American law, t h e Queen's Bench Court of Alberta, Canada. A l a k e bed had d r i e d up. Both t h e landowner and t h e Crown claimed own- e r s h i p of t h e minerals beneath it. The owner's theory was t h a t the d r i e d up surface accreted t o him under t h e common l a w d o c t r i n e , and t h a t included t h e minerals. The Queen's Court agreed, b u t said: "If t h e Crown wished t o r e t a i n i t s minerals while t h e l a k e was p r e s e n t it could have taken t h e s e p a r a t e t i t l e t o those mines and minerals and disposed of them a s it saw f i t . ' ' Re Eliason and Northern Alta Land Registration D i s t r i c t , 115 D.L.R. 3d 360, 6 W.W,R. 361 (Alberta Court of Queen's Bench, 1980) I n summary, I would r e v e r s e t h e t r i a l Court, adopt t h e general common law d o c t r i n e of a c c r e t i o n , b u t except from t h a t d o c t r i n e a previously severed mineral e s t a t e . The common law r u l e of a c c r e t i o n was never intended t o apply t o a severed mineral e s t a t e , and t h e majority opinion c i t e s no a u t h o r i t y t o t h e contrary o t h e r than the questionable and c r i t i c i z e d Nilsen. The S t a t e ' s i n t e r e s t s , r e a l and f a n c i e d , should be subordinate t o t h e s e severed and vested e s t a t e s . &&kt Frank M. Davis, D i s t r i c t Judae, 2 . s i t t i n g i n p l a c e of M r . J u s t i c e L. C. Gulbrandson

July 21, 1983

6fddc6e5-83b6-43bf-9cc4-af1402985963

GOSNAY v BIG SKY OWNERS ASS N

N/A

83-074

Montana

Montana Supreme Court

No. 83-74 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 .MAURICE C. GOSNAY & PAP4LA C. GOSNAY, Plaintiffs and Respondents, BIG SHY OWNERS ASSOCIATION, AND ROBERT J. FRITZ, et al. , Defendants and Appellants. APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable W. W. Lessley, Judge presiding. COUNSEL OF RECORD: For Appellants: f.lorrow, Sedivy & Olson, Bozeman, Montana Edmund Sedivy and Terrence Schaplow argued, Bozeman, Montana For Respondents: 1,.4oore, Rice, 0' Connell & Ref ling, Bozeman, Montana Barry OIConnell argued, Bozeman, Montana - - - . - Submitted: June 9, 1983 Decided: ~ u l y 28, 1983 Filed: JUL 2 8 1983 - - Clerk Mr. Justice Frank B . Morrison, Jr. delivered the Opinion of the Court. Big Sky Owners Association and the individual members of the Big Sky Architectural Committee appeal the October 7, 1982, judgment of the Eighteenth Judicial District Court which allowed Maurice and Pamla Gosnay to construct a stable and keep horses on their property and barred the Architectural Committee from ordering removal of the fence the Gosnays built around their property. Sweetgrass Hills is a subdivision in the Big Sky, Montana area and is owned by Big Sky of Montana, Inc. Protective covenants were issued by Big Sky of Montana, Inc., to control the uses to which the subdivision can be put. Covenant 1 (A) (i) of the protective covenants grants to the Big Sky Architectural Committee the express authority to approve, change or overrule the location of any structure on any residential lot in the subdivision. Other protective covenants provide guidelines to be followed by the Committee when exercising its authority. The Gosnays purchased land by a warranty deed which is subject to the protective covenants. Therefore, those covenants control in this appeal. Heritage Heights Home Owners Ass'n v. Esser (1977), 115 Ariz. 330, 565 P.2d 207. Ma.urice and Pamla Gosnay were shown land in the Sweetqrass Hills Subdivision by realtor David Hyde. The Gosnays became interested in ten acres of land referred to as Tract 11, the largest tract in the subdivision. Gosnays expressed to Hyde an interest in constructing a stable and boarding their horses on the land. The Gosnays own the Karst Camp and use their Belgian Draft horses to pull sleighs in the winter. Mr. Hyde testified that after reviewing the prohibitive covenants with the Gosnays, he informed them that a decision regarding the horses and stable would be up to the Architectural Committee. Mr. Gosnay testified that Mr. Hyde told him there would be no problems, under the prohibitive covenants, in having horses and a stable on that land. The Gosna.ys purchased Tract I1 and began to plan a jackleg fence to completely enclose their property. The Architectural Committee refused to grant Gosnays permission to build the fence. Construction of the fence was commenced in November of 1981, despite lack of approval. On November 9, 1981, Maurice and Pamla Gosnay filed a declaratory judgment seeking to judicially establish the authority of the Big Sky Owners Association (BSOA) to designate Gosnays' land as an area where stables could be constructed under the applicable prohibitive covenants. BSOA filed a complaint in December 1981, seeking a preliminary injunction for the removal of the fence Gosnays had begun constructing. Gosnays then filed a third party complaint on January 13, 1982, against the members of the Big Sky Architectural Committee, attempting to establish the validity of the fence construction. The actions were consolidated and a bench trial was held September 7 and 8, 1982, in the District Court of the Eighteenth Judicial District. On October 8, 1982, a judgment was entered allowing Gosnays to keep their fence and horses and to build a stable. Gosnays were also awarded $5,000.00 in attorneys' fees on November 17, 1982. BSOA and the Architectural Committee now appeal those judgments. We vacate the judgment of the District Court. Four issues are presented to this Court for our review: 1. Did the District Court err in allowing Gosnays' jackleg fence to remain on their property? 2. Did the District Court err in allowing Gosnays to build a stable on their property? 3. Did the District Court err in allowing horses to be kept on the property? 4 Did the District Court err in ordering defendants to pay Gosnays' attorneys,, fees? The following are the primary Prohibitive Covenants relevant to issues one, two and three: "NOW, THEREFORE, Big Sky does hereby establish, dedicate, declare, publish and impose upon the premises the following Protective Covenants which shall run with the land and shall be binding upon and be for the benefit and value of Big Sky and all persons claiming under it, its grantees, successors and assigns and shall be for the purpose of maintaining a uniform and stable value, character, architectural design, use and development of the premises. These Protective Covenants shall apply to the entire premises and to all improvements placed or erected thereon unless otherwise specifically excepted and shall have perpetual existence unless terminated by law or amended as herein provided. 1. USE - "F. TRACTS I AND I1 "a. Tracts I and I1 shall be used for single family residences only. No buildings or improvements shall be placed, constructed, reconstructed, altered or remodeled on any site except to provide for a single family dwelling with an attached or detached garage. Any plans for any dwelling on either tract shall provide for off-street parking for at least two vehicles. "b. Tract I may be further subdivided by the owner thereof into not more than three separate, smaller tracts for residential use only and for the erection of one single family residence with attached or detached garage on each separate tract, each such small tract to be not less than one acre in size. "c. Tract I1 may similarly be further subdivided by the owner thereof into not more than four separate, smaller tracts for residential use only and for the erection of one single family residence with attached or detached garage on each separate tract, each such smaller tract to be not less than one acre in size. 3. ARCHITECTURAL COMMITTEE "D. No building, construction, reconstruction, alteration, remodeling, landscaping, parking, fence, wall or other improvement shall be placed, constructed, erected, repaired, restored, reconstructed, altered, remodeled, added to or maintained on any lot or tract until building drawings, plans and specifications (which must have been prepared by a licensed architect for all construction, reconstruction, alteration or remodeling), and such other information as the Committee may reasonably require, including without being limited to, colors, building materials and models, have been submitted to, and approved by, a majority of the Committee in writing; nor may the same be commenced until the Committee shall have issued a permit allowing for such improvements. I1 . . . 8. ANIMALS "Animals such as dogs, cats, birds or horses are allowed in the subdivision as pets only and so long as they do not constitute a nuisance to others. Kennels, stables or other facilities for the keeping or retention of animals shall be restricted to areas so designated by the Committee. The commercial breeding, care, raising or keeping of any animal is forbidden. If a particular animal or animals shall, in the discretion of the Committee, become a nuisance, the Committee shall have the authority to require that the same be kept tethered or confined on the owners property and the Committee may further require that when the said animal or animals are taken from the said property such animals must then be kept on a leash or bridle and must be under the owner's control at all times. I' The same rules of construction apply to interpreting these prohibitive covenants as apply to interpreting contracts. Nakis v. Cross (1980), 246 Ga. 658, 272 ~ . ~ . 2 d 312. Therefore, we must read the covenants as a whole in order to ascertain their meaning, rather than reading any one covenant or part of a covenant in isolation. Rumph v. Dale Edwards, Inc. (1979), 183 Mont. 359, 367, 600 ~ . 2 d 163, 168. Where, as here, the language of the covenants is clear and explicit, that language will govern our interpretation of the covenants as a whole. " [W] here the words are plain, unambiguous, direct and certain and admit of but one meaning, then it is the duty of this Court to declare what the terms of the covenants contain . . . " Higdem v. Whitman (1975), 167 Mont. 201, 208, 536 P.2d 1185, 1189. DID THE DISTRICT COURT ERR IN ALLOWING THE FENCE? Construction of a fence requires prior approval by the Architectural Committee - covenant 3 (D) . The Committee' s discretion to approve or disapprove a fence must be governed by the prohibitive covenants and must be reasonably exercised. To do otherwise would be an abuse of discretion by the Committee. Melson v. Guilfoy (Mo.App. 1980), 595 S.W.2d 404. The Architectural Committee did not abuse its discretion when it refused Gosnays permission to build their fence. Gosnays' fence is contrary to Big Sky's overall plan for "openness." No other tract or lot in the subdivision is totally enclosed by a fence. Fences which have been allowed by the Architectural Committee have been "border" fences for landscaping purposes and an 8' by 10' cyclone fence around a dog pen. These facts support the Committee's decision and also negate the assertion that, by allowing other fences, the Committee has waived the prohibitive covenant regarding fences. The District Court's judgment allowing Gosnays" jackleg fence to remain on their property is clearly erroneous and we reverse it. DID THE DISTRICT COURT ERR IN ALLOWING STABLES? Construction of a stable requires that the Architectural Committee designate the area(s) in which stables can be built. Covenant 8. Prohibitive covenant 1 (F) (a) restricts buildings on Tract I1 (Gosnays' tract) to single family residences and garages. Therefore, the Architectural Committee acted properly in denying permission to construct a stable on Tract 11. This decision is not to be construed as a complete ban of stables from the Sweetgrass Hills Subdivision. Stables are permitted, but may be located only in areas designated by the Architectural Committee. In the past, those areas have been in the subdivision's agricultural tracts. Stables are not allowed on tracts which are limited by the covenants to single family residences and garages. DID THE DISTRICT COURT ERR IN ALLOWING HORSES? The District Court found that horses, as pets, could be kept on plaintiffs' tract. This action could only be justified if the Architectural Committee abused its discretion in banning the horses. See Exhibit 29, a letter from the Committee's attorney, states: "Certainly horses are allowed in the subdivision as pets provided they are not a nuisance to others. It would be very likely that if a horse was kept year-round without proper stables it would be a nuisance." On appeal appellants5 brief argues valiently in support of this nuisance determination: "Additionally, these horses, and their ensuing, resounding, egregious divestitures of abdominal gas echoing through the hills and vales of this otherwise peaceful area, closely akin to the point blank discharge of a double-barreled shotgun, have utterly no place in this quiet, residential hamlet of Big Sky. 'I While the loquacious author is guilty of hyperbole the nuisance premise is difficult to dispute. Certainly we are unable to say that the Committee, in finding unhoused horses to be a nuisance, abused its discretion as a matter of law. ATTORNEYS' FEES Covenant 14 (D) governs attorneys' fees and provides in relevant part: "D. Actual costs, expenses and reasonable attorneys' fees connected with correcting, remedying, abating, preventing or removing any violation or threatened violation of these covenants incurred either through litigation, entry or self-help shall constitute a claim by the owner or the Committee initiating such action against the owner of the property which is the subject of such violation or threatened violation. Such claim shall not, however, exceed Five Thousand Dollars ($5,000.00) for any one claim and shall be enforcable through appropriate court action." Pursuant to this covenant, appellants are entitled to recover from Gosnays the attorneys' fees generated by this litigation in an amount not to exceed $5,000.00. This matter is reversed and remanded to the District Court with instructions to issue to Gosnays a mandatory injunction to remove the jackleg fence enclosing their land and to conduct a hearing on the reasonable attorneys' fees to be awarded appellants. We concur: Justice Shea specially concurring: I join the opinion of the Court but have a few comments on the findings and conclusions entered in this case. In their appeal the defendants also claim that the trial court adopted virtually verbatim if not entirely verbatim, the proposed findings and conclusions of the plaintiff's counsel. Plaintiff's counsel does not dispute this claim. From time to time the trial courts have been quite critical of the decisions of agencies and boards where the reasons for their decisions are not set forth in the orders of the agencies involved. It seems to me that the trial courts have really no reason to be critical of agency decisionCwhen the trial courts simply rubber stamp the proposed findings and conclusions of the party that they believe should win the lawsuit. This practice hardly bespeaks of a careful, considered analysis of the evidence and the law. The parties, counsel, and the public are entitled from the trial courts to more than the duplicating of proposed findings and conclusions presented by a partisan to the cause. Of course I know that my view of the evils of verbatim parroting of findings and conclusions does not hold sway for too long in this Court, but I will continue to adhere to this view.

July 28, 1983

a0dd9faa-70d6-4a97-820f-86e192d80045

STATE v KELLY

N/A

82-178

Montana

Montana Supreme Court

No. 82-178 I N T H E SUPREME C O U R T O F THE STATE O F MONTANA 1983 STATE O F MONTANA, F l a i n t i f f and Respondent, JAMES KELLY, Defendant and Appellant. APPEAL FROM: D i s t r i c t Court of t h e Eighteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of G a l l a t i n , The Honorable Joseph B. Gary, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Anderson, Edwards & Molloy; Richard W. Anderson argued B i l l i n g s , Montana For Respondent: Mike Greely, Attorney General, Helena, Montana Sarah Power argued, A s s t . Atty. General, Helena A. Michael Salvagni, County Attorney, Bozeman, Montana: Robert T h r o s s e l l , Deputy County Atty. F i l e d : Submitted: May 26, Decided: August 29, 1983 AUG 2 9 1983 Mr. Justice Fred J. Weber delivered the Opinion of the Court. Defendant appeals from a conviction of criminal possession of dangerous drugs with intent to sell, following trial without jury in the Eighteenth Judicial District Court, Gallatin County. We affirm. Defendant raises the following issues: 1. Were the searches in Hawaii illegal and was evidence seized as a result of those searches tainted? 2. Was the opening of the package by the Bozeman police, and their inventory of its contents, an unconstitutional search and an invasion of defendant's right of privacy? 3. Did the issuing magistrate in Montana lack jurisdiction to issue the first search warrant? 4. Was the affidavit of probable cause for the first search warrant fatally defective: a. Did probable cause exist for its issuance? b . Did hearsay information supporting its issuance render it fatally defective? 5. Did the "offense" upon which the first affidavit was based result from entrapment, rendering the issuance of the first search warrant improper? On April 2, 1981, a federal agricultural inspector (Baba) in Honolulu, conducting warrantless searches of United Parcel Service (UPS) packages for plants, pests and diseases under the authority of federal law, opened a box containing what he suspected might be plants, fruits or similar items. His suspicion was based upon the method of packaging, the weight and wrapping of, and the addresses on the package. The package was addressed to defendant with a return address subsequently determined to be fictitious. He observed bricks of a pressed substance in plastic bags, one of which he opened and smelled an odor unlike marijuana he had smelled before. Baba then phoned Honolulu Police Officer Hisatake whom he knew from previous work they had done together, and who was on airport narcotics duty. Then Baba left the open package on the UPS conveyor in care of the UPS manager. Approximately half an hour later, Officer Hisatake arrived at the UPS depot and without a warrant, field-tested the slabs of greenish substance packed beneath a newspaper and some paperback books. The slabs were identified as marijuana in the form of hashish. Hisatake retained about two pounds of the substance for further lab testing. The next day he phoned Sgt. Green of the Bozeman Police Department; the officers agreed the UPS parcel should be mailed to the Bozeman Police by Air Freight. This was done. The box arrived in Bozeman April 5th (Sunday). The next day, pursuant to telephone instructions from federal drug control officials but without a warrant, Sgt. Green opened the box and inventoried and tested the contents of the unsealed UPS package addressed to defendant. The box contained about nine pounds of hashish. Green then rewrapped and resealed the UPS box. On April 7, the Bozeman UPS Manager, at Green's request, delivered the package to the address on the box, the Fox Street residence of defendant. Officers observed the delivery, then Sgt. Green returned to a magistrate's office, where he signed a previously-prepared affidavit describing the delivery, and requested a search warrant for the Fox Street house. The search warrant was granted; officers returned and searched the house. Defendant, his wife and a second man were present, as was a quantity of hashish (valued at approximately $275,000) and a variety of paraphernalia -- scales, baggies (some filled with hashish) , and the unopened UPS box. The officers arrested all three inhabitants. Leaving the home under police surveillance, Sgt. Green returned to the magistrate with an application for another search warrant, based upon the unanticipated evidence uncovered during the first search of defendant's home. The second search warrant was issued. The evidence was photographed, seized and conveyed to the police labs and evidence lockers, where it remained until hearing and trial. Defendants moved for suppression of all evidence. In the course of an extensive suppression hearing, all motions were denied. Just before trial, defendant's wife pleaded guilty. Apparently the charges against the second man were dismissed. Defendant waived his right to a jury trial. The suppression hearing transcript was a stipulated part of the trial transcript. The parties also stipulated that all contraband seized was taken pursuant to the two search warrants. The court found defendant guilty of possession of dangerous drugs with intent to sell. Defendant appeals, alleging that the District Court erred in refusing to suppress tainted evidence which was the fruit of several improper searches. Defendant first argues that the warrantless searches and seizure of the UPS box in Hawaii violated the United States Constitution and the Plant Pest Acts because Baba searched the box without probable cause and Hisatake searched and seized the box without a warrant. He maintains that because all subsequent discoveries and seizures were tainted by illegal procedure in Hawaii and should have been suppressed, his conviction must be overturned. We do not agree. Let us first consider whether Inspector Baba improperly searched the UPS package without a warrant. Baba was acting pursuant to the provisions of the Federal Plant Pest Acts, 7 U.S.C.A. SS147a-167 and the Hawaiian and Territorial ~uarantine Act, 7 C.F.R. S318. These Acts provide for the warrantless inspection of "any persons or means of conveyance" moving into the United States, upon probable cause to believe they are carrying or are infested with plant pests or plant diseases. In Camara v. Municipal Court (1967), 387 U.S. 523, 87 S.Ct. 1727, 18 L.Ed.2d 930, the Supreme Court struck down the warrantless administrative search of buildings for housing, health and fire code violations, holding that, in most situations, administrative searches without warrants are improper. But Camara noted that warrantless administrative searches could be reasonable under some circumstances. In United States v. Schafer (9th Cir. 1972) 461 F.2d 856, the Circuit Court of Appeals explained why upholding a warrantless inspection under the Plant Pest Acts was not inconsistent with Camara. Schafer involved the search by airline officials of the handbag of a passenger boarding a plane bound from Hawaii to the United States. We find the rationale persuasive here. "In [Camara], the Court concluded that requiring building inspectors to obtain search warrants imposed no hardship on the conduct of their mission. There was 'no compelling urgency to inspect at a particular time or on a particular day,' [387 U.S. at 539, 87 S.Ct, at 17361 as the property to be searched was a building, obviously not a thing susceptible to speedy removal. Here, however, the time element is a major consideration. The objects of the search (quarantined fruits, vegetables and plants) can easily be transported out of Hawaii to the continental United States by departing tourists. The effect of such movement on agricultural crops in the mainland states could be serious as each of the quarantined items may carry some form of plant disease or insect which could destroy crops in the other areas. The purpose of the quarantine is to avoid these effects by preventing the movement of the potentially dangerous plant substances. We think a search warrant requirement would 'frustrate' the purpose of these inspections, because of the time delays inherent in the search warrant mechanism. Unless all departing passengers could be detained while warrants could be obtained, the goods would be moved before the warrants could issue. Whereas in Camara there was no suggestion that 'fire, health, and housing code inspection programs could not achieve their goals within the confines of a reasonable search warrant requirement.' [387 U.S. at 533, 87 S.Ct. at 17331 we are persuaded that requiring warrants for agricultural inspections of this type would effectively cripple any meaningful quarantine." Schafer, 461 F.2d at 858. Under the administrative search principles articulated in Camara, and the principles in See v. City of Seattle (1967), 387 U.S. 541, 87 S.Ct. 1737, 18 L.Ed.2d 943, and the numerous progeny of those two landmark cases, a government official would be entitled to search a package without a warrant where there was a significant public protection involved, the intrusion was minimal, the goal was not discovery of a crime, and the governmental purpose would be otherwise thwarted or rendered impracticable by requiring a search warrant. All of these elements are present, making Baba's search a reasonable administrative search. Defendant argues that regardless of the exigencies of the situation, Baba acted without probable cause to believe this particular package contained plant pests or diseases. The probable cause requirement relative to administrative searches is less stringent than that relative to criminal investigations and " [i] f a valid public interest justifies the intrusion contemplated, then there is probable cause to issue a suitably restricted search warrant." Camara, 387 U.S. at 539, 87 S.Ct. at 1736, 18 L.Ed.2d at 941. See also Marshall v. Barlows, Inc. (1978), 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305. The State argues that If [hlere, where the warrant requirement is vitiated by the necessity and urgency of immediate inspection, probable cause exists and a valid public interest justifies the intrusion." The State relies upon another 9th Circuit decision, upholding screening of airline passengers for weapons and explosives, which recognized that: "...[S]earches conducted as part of a general regulatory scheme in furtherance of an administrative purpose, rather than as part of a criminal investigation to secure evidence of crime, may be permissible under the Fourth or - vis sis added) . Moreover, although Baba characterized his search as "random" at trial, his testimony established that he searched only parcels which were unusually heavy and sent by individuals to individuals (as opposed to businesses, etc.). In his experience, those parcels were more likely to contain plants carrying pests or diseases. Thus his search was not a random search but was directed at parcels which by their packaging were more likely to contain items with disease or insects. This, along with the compelling need to find and interrupt the shipment of infested parcels, is sufficient to establish the probable cause contemplated by the Plant Pest Acts. Defendant next argues that, even if Baba's search of the UPS box was reasonable, Hisatake's subsequent warrantless search and seizure of the box was a violation of Fourth Amendment guarantees. Since Baba had already interrupted UPS'S delivery of the package, defendant argues that the exigencies which justified Baba's warrantless search no longer applied, and Hisatake should have obtained a warrant. We reject this argument. Baba, not Hisatake, seized the UPS package legitimately under the "plain view" rule, which permits warrantless seizure of evidence of crime inadvertently discovered by police in the course of a valid search. Coolidge v. New Hampshire (1971), 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564. In his exhaustive study of the requirements of the Fourth Amendment, Professor Wayne LaFave summarizes the Coolidge plain view rule: "[Tlhe plain view doctrine discussed in Coolidge is intended to provide a basis for making a seizure without a warrant. The fact that there is a plain view in the Coolidge sense does not mean that there has been no search; indeed, the situations described by Justice Stewart are in the main search situations--search pursuant to a warrant naming other objects, search during hot pursuit, search incident to arrest, and a search for purposes other than finding evidence. Rather, the effort in Coolidge is to describe when items so found may be seized even though they were not the items which were legitimate objectives of that search. The Coolidge plurality identifies three requirements: (1) there must be a prior valid intrusion; (2) the discovery of the seized items must be inadvertent; and (3) it must be immediately apparent to the police that they have evidence before them." W. LaFave, SEARCH AND SEIZURE, §2.2(a) at 241-42 (1978). The Supreme Court's recent decision, Texas v . Brown, No. 81-419 (U.S. April 19, 1983), reiterates the rule that "if, while lawfully engaged in an activity in a particular place, police officers perceive a suspicious object, they may seize it immediately." Slip opinion at 8. Brown also relaxes rule (3) stated above. Where under Coolidge, it must be "immediately apparent to the police that they have evidence before them," under Brown, probable cause to support a warrantless seizure of evidence in plain view is supplied by "[a] 'practical, nontechnical' probability that incriminating evidence is involved." Slip opinion at 11. Baba's conclusion that the contents of the UPS box were marijuana was sufficient under Brown to justify seizure. He was a plant inspector for the Department of Agriculture. Moreover, although Baba was not technically a "police officer," he was a government official acting pursuant to federal law in seizing unauthorized plant substances uncovered by his search. We hold that Baba's search was a valid administrative search pursuant to standards articulated in Camara and Schafer, and his seizure of the UPS box and its contents pursuant to federal statutes and the plain view rule discussed in Coolidge and Brown, did not violate defendant's Fourth Amendment rights. In Brown, the Supreme Court also stated: " [Wlhen a police officer has observed an object in 'plain view,' the owner's remaining interests in the object are merely those of possession and ownership." Slip opinion at 7-8. In other words, once Baba had recognized and seized the UPS box and its contents, defendant had no further grounds for claiming that any reasonable expectation of privacy in them was offended by either Hisatake's inspection and testing of the box's contents or Sgt. Green's further inspection and testing in Bozeman. The Constitution requires that, before the initial search and seizure, the "deliberate impartial judgment of a judicial officer . . . be interposed between the citizen and the police." Katz v. United States (1967), 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576. It does not require that a magistrate's judgment be interposed between every transfer of evidence between officers or between law enforcement agencies once the evidence has been legitimately seized. Such a requirement would be absurd and would imply a continued privacy interest in the defendant after valid seizure of incriminating evidence. In United States v. Andrews (10th Cir. 1980), 618 F.2d 646, the Circuit Court of Appeals considered whether, after a controlled delivery, a federal drug enforcement agent was required to secure a search warrant before reopening the package containing cocaine at the delivery point. The package, bound for Denver, had been opened by a suspecting cargo supervisor for Continental Air Cargo Service in Miami and field-tested by detectives the supervisor called. The detectives removed some of the cocaine, resealed the package and sent it to Denver on a Continental flight. In Denver, an alerted Drug Enforcement Administration (DEA) official took custody of the package and placed it in a Continental freight vault overnight. Wearing a freight clerk's uniform, he released the package the next morning to the defendant, who was arrested by DEA officials. The agent regained custody of the package and returned to the DEA office, where he opened it and removed the cocaine. The trial court granted defendant's motion to suppress. The Circuit Court of Appeals reversed, holding that: " [TI he police seizure [in Miami] was made upon probable cause and under exigent circumstances. Thus, the shipment of the package to Denver, its delivery over to Andrews there, and its subsequent taking away from Andrews were . . . actions constituting . . . 'official dominion continued unbroken because close surveillance followed the seized contraband, insuring that it remain within official possession."' 618 F.2d at 654. See also United States v. Ford (10th Cir. 1975), 525 F.2d 1308. In both Ford and Andrews, where the initial seizure was legitimate, controlled delivery by private carrier and resumption of custody after delivery was held to amount to continued "official dominion," so that it was not necessary to obtain a search warrant before the container was regained and opened by officials after delivery. In Andrews and Ford, the initial search was private and, under applicable law, did not involve the Fourth Amendment as it would have in Montana. In this case, the initial search and seizure in Hawaii was valid under Camara and Coolidge and did not offend the Fourth Amendment. In all three cases, government dominion over evidence was legitimately obtained and effectively continued during a controlled delivery, and there was no need to procure warrants for each successive exercise of custody and inspection of the evidence. Indeed, here a search warrant was obtained after delivery; in Ford and Andrews, the defendant and contraband were seized without warrants, shortly after delivery. We hold that, since Baba's administrative search and seizure did not violate the Fourth Amendment, no privacy interest of defendant was violated by Hisatake's inspection in Honolulu or Green's later inspection in Bozeman. Thus, the procedures in Hawaii, and the inspection by Green in Bozeman, do not require suppression of the evidence obtained by the Bozeman searches. Our conclusion as to this issue also resolves the second issue raised by defendant. Because government dominion over the box "continued unbroken" for all reasonable purposes, from its valid seizure by Baba in Hawaii to its delivery in Bozeman and during that period of dominion, the box could be inspected without a warrant. Defendant's third issue is that the magistrate who issued the first search warrant in Montana lacked jurisdiction to do so, because the affidavit established that any criminal activity began and ended in Hawaii. It is true that a justice court's criminal jurisdiction is limited under section 3-10-303, MCA, to crimes committed in its county. It is also true that under section 46-1-201(7), MCA, the offenses stated in the affidavit must be violations of the laws of this state or its political subdivisions. Obviously, if the only crime alleged had been committed in Hawaii, the Montana magistrate would have been without jurisdiction to issue a warrant. We hold there is no jurisdictional question here. The affidavit did not explicitly name the offense, but the facts stated clearly indicated that the suspected offense was possession of dangerous drugs which is a violation of Montana law under Title 45, Chapter 9, MCA. The affidavit stated that the suspected offense took place in Bozeman, Gallatin County. Thus, it was within the magistrate's jurisdiction. Whether the magistrate's decision to issue the warrant was correct goes to probable cause, not jurisdiction. The fourth issue raised by defendant is whether the affidavit supporting the first search warrant was so defective that the evidence uncovered and seized pursuant to that warrant was inadmissible at trial. Defendant argues that the affidavit failed to show that an offense had been committed because it did not show that he "knowingly" possessed the hashish -- only that he voluntarily accepted a UPS package. Section 46-5-202, MCA, requires that an affidavit state that an offense has been committed, and that it state facts sufficient to show probable cause for issuance of the warrant. It is well-settled that the evidence sufficient to establish probable cause for a warrant is significantly less than that required to support a conviction. All that need be shown is "a probability of criminal conduct." State v. McKenzie (1978), 177 Mont. 280, 290, 581 P.2d 1205, 1211. That rigid, technical standards are inappropriate to probable cause determinations is also evident from the United States Supreme Court's language in the recent case of Illinois v. Gates, No. 81-430, slip op. at 19-20 (U.S. June 8, 1983): "As early as Locke v. United States, 7 Cranch. 339, 348 (1813) , chief Justice Marshall observed . . . that " the . term "probable cause, " according to its usual acceptation, means less than evidence which would justify condemnation-.-.-.. It imports a seizure made under circumstances which warrant suspicion.' More recently, we said that 'the quanta-.-.-.-of proof' appropriate in ordinary judicial proceedings are inapplicable to the decision to issue a warrant. Brinegar, supra, 338 U.S., at 173. Finely-tuned standards such as proof beyond a reasonable doubt or by a preponderance of the evidence, useful in formal trials, have no place in the magistrate's decision. While an effort to fix some general, numerically precise degree of certainty corresponding to 'probable cause' may not be helpful, it is clear that 'only the probability, -- and not a prima facie showing, of criminal activity - is - t h % standard of Probable cause. ' Spinelli, supra, 393 U. S. , a t 419. See Model Code of Pre-Arraignment Procedure $210.1(7) (Proposed Off. Draft 1972) ; W. LaFave, Search and Seizure, S3.2 (3) (1978) ." Here, the affidavit established that "hashish, a controlled substance," had been discovered in a UPS warehouse in Hawaii addressed to defendant in Bozeman, and that, after a controlled delivery, he had accepted the parcel from UPS in Bozeman. The affidavit established the possession by defendant of a controlled substance in Gallatin County. That it did not establish "knowing" possession is not fatal to the affidavit. It is true that without evidence that defendant knowingly possessed the hashish, there was insufficient evidence to convict him. State v. Smith (1983) , Mont. I P.2d , 40 St. Rep. 494. There was, however, sufficient information to provide probable cause. That the box contained hashish was indisputably established, both in Hawaii and Bozeman. It was addressed to defendant. Possession of hashish is illegal in Montana. The box containing the hashish had been accepted by a male at the Fox Street address and was still inside his Fox Street residence. Defendant stresses the behavior of the police in "orchestrating" the delivery to him, arguing that he could not possibly have known the contents of the UPS box. But if government officials had not seized the box and controlled the delivery, but had discovered its contents some other way and had merely observed the uninterrupted delivery by the UPS, defendant's knowledge or lack of knowledge of the contents of the box would have been no different. In either case, defendant accepted a UPS box with hashish in it. Whether or not he was the "unsuspecting recipient" of a parcel of hashish addressed to him by persons unknown, as he claims, is a question for the fact finder at trial, not to be passed upon by the issuing magistrate. In this case, of course, the first search warrant uncovered far more than enough evidence, apart from the contents of the UPS box, to convict defendant of possession with intent to sell. Thus, it was unnecessary for the fact finder to determine whether or not defendant was aware of the UPS box's contents. That is not dispositive here. Clearly, if there was probable cause for the first Bozeman search, the second (warranted) search and seizure was also legitimate and the evidence obtained was properly admitted. We hold that the affidavit's failure to expressly name the crime alleged and its failure to prove that defendant knew the UPS box's contents did not invalidate the search warrant. The information included in the affidavit was sufficient to be considered a statement that an offense had been committed and to provide probable cause for the search warrant to issue. Defendant argues that the affidavit was fatally defective because it did not include the date the offense occurred. In State ex rel. Townsend v. District Court (1975), 168 Mont. 357, 361-62, 543 P.2d 193, 195-96, we stated: " [Aln affidavit which omits a reference to the time of the criminal event cannot establish probable cause . . . . The time factor is regarded as an important element of probable cause in order to prevent the issuance of warrants on 'loose, vague, or doubtful bases of fact . . .. 1 I1 We find no merit in this argument. In Townsend, no reference was made to time. Here, the affidavit shows that the delivery was at 12:10 P.M., on either April 6 or April 7, 1981. The package had not been removed from the Fox Street house. This small error does not create such a doubtful basis of fact as to defeat the affidavit. Defendant maintains that it was improper for the State to have prepared the affidavit before the UPS delivered the box to Kelly. It indicated that the State knew the delivery would occur, having prearranged it. Thus the State in effect caused the crime to occur. We do not find defendant's argument persuasive for two reasons. First, it is more pertinent to the issue of entrapment than to defects in the affidavit or the warrant. Second, there is nothing inherently wrong in drawing up an affidavit in anticipation of an expected illegal act. It is a convenient way to obtain a search warrant immediately after the offense occurs. Nor are we persuaded by defendant's repeated assertions that the State caused the possession to happen. The State merely controlled the UPS delivery, which would have occurred in any event. Such a controlled delivery has been upheld in Andrews and Ford. - Defendant's final challenge to the sufficiency of the affidavit is that it included hearsay and double hearsay which formed the basis for a finding of probable cause without satisfying the tests articulated in Aguilar v. Texas (1964), 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723 and Spinelli v. United States (1969), 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637, as set forth in Townsend, 168 Mont. 357, 360, 543 P.2d 193, 195-96: "It cannot be disputed that hearsay information may be considered to establish probable cause. State v. Paulson, 167 Mont. 310, 538 P.2d 339, 32 St.Rep. -- 786; Ker v. California, 374 U.S. 23, 83 S.Ct. 1623, 10 L.Ed.27 7 - ~ r a ~ e r v . United States, 358 U.S. 307, 79 S.Ct. 329, 3 ~ X d . 2 d 327. But when hearsay information forms the justification for a finding of probable cause and the issuance of a search warrant, the two-pronged test set out in Aguilar v . Texas, 378 U.S. 108, 114, 84 S.Ct. 1509, 1514, 1 2 L.Ed.2d 723, must be applied and satisfied: " I * * * the magistrate must be informed of some of the underlying circumstances from which the informant concluded that the narcotics were where he claimed they were, and some of the underlying circumstances from which the officer concluded that the informant, whose identity need not be disclosed, see Rugendorf v . United States, 376 U.S. 528, 84 S.Ct. 825, 11 ~.Ed.2d 887, was "credible" or his information "reliable." ' "See also: Spinelli v. United States, 393 U.S. 410, 89 S.Ct. 584, 21 LXd.2d 6 3 7 . - See also Thomson v. Onstad (1979), 182 Mont. 119, 594 P.2d The State properly notes that while the facts in the affidavit pertaining to the Hawaiian portion of events are hearsay, the package in question and the drugs at issue were seen and dealt with by the affiant himself. The events leading up to the delivery of the drugs to the defendant were witnessed by the affiant also. The contents of the package, the address, and the size and shape of the package have all been verified. The hearsay informants' facts have been corroborated by the affiant's personal observation. Furthermore, the affidavit establishes that neither Hisatake nor Baba were ordinary "informants." Both were government officials; Hisatake was a DEA officer and Baba was a federal plant inspector. Defendant argues that because the three officials (Green, Hisatake and Baba) were not closely involved in an ongoing criminal investigation, and because Baba was not a police officer, their status is relatively insignificant. A different view is expressed in W. LaFave, SEARCH AND SEIZURE S3.5 (a) (1978) at 619-20: " .. . [A] n ' informer, ' in the narrow sense of that word, is by no means presumed to be a credible person. This means that it is generally necessary, as a prerequisite to establishing probable cause on the basis of what the informer has told the police, to establish that he is reliable (e.g., by showing he has proved to be reliable on past occasions) or that his information is reliable (e.g., by showing that he has made an admission against his penal interest in the course of giving the information). By contrast, the average citizen who is thrust into the position of being a victim of or a witness to criminal conduct and who thereafter reports what he saw and heard to the police is generally presumed to be reliable, and thus no special showing of such reliability in the particular case is necessary. As might be expected the same may be said of a - -- - - - - person whois a law enforcement officer. "The point was clearly made by the Supreme Court in United States v. Ventresca, involving a search made pursuant to a search warrant obtained upon the affidavit of one Mazaka, an investigator for the Alcohol and Tobacco Tax Division of the Internal Revenue Service. The affidavit referred to various occasions upon which sugar and empty tin cans were observed being carried into certain premises, filled cans were carried out, the odor of fermenting mash was smelled from the sidewalk in front of the premises, and the sounds of a motor or pump were heard coming from the direction of the same premises. These various factual allegations were prefaced in the affidavit with a statement that they were based upon observations by the affiant - and 'upon information received officially from other Investigators attached to the Alcohol and Tobacco Tax Division assigned to this investigation, and reports orally made to me describing the results of their observations and investigation.' Although a divided Court of Appeals ruled this affidavit insufficient, the Supreme Court disagreed . . .. "Following the lead of Ventresca, lower courts have --- consistently - - held that another - law enforcement officer - is - a reliable source -- and that consequently no special showing of reliability need be made as a - ----- part of the probable cause determination." (emphasE added) Montana has recognized a distinction between a "mere informer" and a "citizen-informant," i.e., one who is "motivated by good citizenship." The citizen-informant is accepted as reliable. State v. Leistiko (1978), 176 Mont. 434, 578 P.2d 1161. We find no reason to require a showing of reliability as to either Hisatake or Baba. Hisatake was working for the DEA, although actually a Honolulu police officer; while Baba was somewhere between a citizen-informant and a police officer and also must reasonably be seen as reliable. In discussing the hearsay aspect, it is important to consider the pertinent part of the application for search warrant: "COMES NOW RON GREEN, of the Bozeman Police Department, and being first duly sworn upon oath, deposes and says: "1. That your affiant of the Bozeman Police Department received a phone call from Harvey Hisatake on April 3, 1981. Harvey Hisatake identified himself as a drug enforcement agency agent stationed in Honolulu, Hawaii; "2. That Agent Harvey Hisatake informed your affiant that a Federal Agricultural Inspector, while routinely checking packages delivered to United Parcel Service in Honolulu, Hawaii on April 2, 1981, examined a 9" x 9" x 13" package addressed to James Kelly at an address of 1207 Fox Street, Bozeman, Montana and with a return address of Rosemary Kelly, 1214 Punahall Street, #210, Honolulu, Hawaii. The Inspector examined the contents of the package and discovered a green-like substance which appeared to be hashish; "3. That Agent Hisatake conducted a field test on the substance and discovered that it was hashish, a controlled substance. As a result, Agent Hisatake called your affiant to inform him of his discovery. Then, Agent Hisatake resealed the package, rewrapped it, addressed it to your affiant and placed in on airplane for air express delivery to Bozeman, Gallatin County, Montana; "5. That your affiant opened the package on April 6, 1981. He discovered five plastic packets of a pressed green substance. Your affiant conducted a field test and determined that the substance was hashish, a controlled substance; "6. That your affiant also examined the package and observed that it was addressed to James Kelly, 1207 Fox Street, Bozeman, Montana . . .." The defendant argues that the double hearsay problem arises from Hisatake informing Sgt. Green that a Federal Agricultural Inspector (unnamed) examined the package addressed to the defendant "while routinely checking packages delivered to United Parcel Service in Honolulu." While that is hearsay, and can be classed as double hearsay, the test to be applied is whether or not the information is reliable or credible. In assessing the reliability of informer Hisatake in particular, it is important to keep in mind that Sgt. Green had confirmed his reliability by his personal examination of the package, including its address, size, shape and contents. Considering all of such information together, we conclude that a sufficient showing has been made of reliability as to Hisatake and the Federal Agricultural Inspector Baba. The other prong of the Aguilar-Spinelli test requires that there be a showing of the underlying circumstances from which the informant concluded that the narcotics were where he claimed they were. That has been adequately established by the affidavit which shows that Sgt. Green opened the package, observed the address and tested the contents, determining the same to be hashish. This is a clear confirmation of the informants' conclusion that the narcotics were in the package, where they were claimed to be. We therefore conclude that the two-pronged test of Aguilar-Spinelli has been met and that the hearsay information contained in the application of Sgt. Green was sufficient to form a justification for a finding of probable cause and issuance of the search warrant. While we have concluded that the Aguilar-Spinelli test has been met, we refer again to Illinois v. Gates, which is a case decided so recently that the parties had no time to address it in briefs or oral argument. This United States Supreme Court decision abandons the two-pronged test established by Aguilar-Spinelli. The Court takes a great step away from the "labyrinthine body of judicial refinement" built over the "prongs" and "spurs" of the Aguilar-Spinelli tests. Slip opinion at 25. Illinois v. Gates, the United States Supreme Court overturned a suppression order where evidence of marijuana and weapons possession had been obtained pursuant to a warrant, as the result of an anonymous tip, partially verified as to "innocent details" by a police officer. There was no identification of the informant, and no indication of how the informant obtained his or her knowledge. Excerpts from the opinion, explaining the Court's rationale, follow: "We agree with the Illinois Supreme Court that an informant's 'veracity,' 'reliability' and 'basis of knowledge' are all highly relevant in determining the value of his report. We do not agree, however, that these elements should be understood as entirely separate and independent requirements to be rigidly exacted in every case, which the opinion of the Supreme Court of Illinois would imply. Rather, as detailed below, they should be understood simply as closely intertwined issues that may usefully illuminate the commonsense, practical question whether there is 'probable cause' to believe that contraband or evidence is located in a particular place. "This totality of the circumstances approach is far more consistent with our prior treatment of probable cause than is any rigid demand that specific 'tests' be satisfied by every informant's tip. Perhaps the central teaching of our decisions bearing on the probable cause standard is that it is a 'practical, nontechnical conception.' Brinegar v. United States, 338 U.S. 160, 176 (1949) . 'In dealing with probable cause,-.-.-.-as the very name implies, we deal with probabilities. These are not technical; they are the factual and practical considerations of everyday life on which reasonable and prudent men, not legal technicians, act.' " Slip opinion at 15-16. The Court concluded: "[Ilt is wiser - to abandon the 'two-pronged test' established our decisions in Aguilar and Spinelli. -- In its F a c e we reaffircthe totalitY.of the circumstances analysis that traditionally has informed probable cause determinations . . . . The task of the issuing magistrate is simply to make a practical, commonsense decision whether, given all the circumstances set forth in the affidavit before him, including the 'veracity' and 'basis of knowledge' of persons supplying hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place. And the duty of a reviewing court is simply to ensure that the magistrate had a 'substantial basis for . . . conclud[ing] that probable cause existed.'" Slip opinion at 23 (emphasis added). Applying the Gates test, we hold that under the totality of the circumstances as listed above, the issuing magistrate here had a substantial basis for concluding that probable cause existed, and therefore conclude, on both the Aguilar-Spinelli test and the Gates test, that the affidavit is a sufficient basis for the issuance of the warrant. Finally, we consider defendant's argument that he was "entrapped" by Bozeman police and that, since entrapment was evident from the face of the affidavit, the issuing magistrate should not have signed the first search warrant. Defendant argues that " [hlad it not been for the police conspiracy to deliver sealed contraband to its unsuspecting recipient, the police would never have been in his house to make their 'plain view' observation of other illegal items." There are, then, two questions involved: a. Whether the magistrate improperly approved the first search warrant. b. Whether defendant's conviction must be overturned because he was entrapped. In State v . Kamrud (1980), Mont. , 611 P.2d 188, 190-91, 37 St.Rep. 933, 936-37, we stated: "The entrapment defense is not a constitutional one, as the United States Supreme Court recognized in United States v. Russell (1973), 411 U.S. 423, 433, 93 S.Ct. 1637,1643, 36 L.Ed.2d 366, where it held that 'the defense is not of a constitutional dimension.' Therefore, we must look primarily to Montana statutes and case law. "The federal cases are nevertheless relevant to the extent that they apply the same test used in Montana. The Commission Comment to our statute defining entrapment, section 45-2-213, MCA, states that '[tlhe defense of entrapment generally follows the rule stated by the majority in the Sorrells case.' (Sorrells v. United States (1932), 287 U.S. 435, 53 S.Ct. 2107 77 L.Ed. 413, 86 A.L.R. 249.) Entrapment is, of course, an affirmative defense, and the burden of proving it rests on the defendant. LaCario, 518 P.2d 982, 985; State v. White (1969), 153 Mont. 193, 456 P.2d 54, 56; O'Donnell, 354 P.2d 1105, 1106; Parr, 283 P.2d 1086, 1089. "This Court has held that the defense of entrapment mav be established as a matter of law. In State v. 7 ~rinfell (1977), 172 Mont. 345, 564 P.2d 171, we overturned the defendant's conviction of sale of dangerous drugs on the grounds that the defense of entrapment had been established as a matter of law. Montana has recognized the entrapment defense by case law, and it is now codified in section 45-2-213, MCA: 'Entrapment. A person is not guilty of an offense if his conduct is incited or induced by a public servant or his agent for the purpose of obtaining evidence for the prosecution of such person. However, this section is inapplicable if a public servant or his agent merely affords to such person the opportunity or facility for committing an offense in furtherance of criminal purpose which such person has originated.' "This Court has held: 'This statute is consonant with earlier decisions of this Court which set forth the following elements of entrapment: (1) Criminal intent or design originating in the mind of the police officer or informer; (2 absence of criminal intent or design originating in the mind of the accused; and (3) luring or inducing the accused into committing a crime he had no intention of committing. State ex rel. Hamlin, Jr. v. District - - Court, 163 Mont. 16, 5157.2r74; State v. Karathanos, 158 Mont. 461, 493 P.2d - 326.' State - v . Grenfell, supra, 564 P.2d at 173. "See also State v. Gallaher (19781, Mont., 580 P.2d 930, 935735 St.Rep. 848." Thus, if the evidence before the magistrate had established as a matter of law that the three elements of entrapment were indisputably present and therefore under section 45-2-213, MCA, the defendant could - not be guilty of the crime of possession with intent to sell, the magistrate did err in issuing the search warrant, as defendant asserts. That was not the case, however. The magistrate knew that defendant received and accepted a UPS package of hashish as a result of a controlled delivery. There was no evidence before her of any absence of criminal intent in the mind of the defendant; nor was there any suggestion that defendant had been lured into committing a crime he had no intention of committing. It is true that given these requirements, it would be a rare situation where a magistrate could find entrapment as a matter of law at this stage. Certainly here, defendant has not met his burden of proving that the warrant was erroneously issued on grounds of entrapment. Entrapment, if proven, mandates reversal of a conviction. It does not mandate the suppression of evidence. Here, where the evidence establishing defendant's predisposition to commit the crime charged was seized pursuant to a valid search warrant, it may be used to prove that predisposition. The first search warrant was issued upon probable cause. The record does not establish entrapment as a matter of law. The search uncovered very persuasive evidence that defendant was deeply involved in large-scale drug traffic. Because seizure of the evidence followed a legitimate search, that evidence was admissible at trial to overcome defendant's claim that he was entrapped. It was for the fact-finder to decide, on the basis of evidence presented at trial, whether defendant was not guilty because he was entrapped. In Kamrud , Mont. at , 611 P.2d at 191, 37 St.Rep. at 937, we stated: If 'Entrapment occurs only when the criminal intent or design originates in the mind of the police officer or informer and not with the accused, and the accused is lured or induced into committing a crime he had no intention of committing. Only when the criminal design originates, not with the - - - accused, but in the mind of government officers and ----- - the accused 5 2 persuasion, deceitful - representations, - or inducement, lured - - into the commission a criminal act, can - - made out. In short. - - tinction between induc a case - of t T e r a s a .ng a person to do an unlawful act and setting a trap to-catch him in the execution of a criminal design of his own conception . . . State v . Karathanos (1972), 158 Mont. 461, 493 P.2d 3 2 6 : 331 (holding that there was no entrapment where the defendant approached a police informant in a bar and offered to sell her drugs, later completing the transaction)." (emphasis added) Defendant's "crime" was not his acceptance of the box of hashish, as he insists; it merely provided probable cause to believe he knowingly possessed dangerous drugs with intent to sell. The evidence of defendant's crime of possession with intent to sell was properly, and convincingly, admitted at trial to defeat his affirmative defense of entrapment and prove that he was indeed "caught in the execution of a criminal design of his own conception." Affirmed. We concur: Chief Justice J u s t i c e s M r . J u s t i c e Daniel J. Shea d i s s e n t s and w i l l f i l e a w r i t t e n d i s s e n t l a t e r . M r . J u s t i c e Frank B. Morrison, Jr., w i l l f i l e a separate opinion l a t e r . Mr. Justice John C. Sheehy, dissenting: I dissent. The general rule is that a warrantless search, administrative or otherwise, is illegal. Camara v. Municipal Court (1967), 387 U.S. 523, 87 S.Ct. 1727, 18 L.Ed.2d 930. An exception to the general rule was carved in United States v. Schafer (9th Cir. 1972), 461 F.2d 856. It is necessary to examine the facts of the Schafer case to determine why the circuit court made an exception to the general rule. Terry Lee Schafer was a departing passenger on an airline out of Hawaii. Her handbag was searched when she presented herself at the airport for departure. In her handbag was found a quantity of LSD pills. The search was made by federal authorities pursuant to federal statutes which prevent the transportation from Hawaii of certain quarantined agricultural substances which might spread disease or other injurious effects in the continental United States. The Secretary of Agriculture had adopted a regulation which expressly provided that "[all1 baggage and other personal effects of passengers" were to be searched at airports pursuant to the federal law. 7 C.F.R. § 318.13-12 (a) . In Schafer, therefore, the Ninth Circuit Court of Appeals was impressed by the fact that there was an express provision of federal administration regulation that required the search of all baggage or other personal effects of all departing passengers. The Secretary's power to make such a regulation was founded on 7 U.S.C. § 150 (eel and 162. The Ninth Circuit Court of Appeals upheld this warrantless search because it applied to all persons, was founded on an express regulation, and the exigency of a departing passenger made the time necessary to procure a search warrant impractical and would render nugatory the desired goal of preventing quarantined articles from reaching the continental United States. Contrast the situation in Schafer with that which occurred here. We have a package resting in the United Parcel Service receiving room in a town in Hawaii. The agent in this case does not search - all packages. The field officer is given discretion as to which of the packages he will search. In this case he conducted admittedly a "random" search. The field official testified that no searches were ever conducted on packages received at UPS in the afternoon. In fact, he came to the UPS office during the lunch hour, when the conveyor belt in the UPS office was stopped, and inspected some twelve packages of the unspecified number on the belt. He based his inspections solely on the weight of the packages, after eliminating any packages going between business or mail order addresses. Why he made that distinction he did not specify in his testimony. No reason was shown in his testimony why he had to seize the package here without a search warrant. His inspection of the package in question revealed no plants bearing diseases or other substances which might injuriously affect crops in the continental United States. The evidence reveals no exigency existing which would prevent him from procuring a search warrant. The same line of reasoning applies to officer Hisatake, to whom Baba, the federal official, turned over the opened package. Certainly no exigency existed as to Hisatake, who should have procured a search warrant before seizing the property reported to him by Baba. What the majority has done in this case is to bootstrap the narrow Schafer exception to Camara into a now general rule that any intrusion by a federal official or a state official into packages in commerce without a warrant is permissible, provided that some federal statute allows the federal agent a right of inspection. The majority has carried Schafer too far. The search by Baba was illegal, because no probable cause existed for him to suspect that the package in question contained quarantined substances; it was illega.1 as to Hisatake, because there was no exigency existing which would prevent him from procuring a search warrant to seize the property discovered by Baba. A strong factor on which the Ninth Circuit Court upheld the search in Schafer was that the decision to inspect was not subject to the discretion of the official in the field, relying on Camara, 387 U.S. at 532, 87 S.Ct. at 1733, 18 L.Ed.2d at 937. Since the seizure was illegal in its inception, all other evidence uncovered by the prosecution after the illegal seizure should have been suppressed by the District Court. Then there is the question of entrapment in this case. Our statute defining the crime of possession of dangerous drugs with intent to sell has an inherent peculiarity. Section 45-9-103, MCA. The permissible sentences under the crime are heavier than for mere possession of dangerous drugs. Section 45-9-102, MCA. The code compiler lists these elements as necessary to a conviction for criminal possession of dangerous drugs with intent to sell: (1) knowing (2) control of a (3) dangerous drug for a sufficient time to be able to terminate control, as well as (4) intent to sell the drug. Since the package here was seized in the Kelly home unopened, in the same condition as delivered, there is no evidence in this case upon which Kelly's conviction can he founded, since none of the elements of the crime could be proved beyond a reasonable doubt. It is idle to recite as the majority recites, that it is for the fact finder to determine entrapment in this case. There were no facts for the fact finder to find. Kelly had done nothing but receive from the officers here a package they had delivered to him containing drugs. It is on the receipt alone that the conviction here is founded. His knowing control of a dangerous substance, and his intent to sell the same are completely absent from the evidence. My conclusion is that the power of federal agricultural agents to inspect packages in Hawaii for quarantined plants and insects is being used by law enforcement as an instrument to get into homes otherwise out of their purview. We have developed some strange philosophies about drugs and privacy. The law permits a man to watch lewd movies in his home to his heart Is content. I find that detestable. The law does not permit a man to use drugs in the privacy of his own home. I find drug use also detestable, but I am unable to distinguish the legal concepts that differentiate the privacy rights of the drug user from the lewd-movie watcher. But even where the law is being violated, there are privacy rights in a home which the courts ought to protect as sacred. The federal officer here, Baba, found no violation of the law he was empowered to enforce. Hisatake, the Hawaiian Five-0, without a warrant, took the package out of the stream of commerce to readdress the package. Hisatake reinserted the package into commerce in a scheme designed to get the Bozeman officers into the Kelly home. Every step of those actions was unlawful. I won't condone it. The officers in this case testified they had no claim that Kelly mailed or had caused to be mailed the package to himself. His conviction rests simply on the package delivered to him by the officers, addressed to him by them, and originally sent into commerce by an unknown and unidentified person. Kelly's possession is at most constructive only. Do you have an enemy you would like to frame? Buy yourself an airline ticket to Hawaii and while there round up some marijuana, place it in a heavy package addressed to your enemy but not otherwise conspicuous and deliver it to UPS, but be sure to deliver it in the morning. Chances are it will be randomly opened by someone named Baba who in turn will turn it over to the authorities to make certain that it is delivered to your enemy. Our law enforcement officers will see to it that he is tailed, nailed and jailed. His mere possession of the package will be enough, with the blessing of this Court. In speaking of entrapment, I refer only to the drugs contained in the package. The other drugs and paraphernalia seized in the home may have independently sustained a conviction in a proper case, but here they are tainted by the illegal entry of the officers into the Kelly home.

August 29, 1983

720f9e4b-b090-409c-9399-e4402c09b2bd

BURLINGAME v MARJERRISON

N/A

82-214

Montana

Montana Supreme Court

No. 82-214 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 CLAUDE I. BURLINGAME .and CAROL T. BURLINGAME, Plaintiffs and Appellants, FRED B. MARJERRISON and JEANNINE 0 . !.WRJERRISON, Defendants and Respondents. Appeal from: District Court of the Fourth Judicial District, In and for the County of Sanders, The Honorable Douglas G. Harkin, Judge presiding. Counsel of Record: For Appellants: Claude I. Burlingame, pro se, Thompson Falls, Montana For Respondents: Morales, Volinkaty & Harr; Richard Volinkaty, Missoula, Montana Submitted on Briefs: February 3, 1983 Decided: June 30, 1983 ~iled: JUN 3 0 1983 Clerk Mr. Chief J u s t i c e Frank I. Baswell d e l i v e r e d t h e Opinion o f t h e Court. Claude and C a r o l Burlingame f i l e d a q u i e t t i t l e a c t i o n t o d e t e r m i n e ownership, c o n t r o l and use r i g h t s of a p a r c e l of l a n d l o c a t e d i n Sanders County, Montana. The D i s t r i c t Court s i t t i n g w i t h o u t a j u r y decreed t h a t t i t l e t o t h e p r o p e r t y was v e s t e d i n Burlingames b u t t h a t M a r j e r r i s o n s had a c q u i r e d p r e s c r i p t i v e easements f o r g r a z i n g , a g r i c u l t u r e and timber h a r v e s t i n g . C o s t s were awarded t o M a r j e r r i s o n s . Fol- lowing t h e D i s t r i c t C o u r t ' s d e n i a l of Burlingames' motions t o r e t a x t h e c o s t s and t o amend t h e f i n d i n g s of f a c t , con- c l u s i o n s of law and d e c r e e , Burlingames a p p e a l . W e r e v e r s e . On March 24, 1978, Burlingames e n t e r e d a c o n t r a c t f o r deed t o purchase t h e s o u t h e a s t q u a r t e r of t h e n o r t h e a s t q u a r t e r (SE1/4 NE1/4) of S e c t i o n 30, Township 20 North, Range 26 West, M.P.M. M a r j e r r i s o n s hold t i t l e t o t h e n o r t h e a s t q u a r t e r of t h e s o u t h e a s t q u a r t e r (NE1/4 SE1/4) of S e c t i o n 30, Township 20 North, Range 26 West M.P.M. Marjer- r i s o n s ' t i t l e was a c q u i r e d through two d e e d s d a t e d November 3 , 1945, and J a n u a r y 24, 1962. Both t h e Burlingame p a r c e l and t h e M a r j e r r i s o n p a r c e l were o r i g i n a l l y a c q u i r e d by United S t a t e s p a t e n t i n 1906 by Alexander Rhone and were h e l d a s o n e t r a c t u n t i l M a r j e r r i s o n s ' p r e d e c e s s o r i n i n t e r e s t d i v i d e d t h e p r o p e r t y . A s u r v e y was conducted on b e h a l f o f Burlingames a s a c o n d i t i o n t o t h e s a l e of t h e p r o p e r t y . I t r e v e a l e d t h a t a f e n c e between t h e two p a r c e l s e n c l o s e d approximately f i v e a c r e s of t h e Burlingame t r a c t on its s o u t h e r n border. For purposes of i l l u s t r a t i o n , t h e f o l l o w i n g rough s k e t c h is p r o v i d e d : SKETCH o f SECTION 30 The d a r k l i n e between A and B r e p r e s e n t s t h e surveyed l i n e , e s t a b l i s h e d by Gene Warren and recognized by B u r l i n - games a s t h e s o u t h boundary o f SE1/4 NE1/4. The d o t t e d l i n e between A 1 and B1 r e p r e s e n t s t h e f e n c e claimed by M a r j e r r i - s o n s a s t h e n o r t h boundary o f t h e NE1/4 SE1/4. Fred M a r j e r r i s o n h a s l i v e d on t h e M a r j e r r i s o n t r a c t s i n c e Christmas day, 1935. M a r j e r r i s o n s b u i l t t h e i r home on t h a t t r a c t and t h e y have used t h e t r a c t , i n c l u d i n g t h e f i v e - a c r e p a r c e l , f o r c a t t l e g r a z i n g , a g r i c u l t u r e and timber h a r v e s t i n g s i n c e 1935. P u b l i c r e c o r d s show t h a t t a x e s on t h e two t r a c t s were c o n s i s t e n t l y p a i d by t h e two p a r t i e s and t h e i r p r e d e c e s s o r s i n i n t e r e s t . A d e t e r m i n a t i o n of a c r e a g e f o r t a x p u r p o s e s h a s been accomplished by a review of p l a t books and is based upon t h e l e g a l d e s c r i p t i o n s p r o v i d e d i n d e e d s and c o n t r a c t s . No boundary agreements o r s u r v e y s o t h e r w i s e a f f e c t i n g t h e l e g a l d e s c r i p t i o n of e i t h e r p a r c e l have been l o c a t e d . The D i s t r i c t C o u r t , a f t e r c o n s i d e r a t i o n of a l l t h e e v i d e n c e and t h e i s s u e s r a i s e d a t t r i a l , and a f t e r a n i n s p e c t i o n of t h e p r e m i s e s , found t h a t : no agreed boundary change e x i s t e d ; M a r j e r r i s o n s had n o t a c q u i r e d e q u i t a b l e t i t l e t o t h e p r o p e r t y through a d v e r s e p o s s e s s i o n ; a n d , t h a t t h e s u r v e y was c o r r e c t . It a l s o found, however, t h a t M a r j e r r i s o n s had a c q u i r e d p r e s c r i p t i v e easements on t h e p a r c e l f o r g r a z i n g , a g r i c u l t u r a l , and timber h a r v e s t i n g p u r p o s e s and t h e c o u r t awarded c o s t s t o M a r j e r r i s o n s . Burlingames p r e s e n t t h r e e i s s u e s on a p p e a l : 1. Whether s u b s t a n t i a l c r e d i b l e e v i d e n c e s u p p o r t s t h e d e c r e e ; 2. Whether t h e D i s t r i c t C o u r t e r r e d i n denying Bur- lingames' motion t o r e t a x c o s t s ; and, 3. Whether t h e amended b i l l of c o s t s is v a l i d . W e w i l l a d d r e s s o n l y t h e f i r s t i s s u e , which is d i s - p o s i t i v e of t h i s c a s e . T h i s C o u r t w i l l n o t o v e r t u r n t h e f i n d i n g s of f a c t o f a D i s t r i c t Court where t h e y a r e s u p p o r t e d by s u b s t a n t i a l , though c o n f l i c t i n g , e v i d e n c e u n l e s s t h e r e is a c l e a r prepon- d e r a n c e of t h e e v i d e n c e a g a i n s t t h e f i n d i n g s . S t a t e e x r e l . t i l l s o n v. Department of N a t u r a l Resources and C o n s e r v a t i o n of S t a t e of Montana, Water Resources Div. ( 1 9 8 2 ) , Mont. , 648 P.2d 766, 772, 39 St.Rep. 1294, 1302. W e view t h e e v i d e n c e i n t h e l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y . Cameron & J e n k i n s v. Cameron ( 1 9 7 8 ) , 179 Mont. 219, 228, 587 P.2d 939, 944. Here, t h e e v i d e n c e does n o t s u p p o r t t h e D i s t r i c t C o u r t ' s f i n d i n g of p r e s c r i p t i v e easements. An easement is a r i g h t which one p e r s o n h a s t o u s e t h e l a n d of a n o t h e r f o r a s p e c i f i c p u r p o s e o r a s e r v i t u d e imposed a s a burden on l a n d . Park County Rod and Gun Club v. Department of Highways ( 1 9 7 3 ) , 163 Mont. 372, 376-377, 517 P.2d 352, 355. An easement c o n s i s t s of b o t h a dominant tenement, o r l a n d t o which t h e easement is a t t a c h e d , and a s e r v i e n t tenement o r l a n d on which a burden is imposed. S e c t i o n 70-17-103, MCA. A t common law, a n e a s e m e n t was d e f i n e d a s a nonpossessory i n t e r e s t i n l a n d t h a t d i d n o t i n c l u d e t h e r i g h t t o t a k e t h e s o i l o r a s u b s t a n c e of t h e s o i l . William E. Burby, Real P r o p e r t y , S 22 a t 62-64; 25 Arn.Jur.2d Ease- ments and L i c e n s e s , s§ l, 2. A nonpossessory i n t e r e s t i n l a n d t h a t c o n s i s t e d o f a r i g h t t o t a k e t h e s o i l o r s u b s t a n c e of t h e s o i l , such as t h e r i g h t t o t a k e w i l d game o r f i s h , \\ was known as a p r o f i t a p r e n d r e . Burby, Real P r o p e r t y , S 22 a t 62-64; Black v. Elkhorn Min. Co. ( 1 8 9 2 ) , 49 F. 549, a f f ' d 52 F. 859, a f f ' d ( 1 8 9 6 ) , 163 U . S . 445, 16 S.Ct. 1101, 4 1 L.Ed. 221. Other examples of p r o f i t s 2 p r e n d r e i n c l u d e t h e r i g h t t o feed c a t t l e on a n o t h e r ' s l a n d and t h e r i g h t t o t a k e g r a v e l o r s t o n e o r m i n e r a l s from a n o t h e r ' s l a n d . Thompson on Real P r o p e r t y , S 135 a t 474 (1980 r e p l a c e m e n t ) . Both easements and p r o f i t s may be a c q u i r e d by e x p r e s s g r a n t , r e s e r v a t i o n i n a deed of t h e s e r v i e n t l a n d , implied g r a n t , or by p r e s c r i p t i o n . Thompson, s u p r a , S 135 a t 488-489; Burby, s u p r a , S S 26-31 a t 68-83; P r e n t i c e v. McKay ( 1 9 0 9 ) , 38 Mont. 114, 98 P. 1081. T h i s C o u r t h a s l o n g r e c o g n i z e d b o t h s e r v i t u d e s . R. M. Cobban R e a l t y Co. v. Donlan ( 1 9 1 5 ) , 51 Mont. 58, 66, 149 P. 484, 487. See a l s o , Brannon v. Lewis & C l a r k County ( 1 9 6 3 ) , 143 Mont. 200, 204, 387 P.2d 706, 709. Both forms of s e r v i - t u d e s have been c o d i f i e d by t h e l e g i s l a t u r e i n s e c t i o n s 70- 17-101 and -102, MCA. The f i r s t of t h e two s e c t i o n s p r o v i d e s : "The f o l l o w i n g l a n d b u r d e n s o r s e r v i t u d e s upon l a n d may b e a t t a c h e d t o o t h e r l a n d a s i n c i d e n t s o r a p p u r t e n a n c e s and a r e t h e n c a l l e d easements: " ( 1 ) t h e r i g h t o f p a s t u r e ; " ( 5 ) t h e r i g h t of t a k i n g w a t e r , wood, m i n e r a l s , and o t h e r t h i n g s . " (Emphasis added. ) S e c t i o n 76-17-102, MCA, a l s o d e f i n e s l a n d b u r d e n s o r s e r v i t u d e s t h a t may be g r a n t e d and h e l d even though n o t a t t a c h e d t o l a n d . I t t o o p r o v i d e s a s s e r v i t u d e s t h e r i g h t of p a s t u r e , t h e r i g h t of t a k i n g water, and t h e r i g h t o f t a k i n g o t h e r t h i n g s . While a s e r v i t u d e may by d e f i n i t i o n be an easement, n o t a l l s e r v i t u d e s are easements s i n c e n o t a l l s e r v i t u d e s a r e a t t a c h e d t o o t h e r l a n d as a p p u r t e n a n c e s . By c o n t r a s t , t h e d o c t r i n e o f a d v e r s e p o s s e s s i o n r e f e r s t o a c q u i s i t i o n o f a p o s s e s s o r y i n t e r e s t i n l a n d and r e s u l t s i n a c q u i s i t i o n of t i t l e t o t h e p r o p e r t y . Brannon v. Lewis & C l a r k County, s u p r a , 143 Mont. a t 206, 387 P.2d a t 710. The p r o p e r t y must be claimed under c o l o r o f t i t l e o r by p o s s e s - s i o n which is a c t u a l , v i s i b l e , e x c l u s i v e , h o s t i l e and con- t i n u o u s f o r t h e s t a t u t o r y p e r i o d . The p a r t y c l a i m i n g a d v e r s e p o s s e s s i o n must a l s o have p a i d t h e t a x e s on t h e p r o p e r t y f o r the full statutory period pursuant to section 70-19-411, MCA. Swecker v. Dorn (1979), 181 Mont. 436, 441, 593 P.2d 1055, 1058. Here, the District Court held that Marjerrisons had not acquired title to the parcel through adverse possession since they did not pay property taxes on the disputed parcel as required pursuant to section 70-19-411, MCA. Brannon v. Lewis & Clark County, supra, 143 Mont. at 206, 387 P.2d at 710. It also found no agreed boundary change and no error in the survey. It then concluded that Marjerrisons had acquired prescriptive easements for the purpose of grazing, agriculture and timber harvesting. We disagree. Both prescriptive easements and title by adverse possession are established in a similar manner. Brannon v. Lewis and Clark County, supra. The claimant must show use that is open, notorious, exclusive, adverse, continuous, and uninterrupted for the full statutory period. Blasdel v. Montana Power Co. (1982), Mon t . , 640 P.2d 889, 895, 39 St.Rep. 219, 225; sections 70-19-404, -405, MCA. Here, Marjerrisons needed to demonstrate and did demonstrate each of these elements for a five-year period. Blasdel, 640 P.2d at 895, 39 St.Rep. at 225. An easement, however, is by definition a nonpossessory interest. Here, Marjerrisons held complete possession of the parcel for the statutory period. They did not merely impose a burden upon the Burlingame parcel for the benefit of a dominant tenement. In a case on all fours with this, the Florida Court of Appeals distinguished easements from the right to occupy and e n j o y t h e land i t s e l f . I t h e l d t h a t where, a s h e r e , t h e c l a i m a n t had complete p o s s e s s i o n of t h e s u b j e c t p r o p e r t y , t h e c l a i m amounted t o "a complete t a k i n g i n c o n s i s t e n t w i t h a c l a i m of easement." P l a t t v. P i e t r a s (Fla.App. 1 9 8 0 ) , 382 So.2d 414, 416. See a l s o , Black v. Elkhorn Min. Co., s u p r a . W e a g r e e . Where a p r e s c r i p t i v e r i g h t t o a s e r v i t u d e h a s t h e e f f e c t of l e a v i n g t h e owner w i t h a n empty f e e t i t l e , t h e s i t u a t i o n is n o t one of p r e s c r i p t i v e r i g h t i n t h e form of a n easement. I t h a s r i p e n e d i n t o a c l a i m f o r a d v e r s e posses- s i o n . A l l of t h e r e q u i r e m e n t s o f a d v e r s e p o s s e s s i o n must t h e n be m e t , i n c l u d i n g payment of t a x e s . Brannon v. L e w i s and C l a r k County, s u p r a , 143 Mont. a t 206, 387 P.2d a t 710. Here, M a r j e r r i s o n s ' use and occupancy of t h e l a n d d i d n o t amount t o a c q u i s i t i o n o f a n e a s e m e n t t h a t was m e r e l y a p p u r t e n a n t t o t h e dominant tenement. It must r a t h e r be c h a r a c t e r i z e d a s complete p o s s e s s i o n , dominion and u s e of t h e p a r c e l t o t h e e x c l u s i o n o f B u r l i n g a m e s a n d t h e i r p r e d e c e s s o r s i n i n t e r e s t . I t t a k e s on t h e a s p e c t of a fee. M a r j e r r i s o n s f i r s t l i v e d on t h e p r o p e r t y i n 1935. Testimony e s t a b l i s h e d t h a t t h e p l o t was used f o r g a r d e n i n g . Corn was r a i s e d . Cows and h o r s e s were p a s t u r e d and watered t h e r e . A f e n c e i n some form o r a n o t h e r h a s e x i s t e d s i n c e 1 9 3 5 . Dr. Edwin J . B u r k e , a wood s c i e n t i s t a t t h e U n i v e r s i t y of Montana, examined wood f r a g m e n t s removed from t h e corner f e n c e p o s t a t t h e n o r t h e a s t c o r n e r of M a r j e r r i - s o n s ' p r o p e r t y . H i s e x p e r t testimony e s t a b l i s h e d t h a t t h e o r i g i n a l corner p o s t of t h e f e n c e was most l i k e l y s e t around 1916. The d i s t r i c t judge v i s i t e d t h e l a n d and p e r s o n a l l y viewed the site at the request of the parties. The use has been open, notorious, exclusive, adverse, continuous and uninterrupted. One cannot gain adverse possession to land unless one pays the taxes on the land throughout the statutory period. Nor can one acquire a prescriptive right to property which in effect usurps the ownership of the fee title without paying the taxes thereon. Marjerrisons failed to do so. They have acquired no interest in the property. Burlingames also challenge some of the costs included in Marjerrisons' memorandum of costs and the amendment of the bill of costs. These issues are moot on reversal since Burlingames now prevail and will not be assessed costs. Reversed and remanded to the District Court for entry of a decree consistent with this opinion. ~LA-Q$64dA,Au&, Chief ~us'fice We concur:

June 30, 1983

593d8539-fa6d-49d3-8f71-68516f585430

STATE v WOOD

N/A

82-469

Montana

Montana Supreme Court

No. 82-469 IN T H E SUPREME C O U R T OF T H E STATE O F M O N T A N A 1983 STATE O F M O N T A N A , P l a i n t i f f and Appellant, VS . BRIAN J. WOOD, Defendant and Respondent. Appeal from: D i s t r i c t Court of the Eishteenth J u d i c i a l D i s t r i c t , In and f o r t h e County of G a l l a t i n Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellant: Hon. Mike Greely, Attorney General, Helena, Montana Marge Johnson arqued, Assistant Attorney General. Helena, Montana A. Michael Salvaqni, County Attorney, Bozeman, Montana For xespondent : Thomas M. Gaa argued, Bozeman, Yontana Submitted 3 5 , 1 9 8 3 Decided: July 1 8 , 1 9 8 3 JUL I 8 1983 F i l e d : Clerk Mr. Chief J u s t i c e Prank I. Haswell d e l i v e r e d t h e Opinion of t h e Court. The S t a t e a p p e a l s t h e G a l l a t i n County D i s t r i c t C o u r t o r d e r s u p p r e s s i n g e v i d e n c e found i n a s e a r c h i n c i d e n t t o an a r r e s t f o r i s s u i n g a bad check. W e r e v e r s e . Between J u l y 1 7 , 1981, and J u l y 26, 1981, B r i a n Wood i s s u e d f o u r checks t h a t t o t a l e d $49.97, and between October 10, 1981, and October 30, 1981, he i s s u e d n i n e more t h a t t o t a l e d $181.79. Each of t h e s e checks w a s r e t u r n e d t o t h e payee because of i n s u f f i c i e n t f u n d s i n Wood's account. The p a y e e s d i d n o t c o n t a c t Wood. On November 23, 1981, t h e j u s t i c e o f t h e peace i s s u e d an a r r e s t w a r r a n t f o r Wood on t h e c h a r g e of i s s u i n g a bad check. There were no p r e v i o u s e f f o r t s t o s e c u r e h i s p r e s e n c e t o answer t h e c h a r g e o r p o s t bond. A t a p p r o x i m a t e l y 7:30 a.m. on December 4 , 1 9 8 1 , O f f i c e r David P e t e r s o n of t h e G a l l a t i n County s h e r i f f ' s d e p a r t m e n t a r r e s t e d Wood a t h i s home. No o f f e r t o a c c e p t bond ( $ 5 0 0 ) was made nor was a " n o t i c e t o appear" o r summons t e n d e r e d i n l i e u of a f u l l c u s t o d i a l a r r e s t . During t h e booking p r o c e d u r e a f u l l s e a r c h of Wood w a s conducted, and one gram of h a s h i s h was found. On March 29, 1982, i n f o r m a t i o n s were f i l e d c h a r g i n g Wood w i t h i s s u i n g a bad check and w i t h c r i m i n a i p o s s e s s i o n of dangerous d r u g s , both f e l o n i e s . Wood p l e a d g u i l t y t o i s s u i n g a bad check. However, t h e D i s t r i c t C o u r t g r a n t e d h i s motion t o s u p p r e s s t h e c o n t r a b a n d on t h e b a s i s t h a t t h e a r r e s t , from which t h e s e a r c h stemmed, w a s an u n c o n s t i t u t i o n a l i n v a s i o n of p r i v a c y under S t a t e v. C a r l s o n ( 1 9 8 2 ) , Mont . , 644 P.2d 498, 39 St.Rep. 802. The lower c o u r t r u l e d t h a t t h e S t a t e f a i l e d t o show a compeiilng s t a t e i n t e r e s t f o r u t i l i z i n g t h e most i n t r u s i v e means t o e f f e c t u a t e its i n t e r e s t . From t h i s r u l i n g t h e S t a t e a p p e a l s . The s o l e i s s u e f o r our c o n s i d e r a t i o n is whether a f u l l c u s t o d i a l a r r e s t was p r o p e r i n t h i s c a s e . E s s e n t i a l l y , t h e S t a t e c o n t e n d s t h a t t h e D i s t r i c t Court m i s t a k e n l y extended t h e C a r l s o n d e c i s i o n t o f e l o n i e s . The C o u r t , i n C a r l s o n , c l e a r l y l i m i t e d i t s r u l i n g t o t r a f f i c - r e l a t e d misdemeanors. The i n t e r e s t s of s o c i e t y i n t h e a d m i n i s t r a t i o n of j u s t i c e is g r e a t e r h e r e t h a n i n C a r l s o n s i n c e a f e l o n y is involved. T h i s is a s u f f i c i e n t compelling i n t e r e s t t o j u s t i f y a f u l l c u s t o d i a l a r r e s t . W e hold t h e a r r e s t was n o t a v i o l a t i o n of Wood's c o n s t i t u t i o n a l r i g h t of p r i v a c y . F u l l c u s t o d i a l a r r e s t s , supported by a w a r r a n t , f o r f e l o n i e s a r e proper. F i r s t o f a l l , t h e apprehension of f e l o n y s u s p e c t s is a compelling s t a t e i n t e r e s t t h a t j u s t i f i e s a f u l l c u s t o d i a l a r r e s t p u r s u a n t t o a w a r r a n t . T h i s Court h e l d i n S t a t e ex r e l . Zander v. District Court ( 1 9 7 9 ) , 180 Mont. 548, 591 P.2d 656, " [ t l h e r i g h t of i n d i v i d u a l p r i v a c y must y i e l d t o a compelling s t a t e i n t e r e s t . Such compelling s t a t e i n t e r e s t e x i s t s where t h e s t a t e e n f o r c e s i t s c r i m i n a l laws f o r t h e b e n e f i t and p r o t e c t i o n of o t h e r fundamental r i g h t s of i t s c i t i z e n s . " 180 Mont. a t 556, 591 P.2d a t 660. The appre- hension of f e l o n s is proper enforcement of c r i m i n a l laws that w i l l b e n e f i t a l l c i t i z e n s . S p e c i f i c a l l y , the enforcement of laws p r o h i b i t i n g t h e i s s u a n c e of bad checks p r o t e c t s v a l u a b l e fundamental r i g h t s of c i t i z e n s . Second, C a r l s o n is l i m i t e d t o t r a f f i c - r e l a t e d misde- meanors. I n C a r l s o n t h i s Court a d d r e s s e d t h e i s s u e whether a f u l l c u s t o d i a l a r r e s t was proper f o r misdemeanor t r a f f i c o f f e n s e s . C a r l s o n was involved i n a t r a f f i c a c c i d e n t where- upon he t o l d t h e i n v e s t i g a t i n g p o l i c e t h a t he had a l i c e n s e b u t d i d n o t have it w i t h him. The p o l i c e could n o t immedi- a t e l y check on t h i s s t o r y . L a t e r , p o l i c e found d e f e n d a n t was d r i v i n g w i t h a revoked l i c e n s e ; t h u s , t h e c i t y c l e r k was t o l d t o m a i l two " n o t i c e s t o appear" t o d e f e n d a n t f o r d r i v i n g w i t h o u t a l i c e n s e and o b s t r u c t i n g an o f f i c e r . The n o t i c e s summoned t h e d e f e n d a n t t o appear on March 11, 1981. The n o t i c e s were - n o t mailed and when t h e d e f e n d a n t f a i l e d t o a p p e a r , t h e p o l i c e o b t a i n e d a w a r r a n t and a r r e s t e d t h e d e f e n d a n t . When t h e a r r e s t o c c u r r e d i n d e f e n d a n t ' s home, c o n t r a b a n d was observed. P o l i c e l a t e r o b t a i n e d a s e a r c h w a r r a n t and s e i z e d t h e contraband. Defendant was charged w i t h c r i m i n a l p o s s e s s i o n of dangerous d r u g s and t h e f t , a l l f e l o n i e s . The D i s t r i c t Court suppressed t h e s e i z e d e v i d e n c e b e c a u s e d e f e n d a n t ' s F o u r t h Amendment r i g h t s had b e e n v i o l a t e d . T h i s Court h e l d t h a t e n t r y by t h e p o l i c e p u r s u a n t t o t h e a r r e s t w a r r a n t was u n r e a s o n a b l e a s t h e r e was no j u s t i f i - c a t i o n o r exigency f o r a f u l l c u s t o d i a l a r r e s t . Hence, t h e o b s e r v a t i o n of t h e contraband was a w a r r a n t l e s s s e a r c h which is always presumed unreasonable. C a r l s o n , 6 4 4 P.2d a t 504, 39 St.Rep. a t 810. The r a t i o n a l e f o r o u r h o l d i n g was b a s e d o n t h e misdemeanor t r a f f i c o f f e n s e s . Applied t o such o f f e n s e s , t h e r e were l e s s i n t r u s i v e means t o accomplish t h e S t a t e ' s o b j e c t i v e ; t h e r e f o r e , no compelling i n t e r e s t e x i s t e d f o r t h e S t a t e ' s i n v a s i o n of C a r l s o n ' s p r i v a c y . S p e c i f i c a l l y , t h e d e f e n d a n t was never n o t i f i e d of t h e t r a f f i c v i o l a t i o n s and t h e r e is a s p e c i f i c municipal p o l i c y t h a t p r e v e n t s a r r e s t s f o r t r a f f i c o f f e n s e s u n l e s s t h e accused d o e s n o t respond t o n o t i c e s . W e noted o t h e r o p t i o n s less i n t r u s i v e t h a n an a r r e s t t h a t t h e c i t y could have u t i l i z e d b u t d i d n o t . F u r t h e r i n d i c a t i o n t h a t C a r l s o n is l i m i t e d t o t r a f f i c - r e l a t e d misdemeanors is found i n t h e l a s t paragraph of t h e m a j o r i t y o p i n i o n . W e s t a t e d : ". . . i f w e were t o s u s t a i n t h e e n t r y by t h e p o l i c e o f f i c e r s a s r e a s o n a b l e , t h e r e would be few i n s t a n c e s i n t h e s e r v i c e of w a r r a n t s of a r r e s t f o r t r a f f i c - r e l a t e d o f f e n s e s when t h e o f f i c e r s would n o t g a i n e n t r a n c e i n s i d e t h e home. Few p e r s o n s a r e f u l l y d r e s s e d and ready f o r t h e s t r e e t when they answer t h e door i n response t o a knock. I n e v i t a b l y t h e s e a r c h would be held i n c i d e n t t o t h e a r r e s t , and n o t v i c e v e r s a . The C i r c u i t C o u r t of Appeals f o r t h e Ninth C i r c u i t h a s been c a r e f u l t o avoid opening up s e a r c h e s on t h e b a s i s of t r a f f i c - r e l a t e d a r r e s t s , T a g l e v o r e v . United S t a t e s ( 1 9 6 1 ) , 291 F.2d 262; a s has t h e F i f t h C i r c u i t , Amador-Gonzalez v. United S t a t e s ( 1 9 6 8 ) , 391 F.2d 308." 644 P.2d a t 505, 39 St.Rep. a t 811. C o n s e q u e n t l y , t h e D i s t r i c t C o u r t h e r e e r r o n e o u s l y extended C a r l s o n t o f e l o n i e s . Wood was charged w i t h a v i o l a t i o n of s e c t i o n 45-6-316(1), MCA, a f e l o n y , and a f u l l c u s t o d i a l a r r e s t was p r o p e r p u r s u a n t t o a v a l i d w a r r a n t . T h i r d , i f e v e r y f e l o n y a r r e s t s u p p o r t e d by a w a r r a n t was s u b j e c t t o heightened j u d i c i a l s c r u t i n y , l a w enforcement would be unreasonably burdened. I n e f f e c t , t h e p o l i c e would have no c l e a r g u i d e l i n e s t o d e t e r m i n e whether a p a r t i c u l a r a r r e s t w i l l be c o n s t i t u t i o n a l l y c o r r e c t . The o r d e r o f t h e D i s t r i c t C o u r t s u p p r e s s i n g t h e e v i d e n c e is v a c a t e d , and t h e c a u s e remanded t o t h e D i s t r i c t Court f o r f u r t h e r proceedings. Chief ~ustice \ 'L J u s t i c e s M r . J u s t i c e Daniel J. Shea w i l l f i l e a s e p a r a t e opinion l a t e r .

July 18, 1983

084c00ce-3bed-4d83-a0f9-8390fac35625

BUNKE INC v JOHNSON

N/A

82-459

Montana

Montana Supreme Court

NO. 82-459 I N THE SUPPSME C O U R T OF THE STATE OF M O N T A N A 1983 BUNKE, I N C . , a Montana c o r p o r a t i o n , p l a i n t i f f and Appellant, B O B JOHNSON and H A R L A N CARPENTER, d/b/a t h e JOCAR P a r t n e r s h i p , Defendants and ~ e s p o n d e n t s . Appeal from: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Yellowstone Honorable Robert Wilson, Judge p r e s i d i n a . Counsel of Record: For Appellant: James R. Carlson, Hysham. Montana For Respondents- Ralph L. H e r r i o t t , B i l l i n q s , Montana -- Submitted on b r i e f s : March 24 1983 Decided: July 1 8 , 1 9 8 3 F i l e d : JUL 1 8 1983 Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. Plaintiff Bunke, Inc. (Bunke) appeals from a decision of the Thirteenth Judicial District Court, Yellowstone County, in this declaratory judgment action arising out of the lease of The Rails Inn Motel in Forsyth, Montana. We affirm the District Court. Bunke raises the following issues on appeal: 1. Does section 70-26-203, MCA, justify the tenant, Bunke, vacating the premises and discharge it from further payment of rent a.nd other obligations under the lease? 2 . Does the landlord's retaking of possession and operation of the motel terminate the lease and with it all of the obligations under the lease? Plaintiff Bunke is a family corporation based in Miles City, Montana, which operates several motels in the area. Defendants Bob Johnson (a contractor) and Harlan Carpenter formed a partnership (Jocar) in fall of 1980 for the purpose of building the Rails Inn Motel in Forsyth, Montana. Their decision to build was based in part upon their ongoing negotiations with Burlington Northern Railroad (BN) for the use of the facility by a guaranteed number of BN employees, at that turn-around point on the line. Letters from BN's Tom Jarnigan indicate that BN did not promise a long-range contract, but at first contemplated a guaranteed 35 rooms per day. The agreement finally entered into by Jocar and BN on March 31, 1981 guaranteed 20 occupancies per day at a reduced rate of $17 each. The contract was terminable upon thirty days' written notice or 24 hours' notice in the event of certain contingencies. No mention was made in the agreement of cafe or bar facilities. Bunke contends the restaurant and bar were essential to the BN lease, while Jocar's position is that those facilities were to be installed if and when suitable operators could be found. In spring of 1981, while Jocar was proceeding with the construction of the Rails Inn, Bunke expressed an interest in leasing and operating the facility. During subsequent negotiations between Bunke and Jocar, Garry Bunke, who is an officer of the corporation and an attorney, represented Bunke; Jocar was not represented by counsel. The record suggests that numerous matters were discussed which were not included in the lease agreement drafted by Garry Bunke and signed by the parties April 21, 1981. The term of the lease was from May 1, 1981, to April 30, 1982. The monthly rental payment was $13,295, payable on the fifth day of the following month. The lease provided that Bunke would pay $11,400 or the actual property taxes, whichever was less, and $2,400 as its share of the insurance. Bunke would be liable for utilities, and would not involve Jocar in any expense or liability. Bunke had a one-year option to purchase the entire facility, including "the restaurant and bar portion," for $850,000; the price did not include "fixtures, furniture and equipment nor liquor license. " In the event Bunke chose not to exercise the option to purchase, all lease payments were to be considered rental. Jocar had the right to terminate the lease upon 30 days' written notice for Bunke's failure to perform the conditions of the lease or failure to conduct its business properly. The lease contained no provisions regarding: a. The railroad occupancy agreement; b. Installation and operation of a bar and cafe; c. Responsibility for repairs and maintenance; d. Responsibility for correcting flaws in construction and supplying furnishings; e. Responsibility for complying with sanitary and licensing standards and getting a license. f. The cost of signs; g. Termination by Bunke; h. Effect of termination upon the option to purchase and rental payments. Bunke took possession of the Rails Inn on May 1, 1981, installed a manager, and opened for business May 4, 1981. In the weeks prior to Bunkels taking possession, Bunke's president, Paul Bunke, had visited the site numerous times. He was familiar with the progress of construction, and the fact that the Rails Inn was not completely finished at the time Bunke took possession, and could only enjoy limited occupancy at first. He also had read the BN agreement and was familiar with its terms. Numerous problems arose between Bunke and Jocar from the outset, partly because the facility was newly constructed and was just starting up, partly because the lease failed to establish the responsibility of Jocar for certain equipment, adjustments and corrections demanded by Bunke. Jocar did not finish the bar/cafe section; nor did Jocar find anyone to operate a bar/cafe during Bunkels occupancy, although the Rails Inn sign advertised "The Beanery Cafe'' and "The Sidetrack Lounge." Jocar refused to finish and open the bar/cafe section unless a suitable operator could be found who was willing to pay the $3,000 or $4,000 monthly rental. Bunke claims many prospective clients turned away upon learning the facility lacked a bar and cafe. Bunke also claims the lack of a bar and cafe led to BN's reduction of its guaranteed occupancy from 20 to ten rooms per day, effective December 1981. In the beginning of May when the Rails Inn opened, the bedspreads and color TV's had not yet arrived; the beds' headboards did not match the mattresses; the parking lot was not paved; room key tags, checkout cards, and other small items were not provided; there was no ice machine; light fixtures in the restaurant portion and the basement were missing; security lights and door, certain handrails, electrical panels and fire extinguisher boxes were not finished. Loose bricks at the front entrance caused water to pool and seep into the lobby when it rained. In the weeks that followed, Bunke and Jocar could not agree as to which was responsible for finishing certain items, which items amounted to wear and tear, and how responsibility and expenses for signs, utilities and compliance with codes should be allocated. During the summer of 1981, the Rails Inn was inspected by the Rosebud. County Department of Public Health and the Montana Building Codes Divison. Certain deficiencies were found requiring correction before the Rails Inn could be licensed. These corrections included handrails on certain stairways, laundry chute sprinklers, laundry room fans, and basement sprinklers. Certain of the deficiencies were corrected by Jocar--the laundry chute was closed off and fans were relocated. Handrails were installed in October 1981. The last letter from the Rosebud County Department of Public Health is dated October 22, 1981. The letter indicated that further information was required from the Montana Building Codes' Division before the motel could be licensed. During the summer of 1981, Bunke and Jocar negotiated a substantial reduction of rental payments based upon the above deficiencies. They agreed to reduce the rent for May and June to 40% of actual income rather than the $13,295 monthly figure specified in the lease. The rent for May was $4,904; the rent for June was $8,760. Bunke and. Jocar agreed that the rental for July, August, and perhaps September, would be $12,500 per month. Many deficiencies were actually corrected by Jocar. The parking lot was paved in July 1981; the TVs, proper headboards, and bedspreads were received and installed by mid-May. Jocar installed rain gutters, replaced bricks, and closed off the laundry chute to conform to building code requirements. Bunke supplied its own ice machine and repaired door locks. Certain matters remained unresolved, including the cost of signs and the absence of the bar/cafe. On September 15, 1981, Paul Bunke sent Bob Johnson of Jocar the following letter: "This is to confirm our conversation at the Blue Spruce today, September 15, 1981. It is my understanding that the lease for the Rails Inn will remain at $12,500.00 for the month of September, less $1,886.03 for amounts due by JOCAR to Bunkes, Inc . It is further my understanding that the October rental is to be negotiated at that time. Further, and also pursuant to our conversation, we intend on setting November 1, 1981 as a termination date for the lease in exchange for releasing the option to purchase. We are willing to continue the lease if we can mutually agree with you as to terms for the month of November and subsequent months." No reference is made to specific deficiencies or the overall incompleteness of the Rails Inn. Jocar responded in writing on October 9, 1981, stating that full rental payments were expected. On October 16, 1981, Garry Bunke wrote to Jocar setting out a schedule of past payments. He mentioned the $4,904 May payment, which was only 40% of the gross income, "due to the fact that the motel was not completed on May 1." He also referred to the $8,760 June payment, also only 40% of the June gross, because "the motel still was not complete in many respects." Bunke stated that Jocar's failure to install the bar/cafe was the major problem with the lease. He stated that the motel was "still not complete in many respects," asserting that defects in the laundry room would have to be corrected before the State would issue a license. On October 20, 1981, Jocar sent Bunke a letter which included a list of amounts due and stated: "Jocar will look to your corporation for the payments set forth in the written lease until the same expires of its own terms." This intention was reiterated in a letter from Jocar to Bunke dated November 6, 1981. On November 1, 1981, Bunke moved out of the Rails Inn. Bunke made no rental payments or other payments after October 1, 1981. Jocar operated the Rails Inn from November 1, 1981 to May 1, 1982, netting $36,758.83. On November 25, 1981, Bunke filed its complaint, seeking a declaratory judgment that Jocar had breached the "terms and provisions, warranties and representations that they made to enter into the lease agreement," and seeking damages in the amount of $23,000 for that breach. Jocar cross-complained, alleging damages arising from Bunke's unilateral termination of the lease and its failure to make the remaining rental payments and other payments required by the lease agreement. Trial was held on July 13-14, 1982, before the District Court sitting without a jury. On August 10, 1982, the District Court filed its findings and conclusions; judgment in favor of Jocar was entered August 24, 1982. The court held that Bunke was liable to Jocar for $54,572.98 plus costs; the amount represented adjusted damages less mitigation resulting from Jocar's operation of the Rails Inn between November 1, 1981 and May 1, 1982. Bunke appeals. Bunke argues that the District Court ignored section 70-26-203(1), MCA, which states: "If within a reasonable time after notice to the lessor of dilapidations which he ought to repair, he neglects to do so, and if the cost of such repairs does not require an expenditure greater than 1 month's rent of the premises, the lessee may perform such repairs himself and deduct the expenses of such repairs from the rent, or the lessee may vacate the premises, in whichcase he is discharged from further paymenFof rent or -- performance - of other conditions." (Emphasis a d d e d ) . Bunke cites cases in which this Court recognized that the lessor's failure to repair "dilapidations" justified the lessee's choosing either of the options stated in 70-26-203(1), MCA, and similar earlier code sections. Lowe v. Root (1975), 166 Mont. 150, 531 P.2d 674; Noe v. Cameron (1922), 62 Mont. 527, 205 P. 256. The lessee's right to "repair and d.eductW or vacate the premises if a lessor fails to make repairs he ought to make is well-settled in Montana. Lowe, supra; Lake v. Emigh (1946), 118 Mont. 325, 167 P.2d 575; (SS42-401, 402, R.C.M. 1947; S(S7741, 7742, R.C.M. 1935; section 70-26-203 (I), MCA. This right arises under contract law and involves the presumption that a person would not agree to lease a residential facility which was unfit for human habitation. In Lowe, 166 Mont. at 159, 531 P.2d at 679, this Court recognized that the presumption extends to commercial residential facilities, such as hotels, stating: "Beyond a doubt a hotel is 'a building intended for the occupation of human beings' and thus within the scope of sections 42-201 and 42-202, R.C.M. 1947." It does not follow, however that a lessee may vacate without liability, or repair and deduct, where the needed repairs do not significantly affect the leasehold or compromise the purposes for which the property is leased. In Lake, 118 Mont. at 332, 167 P.2d at 579, this Court noted that sections 7741 and 7742 of the 1935 Revised Codes of Montana (forerunners to section 70-26-203, MCA) "relate only to dilapidations rendering the premises untenantable" or "unfit for habitation." Section 42-201, R.C.M. 1947, required that the lessor of a building intended for human occupation "must, in the absence of an agreement to the contrary, put it into a condition fit for such occupation, and repair all subsequent dilapidations thereof which render it untenantable . . . " Section 42-202 R.C.M. 1947, allowed a lessee to vacate, or repair and deduct up to one month's rent, as to dilapidations which the lessor "ought to repair." Section 42-201, R.C.M. 1947, was repealed in 1977. Section 42-202 was reenacted substantially intact into section 70-26-203 (1) , MCA, applicable to commercial residential leases. The repeal of section 42-201 leaves in some doubt the character of those dilapidations which a landlord ought to repair under section 70-26-203, MCA. If the dilapidations must be so extensive as to render the premises untenantable, they would probably also be so extensive that the cost of repairing them would exceed a month Is rent. This would leave the tenant with the unsatisfactory options of (1) remaining in premises, which while not untenantable are significantly affected by serious defects; (2) vacating at risk of liability under the lease; or (3) repairing at his own expense. On the other hand, the statute can hardly be intended to burden the landlord with making the most trivial repairs or facing a broken lease. Clearly, the dilapidations that a landlord ought to repair under section 70-26-203, MCA, are those which significantly diminish the enjoyment of the premises or substantially interfere with the purposes for which the lease premises are intended. The record here establishes that the building "deficiencies" listed by Bunke were not such as to adversely affect rentals, thus compromising the purpose of the lease. Indeed, Bunke rented the rooms in the Rails Inn continuously from the first week of its possession of the facility. Bunke has not demonstrated that the deficiencies that existed were substantial enough to have an adverse financial effect. Bunke relies upon Lowe, supra, to support its assertion that Jocar's failure to comply with all code requirements is sufficient to justify Bunke's abandonment of the Rails Inn in November, 1981. In Lowe, 166 Mont. at 159, 531 P.2d at 679, we stated: " [Lessee] had the choice of making the repairs called for by the letter of the fire marshal and deducting the cost from the rent payments, to the extent of one month's rent payment, or to vacate the premises." In Lowe the deficiencies noted in the fire marshal's letter were sufficient to warrant the condemnation of the building as a fire hazard and a public nuisance. In the case at bar the record supports the District Court's conclusion that Jocar took steps to remedy the deficiencies and bring the building up to code requirements so it could be licensed. Communications in the record from the Rosebud County sanitarian express the county's recognition of Jocar's correction of several problems. The remaining problems were obviously minimal; the record shows that Jocar obtained the city business license for the Rails Inn without difficulty. It appears that Jocar has not yet applied for a motel license from the State. During the summer months, the Rails Inn has been operating at about 83% of capacity, which Jocar considers successful. This Court also must consider the negotiated agreement between Bunke and Jocar to reduce the May rent by $8,000 and the June rent by $4,500 because of deficiencies which existed when Bunke assumed occupancy of the Rails Inn. Such a substantial reduction in rent suggests that the parties settled the question between them, and that Bunke assumed the responsibility for correcting deficiencies. In effect, the negotiated reduction suggests an agreement to "deduct and repair. " Section 70-26-203, MCA, is phrased in the disjunctive; a tenant is not granted the right to deduct for the repairs of a building's flaws, - and to vacate the premises because of the flaws. The record also establishes that Bunke entered into the lease agreement and took possession of the Rails Inn knowing the facility was not finished, and that completion would take some time. Bunke may not fairly argue the delay in completion to justify a decision to abandon only a few months after taking possession. In light of the evidence that (1) the deficiencies in the Rails Inn were not significant enough to have an adverse financial impact upon the motel's operation; (2) Jocar had taken some steps to conform to code requirements prior to Bunke's departure; (3) the rent reductions suggest an agreed settlement of Bunke's claims of incomplete construction, we find substantial evidence to support the District Court's conclusion that Bunke was not entitled to vacate without further obligation under the lease pursuant to section 70-26-203, MCA. We note in passing that those "promises" which Bunke claims induced it to enter into the lease--the BN guaranteed occupancy agreement and the operation of a bar/cafe on the premises--are not dispositive here. First, and most obvious, they are not pertinent to the issues raised by Bunke. Section 70-26-203, MCA, is not applicable; the absence of a bar/cafe can hardly be considered a "dilapidation" which the landlord ought to repair. Second, if Bunke had intended to hold Jocar to any "promises", those promises could have and should have been incorporated into the lease agreement which Bunke's attorney drafted. This was not done. Where the contract is clear and unequivocal on its face, we will not consider par01 evidence to modify its terms. Spraggins v. Elvidge (1981), Mont . , 625 P.2d 1151, 38 St.Rep. 493. Evidence of negotiations which preceded the written contract may have been admissible at trial to support Bunke's theory of fraud, under section 72-11-304(2), MCA. But the District Court found no fraud, and, as Bunke notes, fraud is not raised as an issue on appeal. Bunke may not use that evidence on appeal to seek to modify the terms of the contract, which is clear and unambiguous on its face, and which simply does not provide for Jocar's operation of a bar and cafe on the premises. Third, the record establishes that Bunkes had read and were familiar with the terms of the BN agreement. The agreement made no reference to a bar/cafe; it contained a 30-day termination provision. Bunke could not reasonably claim to have relied on assurances by Jocar that the bar/cafe was "necessary" to the BN agreement, or that the Rails Inn was certain to enjoy a long-term occupancy guarantee from BN. Finally, there is testimony from Bob Johnson that Jocar agreed to install a bar/cafe only if a suitable operator could be found, who could pay the monthly rental of $3,000-$4,000. Johnson testifed that he was unable to find such an operator, although a number of prospective operators were interviewed. There is substantial evidence to support the District Court's conclusion that Jocar was not obliged under the contract or otherwise to establish an operating bar/cafe within the Rails Inn. We hold that Bunke was not entitled to vacate the Rails Inn under section 76-20-203, MCA, and that Bunke unilaterally breached the terms of the lease agreement by abandoning the premises on November 1, 1981, and failing to make the agreed monthly rental payments and other payments. 11. Runke argues that by reentering and taking possession of the Rails Inn on November 1, 1981, Jocar impliedly consented to Bunke's surrender of the premises, thereby extinguishing Bunke's further obligations under the lease agreement. Bunke quotes from the American Law of Property subsection 3.99: "A lease may be terminated by surrender, a 'yielding up' to the owner of the reversion or remainder. The surrender ordinarily will not affect any interest third persons may have acquired in the leasehold. It extinguishes the lessee's liability for future rent, but not for accrued rent or for past breaches of other covenants. "The situation that has given rise to most litigation is that where the tenant abandons the premises and refuses to pay rent. The courts usually hold that the lessor may let the premises lie idle and collect the rent. There are statements in some cases that the lessor has a duty to mitigate damages, as for breach of contract, but most of the decisions are simply that if the lessor reenters for the purpose of reletting for the - - lessee he must use reasonable diligence in so doing. Generally, however, the courts -- hold that the lessor who reenters may relet -- for the lessee's benefit, hoIdinq the lessee for any deficiency, provided - he gives the lessee notice." (Emphasis added) Bunke also relies upon Knight v. OM1 Corp. (1977), 174 Mont. 72, 568 P.2d 552. In Knight, the landlord cancelled the lease agreement for non-payment of rent. We found that the landlord's cancellation and reentry terminated the lease agreement, and absent an explicit saving clause in the lease agreement establishing the tenant's further obligations, there were none. Bunke also refers this Court to Bonnet v. Seekins (1952) , 126 Mont. 24, 29, 30, 243 P. 2d 317, 320 (cited in Knight, supra), wherein this Court stated: "The obligation to pay the agreed rental continues until the lease is legally terminated. (citation omitted) "A lease for a fixed term may not be terminated by the act of the tenant in abandoning the property before the end of the term in the absence of consent on the part of the landlord. (citation omitted) The landlord's consent to the surrender or abandonment may be either express or implied. (citation omitted) "'A surrender cannot be effected by the act of only one party; the concurrence, in some way, of both lessor and lessee is necessary in order to accomplish a surrender.' 3 Thompson on Real Property, p. 750, sec. 1491. 'The surrender of leased premises b~ the tenant before the expiration - of the term is not effective unless there is an - - - - - - - acceptance 2 the landlord. Any act equivalent to an aareement on the art of the tenant to abandon - L - - and <he landlord to resume possession is sufficient -- to constitute surrender. ' Id., p. 7 5 1 . " (~mphasis - added) We have no quarrel with Bunke's statement of the law, but we do not find it applicable here, where Jocar expressly rejected Bunke's surrender and refused to terminate the lease, but operated the Rails Inn for the purpose of mitigating damages. In the case at bar, the lease agreement was not legally terminated by express consent, or by forfeiture or cancellation, as in Knight; in fact, Jocar expressly refused to consent to Bunke's vacating the Rails Inn. In three letters to Bunke dated both before and after November 1, 1981, Jocar warned Bunke that Bunke would be held to "strict compliance" with the terms of the lease agreement, and would be held liable for payments set forth in the lease agreement "until the same expires of its own terms." Jocar's position also was communicated to Bunke during personal meetings between the parties prior to Bunke's vacating the premises. It is true that Jocar was present at the Rails Inn on November 1, 1981, to assist in inventorying certain motel furnishings for which Bunke was credited and that there was no particular acrimony between the parties at that time. Bunke relies upon this peaceable transfer to support its claim that Jocar impliedly consented to Bunke's departure. These facts are not dispositive. It is not necessary that parties come to blows or break off all dealings with each other to establish that their positions are legally irreconcilable. Jocar had made its position clear. Its presence the day of Bunke ' s abandonment of the premises was solely to facilitate the continued operation of the Rails Inn for the purpose of mitigating the damages caused by Bunke's abandonment. We hold, therefore, that where a tenant unilaterally terminates the lease of commercial residential premises and vacates, without justification under section 70-26-203, MCA, and the landlord expressly refuses its consent to the tenant's withdrawal, and subsequently operates the facility for the tenant in order to mitigate damages, the tenant is liable for the net damages. The District Court's findings to that effect are supported by the record and by the law. Affirmed. We concur: .an-% ~.&d Chief Justice Mr. Justice Frank B. Morrison, Jr., will file a written dissent later.

July 18, 1983

049c463e-aaf5-4057-8392-1348baeadc31

SHANNON v CITY OF FORSYTH

N/A

83-047

Montana

Montana Supreme Court

No. 83-47 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 MIKE P.F. SHANNON & KATHY SHANNOTJ , Petitioners and Appellants, CITY OF FORSYTII, Respondent and Respondent. Appeal from: District Court of the Sixteenth Judicial District, In and for the County of Rosebud, The Honorable A. B. Martin, Judge presiding. Counsel of Record: For Appellant: Russell K. Fillner-argued, Billings, Montana For Respondent : William F. Meisburger argued, Forsyth, YOntana Submitted: June 6, 1983 Decided: July 14, 1983 Filed: 3uL 1 4 1983 Clerk Mr. Justice John C. Sheehy delivered the Opinion of the Court. Appellants (the Shannons) filed a petition with the City of Forsyth seeking a waiver to locate a mobile home on a lot in a "Residential A" zoning district which excludes mobile homes. After the City Council denied their petition, the Shannons filed a petition for writ of review in the District Court of the Sixteenth Judicial District, Rosebud County. The District Court affirmed the decision of the City Council and this appeal followed. The City of Forsyth is divided into four zoning districts: Residential A, Residential B, Commercial C, and Industrial D. Mobile homes are excluded from Residential A districts unless a person seeking a variance of the zoning restrictions submits a proper petition to the City Clerk and the City Council thereafter grants the variance. A proper petition must include 1) the signatures of at least 80% of the landowners residing within 300 feet of the proposed location of the mobile home; and 2) the signatures of the adjoining landowners. On May 12, 1982, the Shannons presented a petition to the City Clerk of Forsyth seeking a variance in order to place a mobile home on their property at Lot 2, Block 42, which is located in a Residential A district. The petition contained the signatures of at least 80% of the landowners residing within 300 feet of the lot. However, since the petition did not contain the signatures of the adjoining landowners, it was returned to the Shannons on May 14, 1982. When the Shannons discovered they could. not obtain the necessary approval of the owners of adjoining Lot 3, they deeded a one-foot strip of land on the south boundary of Lot 2 to Mike Shannon's mother and step-father, Theresa and Rink Baukema. The Shannons also deeded all of adjoining Lot 1 to the Baukemas, who signed the petition as adjoining landowners. The Shannons thereafter resubmitted the petition. On June 28, 1982, the City Council held a hearing on the Shannon's petition. At that time, Mike Shannon explained to the City Council that he had deeded the one-foot strip of Land to the Baukemas to obtain their consent as adjoining landowners, since the owners of Lot 3 would not give their consent to the variance. The City Clerk then informed the City Council that three persons who had signed the original petition had called the Clerk's office on the morning of the hearing to request that their names be withdrawn from the petition. Another signator contacted a city alderman the day of the hearing to ask that his name also be removed from the petition. The City Council thereafter denied the Shannons' petition because the Shannons had failed to obtain signatures from 80% of the owners residing within 300 feet of the lot and because of the Shannons' "attempt to circumvent the intent of the city code by deeding one foot of property" to the Baukemas. The Shannons thereafter sought a writ of review in the District Court, which upheld the City Council's ruling. In so holding, the District Court stated, "In the present case the non-consenting landowner has done nothing. The effect of his doing nothing is that the City Council can do nothing except observe the zoning restriction. This is not a delegation of a legislative power to the non-consenting landowners, because it is the city ordinance that restricts the petitioners' use of their property." It should be noted that there are currently four mobile homes located on the eastern half of Block 42, which is where the Shannons' lot is located. One of these belongs to the owners of adjoining Lot 3, who refused to consent to the Shannons' petition. There are also no houses on the eastern half of Block 42. The appellant presented two issues in this appeal: 1. Can the City Council remove names from a qualified petition where it acts on information received by its clerk over the telephone or orally from an alderman on the day of the hearing? 2. Is the zoning ordinance unconstitutional because it unlawfully delegates legislative authority and police power to adjoining landowners and landowners residing within 300 feet of the Shannons' property? We need not discuss the first issue, since the City of Forsyth conceded in an agreed statement of facts presented in the District Court that the Sha.nnons obtained the signatures of 80% of the landowners residing within 300 feet of the Shannons' property. Next, the Shannons challenge the constitutionality of the zoning ordinance on the grounds that (1) it unlawfully delegates legislative authority to adjoining landowners and 80% of the landowners residing within 300 feet of their property, thus depriving them of due process and equal protection under the 1st and 14th Amendments of the United States Constitution and Article 2, §§4 and 17 of the Montana State Constitution; and (2) it represents an unwarranted application of police power. We agree with the Shannons on both grounds. To be upheld as a lawful delegation of legislative authority, a "consent" ordinance such as the one adopted by the City of Forsyth must contain standards or guidelines which can be used by a board of adjustment to judge the propriety of a neighbor's withholding of consent. See Eubank v. City of Richmond (1912), 226 U.S. 137, 33 S.Ct. 76, 57 L.Ed. 156; Janas v. Town Board & Zoning Board of Appeals (App. Div. 1976), 382 N.Y.2d 394; State ex rel. Daniels v. Kasten (Mo. App. 1964), 382 S.W.2d 714. A "consent" ordinance will fail if it is found to be arbitrary or capricious. See Seattle Title Trust Co. v. Roberge (1928), 278 U.S. 116, 49 S.Ct. 50, 73 L.Ed. 210; People v. Deeks (1969), 61 Misc.2d 1019; 307 N.Y.S.2d 914. In this case, we find that the "consent" ordinance must fail on both counts. The ordinance provides no standard whatsoever by which the consents may be judged. The effect of the ordinance is to make the right to locate the mobile home in a "Residential A" district dependent wholly on the will and whim of the adjoining owners and 80% of the owners within 300 feet of the property without the application of any sensible fixed guidelines or standards, calculated to protect the interests of all the inhabitants. The result is unequal treatment under the law. Kasten at 717. The "consent" ordinance is also arbitrary and capricious, since the exercise of a negative vote by one resident could defeat the Shannons' petition. The arbitrariness of the ordinance is obvious when the Shannons' adjoining neighbors, who live in a mobile home, can withhold their consent and deny the Shannons the right to locate a mobile home on their property. The "consent" ordinance also represents an unwarranted application of police power. This Court stated in Freeman v. Board of Adjustment (1934), 97 Mont. 342, 356, 34 ~ . 2 d 534, "In order for [an] ordinance to comply with the requirements essential to the exercise of police power . . . it [is] essential that there should be an appellate body, such as the board of adjustment, with the power to consider exceptional cases." Here, although the zoning ordinance gives the City Council, acting as a board of adjustment, the power to refuse to grant the petition, the City Council does not have the same power to determine whether a variance should be granted unless a petition is submitted with the required consent signatures. Thus, the City Council is effectively precluded from hearing and determining the Shannons' petition. We therefore find the "consent" ordinance in this case to be unconstitutional as an unlawful delegation of legislative authority and police power. The judgment of the District Court is reversed. / - - x We Concur: s 4 & $ / Chief Justice %@

July 14, 1983

3da61331-afa5-44d0-86b3-3e50b98ca44f

DAMJANOVICH v WESTERN FIRE INS CO

N/A

82-209

Montana

Montana Supreme Court

VO. 52-209 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 PETAR B. DAMJANOVICH, Plaintiff and Appellant, WESTERN FIRE INSURANCE CO&'lPANY, Defendant and Respondent. Appeal from: District Court of the Thirteenth Judicial. District, In and for the County of Yellowstone Honorable William J. Speare, ,Tudae presidinu Counsel of Record. For Appellant: Lee Overfelt arqued, Billings, Montana Stephens and Cole, Billinus, Montana For Respondent : Anderson, Brown, Gerbase, Cebull & Jones, Billinqs, Plontana Steve Harman argued, Billinqs, Montana Submitted: March 24, 1983 Decided: June 30, 1983 JUN 3 0 ~ ~ d d ~iled: Mr. Justice John C. Sheehy delivered the Opinion of the Court. Petar B. Damjanovich was involved in a collision with a parked car. Because the owner of the parked car was uninsured, Damjanovich brought suit against his insurance company to recover uninsured motorist benefits under his insurance policy. A jury in the Thirteenth Judicial District, Yellowstone County, found that Damjanovich's negligence was greater than that of the owner of the parked vehicle. The District Court entered judgment for the defendant insurance company based on the jury verdict. Damjanovich appeals. We reverse and remand for a new trial. On October 4, 1978, Jack Light was traveling eastbound on 1-94, a part of the interstate system, toward Ballentine, Montana, in his 1974 Ford Galaxy. Between 5:15 and 5:30 p.m., his car suddenly stopped running and he coasted to the right side of the highway. Light left the car, then returned with a mechanic who determined the problem to be bad points. They decided to leave the vehicle parked on the highway overnight with plans to return the next day to repair the car. The interstate highway in this case is one composed of two paved strips, one each for eastbound and westbound traffic separated by a medium strip. Each westbound and eastbound strip is divided into two main lanes for traffic. On the righthand side of one's direction of travel, a parking or emergency lane is also provided, separated from the right driving lane by a solid painted line. Damjanovich was driving his automobile eastbound on the interstate highway at approximately 3:00 a.m. on October 5, 1978, when his car collided with the parked Light vehicle. There are several disputes in the evidence. The defendant claimed that the Light vehicle was parked entirely within the emergency lane on the righthand side of the highway. Damjanovich claims that a portion of the Light vehicle protruded into the main traveled portion of the traffic lane in which he was driving eastbound. Damjanovich testified that as he approached the parked vehicle, which he did not see, he was blinded by oncoming lights and thus drifted into the emergency lane where the collision with the parked vehicle occurred. There was dispute in the evidence as to whether he had claimed such events following the accident. It appears uncontradicted in the evidence that the parked vehicle had been left unlighted and without warnings posted around it of its presence in the emergency lane. At trial, the District Court instructed the jury in effect that it is negligence as a matter of law under Montana statutes to drive a motor vehicle in the emergency lane. Damjanovich contended that such an instruction should be tempered with an instruction on the emergency rule. The issue presented to this Court by Damjanovich is whether the District Court erred in instructing the jury on negligence per se without also instructing it on the doctrine of sudden emergency. With respect to the operation of his car by Damjanovich, the court gave the jury the following instructions: INSTRUCTION NO. 16 "You are instructed that interstate highway no. 94 is a controlled-access highway. A statute in the State of Montana, section 61-8-331 (2) (a) and (c) , MCA, states, in pertinent part, as follows: ' I ' (2) On any controlled access highway or facility, it is unlawful for any person to: " " I (a) drive a vehicle over, upon or across any curb, central dividing section, or other separation or dividing lines; " I " (c) drive any vehicle except in the proper lane, in the proper direction, and to the right of the central dividing curb, separation, section or line; I ' ' INSTRUCTION NO. 17 "If you find from the evidence that the plaintiff, Petar Damjanovich conducted himself in violation of the law just read to you, you are instructed that such conduct was negligence as a matter of law. "However, in this action, a violation of law is of no consequence unless it was a proximate cause of an injury found by you to be suffered by the plaintiff." Counsel for Damjanovich objected to instructions no. 16 and 17 upon the grounds that they imposed an absolute duty upon all operators of motor vehicles on limited access highways to stay strictly within their lanes of travel and that in the absence of a sudden peril instruction it was tantamount to a direct instruction to the jury to find Petar Damjanovich guilty of negligence. In connection with his objection to instruction no. 16 and Damjanovich's counsel offered instructions respecting sudden emergency, all of which were by the court denied. Damjanovich's argument on appeal is that the lights of an oncoming car blinded him and placed him in peril and that he so testified. Therefore, he contends he was entitled to sudden peril instructions which would mitigate the mandatory effect of instructions 16 and 17. The defendant insurance company on the other hand contends that under Eslinger v. Ringsby Truck Lines, Inc. (1981) , Mont . , 636 P.2d 254, 38 St.Rep. 1863, Damjanovich was not entitled to the sudden emergency instructions because the evidence was not sufficient to support a finding that the claimed emergency actually or apparently existed. The defendant contends that it was questionable whether an emergency actually or apparently existed; that Damjanovich had no other witnesses to testify to the alleged emergency; that he did not mention the alleged emergency immediately until several days after the accident; and that there was no physical evidence of evasive action taken by Damjanovich. Ordinarily, it is the duty of this Court to regard the evidence in the District Court trial in the light most favorable to the prevailing party. Since, however, the sudden emergency issue was not submitted by instructions to * - the jury, we are not - -- , , , , the * ~ ~ l ~ & b - w Lk f& .l - 1 - J s We do not regard this case as one in which a sudden emergency instruction should have been given. Eslinger , supra. Rather we find that the objections of Damjanovich to the negligence per - se instructions applying to him should have been regarded by the District Court. Under the facts of this case, Damjanovich was driving on or over at least a portion of the emergency lane when his vehicle collided with the parked vehicle. When the jury applied instructions no. 16 and 17 to that fact, it was mandated by the District Court to find (1) such driving was negligent as a matter of law, and (2) such driving was a proximate cause of plaintiff's injuries. No room was given to the jury under those instructions to determine if driving in the emergency lane by Damjanovich was something a person using ordinary care in the circumstances might have been doing. The instructions were severely limited. If Damjanovich was in the emergency lane, and the collision resulted from that, then Damjanovich was negligent as a matter of law. In effect, Damjanovich was instructed out of court, based on the fact that the collision occurred in the emergency lane without any consideration given to whether a reasonably prudent person in the same circumstances might also have been driving in the emergency lane. This is the first occasion for this Court to consider the effect of a motorist driving over and into that portion of an interstate highway known generally as the emergency lane. Certainly the statute given to the jury in this case with respect to a motorists' duty, section 61-8-331 (2), MCA, is imprecise. The statute does not, by its terms, cover the case of a motorist entering over or upon the emergency lane of interstate highways in this state. The thrust of the statute is to forbid the crossing-over by vehicles into the driving lanes reserved for opposite-direction traffic. We hold that the language of the statutes set out in instruction No. 16, supra, does not apply to vehicles which may occasionally be driven over or into the emergency lane of an interstate highway. To rule otherwise would be contra to our common experience in the use of interstate highways. Drivers frequently veer to the right over and upon the emergency lane to avoid snow or slush being thrown by overtaking traffic; to avoid blocking the traffic lanes when circumstances require a vehicle to proceed more slowly than the normal speed of traffic in those lanes (see Section 61-8-321(2), MCA), or to bring a vehicle to a stop to stretch or change drivers. Surely none of these examples should be considered violations of Section 61-8-331, MCA and, thus, negligence as a matter of law. No state statute that we can find, including Section 61-8-331, MCA, forbids the use of emergency lanes by drivers with specificity. Application of Section 61-8-331, MCA to Damjanovich, in this case, negates, in effect, the continuing negligence of Jack Light who left his unlighted car in the dark on the highway. Ashley v. Safeway Stores, Inc., (1935) 100 Mont. 312, 47 P.2d 53; Section 61-9-214, MCA. In our view, this cause should have been submitted to the lury with respect to the operation of the vehicle by Damjanovich under the ordinary rules relating to negligence. A proper instruction, suitable for this case, would have stated in substance: You are instructed that a person who drives a motor vehicle into or upon the emergency lane of the interstate highway when a reasonably prudent person using ordinary care would not do so, is negligent. Conversely, if a person drives a motor vehicle into or upon the emergency lane of an interstate highway and a reasonably prudent person would ordinarily have done the same under the circumstances of the situation, then you may not find the person negligent because of such driving. Because of the instructional error, we reverse the District Court judgment and remand for a new trial. We concur: Justices iqr. Chief J u s t i c e Prank I. Haswell, d i s s e n t i n g : The m a j o r i t y f i n d t h a t J u r y I n s t r u c t i o n Nos. 16 and 17 r e q u l r e t h e j u r y t o f i n d t h a t Damjanovich was n e g l i g e n t a s a m a t t e r of law f o r d r i v i n g i n t h e emergency l a n e and such d r i v i n g was t h e proximate c a u s e o f h i s i n j u r i e s . I n e f f e c t , t h e m a j o r i t y conclude t h a t Damjanovich was i n s t r u c t e d o u t o f c o u r t based on t h e f a c t t h a t t h e c o l l i s i o n o c c u r r e d i n t h e emergency l a n e w i t h o u t any c o n s i d e r a t i o n g i v e n t o whether a r e a s o n a b l y p r u d e n t p e r s o n i n t h e same c i r c u m s t a n c e s might a l s o have been d r i v i n g i n t h e emergency l a n e . The m a j o r i t y conclude by h o l d i n g t h a t d r i v i n g i n t h e emergency l a n e is n o t unlawful; hence, r e v e r s e and remand t h e case f o r a new t r i a l because t h e j u r y was i n s t r u c t e d t h a t such a c t i o n is unlawful. I would a f f i r m because (1) it is unlawful t o d r i v e i n t h e emergency l a n e under t h e f a c t s of t h i s c a s e , and ( 2 ) t h e j u r y was p r o p e r l y i n s t r u c t e d . The f a c t s of t h i s a c c i d e n t must be n o t e d t o p l a c e t h e c a s e i n c o n t e x t . Defendant was d r i v i n g i n t h e emergency l a n e and rear-ended a parked c a r . D r i v i n g i n t h e emergency l a n e is u n l a w f u l - - t h u s , n e g l i g e n c e p e r se. However, l i a b i l i t y w i l l a t t a c h o n l y i f such unlawful a c t is t h e proximate c a u s e o f some i n j u r y . I n s t r u c t i o n No. 1 6 is s e c t i o n 61-8-331(2)(a) and ( c ) , MCA. These s t a t u t o r y s e c t i o n s p r e s c r i b e t h a t on a c o n t r o l l e d a c c e s s highway, no d r i v e r s h a l l c r o s s any c u r b , c e n t r a l d i v i d i n g s e c t i o n o r o t h e r d i v i d i n g l i n e . It f u r t h e r p r o v i d e s t h a t v e h i c l e s must be d r i v e n i n t h e proper l a n e , i n t h e proper d i r e c t i o n and t o t h e r i g h t of t h e c e n t r a l d i v i d i n g l i n e . Also, s e c t i o n 61-1-206, MCA, d e f i n e s a roadway a s any p o r t i o n of a highway used f o r v e h i c u l a r t r a v e l e x c l u d i n g t h e s h o u l d e r o r t h e berm. The p l a i n meaning o f t h e a b o v e s t a t u t o r y s e c t i o n s mandates t h a t one must d r i v e o n l y i n t h e proper l a n e of t r a v e l and t h e emergency l a n e is - n o t t h e p r o p e r l a n e of t r a v e l . Damjanovich's a c t i o n s were unlawful and t h e j u r y determined t h e y were t h e proximate c a u s e of h i s i n j ur ies . Damjanovich's a c t i o n s could be excused by t h e sudden emergency d o c t r i n e . However, t h e lower c o u r t r e f u s e d t h e i n s t r u c t i o n s . The E s l i n g e r o p i n i o n e s t a b l i s h e d c e r t a i n f i n d i n g s t h a t m u s t be made b e f o r e a s u d d e n e m e r g e n c y d o c t r i n e i n s t r u c t i o n is g i v e n . Under t h e f a c t s of t h i s c a s e , t h e s e r e q u i s i t e f i n d i n g s could n o t be made. I t is v e r y q u e s t i o n a b l e t h a t an emergency a c t u a l l y o r a p p a r e n t l y e x i s t e d . A p p e l l a n t h a s no o t h e r w i t n e s s e s t o t e s t i f y t o t h e a l l e g e d emergency. The a p p e l l a n t ' s t e s t i m o n y is t h e o n l y evidence of t h e p o t e n t i a l d i s a s t e r . Second, a p p e l l a n t d i d n o t mention t h e a l l e g e d emergency u n t i l s e v e r a l d a y s a f t e r t h e a c c i d e n t . T h i r d , t h e r e was no p h y s i c a l evidence of e v a s i v e a c t i o n t a k e n by t h e a p p e l l a n t . F i n a l l y , t h e r e was testimony t h a t t h e a p p e l l a n t was aware of t h e parked c a r ; t h u s , he should have a n t i c i p a t e d it. The e v i d e n c e is simply i n s u f f i c i e n t t o s u p p o r t a f i n d i n g t h a t an emergency e x i s t e d . Furthermore, t h e j u r y was p r o p e r l y i n s t r u c t e d w i t h r e s p e c t t o Damjanovich's case. F i r s t o f a l l , t h e j u r y was i n s t r u c t e d t h a t i f Damjanovich's a c t i o n s were n e g l i g e n c e p e r se, such n e g l i g e n c e was of no consequence u n l e s s it was the proximate c a u s e of some i n j u r y . The j u r y found t h e n e g l i - gence and t h e r e q u i s i t e proximate cause. Second, e v i d e n c e was p r e s e n t e d , and t h e j u r y was i n s t r u c t e d on p o s s i b l e s t a t u t o r y v i o l a t i o n s by L i g h t and Damjanovich. The j u r y weighed t h e evidence, a p p l i e d t h e law and, under t h e doc- t r i n e of comparative n e g l i g e n c e , concluded t h a t t h e n e g l i - gence of Damjanovich was f a r g r e a t e r t h a n t h a t of L i g h t . T h i s Court should n o t d i s t u r b t h a t f i n d i n g . I would, however, a g r e e w i t h t h e m a j o r i t y t h a t t h e r e a r e c e r t a i n s i t u a t i o n s t h a t would r e q u i r e d r i v i n g i n t h e emergency l a n e and under such c i r c u m s t a n c e s such a c t i o n would n o t c o n s t i t u t e n e g l i g e n c e p e r se. For example, d r i v e r s must o f t e n swerve t o t h e r i g h t o r d r i v e a t e m p o r a r i l y d i s - a b l e d v e h i c l e i n t h e emergency l a n e t o a v o i d t r a f f i c impediment. However, t h i s c a s e i s n o t one o f t h e s e emergency s i t u a t i o n s . For t h e f o r e g o i n g r e a s o n s I would a f f i r m t h e j u ~ y v e r d i c t and t h e D i s t r i c t C o u r t ' s judgment e n t e r e d thereon. 3A&8.$4$4 Chief J u s t i c e M r . J u s t i c e L. C. Gulbrandson: I concur i n t h e f o r e g o i n g d i s s e n t of Mr.]Chief J u s t i c e I H a s w e l l . ~ y ' s t ice ,/'

June 30, 1983

f8e812c4-b7f6-4319-8c3a-63fb13b49a37

MARRIAGE OF CHEREWICK

N/A

82-515

Montana

Montana Supreme Court

No. 82-515 I N THE SUPREME COURT O F THE STATE OF MONTANA 1983 I N RE THE MARRIAGE O F PATRICIA McCONNELL-CHEREWICK, P e t i t i o n e r and Respondent, -vs- T H O M A S ANDREW CHEREWICK, Respondent and Appellant. Appeal from: D i s t r i c t Court of t h e Thirteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Yellowstone, The Honorable Robert H. Wilson, Judge presiding. Counsel of Record: For Appellant: W. Corbin Howard, B i l l i n g s , Montana For Respondent: Davidson, Veeder, Baugh, Broeder, Poppler & Michelotti; Doris M. Poppler, B i l l i n g s , Montana Submitted on B r i e f s : A p r i l 15, 1983 Decided: J u l y 13, 1983 Clerk Mr. J u s t i c e John C. Sheehy d e l i v e r e d t h e Opinion of t h e Court. Thomas Andrew Cherewick, t h e husband i n a d i s s o l u t i o n proceeding, a p p e a l s from a f i n a l d e c r e e of d i s s o l u t i o n g r a n t i n g custody of t h e minor c h i l d of t h e p a r t i e s t o t h e wife, P a t r i c i a McConnell-Cherewick, and an o r d e r denying Thomas's motion f o r a new t r i a l and amendment of t h e f i n d - i n g s of f a c t and c o n c l u s i o n s of law e n t e r e d by t h e D i s t r i c t C o u r t o f t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , Y e l l o w s t o n e County. The p a r t i e s were married on J u n e 1 5 , 1974. P a t r i c i a was 22 y e a r s of age, Thomas was 27. One c h i l d , T i f f a n y , was born of t h e marriage on August 6, 1980. Both p a r t i e s a r e w e l l educated and pursuing c a r e e r s . A f t e r t h e c h i l d was born, P a t r i c i a remained a t home f o r a s h o r t p e r i o d of t i m e . T h e r e a f t e r , P a t r i c i a took T i f f a n y t o work w i t h her f o r about s i x months b e f o r e t h e p a r t i e s p l a c e d h e r i n a day c a r e c e n t e r . The primary c a r e of t h e c h i l d remained w i t h P a t r i c i a u n t i l s h e moved from t h e f a m i l y home. The p a r t i e s t h e n shared c a r e of T i f f a n y u n t i l a p s y c h i a t r i s t , Marian Martin, recommended t h a t Thomas r e t a i n p r i m a r y c a r e a n d a l l o w P a t r i c i a v i s i t a t i o n u n t i l completion of t h e d i s s o l u t i o n proceeding . A f t e r a h e a r i n g , t h e D i s t r i c t Court g r a n t e d custody of T i f f a n y t o P a t r i c i a and allowed Thomas r e a s o n a b l e l i b e r a l v i s i t a t i o n . The D i s t r i c t Court r e f u s e d t o a l l o w j o i n t custody because of t h e h o s t i l i t y t h a t had developed between t h e p a r t i e s . The D i s t r i c t Court e n t e r e d t h e f i n a l d e c r e e on August 12, 1982. Thomas f i l e d a combined motion f o r new t r i a l and f o r amendment of t h e f i n d i n g s of f a c t and conclu- s i o n s of law. Thomas's motion was heard and deemed denied by t h e D i s t r i c t C o u r t ' s f a i l u r e t o a c t . Thomas f i l e d n o t i c e of a p p e a l . W e a f f i r m t h e o r d e r of t h e D i s t r i c t Court i n a l l r e s p e c t s . The i s s u e s p r e s e n t e d i n t h i s c a s e a r e : 1. Whether t h e District Court e r r e d i n r e f u s i n g t o admit i n t o evidence Thomas's proposed e x h i b i t " N , " a l e t t e r from P a t r i c i a t o her f a t h e r . 2. Whether t h e D i s t r i c t Court e r r e d i n r e f u s i n g t o g r a n t a new t r i a l o r amend its f i n d i n g s of f a c t and conclu- s i o n s of law upon t h e ground of newly d i s c o v e r e d e v i d e n c e . 3 . Whether t h e D i s t r i c t Court e r r e d i n awarding c u s t o d y of t h e minor c h i l d of t h e p a r t i e s t o P a t r i c i a . The f i r s t i s s u e is whether t h e District Court p r o p e r l y excluded Thomas's proposed e x h i b i t " N , " a l e t t e r w r i t t e n by P a t r i c i a t o h e r f a t h e r . The l e t t e r was a p r i v a t e communica- t i o n . There is no e v i d e n c e p r e s e n t e d s u g g e s t i n g t h a t t h e l e t t e r was completed o r s e n t . Thomas found t h e l e t t e r and photocopied it f o r u s e a t a l a t e r d a t e . Thomas o b j e c t s t o t h e s t a t e m e n t i n t h e l e t t e r t h a t , "My lawyer is i n c a h o o t s w i t h t h e p s y c h o l o g i s t - They a r e s e t t i n g Tom up v e r y smart- They w i l l make m e look s u p e r good." The D i s t r i c t Court o r i g i n a l l y excluded t h e e x h i b i t a s i r r e l e v a n t and l a t e r excluded it when used t o impeach t h e w i t n e s s . Thomas contends t h e e x h i b i t c o n t r a d i c t s P a t r i c i a ' s testimony a t t h e h e a r i n g and had b e a r i n g on her c r e d i b i l i t y . Rule 401, Mont.R.Evid., p r o v i d e s : "Relevant evidence means evidence having any tendency t o make t h e e x i s t e n c e of any f a c t t h a t is of consequence t o t h e d e t e r - m i n a t i o n of t h e a c t i o n more p r o b a b l e o r l e s s p r o b a b l e t h a n it would be w i t h o u t t h e evidence. Relevant e v i d e n c e may in- c l u d e e v i d e n c e b e a r i n g upon t h e c r e d i b i l - i t y o f a w i t n e s s o r h e a r s a y d e c l a r a n t . " The t e s t o f r e l e v a n c e is: ". . . whether an item of e v i d e n c e w i l l have any v a l u e , a s determined by l o g i c and e x p e r i e n c e , i n proving t h e p r o p o s i - t i o n f o r which it is o f f e r e d . The s t a n - d a r d u s e d t o m e a s u r e t h i s a c c e p t a b l e p r o b a t i v e v a l u e is 'any tendency t o make t h e e x i s t e n c e of any f a c t . . . more p r o b a b l e o r less p r o b a b l e t h a n it would be w i t h o u t t h e evidence. ' I 1 S t a t e v. F i t z p a t r i c k ( 1 9 8 0 ) , Nont . , 606 P.2d 1343, 1354, 37 St.Rep. 194, 207. The D i s t r i c t Court h a s broad d i s c r e t i o n t o d e t e r m i n e whether o r n o t t h e e v i d e n c e is r e l e v a n t . Without a showing t h a t t h e D i s t r i c t Court h a s abused its d i s c r e t i o n , t h i s Court w i l l n o t o v e r t u r n t h e District C o u r t ' s d e t e r m i n a t i o n of relevancy. S t a t e v. C l o s e ( 1 9 8 1 ) , Mont. , 623 P.2d 940, 38 St.Rep. 177. The l e t t e r was a p r i v a t e communication t h a t was n o t completed o r d e l i v e r e d t o t h e i n t e n d e d r e c e i v e r . The D i s - t r i c t Court allowed P a t r i c i a t o t e s t i f y a s t o t h e c o n t e n t s of t h e l e t t e r . The Court had t h e o p p o r t u n i t y t o see t h e w i t n e s s and d e t e r m i n e whether t h e e v i d e n c e was r e l e v a n t a s t o t h e t r u t h of t h e s t a t e m e n t s made and h e r c r e d i b i l i t y . W e f i n d no e v i d e n c e i n t h e r e c o r d t o i n d i c a t e t h a t t h e D i s t r i c t Court abused its d i s c r e t i o n i n e x c l u d i n g t h e evidence. The second i s s u e is whether t h e D i s t r i c t C o u r t e r r e d i n r e f u s i n g t o g r a n t a new t r i a l o r amend i t s f i n d i n g s of f a c t and c o n c l u s i o n s of law upon t h e ground of newly d i s c o v e r e d evidence. Thomas a s s e r t s t h e newly d i s c o v e r e d evidence is t h e evidence t h a t P a t r i c i a ' s back y a r d is n o t fenced and is bounded by a d i t c h . There was evidence p r e s e n t e d a t t h e h e a r i n g t h a t P a t r i c i a l i v e d w i t h a n o t h e r woman who had two c h i l d r e n . The c h i l d r e n g o t along w e l l and enjoyed each o t h e r ' s company. They were l i v i n g i n a l a r g e house a t t h e t i m e of t h e h e a r i n g . Thomas p r e s e n t s no evidence t o show t h a t T i f f a n y and P a t r i c i a have moved froin t h i s home. The evidence of whether t h e yard was fenced was a v a i l a b l e a t t h e t i m e of t h e h e a r i n g : "Q. What type of yard d o e s your p r e s e n t home h a v e ? A. [ P a t r i c i a ] W e h a v e approximately a h a l f a c r e . I t ' s enclosed with a f e n c e on one s i d e , a hedge is on t h e o t h e r s i d e . And I t a k e v e r y good t o watch her when w e a r e o u t s i d e . There is a swing, a l s o , i n t h e back f o r h e r . " W e have s t a t e d t h e g u i d e l i n e s f o r d e t e r m i n i n g whether a new t r i a l is j u s t i f i e d : "1. The a l l e g e d 'newly d i s c o v e r e d ' e v i - dence came t o h i s knowledge a f t e r t h e t r i a l ; "2. I t was n o t a want of d i l i g e n c e which precluded its e a r l i e r d i s c o v e r y ; "3. The m a t e r i a l i t y of t h e evidence is s o g r e a t it would probably produce a d i f f e r e n t r e s u l t on r e t r i a l ; and, "4. The a l l e g e d 'new e v i d e n c e ' is n o t merely cumulative, n o t t e n d i n g o n l y t o impeach o r d i s c r e d i t w i t n e s s e s i n t h e c a s e . " K a r t e s v. K a r t e s ( 1 9 7 7 ) , 175 Mont. 210, 214-215, 573 P.2d 191, 194. With regard t o P a t r i c i a ' s y a r d , it is c l e a r t h a t t h e evidence was a v a i l a b l e a t t h e t i m e of t h e h e a r i n g and could have been a s c e r t a i n e d through s i m p l e d i s c o v e r y . I n f a c t , P a t r i c i a t e s t i f i e d t o t h e f a c t t h a t t h e yard was n o t completely fenced. No o t h e r evidence was p r e s e n t e d showing t h a t t h e yard was fenced. While t h e D i s t r i c t Court d i d s t a t e t h a t t h e yard was f e n c e d , t h i s o v e r s i g h t was n o t s i g n i f i c a n t t o w a r r a n t r e v e r s a l . T h e r e f o r e , t h e a s s e r t i o n t h a t t h i s "discovery" w a r r a n t s a new t r i a l is w i t h o u t m e r i t . Thomas a d d i t i o n a l l y a s s e r t s t h a t a f t e r t h e h e a r i n g on August 2 , 1982, P a t r i c i a took T i f f a n y from t n e day c a r e c e n t e r f o r a day. Because of t h i s e'vidence, Thomas a s s e r t s he is e n t i t l e d t o a new t r i a l because P a t r i c i a was n o t co- o p e r a t i n g with t h e planned schedule. Again, we do n o t f i n d t h i s evidence s u f f i c i e n t t o w a r r a n t a new t r i a l . F u r t h e r - more, t h e District Court d i d n o t e s t a b l i s h a v i s i t a t i o n s c h e d u l e u n t i l August 1 0 , 1982. Thomas a d m i t s t h a t he was informed by t h e couple who manage t h e day c a r e c e n t e r t h a t T i f f a n y was with her mother. H e t h e r e f o r e d i d n o t f e a r f o r her s a f e t y . There is no m e r i t t o t h e c o n t e n t i o n t h a t t h i s "newly discovered" evidence j u s t i f i e s a new t r i a l . Thomas f i n a l l y a r g u e s t h a t a new t r i a l was j u s t i f i e d by t h e f a c t t h a t D r . Joseph Rich, a p s y c h i a t r i s t who had c o u n s e l l e d both p a r t i e s p r i o r t o t h e d i s s o l u t i o n of t h e i r m a r r i a g e , decided t o t e s t i f y . D r . Rich r e f u s e d t o t e s t i f y a t t h e o r i g i n a l h e a r i n g because t h e p a r t i e s agreed t h a t t h e i n f o r m a t i o n o b t a i n e d by Rich i n c o u n s e l i n g would n o t be used i n c o u r t . However, he was l a t e r w i l l i n g t o t e s t i f y about c o u n s e l i n g s e s s i o n s he had had a l o n e w i t h Thomas and t o s t a t e h i s o b j e c t i o n s a b o u t M a r i a n M a r t i n ' s s t a t e m e n t s r e g a r d i n g Thomas's anger. Dr. Rich was a v a i l a b l e a t t h e time of t r i a l and could have been subpoenaed by Thomas. The evidence d i d n o t come t o t h e knowledge of Thomas a f t e r t h e t r i a l and t h e r e was want of d i l i g e n c e by Thomas a s t o t h e testimony of Rich. The m a t e r i a l i t y of t h e evidence was n o t s o g r e a t a s t o produce a d i f f e r e n t r e s u l t by t h e D i s t r i c t Court. T h e r e f o r e , w e a r e n o t persuaded by t h i s argument. The D i s t r i c t Court d i d n o t abuse its d i s c r e t i o n by denying Thomas a new t r i a l . F u r t h e r m o r e , w i t h r e g a r d t o t h e newly d i s c o v e r e d e v i d e n c e , we do n o t f i n d t h e f i n d i n g s of t h e D i s t r i c t Court on t h i s "newly d i s c o v e r e d " evidence t o be c l e a r l y e r r o n e o u s . Rule 5 2 ( a ) , M.R.Civ.P. The t h i r d i s s u e r a i s e d on a p p e a l is whether t h e D i s t r i c t Court e r r e d i n o r d e r i n g c u s t o d y of T i f f a n y t o P a t r i c i a . Thomas c o n t e n d s t h e District C o u r t f a i l e d t o s e t f o r t h a l l t h e r e a s o n s f o r t h e c u s t o d y d e t e r m i n a t i o n a s r e q u i r e d by s e c t i o n 40-4-212(3), ( 4 ) , MCA. S e c t i o n 40-4-212, MCA, p r o v i d e s : " B e s t i n t e r e s t of c h i l d . The c o u r t s h a l l d e t e r m i n e c u s t o d y i n accordance w i t h t h e b e s t i n t e r e s t of t h e c h i l d . The c o u r t s h a l l c o n s i d e r a l l r e l e v a n t f a c t o r s i n c l u d i n g : "(1) t h e wishes of t h e c h i l d ' s p a r e n t o r p a r e n t s a s t o h i s custody; " ( 2 ) t h e wishes of t h e c h i l d a s t o h i s c u s t o d i a n ; " ( 3 ) t h e i n t e r a c t i o n and i n t e r r e l a t i o n - s h i p of t h e c h i l d w i t h h i s p a r e n t o r p a r e n t s , h i s s i b l i n g s , and a n y o t h e r person who may s i g n i f i c a n t l y a f f e c t t h e c h i l d ' s b e s t i n t e r e s t ; " ( 4 ) t h e c h i l d ' s a d j u s t m e n t t o h i s home, s c h o o l , and community; and " ( 5 ) t h e mental and p h y s i c a l h e a l t h of a l l i n d i v i d u a l s involved." Thomas a s s e r t s t h e D i s t r i c t Court f a i l e d t o make t h e n e c e s s a r y f i n d i n g s by " i g n o r i n g " e v i d e n c e he had s u b m i t t e d . H e a r g u e s t h a t t h e D i s t r i c t Court made no f i n d i n g s r e g a r d i n g t h e s p e c i f i c r e l a t i o n s h i p between t h e p a r t i e s . He f u r t h e r a s s e r t s t h e D i s t r i c t Court f a i l e d t o make t h e n e c e s s a r y f i n d i n g s r e g a r d i n g T i f f a n y ' s a d j u s t m e n t t o h e r home and community. The D i s t r i c t Court found: "The Court h a s c o n s i d e r e d a l l a p p r o p r i a t e f a c t o r s on c u s t o d y a s f o l l o w s : "1. Both p a r t i e s seek s o l e custody. "2. From the evidence, it is apparent that the child is well-adjusted and although experiencing the stress of her parents' separation and divorce, is developing normally. "3. All parties enjoy excellent mental and physical health. However, Dr. Marian Martin recommends that both parties seek counseling and take a 'parenting course'. "That it would be in the best interests of the minor child of the parties to be placed in the care, custody and control of the petitioner and that respondent have reasonable liberal rights of visita- tion. The Court bases this finding upon the fact that joint custody works only if the parties are able to communicate freely and work well together, and share the responsibilities without rancor. Testimony of the parties and observed open hostility of the parties in the courtroom raises doubt that the parties can agree on substantial matters well enough for joint custody to work well, and the age of the child is such that one domicile would give her more security emotionally. The testimony of the parties does not indicate that respondent shared child-rearing responsibilities and home- maker duties equally with petitioner. It is clear that petitioner bore those responsibilities prior to the separation. The testimony further showed that the present living arrangements of the peti- tioner are more desirable for a young female child as testimony showed the family home is located in a remote sec- tion of the city, with no near neighbors or children to play with, that the home does not have a yard or fenced enclosure for her to play in and that petitioner's home is well suited for the needs of the child, with a large fenced yard, and other children nearby. "Although Dr. Martin's recommendation was to place primary custody with the father, testimony was clear that the father was rather inflexible in allowing the mother frequent visitation and that the father sometimes has used the child's visitation as an outlet for his bitterness and hostility toward the mother for divorcing him. Dr. Taylor testified that most of the five counseling sessions had dealt with respondent's bitterness toward peti- tioner and had to be directed toward his relationship with the child. Petitioner t e s t i f i e d t h a t s h e would c o o p e r a t e f u l l y w i t h t h e c o u r t ' s c u s t o d i a l arrangements i f s h e were g i v e n custody. Witness Diane G i r a r d o t t e s t i f i e d of h e r p e r s o n a l obser- v a t i o n o f p e t i t i o n e r ' s c h i l d - r e a r i n g a b i l i t i e s and t h e home environment and t h a t same was e x c e l l e n t . " The f u n c t i o n of t h i s Court i n reviewing f i n d i n g s of f a c t i n a c i v i l a c t i o n t r i e d by t h e District Court w i t h o u t a j u r y is n o t t o s u b s t i t u t e its judgment i n p l a c e of t h e t r i e r of f a c t s b u t r a t h e r is c o n f i n e d t o d e t e r m i n i n g whether t h e r e is s u b s t a n t i a l c r e d i b l e evidence t o s u p p o r t t h e f i n d i n g s of f a c t and c o n c l u s i o n s of t h e D i s t r i c t Court. Cameron & J e n k i n s v. Cameron ( 1 9 7 8 ) , 179 Mont. 219, 587 P.2d 939. Each p a r t y had t h e o p p o r t u n i t y t o p r e s e n t evidence. S e v e r a l e x p e r t s and f r i e n d s were c a l l e d and t h e D i s t r i c t Court h e a r d e x t e n s i v e testimony on both s i d e s . The District Court had t h e o p p o r t u n i t y t o view t h e w i t n e s s e s and e v a l u a t e t h e i r testimony. The D i s t r i c t Court is n o t o b l i g a t e d t o o u t l i n e a l l of t h e testmony p r e s e n t e d a t t r i a l i n its f i n d i n g s of f a c t . The D i s t r i c t Court p r o p e r l y supported its c u s t o d y d e t e r m i n a t i o n . There was s u b s t a n t i a l c r e d i b l e evidence p r e s e n t e d a t t h e h e a r i n g t o s u p p o r t t h e f i n d i n g s and c o n c l u s i o n s of t h e D i s t r i c t Court w i t h r e g a r d t o t h e c u s t o d y d e t e r m i n a t i o n . The judgment of t h e D i s t r i c t Court is a f f i r m e d . W e concur:

July 13, 1983

3168967f-3d68-4e28-b320-dfd2793d1722

FORMICOVE v BURLINGTON NORTHERN

N/A

83-143

Montana

Montana Supreme Court

Yo. 8 3 - 1 4 3 I N THE SUPREME COURT OF THE STATE OF MONTA??A 1 9 8 3 FORMICOVE, I N C . , P l a i n t i f f and A p p e l l a n t , -vs- BURLINGTON NORTHERN, INC . , D e f e n d a n t and R e s p o n d e n t . APPEAL FROM: D i s t r i c t C o u r t of t h e E i g h t h J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of C a s c a d e , T h e H o n o r a b l e John M. M c C a r v e l , Judge presiding. COUNSEL OF RECORD: F o r A p p e l l a n t : D z i v i , C o n k l i n & N y b o ; S u s a n J. R e b e c k , G r e a t Falls, M o n t a n a F o r R e s p o n d e n t : C h a r l e s C. D e a r d e n , B i l l i n g s , Montana F i l e d : S u b m i t t e d : S e p t e m b e r 2 1 , 1 9 3 3 D e c i d e d : D e c e m b e r 2 0 , 1 9 8 3 C l e r k Honorable Gordon R. Bennett, District Judge, delivered the Opinion of the Court. Plaintiff, Formicove, Inc. , appeals from a summary judgment granted Burlington Northern, Inc. (RN) , by the District Court of the Eighth Judicial District, Cascade County. BN has a railroad enbankment situated between Formicove's property and the Missouri River. Two culverts run under the embankment. In May of 1980 and June of 1982 Formicove's basement was flooded. by surface waters. Formicove claims BN's failure to maintain its culverts caused the surface waters to flood Formicove's basement. Relying upon LeMunyon v . Gallatin Valley Ry. Co. (1921), 60 Mont. 517, 199 P. 915, the District Court held that section 69-14-240, MCA, does not impose a statutory duty on BN with regard to obstruction of surface waters and granted RN summa- ry judgment. The dispositive issue here is whether the LeMunyon case correctly held that section 69-14-240, MCA, imposes no sta-tu- tory duty on a ra.ilroad with regard to obstruction of surface waters. We believe the LeMunyon holding is manifestly incor- rect and must therefore be overruled. Relying on definitions of surface waters and water- courses Laid down in F0rdha.m v. Northern Pacific Ry. Co. (1904), 30 Mont. 421, 76 P. 1040 (set forth below) and the facts presented, the Court found that the water in question was surface water as opposed to water running in a water- course. Reciting the common law rule to the effect that surface water is "the enemy of all mankind.," against which each owner is legally entitled to protect his land, the Court concluded the rule was not altered by what was then section 4362, Revised Codes, a codification of a 1903 Act, now sec- tion 69-14-240(1), MCA. That section then provided: "It shall be the duty of every corpora- tion, company, or person owning or oper- ating any railroa-d, or branch thereof, in this- state, and of any corpora.tion, company, or person constructing any railroad in this state, within three months after the completion of the same through any county in this state, to cause to be constructed and maintained suitable ditches and drains along each side of the roadbed of such road or to construct culverts or openings through such roadbed to connect with ditches or drains, or watercourses, so as to afford sufficient outlet to drain and carry off the water along such railroad whenever the draining of such water has been obstructed or rendered necessary by the construction of such railroad; provided that none of the drains or ditches herein referred to shall he required to be constructed by any of the persons or corworations herein named or described, except when required to remove and drain - off water accumulated upon property adjacent to or upon the right of way whose natural channel or outlet has been destroyed or impairedby the embankment of such railway so constructed as afore- said. . . ." (Emphasis added.) The Court held: ". . . That portion of section 4362, supra, included within the exception or proviso, which mentions 'natural channel' or 'outlet1 refers back to the first or main body of the section, fixing the requirements of railroad. corporations as to ditches, drains, and watercourses, and means 'ditches,' 'drains,' or 'water- courses' as therein expressed, and hence the provisi.ons of this section likewise afford no relief to the respondent." 60 Mont. at 525, 199 P. at 917. This view has been followed for more than sixty-two years. Where the intention of the legisl-ature can be deter- mined from the plain mea.ning of words used in a statute, courts may not go further and apply any other means of inter- pretation. Tongue River Elec. Coop. v. Mont. Power Co. (Mont. 1981), 636 P.2d 862, 38 St.Rep. 2032. In construing a statute, our duty is simply to ascer- tain and declare what is in terms or in substance contained therein. We may not insert what has been omitted or omit what has been inserted. Section 1-2-101, MCA. The statutory language before the proviso required construction and maintenance of ditches and drains to connect with "ditches or drains or watercourses" to carry off water impounded hy a railroad embankment. The proviso was a limi- tation on the general rule: Drains and ditches will be re- quired only to drain off accumulated wa.ter whose "natural channel or outlet" has been destroyed or impaired by the embankment. The LeMunyon opinion equated the words "natural channel or outlet" in the proviso to the words "ditches or drains or watercourses" in the principal clause and apparent- ly concluded from this that the word "watercourses" was intended to be included in the proviso and that therefore the statute did not contemplate surface water, only watercourses. This severely limiting construction overlooks the obvious principal purpose of the statute, which was to change the common law rule as it applied to railroads. The statute speaks not only of "watercourses, " but "ditches, " f drain.^, " "~ulverts," "openings," and "outlets" to drain and carry off water ". . . whenever the draining of such water has been obstructed" and rem0vin.g and draininq off water accumulated upon nonrailroad property. Clearly the statute was intended to deal with impounded water of any kind, without regard to the nice distinction made between surface water and a water- course in Fordham, 30 Mont. at 431, 76 P. at 1043: ". . . If the flood water becomes severed from the main current, or leaves the same never to return, and spreads out over the lower ground, it becomes surface water. But if it forms a continuous body with the water flowing in the ordinary chan- nel, or if it departs from such channel presently to return, it is to be regarded as still a part of the stream. . . ." While it might be said, as the commissioner did, that the proviso words "natural channel or outlet" refer to the principal clause, it is not possible to comprehend from his opinion how he equated those words to the words "ditches, drains or watercourses" in the principal clause. The context is n.ot even the same. The latter words are used to describe the places to which the vagrant water is to be returned. The former words are used to describe the places from which the vagrant water came as a result of the embankment. There is no rule of statutory construction that would approve of this contextual flip-flop. Even if by this literary legerdemain one reads the words "ditches or drains or watercourses" into the proviso to substitute for the words "natural- channel or outlet" set forth therein by the legislature, the limitation imposed bv the LeMunvon court decision could not be sustained. To do so we would be required to give meaning to the word "watercours- es" and to ignore the words ditches and drains. In constru- ing a statute we are required to consider it as a whole and, if possible, give meaning to every word contained therein. Section 1-2-101, MCA; State ex rel. Cashmore v. Anderson (1973.), 160 Mont. 175, 500 P.2d 921. In doing so here, we would have to recognize that ditches and drains carry surfa.ce waters as well as water in watercourses as defined in Fordham, supra. Thus, even if the tortured construction rendered in LeMunyon is accepted, it would not support the conclusion that the proviso limited application of the stat- ute to watercourses. We must assume that the legislature does not perform idle acts. Section 1-3-223, MCA. An interpretation that gives effect is always preferred to one that makes a statute void or treats a statute as mere surplusage. American Linen Supply v. Dept. of Revenue (Mont. 1980), 617 P.2d 131, 37 St.Rep. 1707. The LeMunyon construction reduced the statute to mere surplusage, making it nothing more than a codifica- tion of the common enemy rule. Viewing the statute as written, rather than as artifi- cially reconstructed, we reach the unavoidahle conclusion that the legislature intended to change the existing law and set aside the common enemy rule as applied to railroad em- bankments in favor of the adopted maxim, " [olne must so use his own rights as not to infringe upon the rights of anoth- er." Section 1-3-205, MCA. Our conclusion is reinforced by interpretations of a comparable Missouri statute by that state's courts (Cox v. Hannibal & St. J. F . . Co. (1903), 174 Mo. 588, 74 S.W. 854, and Murphy v. St. Louis-San Francisco R. Co. (1920), 205 Mo.App. 682, 226 S.W. 637) and confirmed by the United States Supreme Court (Chicago & Alton R. Co. v. Tranbarger (1915), 238 U.S. 67, 35 S.Ct. 678, 59 L.Ed. 1204). Section 69-14-240(1), MCA, is the same as section 4362 Revised Codes, the statute construed by the LeMunyon court, except for the conversion of the proviso clause into a sepa- rate sentence during codification. It is apparent then that section 69-14-240, MCA, was misconstrued in LeMunyon. BN nevertheless contends that under the doctrine of stare decisis we must follow this prior contrary holding. While stare decisis is a fundamental doctrine which reflects our concerns for stability, predictability and equal treatment, stare decisis does not require that we follow a manifestly wrong decision. State v. Fischl (1933) , 94 Mont. 92, 20 P.2d 1057; State v. District Court of Fourth Judicial Dist. (1965), 145 Mont. 287, 400 P.2d 648. See also, Jepson v. Department of Labor & Industries (1977), 89 Wash.2d 394, 573 P.2d 10. LeMunyon is therefore overruled insofar a.s it held that section 69-14-240, MCA, imposes no d.uty on a rail- road for obstruction of surface waters. Reversed and remanded. sse Honorable Cor on District Judge, sitting in place of Mr. Chief Justice Frank I. Haswell We concur: District Judge, sifztihg in place of Mr. Justice Frank R . Morrison, Jr. Mr. Justice Fred J. Weber respectfully dissents as follows: I dissent from the majority holding that Le Munyon and - case law consistent with that 192,- opinion misconstrue section 69-14-240, MCA. Nothing in the statutory language nor the legislative history indicates that the Montana legislature intended to hold railroads to a higher dutv of care in managing surface water than the duty imposed on other property owners. "An uphill property owner owes no duty to his downhill neighbor to prevent the encroachment of such vagrant or surface waters from his property onto his neighbor's. Le Munyon v. Gallatin Valley Ry. Co., 60 Mont. 517, 199 P. 915. This Le Munyon rule has been reviewed and affirmed from-time to time in the following Montana cases: Sylvester v. Anaconda Min. Co., 73 Mont. 465, 236 P. 1067; O'Hare v. Johnson, 116 Mont. 410, 153 P.2d 888; State Highway Comm'n v. Biastoch Meats, Inc., 145 Mont. 261, 400 P.2d 274. Accordingly, defendant is entitled to judgment as a matter of law." Roope v. The Anaconda Company (1972), 159 Mont. 28, 33, 494 P.2d 922, 924. In reaching the "unavoidable conclusion that the legislature intended to change the existing law and set aside the common enemy rule as applied to railroad embankments," the majority overrules - Le Munyon and 62 years of precedent, which consistently found to the contrary. The predecessor to section 69-14-240, MCA was enacted in 1903. At no time in the intervening 80 years has our legislature amended the statute to include surface waters. The majority cites Missouri case law to bolster its discovery of legislative intent regarding surface water. The 1879 version of Missouri's statute is identical to the challenged language in the first part of section 69-14-240, MCA. See Rev.St.Mo. S 810 (1879). However, in 1907 the Missouri legislature added the critical element underscored below: "It shall be the duty of every corporation, company or person owning or operating any railroad or branch thereof in this state, and of any corporation, company or person constructing any railroad in this state, within three months after the completion of the same through any county in this state, to cause to be constructed and maintained suitable openings across and through the right of way and roadbed of such railroad, and suitable ditches and drains along each side of the roadbed of such railrcad, to connect with ditches, drains or water courses, so as to afford sufficient outlet to drain off the water, including surface water, along such railroad whenever the draining of such water has been obstructed or rendered necessary by the construction of such railroad; . . .. " Rev.St.Mo. S 3150 (1909). See Rev.St.Mo. § 389.660 (1-978). This amendment nullifies the precedential value of the 1915 and 1920 cases cited as authority in the majority opinion. Cox v. Hannibal and St. Joseph R. Co. (19031, 174 Mo. 588, 74 S.W. 854 is limited authority for the majority position. In Missouri, - Cox was approved by the 1907 legislative addition of "surface water" to its statute. Montana had the same legislative opportunity as Missouri, but chose not to exercise it. That is a portion of our history which was not considered by the majority. The majority's statutory reinterpretation imposes a new duty upon the railroad without defining that duty'. Plaintiff here characterized the offending water as surface water and rain water. The majority opinion apparently imposes a duty upon Burlington Northern to accept adjoining property owners' surface water. It does not specify how the railroad is to manage these waters once they are diverted from adjoining lands into the railroad's ditches and culverts. The Supreme Court of Missouri has held that: "'The law places upon a railroad no duty (and grants a railroad no permission) to enter upon any servient land to construct or to enlarge any existing ditch, drain or watercourse to increase its water carrying capacity,' Smithpeter v. Wabash R. Co., supra, and a railroad may not make an opening in its roadbed and discharge accumulated surface water on an adjacent proprietor, when no ditch, drain or watercourse exists to carry it away without incurring liability for such action." Temple v. Atchison, Topeka & Santa Fe Railway Co. (1967), 417 S.W.2d 97, 100. A new duty to drain off or remove accumulated surface waters from adioining property has been created here. I believe the judiciary, like the legislature, has an obligation to define the limits of any duty it imposes upon individual or corporate citizens. Last, I am troubled by ex post facto application of the majority's holding. The District Court's summary judgment in favor of the defendant was a correct ruling based on the law at that time. To reverse that judgment, the majority has overruled long-standing precedent. The cause is remanded for a determination of liability for failure to perform a duty. According to rulings of this Court in effect at the time of the flooding, that duty did not exist. In remanding the cause to be tried under new law, the majority not only imposes a new duty upon the defendant, hut instructs the District Court to apply 1983 law to 1980 facts. "The construction given to a statute, although erroneous, before its reversal or modification, becomes a part of it as much as though written into it; and the change made in construction will affect only contracts made thereafter." Montana Horse Products Co. v. Great Northern Ry. Co. (1932), 91 Mont. 194, 216, 7 P.2d 919, 927. The issue of liability for flooding that occurred prior - to this Court's reconstruction of the statute and reversal of Le Munyon should not be affected by today's ruling. I would affirm the District Court and leave the changing of the statute to the legislature. /'--TI l / - I join in the foreqoinq d f

December 20, 1983

760f69f5-ff4e-4a48-a701-78ad35f49af5

SHEPARD v MIDLAND FOODS INC

N/A

82-395

Montana

Montana Supreme Court

NO. 8 2 - 3 9 5 I N THE SUPREME COURT OF THE STATE OF WNTAPJA 1983 DEE SHEPARD, C l a i m a n t and A p p e l l a n t , VS. MIDLAND FOODS, INCORPORATED. E m p l o y e r , and GLACIER GFNERAL ASSURANCE COMPANY, D e f e n d a n t s and R e s p o n d e n t s . A p p e a l f r o m W o r k e r s ' C o m p e n s a t i o n C o u r t H o n o r a b l e T i m R e a r d o n , J u d g e presidina C o u n s e l of R e c o r d : F o r A p p e l l a n t : H a l l , H a l v e r s o n & S h e e h y , B i l l i n q s , M o n t a n a W i l l i a m T. K e l l y , B i l l i n g s , P l o n t a n a F o r R e s p o n d e n t s : C r o w l e y , H a u a h e y , H a n s o n , T o o l e & D i e t r i c h , B i l l i n g s , M o n t a n a S u b m i t t e d o n briefs- A p r i l 2 1 1983 D e c i d e d ? July 19 , 19 83 JUL I 9 1983 F i l e d : d Mr. Justice Fred J. Weber delivered the Opinion of the Court. Claimant Shepard appeals from a decision of the Workers' Compensation Court that he was ineligible for further benefits. We reverse the Workers' Compensation Court, and remand for a determination of compensation due, as well as fees, costs and penalties, if any. Claimant presents half a dozen issues for review. The following issues are dispositive: 1. Whether there was substantial evidence to support the Workers' Compensation Court's determination that claimant's knees had deteriorated (and eventually collapsed) because of other than work related reasons. 2. Whether there was substantial evidence to support the Workers' Compensation Court's determination that claimant had recovered from his February 14, 1980 industrial accident by February 25, 1980, when he returned to work. Dee Shepard, the claimant, has been a general laborer all his working life. In September of 1973, he was hired by Midland Foods, Inc. (Midland) . His job involved very heavy work cleaning the boning room and beef coolers in a packing plant. For six and one-half years, claimant routinely lifted garbage cans and tubs containing meat scraps and bones which weighed several hundred pounds. He jacked up and hauled away racks of meat weighing half a ton to a ton. He washed the boning rooms and coolers, squatting, kneeling and stooping for hours at a time, while pulling heavy hoses and machinery. He lifted garbage cans full of ice. He jumped on and off a four-foot-high table he had to clean. Mr. Shepard is a stocky man, 5'4%'' tall, whose weight has fluctuated between 155 and 205 lbs. over the last decade. His favorite hobby, up until he was 50 or 52 years old, was weightlifting. At 50 years of age, he could lift 500 lbs. He stopped weightlifting about 1969. In 1972, Mr. Shepard began having pain in his knees. His doctor diagnosed the condition as degenerative arthritis and chondrocalcinosis. Doctors testifying in this case described the first condition as a relentlessly progressive disease involving the wearing away of the cartilage lining of a joint, accompanied by pain, bony changes and some bone deformation. The condition generally takes years to develop into an advanced stage and is not reversible. It is aggravated, and the accompanying degeneration of joints and bones is accelerated, by weightbearing, obesity and trauma. The doctors described chondrocalcinosis as the existence of calcium crystal deposits in the joints. The deposits sometimes break free and cause episodes of severe pain and swelling known as "pseudogout." Pseudogout is treatable with anti-inflammatory drugs. Chondrocalcinosis and pseudogout do not cause instability or degenerative changes in the bone. They are neither caused nor aggravated by heavy lifting. In fact, pseudogout may flare up during periods of inactivity, as the record shows it did for Dee Shepard. The physician attending Mr. Shepard in 1972 (Dr. Flynn) noted that an x-ray of the left knee showed changes in the cartilage and bone consistent with advanced degenerative arthritic change. He noted, "I cannot see any fracture or dislocation in the left knee." During the next eight years, claimant experienced several episodes of pain and swelling and some instability in his knees. Doctors treated him by draining synovial fluid and injecting cortisone into the knee. In 1975, when Mr. Shepard was hospitalized for a heart "minimal varus deformity, I ' or slight bowleggedness , was noted by a Dr. Hull in both of Mr. Shepard's knees. This condition is also consistent with degenerative arthritis. From September of 1973 on, Mr. Shepard performed the extremely heavy work required by his job with Midland. By 1977, he was walking with a limp. On February 14, 1980, Mr. Shepard slipped on an icy step at work and fell, twisting his left knee and striking it sharply against the edge of the step. His knee was numbed by the blow but gradually became very painful. Mr. Shepard completed his shift, then went to the St. Vincent's ~ospital emergency room in Billings, where his knee was x-rayed and his leg put in a strap-on cast. Within a few days, claimant visited Dr. Taylor, who fitted him with a hinged leather lace-up brace and crutches. The brace was required to keep Mr. Shepard's left knee from "popping out," or dislocating. He wore the brace for approximately a year, and used the crutches for two months longer. Mr. Shepard received temporary total disability benefits until he returned to his job on February 25, 1980, a period of ten days. He testified that working after February 25 was extremely painful for him, and that he began to experience difficulties with his right knee as well: "Q. Did you experience any problems as a result of wearing that hinged knee brace for approximately a year? A . Yes. I would have to lace it so tight in order to keep my left knee in place that I would cut off the circulation off of my leg and my leg would swell above the brace and also below the brace. And my toes would discolor, and three to four times a night I would have to open it up and massage my leg in order to get circulation back. The pain was terrible. . . If I slacked off a little bit on the brace, [the left knee] would not stay in place. I'd go to step down, and I would fall because there was nothing there. "Q. What problems were you having with the right knee during this period of time? A. I was bearing as much weight as I could bear to take the pressure off the left knee. "Q. What did you experience as a result of putting more weight on your right knee? A. Mostly it would get so tired and then I would he getting pain. "Q. In which leg or knee? A. On the right -- On the right knee." On April 10, 1980, on the advice of Dr. Taylor, Dee Shepard retired. Dr. Taylor's case notes on Mr. Shepard, dated April 10, 1980, state, "His knees have collapsed." A subsequent letter from Dr. Taylor to claimant's attorney, dated June 15, 1981, states in pertinent part: "I would say there was aggravation of a knee problem with the accident of Feb. 14, 1980 . . . His knee problem is presumed to be quite a long term, very chronic, kind of dysfunction, and I would consider the percent of aggravation . . . to be very small as regards the Feb. 14, 1980 incident." Dr. Griffin examined Mr. Shepard in December of 1981. He noted that x-rays showed significant degenerative changes in Mr. Shepard's knees since 1972, and found "rather remarkable [varus] deformity . " (bowleggedness) Dr. Griffin testifed that such a deformity "means almost always that there's been significant bony change in one of the compartments of the knee . . . [It] means that there's significant wear and tear." Dr. Griffin also stated that while Mr. Shepard's weightlifting hobby could explain the changes evident -- in 1972, it could not be considered the only possible cause, and that weighthearing, along with obesity and trauma would accelerate the degeneration of the cartilage and the joints. Dr. Taylor, Mr. Shepard's attending physician after the February 14, 1980 accident, stated that he was "not very impressed with the specific incident as the main problem." He described Mr. Shephard's knees as "disaster knees," which, due to a longstanding condition of degenerative arthritis had deteriorated by 1980 to the point that they would respond to nothing but fusion, or the more preferable total knee replacement. Dr. Taylor noted that the February 1980 x-rays indicated "multiple knee in juries [and] many, many subluxations" or small dislocations in both knees. He stated that, although the industrial accident was an aggravant, he did not consider it the major cause of damage to Mr. Shepard's joints, not the kind of thing which takes the arthritic person to his "crippling end." The weightbearing and activity associated with day-to-day living aggravated the condition. Dr. Taylor stated that Mr. Shepard's knee deterioration would have resulted in his forced retirement within a short period. He also stated: "The job that you described to me, that was described to me that Mr. Shepard did at Midland Pack, I am sure would be an accelerant." Upon Mr. Shepard's retirement he sought, and was denied, permanent total disability benefits. He petitioned the Workers' Compensation Court for a hearing, which was held November 18, 1981. The Workers' Compensation Court issued its findings of fact, conclusions of law and judgment on September 14, 1982 denying benefits, costs, fees and penalties. Mr. Shepard appeals. I. Mr. Shepard argues that both his work for Midland and the February 14, 1980 accident at work aggravated his underlying condition of degenerative arthritis, accelerating the approach of his eventual breakdown and total disability. He argues that the Workers' Compensation Court erred in its conclusion that the condition of his knees had deteriorated because of other than work-related reasons. We agree. Uncontested evidence established that Mr. Shepard's degenerative arthritis was a pre-existing condition which had been diagnosed prior to his beginning work at Midland. "The well established rule in Montana is that an employer takes his employee subject to the - - employee's physical condition at the time of - - - - employment. Schumacher v. Empire Steel Manufacturina Co. and ~ m ~ l o v e r T Mutual Liabilitv - I - - L . ' z . Insurance Co. (1977), Mont., 574 P.2d 987, 34 St.Rep. 1112. Close v. St. Regis Paper Co. (1977), -- Mont., 573 P.2d 163. The fact that an employee is suffering from or afflicted with pre-existing disease or disability does not preclude compensation if the disease or disability is aggravated or accelerated by an industrial accident. Birnie v . U.S. Gypsum Co. (1958), 134 Mont. 39, 328 ~ z d 133; ~ u m s e y v . Cardinal Petroleum (1975), 166 Mont. 17, 5 3 0 - p . 2 d 433." Robins v. Anaconda Aluminum Company (1 978) , 175 Mont. 514, 518, 575 P.2d 67, 70. This Court has recognized that a series of minor traumas, which are work related and which sufficiently aggravate a pre-existing condition to result in disability, must be treated as a slowly developing injury, which is compensable. Jones v. St. Regis Paper Co. (1982) Mont . , 639 P.2d 1140, 38, St.Rep. 2201. In Hoehne v. Granite Lumber Co. (1980) Mont . , 615 P.2d 863, 37 St. Rep. 1307 (not. a pre-existing injury case), we held that the "tangible happening of a traumatic nature" required under section 39-71-119 (1) , MCA, before injury can be found, need not be a single isolated incident, but may well be a "chain of incidents" leading to an injury. In Hoehne, the claimant's job involved stacking lumber on a daily basis; the work itself was found to be a series of actions or incidents resulting in injury. In Hoehne, this Court also recognized that "unusual strain" under section 39-71-119 (1) , MCA, does not necessarily refer to an unexpected cause, but can apply to an unexpected resulting injury, even though the effort involved was not unusual for the particular job. See Jones v. Bair's Cafes (1968) 152 Mont. 13, 445 P.2d 923, wherein claimant, a dishwasher, was injured lifting a heavy tray of dishes, although such lifting was a routine part of her job. This Court affirmed the Workers' Compensation Court, holding that there was an "unusual strain" and a compensable injury under section 92-418, R.C.M. 1947, the forerunner to section 39-71-119 (I), MCA. In the case at bar, both Dr. Griffin and Dr. Taylor testified by deposition that the heavy work Mr. Shepard routinely performed at Midland would have aggravated his existing condition, i.e., would have accelerated the breakdown of his knees. Both physicians recognized the February 14, 1980 accident as an aggravant of Mr. Shepard's condition. X-rays show "a marked increase" in varus bone deformity between 1972 and 1980, just after Mr. Shepard's accident. The x-rays also indicate "many, many subluxations", or small dislocations in the knee joints, which were not evident in 1972. The physicians stated that these symptoms were indicative of wear and tear on the joint, and would probably result in pain and instability. This evidence of work-related injury aggravating a pre-existing condition is considerable and is unrebutted. The well-settled standard of review in cases appealed from the Worker's Compensation Court is stated in Nielsen v . Beaver Pond, Inc. (1983) Mont . , 661 P.2d 47, 49, 40 St.Rep. 489, 491: "Our function in reviewing a decision of the Workers' Compensation Court is to determine whether there is substantial evidence to support the findings and conclusions of that court. We cannot substitute our judgment for that of the trial court as to the weight of evidence on questions of fact. Where there is substantial evidence to support the findings of the Workers ' Compensation Court, this Court cannot overturn the decision. Steffes v. 93 Leasing Co., Inc. (U.S.F. & G.) (1978), 177 Mont. 83, 86, 87, 580 P.2d 450, 452; [Pinion v. H. C. Smith Const. Co. (1980) Mont . , 619 P.2d 167, 168, 37 St.Rep. 1 , 1356-571 Novak v . Montgomery Ward and Co. (1981), Mont., 638 P.2d 390, 392, 38 St.Rep. 1803; Viets v. Sweet Grass County (1978), 178 Mont. 337, 583 P.2d 1070, 1071, 1072." Respondent relies on statements by Dr. Taylor and Dr. Griffin that Mr. Shepard's "main problem" was degenerative arthritis of the knees and pseudogout caused by chondrocalcinosis, which conditions had been present for nearly a decade and probably would have forced his early retirement even absent the 1980 accident. The Workers' Compensation Court found that the 1980 accident aggravated Dee Shepard's pre-existing knee condition, and that "weight-bearing, at work or otherwise, would speed up the degenerative process." There is no evidence whatsoever to suggest that Mr. Shepard did heavy work outside of his job with Midland, having abandoned his weightlifting hobby at least three years before he began work with Midland and more than ten years before his fall in February of 1980. Certainly his own weight and the normal degeneration associated with the disease contributed to Mr. Shepard's breakdown in 1980. But unchallenged medical evidence establishes that the pre-existing condition was aggravated and the degeneration and breakdown were accelerated by the many small traumas to his knees caused by Mr. Shepard's work with Midland and also by his February 14, 1980 industrial accident. We hold that the Workers' Compensation Court's conclusion that Dee Shepard's knees had deteriorated for other than work related reasons is not supported by substantial evidence. 11. The Worker's Compensation Court found that when Dee Shepard returned to work on February 25, 1980, he "had completely recovered" from the aggravation of his condition caused by his fall. Respondent now urges this Court not to "retry Dee Shepard's case," because the unrebutted evidence that he returned to work and worked steadily for approximately six weeks before retiring, constitutes substantial evidence that he had completely recovered. We do not agree. That evidence only indicates that he was able to return to work for six weeks. The remainder of the evidence establishes that Dee Shepard returned to work in a condition far worse than before his accident and that he worked for six weeks despite pain, inconvenience and further deterioration of his condition caused by the heavy work and his attempts to minimize the pain and damage to his left knee by shifting his weight to the right. Before his accident, Dee Shepard had worked steadily for years, without a brace, without crutches, and without constant, severe pain. He returned to work only ten days after his accident with a hinged leather brace, which had to be kept extremely tight to prevent his knee from dislocating constantly. He was in such pain that he took up to a dozen aspirin during a shift, a fact noted by the Workers' Compensation Court. His right knee began to trouble him because of the extent to which he favored the left. In April of 1980, Dr. Taylor noted: "His knees have collapsed." Dr. Taylor stated in deposition that there is no "healing process" with degenerative arthritis, only an "attempt at healing" which results in the type of extra bone formation evident in Mr. Shepard's x-rays. The disease itself is "relentlessly progressive", although the speed of deterioration can be affected by weightbearing, obesity and trauma. Dr. Griffin, who treated several of Mr. Shepard's episodes of pseudogout between 1972 and 1976, did not see Mr. Shepard again until December of 1981, nearly two years after Mr. Shepard's return to work. His conclusion that in December of 1981, Mr. Shepard's pseudogout symptoms were, "fairly well resolved," can have no bearing here, being too remote in time to indicate Mr. Shepard's condition upon his return to work in February of 1980. Mr. Shepard stated at hearing in November of 1981 that he was at that time exercising and moving without pain. Dr. Taylor attributed that not to recovery, but to "neuropathic knees", a loss of feeling in the knees, generally due to some other condition, which usually results in further knee damage due to use of a damaged knee joint without the protection of the warning provided by pain. There is no substantial evidence which supports the Workers' Compensation Courts' conclusion that Dee Shepard had fully recovered from his accident at the time he returned to work. On the contrary, all significant evidence suggests the return to work of a man disabled by disease, weightbearing at work, and work-related trauma, whose disability was increased by his return to work. We reverse the Workers' Compensation Court on both issues and remand this case for a determination of the compensation, costs, fees and penalties, if any, to which Dee Shepard is entitled. We concur: Justices 11 Mr. J u s t i c e L . C. Gulbrandson d i s s e n t i n g . I r e s p e c t f u l l y d i s s e n t . I would a f f i r m t h e d e c i s i o n of t h e Workers' Compensation C o u r t on t h e b a s i s t h a t t h e r e is s u b s t a n t i a l evidence t o s u p p o r t t h e f i n d i n g s and c o n c l u s i o n of t h a t c o u r t . Judge Reardon, a f t e r observing and h e a r i n g t h e testimony of t h e c l a i m a n t and c o n s i d e r i n g t h e d e p o s i t i o n s of t h e two medical e x p e r t s , r u l e d t h a t t h e c l a i m a n t ' s i n c a p a c i t i e s were not produced by t h e i n d u s t r i a l a c c i d e n t of February 1 4 , 1980. I n r e f e r r i n g t o t h e c l a i m a n t ' s medical c o n d i t i o n and t h e s p e c i f i c i n c i d e n t of t h e knee i n j u r y on February 1 4 , 1980, D r . Taylor t e s t i f i e d a s f o l l o w s : "Q. During t h e c o u r s e of Mr. K e l l y ' s examina- t i o n e a r l i e r , you were r e f e r r e d t o your f i r s t r e p o r t of t r e a t m e n t of Mr. Shepard, and you s a i d t h a t your d i a g n o s i s was ' k n e e a r t h r i t i s ' , i n d i c a t i n g t h a t you were n o t p a r t i c u l a r l y impressed w i t h t h e s i n g l e i n c i d e n t . Can you d e s c r i b e why? A . I was . . . You a r e i n f a c t c o r r e c t . I was not impressed w i t h t h e s i n g l e i n c i d e n t , a s it was q u i t e c l e a r from c l i n i c a l f i n d i n g s and x-ray f i n d i n g s t h a t Mr. Shepard had had, i n my o p i n i o n , a high l i k e l i h o o d of having had b a d l y d i s o r g a n i z e d knees f o r some time. I n f a c t , I d i d n o t even r e f e r i n m y i n i t i a l n o t e and i n c o r r e c t l y so t o t h e f a c t t h a t he had been r e c e n t l y i n j u r e d . "Q. You have i n d i c a t e d t o Mr. Shepard and a l s o t o Midland Foods t h a t he should probably r e t i r e because of t h e c o n d i t i o n of h i s knees. A . T h a t , and a n o t h e r reason. "Q. What is t h e o t h e r reason? A. That is something t h a t I have t o t a k e e x c e p t i o n t o Mr. K e l l y ' s list of f a c t . I r e a l l y q u e s t i o n a s r e a d i l y a s t h e q u i t t i n g work of how b a d l y he wants t o keep working. H e f i t s " t h e l a s t - s t r a w syndrome". T h a t is an e l d e r l y man who is working i n a r e l a t i v e l y , an uneducated e l d e r l y man who is working i n a f a i r l y u n i n t e r e s t i n g job who s u s t a i n s a n i n j u r y , and t h a t i n j u r y can be r e l a t i v e l y minor. I t is r e a l l y d i f f i c u l t f o r t h a t p a t i e n t t o r e t u r n t o work, and f o r t h a t reason i n making t h a t d i a g n o s i s of " t h e l a s t - s t r a w syndrome", I recommended t h a t he be r e t i r e d a s I f e l t c e r t a i n t h a t he would never r e t u r n t o work, i n any c a s e . "Q. R e f e r r i n g t h e n t o t h e f i r s t r e a s o n , t h e i n s t a b i l i t y and t h e long-standing problems w i t h both knees, would t h a t reason a l o n e have been s u f f i c i e n t f o r you t o make t h a t recommen- d a t i o n t h a t he r e t i r e ? A. Yes. "Q. Is t h e l e f t knee, based upon your c l i n i - c a l f i n d i n g s and your x-rays and a l l of your e x p e r i e n c e i n t h e same, b e t t e r or worse con- d i t i o n t h a n t h e r i g h t knee? A. Well, both a r e i n t e r r i b l e c o n d i t i o n , b u t I would say t h a t t h e l e f t knee has some reten- t i o n of j o i n t space medially, and on a s c a l e of one hundred bad p o i n t s t h e r i g h t knee has one hundred and t h e l e f t h a s ninety-nine. "Q. So a c t u a l l y t h e l e f t knee is b e t t e r t h a n t h e r i g h t knee based on what? A . Very m a r g i n a l l y . "Q. T h a t ' s a l l ? A. And r e c a l l , t o o , t h a t h i s t o r i c a l l y he h a s p a i n i n h i s , he has a l l e g e d p a i n i n h i s l e f t knee and t h a t o b v i o u s l y makes it a worse knee. "Q. You i n d i c a t e d a l s o i n answer t o a q u e s t i o n by Mr. K e l l y t h a t t h e o r d i n a r y func- t i o n s of l i f e a r e going t o c o n t i n u e t o aggra- v a t e t h e c o n d i t i o n of Mr. Shepard's knees? A. Yes. T h i s is a r e l e n t l o u s l y p r o g r e s s i v e c o n d i t i o n . "Q. You s a i d t h a t it is a r e l e n t l o u s l y p r o g r e s s i v e c o n d i t i o n , and t h a t t h e r e a r e a g g r a v a t i o n s s i m i l a r t o t h e one which you pre- sumed occurred on February t h e 1 4 t h , 1980, t h e i n d u s t r i a l a c c i d e n t . And I am asking you t o d e s c r i b e what t h e e f f e c t of those a g g r a v a t i o n s is, o r what t h e i r n a t u r e is. A. That was a s p e c i f i c aggravant, an i n j u r y . And t h e s e , while they a r e probably aggravants, a r e not t h e kind of t h i n g s which t a k e s t h i s man t o h i s e v e n t u a l end, and I t h i n k t h a t end must be a c r i p p l i n g end. They a r e , t h e t h i n g s t h a t bring him t o t h a t end a r e t h e f a c t t h a t h e c o n t i n u e s t o bear weight; i n o t h e r words, h e g e t s o u t of bed i n t h e morning, goes t o t h e bathroom, h a s b r e a k f a s t , goes o u t and works i n h i s yard or goes f o r a walk or goes f i s h i n g o r g e t s i n t h e c a r and goes down t o t h e grocery s t o r e , a l l of t h e s e t h i n g s involve weight b e a r i n g and w i l l mandate r e l e n t l o u s p r o g r e s s i o n . "Q. Doctor, w e t a k e t h e view t h a t i f Mr. Shepard is d i s a b l e d due t o a p h y s i c a l con- d i t i o n a t t h i s t i m e , t h a t t h a t d i s a b i l i t y is one which e x i s t s w i t h o r w i t h o u t t h e occurrence of t h i s February 1 4 t h , 1980 i n c i - d e n t . Do you a g r e e ? "A. Okay, w i t h i n a reasonable degree of medi- c a l c e r t a i n t y , yes. "Q. You a g r e e with me? A . Yes. Agree t h a t he would have been, would have r e t i r e m e n t w i t h i n a s h o r t p e r i o d , i n any c a s e , a s much because of h i s knees a s t h e o t h e r f a c t o r t h a t I mentioned. I n a d d i t i o n t o which, he approaches t h e normal age f o r r e t i r e m e n t , i n any c a s e . " D r . G r i f f i n t e s t i f i e d by d e p o s i t i o n and h o s p i t a l r e c o r d s from t h e B i l l i n g s C l i n i c were r e c e i v e d i n evidence. Those r e c o r d s r e v e a l e d s e v e r e knee problems a s e a r l y a s August ,1972. The r a d i o l o g y r e p o r t , made i n c o n j u n c t i o n w i t h c l a i m a n t ' s c o m p l a i n t s a t t h a t t i m e , s t a t e d : "These f i n d i n g s a r e c o n s i s t e n t w i t h advanced d e g e n e r a t i v e a r t h r i t i c change." D r . G r i f f i n t e s t i f i e d a s follows: " [Q.] I ' m asking d i d you s e e any symptoms of t h i s February 1980 s l i p and f a l l on your phy- s i c a l examination of Mr. Shepard? A. Well, t h e o n l y t h i n g I saw was--evidence of h i s p h y s i c a l f i n d i n g s was noted; namely, some a r t h r i t i c changes i n both knees. "Q. And t h e s e a r e t h i n g s t h a t you had s e e n going back a s f a r a s 1972, c o r r e c t ? A . C o r r e c t . "Q. I n c l u d i n g , I t h i n k , a r e f e r e n c e t o t h e l i m p a s f a r back a s 1977, a t l e a s t ? A . Right. "Q. Well, Doctor, i n a n u t s h e l l , I g u e s s I ' m a s k i n g whether or n o t it would be your medical o p i n i o n t h a t Mr. Shepard 's impairment w i t h r e g a r d t o h i s knees was m e d i c a l l y t h e r e s u l t of t h e d e g e n e r a t i v e a r t h r i t i s , pseudogout, and c h o n d r o c a l c i n o s i s , which is of longstanding. "MR. KELLY: Excuse m e . Objected t o on t h e grounds t h a t t h e q u e s t i o n is not phrased i n t h e terms of being w i t h i n a reasonable degree of medical c e r t a i n i t y and is i r r e l e v a n t and immaterial. "BY MR. BISHOP: "Q. And, of c o u r s e , I ' m asking f o r your opi- n i o n w i t h i n a reasonable degree of medical c e r t a i n t y . A . Well, t h e answer t o your q u e s t i o n is yes. "Q. Doctor, w e have p r e v i o u s l y taken t h e d e p o s i t i o n of D r . James T a y l o r , an o r t h o p e d i c surgeon h e r e i n B i l l i n g s who you have r e f e r r e d t o a l s o , I s e e , i n your n o t e of December 29, 1981, and Dr. Taylor has t e s t i f i e d t h a t h e ' s n o t impressed w i t h t h e s i n g l e i n c i d e n t of February 1980 a s an e x p l a n a t i o n f o r t h e con- d i t i o n of Mr. S h e p a r d ' s knees, which Mr. Shepard d e s c r i b e s a s i n c a p a c i t a t i n g , and I w i l l ask you f o r your o p i n i o n , t o a r e a s o n a b l e d e g r e e of medical c e r t a i n t y , a s t o t h e e f f e c t , i f any, which you would a s s i g n t o t h e February 1980 e v e n t which Mr. Shepard has d e s c r i b e d t o you i n s o f a r a s it r e l a t e s t o t h e c o n d i t i o n of h i s knees which you have s e e n from 1972 through December 29, 1981. "MR. KELLY: Excuse me, Doctor, b e f o r e you answer. I wish t o o b j e c t upon t h e grounds t h a t t h e q u e s t i o n exceeds t h e scope of t h e c r o s s examination and i s improper, i r r e l e v a n t , i m m a t e r i a l , and incompetent, and does n o t assume a l l of t h e f a c t s , and is an improper h y p o t h e t i c a l q u e s t i o n . "MR. BISHOP: I n view of t h e f a c t t h a t c r o s s examination c e n t e r e d on t h e q u e s t i o n of t h e c l a i m a n t ' s i n c a p a c i t y and t h e measuring of t h a t i n c a p a c i t y , I t h i n k t h a t t h i s r e d i r e c t is p e r f e c t l y w i t h i n t h e scope of c r o s s . "MR. KELLY: I move t o s t r i k e C o u n s e l ' s audi- t o r y e x p l a n a t i o n a s n o t c o n s t i t u t i n g a q u e s t i o n . "BY MR. BISHOP: "Q. Do you have t h e q u e s t i o n i n mind s t i l l , Doctor? A. Well, yeah, I t h i n k I know what t h e q u e s t i o n is. "Q. Okay. Why d o n ' t you go ahead and t r y t o answer it, then. A . Well based on m y n o t e s and r e c o r d s , I would s a y t h a t Mr. S h e p a r d ' s i n c a p a c i t y r e l a t e d t o h i s a r t h r i t i s is one of l o n g s t a n d i n g , and I , s i n c e I d i d n o t s e e him a t t h e time of h i s i n j u r y b u t I d i d see him i n December of 1981, and I would say t h a t h i s changes were t h o s e of c h r o n i c d e g e n e r a t i v e a r t h r i t i s of t h e knees, a c h r o n i c p r o c e s s . "Q. What e f f e c t o r s i g n i f i c a n c e , i f any, would you a s s i g n t o t h e February 1980 s l i p and f a l l i n c i d e n t which Mr. Shepard d e s c r i b e s ? A . From what it sounded l i k e t o m e , he had a c o n t u s i o n of h i s knee w i t h a l o t of immediate p a i n and s w e l l i n g and d i s c o m f o r t . "Q. From what you saw, d i d it appear t h a t t h a t had, t h e n , run its c o u r s e ? A . I t appeared t o be f a i r l y much r e s o l v e d when I saw him." The Workers ' Compensation C o u r t ' s d e c i s i o n h i n g e s upon t h e fundamental p r i n c i p l e t h a t compensation is payable o n l y f o r " i n j u r y producing . . . d i s a b i l i t y . " See s e c t i o n s 39-71-701, 702, and 703, MCA. I n m y view, workers' compensation i n s u r a n c e does have s t a t u - t o r y l i m i t s . Its b e n e f i t s should be l i b e r a l l y allowed, b u t it should n o t be construed so broadly t h a t it becomes a s u b s t i t u t e f o r g e n e r a l h e a l t h i n s u r a n c e , pensions, o r r e t i r e m e n t programs. T h i s Court r e c e n t l y handed down a d e c i s i o n t a c i t l y approving t h e S t a t e ' s commendable program of h i r i n g t h e handicapped. I f e a r t h a t t h e m a j o r i t y d e c i s i o n w i l l provide g r e a t i n c e n t i v e t o employers t o avoid h i r i n g anyone who is i n less t h a n p e r f e c t h e a l t h . I would a f f i r m t h e Workers' Compensat \

July 19, 1983

7ec6164b-e0a0-4004-9919-146fc54ab291

THOMPKINS v FULLER

N/A

82-396

Montana

Montana Supreme Court

No. 82-396 I N T H E SUPREME C O U R T O F T H E STATE O F MOFJTANA 1983 S. DENNIS THOP4PKINS, d/b/a PYRAMID BUILDERS I P l a i n t i f f s and Respondents, DAVID FULLER, COb!lMISSIONER O F THE DEPARTMENT O F L A B O R AND II\lDUSTRY, STATE O F MONTANA, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Lake, The Honorable James B. Wheelis, Judge p r e s i d i n g . Counsel of Record: For Appellant: Paul J. Van T r i c h t argued, Dept. of Labor, Heilena Montana For Respondents: Thomas Hoover argued, Big Fork, Montana For Amicus Curiae: Joseph PJ. Duffy argued, Great F a l l s , Montana (Montana S t a t e Bldg. Trades Council) submitted: A p r i l 21, 1983 Decided: J u l y 21, 1983 F i l e d : Jut 2 1 1983 Clerk Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e C o u r t . The Department of Labor and I n d u s t r y a p p e a l s a d e c i s i o n of t h e D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , County of Lake. T h i s d i s p u t e d e a l s w i t h t h e amount of wages paid by a b u i l d i n g c o n t r a c t o r t o h i s employees on a s t a t e - f inanced c o n s t r u c t i o n p r o j e c t . E s s e n t i a l l y , t h i s case i n v o l v e s i n t e r p r e - t a t i o n of Montana's L i t t l e "Davis-Bacon A c t , I 1 s e c t i o n s 18-2-401, e t . s e q . , MCA ( 1 9 7 9 ) , which r e q u i r e s c o n t r a c t o r s on p u b l i c pro- j e c t s t o pay t h e i r employees " t h e s t a n d a r d p r e v a i l i n g r a t e of wages . . . a p p l i c a b l e t o t h e county o r l o c a l i t y i n which t h e work is being performed." S e c t i o n 18-2-403(1), MCA, ( 1 9 7 9 ) . I n i t i a l l y , w e note t h a t t h e 1979 s t a t u t e s a r e a p p l i c a b l e t o t h i s c a s e . W e a f f i r m t h e judgment with t h e e x c e p t i o n of t h e a t t o r n e y ' s f e e s . I n 1980 t h e U n i v e r s i t y of Montana l e t c o n t r a c t s f o r t h e c o n s t r u c t i o n of a r e s e a r c h l a b o r a t o r y a t Yellow Bay on Flathead Lake. The respondent was accepted a s t h e mechanical c o n t r a c t o r . P r i o r t o t h i s time, respondent was p r i m a r i l y involved i n res iden- t i a l c o n s t r u c t i o n . The l a b o r a t o r y was h i s f i r s t c o n t r a c t w i t h a governmental e n t i t y . The respondent was not a s i g n a t o r y t o any c o l l e c t i v e b a r g a i n i n g agreement, and a l l of h i s employees were nonunion. The c o n t r a c t r e q u i r e d t h e respondent t o abide by t h e l a b o r laws of t h e S t a t e of Montana; s p e c i f i c a l l y , he was r e q u i r e d t o pay h i s employees t h e " s t a n d a r d p r e v a i l i n g r a t e " (SPR) a p p l i c a b l e t o t h e county or l o c a l i t y i n which t h e work was being performed. The c o n t r a c t language was taken from v a r i o u s p a r t s of Montana's L i t t l e Davis-Bacon A c t . Concerning h i s r e s p o n s i b i l i t i e s , he con- t a c t e d a K a l i s p e l l a t t o r n e y who reviewed t h e c o n t r a c t . Nothing was d i s c u s s e d concerning t h e SPR p r o v i s i o n . Respondent a l s o t a l k e d t o t h e p r o j e c t a r c h i t e c t and a c o n t r a c t o r f r i e n d who had been coaching him. Through t h e s e d i s c u s s i o n s he b e l i e v e d himself t o be i n f u l l compliance w i t h Montana law. C o n s t r u c t i o n began and t h e r e a f t e r t h e S t a t e r e c e i v e d a complaint t h a t respondent was not paying h i s employees t h e SPR. The complaint was made by the b u s i n e s s r e p r e s e n t a t i v e f o r the c a r p e n t e r s union of Northwest Montana. The union r e p r e s e n t a t i v e t e s t i f i e d i n p a r t a s follows: "Q. Did you have a c o n v e r s a t i o n w i t h Thompkins on t h i s p r o j e c t ? A. Yes, I encouraged him t o j o i n the Union. "Q. Did you encourage him t o j o i n t h e Union? A . I d i d . "Q. What d i d you t e l l him when he wouldn't j o i n t h e Union? A. I s a i d I ' d have t o do m y job and whatever was a v a i l a b l e t o m e t o t r y and g e t him t o j o i n . "Q. And what d i d you do? A. I r e p o r t e d it t o t h e Department of Labor t h a t I d i d n ' t think he was paying p r e v a i l i n g wage. " The S t a t e i n v e s t i g a t e d and concluded t h a t the complaint was l e g i t i m a t e . Below is a c h a r t showing t h e wages t h a t were a c t u a l l y p a i d by t h e respondent and t h e wages which t h e S t a t e c l a i m s should have been paid a s t h e SPR. W A G E S ACTUALLY "STANDARD PREVAILING RATE" EMPLOYEE J O B PAID AS DETERMINED BY THE STATE Mar t o n c a r p e n t e r $9.00/hour C a r p e n t e r s : Becker c a r p e n t e r $9.00/hour 12.05/hour--5/1/79-4/30/80 Ryland c a r p e n t e r $8.00/hour 13.02/hour--5/1/80-4/30/81 Thompkins c a r p e n t e r $ll.OO/hour Hale l a b o r e r $6.00/hour Laborers : Raudebaugh c a r p e n t e r / s a l a r i e d l o . 55/hour--7/1/79-6/30/80 s u p e r i n t e n d e n t 11,45/hour--7/1/80-6/30/81 The S t a t e c l a i m s t h a t it considered t h r e e sources of i n f o r - mation t o determine t h e SPR: (1) wage r a t e i n f o r m a t i o n compiled by t h e Employment S e c u r i t y ~ i v i s i o n ; (2) Davis-Bacon r a t e s p u b l i s h e d by t h e United S t a t e s Department of Labor; and ( 3 ) l o c a l c o l l e c t i v e bargaining agreements. However, t h e r a t e s e s t a b l i s h e d by t h e S t a t e were taken verbatim from number t h r e e , c o l l e c t i v e b a r g a i n i n g agreements. According t o t h e S t a t e , t h e r e was l i t t l e v a r i a t i o n between t h e t h r e e s o u r c e s , and i n such c a s e s it has been t h e p o l i c y t o adopt r a t e s from t h e bargaining agreements. The respondent commenced t h i s a c t i o n by seeking a d e c l a r a t o r y judgment i n the D i s t r i c t Court. The S t a t e f i l e d an answer and c o u n t e r c l a i m praying f o r an o r d e r r e q u i r i n g Thompkins t o pay p a s t due wages and p e n a l t i e s and a t t o r n e y f e e s . Thompkins sought summary judgment but h i s motion was denied. A nonjury t r i a l was h e l d a f t e r which t h e D i s t r i c t Court e n t e r e d judgment i n favor of t h e p l a i n t i f f / c o n t r a c t o r . The Commissioner Labor and I n d u s t r y t h e n appealed. The a p p e l l a n t h a s r a i s e d the following i s s u e s : (1) whether t h e D i s t r i c t Court e r r e d by not adopting t h e commissioner's d e t e r m i n a t i o n of t h e s t a n d a r d p r e v a i l i n g r a t e ; ( 2 ) whether t h e D i s t r i c t Court e r r e d i n its i n t e r p r e t a t i o n of t h e s t a t u t o r y p h r a s e "work of a s i m i l a r c h a r a c t e r ; " ( 3 ) whether t h e admission of h e a r s a y evidence was r e v e r s i b l e e r r o r ; and ( 4 ) whether t h e award of a t t o r n e y f e e s t o respondent was p r o p e r . W e a d d r e s s t h e s e i s s u e s i n t u r n . A p p e l l a n t ' s f i r s t i s s u e is r a i s e d i n response t o t h e f o l l o w i n g comment by t h e D i s t r i c t Court: "Defendant [ a p p e l l a n t ] a r g u e s t h a t o n l y t h e Commissioner of t h e Department of Labor and I n d u s t r y h a s t h e a u t h o r i t y t o determine t h e p r e v a i l i n g r a t e of wages i n a given a r e a . Defendant i g n o r e s t h e p l a i n meaning of t h e s t a t u t e : 'The Montana Commissioner may deter- mine . . . ' M.C.A. 518-2-402(1979) . . . Because t h e power t o determine the p r e v a i l i n g r a t e of wages is not e x c l u s i v e l y t h a t of t h e Commissioner, t h a t power, a t t h e time the par- t i e s e n t e r e d i n t o t h e c o n t r a c t i n q u e s t i o n , r e s t e d a l s o with t h e p l a i n t i f f , s u b j e c t t o t h e s t a n d a r d s s e t o u t i n the a p p l i c a b l e laws. The i s s u e , t h e n , on which p l a i n t i f f ' s r e q u e s t f o r d e c l a r a t o r y judgment t u r n s , is whether plain- t i f f r a t h e r than t h e defendant h a s made t h e proper d e t e r m i n a t i o n of what t h e i r c o n t r a c t term ' s t a n d a r d p r e v a i l i n g r a t e of wages' a s d e f i n e d i n M.C.A. S 18-2-401 ( a ) (1979) means. The i s s u e , c o n t r a r y t o d e f e n d a n t ' s p o s i t i o n , i s not whether and under what s t a n d a r d s t h i s Court may review a d e c i s i o n o r d e t e r m i n a t i o n of an a d m i n i s t r a t i v e agency. " P l a i n t i f f ' s r e q u e s t f o r a d e c l a r a t o r y judgment would be a r e q u e s t f o r a review of a d e c i s i o n or d e t e r m i n a t i o n of an a d m i n i s t r a t i v e agency i f i n f a c t t h e commissioner of l a b o r had determined t h e standard p r e v a i l i n g r a t e of wages f o r t h e job c l a s s i f i c a t i o n s i n q u e s t i o n . But t h e commissioner d i d not make t h e d e t e r - mination he was a u t h o r i z e d t o make under M.C.A. 5 18-2-402(1)(1979)." The D i s t r i c t Court obviously viewed t h e problem a s one of c o n t r a c t i n t e r p r e t a t i o n . Here, t h e c o n t r a c t required t h e respon- d e n t t o pay h i s employees t h e SPR y e t t h e r e were no s p e c i f i c h o u r l y r a t e s contained i n t h e c o n t r a c t . The c o u r t focused on whether respondent, a s a c o n t r a c t i n g p a r t y , p r o p e r l y i n t e r p r e t e d t h e c o n t r a c t term "standard p r e v a i l i n g r a t e ." The a p p e l l a n t argues t h a t : (1) it d i d make a d e t e r m i n a t i o n o f t h e SPR and its d e t e r m i n a t i o n should have been granted d e f e r e n c e by t h e c o u r t , and ( 2 ) t h e respondent d i d not have t h e s t a t u t o r y power t o determine the r a t e . T h a t power rests exclu- s i v e l y with t h e a p p e l l a n t . W e a g r e e with a p p e l l a n t ' s second p o i n t ; t h e respondent was n o t empowered by s e c t i o n 18-2-402(1), MCA, ( 1 9 7 9 ) , t o determine t h e s t a n d a r d p r e v a i l i n g r a t e of wages. The s t a t u t e i n q u e s t i o n s t a t e d : " [ t ] he Montana commissioner of l a b o r may determine t h e s t a n d a r d p r e v a i l i n g r a t e of wages i n t h e county o r l o c a l i t y i n which t h e c o n t r a c t is t o be performed." S e c t i o n 18-2-402(1), MCA, ( 1 9 7 9 ) . The D i s t r i c t Court i n c o r r e c t l y concluded t h a t s i n c e t h e power is p e r m i s s i v e i n t h a t t h e "commissioner . . . may determine t h e . . . r a t e , " it must a l s o be nonexclusive. A j u d g e ' s t a s k i n c o n s t r u i n g s t a t u t e s is "simply t o a s c e r t a i n and d e c l a r e what is i n terms o r i n s u b s t a n c e contained t h e r e i n , n o t t o i n s e r t what has been omitted . . ." S e c t i o n 1-2-101, MCA. The c o u r t c l e a r l y v i o l a t e d t h i s p r i n c i p l e . The s t a t u t e s a y s n o t h i n g about being nonexclusive. On t h e c o n t r a r y , t h e h i s t o r y of t h i s l e g i s l a t i o n would i n d i c a t e o t h e r w i s e . The o r i g i n a l v e r s i o n of Montana's L i t t l e Davis-Bacon A c t was e n a c t e d i n 1931. S i n c e then it has been amended s e v e r a l times. Montana's A c t is analogous t o the Federal Davis-Bacon A c t which was a l s o enacted i n 1931. T h i s kind of l e g i s l a t i o n has a s one of its purposes t h e p r o t e c t i o n of l o c a l l a b o r markets. The a c t pre- v e n t s c o n t r a c t o r s from importing cheap l a b o r t o t h e d e t r i m e n t of l o c a l workers. T h i s purpose is achieved by r e q u i r i n g c o n t r a c t o r s t o pay t h e r a t e of wages p r e v a i l i n g i n t h e l o c a l i t y . To a l l o w p o t e n t i a l l y s e l f - s e r v i n g c o n t r a c t o r s t o determine t h e r a t e would d e f e a t t h e l e g i s l a t i v e purpose. A s t h e United S t a t e s Supreme Court noted i n a c a s e c o n s t r u i n g t h e F e d e r a l Davis-Bacon A c t : " [ t ] he language of t h e A c t and its l e g i s l a t i v e h i s t o r y p l a i n l y show t h a t it was not t o bene- f i t c o n t r a c t o r s , b u t r a t h e r t o p r o t e c t t h e i r employees from substandard e a r n i n g s by f i x i n g a f l o o r under wages on government p r o j e c t s . Congress sought t o accomplish t h i s r e s u l t by d i r e c t i n g t h e S e c r e t a r y of Labor t o d e t e r m i n e , on t h e b a s i s of p r e v a i l i n g r a t e s i n t h e loca- l i t y , t h e a p p r o p r i a t e minimum wages f o r each p r o j e c t . " United S t a t e s v. Binghamton C o n s t r u c t i o n Co. ( 1 9 5 4 ) , 347 U.S. 171, 176-77. 74 S.Ct. 438, 98 L.Ed. 594. W e hold t h a t t h e a u t h o r i t y t o d e t e r m i n e t h e SPR rests exclu- s i v e l y w i t h t h e commissioner of l a b o r under t h e s t a t u t e . W e a l s o conclude t h a t t h e D i s t r i c t Court was i n c o r r e c t i n allowing t h e c o n t r a c t o r t o determine t h e SPR i n t h e absence of such a d e t e r - m i n a t i o n by t h e commissioner. While we a g r e e w i t h t h e commissioner's c o n t e n t i o n t h a t t h e respondent d i d not have t h e s t a t u t o r y power t o d e t e r m i n e t h e SPR, t h i s c o n c l u s i o n by t h e c o u r t is n o t r e v e r s i b l e e r r o r f o r t h e f o l l o w i n g s t a t e d r e a s o n s . A p p e l l a n t a r g u e s t h a t it d i d make a d e t e r m i n a t i o n of t h e SPR and t h a t its f i g u r e s should have been accepted u n l e s s they were shown t o be a r b i t r a r y o r c a p r i c i o u s . Here, t h e c o u r t focused on c o n t r a c t p r i n c i p l e s ; framing t h e i s s u e a s whether t h e respondent made t h e proper d e t e r m i n a t i o n of t h e c o n t r a c t term " s t a n d a r d p r e v a i l i n g r a t e . " I n o t h e r words, t h e c o u r t reasoned t h a t t h e respondent, a s a c o n t r a c t i n g p a r t y had t h e power t o pay h i s employees a t t h o s e r a t e s which he b e l i e v e d would meet t h e c o n t r a c t requirements. However, t h i s power is n o t t h e same a s t h a t granted t o t h e commissioner under s t a t u t e . The commissioner d e r i v e s h i s power from s t a t u t e , whereas t h e respondent d e r i v e s h i s power from t h e c o n t r a c t . The D i s t r i c t Court confused t h i s d i s t i n c t i o n . T h i s is probably t h e reason t h e c o u r t i n t e r p r e t e d t h e s t a t u t e a s it d i d . Notwithstanding t h i s con£ u s i o n , t h e D i s t r i c t Court reached t h e c o n c l u s i o n . Consequently, t h e e r r o r was harmless. Next, a p p e l l a n t a r g u e s t h a t it d i d make a d e t e r m i n a t i o n of t h e SPR and t h a t its f i g u r e s should have been accepted u n l e s s t h e y were shown t o be a r b i t r a r y or c a p r i c i o u s . The focus of t h i s argument concerns t h e a p p r o p r i a t e s t a n d a r d of review. The D i s t r i c t Court would have been o b l i g a t e d t o a f f i r m t h e agency d e t e r m i n a t i o n even i f it found it t o be an a r b i t r a r y and c a p r i - c i o u s s t a n d a r d of j u d i c i a l review. S t a t e ex. r e l . Montana Wilderness A s s o c i a t i o n v. Board of N a t u r a l Resources and Conservation ( 1 9 8 2 ) , Mont. , 648 P.2d 734, 39 St.Rep. 1238. T h i s s t a n d a r d r e c o g n i z e s agency e x p e r t i s e and p r o h i b i t s a c o u r t from s u b s t i t u t i n g its judgment f o r t h a t of an agency. I t h a s been argued t h a t wage f i g u r e s of t h e Commissioner d i d not e x i s t a t t h e time of c o n t r a c t i n g . T h e r e f o r e , on t h i s b a s i s , t h e r e was n o t an agency d e c i s i o n . W e do not e n t i r e l y a g r e e . The evidence shows t h a t r a t e s a r e not set f o r i n d i v i d u a l pro- jects. The a p p e l l a n t determines p r e v a i l i n g r a t e s each y e a r d u r i n g May or June. According t o a p p e l l a n t , when a c o n t r a c t is e n t e r e d i n t o , t h e s e r a t e s become a p p l i c a b l e and t h e c o n t r a c t o r t h e n has a duty t o c o n t a c t t h e department t o f i n d o u t what he should pay h i s employees. Appellant r e l i e s on t h i s p r a c t i c e t o show an agency d e c i s i o n deserving of d e f e r e n c e . W e cannot a c c e p t t h i s argument. W e hold t h a t even though t h e s t a t e ' s f i g u r e s e x i s t e d a t t h e time of c o n t r a c t i n g , t h e i r mere e x i s t e n c e cannot be held t o c o n s t i t u t e an agency d e c i s i o n . Under t h e b a s i c c o n t r a c t p r i n c i p l e s a p a r t y cannot be bound t o terms he is not aware o f . There must be meeting of t h e minds o r mutual a s s e n t on a l l of t h e e s s e n t i a l terms. Chadwick v. Giberson ( 1 9 8 0 ) , Mont. , 618 P.2d 1213, 37 St.Rep. 1723. Here t h e c o n t r a c t s t a t e d : " [ t l h e s t a n d a r d p r e v a i l i n g r a t e of wage, t h a t p a i d by o t h e r c o n t r a c t o r s i n t h e a r e a , must be paid f o r work performed. " The respondent, unexperienced i n p u b l i c works p r o j e c t s , read t h i s language and concluded t h a t h i s wage r a t e s were w i t h i n t h e range of r a t e s p r e v a i l i n g i n t h e a r e a . Respondent cannot be h e l d t o payment of s p e c i f i c r a t e s t h a t d i d n o t appear i n the c o n t r a c t of which he had no knowledge, b u t o n l y existed somewhere within the bureaucracy. W e note t h a t t h i s problem has been corrected by the legislature. The current law requires a l l bid specifications and contracts to contain the spe- c i f i c r a t e s payable by contractors. Section 18-2-422, MCA, (1981). W e hold the D i s t r i c t Court did not error i n its refusal t o adopt the commissioner 's rates. The next issue raised by appellant is whether the D i s t r i c t Court erred i n its interpretation of the statutory phrase, "work of a similar character." The s t a t u t e which contains the disputed phrase s t a t e s : "'Standard prevailinq - - r a t e of wages . . . applicable to the county or l o c a l i t y in which the work is being performed,' means those waqes which are paid i n the county or locality by other contractors for work of 2 similar - character performed i n that county or locality by each c r a f t , c l a s s i f i c a t i o n , or type of worker . . ." ( emphasis added ) Section 18-2-401(5)(a), MCA, ( 1 9 7 9 ) . Appellant's argument is somewhat confusing. A t one place i n the b r i e f , appellant argues that "work of a similar character" r e f e r s to similar public works projects. Furthermore, a t t r i a l , various witnesses for the s t a t e t e s t i f i e d t h a t the phrase means similar public works. Our problem is this; i n these instances it appears t h a t appellant is construing the statutory phrase to include only public works. However, i n another portion of its b r i e f , appellant lists several public works and commercial construction projects that it claims were of a similar character t o the Yellow Bay Project. For analysis of t h i s issue, w e w i l l assume t h a t appellant does not distinguish between public and private projects. The s t a t u t e makes no distinction i n t h i s regard, nor should we. Therefore, appellant's argument can be stated as follows: the statutory phrase "work of a similar character" refers to projects as a whole, either public or pri- vate, and not as the court found, to the various components or individual labor of projects. I f w e were to accept appellant's definition, the s t a t u t e could be paraphrased as follows; " 'standard prevailing r a t e of wages . . . means t h o s e wages . . . which a r e paid . . . by o t h e r c o n t r a c t o r s . . . [on s i m i l a r p r o j e c t s ] i n t h a t county o r loca- l i t y . . ." According t o a p p e l l a n t , t h e r e were s e v e r a l p u b l i c and commercial p r o j e c t s which were s i m i l a r . These i n c l u d e work done on t h e Ronan S c h o o l , t h e S a i n t I g n a t i u s Water Improvement P r o j e c t , a Polson i n d u s t r i a l b u i l d i n g , t h e Lake County Courthouse, t h e B and B S t o r e i n P o l s o n , and Ready Mix C o n c r e t e i n Polson. On t h e o t h e r hand, i f t h e r e s p o n d e n t ' s d e f i n i t i o n were a c c e p t e d , t h e s t a t u t e would read: " ' s t a n d a r d p r e v a i l i n g r a t e of wages . . . means t h o s e wages . . . which a r e paid . . . by o t h e r c o n t r a c t o r s . . . [ f o r s i m i l a r t y p e s of l a b o r ] i n t h a t county o r l o c a l i t y . . ." W e a g r e e with a p p e l l a n t ' s i n t e r p r e t a t i o n . "Work of a s i m i l a r c h a r a c t e r " r e f e r s t o p r o j e c t s a s a whole. C l e a r l y , t h e f e d e r a l law and accompanying r e g u l a t i o n s have focused on t h e type of pro- ject r a t h e r t h a n t h e type of i n d i v i d u a l l a b o r . However, we n o t e t h a t t h e language of t h e F e d e r a l A c t is d i f f e r e n t . The analogous f e d e r a l p r o v i s i o n s t a t e s : " s p e c i f i c a t i o n s f o r e v e r y c o n t r a c t . . . s h a l l c o n t a i n a p r o v i s i o n s t a t i n g t h e minimum wages t o be p a i d . . . based upon wages . . . p r e v a i l i n g . . . on p r o j e c t s o f - - a c h a r a c t e r s i m i l a r . . .I1 40 U.S.C. s e c t i o n 2 7 6 ( a ) , ( 1 9 6 4 ) . The use of t h e word " p r o j e c t s " would c e r t a i n l y d i c t a t e t h e f o c u s o f t h e F e d e r a l A c t . Montana's A c t u s e s t h e word "work" r a t h e r than " p r o j e c t s . " A r e a d i n g of t h e A c t l e a d s us t o t h e c o n c l u s i o n t h a t "work" is synonomous w i t h " p r o j e c t s .I1 For example, s e c t i o n 18-2-403 ( l ) , MCA, ( 1 9 7 9 ) r e a d s : " I n any c o n t r a c t l e t f o r s t a t e , county, muni- c i p a l , s c h o o l , o r heavy highway c o n s t r u c t i o n , s e r v i c e s , r e p a i r , o r maintenance work . . . t h e r e s h a l l be i n s e r t e d i n t h e c o n t r a c t a pro- v i s i o n r e q u i r i n g t h e c o n t r a c t o r . . . t o pay t h e s t a n d a r d p r e v a i l i n g r a t e of wages . . . i n e f f e c t and a p p l i c a b l e t o t h e county o r loca- l i t y i n which t h e work is being performed." (emphasis added) The word "work" r e f e r s t o " s t a t e , county, m u n i c i p a l , s c h o o l , o r heavy highway c o n s t r u c t i o n , s e r v i c e s , r e p a i r , o r maintenance work." W e f i n d t h e word "work" r e f e r s t o t h e e n t i r e p r o j e c t f o r which t h e c o n t r a c t is l e t . Another example is s e c t i o n 18-2-401 ( 5 ) ( b ) , MCA, ( 1 9 8 1 ) . "When work of a s i m i l a r c h a r a c t e r is not being performed i n t h e county or l o c a l i t y , t h e s t a n d a r d p r e v a i l i n g r a t e of wages . . . s h a l l be t h o s e r a t e s e s t a b l i s h e d by c o l l e c t i v e b a r g a i n i n g agreements i n e f f e c t i n t h e county o r l o c a l i t y . . . " I f t h e f o r e g o i n g s e c t i o n is t o have any meaning, "work" must mean " p r o j e c t s . " I f "work" r e f e r r e d t o i n d i v i d u a l l a b o r it would be d i f f i c u l t t o imagine any purpose f o r t h e r u l e . Where could one f i n d a county or l o c a l i t y where a b s o l u t e l y no i n d i v i d u a l l a b o r is being performed by c a r p e n t e r s , l a b o r e r s , plumbers, o r whatever t h e a p p l i c a b l e t r a d e , i n o r d e r f o r t h e r u l e t o apply. However, c o u n t i e s o r l o c a l i t i e s could e a s i l y f a i l t o have s i m i l a r on-going p r o j e c t s such a s highway c o n s t r u c t i o n . W e could imagine a s i t u a t i o n where l a b o r e r s a r e performing t h e same k i n d s of t a s k s on d i f f e r e n t p r o j e c t s . For example, a l a b o r e r working f o r a r e s i d e n t i a l c o n t r a c t o r could spend h i s t i m e h a u l i n g b r i c k s , a s could a l a b o r e r working on a s t a t e o f f i c e b u i l d i n g . The o n l y d i f f e r e n c e could be t h e r a t e of pay. The former could be e a r n i n g $6 p e r hour while t h e l a t t e r could be e a r n i n g $10 p e r hour; t h e d i f f e r e n c e between union and nonunion wages. Then, i f t h e commissioner were required t o determine t h e p r e v a i l i n g r a t e f o r l a b o r e r s working on a s t a t e financed labora- t o r y , based on r a t e s paid by c o n t r a c t o r s f o r i n d i v i d u a l l a b o r of a s i m i l a r c h a r a c t e r , which r a t e would be a p p r o p r i a t e ? Should t h e commissioner be o b l i g a t e d t o c o n s i d e r whether o r not t h e l a b o r e r s working on t h e l a b o r a t o r y w i l l be hauling b r i c k s ? W e think n o t . I t o n l y makes sense t h a t "work of a s i m i l a r c h a r a c t e r " cannot r e f e r t o i n d i v i d u a l l a b o r . I f the t o t a l p r o j e c t i n t e r p r e t a t i o n is used i n t h e above example, the commissioner need o n l y d e t e r - mine whether t h e l a b o r a t o r y is more s i m i l a r t o an o f f i c e b u i l d i n g o r a r e s i d e n c e . While t h i s example is s i m p l i f i e d , it i l l u s t r a t e s t h e n e c e s s i t y of d e f i n i n g work of a s i m i l a r c h a r a c t e r t o mean s i m i l a r p r o j e c t s . A p p e l l a n t p o i n t s o u t , and w e a g r e e , t h a t " [ t l h e Montana ' L i t t l e Davis-Bacon' A c t was designed t o p r e s e r v e t h e e x i s t i n g wage p a t t e r n s i n t h e a r e a , t h e e x i s t i n g wage d i f - f e r e n t i a l between commercial and r e s i d e n t i a l c o n s t r u c t i o n .'I Although we a g r e e with a p p e l l a n t ' s i n t e r p r e t a t i o n of "work of a s i m i l a r c h a r a c t e r " we do not f i n d e r r o r . W e do r e c o g n i z e why a p p e l l a n t r a i s e d t h e i s s u e . Appellant was prompted by a c u r i o u s s t a t e m e n t made by t h e D i s t r i c t Court. The c o u r t s t a t e d : " t h i s c o u r t can o n l y conclude t h a t work of c a r p e n t e r s , l a b o r e r s and s u p e r i n t e n d e n t s i n r e s i d e n t i a l c o n s t r u c t i o n is of a s i m i l a r c h a r a c t e r t o t h a t which p l a i n t i f f ' s employees performed on t h e Yellow Bay P r o j e c t . That is, t h e s i m i l a r i t y is between the type of l a b o r involved and not t h e type (i.e., government or p r i v a t e ) of p r o j e c t involved." T h i s comment by t h e c o u r t is an i n c o r r e c t i n t e r p r e t a t i o n of t h e phrase "work of a s i m i l a r c h a r a c t e r ." W e cannot understand why t h e c o u r t made t h e s t a t e m e n t . The c o u r t ' s a n a l y s i s of t h e i s s u e and its p r e v i o u s s t a t e m e n t s a r e c l e a r l y c o n t r a r y . T h i s s t a t e m e n t is nothing more than v e r b i a g e , and c e r t a i n l y not of t h e n a t u r e on which t o p r e d i c a t e e r r o r . What t h e t r i a l c o u r t s a i d , and what t h e c o u r t d i d , a r e two d i f f e r e n t t h i n g s . From our f o l l o w i n g d i s c u s s i o n , it is e v i d e n t t h a t what t h e c o u r t d i d was p r o p e r . Here, t h i s D i s t r i c t Court a s f a c t f i n d e r a t t a c h e d s i g n i f i - cance t o two kinds of evidence. F i r s t was t h e testimony of James Thompson, t h e p r o j e c t a r c h i t e c t . Thompson t e s t i f i e d a s f o l l o w s : "Q. Would you e x p l a i n t h e n a t u r e of t h e b u i l d i n g t h a t was b u i l t , J i m ? Whether it was frame, l o g , what kind of a b u i l d i n g was it t h a t we're t a l k i n g about h e r e ? A. It was b a s i c a l l y a r e l a t i v e l y simple s t r u c t u r e , c o n c r e t e block, e x t e r i o r w a l l s , open westbound s t y l e j o i s t s with a c o n c r e t e f l o o r poured over them f o r t h e f l o o r over a crawl space. The roof s t r u c t u r e was wood with a metal covering, t h e metal roof covering, t h e e x t e r i o r f i n i s h of t h e b u i l d i n g was a foam w i t h a type of s t u c c o f i n i s h over it. "Q. Would you c h a r a c t e r i z e t h e job a s a tech- n i c a l one o r a simple one? A. I would say t h e job was r e l a t i v e l y simple and could be broken down i n t o a s e r i e s of s u b c o n t r a c t s . T h a t it was a series of s u b c o n t r a c t s t h a t made it simple. "Q. A l l r i g h t , would a c o n t r a c t o r with suf- f i c i e n t e x p e r i e n c e t o b u i l d a r e s i d e n c e o r apartment house have t h e working knowledge t o complete t h i s p r o j e c t . A. Most c e r t a i n l y . "Q. Very w e l l , p u t t i n g up t h e block and p u t t i n g up t h e s h e e t rock i n t h i s b u i l d i n g , is t h a t any d i f f e r e n t t h a n p u t t i n g up block o r s h e e t rock i n a home o r i n a commercial b u i l d i n g ? A. No. "Q. I t ' s one i n t h e same. A. One i n t h e same. " I n view of t h e above-quoted evidence t h e c o u r t , i n its c o n c l u s i o n s of law, s t a t e d : " [ t l h e 'work of a s i m i l a r c h a r a c t e r ' t o be performed, . . . was r e s i d e n t i a l t y p e c o n s t r u c t i o n . " (emphasis added) I n e x p l a i n i n g t h i s c o n c l u s i o n , t h e c o u r t s a i d : " [ t l h e record r e v e a l s t h a t t h e employees whose wages a r e a t i s s u e . . . were capable of b u i l d i n g a r e s i d e n c e . James Thompson, t h e p r o j e c t a r c h i t e c t , t e s t i f i e d t h a t g c o n t r a c t o r c a p a b l e of workinq one - r e s i d e n t i a l b u i l d i g - - was a l s o q u a l i f i e d - t o perform t & c o n t r a c t . . ." (emphasis added) S i n c e t h e Yellow Bay p r o j e c t was much l i k e b u i l d i n g a resi- dence, t h e c o u r t found i m p o r t a n t t h e evidence concerning r a t e s p a i d by r e s i d e n t i a l c o n t r a c t o r s i n Lake County. The Court d i s c u s s e d t h e evidence a s follows: "The o n l y evidence on t h e record r e g a r d i n g whether p l a i n t i f f [ p a i d p r e v a i l i n g wages] is t h a t introduced by p l a i n t i f f . The following is p l a i n t i f f ' s summary of t h a t evidence. "'To make an e f f o r t t o determine what t h e pre- v a i l i n g wage is i n Lake County t h e p l a i n t i f f c a l l e d Mr. Doug Stam, l o c a l manager of t h e s t a t e job s e r v i c e o f f i c e . I n t r o d u c e d i n t o e v i d e n c e was a list prepared by Mr. Stam which c o n t a i n e d names of 50 c o n t r a c t o r s and he opined t h a t approximately 1 5 o f t h e s e contrac- t o r s were c a p a b l e of completing t h e Yellow Bay job. Mr. Stam a l s o t e s t i f i e d t h a t he knew of h i s p e r s o n a l knowledge t h a t t h e f o l l o w i n g c o n t r a c t o r s i n Lake County were paying t h e i r employees t h e following wages : ' "'CONTRACTOR CARPENTERS LABORERS Mr. Durand $10.00 $7.00 Mr. Olson 9.00 7.00 Mr. Feeber 8.00 6.00 Mr. McCrum 8.00 5.00 Mr. Galy 8.00 - 10.00 4.00 - 5.00 Mr. Baker 8.00 - 11.00 4.50 - 6.00' " ' P l a i n t i f f c a l l e d t o t h e s t a n d t h e following c o n t r a c t o r s and t h e y t e s t i f i e d they paid t h e i r employees t h e following wages : ' "'CONTRACTOR CARPENTERS LABORERS Wallace Olsen $ 8.00 - 10.00 $4.00 - 6.00 A l l e n Smith 11.00 + f r i n g e s 8.00 Dennis Paulson 7.00 ---- Daniel J u r y 6.00 - 8.00 5.00 Don Whiting 7.00 - 8.00 5.00 - 6.00 Dan Baker 7.00 - 8.00 ----I " ' A l l of t h e c o n t r a c t o r s l i s t e d above a r e resi- d e n t s of Lake County, Montana; a l l t e s t i f i e d t h a t t h e y d i d r e s i d e n t i a l b u i l d i n g (James Thompson t e s t i f i e d t h a t any c o n t r a c t o r t h a t c o u l d b u i l d a r e s i d e n c e could have handled t h i s p u b l i c p r o j e c t ) and t h e wages l i s t e d a r e t h o s e paid by t h e c o n t r a c t o r s d u r i n g t h e year 1980. Each c o n t r a c t o r employed from 1 - 8 employees d u r i n g t h e year 1980. The d e f e n d a n t h a s taken t h e p o s i t i o n t h a t t h e p r e v a i l i n g r a t e of wages i n t h e a r e a is $11.13 p l u s f r i n g e b e n e f i t s ( u n i o n s c a l e ) . Only one c o n t r a c t o r t e s t i f i e d from Lake County ( A 1 Smith) who pays h i s employees union s c a l e and t h o s e employees work o n l y on a p a r t time b a s i s . V i r t u a l l y a l l o t h e r c o n t r a c t o r s were non-union and a l l w i t n e s s e s who t e s t i f i e d i n c l u d i n g A 1 Smith, t h e s o l e union c o n t r a c t o r , were unaware of any o t h e r union c o n t r a c t o r i n Lake County.' " T h i s summary a c c u r a t e l y r e f l e c t s t h e evidence i n t r o d u c e d r e g a r d i n g wages. I t shows t h a t a m a j o r i t y of t h e c a r p e n t e r s i n Lake County r e p r e s e n t e d i n t h i s s u r v e y who work on r e s i d e n t i a l - t y p e c o n s t r u c t i o n a r e paid $7.00 - $9.00 an hour and t h a t l a b o r e r s a r e paid $4.00 - $6.00 a n hour. Presumably, t h e d i f f e r e n c e s r e p r e s e n t d i f f e r e n c e s i n i n d i v i d u a l t r a i n i n g and e x p e r i e n c e . "From t h e s e a v e r a g e s it is a p p a r e n t t h a t p l a i n t i f f p a i d t h e p r e v a i l i n g r a t e of wages i n Lake County f o r r e s i d e n t i a l - t y p e c o n s t r u c t i o n f o r c a r p e n t e r s and a l a b o r e r . " I n view of t h e two t y p e s of e v i d e n c e , t h e c o u r t reasoned a s f o l l o w s : The testimony of t h e a r c h i t e c t e s t a b l i s h e d t h a t t h e Yellow Bay p r o j e c t was much l i k e b u i l d i n g a r e s i d e n c e , t h e r e f o r e , t h e Yellow Bay p r o j e c t is of a s i m i l a r c h a r a c t e r t o r e s i d e n t i a l c o n s t r u c t i o n . Consequently, t h e s t a n d a r d p r e v a i l i n g r a t e of wages must be those wages which a r e paid i n t h e county o r loca- l i t y by o t h e r c o n t r a c t o r s involved i n r e s i d e n t i a l c o n s t r u c t i o n . T h i s reasoning is e x a c t l y what is c a l l e d f o r i n s e c t i o n 1 8 - 2 - 4 0 1 ( 5 ) ( a ) , MCA, ( 1 9 8 1 ) . The c o u r t ' s a n a l y s i s c l e a r l y r e c o g n i z e s t h a t "work of a s i m i l a r c h a r a c t e r " means t h e t o t a l p r o j e c t , n o t t h e v a r i o u s k i n d s of l a b o r involved. W e a g r e e w i t h t h a t s t a t u t o r y i n t e r p r e t a t i o n . W e do n o t understand why t h e c o u r t made t h e s t a t e m e n t t h a t " t h e s i m i l a r i t y is between t h e type of l a b o r involved and n o t t h e type . . . of p r o j e c t involved." I n its c o n c l u s i o n of law number s i x t h e c o u r t u n e q u i v o c a l l y s t a t e d : " [ t l h e 'work of a s i m i l a r c h a r a c t e r ' t o be performed under M.C.A. 518-2-401(3)(a) (1979) was r e s i d e n t i a l type c o n s t r u c t i o n . " These s t a t e m e n t s a r e c o n f l i c t i n g . I n such a s i t u a t i o n w e must g i v e e f f e c t t o t h e s t a t e m e n t which makes v a l i d t h e c o u r t ' s a n a l y s i s . A p p e l l a n t ' s argument is r e a l l y a m a n i f e s t a t i o n of its d i s a g r e e m e n t w i t h t h e c o u r t ' s c o n c l u s i o n t h a t t h e "work of a s i m i l a r c h a r a c t e r " t o be performed was r e s i d e n t i a l type construc- t i o n . W e n o t e t h a t t h e c l a s s i f i c a t i o n of r e s i d e n t i a l construc- t i o n is one of s e v e r a l c l a s s i f i c a t i o n s used by t h e S e c r e t a r y of Labor under t h e F e d e r a l Davis-Bacon A c t . A p p e l l a n t goes t o g r e a t l e n g t h s t o i n s t r u c t t h i s Court on t h e h i s t o r y and development of t h e Davis-Bacon A c t . According t o a p p e l l a n t , t h i s Court should s u p p o r t " u n i f o r m i t y between s t a t e and f e d e r a l r e g u l a t i o n s and procedures." Presumably, p a r t of t h a t u n i f o r m i t y would be r e c o g n i t i o n of t h e United S t a t e s Department of L a b o r ' s v a r i o u s c l a s s i f i c a t i o n s of c o n s t r u c t i o n . The compliance o f f i c e r of t h e Labor S t a n d a r d s D i v i s i o n of t h e Department of Labor and I n d u s t r y t e s t i f i e d t h a t t h e F e d e r a l Davis-Bacon r a t e s a r e determined f o r t h r e e d i f f e r e n t t y p e s of c o n s t r u c t i o n ; r e s i d e n t i a l , b u i l d i n g , and heavy and highway. Y e t when asked about r e s i d e n t i a l c o n s t r u c t i o n c l a s s i f i c a t i o n i n Montana, t h e w i t n e s s r e p l i e d : "Okay, w e l l , f i r s t of a l l , we d o n ' t use r e s i d e n t i a l . W e h a v e n ' t had a need. Okay, b u i l d i n g c o n s t r u c t i o n would be any type of b u i l d i n g . " W e do not a t t e m p t t o d e f i n e " r e s i d e n t i a l c o n s t r u c t i o n " f o r t h e commissioner, nor do w e hold t h a t t h e s t a t u t e r e q u i r e s t h i s kind of c l a s s i f i c a t i o n . W e o n l y hold t h a t t h e evidence supported t h e D i s t r i c t C o u r t ' s c o n c l u s i o n t h a t c o n s t r u c t i o n of t h e Yellow Bay l a b o r a t o r y was "of a s i m i l a r c h a r a c t e r " t o r e s i d e n t i a l c o n s t r u c t i o n . W e f u r t h e r hold t h a t t h e evidence supported t h e c o u r t ' s c o n c l u s i o n t h a t t h e respondent had paid t h e " s t a n d a r d p r e v a i l i n g r a t e of wages." Next, a p p e l l a n t c h a l l e n g e s t h e admission of what h a s been l a b e l e d t h e "Stam survey." A t t r i a l , Mr. Stam, t h e manager of t h e l o c a l job s e r v i c e o f f i c e , t e s t i f i e d concerning t h e r a t e of wages p a i d by c o n t r a c t o r s t o c a r p e n t e r s and l a b o r e r s i n Lake County. The b a s i s of h i s testimony came from a t e l e p h o n e survey conducted by himself t h e day b e f o r e . H e c o n t a c t e d s e v e r a l l o c a l c o n t r a c t o r s and asked them what t h e i r wage r a t e s were. H e t e s t i f i e d a t l e n g t h concerning t h e i r responses. The evidence was c l e a r l y h e a r s a y b u t was admitted over o b j e c t i o n p u r s u a n t t o Rule 8 0 3 ( 2 4 ) , Mont.R.Evid., which a l l o w s a s e x c e p t i o n s t o t h e hearsay r u l e " s t a t e m e n t [ s ] n o t s p e c i f i c a l l y covered by any of t h e f o r e g o i n g e x c e p t i o n s b u t having comparable c i r c u m s t a n t i a l guaran- t e e s of t r u s t w o r t h i n e s s . " W e hold t h a t it was e r r o r t o admit t h e testimony because t h e e v i d e n c e d i d not have comparable g u a r a n t e e s of t r u s t w o r t h i n e s s . I n d e t e r m i n i n g whether o r not t h e evidence should be a d m i t t e d , t h e Commission on Rules of Evidence noted t h a t " [ t l h e g u a r a n t e e o f t r u s t w o r t h i n e s s set o u t i n t h e Commission Comments t o each of t h e o t h e r e x c e p t i o n s [of Rule 8031 is t h e c r i t e r i a t o be used i n d e t e r m i n i n g whether t o a p p l y t h i s open-ended e x c e p t i o n and f i n d a 'comparable c i r c u m s t a n t i a l g u a r a n t e e of t r u s t w o r t h i n e s s . ' I' W e have reviewed t h e o t h e r e x c e p t i o n s contained i n Rule 803 and f i n d t h a t t h e Stam testimony should have been excluded. For example, one of t h e e x c e p t i o n s d e a l s with v a r i o u s k i n d s of p u b l i c r e c o r d s and r e p o r t s . Rule 803 ( 8 ) Mont.R.Evid. Under t h i s e x c e p t i o n , d a t e c o m p i l a t i o n s of an agency a r e a d m i s s i b l e i f t h e i n f o r m a t i o n is t h e r e s u l t of a regularly-conducted a c t i v i t y o r a duty imposed by law. The Commission Comments t o e x c e p t i o n ( 8 ) r e f e r t o g u a r a n t e e s of t r u s t w o r t h i n e s s under e x c e p t i o n ( 6 ) ; "The g u a r a n t e e of t r u s t w o r t h i n e s s is provided by t h e n a t u r e of t h e record and t h e cir- cumstances of p r e p a r a t i o n , enhanced by s y s t e m a t i c checking, by r e g u l a r i t y and con- t i n u i t y which produce h a b i t s of p r e c i s i o n , by a c t u a l e x p e r i e n c e of b u s i n e s s i n r e l y i n g upon them, o r by a d u t y t o make an a c c u r a t e record a s p a r t of a c o n t i n u i n g job o r o c c u p a t i o n . ' " A n n o t a t i o n s t o Mont .R.Evid. Commission Comments t o Rule 803 ( 6 ) , p. 285. Exception number ( 8 ) is p a r t i c u l a r l y a p p r o p r i a t e t o our c o n s i d e r a t i o n of t h e Stam testimony s i n c e t h e evidence c o n s i s t e d o f d a t a compiled by a s t a t e employee. There is no doubt t h a t t h e e v i d e n c e d i d n o t meet t h e g u a r a n t e e s of t r u s t w o r t h i n e s s . Even though t h e evidence was i n a d m i s s i b l e , t h e e r r o r was harmless. Under Rule 61, M.R.Civ.P., " [ n l o e r r o r i n e i t h e r t h e admission o r e x c l u s i o n of evidence . . . is ground f o r . . . d i s t u r b i n g a judgment o r o r d e r , u n l e s s r e f u s a l t o t a k e such a c t i o n a p p e a r s t o t h e c o u r t i n c o n s i s t e n t w i t h s u b s t a n t i a l j u s t i c e . The c o u r t a t e v e r y s t a g e of t h e proceeding must d i s r e - g a r d any e r r o r or d e f e c t i n t h e proceeding which does not a f f e c t t h e s u b s t a n t i a l r i g h t s of t h e p a r t i e s . " T h i s r u l e was intended t o p r e v e n t r e v e r s a l s based on incon- s e q u e n t i a l e r r o r s . Where s u b s t a n t i a l j u s t i c e h a s been done, t h e l i t i g a t i o n should be ended. Copenhaver e t a l . v. Northern Pac. Ry. Co. ( 1 9 1 1 ) , 42 Mont. 453, 113 P. 467. The admission of t h e c o n t e s t e d h e a r s a y evidence d i d not af f e c t s u b s t a n t i a l r i g h t s of t h e a p p e l l a n t because t h e evidence was cumulative. The respon- d e n t c a l l e d s i x l o c a l c o n t r a c t o r s t o t e s t i f y concerning t h e i r wage r a t e s f o r c a r p e n t e r s and l a b o r e r s . A l l of t h e c o n t r a c t o r s were Lake County r e s i d e n t s and t e s t i f i e d t h a t t h e y performed r e s i d e n t i a l c o n s t r u c t i o n . Five of t h e s i x c o n t r a c t o r s paid t h e i r employees a t r a t e s s i m i l a r t o t h e r a t e s paid by respondent. From t h i s evidence, t h e c o u r t could l o g i c a l l y conclude t h a t respondent had p a i d t h e s t a n d a r d p r e v a i l i n g r a t e of wages. The "Stam survey" was not needed. F i n a l l y , w e c o n s i d e r whether t h e c o u r t abused its d i s c r e t i o n i n awarding a t t o r n e y f e e s t o t h e r e s p o n d e n t ? I n t h e c o u r t ' s memorandum it is s t a t e d : " P l a i n t i f f [respondent] h a s r e q u e s t e d t h i s C o u r t t o award him a t t o r n e y ' s f e e s . . . he is n o t e n t i t l e d t o a t t o r n e y ' s f e e s on s t a t u t o r y grounds . . . However, a s a n e q u i t a b l e measure, t h e Court may p r e v e n t a p a r t y from b e a r i n g t h e unconscionable burden of funding a l a w s u i t , even one a g a i n s t t h e s t a t e , which is t h e r e s u l t of u n j u s t p o l i c y . " I t h a s long been t h e r u l e i n Montana t h a t i n t h e absence of agreement between t h e p a r t i e s o r s t a t u t o r y a u t h o r i z a t i o n , a suc- c e s s f u l p a r t y is not e n t i t l e d t o an award of a t t o r n e y ' s f e e s . N i k l e s v. Barnes ( 1 9 6 9 ) , 153 Mont. 113, 454 P.2d 608. T h i s g e n e r a l r u l e is a p p l i c a b l e t o t h i s c a s e . The t r i a l c o u r t a t t e m p t e d t o r e l y on its e q u i t a b l e power i n making t h e award. T h i s was e r r o r . W e r e c o g n i z e a very narrow e x c e p t i o n t o t h e above r u l e . A District Court does have e q u i t a b l e power t o award a t t o r n e y ' s f e e s where t h e p r e v a i l i n g p a r t y h a s been forced i n t o a n a c t i o n t h a t is f r i v o l o u s and u t t e r l y w i t h o u t m e r i t . Wilson v. Department of N a t u r a l Resources and Conservation (1982 ) , Mont . , 648 P.2d 766, 39 St.Rep. 1294. C l e a r l y , t h e excep- t i o n is not a p p l i c a b l e t o t h i s c a s e . The award of a t t o r n e y ' s f e e s is vacated and t h e remainder of t h e judgment is a f f i r m e d f o r t h e reasons s t a t e d h e r e i n . We concur: Justices Mr. Justice John C. Sheehy concurring in part, and dissenting in part. I concur (1) the Commissioner has exclusive power to determine the standard prevailing rates of wages under the State's statutes; ( 2 ) that "work of a similar character" refers to projects and not to types of labor; (3) that the Stam "Survey" was inadmissible; and (4) that no attorney's fees should be awarded. Otherwise, I p u t as much distance as possible between m e and everything else that i s said in the majority opinion. I t i s easy to expose the sophistry of the majority. One need only ask, "If Yellow Bay Laboratory were a federal project, would Thompkins have had to pay Davis-Bacon wage-rates?" The answer i s a resounding "yes". A t the same time as the Yellow Bay project, contractors on the federally-funded Lake County Courthouse and Ronan School project paid Davis-Bacon wages based on the federal determinations. Here the State Commissioner had promulgated standard prevai 1 ing wage-rates applicable to Yellow Bay Laboratory. Thompkins did not pay the wage- rates. H e clearly violated State law and the terms of his contract with the State. Almost universally i t i s recognized right, suitable, and expedient that state Little Davis-Bacon acts and the federal Davis-Bacon Act be construed in harmony. See Associated General Contractors v. State of N e w Hampshire, 306 A2d 204 ( N H 1973). The purpose of the state act i s to safeguard existing minimum wage standards and prevent unfair competition. Sec. 39-1-401 MCA. I t i s incredible that a court of this level would state that here the Commissioner had indeed determined standard prevailing wage-rates which existed a t the time the Yellow Bay Laboratory contract was entered into, and then to state that the State's wage figures are not a part of that contract. "There must," says the majority, "be a meeting of the minds or mutual assent on all of the essential terms." T o assume t h a t this contractor, counseled b y an attorney, was so naive as not to know what "standard prevailing wage-rates" meant i s itself naivete of the farthest reach. The issue should not be so simply dismissed on the mere grounds there was no mutual consent to the standard prevailing wage-rates. The provisions of subsisting statutes in force and applicable to contract are incorporated in the contract much as those specifically set forth therein. Valier Company v. State, 123 Mont. 329, 215 P2d 966 (1950). Therefore, Thompkins contracted if he paid less than the standard p r e v a i l i n g wayes "as established under the pub1 i c works contract", he f o r f e i t e d Twenty-five (25) Do1 l a r s per day f o r each underpaid worker. Section 18-2-407, MCA. He contracted t h a t the Commissioner of Labor may s e t the standard p r e v a i l i n g wage-rates. Section 18-2-402, MCA. Since Thompkins was n o t a signator t o any c o l l e c t i v e bargaining agreement, he contracted t o pay "negotiated fringe benefits" t o h i s employees as wages by undertaking a s t a t e public-works contract. Section 18-2-405, MCA. These s t a t u t o r y provisions were p a r t and parcel of t h i s c o n t r a c t w i t h the State whether s p e c i f i c a l l y stated i n h i s contract o r not. It i s n o t an excuse t h a t the standard prevai 1 i n g wage-rate "existed i n the bureaucracy" as the ma,jori ty states. It was Thompkins' s t a t u t o r y and contractual duty t o comply w i t h t h e findings o f the l a w f u l l y established bureaucracy a c t i n g under s t a t u t o r y d i r e c t i v e s . The inconvenient existence o f these s t a t u t e s and decisional c o n t r a c t law proved no d e t e r r e n t t o the d i s t r i c t court, and i s now no bar t o the m a j o r i t y . One o f the prime objects o f the S t a t e ' s L i t t l e Davis-Bacon Act i s t o prevent contractors from t a k i n g advantage o f the excess l a b o r pool i n a depressed l o c a l i t y . P i t t i n g worker against worker i n competition f o r the few jobs a v a i l a b l e by f o r c i n g them t o bargain i n d i v i d u a l l y f o r the wages on p u b l i c contracts i s n o t good business o r good p o l i c y for the State o r any o f i t s subdivisions. Prevention of c u t t h r o a t worker competition i n the s t r u g g l e t o survive i s something the courts ought t o p r o t e c t i n the noblest ~erformance o f t h e i r duty. The m a j o r i t y f a i l s i t s duty here. I d i s s o c i a t e myself from t h i s r e s u l t e n t i r e l y . The d i s t r i c t c o u r t judge, by assessing a t t o r n e y ' s fees against the Commissioner where no s t a t u t o r y o r equitable basis e x i s t e d f o r a t t o r n e y ' s fees, seemed determined t o punish the State. This court, by side-stepping contract law, punishes the workers and awards the c o n t r a c t o r a f a t t e r p r o f i t from t h e i r r i g h t f u l due. F i n a l l y , t h i s court errs, as d i d the d i s t r i c t c o u r t judge, when i t holds t h a t b u i l d i n g the Yellow Bay Laboratory was the same as b u i l d i n g a house. Rare indeed i s the house ( i t would be a c a s t l e ) where the mechanical sub-contract, t h a t p o r t i o n o f the p r o j e c t b i d and won by Thompkins, amounts t o Two Hundred T h i r t y - f i v e Thousand (235,000) Do1 l a r s out o f a Hal f - M i l l i o n Do1 1 a r p r o j e c t . (The plumbing contract was One Hundred Twenty Thousand (120,000) Do1 1 ars ; the e l e c t r i c a l about Eighty Thousand (80,000) Do1 l a r s . ) Edgar Guest said, "It takes a heap o' l i v i n ' t o make a house a home." It takes more than l i v i n ' , i t takes a heap o ' plumbin' and a heap o' h e a t i n ' and c o o l i n ' t o make a house a lab. (See Odgen Nash: "Come Clean, Mr. Guest".) But i t does n o t take a Class A Contractor's License t o b u i l d a house, and t h a t i s what State law required f o r a p r o j e c t the s i z e o f Yellow Bay Laboratory, Section 15-50-204, MCA. This c o u r t and the d i s t r i c t c o u r t should have confined the search f o r p r e v a i l i n g wage-rates t o the wages paid i n the l o c a l i t y by the class o f contractors e l i g i b l e t o b u i l d the p r o j e c t , t h a t i s , Class A Contractors. 4 - & . B & J u s t i c e John C. Sheet$ W e Concur i n the Dissent: a n i e l J. Shea

July 21, 1983

4a5110f0-4401-4e91-9bed-32cb14dbe75d

STATE v ZAMPICH

N/A

82-419

Montana

Montana Supreme Court

82-419 I N T H E SUPlG3ME C O U R T OF T H E STATE O F M O N T A N A 1983 T H E STATE O F M O N T A N A , P l a i n t i f f and Respondent, VS . K E N N E T H NORh'IAN ZAlQICH , Defendant and Appellant. Appeal from. D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t I n and f o r t h e County of Chouteau Honorable H. William Coder, Judge presidinq. Counsel of Record- For Appellant: Daniel Donovan argued, Great F a l l s , Montana For Respondent: Hon. Mike Greely, Attorney General, Helena, Montana Dorothy McCarter argued, Assistant Attorney General, Helena Yontana A l l i n H. Cheetham, County Attorney, F o r t Benton, Montana - - -- Submitted: Ivlay 31, 1983 Decided: August 1, 1983 Filed ~ AUG 1 1983 M r . J u s t i c e Frank B. Morrison, Jr. d e l i v e r e d t h e Opinion of t h e Court. Kenneth Zampich was convicted by a jury i n t h e Eighth J u d i c i a l District Court of m i t i g a t e d d e l i b e r a t e homicide. H e was sentenced t o twelve y e a r s i n p r i s o n , with f o u r o f t h e y e a r s suspended. Zampich now a p p e a l s h i s c o n v i c t i o n and sentence. W e a f f i r m both. Defendant worked f o r Gary Wigger a s a g r a i n t r u c k d r i v e r . On August 26, 1981, defendant, Wigger and S c o t t y Smith went t o t h e C a r t e r Tavern i n C a r t e r , Montana, t o d r i n k beer and play pool a f t e r work. Ray C l i n e , t h e owner, joined them. The pool games and t h e evening were r e l a t i v e l y uneventful. Defendant stopped d r i n k i n g beer and commenced d r i n k i n g soda pop sometime l a t e i n t h e evening. Witnesses t e s t i f i e d t h a t he was n o t drunk. A s defendant was p r e p a r i n g t o l e a v e t h e b a r , he attempted t o purchase a bag of i c e . Ray C l i n e argued w i t h him over t h e p r i c e and a f i s t f i g h t ensued. C l i n e h i t defendant i n t h e head with h i s f i s t . The blow was i n t e n s i f i e d by a t u r q u o i s e r i n g C l i n e was wearing. The blow caused defendant t o f a l l a g a i n s t a juke box. S c o t t y Smith broke up t h e f i g h t and defendant l e f t , saying: " W e l l , w e ' l l see what m y 30.06 h a s t o say about it." Defendant's son, P a t r i c k , rode home w i t h h i s f a t h e r i n t h e i r pickup t r u c k . P a t t e s t i f i e d t h a t d u r i n g t h e r i d e , h i s f a t h e r s a i d t h a t he ought t o k i l l t h e "son-of-a-bitch". Sharon Zampich, w i f e o f defendant, was watching t e l e v i s i o n when h e r husband and P a t a r r i v e d home a t 1:45 a.m. Defendant d i d n o t speak t o h i s w i f e , b u t went i n t o h i s bedroom and r e t u r n e d w i t h h i s 30.06 r i f l e . When Sharon Zampich asked what he was doing, defendant responded t h a t , "he was going after Ray Cline. " He then left the house and drove his pickup truck back toward the Carter Tavern. Sharon Zampich testified that her husband was not himself at that time. He appeared to be in a daze and his eyes were glazed. Pat was also uncertain his father knew what he was doing. Scotty Smith, Gary Wigger and other bar patrons testified that approximately ten minutes after defendant had left the bar, a shot was heard and Ray Cline fell to the floor. The shot came through a back window and had struck Cline in the back. Ken Zampich did not return home that night. He awoke the next morning in his truck on a sideroad near Floweree, Montana. His head had been bleeding and both his head and his back were aching. He drove to Great Falls, where he was peacefully arrested that same day. At the time of defendant's arrest, his 30.06 rifle was found in his pickup truck. He has no memory of what happened after Smith broke up the fight. After his conviction, defendant was designated a non-dangerous offender for purposes of parole and given credit for the ten months he had spent in the Choteau County jail awaiting trial. Further, he was permitted to serve the remainder of his sentence in the Choteau County jail rather than the Montana State Prison. He is now free on $2500 bail pending this appeal of his conviction and sentence. The first issue presented on appeal is whether the District Court erred in refusing to instruct the jury that the burden is on the State of Montana to prove beyond a reasonable doubt that defendant Zampich acted purposely, knowingly and voluntarily? At trial defendant contended that, due to various circumstances at the time of the offense, including intense head, neck and back pain, humiliation, anger, mistreatment, fear, and the assault by Cline who had threatened to put him six feet under, he did not know what he was doing and was not able to control himself. Specifically, Zampich claimed that if he shot Ray Cline, it was not a voluntary act. That defense was supported by the testimony of Dr. J. Earl Farris, a psychologist who examined and tested Ken Zampich in October, 1981 and again in February, 1982. Dr. Farris testified that defendant's conduct, head injuries and emotional state support the theory that even though he might have been able to act in a directed way and with perception (purposely and knowingly), defendant may not have been acting with "moral control" (voluntarily) . That is, he might have been acting with cognition and without volition. Since evidence was presented that he might have been acting without volition, defendant argues that the jury should have been instructed regarding both cognitive and volitional behavior. Defense counsel submitted several proposed instructions concerning the concept that Zampich was not capable of acting purposely, knowingly and voluntarily. For example, defendant's proposed instruction No. 43 (setting out the theory of the defense) stated: "Under this Theory, the Defense contends that he did not act purposely or knowingly or voluntarily and was not capable of acting purposely or knowingly or voluntarily. The burden is on the State of Montana to prove beyond a reasonable doubt to a moral certainty that Kenneth Norman Zampich acted purposely, knowingly, and voluntarily and was capable of acting purposely, knowingly and voluntarily." The trial court gave essentially the same instruction, after deleting every use of the word "voluntarily". However, Instruction No. 6, as given by the trial court, stated: "A material element of every offense is a voluntary act." Section 45-2-202, MCA. That instruction properly called the jury's attention to the psychological evidence defense counsel had marshalled. Instructions No. 2 and No. 5 stated that the State of Montana has the burden to prove each element of the crime beyond a reasonable doubt. Reading all the instructions together, as is required by this Court, it is clear the jury was properly instructed regarding defendant's theory of the case. Cf. State v . Riley (1982), Mont. , 649 P.2d 1273, 39 St.Rep 1491; State v. Johnson (1982), Mont . , 646 P.2d 507, 39 St.Rep. 1014; State v. McKenzie (1980), Mont . , 608 P.2d 428, 37 St.Rep. 325, certiorari denied 449 U.S. 1050, 101 S.Ct. 626, 66 L.Ed.2d 507; State v. Azure (1979), 181 Mont. 47, 591 P.2d The second issue before this Court is: Did the District Court err in failing to apply exceptions found in section 46-18-222 (2) and (3) , MCA, to the mandatory two year minimum sentence for mitigated deliberate homicide and in failing to follow the procedures set forth in section 46-18-223, MCA? Section 46-18-222(2) and (3), MCA state: "Exceptions to mandatory minimum sentences and restrictions on deferred imposition and suspended execution of sentence. All mandatory minimum sentences prescribed by the laws of this state. . . do not apply if: (2) the defendant's mental capacity, at the time of the commission of the offense for which he is to be sentenced, was significantly impaired, although not so impaired as to constitute a defense to the prosecution; (3) the defendant, at the time of the commission of the offense for which he is to be sentenced, was acting under unusual and substantial duress, although not such duress as would constitute a defense to the prosecution." Defense counsel requested, at a hearing prior to sentencing, that section 46-18-222(2) and (3) be applied to defendant and that the two year minimum sentence for mitigated deliberate homicide not be imposed.. The trial judge applied section 46-18-222(2), MCA, to defendant but sentenced defendant to more than the mandatory minimum sentence for mitigated deliberate homicide. We find no error. The trial judge gave great consideration to defendant's situation prior to imposing the sentence. The sentencing order contains specific reasons for the sentence imposed. The procedures of section 46-18-223, MCA, have been substantially followed. We would be "splitting hairs" to overturn the sentence in this case because the trial judge did not make a specific finding stating that "section 46-18-222, MCA, should not apply because . . ." Defendant's conviction and sentence are affirmed. We concur:

August 1, 1983

c6708c27-fa0f-4111-9356-244e9f5d579a

MARRIAGE OF WITBART

N/A

82-203

Montana

Montana Supreme Court

Z J o . 82-203 IN THE SUPREPIE COULPT OF TIIE STATE OF I l O ' i J T A P J A 1983 IN RE THE MARRIAGE OF DELBERT HENRY WITBART, Petitioner, -vs- LaVERNA MAE WITBART , Respondent and Appellant. ----------------- ALLEN B. HOUSTON, Plaintiff and Respondent, -vs- DELBERT HENRY WITBART a/k/a DCLBERT (DEI,) 13. WITBART, & LaVERNA MAE WITBART, Defendants and. Appellants. ------------------ DEL 11. WITBA3T, d/b/a ACADEMY ENGINEERL!.JG CONSTRUCTIOIJ, Plaintiff, -vs- HARLAIi3 E. BAUER & MARGARET E . BAUEX, Defendants and Respondents. ------------------ CLARK BROTHERS CONTRACTORS, a Mont . corp. , Plaintiff and Respondent, -vs- EARLAND E. BAUER, MARGARET E. BAUER, & DEL 11. SJITBART, d/b/a ACADEMY ENGINEERING CONSTRUCTION, Defendants. ---" ---- - ----- - ---- WESTERN EQUIPMENT CO. , Plaintiff and Respondent, DELBERT HENRY WITEART & LaVERrJA M A E WITBART, Defendants and Appellants. Appeal from: District Court of the Fourth Judicial District, In and for the County of Ravalli, The Honorable James B. Wheelis, Judge presiding. Counsel of Record: For Appellant: Cannon & Sheehy; Edmund Sheehy, Jr. argued, Eelena, Montana (LaVerna 7Vitbart) For Respondents: Richard A. Weber argued, Hamilton, Montana (Western Equipment) Gail B. Goheen argued, Ranilton, Montana (Houston) John D. Greef argued, Hamilton, i l l o n t a n a (Bowers) Larry R. Meyer argued, Stevensville, Montana (Clark Brothers) - - - Submitted: May 5, 1983 Decided: June 27, 1983 Filed: JUN271983 Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. This is an appeal of the January 14, 1982, judgment and February 17, 1982, amended judgment of the Fourth Judicial District Court distributing Del Witbart's award of $26,677.47 and interest from his action to foreclose a mechanic's lien against Harland and Margaret Bauer. On April 10, 1979, Harland and Margaret Bauer, and Delbert Witbart entered into a written contract wherein Delbert agreed to construct a road for the Bauers. Del then entered into a contract with Clark Brothers Construction for heavy equipment to be used in buiiding the road. A dispute later arose between Bauers and Witbart. Bauers refused to pay Witbart for building the road. Therefore, Witbart filed a mechanic's lien against Bauers on June 29, 1979, Cause No. DV 79-385. Clark also filed a mechanic's lien against Bauers on July 2, 1979. Bauers subsequently posted a bond in lieu of Clark's lien. On July 9, 1981, judgment was entered against Bauers and in favor of Witbart in the amount of $26,677.47. Witbart had been assigning portions of his interest in the prospective judgment to several individuals (as discussed below). The $26,677.47 was ordered retained by the Clerk of the Court pending notification of the assignees. LaVerna and Delbert Witbart were divorced in the spring of 1980. The uncontested dissolution decree incorporated a separation agreement signed by the parties on March 27, 1980. The agreement included no provision for the maintenance or support of LaVerna. Rather, it stated that all family obligations incurred by the parties had been fully determined and discharged. The agreement further provided that LaVerna would convey to Delbert by contract for deed her one-half interest in the parties1 home. The home was purchased the same month the separation agreement was entered into, March 1980. LaVernals interest in the home at that time was negligible. Finally, the agreement provided under the heading "Real Property", that Delbert would pay LaVerna $25,000.00 and that if Delbert received sufficient money in the Bauer mechanic's lien foreclosure suit, he would remit to LaVerna the money received, to the extent necessary to pay any balance of the $25,000.00 remaining due. At that time, Delbert anticipated receiving at least $75,000.00 from the Bauers. Delbert testified that he was otherwise insolvent at the time he entered into the agreement. Allen Houston loaned Delbert approximately $10,000.00 on August 24, 1978, to be used as down payment for the house. On July 28, 1980, Delbert assigned $7,473.18 of his interest in the prospective Bauer mechanic's lien judgment to Houston for security. On September 22, 1980, Delbert assigned a part of his interest in the same prospective judgment to Clark Construction for $9,275.82 of the $15,087.82 owed Clark by Delbert and Bauers. Finally, on April 27, 1982, Delbert assigned $5,616.35 of his interest in the prospective judgment to Western Equipment Company. On July 20, 1981, LaVerna filed a motion for payment, out of the Witbart-Bauer judgment fund, of monies allegedly owed by Delbert to LaVerna pursuant to their separation agreement. Delbert's creditors contested LaVernals interest in the judgment fund, alleging that the agreement on which it is based is fraudulent. The District Court thereafter merged all the claims to the judgment fund into one action. A hearing was held August 13, 1982, to determine the proper distribution of the $26,677.47 actually received by Witbart from the Bauer judgment. An order was issued January 1-4, 1982, completely annulling, as a fraudulent conveyance pursuant to section 31-2-311, MCA, Delbert's promise in the Witbart separation agreement to pay LaVerna $25,000.00. LaVerna's interest in the Bauer judgment fund was thereby rendered void. First priority to the fund was awarded Allen Houston in the amount of $7,473.18, plus interest at the rate of 163% per annum from July 25, 1980, and reasonable attorney's fees. Western Equipment Company was awarded $5,616.35, plus 10% interest per annum from the date of judgment and costs. Clark was awarded no interest in the judgment fund. Rather, Clark was required to resort to the $15,087.82 Bauer lien bond for payment. On motion by Bauers, the trial court amended the judgment on February 17, 1982, foreclosed Clark's lien against Bauers and permitted Clark to collect $9,275.82 from the judgment fund, plus interest at the rate of 10% per annum from the date of judgment. Clark was granted second priority to the fund, before Western Equipment Company. LaVerna Witbart now appeals the February 17, 1982, amended judgment and presents this Court with at least five issues for our review. Our disposition of this appeal renders consideration of all but one of those issues unnecessary. The trial judge considered the separation agreement to be a conveyance. He found no fair consideration for Delbert's obligation to pay LaVerna $25,000.00. Delbert's promise was therefore annulled, pursuant to section 31-2-311, MCA, a section of the Montana Uniform Fraudulent Conveyances Act. Any interest LaVerna might have had in the Witbart-Bauer judgment fund was extinguished. The agreement was not a conveyance. A separation agreement incorporated into a divorce decree is enforceable only as a judgment. Lawrence v. Lawrence (1982) , Mont. - I - , 642 P.2d 1043, 1049, 39 St.Rep. 548, 556. A judgment can not be attacked or reopened for lack of fair consideration. It can be reopened if obtained through fraud. See Rule 60(b), M.R.Civ.P., which lists the six reasons for reopening a judgment. Section 40-4-208(3), MCA, states in pertinent part: "(3) The provisions as to property disposition may not be revoked or modified by a court, except: (a) * * * (b) if the court finds the existence of conditions that justify the reopening of a judgment under the laws of this state." (emphasis supplied) We have construed this section as giving a trial court jurisdiction to determine whether fraud was committed in obtaining a property distribution agreement. Hopper v. Hopper (1979), 183 Mont. 543, 601 P.2d 29. Pilati v. Pilati (1979), 181 Mont. 182, 592 P.2d 1374. If fraud is found, the divorce decree may be reopened and a more equitable property distribution made. Pilati, 181 Mont. at p. 186, 592 P.2d at The trial judge improperly applied the Uniform Fraudulent Conveyances Act to this case. We therefore remand this case to District Court for a new trial on the issue of whether or not fraud was committed upon the court at the time the Witbart separation agreement was approved. "[Ilt has long been the rule in Montana that a court of equity has inherent power, independent of statute, to grant relief from judgments gained by fraud. " Selway v. Burns, Estate of Burles (1967) , 150 Mont. 1, 8, 429 P.2d 640, 644. A finding of fraud would justify reopening the judgment granting LaVerna $25,000.00. Otherwise, LaVerna is entitled to the $25,000.00 and is entitled to first priority to the Witbart-Bauer judgment fund, per the separation agreement. One of the issues raised by LaVerna will become pertinent on remand if the trial judge finds fraud on the court and denies LaVernals claim to $25,000.00 of the Witbart-Bauer judgment fund: Did the District Court err by amending its judgment and allowing Clark Brothers Construction, Inc., to receive funds from the Witbart-Bauer judgment fund? We find no error. Clark Brothers Construction has continually been considered a party to this action. Delbert assigned a portion of his interest in the Witbart-Bauer judgment fund to Clark Brothers on September 22, 1980. The District Court order of August 6, 1981, states in part: "2. A hearing on the distribution of assets now held by the Clerk of Court in DV-79-385 [the Witbart-Bauer judgment fund] will be held at 1:30 p.m. on August 13, 1981, and all parties in any of the above-entitled causes may and shall appear to present evidence at that time relating to the merits of their claims or tending to disprove the claims of other parties." One of the "above-entitled causes" was Clark Brothers Construction v. Harland E. Bauer, Margaret E. Bauer and Delbert Witbart, d/b/a Academy Engineering Construction. Clearly, the District Court considered Clark Brothers to be one of the parties with a potential interest in the Witbart-Bauer jugdment fund. LaVerna cannot now, for the first time on appeal, raise the issue of whether Clark Brothers was entitled to claim any of the judgment fund monies. Green v. Green (1978), 176 Mont. 532, 536, 579 P.2d Furthermore, the District Court did not abuse its discretion in allowing Clark Brothers to collect from the judgment fund rather than the Bauer bond fund. Section 31-2-105, MCA, states: "Relative rights of different creditors. Where a creditor is entitled to resort to each of several funds for the satisfaction of his claim and another person has an interest in or is entitled as a creditor to resort to some but not all of them, the latter may require the former to seek satisfaction from those funds to which the latter has no such claim, so far as it can be done without impairing the right of the former to complete satisfaction and without doing injustice to third persons." - - (emphasis supplied) The District Court found that to require Clark Brothers to resort to the Bauer bond fund for payment would do injustice to the Bauers. They would then be required to make double payment for the use of Clark Brother's equipment: first, to Delbert through the Witbart-Bauer judgment and second, to Clark Brothers through the Bauer bond fund. There is substantial credible evidence to support that finding of the trial court. Contrary to LaVerna's contentions, our decision in General Electric Supply Co. v. Montana Automobile Association (19801, Mont . , 617 P.2d 136, 37 St.Rep. 1715 does not permit a double payment in this instance. In that case, General Electric Supply did not have two or more funds from which to choose for satisfaction of its claim. It's immediate debtor, whose position would be similar to that of Delbert's in the instant case, was bankrupt. If General Electric Supply had not been allowed to seek satisfaction from the Montana Automobile Association, it would have gone unpaid. That is not the case here. Clark Brothers Construction will not go unpaid if it is not allowed to seek satisfaction from Bauers. They may still receive payment from Delbert Witbart. We remand this case for a new trial consistent with the We concur: Chief Justice Justices sitting in place of Mr. ~ u s t i c e John C. Sheehy Mr. Chief Justice Frank I. Haswell and Mr. Justice L. C. Gulbrandson dissent and will file a written dissent later.

June 27, 1983

18290a37-82b4-4dd5-910e-5d5609aa81ba

MORRISON v HIGBEE

N/A

83-031

Montana

Montana Supreme Court

No. 83-31 IN THE SUPRE:ME COURT OF THE STATE OF MONTANA 1983 PETER A. MORRISON, et al., Plaintiffs, E D V J I ? J P. IIIGBEE, et a1 . , Defendants. ......................................... JAMES E. ROBERTSON, Plaintiff and Appellant, -vs- LETJIS HUGHES and MILDRED HUGHES, et al., Defendants and Respondents. Appeal from: District Court of the Fifth Judicial District, In and for the County of l,ladison, The Honorable Joseph Gary, Judge presising. Counsel of Record: For Appellant: Moore, Rice, 0' Connell & Refling, David C. Moon, Bozeman, Montana For Respondents: filorrow, Sedivy & Olson; J. II. Morrow, Rozenan, Montana Submitted on Briefs: March 31, 1983 Decided: June 30, 1983 Filed: J U M 3 0 1983 P Clerk Mr. J u s t i c e John C. Sheehy d e l i v e r e d t h e Opinion of t h e Court. Robertson brought an actiorl i n t h e D i s t r i c t Court of t h e F i f t h J u d i c i a l District, Madison County, t o o b t a i n an i n j u n c t i o n a g a i n s t t h e d e f e n d a n t s Hughes t o p r e v e n t them from f u r t h e r u t i l i z i n g a p o r t i o n of R o b e r t s o n ' s i r r i g a t i o n d i t c h t o convey water. The Hughes counterclaimed f o r damages, both a c t u a l and p u n i t i v e , a l l e g i n g t h a t Robertson n e g l i g e n t l y maintained t h e d i t c h , which caused e r o s i o n , and m a l i c i o u s l y r e f u s e d t o t a k e c o r r e c t i v e a c t i o n t o p r e v e n t t h e e r o s i o n . The c a s e was t o be t r i e d by j u r y , b u t a t t h e c l o s e of t h e evidence, t h e D i s t r i c t Court d i r e c t e d v e r d i c t s i n f a v o r of t h e Hughes r e g a r d i n g t h e i n j u n c t i o n and Robertson r e g a r d i n g t h e counterclaim. Both p a r t i e s appeal. S i n c e approximately 1949, L e w i s Hughes and Robertson have been ranching i n Madison County. I n 1953, Robertson and h i s w i f e gave t h e Hughes o r a l p e r m i s s i o n t o use t h e d i t c h i n c o n t r o v e r s y ( t h e Robertson d i t c h ) t o i r r i g a t e t h e i r ranch. P r i o r t o t h a t time, however, t h e Hughes' p r e d e c e s s o r s a l s o used t h e d i t c h f o r i r r i g a t i o n purposes. The l e n g t h of t i m e d u r i n g which t h e Hughes' p r e d e c e s s o r s used t h e d i t c h was n o t c o n c l u s i v e l y d i s c l o s e d a t t r i a l . On October 8, 1959, t h e Robertsons s e n t a l e t t e r t o t h e Hughes revoking t h e i r p e r m i s s i o n t o use t h e d i t c h . S h o r t l y t h e r e a f t e r , L e w i s Hughes asked t h e Robertsons i f he could c o n t i n u e t o use t h e d i t c h f o r i r r i g a t i o n purposes. An agreement was t h e n d r a f t e d by t h e Robertsons ' a t t o r n e y , which g r a n t e d t o t h e Hughes a l i c e n s e t o use t h e d i t c h . The agreement a l s o provided t h a t t h e l i c e n s e was s u b j e c t t o ter- m i n a t i o n a t any t i m e by t h e Robertsons and t h a t t h e Hughes pay f o r one-half of t h e maintenance c o s t s of t h e d i t c h . L e w l s Hughes s i g n e d t h e agreement i n t h e Robertsons' a t t o r n e y ' s o f f i c e and then took t h e agreement home f o r h i s w i f e t o s i g n . L e w i s Hughes t e s t i f i e d t h a t he d i d n o t c a r e - f u l l y read t h e agreement and d i d n o t understand it. H e a l s o t e s t i f i e d t h a t t h e Robertsons' a t t o r n e y t o l d him t h e agree- ment was d r a f t e d t o g i v e him a r i g h t i n t h e Robertson d i t c h f o r e v e r . Mildred Hughes t e s t i f i e d t h a t when s h e s i g n e d t h e agreement, she was r e l y i n g upon what her husband t o l d h e r t h e agreement s a i d . She a l s o t e s t i f i e d t h a t s h e d i d n o t read t h e agreement v e r y c a r e f u l l y . The agreement was i n t h e Hughes' p o s s e s s i o n f o r a t l e a s t two d a y s b e f o r e it was r e t u r n e d t o t h e a t t o r n e y ' s o f f i c e . Both Robertson and t h e Hughes continued t o u s e t h e d i t c h f o r i r r i g a t i o n purposes from 1959 t o 1980. During t h a t t i m e , t h e Hughes and Robertson o r h i s lessees main- t a i n e d t h e d i t c h by a n n u a l l y removing brush which impeded t h e flow of water through t h e d i t c h . A t v a r i o u s times, R o b e r t s o n ' s lessees a l s o helped t h e Hughes m a i n t a i n t h e d i t c h by removing t h e t r e e s and b u i l d i n g up t h e d i t c h banks. During t h a t p e r i o d , however, t h e Hughes were r e q u i r e d t o move a f e n c e l o c a t e d on t h e s o u t h s i d e of t h e Robertson d i t c h because of washing and e r o s i o n which t h e Hughes a l l e g e o c c u r r e d i n t h e d i t c h . L e w i s Hughes a l s o t e s t i f i e d t h a t Robertson allowed a headgate on t h e d i t c h t o wash o u t , which r u i n e d e i g h t a c r e s of h i s l a n d . On cross-examination, however, Hughes admitted t h a t t h e wash-out o c c u r r e d b e f o r e Robertson had a c q u i r e d an i n t e r e s t i n t h e d i t c h . On March 1 4 , 1980, R o b e r t s o n ' s a t t o r n e y s e n t a l e t t e r t o t h e Hughes revoking t h e l i c e n s e . The Hughes, however, continued t o use t h e d i t c h f o r i r r i g a t i o n purposes. Robert- son t h e n f i l e d a complaint s e e k i n g t o e n j o i n t h e Hughes from using t h e d i t c h . The Hughes brought a c o u n t e r c l a i m a l l e g i n g t h a t R o b e r t s o n ' s n e g l i g e n t maintenance of t h e d i t c h caused e r o s i o n which damaged t h e i r p r o p e r t y . The Hughes a l s o asked f o r p u n i t i v e damages because of R o b e r t s o n ' s a l l e g e d oppres- s i v e and m a l i c i o u s r e f u s a l t o do a n y t h i n g t o p r e v e n t t h e e r o s i o n . A t t r i a l , t h e Hughes p r e s e n t e d e v i d e n c e t o show t h a t e r o s i o n had occurred i n t h e Robertson d i t c h and t h a t t h e e r o s i o n damaged t h e i r p r o p e r t y . The Hughes d i d n o t p r e s e n t testimony, however, t o prove when t h e e r o s i o n o c c u r r e d . Louie Day (Hughes' e x p e r t w i t n e s s ) t e s t i f i e d t h a t he d i d n o t know when t h e e r o s i o n o c c u r r e d , b u t t h a t it could have hap- pened f i f t y o r one hundred y e a r s ago. H e a l s o t e s t i f i e d t h a t t h e e r o s i o n has c o n t i n u e d s i n c e t h e d i t c h was f i r s t p u t i n . A t t h e c l o s e o f t h e e v i d e n c e , b o t h Robertson and t h e Hughes moved f o r d i r e c t e d v e r d i c t s , and t h e D i s t r i c t Court g r a n t e d b o t h motions. Robertson now a p p e a l s from t h e p o r t i o n of t h e v e r d i c t wherein t h e Hughes were adjudged t o have a p r e s c r i p t i v e easement i n t h e Robertson d i t c h . The Hughes a l s o a p p e a l , a r g u i n g t h a t t h e i s s u e of whether Robertson n e g l i g e n t l y maintained t h e d i t c h should have been p r e s e n t e d t o t h e j u r y . B a s i c a l l y , two i s s u e s a r e p r e s e n t e d f o r our review: 1. Did t h e D i s t r i c t Court e r r i n d i r e c t i n g a v e r d i c t f o r the Hughes by f i n d i n g t h a t the October 1 9 , 1959, agree- ment d i d n o t d i v e s t t h e Hughes of any d i t c h r i g h t s ? 11. Did t h e D i s t r i c t Court e r r i n d i r e c t i n g a v e r d i c t f o r Robertson by f i n d i n g t h a t t h e Hughes f a i l e d t o prove t h a t R o b e r t s o n ' s a c t i o n caused t h e Hughes' damages, which removed t h a t i s s u e from t h e j u r y ' s c o n s i d e r a t i o n ? I. DIRECTED VERDICT FOR THE HUGHES P u r s u a n t t o t h e d i r e c t i o n of t h e D i s t r i c t C o u r t judge, t h e j u r y found a s f o l l o w s : "On t h e p l a i n t i f f R o b e r t s o n ' s c l a i m a g a i n s t t h e d e f e n d a n t s Hughes f o r a n i n j u n c t i o n a g a i n s t t h e d e f e n d a n t s Hughest c o n t i n u e d use of t h e 'Robertson' c a n a l o r d i t c h , f i n d t h a t t h e d e f e n d a n t s Hughes have a p r e s c r i p t i v e r i g h t by u s e of unin- t e r r u p t e d , c o n t i n u o u s u s e o f t h i s d i t c h f o r a p e r i o d of t i m e i n e x c e s s of t e n y e a r s p r i o r t o October 1 9 , 1959, a d v e r s e t o t h e p l a i n t i f f Robertson and h i s prede- c e s s o r s i n i n t e r e s t , a n d by r e a s o n t h e r e o f t h e agreement of October 1 9 , 1959 b e i n g w i t h o u t c o n s i d e r a t i o n , d i d n o t d i v e s t t h e d e f e n d a n t s Hughes o f a n y r i g h t s i n t h e d i t c h and d i d n o t c r e a t e a mere l i c e n s e i n t h e u s e of s a i d d i t c h and by r e a s o n t h e r e o f t h e p l a i n t i f f Robertson is n o t e n t i t l e d t o a judgment f o r a n i n j u n c t i o n p r o h i b i t i n g t h e d e f e n d a n t s Hughes from u s i n g s a i d d i t c h . " Robertson p r e s e n t s many arguments f o r h i s c o n t e n t i o n t h a t t h e D i s t r i c t Court e r r e d by r e f u s i n g t o g r a n t t h e i n j u n c t i o n , b u t t h e argument w e f i n d most compelling is t h a t no p r e s c r i p t i v e easement e x i s t e d . I n Montana, a p a r t y c l a i m i n g t o have a c q u i r e d a n easement by p r e s c r i p t i o n must show open, n o t o r i o u s , e x c l u s i v e , a d v e r s e , c o n t i n u o u s , and u n i n t e r r u p t e d u s e o f t h e easement claimed f o r t h e f u l l s t a t u t o r y p e r i o d . Madison County v. E l f o r d ( 1 9 8 3 ) , Mont. , 661 P.2d 1266, 40 St.Rep. 457. I f t h e u s e b e g i n s as a p e r m i s s i v e u s e , it c a n n o t r i p e n i n t o a p r e s c r i p - t i v e r i g h t , no matter how long it may c o n t i n u e , u n l e s s t h e r e is a d i s t i n c t and p o s i t i v e a s s e r t i o n of a r i g h t h o s t i l e t o t h e owner. Drew v. Burggraf ( 1 9 6 3 ) , 1 4 1 Mont. 405, 387 P.2d I n t h i s c a s e , t h e Hughes' own a c t i o n s i n d i c a t e t h a t t h e i r u s e of t h e d i t c h was p e r m i s s i v e r a t h e r t h a n h o s t i l e . For example, i n 1953, Lewis Hughes asked t h e p e r m i s s i o n of t h e Robertsons t o use t h e d i t c h t o i r r i g a t e h i s ranch. I n 1959 when t h e Robertsons revoked t h e i r p e r m i s s i o n , t h e Hughes s i g n e d a l i c e n s e agreement which s t a t e d t h a t t h e Kobertsons could revoke t h e i r p e r m i s s i o n a t any t i m e . The Hughes argue t h a t because t h e y d i d n o t read t h e agreement c a r e f u l l y and d i d n o t understand it, t h e y should n o t be h e l d a c c o u n t a b l e t o t h e terms of t h e agreement. However, "a p a r t y t o a c o n t r a c t cannot avoid t h e c o n t r a c t on t h e ground t h a t he made a mistake where t h e r e h a s been no misrepre- s e n t a t i o n , no ambiguity i n t h e terms of t h e c o n t r a c t and t h e o t h e r p a r t y h a s no n o t i c e of such m i s t a k e and a c t s i n good f a i t h . ' ' S i l v a v. McGuinness ( 1 9 8 0 ) , Mont. , 615 P.2d 879, 37 St.Rep. 1401. The Hughes a l s o argue t h a t t h e y had a p r e s c r i p t i v e easement i n t h e d i t c h p r i o r t o s i g n i n g t h e l i c e n s e agreement because of t h e i r p r e d e c e s s o r s ' u s e of t h e d i t c h . The o n l y testimony regarding t h e use of t h e d i t c h by t h e Hughes' p r e d e c e s s o r s came from L e w i s Hughes who s t a t e d t h a t t h e d i t c h had been used f o r f i f t y y e a r s and t h a t t h e " o l d t i m e r s " p u t t h e i r water t o g e t h e r i n t o one d i t c h i n times of drought s o t h a t t h e water would reach t h e end of t h e d i t c h where t h e ranches were l o c a t e d . T h i s testimony d o e s n o t i n d i c a t e h o s t i l e use, b u t on t h e c o n t r a r y i n d i c a t e s f r i e n d l y c o o p e r a t i o n between neighbors. Even i f Lewis Hughes' t e s t i - mony could be c o n s t r u e d t o i n d i c a t e t h a t h i s p r e d e c e s s o r s o b t a i n e d a p r e s c r i p t i v e easement, Hughes' subsequent a c t i o n s of a s k i n g permission t o use t h e d i t c h and of s i g n i n g t h e l i c e n s e agreement a r e incompatible w i t h t h e n a t u r e of a p r e s c r i p t i v e easement. A s s t a t e d i n s e c t i o n 70-17-111(3), MCA: "A s e r v i t u d e is e x t i n g u i s h e d by t h e performance of any a c t upon e i t h e r tenement by t h e owner of t h e s e r v i t u d e o r w i t h h i s a s s e n t which is i n c o m p a t i b l e w i t h its n a t u r e o r e x e r c i s e . 'I The a c t i o n s of t h e Hughes d e m o n s t r a t e t h a t t h e y d i d n o t o b t a i n an i n t e r e s t i n t h e d i t c h by p r e s c r i p t i o n , b u t merely a c q u i r e d a l i c e n s e t o u s e t h e d i t c h . The term " l i c e n s e " has been d e f i n e d a s t h e p e r m i s s i o n o r a u t h o r i t y t o do a p a r t i c u l a r a c t o r s e r i e s of a c t s upon t h e l a n d of a n o t h e r w i t h o u t p o s s e s s i n g an i n t e r e s t t h e r e i n . Renfro e t a l . v. Dettwiler ( 1 9 3 3 ) , 95 Mont. 391, 26 P.2d 992. Because no p o s s e s s o r y i n t e r e s t e x i s t s i n t h e l i c e n s e e , t h e l i c e n s e may be revoked a t w i l l . "The l i c e n s e e is c o n c l u s i v e l y presumed, a s a m a t t e r of law, t o know t h a t t h e l i c e n s e is r e v o c a b l e a t t h e p l e a s u r e of t h e l i c e n s o r , and i f h e expends money i n c o n n e c t i o n w i t h h i s e n t r y upon t h e l a n d of t h e l a t t e r h e does s o a t h i s p e r i l . Any o t h e r d o c t r i n e would render most l i c e n s e s i r r e v o c a b l e and make them o p e r a t e a s conveyances of i n t e r e s t s i n l a n d . " Renfro, 93 Mont. a t 398, 26 P.2d a t 994. W e r e v e r s e t h e D i s t r i c t C o u r t ' s f i n d i n g t h a t a pre- s c r i p t i v e easement e x i s t e d i n t h e Hughes and o r d e r t h e D l s t r i c t Court t o i s s u e an i n j u n c t i o n p r e v e n t i n g f u r t h e r u s e by t h e Hughes of t h e Robertson d i t c h . I . DIRECTED VERDICT FOR ROBERTSON P u r s u a n t t o t h e d i r e c t i o n of t h e D i s t r i c t Court judge, t h e j u r y found a s f o l l o w s : "On t h e c o u n t e r c l a i m of t h e d e f e n d a n t s Hughes a g a i n s t t h e p l a i n t i f f Robertson, w e f i n d t h a t t h e r e was a f a i l u r e of proof t o show t h a t any a c t i o n of t h e p l a i n t i f f Robertson caused damages t o t h e defen- d a n t s Hughes inasmuch a s t h e 'Robertson' d i t c h i n q u e s t i o n had been l o c a t e d and e s t a b l i s h e d a t l e a s t 20 y e a r s p r i o r t o t h e a c q u i r i n g of i n t e r e s t i n t h e l a n d s i n q u e s t i o n by e i t h e r t h e p l a i n t i f f o r t h e d e f e n d a n t s , and t h a t t h e r e is no e v i d e n c e t h a t any a c t i o n of t h e p l a i n t i f f caused t h e e r o s i o n o r i g i n a l l y and t h a t t h e sub- s e q u e n t , g r a d u a l e r o s i o n is no d i f f e r e n t t h a n t h a t of any o t h e r i r r i g a t i o n d i t c h i n e x i s t e n c e and is n o t p r o x i m a t e l y caused by any a c t i o n o r i n a c t i o n of t h e p l a i n t i f f R o b e r t s o n , and by r e a s o n t h e r e o f , t h e d e f e n d a n t s a r e n o t e n t i t l e d t o a n y c l a i m of damages a g a i n s t t h e p l a i n t i f f Robertson." The r u l e f o r d e t e r m i n i n g whether a d i r e c t e d v e r d i c t should be g r a n t e d i n n e g l i g e n c e a c t i o n s h a s been s t a t e d i n Lawlor v. County of F l a t h e a d ( 1 9 7 8 ) , 177 Mont. 508, 582 P.2d 751, a s f o l l o w s : ". . . a s a g e n e r a l r u l e , t h e i s s u e s of n e g l i g e n c e and c o n t r i b u t o r y n e g l i g e n c e must be d e c i d e d by t h e j u r y under appro- p r i a t e i n s t r u c t i o n s . . . and t h e s e t t l e d r u l e is t h a t a c a s e should n o t be t a k e n from t h e j u r y u n l e s s it f o l l o w s a s a m a t t e r of l a w t h a t p l a i n t i f f c a n n o t recover upon any view of t h e e v i d e n c e , i n c l u d i n g t h e l e g i t i m a t e i n f e r e n c e s t o be drawn from it; e v e r y f a c t w i l l be deemed p r o v e d which t h e e v i d e n c e t e n d s t o prove. " Quoted from A u t i o v. Miller ( 1 9 3 2 ) , 92 Mont. 150, 167, 1 1 P.2d 1039, 1044. The Hughes contend t h a t t h i s r u l e should have p r e c l u d e d t h e D i s t r i c t Court from i s s u i n g a d i r e c t e d v e r d i c t because i n f e r e n c e s could have been drawn from t h e e v i d e n c e t o show t h a t Robertson was n e g l i g e n t i n m a i n t a i n i n g t h e d i t c h and t h a t h i s n e g l i g e n c e caused t h e e r o s i o n . W e d i s a g r e e . I n t h i s c a s e , no evidence was p r e s e n t e d t o prove t h a t Robertson breached any d u t y which caused t h e damages com- p l a i n e d of by t h e Hughes. " [A] breach of d u t y r e l i e d upon must have been t h e proximate c a u s e of t h e i n j u r y , and t h e f a c t s p l e a d e d must d i s c l o s e t h e c a u s a l c o n n e c t i o n between t h e d e f e n d a n t ' s n e g l i g e n t a c t and t h e i n j u r y complained o f . " Fusselinan v. Yellowstone V a l l e y e t c . Co. ( 1 9 1 7 ) , 53 Mont. 254, 163 P. 473. The most which c a n b e deduced from t h e e v i d e n c e is t h a t any damages which d i d i n f a c t occur t o t h e Hughes' p r o p e r t y o c c u r r e d b e f o r e Robertson a c q u i r e d h i s i n t e r e s t i n t h e d i t c h . For example, Louie Day t e s t i f i e d t h a t t h e e r o s i o n had c o n t i n u e d s i n c e t h e d i t c h was o r i g i n a l l y p u t i n . (The evidence r e v e a l e d t h a t t h e d i t c h was " p u t i n " long b e f o r e t h e Hughes and Robertson owned t h e i r ranches. ) Even L e w i s Hughes admitted t h a t Mrs. Robertson, who was Robert- s o n ' s p r e d e c e s s o r , was r e s p o n s i b l e f o r any damages caused by t h e d i t c h . C l e a r l y , such evidence is i n s u f f i c i e n t t o s u p p o r t an award of damages. The p r e s e n t c a s e d i f f e r s from t h e r e c e n t c a s e of Marta v. Smith ( 1 9 8 1 ) , Mont . , 622 P.2d 1011, 38 St.Rep. 28, wherein t h i s Court upheld a District C o u r t ' s judgment which awarded damages f o r e r o s i o n caused by t h e n e g l i g e n t a c t s of t h e d e f e n d a n t . I n Marta, t h i s Court quoted p a r t i a l l y from C a l v e r t v. Anderson ( 1 9 2 5 ) , 7 3 Mont. 551, 236 P. 847, which w e now q u o t e i n t o t o a s f o l l o w s : " I t is t h e r u l e i n t h i s s t a t e t h a t t h e owner of an i r r i g a t i n g d i t c h is n o t a n i n s u r e r t h e r e o f , and is l i a b l e o n l y f o r damages caused by h i s w i l l f u l a c t s , o r by h i s n e g l i g e n c e i n c o n s t r u c t i n g , m a i n t a i n i n g , o r u s i n g h i s d i t c h . " The f a c t s i n t h i s c a s e , u n l i k e t h o s e i n Marta, do n o t show t h a t Robertson w i l l f u l l y o r n e g l i g e n t l y c o n s t r u c t e d , m a i n t a i n e d , o r used t h e d i t c h . W e t h e r e f o r e hold t h a t t h e D i s t r i c t Court was c o r r e c t i n d i r e c t i n g a v e r d i c t which found t h a t t h e Hughes were n o t e n t i t l e d t o damages. Reversed i n p a r t and affirmed in p a r t . N o c o s t s t o e i t h e r party. i ' " L \I ,Y$ t LGkl, / Justice W e concur:

June 30, 1983

04909422-c07a-4463-bf0f-dfa2e2785cb4

HARDY v KRUTZFELDT

N/A

83-088

Montana

Montana Supreme Court

No. 83-88 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 3 MARY JANE IIARDY, MARY JOAN FOX, DAN FOX, and L.O. RANCH CO., a Mont. corp. , P l a i n t i f f s and A p p e l l a n t s , and ROBERT JOHN HARDY and BARBARA ANN HARDY, D e f e n d a n t s and A p p e l l a n t s , LEWIS JOHN KRUTZFELDT, JUNE FRANCIS RAFFERTY, WILLIAM J. KRUTZFELDT, J U L I E ANN KRUTZFELDT, KAREN JOYCE KRUTZELDT, EDWIN DUDLEY HARDY, BARBARA MARIE HARDY, and GEORGE RAFFERTY, D e f e n d a n t s and R e s p o n d e n t s . APPEAL FROM: D i s t r i c t C o u r t of t h e S i x t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of C u s t e r , T h e H o n o r a b l e A. B. M a r t i n , Judge presiding. COUNSEL OF RECORD: F o r A p p e l l a n t s : B r u c e B r o w n argued; B r o w n and HUSS, M i l e s C i t y , M o n t a n a T h o m a s M o n a g h a n ; L u c a s & M o n a g h a n , M i l e s C i t y , M o n t a n a For R e s p o n d e n t s : B r u c e T o o l e argued; C r o w l e y , H a u g h e y , H a n s o n , T o o l e & D i e t r i c h , , B i l l i n g s , M o n t a n a S u b m i t t e d : O c t o b e r 2 6 , 1 9 8 3 D e c i d e d : N o v e m b e r 2 1 , 1 9 8 3 F i l e d : ?'4gS13. ,,: !$:kd C l e r k Mr. Justice John C. Sheehy delivered the Opinion of the Court. Mary Jane Hardy, Mary Joan Fox, Dan Fox, and L. 0 . Ranch Co., plaintiffs, and Robert John Hardy and Barbara Ann Hardy, defendants, appeal from a judgment of the District Court of the Sixteenth Judicial District, Custer County, granting summary judgment in favor of the other defendants and refusing to adjudge that the right of first refusal in an agreement between the parties was invalid. The issue here is whether an agreement providing for a right of refusal before property is offered for sale is void as constituting an unreasonable restraint on alienation and against public policy. We hold that no justiciable controversy is presented on the facts before us in this case. The parties to this action are the heirs of Robert F. Hardy. In his lifetime he created certain trusts, and upon his death, the trusts became operative. Later the trusts were terminated and the Hardy heirs entered into negotiation for the division of the ranch properties which constituted the corpus of the trusts. The negotiations culminated in an agreement dated November 22, 1977. That agreement divides the Hardy ranch properties into seven tracts and provides for the di-stribution of the seven tracts of land among seven persons designated as grantees. A right of first refusal to purchase is provided for the parties, summarized by the District Court as follows: 1. Should one or more of the named grantees desire to sell his tract, he must first offer it to any one or more of the remaining grantees, until all have refused to purchase; the grantees upon receiving the offer have 60 days to accept and arrange financing; if the offer is made to more than one of the remaining grantees, the first to accept in writing is accorded priority. 2. Only after first offering to sell to all the remaining grantees can the selling grantee offer the lands to a third party. 3. If the selling grantee enters into a contract for the sale of a tract with a third party purchaser, the selling grantee must again offer to sell the lands to one or more of the other grantees until all have refused to purchase upon the contract terms; again the first grantee to accept in writing is accorded priority, and the grantee or grantees receiving the contract offer have 60 days to accept and arrange financing. 4. The preemption right is conditioned to bind any third party purchasers, successors or assigns of the oriqinal seven grantees. 5. The preemption right is to descend to the spouse and the descendants of the seven grantees named. 6. The restraint on alienation embodied in the preemption is to terminate upon the death of the last of the seven named grantees. The plaintiffs filed a complaint for declaratory relief on March 26, 1981, in which they requested the District Court to declare t.hat portion of the November 22, 1977 agreement relating to first refusal rights invalid and void as an unreasonable restraint on alienation. Defendants Robert John Hardy and Barbara Ann Hardy joined with the plaintiffs in this contention. The District Court granted defendants' motion for summary judgment on April 9, 1982, denying the plaintiffs1 motion, holding in effect, that the first refusal right was valid and not an unreasonable restraint on alienation. It is from that holding that this appeal ensued. The basic contention of the appellants here is that the procedures for exercising the preemptive refusal provisions of the agreement are so awkward and time consuming that they render the property of the grantees unmarketable. As far as the record here shows, there is no pending sale or offer for sale of the ranch properties, or purchase or offer to purchase the lands involved in this case which is affected by the first refusal rights in the contract. Nor does any third party appear before the court in this cause contending that the preemptive clauses are invalid as to him. We have before us only a suit for declaratory judgment under the Uniform Declaratory Judgments Act. It is true that the purpose of the Uniform Declaratory Judgments Act is remedial, to "settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations;" and is to be liberally construed and administered. Section 27-8-102, MCA. It is also true that the powers vested by the statute in the courts to render declaratory judgments includes "power to declare rights, status and other legal relations whether or not further relief is or could be claimed." Section 27-8-201, MCA . Nevertheless, this Court has on occasion refused to entertain a declaratory judgment action on the ground that no controversy is pending which the judgment would affect, and this Court attempts to avoid rendering advisory opinions. The District Court in this case touched on the problem of justiciability in its order granting summary judgment, stating: ". . . It goes without saying that a Court will not declare a provision of a contract invalid because of conjecture. Anticipated or unanticipated problems may arise in the future which the parties might or might not then resolve, but if not, then the court by stipulation could imply conditions necessary to reasonably carry out provisions of the contract which the agreeing parties felt were important in the formulation of the written contract. In this case the parties by the agreement, believed tha.t the lands should be kept in the family until the last of the seven grantees died." The order of the District Court granting summary judgment here can in the circumstances be construed to mean that as far as the records here show, there was no reason for the District Court to determine that the preemptive first refusal clause was invalid. The only thing before this Court in this case is a difference of opinion among lawyers on the legal effect of the preemptive first refusal clause. We do not have before us any litigants involved in an actual controversy who are deprived of a property right in seeking redress. Our decision here will not affect any party to the contract directly, because on this record there has not been any intent by any party to sell property outside the preemptive clause, nor any third party seeking to be relieved from the preemptive clause. In support of their complaint, the appellants attacking the preemptive clause have postulated a series of horribles, each of which may be speculatively true, if the clause is permitted to govern. In opposition to appellant's position, the respondents have pooh-poohed the horribles, and have insisted on the legality of the clause which so far has not detrimentally affected anybody. The respondents liken the preemptive clause to a . n ordinary trust where the corpus includes 1a.n.d. No concrete controversy is here, and we are asked by the parties on each side to give an opinion merely upon hypothetical facts and abstract propositions. No litigant bef ore immediate danger of sustaining direct in jury from the preemptive clause. Therefore we do not have a justiciable controversy over which the judicial power to determine real controversies may be exercised. Rroad language in the Uniform Declaratory Judgments Act, section 27-8-101, et seq., MCA, may not be used as a platform for courts in this state to plunge into indefinite amorphous ponds of contract interpretation. In Chovanak v. Matthews (1948), 120 Mont. 520, 525-26, 188 P.2d 582, this Court said: "It is by reason of the fact that it is only judicia.1 power that the courts possess, that they are not permitted to decide mere differences of opinion between citizens, or between citizens and the state, or the administrative officials of the state, as to the validity of statutes. Particularly is it true where a statute, regular[ly] enacted by the lawmaking branch of the government, is attacked by the citizen as being in violation of some provision or provisions of the Constitution. "The judicial power of the United States is vested in 'one Supreme Court and in such inferior Courts as the Congress may from time to time ordain and establish.' Sec. 1, Art. 111, of the United States Constitution. The judicial power vested in the district courts and the Supreme Court of Montana, by the provisions of the Montana Constitution, extend to such 'cases at law and in equity' as are within the judicial cognizance of the state sovereignty. Article 8, secs. 3, 11, [I889 Montana Constitution.] By 'cases' and 'controversies' within the judicial power to determine, is meant real controversies and not abstract differences of opinion or moot questions. Neither federal nor state Constitution has granted such power." The summary judgment of the District Court, insofar as it may be construed to determine by the rights of the parties under the preemptive purchase agreement, is reversed. The cause is remanded to the District Court with instructions to dismiss without prejudice. ") ' - 4 , - j i c 5 ! & 3 & 4 $ We Concur: % - , Chief Ju'stice &/@a& Justices A District Judge, sitting for Mr. Justice Frank B. Morrison, Jr. Mr. Justice L. C. Gulbrandson, Mr. Justice Daniel J. Shea and Mr. Justice Fred J. Weber dissent and will file written dissents later. I N THE SUPREME COURT O F THE STATE OF MONTANA No. 83-88 HARDY v. KRTJTZFELDT D I S S E N T Submitted: N o v e m b e r 23, 1983 4 . Justice Fred J. Weber respectfully dissents as follows: I respectful-ly dissent from the applicati-on of our declaratory judgment law to the facts of this case. This is an ideal case for a declaratory judgment. The plaintiffs contend that the right of first refusal summarized in the majority opinion is void as an unreasonable restraint on alienation. Deposition testimony shows that the right of first refusal was intended to keep the ranch property in the family. Because the first refusal right decends to the spouse and descendants of a deceased party and terminates only upon the death of the last named party, there are 39 people who potentially have a right of first refusal and therefore constitute the persons to whom notice is required in the event of an attempted sale. Each of such persons has a right to purchase. Even if a sale does take place to a third party purchaser, the same right extends to the remainder of such 39 persons and continues until the death of the last of the seven named grantees. From the admitted facts, I conclude there is a significant restraint on the right of sale of each of the seven parties involved in the contract. Where a party contends this is an unreasonable restraint, that contention appears sufficient to warrant declaratory judgment. Section 27-8-202, MCA, (a part of the Uniform Declaratory Judgment Act) in pertinent part states: "Any person interested under a . . . written contract . . . or whose rights . . . are affected by a . . . contract . . . may have determined any question of construction or validity under the . . . contract . . . and obtain a declaration of rights . . ." With regard to the interpretation of a contract, the foregoing is buttressed by section 27-8-203, MCA, which provides : "A contract may he construed either before or after there has been a breach thereof." This appears to negative a requirement fcr something in the nature of breach. It seems clear that under the specific wording of the statute, the parties are entitled to a declaration of their rights under the present facts. Apparently the majority is suggesting that there should have been a showing of an intention. to sell. property by one of the parties and of some type of adverse effect, or a completed sale and a . n objection by a third party seeking to be relieved from the preemptive clause. I do not find that type of a fact situation is necessary in order to determine that a justiciable controversy exists under the Act. As stated by this Court in Lee v. State (Mont. 1981), 635 P,2d 1282 at "The test of whether a iusticiable controversy exists is set forth in Matter - of Secret Grand Jury - Inquiry (1976), 170 Mont. 354, 357, 553 P.2d 987, 990. There this Court said: "'First, a justiciable controversy requires that parties have existing and genuine, as distinguished from theoretical, rights or interest. Second, the controversy must be one upon which the judgment of the court may effectively operate, as distinguished from a debate or argument invoking a purelv political, administrative, philosophical or academic conclusion. Third, must be a controversy the judicial determination of which will have the effect of a final judgment in law or decree in equity upon the rights, status or legal relationships of one or more of the real parties in interest, or lacking these qualities be of such overriding public moment as to constitute the legal equivalent of all of them.'" First, the parties here have a genuine and existing property interest which on its face is affected by a restraint on the power of sale, and therefore meets the first test. Second, the judgment of this Court could effectively operate because it would determine that the restraint on alienation was to remain controlling or was in fact void. That is clearly not a philosophical or academic conclusion. Third, a conclusion by the court as to the validity or invalidity of the restraint would certainly be a judicial determination which would have the effect of a final judgment in law upon the rights of these parties. At that point it seems to me that the parties have met the tests previously stated by this Court. In City of Billinas v. Public Service Commission (Mont. 1981), 631 P.2d 1295, the City requested the court to decide whether a 1963 contract with a District was valid and binding and whether this contract required the City to supply water mains and to serve an increased district area without Limitation, as well as other requests. The District Court concluded the contract was valid and binding. This Court approved that determination. We did not suggest that the City had to wait until requested to supply additional water mains or until asked to serve an increased area of the District before determining the respective rights of the parties to the contract. In a similar manner, 1 do not think it is appropriate here to require a party to attempt to sell the property, to give the very extensive notices required, and to somehow prove that the restraint has reduced the value of the property. That would be difficult, time consuming and expensive. Here we have a very real restraint on the right of sale which on its fzce will have an adverse affect on sale. The question is whether that restraint should be maintained or not. That constitutes a justiciable controversy under the Uniform Declartory Judgment Act, similar to City - of Billings. I would decide the case on its merits. W j o i n in the foregoing dissent of Justi ' % e b e r . / c & *

November 21, 1983

01416202-82ae-422c-acb6-09cf2f20f2ff

TAYLOR v DEPT OF FISH WILDLIFE

N/A

82-244

Montana

Montana Supreme Court

No. 82-244 I N THE SUPREME C O U R T O F T H E STATE O F M O N T A N A 1983 C O U R T N E Y L. TAYLOR, P l a i n t i f f and Appellant, DEPARTMENT O F FISH, WILDLIFE & PARKS, STATE O F M O N T A N A , and JAMES W. FLYNN, Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t , I n and f o r t h e County of Lewis & Clark, The Honorable P e t e r Meloy, Judge p r e s i d i n g . Counsel of Record: For Appellant: Robinson, Doyle & B e l l ; John Doyle argued, Hamilton, Montana For Respondent: Kevin C. Meek argued, Dept. F i s h , W i l d l i f e and Parks, Helena, Montana Submitted: May 5 , 1983 Decided : J u l y 1 4 , 1983 F i l e d : Clerk Mr. Chief Justice Frank 1. Haswell delivered the Opinion of the Court. Courtney Taylor appeals the District Court decision dismissing his action against the Department of Fish, Wildlife and Parks to void his forced retirement at age sixty and reinstate him to his position as game warden with attorney fees, costs and backpay. We reverse and remand for further proceedings. Taylor has been employed as a state game warden by the Department of Fish, Wildlife and Parks since 1952. On August 7, 1979, he reached the age of sixty. Pursuant to section 19-8-601 (2), MCA, of the Game Wardens Retirement Act, he was compulsorily retired. On November 15, 1978, Taylor began investigating what action he might take to avoid compulsory retirement. He informed the Department on December 29, 1978, that he was not considering retirement. On June 22, 1979, Taylor informed the Secretary of Labor and the Equal Opportunity Cornmission of his intention to bring an action against the Department for violation of the Federal Age Discrimination in Employment Act, 29 U.S.C. S S 621-634. In February 1979 he was informed by the Administrator of the Public Employee Retirement Systems Division that he was compelled to enforce the Game Wardens Retirement Act as written. Taylor filed a complaint of discrimination with the Montana Human Rights Commission on August 6, 1979, the day before his retirement. On November 26, 1979, the Human Rights Division ruled in favor of the State. It held: ". . . Charging Party has no remedy under Montana statutes. It is possible, of course, that his forced retirement may be in violation of federal law. However, that is not a question for the Montana Human Rights Commission to decide. In- deed, it is not even a deferral agency for EEOC complaints which allege age discrimination. "Likewise, it would be an abuse of dis- cretion for this administrative agency to rule on the constitutional question. "Therefore a finding of no jurisdiction must be made insofar as the complaint alleges federal statutory and constitu- tional violations. To the extent that Montana age discrimination statutes are in issue, a finding of no reasonable cause is required." This ruling was made final December 18, 1979. By a letter dated November 26, 1979, appellant was advised: "The complainant has the right to make a written request for an informal confer- ence with the division administrator why the investigator's findings should not have been accepted. If the determination is not altered as a result of such a conference, the complainant has the right to formally request a hearing on the no cause finding. At such a hearing, the issue for consideration is the adequacy of the investigation, not the liability of the respondent. If such a hearing is requested, you wlll have the right to be present with or without counsel and to participate. However, you would not be required to do so, and no legal conse- quences would follow from your decision not to participate. You will be informed of any request for an informal conference or for a hearing in this matter." Thirty days after the Human Rights Commission ruling was made final, Taylor brought an action against the State in United States District Court, Missoula Division, for violations of section 7(b) of the ADEA, 29 U.S.C. S 626(b), and the Fourteenth Amendment to the United States Constitu- tion. The Department was awarded summary judgment on October 6, 1981. On November 25, 1981, Taylor filed an action in District Court of Lewis and Clark County. He alleged that the enforcement of the game warden retirement statute vio- lates the equal protection clause of the Montana Constitu- z r ($4 tion, Art. & Section 4. Essentially, Taylor claimed that the retirement statute is not based on a bona fide occupa- tional qualification as the State does not require physical conditioning as a prerequisite for the job during a game warden's course of employment. He asked that the statute be declared unconstitutional, that he be reinstated as a game warden, and that he recover backpay, attorney fees, and costs. The District Court granted the Department's motion to dismiss. The court's action was based upon failure to bring the administrative appeal within thirty days of the conclu- sion of the agency proceeding in violation of section 2-4- 702, MCA. Taylor appeals the District Court dismissal. Five issues have been raised for our consideration: 1. Does Dolan v. School District #lo, Deer Lodge (1981) , Mont . , 636 P.2d 825, 38 St.Rep. 1903, require voiding the game warden retirement statute because of an irreconcilable conflict with the anti-discrimination provisions in the Human Rights Act? 2 . Must appellant exhaust available administrative remedies before seeking judicial relief? 3. Should an evidentiary hearing be conducted to determine whether there is a basis for age discrimination in Montana and to determine the appellant's damages, if any? 4. Is appellant's claim barred by the statute of limitations? 5. Is the United States Supreme Court case of Equal Employment Opportunity Commission v. Wyoming, Cause No. 81- 554 (decided March 2, 1983), applicable to this case? Taylor argues that the irreconcilable conflict between tne game warden retirement statute and certain provisions of the Human Rights Act requires the retirement provision to be declared void. He contends that the clear intent of the legislature to abolish age discrimination in employment as expressed in Dolan, supra, mandates this result. The Department of Fish, Wildlife and Parks asserts that Dolan does not state that all age qualifications are invalid. Counsel admits the Department has a great burden to prove that the mandatory retirement age is related to job performance; it should be given the opportunity to meet that burden. Under the authority of Dolan, we conclude that the Human Rights Act necessarily repeals the game warden retire- ment statute to the extent of any irreconcilable conflict or inconsistency. See also, Kuchan v. Harvey (1978), 179 Mont. 7, 585 P.2d 1298; State Aeronautics Comm. v. Board of Examiners (1948), 121 Mont. 402, 194 P.2d 633. Mary Dolan was a school teacher who, in March 1977, was compulsorily retired pursuant to section 20-4-203(2), MCA. She wanted to continue teaching and proceeded through the proper adminis- trative channels where her forced retirement was affirmed. She filed an action in District Court, and it ruled that section 20-4-203(2), MCA, violated the equal protection and due process clauses of the United States and Montana Consti- tutions and was repealed by the enactment of sections 49-2- 303(1) and 49-3-201, MCA, of the Human Rights Act. On appeal this Court affirmed the District Court deci- sion. We determined that the appeal could be decided on statutory grounds without reaching constitutional considera- tions. It was recognized that the Court should not pass on the constitutionality of any act of the legislature unless required for a decision of the case. State v. King (1903), 28 Mont. 268, 277, 72 P. 657, 658. The Court applied the rule of statutory construction that requires repeal of an earlier statute that conflicts with a later one. This was done to effectuate the clear intent of the legislature to abolish discrimination in employment based solely on age. To hold otherwise would materially dilute the effect of Montana's anti-discrimina- tion legislation. We noted that Title 49 contains very broad anti-discrimination prohibitions and very limited exceptions to such prohibitions. This indicates the legislature intended to abolish all discrimination in employment except under the most limited circumstances. In Dolan the tenure statute violated this intention because it allowed discrimination based solely on age. No qualifying or justifying reasons were included in the statute which would place the forced retirement within the purview of the exceptions in Title 49. We thereby concluded that the statute was impliedly repealed by Title 49. The present case is quite similar to Dolan. In both cases the constitutionality of mandatory retirement statutes is challenged. In this case, as in Dolan, we must decide the case on statutory, rather than constitutional, grounds, if possible. Dieruf v. City of Bozeman (1977), 173 Mont. 447, 563 P.2d 127; State ex rel. Hammond v. 160 Mont. 391, 503 P.2d 52; S t a t e ex r e l . Konen v. C i t y of B u t t e ( 1 9 6 4 ) , 144 Mont. 95, 394 P.2d 753; A p p l i c a t i o n of B a k e r S a l e s B a r n ( 1 9 6 2 ) , 140 Mont. 1, 367 P.2d 7 7 5 ; Yellowstone Bank v. S t a t e Bd. of E q u a l i z a t i o n ( 1 9 6 0 ) , 137 Mont. 198, 351 P.2d 904; S t a t e ex r e l . Burns v. Lacklen ( 1 9 5 5 ) , 129 Mont. 243, 284 P.2d 998; Monarch Mining Co. v. S t a t e Highway Comm. ( 1 9 5 4 ) , 128 Mont. 65, 270 P.2d 738; Yale O i l Corp. v. Plentywood Farmers O i l ( 1 9 3 5 ) , 98 Mont. 582, 4 1 P.2d 1 0 ; S t a t e v. T e s l a e t a l . ( 1 9 2 4 ) , 69 Mont. 503, 223 P. 107. W e r e c o g n i z e t h e r u l e of s t a t u t o r y c o n s t r u c t i o n which p r o v i d e s t h a t s p e c i a l s t a t u t e s w i l l p r e v a i l over g e n e r a l s t a t u t e s . Kuchan v. Harvey ( 1 9 7 8 ) , 179 Mont. 7 , 585 P.2d 1298; B r y a n t v. B a l l e t a l . ( 1 9 7 1 ) , 157 Mont. 28, 482 P.2d 147; Teamsters, e t a l . , Local 45 v. Montana Liquor C o n t r o l Board ( 1 9 7 0 ) , 155 Mont. 300, 471 P.2d 541; Monarch Lumber Co. v. Haggard ( 1 9 6 1 ) , 139 Mont. 105, 360 P.2d 794; I n r e K e s l ' s E s t a t e ( 1 9 4 5 ) , 117 Mont. 377, 1 6 1 P.2d 641; I n r e S t e v e n s o n ( 1 9 3 0 ) , 87 Mont. 486, 289 P. 566. T i t l e 49 is a g e n e r a l l e g i s l a t i v e enactment t h a t d e a l s w i t h employment whereas t h e game warden r e t i r e m e n t s t a t u t e is a s p e c i a l s t a t u t e a f f e c t i n g o n l y game wardens. I n Dolan, on t h e o t h e r hand, we a p p l i e d t h e r u l e o f s t a t u t o r y c o n s t r u c t i o n t h a t r e q u i r e s s t r i k i n g a p r i o r s p e c i a l s t a t u t e t h a t i r r e c o n c i l a b l y c o n f l i c t s w i t h a l a t e r g e n e r a l s t a t u t e because t h e i n t e n t i o n of t h e l e g i s l a t u r e t o e f f e c t a r e p e a l is c l e a r l y m a n i f e s t e d . Dolan, 636 P.2d a t 828, 38 St.Rep. a t 1907; see a l s o , Kuchan v. Harvey, s u p r a ; S t a t e A e r o n a u t i c s Comm. v. Board o f Examiners, s u p r a . W e a l s o a p p l y t h i s r u l e h e r e . The particular provisions of the Human Rights Act are in direct conflict with the retirement statute. Section 49-2-303(1)(a), MCA, reads: "Discrimination in employment. (1) It is an unlawful discriminatory practice for: "(a) an employer to refuse employment to a person, to bar him from employment, or to discriminate against him in compensa- tion or in a term, condition, or privi- lege of employment because of his race, creed, religion, marital status, color, or national origin or because of his age, physical or mental handicap, or sex when the reasonable demands of the position do not require an age, physical or mental handicap, or sex distinction;" Section 49-3-201, MCA, reads: "Employment of state and local government personnel. (1) State and local government officials and supervisory personnel shall recruit, appoint, assign, train, evalu- ate, and promote personnel on the basis of merit and qualifications without regard to race, color, religion, creed, political ideas, sex, age, marital status, physical or mental handicap, or national origin. "(2) All state and local governmental agencies shall: " (a) promulgate written directives to carry out this policy and to guarantee equal employment opportunities at all levels of state and local government; "(b) regularly review their personnel practices to assure compliance; and "(c) conduct continuing orientation and training programs with emphasis on human relations and fair employment practices. "(3) The department of administration shall insure that the entire examination process, including appraisal of qualifi- cations, is free from bias." The game warden retirement statute reads: "(2) Retire- ment shall be compulsory at age 60." Section 19-8-601(2), MCA. C o n s e q u e n t l y , t h e l a t e r s t a t u t e ( e . , t h e Human R i g h t s A c t ) i m p l i e d l y r e p e a l s t h e r e t i r e m e n t s t a t u t e t o e f f e c t u a t e t h e c l e a r i n t e n t of t h e l e g i s l a t u r e . Dolan, Kuchan, and S t a t e A r e o n a u t i c s Comm., s u p r a . A s e x p r e s s e d i n Dolan, t h e i n t e n t of t h e l e g i s l a t u r e i n p a s s i n g t h e Human R i g h t s Act was t o p r e v e n t a l l a g e d i s - c r i m i n a t i o n i n employment u n l e s s a g e is r e l a t e d t o j o b performance. C e r t a i n s p e c i f i c e x c e p t i o n s were e n a c t e d p e r - m i t t i n g age d i s c r i m i n a t i o n ; however, Dolan p o i n t s o u t t h e r e must be a j u s t i f i c a t i o n f o r age d i s c r i m i n a t i o n t o b r i n g it i n t o t h e purview of t h e s e e x c e p t i o n s . 636 P.2d a t 829, 38 St.Rep. a t 1908. Furthermore, s e c t i o n 49-2-303(2), MCA, p r o v i d e s t h a t such s t a t u t o r y e x c e p t i o n s must be s t r i c t l y c o n s t r u e d . I n t h i s c a s e , t h e game warden r e t i r e m e n t s t a t u t e d o e s n o t p r o v i d e any j u s t i f i c a t i o n o r q u a l i f i c a t i o n f o r compulsory r e t i r e m e n t b u t simply r e t i r e s e v e r y p e r s o n reach- i n g a g e s i x t y . T i t l e 4 9 i n d i c a t e s t h a t t h e l e g i s l a t u r e i n t e n d e d t o a b o l i s h such r e s u l t and, s i n c e no q u a l i f i c a t i o n o r j u s t i f i c a t i o n b r i n g s t h e d i s c r i m i n a t i o n w i t h i n t h e s c o p e of t h e e x c e p t i o n s , t h e s t a t u t e h a s been i m p l i e d l y r e p e a l e d by T i t l e 49. The Department a r g u e s s t r o n g l y t h a t t h e exhaus t i o n d o c t r i n e should p r e c l u d e Taylor from j u d i c i a l r e d r e s s . W e h o l d t h a t T a y l o r a c t e d p r o p e r l y i n b r i n g i n g h i s c a s e d i r e c t l y t o D i s t r i c t Court. F i r s t of a l l , t h i s Court h a s h e r e t o f o r e h e l d t h a t t h i s c a s e is an " o r i g i n a l a c t i o n , " n o t a j u d i c i a l review of an a d m i n i s t r a t i v e a c t i o n . Thus, t h e d o c t r i n e simply d o e s n o t a p p l y Second, i n t h e a r e a of t a x a p p e a l s , t h i s Court e s t a b - lished an exception to the exhaustion doctrine in Keller v. Dept. of Revenue (1979), 182 Mont. 478, 597 P.2d 736. In Keller taxpayers sought to appeal a ruling by the Department of Revenue to the District Court. The District Court held that they must exhaust their remedies with the State Tax Appeal Board. We held that the particular Department of Revenue ruling was an interpretation of law that must be made by the judiciary and, thus, the exhaustion doctrine is inapplicable. The same applies here. Next, Taylor asserts that a fact-finding hearing should not be conducted to determine whether there is a basis for age discrimination. Since no qualifying reasons for discrimination are found in the game warden retirement statute, the statute is violative of the Human Rights Act on its face and should be stricken. The Department argues that it should be allowed to offer proof that a game warden's age is related to his job performance. Further, a hearing should be held to determine the amount Taylor's backpay award should be offset by his wages earned since retirement and to determine the fairness o i attorney fees. The compulsory retirement statute does not condition retirement on qualifications or justification which could place such discrimination in Title 49 exceptions. We hold tnat the statute facially conflicts with the Human Rights Act. The judiciary should not interfere with the legisla- tive function of establishing employment and retirement qualifications. To determine if a basis for age discrimination exists, the court, in essence, would be rewriting the statute. It would have t o add q u a l i f i c a t i o n s and j u s t i f i c a t i o n s t o t h e compulsory r e t i r e m e n t s t a t u t e t o e s t a b l i s h t h a t a game warden's age is r e l a t e d t o j o b performance, t h e r e b y b r i n g i n g t h e d i s c r i m i n a t i o n w i t h i n t h e s t a t u t o r y e x c e p t i o n s . T h i s would be i n e x c e s s of t h e c o u r t ' s a u t h o r i t y . W e h e l d i n Chennault v. Sager ( 1 9 8 0 ) , Mont. , 610 P.2d 173, 37 St.Rep. 857, t h a t t h e r o l e of a c o u r t i n c o n s t r u i n g a s t a t u t e is simply t o a s c e r t a i n and d e c l a r e its s u b s t a n c e and n o t t o i n s e r t what h a s been o m i t t e d . The s t a t u t e s i n ques- t i o n omit any bona f i d e o c c u p a t i o n a l q u a l i f i c a t i o n s f o r game wardens o r any b a s i s f o r age d i s c r i m i n a t i o n i n such employ- ment. Furthermore, d e t e r m i n i n g t h e b a s i s f o r age d i s c r i m i n a - t i o n i n Montana w i l l e n t a i l a g r e a t f a c t - f i n d i n g e f f o r t . T h i s might i n c l u d e , among o t h e r t h i n g s , a s t a t u t o r y s u r v e y , hearing e x p e r t testimony r e g a r d i n g i n d i v i d u a l v a r i a t i o n s i n a g e p r o g r e s s i o n and s p e c i f i c s a b o u t t h e o c c u p a t i o n i n q u e s t i o n . The l e g i s l a t u r e , n o t t h e c o u r t s , h a s t h e p r o p e r r e s o u r c e s t o assume such an undertaking. A d d i t i o n a l l y , p u b l i c p o l i c y i s s u e s a r e b e s t r e s o l v e d by t h e l e g i s l a t u r e i n t h e f i r s t i n s t a n c e . S i n c e t h e D i s t r i c t Court r u l e d i n f a v o r of t h e Depart- ment, no h e a r i n g was h e l d t o d e t e r m i n e t h e amount of awards f o r p a s t wages, b e n e f i t s , a t t o r n e y f e e s and c o s t s . W e must remand t o t h e D i s t r i c t Court f o r a n e v i d e n t i a r y h e a r i n g on t h e s e i t e m s . During o r a l argument b e f o r e t h i s Court t h e Department r a i s e d , f o r t h e f i r s t t i m e , t h e d e f e n s e t h a t T a y l o r ' s c l a i m was b a r r e d by t h e two-year s t a t u t e of l i m i t a t i o n s f o r t o r t a c t i o n s i n v o l v i n g p r o p e r t y . S e c t i o n 27-2-207, MCA. W e a l l o w e d s u p p l e m e n t a l b r i e f i n g on t h i s i s s u e . T a y l o r c o n t e n d s t h a t , a c c o r d i n g t o l o n g s t a n d i n g case l a w i n Montana, Rule 8 ( c ) , M.R.Civ.P., r e q u i r e s a s t a t u t e o f l i m i t a t i o n s d e f e n s e t o be p l e a d a f f i r m a t i v e l y , a n d , i f n o t , it 1s waived a s a d e f e n s e . Here, t h e Department r a i s e s t h i s i s s u e f o r t h e f i r s t t i m e a t o r a l argument on a p p e a l . The Department c l a i m s t h a t t n e d e f e n s e of s t a t u t e o f l i m i t a t i o n s can be r a i s e d f o r t h e f i r s t time on a p p e a l a c c o r d i n g t o R i e r s o n v. Board o f A d m i n i s t r a t i o n of PERS ( 1 9 8 1 I Mont . , 622 P.2d 195, 38 St.Rep. 3 . I n R i e r s o n t h e a p p e l l a n t f i r s t r a i s e d t h e i s s u e of s t a t u t e o f l i m i t a t i o n s i n h i s p e t i t i o n f o r r e h e a r i n g i n t h e Supreme Court. T h i s C o u r t a d d r e s s e d and d e c i d e d t h e i s s u e a d v e r s e t o a p p e l l a n t . The Department a r g u e s t h a t t h i s is i m p l i e d a u t h o r i t y t o a d d r e s s t h e s t a t u t e o f l i m i t a t i o n s d e f e n s e on a p p e a l even though it was n o t r a i s e d i n t h e D i s t r i c t Court. W e h o l d t h a t t h e s t a t u t e o f l i m i t a t i o n s d e f e n s e h a s been waived and, t h u s , c a n n o t be r a i s e d h e r e . Rule 8 ( c ) , M.K.Civ.P., p r o v i d e s t h a t a d e f e n s e of t h e s t a t u t e o f l i m i t a t i o n s is a n a f f i r m a t i v e d e f e n s e and c a n o n l y be r a i s e d by answer. The law is c l e a r t h a t i f t h e d e f e n s e is n o t p l e a d a f f i r m a t i v e l y , it is waived. B u t t e Country Club v. M e t r o p o l i t a n D i s t . ( 1 9 7 4 ) , 164 Mont. 75, 519 P.2d 408; ilansen v. Keirnan e t a1. ( 1 9 7 2 ) , 159 Mont. 448, 499 P.2d 787; Turner v. Powell ( 1 9 2 9 ) , 85 Mont. 241, 278 P. 512; S t a t e ex rel. Kolbow V. D i s t . C o u r t ( 1 9 0 9 ) , 38 Mont. 415, 0 ' - c- q " . 100 P. 207; GrogRn &. V a l l e y T r a d i n g Co. ( 1 9 0 4 ) , 30 Mont. The Department d i d n o t r a i s e s e c t i o n 27-2-207, MCA, as a d e f e n s e i n t h e D i s t r i c t Court; hence, t h e d e f e n s e h a s been waived. There is no language i n Rierson t h a t would a l l o w a p a r t y t o r a i s e a d e f e n s e on a p p e a l t h a t h a s been waived due t o a f a i l u r e t o a s s e r t it a t t h e t r i a l l e v e l . There is simply no holding i n Rierson t h a t o v e r r u l e s many y e a r s of case l a w r e g a r d i n g t h e s t a t u t e of l i m i t a t i o n s d e f e n s e . W e a l s o ordered supplemental b r i e f i n g on t h e a p p l i c a - b i l i t y o f E q u a l Employment O p p o r t u n i t y Commission v . Wyoming, s u p r a , t o t h e p r e s e n t case. Both p a r t i e s a s s e r t t h a t t h e United S t a t e s Supreme Court c a s e h a s no a p p l i c a - t i o n . W e agree. The c a s e s a r e d i s t i n g u i s h a b l e . EEOC addressed t h e i s s u e of whether t h e F e d e r a l Age Discrimina- t i o n i n Employment A c t a p p l i e d t o t h e Wyoming s t a t e game warden r e t i r e m e n t s t a t u t e . The p r e s e n t c a s e d e a l s w i t h t h e Montana Human R i g h t s A c t and its a p p l i c a t i o n t o t h e Montana game warden compulsory r e t i r e m e n t s t a t u t e . I n EEOC, t h e United S t a t e s Supreme Court a p p l i e d a f e d e r a l a c t t o a Wyoming s t a t u t e , whereas h e r e w e a r e applying Montana's Human R i g h t s A c t t o M o n t a n a ' s game warden r e t i r e m e n t s t a t u t e . R e v e r s e d a n d remanded f o r f u r t h e r p r o c e e d i n g s c o n s i s t e n t w i t h t h i s o p i n i o n . '?A&d. Chief J u s t i c e W e concur:

July 14, 1983

780fc7b1-7aeb-4ad9-80ff-86f9fcbcd19b

SORUM v RIEDER CO

N/A

82-392

Montana

Montana Supreme Court

IN THE SUPREME COURT OF THE STATE OF MONTANA No. 82-392 DONAL R. SORUM (FATAL), DELORES P. SORUM, personal representative for the Estate and of DENISE SORUM MATZ and LEE ANN GETTEN, as children of the deceased, Claimant and Appellant, v. RIEDER AND COMPANY, Employer, and AMERICAN HARDWARE MUTUAL, Insurer, Respondent and Cross-Appellant. ORDER AMENDING OPINION PER CURIAM: The parties having notified the Court that an error of fact appears in our opinion in this case, IT IS ORDERED: 1. The opinion of Court in this case be and is hereby amended so that the language appearing on page three of the opinion reads as follows: "Claimants Sorum and American Hardware were unable to reach an amicable agreement as to the division of the settlement. As a result, $285,000 of the settlement had before this appeal been distributed to Sorum; the remaining $15,000 has been placed in deposit with a trustee pending the outcome of this litigation." DATED this la day of - & 4 8 3 . - Chief Justice \ No. 82-392 I N THE SUPREME COURT O F T H E STATE O F M O N T A N A 1983 D O N A L D R. SORUM, (FATAL), DELORES P. SORUM, personal r e p r e s e n t a t i v e f o r t h e Estate of DENISE S O R U M Y A T Z AND LEE ANN GETTEN as c h i l d r e n of deceased, Claimant and Appellant, RIEDER AND C O M P A N Y , Employer, and AMERICAN H A R D W A R E MUTUAL, Defendant and Respondent. Appeal from: Workers' Compensation Court, The Honorable Timothy Reardon, Judge p r e s i d i n g . Counsel of Record: For Appellant: F r i s b e e , I4oore & S t u f f t ; John P. Moore argued, Cut Bank, Montana For Respondent: Marra, Wenz, Johnson & Hopkins; Thomas Marra and Charles Johnson argued, Great F a l l s , Montana Submitted: June 2, 1983 Decided: J u l y 1 4 , 1983 . JUL 1 4 1383 F i l e d . Clerk Mr. Justice John C. Sheehy delivered the Opinion of the Court. Claimants Sorum appeal from an order of the Workers' Compensation Court awarding 100% subrogation to American Hardware Mutual in the proceeds of a third-party settlement of tort claims achieved by Sorum. American Hardware cross-appeals from the application by the Workers Compensation Court of the Swanson rule (Swanson v. Champion International Corporation (1982), Mont . , 646 P.2d 1166, 39 St.Rep. 639), to the subrogation rights of American Hardware. We reverse the Workers Compensation Court as to the 100% subrogation interest of American Hardware, and affirm the application of the Swanson rule. Before discussing the issues, we state the general facts giving rise to the controversy. Donald R. Sorum, an employee of Rieder & Company of Cutbank, Montana, lost his life on August 22, 1979 as the result of an industrial accident. One Leonard F. Doran was operating a road grader which got out of control and struck a scaffold upon which decedent Sorum was working. The circumstances related to this court indicate that the death may have been instantaneous. Rieder & Company, Sorumfs employer, carried its workersf compensation coverage with American Hardware. That company, in the regular course of events, began paying workmanf s compensation benefits to the widow of the deceased, Dolores P. Sorum. The subrogation rights of American Hardware arise out of the payment of those benefits. Dolores Sorum, as personal representative and widow of the decedent, and the heirs in their own behalf, brought suit against Leonard F. Doran for damages arising out of the injuries and death of Donald R. Sorum. While this suit was in progress, Doran's insurance carrier, Safeco Insurance Company, brought action in the District Court, 18th District, Gallatin County, alleging fraud in the procurement of the insurance policy which would otherwise insure Doran for his liability arising out of Sorum's death. Through claimants' counsel, Sorums intervened in the Gallatin County action and eventually the District Court in Gallatin County granted summary judgment in favor of the Sorums, refusing to hold Doran's insurance policy void. As a result, a settlement of $300,000 was reached for Safeco's responsibility as insurer of Doran. Claimants Sorum and American Hardware were unable to reach an amicable agreement as to the division of the settlement. As a result, the $300,000 has been placed on deposit with a trustee pending the outcome of this litigation. In the meantime, the matter was brought to the Workers' Compensation Court for decision, resulting in the orders which are here appealed from by the parties. Whether American Hardware is entitled to 50% or 100% - - - - - subrogation - - for the benefits it has paid or will pay to - - - - - claimants Sorum. The subrogation rights of American Hardware, a first lien on the claim, judgment or recovery made by the Sorums, an controlled by section 39-71-414, MCA. In pertinent part, that section provides: "Section 39-71-414. Subrogation. "(1) If an action is prosecuted as provided for. . . the insurer is entitled to subrogation for all compensation and benefits paid or to be paid under the Workman's Compensation Act. . . " (2) (a) If the injured employee intends to institute the third-party action, he shall give the insurer reasonable notice of his intention to institute the action. "(b) The injured employee may request that the insurer pay a proportionate share of the reasonable cost of the action, including attorneys' fees. " (c) The insurer may elect not to participate in the cost of the action. If this election is made, the insurer waives 5 0 % of its subrogation rights granted by this section. " ( 3 ) If an injured employee refuses or fails to institute the third-party action within 1 year from the date of injury, the insurer may institute the action in the name of the employee and for the employee's benefit or that of the employee's personal representative. . ." The principal controversy under this issue is whether American Hardware communicated to Sorums that it elected to pay a proportionate share of the reasonable costs of the action against Doran, including attorney's fees. American Hardware contends that it did communicate such election to counsel for the Sorums. On the other hand, the Sorums contend that American Hardware never communicated its intent to pay such costs and attorney's fees until the settlement had been achieved and, therefore, it has waived 5 0 % of its subrogation rights. The record in this case, the arguments in brief and the oral presentation are replete with charges and countercharges by each counsel of bad faith and sharp practice on the part of the other. We cut through these charges and countercharges to go to the heart of the matter: What evidence in the record indicates on the part of American Hardware an unequivocal agreement communicated to the Sorums that the company would pay a proportionate share of the reasonable costs of the action, including attorney's fees? In the voluminous record of this case, all that we have on this principal issue is a few letters between the parties that shed any light on American Hardware's communicated intent to Sorum. Although the deposition of Wesley Noel, the insurance adjuster for American Hardware handling the case at the time, was taken in the course of the proceedings here, Noel was prevented by his counsel at the time of his deposition from producing material from his file which would have aided in determining American Hardware's intent as to such participation. Moreover, at the Workerst Compensation Court hearing, no additional evidence was presented on oral testimony other than documentary exhibits, including those to which we will here advert. We are, therefore, in as good position as the Workers' Compensation Court to determine the fact issue. As we indicated, on August 22, 1979, the decedent met his unfortunate dea.th. On August 28, 1979, Noel traveled to Bozeman to discuss the facts of the accident with Doran, the operator of the road grader. On October 12, 1979, letters were issued to Dolores Sorum as personal representative of the decedent's estate. She signed the complaint against Leonard Doran on October 26, 1979. On November 6, 1979, ~ o e l addressed a letter to counsel for the claimant, in which he said with respect to the payment of costs and attorney's fees: "As of now, we have not reached a final - - determination - - a s t o whether or not we will-or will ------ not participate - - - - in the cost of any action which miaht be filed. In the event YOU are unable to -- z reach an agreement with the Dorants insurance company or Doran and his representatives, and determine it is necessary to institute an action, I would appreciate your giving me ample notice of your intentions." (Emphasis supplied). On November 12, 1979, counsel for the Sorums transmitted to Noel, along with an enclosing letter, a copy of Sorum's complaint against Doran which, the letter stated, had been filed. The court file indicates that the complaint was filed on November 15, 1979. The written records in this cause do not indicate that a request was made by counsel for Sorums for payment of the company's share of the costs a.nd attorney's fees under section 39-71-414 (2) (b). However, Noel's letter of November 6, 1979, stating the company had not yet made a decision, indicates such a request had been made. It should be apparent that when a request is made upon an insurer under section 39-71-414, MCA, for payment of a share of the attorney's fees and costs of an action against a responsible third party, the response of the insurer as to its intention should be explicit, immediate and without reservation. Such a response is necessary because it will aid the claimant's attorney to evaluate the claim from his clients' viewpoint, and it will give assurance to the claimant that costs will be shared as incurred if the suit is unsuccessful; and, further, it means that attorney's fees in the third-party suit will be shared in those cases where the claimant is responsible for fees. The next correspondence in the record is a letter from Noel to claimant's attorney dated January 24, 1980. Confirming a recent conversation, Noel stated: "As I pointed out in our telephone conversation, - we do wish to actively participate in a third-party - - - - - action and, thus, protect our subrogation rights as per theworkman's compensation law. I ha= discussed this point with the company attorney. . . and he has suggested that perhaps it might be helpful if he were to assist by taking depositions, or in any other area where his expertise might be of some benefit. If you have other suggestions as to how we might be able to participate, which would be to our mutual benefit, please advise." (Emphasis supplied) It is on the language of that letter that the Workers' Compensation Court relied when it found that American Hardware intended to pay the reasonable costs of the action, including attorney's fees. In order to reach that conclusion, however, the court must infer that Noel, in proposing "to actively participate" was talking about payment of costs and not about participating in the third-party action itself by having its attorney participate. The tenor of the letter seems to be that the attorney for American Hardware would, himself, take a part in the prosecution of claimant's claim against the responsible third party. Of course, this could not be. The claimant has a right to his or her own attorney in the prosecution of such action, and the employer or its carrier has no right to prosecute the action unless the injured employee or his estate refuses or fails to institute the third-party action within one year from the date of the injury. (Section 39-71-414(3), MCA.) That the insurer was entertaining a reservation about whether it would participate in the payment of attorney's fees is buttressed by the next item of correspondence from Noel, which was not sent until July 14, 1980, in which he stated: "I can appreciate your concern over our principal's - - refusal to make a substantial advance to cover costs, as I am sure that Mrs. Sorum does not have the funds available to readily advance these funds. However, we would. - be agreeable to participating on a pro ratabasis, the incurred costs of discover5 - and would also furnish the services-of our own - - - attorney - to assist you. I would question very seriously - - that we would have any obligation to participate ---- in the cost of attorney's fees incurred to prosecute the declaratory judgment action. - "I wish to point out that the law clearly sta.tes that we are entitled to a 50% recovery of the total benefits we have paid, regardless of whether we participate in any manner. This, understandably, is one of the reasons why the company is not agreeable to making advances along the lines you have previously suggested." (Emphasis supplied) No other interpretation of the foregoing language is possible except that the company was hedging with respect to sharing the payment of attorney's fees. The declaratory judgment referred to in the letter is the action that was brought by Safeco to set aside the insurance policy covering Doran. American Hardware was questioning any responsibility for its contribution to that action, although the proceeds of settlement which are now on the table arose from that action. It is clear that American Hardware misinterpreted its duties with respect to section 39-71-414 (2) (b) . Under that section, if the company intended to share in the costs, it must not only share the costs of discovery, but also the attorneys fees. Again, the insurer is suggesting that its attorney would "assist" claimant ' s counsel in the action against the responsible third party. There is no legal basis for that suggestion under statutes applicable. On July 17, 1980, counsel for the Sorums wrote to Noel indicating that American Hardware had refused to participate by sharing costs and fees, and that he was going ahead on the basis that the company had a 50% subrogation right. Thereafter, when the settlement proceeds arrived in the form of a check from the responsible carrier, the parties were unable to agree on its division and the resulting proceedings before the Workers' Compensation Court that we have described above occurred. There are no other references in the record, either in correspondence or by deposition from Noel, which would give us any further information as to the intent of American Hardware to participate in this action, prior to the proceeds of the settlement being obtained, except as we have stated them here. We do not find therefrom that the insurer communicated to the claimants its intention to "pay a proportionate share of the reasonable cost of the action, including attorney's fees. " Section 39-71-414 (2) (b) , MCA. Accordingly, we hold that the Workers' Compensation Court erred in determining that American Hardware is entitled to 100% subrogation rights in this case, and hold instead that it is entitled to but 50% subrogation. Section Should - - the rule against retroactive application - of decisional law prevent application of -- the Swanson --- rule to the insurer's subrogation rights? American Mutual Hardware cross appeals from the decision of the Workers' Compensation Court applying the Swanson rule in determining the subrogation rights of the insurer in this case. The Swanson rule was announced by us in Swanson v. Champion International Corporation (1982), Mont. I 646 P.2d 1166, 39 St.Rep. 639. As we said, Donald R. Sorum died on August 22, 1979. A petition was filed in the Workers' Compensation Court on September 22, 1980. The cause was heard by the Workers' Compensation Court on December 16, 1981, and was deemed submitted on February 2, 1982. On April 9, 1982, the Swanson decision was handed down. The Workers' Compensation Court issued its findings of fact and conclusions of law in this case on September 14, 1982. American Hardware contends that the court has made a retroactive application of the Swanson rule and that the company is entitled. to have its subrogation right determined according to Tuttle v. Morrison-Knudsen Company, Inc. (1978), 177 Mont. 166, 580 P.2d 1379. American Hardware also contends that the decision in Swanson, supra, overruled Fisher v. Missoula White Pine Sash Company v. Michigan Mutal Liability Company (1974), 164 Mont. 41, 518 P.2d 795, and thus constitutes "new" decisional law which should not be given retroactive application. The cross appeal misapprehends our holding in Swanson. We distinguished, rather than overruled, Fisher, supra. See 646 P.2d at 1173. We pointed out that the Fisher rule should no longer pertain because of changes made in the 1977 legislature on provisions of the Workman's Compensation Act, upon which Fisher had depended. We stated: "More important is the change that was made in the 1977 Montana Legislature of the provisions that relate to the protection of the employer through the exclusivity of the Workers' Compensation Act. In Fisher, this court placed great reliance on that part of former Section 92-204 RCM 1947, which stated, 'and in case of death shall bind his personal representative, and all persons having any right or claim to compensation for his injury or death,' as meaning that the recovery rights of the heirs were subject to the subrogation rights of the employer. 164 Mont. at 45, 518 P.2d at 797. "The 1977 amendment removed this language from the subrogation portions of former Section 92-204, and established a separate statute which related to the exclusivity of the Workers' Compensation Act as to the employer. The intent of the legislature that the heirs were bound as to exclusivity but not as to subrogation is now more clear. That statute now reads: ([here is set out the provisions of section 39-71-4111 ) . "A study of the foregoing statute will demonstrate that the inclusion of the words 'all persons having any right or claim to compensation for his injury or death' is intended to bind those persons as to suits against the employer, not third parties. In that context, any reference to this language with respect to the subrogation rights in the succeeding statutes is to take the quoted language out of context and away from the subject to which it is intended to pertain. The language relates to exclusivity; under the present statutory scheme, it should not be construed to include the Workers' Compensation subrogation provisions, for in none of the present subrogation provisions is there any indication that the legislature intended to include the rights of heirs within the employer's subrogation lien. "We therefore conclude that under the present statutory scheme, as it applies to this case, and because of the intrinsic differences that exist now and have always existed in the source and effect of recoveries made in survival actions as distinguished from wrongful death actions, the subrogation rights of the employer or its insurer under the Workers' Compensation Act do not extend to recoveries made under wrongful death claims. To that extent, we distinguish Fisher v. Missoula White Pine Sash Company (1974), 164 Mont. 41, 518 P.2d 7 9 5 . ' ' 646 P.2d at 1173, 39 St.Rep at 647. The statutory changes to which we adverted in Swanson occurred in 1977. The 1977 amendments to the Workers' Compensation statutes preceded the occurrence in 1979 of the death of Donald Sorum, and also preceded the proceedings of the Workers' Compensation Court in this case by more than three years. Even if arguendo, the application of Swanson in this case be considered as retroactive, American Hardware cannot bring itself within the rules requiring nonretroactivity. One of the factors which must be considered in determining nonretroactive application is whether application would be inequitable. LaRoque v. State & Alley (1978), 178 Mont. 315, 583 P.2d 1059, citing Chevron Oil v. Huson (1971), 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296. American Hardware contends that in determining equity, we may not look at the affect on the Sorum claimants, but may only consider the affect of nonretroactivity on American Hardware & Mutual. However, we feel that equity is a two-sided coin. This Court has repeatedly stated that under section 39-71-104, MCA, the Workers' Compensation Act is to be liberally construed in favor of the employee. In effect, American Hardware & Mutual is contending here by seeking to avoid the Swanson rule that it may reach into the non-economic damages recovered under the wrongful death statutes in favor of the heirs in order to satisfy its subrogation rights. We can think of nothing more inequitable than allowing the insurer to go beyond the economic damages to invade the recovery made by the heirs for such items as the loss of comfort and society of the decedent suffered by the surviving heirs, and the loss of consortium by a surviving spouse. 646 P.2d at 1170. To hold in favor of American Hardware on this issue would be to lose sight of the factors that guided us to our decision in Swanson, supra. The cross appeal is, therefore, denied. We, therefore, remand this cause to the Workers' Compensation Court with instructions to conduct such hearings as may be necessary and to make and enter its findings, conclusions and order determining the subrogation rights of the insurer in this case based on the guidance of this opinion. , - .-\ We Concur: %d!@u&q Chief Justice Justices - 12 - Mr. J u s t i c e John Conway Harrison d i s s e n t i n g : I d i s s e n t . The p l a i n t i f f s contend t h a t the i n s u r e r is not e n t i t l e d to 100 p e r c e n t s u b r o g a t i o n because t h e i n s u r e r did not p a r t i c i p a t e i n t h e t h i r d - p a r t y a c t i o n . I d i s a g r e e and would hold under 39-71-414, MCA, t h a t t h e r e was s u f f i c i e n t showing of par- t i c i p a t i o n on t h e p a r t of t h e i n s u r e r t o e n t i t l e him t o t h e 100 p e r c e n t s u b r o g a t i o n . See T u t t l e v. Morrison-Knutson Co., I n c . ( 1 9 7 8 ) , 177 Mont. 166, 580 P.2d 1379, where t h i s Court approved such a s u b r o g a t i o n . The formula s e t f o r t h i n t h a t case r e q u i r e s t h e i n s u r e r pay its p r o p o r t i o n a t e s h a r e of t h e c o s t s and a t t o r n e y ' s f e e s and t h a t amount could be computed a f t e r s e t t l e - ment o r iudqment. An i n h e r e n t problem i n t h e formula is t h a t it is impossible t o compute t h e p r o p o r t i o n a t e s h a r e of a t t o r n e y 's f e e s and c o s t s p r i o r t o s e t t l e m e n t or judgment because t h e amount of t h e t h i r d - p a r t y recovery is unknown. I conclude t h e c l a i m a n t may r e q u e s t t h e i n s u r e r advance a l l c o s t s , i n c l u d i n g a t t o r n e y ' s f e e s , a s t h e y a r e i n c u r r e d . The Workers' Compensation A c t must be l i b e r a l l y construed i n f a v o r of t h e c l a i m a n t , s e c t i o n 39-71-104, MCA. I f t h e c l a i m a n t r e q u e s t s t h e i n s u r e r t o advance c o s t s , " t h e i n s u r e r may e l e c t not t o p a r t i c i p a t e i n t h e c o s t of t h e a c t i o n . I f t h i s e l e c t i o n is made, t h e i n s u r e r waives 50 p e r c e n t of its s u b r o g a t i o n r i g h t s g r a n t e d by t h i s s e c t i o n . " S e c t i o n 39-71-414 ( 2 ) ( c ) , MCA. The c l a i m a n t ' s c o n t e n t i o n t h a t t h e insured is not e n t i t l e d t o 100 p e r c e n t s u b r o g a t i o n because it f a i l e d t o p a r t i c i p a t e a c t i v e l y i n a t h i r d - p a r t y a c t i o n is, i n m y o p i n i o n , without m e r i t . On J a n u a r y 4 , 1980, t h e i n s u r e r wrote t o t h e c l a i m a n t ' s counsel s t a t i n g : "we do wish t o a c t i v e l y p a r t i c i p a t e i n the t h i r d - p a r t y a c t i o n and t h u s p r o t e c t our s u b r o g a t i o n r i g h t s a s per workers' compensation law." The i n s u r e r c o n s i s t e n t l y held t o t h i s posi- t i o n and l a t e r o f f e r e d t o advance c o s t s on a p r o - r a t a b a s i s i f c l a i m a n t ' s counsel would f u r n i s h it with r e c e i p t s with t h e a c t u a l c o s t e x p e n d i t u r e s . The c l a i m a n t ' s counsel d i d not f u r n i s h t h e i n s u r e r w i t h t h e r e c e i p t s f o r a c t u a l c o s t e x p e n d i t u r e s u n t i l t h e t h i r d - p a r t y a c t i o n was s e t t l e d and t h e amount proved t o be f a r l e s s t h a n what counsel f o r t h e i n s u r e d o r i g i n a l l y s u g g e s t e d . Here t h e Workers' Compensation Court found t h e insured agreed t o p a r t i c i p a t e and is e n t i t l e d t o 100 p e r c e n t s u b r o g a t i o n . There is, i n m y o p i n i o n , s u b s t a n t i a l evidence t o s u p p o r t t h e Workers' Compensation C o u r t ' s f i n d i n g and t h i s Court should have upheld t h o s e f i n d i n g s . See P i n i o n v. H. E. Smith C o n s t r u c t i o n Co. (1980 1 1 Mont . , 619 P.2d 167, 37 St.Rep:l355; Head v. Missoula S e r v i c e Company ( 1 9 7 9 ) , 1 8 1 Mont. 129, 592 P.2d 507. There being s u b s t a n t i a l evidence t o s u p p o r t t h e f i n d i n g s of t h e Compensation C o u r t , I would uphold t h e f i n d i n g s of t h a t c o u r t . We concur in the dissent

July 14, 1983

cac3f81f-c313-4927-82bb-a7b3c3cd3647

HENDRICKSON v NEIMAN

N/A

82-491

Montana

Montana Supreme Court

N O . 82-491 I N THE SUPREME COURT O F THE STATE O F M O N T A N A 1 9 8 3 LEILA HENDRICKSON, P l a i n t i f f and A p p e l l a n t , V S . PAUL A . N E I M A N and HAVRE DISTRIBUTORS, I N C . , D e f e n d a n t s and R e s p o n d e n t s . Appeal from: D i s t r i c t C o u r t o f t h e T w e l f t h J u d i c i a l D i s t r i c t , I n and f o r t h e County o f H i l l H o n o r a b l e B. W . Thomas, J u d g e p r e s i d i n g . C o u n s e l o f Record: F o r A p p e l l a n t : Howard F. S t r a u s e , G r e a t F a l l s , Montana F o r R e s p o n d e n t s : A l e x a n d e r & Baucus, G r e a t F a l l s , Montana Bosch, Kuhr, D u g d a l e , Warner & Kaze, H a v r e , Montana - - S u b m i t t e d on b r i e f s : F e b r u a r y 1 7 , 1 9 8 3 D e c i d e d : June 1 0 , 1 9 8 3 C l e r k Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. On November 29, 1982, the District Court of Hill County entered a final order granting summary judgment in favor of defendant Havre Distributors, Inc., pursuant to Rule 5 4 ( b ) , M.R.Civ.P. Plaintiff appeals. We vacate the order and remand. At approximately 3:00 p.m. on Friday, May 1, 1981, Leila Hendrickson finished working her shift at the Iron Horse Pancake House in Havre, Montana, and attempted to cross First Street at Fourth Avenue in front of the Park Hotel. The hotel sits on the northwest corner of the inter- section. We include the following diagram for clarification: - -- - - - - - - - - - a - - - - - - - . - - - - . I " - 4 - - . ~ I K S T STREET - - . -- Hendrickson was c r o s s i n g from t h e n o r t h s i d e of t h e s t r e e t t o t h e s o u t h s i d e of t h e s t r e e t and was on t h e w e s t s i d e of t h e i n t e r s e c t i o n . F i r s t S t r e e t is a two-way s t r e e t w i t h a p a r k i n g l a n e on each s i d e of t h e s t r e e t and f o u r l a n e s of t r a f f i c (two l a n e s f o r westbound t r a f f i c and two l a n e s f o r eastbound t r a f f i c ) . A s s h e s t a r t e d t o c r o s s t h e s t r e e t i n f r o n t of t h e h o t e l , Hendrickson e n t e r e d a p e d e s t r i a n crosswalk b u t found it a t l e a s t p a r t i a l l y blocked by a beer d e l i v e r y t r u c k belonging t o d e f e n d a n t Havre D i s t r i b u t o r s , Inc. The r e a r wheels of t h e v e h i c l e extended i n t o t h e crosswalk from t h e w e s t , and t h e t r u c k extended even f u r t h e r i n t o t h e c r o s s - walk. I t was a l s o parked one-to-two f e e t from t h e curb. P l a i n t i f f walked o u t of t h e crosswalk around t h e back of t h e t r u c k and t h e n r e e n t e r e d t h e crosswalk. No o t h e r v e h i c l e s were parked between t h e d e l i v e r y t r u c k and t h e i n t e r s e c t i o n . Before proceeding a c r o s s F i r s t S t r e e t , s h e c h e c k e d i n b o t h d i r e c t i o n s f o r t r a f f i c . H e n d r i c k s o n c o n t i n u e d walking a c r o s s t h e s t r e e t through t h e o u t s i d e westbound l a n e . A v e h i c l e i n t h e o u t s i d e westbound l a n e stopped t o w a i t f o r h e r . A s s h e e n t e r e r d t h e i n s i d e westbound l a n e , s h e was s t r u c k by a v e h i c l e d r i v e n by d e f e n d a n t Neiman and was thrown o n t o t h e hood of h i s c a r . Both of Hendrickson's l e g s were broken by t h e impact, and due t o c o m p l i c a t i o n s s h e h a s been u n a b l e t o r e t u r n t o work. Neiman t e s t i f i e d i n h i s d e p o s i t i o n t h a t h e t h o u g h t t h e v e h i c l e stopped i n t h e o u t s i d e l a n e of t r a f f i c was w a i t i n g f o r a break i n t r a f f i c t o proceed around t h e d e l i v e r y t r u c k , which extended i n t o t h e o u t e r t r a f f i c l a n e . H e d i d n o t s e e p l a i n t i f f u n t i l he s t r u c k h e r . H i s v e h i c l e d i d n o t come t o a s t o p f o r s i x t y - t h r e e f e e t . Neiman was c i t e d f o r and p l e a d e d g u i l t y t o r e c k l e s s d r i v i n g and opera- t i o n of a n u n s a f e v e h i c l e . P l a i n t i f f brought s u i t a g a i n s t Neiman and a g a i n s t Havre D i s t r i b u t o r s , I n c . She a l l e g e d n e g l i g e n c e on t h e p a r t of Bavre D i s t r i b u t o r s , I n c . , f o r p a r k i n g s o a s t o p a r t i a l l y p r o t r u d e i n t o t h e o u t s i d e d r i v i n g l a n e and s o a s t o block t h e crosswalk. She a l s o a l l e g e d t h a t Neiman o p e r a t e d h i s v e h i c l e c a r e l e s s l y and r e c k l e s s l y and f a i l e d t o keep a p r o p e r lookout. A f t e r c o n s i d e r i n g t h e p l e a d i n g s , answers t o i n t e r r o g a t o r i e s , d e p o s i t i o n s and a f f i d a v i t s on f i l e , and t h e b r i e f s and arguments of c o u n s e l , t h e D i s t r i c t Court g r a n t e d summary judgment t o Havre D i s t r i b u t o r s , Inc. Summary judg- ment was g r a n t e d on t h e b a s i s t h a t t h e r e was no g e n u i n e i s s u e a s t o any m a t e r i a l f a c t , t h a t any n e g l i g e n c e on t h e p a r t o f Havre D i s t r i b u t o r s , I n c . , was n o t t h e proximate c a u s e of Hendrickson's i n j u r i e s and t h a t " p l a i n t i f f was i n j u r e d a s t h e r e s u l t o f t h e i n d e p e n d e n t , i n t e r v e n i n g n e g l i g e n t a c t o f d e f e n d a n t P a u l A. Neiman." P l a i n t i f f p r e s e n t s a s i n g l e i s s u e on a p p e a l : Did t h e D i s t r i c t Court e r r i n g r a n t i n g summary judgment t o Havre D i s t r i b u t o r s , Inc.? Summary judgment may be g r a n t e d p u r s u a n t t o Rule 5 6 , M.R.Civ.P., when t h e r e is no genuine d i s p u t e over m a t e r i a l f a c t s and t h e moving p a r t y is e n t i t l e d t o a judgment a s a m a t t e r of l a w . The i n i t i a l burden of proof is upon t h e p a r t y moving f o r summary judgment. The moving p a r t y must d e m o n s t r a t e t h a t no g e n u i n e i s s u e of m a t e r i a l f a c t e x i s t s . Then, t h e p a r t y opposing t h e motion must come forward w i t h s u b s t a n t i a l evidence t h a t r a i s e s a g e n u i n e i s s u e of m a t e r i a l f a c t . A l l - S t a t e Leasing Co. v. Top H a t Lounge, I n c . ( 1 9 8 2 ) , Mont . , 649 P.2d 1250, 1251-1252, 39 St.Rep. 425, 428. Havre D i s t r i b u t o r s , I n c . , a r g u e s t h a t t h e p o s i t i o n i n g of t h e d e l i v e r y t r u c k could n o t have c o n t r i b u t e d t o t h e a c c i d e n t . R a t h e r , t h e company a r g u e s t h a t t h e a c c i d e n t was caused by Neiman's i n d e p e n d e n t , i n t e r v e n i n g a c t s . Hendrick- s o n and Neiman b o t h a r g u e t h a t s u b s t a n t i a l e v i d e n c e e s t a b - l i s h e s n e g l i g e n c e on t h e p a r t of Havre D i s t r i b u t o r s , I n c . They a r g u e t h a t Havre D i s t r i b u t o r s , I n c . , owed a s t a t u t o r y d u t y of care t o p l a i n t i f f which was breached when t h e t r u c k w a s parked more t h a n e i g h t e e n i n c h e s from t h e c u r b and i n a crosswalk. S e c t i o n s 61-8-354 and -355, MCA. F u r t h e r , p l a i n - t i f f a r g u e s t h a t s h e f a l l s w i t h i n t h e class i n t e n d e d t o be p r o t e c t e d and t h a t Havre D i s t r i b u t o r s , I n c . , is a member of t h e c l a s s a g a i n s t whom a d u t y was imposed. W e a g r e e . W e d i s a g r e e , however, w i t h p l a i n t i f f ' s r e l i a n c e upon Azure v. C i t y o f B i l l i n g s ( 1 9 7 9 ) , 182 Mont. 234, 240-241, 596 P.2d 460, 464, f o r t h e p r o p o s i t i o n t h a t such a demon- s t r a t i o n is a l l t h a t is n e c e s s a r y i n o r d e r t o h o l d Havre D i s t r i b u t o r s , I n c . , n e g l i g e n t p e r se. I t is a x i o m a t i c t h a t i n o r d e r t o h o l d a p a r t y n e g l i g e n t p e r se f o r a v i o l a t i o n o f s t a t u t e , a p l a i n t i f f must d e m o n s t r a t e t h a t such v i o l a t i o n c o n s t i t u t e d t h e proximate c a u s e of t h e i n j u r y r e c e i v e d and t h e r e s u l t i n g damages. S e e , Azure, 182 Mont. a t 240, 596 P.2d a t 464; Kudrna v. Comet Corp. ( 1 9 7 7 ) , 175 Mont. 29, 39, 572 P.2d 183, 189. P l a i n t i f f a r g u e s t h a t t h e i l l e g a l p a r k i n g o f t h e t r u c k could have been a proximate c a u s e of t h e a c c i d e n t s i n c e s h e may have a l r e a d y been a c r o s s t h e i n t e r s e c t i o n had s h e n o t been r e q u i r e d t o d e t o u r around t h e v e h i c l e . A l t e r n a t i v e l y , s h e contends t h a t t h e j u r y could r e a s o n a b l y conclude t h a t i f t h e beer t r u c k was n o t p r o t r u d i n g i n t o t h e o u t e r d r i v i n g l a n e , Neiman would have recognized t h a t t h e v e h i c l e i n t h e r i g h t hand l a n e was stopped f o r some o t h e r purpose, such a s a p e d e s t r i a n . There is c o n f l i c t i n g e v i d e n c e i n t h e r e c o r d a s t o where t h e d e l i v e r y t r u c k was p a r k e d , how f a r i n t o t h e t r a f f i c l a n e and i n t o t h e crosswalk it extended, and a s t o whether t h e t r u c k ' s p o s i t i o n c o u l d have been a proximate cause of t h e a c c i d e n t . A genuine i s s u e of m a t e r i a l f a c t e x i s t s h e r e . O r d i n a r i l y , i s s u e s of n e g l i g e n c e a r e n o t s u s c e p t i b l e t o summary judgment and a r e b e t t e r determined a t t r i a l . Brown v. M e r r i l l Lynch, P i e r c e , Fenner & Smith, I n c . ( 1 9 8 2 ) , Mont. , 640 P.2d 453, 458, 39 St.Rep. 305, 310. L i a b i l i t y should n o t be a d j u d i c a t e d upon a motion f o r sum- mary judgment where f a c t u a l i s s u e s c o n c e r n i n g n e g l i g e n c e and c a u s a t i o n a r e p r e s e n t e d . Duchesneau v. S i l v e r Bow County ( 1 9 7 1 ) , 158 Mont. 369, 377, 492 P.2d 926, 931. F u r t h e r , where, a s h e r e , two d e f e n d a n t s a r e i n v o l v e d , summary judg- ment g r a n t e d i n f a v o r of one a l l o w s t h e remaining d e f e n d a n t t o i n t r o d u c e e v i d e n c e t h a t t e n d s t o s h i f t blame f o r t h e a c c i d e n t t o one no l o n g e r a p a r t y t o t h e a c t i o n . The summary judgment is v a c a t e d and t h e cause remanded t o t h e D i s t r i c t Court f o r f u r t h e r p r o c e e d i n g s . ~dd,i;bhd Chief J u s t i c e We concur: \ ibj.r, 4. & , ' / Justices Mr. Justice Frank B. Morrison, Jr. specially concurs as follows: I concur in the result but not in all that is said in the majority opinion. Specifically, I take issue with that portion of the majority opinion wherein it is stated: "Further, where, as here, two defendants are involved, summary judgment granted in favor of one allows the remaining defendant to introduce evidence that tends to shift blame for the accident to one no longer a party to the action." This is no reason to refuse summary judgment against the defendant not at fault. The majority opinion seems to take the position that summary judgment will never be granted in favor of one defendant, where there are multiple defendants, for the reason that the remaining defendants can shift the blame for the accident to one who is no longer a party to the action. Of course, if those defendants remaining in the case attempted to shift blame to a defendant in favor of whom summary judgment had been entered, the plaintiff could then reply by showing that the court had absolved the absent defendant. Nevertheless, the trial strategy of the parties is not relevant to a determination of whether there is a genuine issue of material fact foreclosing the entry of summary judgment. The only determination in this case is whether a jury issue exists with respect to the defendant. If no jury issue exists then summary judgment should be granted irrespective of what the remaining defendant argues at trial. Here there is a genuine issue of material fact on negligence and causation which forecloses the granting of summary judgment. Therefore, the case is properly remanded for trial. M r . J u s t i c e Daniel J. Shea: I j o i n i n t h e s p e c i a l concurrence of J u s t i c e Morrison.

June 10, 1983

6f291052-82d7-49f9-9de6-8c63b956bc88

CRABTREE v MONTANA STATE LIBRARY

N/A

82-226

Montana

Montana Supreme Court

N O . 8 2 - 2 2 6 I N THE SUPREME COURT OF THE STATE OF M O N T A N A 1 9 8 3 V I V I A N CRABTREE, P l a i n t i f f and R e s p o n d e n t , M O N T A N A STATE LIBRARY, a n a g e n c y o f t h e S t a t e o f Montana, and SARA PARKER, ( s u b nom. ) , i n h e r c a p a c i t y as Montana S t a t e L i b r a r i a n , D e f e n d a n t s and A p p e l l a n t s . Appeal from: D i s t r i c t C o u r t o f t h e F i r s t J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Lewis a n d C l a r k H o n o r a b l e Gordon B e n n e t t , J u d g e p r e s i d i n g C o u n s e l o f R e c o r d : F o r A p p e l l a n t s : Hon. Mike G r e e l y , A t t o r n e y G e n e r a l , H e l e n a , Montana Roy H . Andes, A s s i s t a n t A t t o r n e y G e n e r a l , a r g u e d , H e l e n a , Montana F o r R e s p o n d e n t : James P . R e y n o l d s a r g u e d , H e l e n a , Montana F o r Amicus C u r i a e : P a t r i c i a S c h a e f e r , D e p t . o f Admin., H e l e n a , Montana J a n Van R i p e r , D e p t . o f L a b o r & I n d u s t r y , H e l e n a , Montana Mae Nan E l l i n g s o n , C i t y A t t o r n e y ' s O f f i c e , M i s s o u l a , Montana F i l e d : S u b m i t t e d : March 1, 1983 J U M 1 6 1983 Mr. Justice Daniel J. Shea delivered the Opinion of the Court. The defendants, Montana State Library, et al. (Library), appeal an order of the Lewis and Clark County District Court requiring the Library to reopen the hiring process for a position which they had already filled, and that they give an absolute preference to any minimally qualified veteran or disabled civilian over all nondisabled civilian applicants. The plaintiff, Vivian Crabtree (Crabtree), brought this action under a veterans and disabled. civilians preference statute, section 1-0-2-203, MCA, which states: "Preference in appointment and employment. (1) In every public department and upon all public works of the state of Montana and of any county or city thereof, the following shall be preferred for appointment and employment: veterans, their spouses and surviving spouses, and other dependents of disabled veterans and disabled civilians recommended by the rehabilitative services division of the department of social and rehabilitative services. " (2) Age, loss of limb, or other physical impairment which does not in fact incapacitate does not disqualify any disabled veteran or civilian provided he or she possesses the business capacity, competency, and education to discharge the duties of the position involved." Crabtree invoked this statute, and pursuant to the remedy provided for in section 10-2-206, MCA, filed an action in District Court asserting the statutory preference for public employment. She alleged that she was a disabled person, that she qualified for the position, and that the Library denied her the statutory preference. Although the Library challenged Crabtree's standing in trial court and did so initially in the briefs filed before this Court, at the oral argument of this appeal the Library conceded that Crabtree had standing to file the lawsuit. Having conceded the standing issue, two issues remain. First, the Library contends that the trial court erred by interpreting the preference in appointment and employment statute as creating a job entitlement for any minimally qualified veteran or disabled applicant. Second, the Library claims that the remedy ordered by the trial court is too extensive. The trial court reopened the hiring process for this position by ordering that the position be redefined and readvertised. We affirm. Crabtree has been legally blind from birth as a result of congenital cataracts. She does have some residual vision and can read printed pages with the help of a device that magnifies print. She has a Bachelor's degree in social work from the University of Montana. In August 1981, the Library announced a position opening for a coordinator of volunteer services and circulated a Notice of Position Open throughout the state. According to the notice, the duties of the job were to design and implement a state-wide program using volunteer readers to record library materials for the blind. In September 1981, Crabtree formally applied for the job stating on her application that she is legally blind. The Library concedes that Crabtree was qualified for a hiring preference because of her condition. The Library received a total of 46 applications, and four of these applicants claimed a disabled preference. A preliminary screening of the applications was done by scoring each applicant on a rating scale developed by the Library. Points were assigned in eight categories including voice evaluation, ability to plan and conduct workshops, ability to identify needs of handicapped, ability to work well with people, public relations, organizational skills and self-starting ability, library skills and training, and consultative skills. After the preliminary screening, the Library called ten applicants for a personal interview. Crabtree had scored 50 points a.nd was called. The three other disabled applicants were also called. One purpose of the interview was to obtain additional information from the applicants about their qualifications. Based on the interview, the Library added points to an applicant's scores when appropriate. On September 22, 1981, the State Librarian notified Crabtree that another person had been hired. Crabtree then filed an action in District Court. At the hearing in trial court, a witness for the Library testified that Crabtree was rejected because she lacked essential qualifications in voice evaluation, ability to plan and conduct workshops, public relations, library skills, and consultative skills. Crabtree testified that the interviewer failed to ask her questions designed to elicit information about each of those specific areas. As an example, Crabtree claims that she was not asked about her speech training. The person who was eventually hired was given 17 points in the voice evaluation category because she had three college speech courses. Crabtree also had three college speech courses, but was not asked about them and received no points for voice evaluation. The Library argues that section 10-2-203, MCA, creates a preference for veterans or qualified disabled civilians who are within the pool of truly qualified applicants. Subsection (1) of the statute provides that a veteran or disabled civilian " . . . shall be preferred . . . 11 . subsection (2) contains the language " . . . provided he or she possesses the business capacity, competency, and education to discharge the duties of the position involved." ~elying on this language, the Library argues that the legislature did not intend that any minimally qualified veteran or disabled civilian would be entitled to employment. Rather, the Library argues, the statute creates a preference for veterans or qualified disabled civilians who are within the pool of truly qualified applicants. Under this interpretation strict equality of qualifications for the position would not be required, and the preference would be invoked when applicants are approximately equal. The Library argues, therefore, that if an employer reasonably believes that some non-preferred applicant is substantially better qualified the employer would have the discretion to hire the best applicant. We disagree. We do not believe that the legislature intended the preference to be triggered only when the applicants are approximately equal. The history of the statute leads us to the conclusion that the entitlement was intended. The trial court addressed this issue in a well reasoned memorandum opinion, which we quote and adopt with approval: "[tlhe question must be viewed as one of first impression and its resolution be based mainly on statutory construction. "The statute was born in the wake of World War I and limited its provisions to veterans only. (Chapter 211, 1 , . 1921.) From this earliest enactment, it was clear the preference was intended to be absolute. Age, loss of limb or other physical impairment '. . . which does not in fact incapacitate" would not be deemed disqualification for preference, provided the veterans possessed 'the business capacity, competency and education to discharge the duties of the position involved.' This language persists, unchanged, to this day (10-2-203 (2) ) . Clearly, actual incapacitation to discharge the duties of the position was the only ground intended to deprive the veteran of preference. This cannot be construed to be a - relative preference, it is an absolute preference having nothing whatever to do with the qualification of other applicants. This original section was amended six years later to include disabled civilians, and the section was not otherwise altered. (Chapter 133, L. 1927.) In 1937 the section was amended to give it the teeth it now has in Section 10-2-206. (Chapter 66, L. 1937.) This [section] provided a right of action to any person entitled to preference who was denied a position and who felt that '. . . he is in fact qualified physically, mentally and possesses business capacity, competency and education to discharge the duties of the position applied for. . . I . Aqain, this lanquaqe remains unchanqed to date and is not a d e c l - a r ; t i o n of a relative preference but an absolute one, viz., if he can discharge the duty he's entitled to the job. The legislature has looked at this 'Veterans Preference Act' at least nine times since 1937 (1943, 1947, 1949, 1955, 1969, 1975, 1977, 1979 and 1981) and left these original provisions undefiled. There has not been, and there is not today, any language in the statute that suggests that the preference is relative to the qualification of any other applicant. The only limiting factor is the ability of the disabled civilian, or veteran, to do the job. "The Montana Supreme Court, in 1941, found that the Anaconda mayor had to give the preference to a veteran if the veteran were . . . qualified for the position within the contemplation of the statute. ' It did not elaborate upon what it felt the statute contemplated in this regard, but I believe the case, taken in its entirety, would support the proposition that the mayor had to hire the veteran if he could do the job. The court decided the mayor did not abuse his discretion in determining the veteran could not handle the job. (Horvath - v. Mayor of Anaconda, 112 M. 266). . . - "Statutory construction and such precedent we have would give Montana veterans and disabled civilians who meet the minimum qualifications for a state, county or municipal job an absolute preference over all other non-veterans or non-disabled civilians under Section 10-2-203." We hold that an absolute preference was intended by the enactment of section 10-2-203, MCA, and therefore, that the trial court properly construed the preference in appointment and employment statute. Before discussing the remedy ordered by the District Court, which the Library argues is too extensive, we discuss our holding in relation to the issues raised by amicus, all of whom seek reversal of the District Court order. While it is not our custom to address separately issues not raised by the parties, we depart from that practice here because of the widespread impact that the Library and amicus argue our opinion will have on the hiring practices within state and local levels of government. The Department of Labor and Industry argues that an absolute entitlement ruling runs afoul of the Human Rights Act, specifically section 49-1-102, MCA, which prohits "discrimination because of race, creed, religion, color, sex, physical or mental handicap, age, or national origin." The main argument -- is that the preference statute, so construed, discriminates against females because the vast majority of the military who would be entitled to the preference, is comprised of men. The Department of Administration argues that the order runs afoul of the Governmental Code of Fair Practices, and specifically section 49-3-201 (1) , MCA, which provides in part that government agencies shall appoint personnel "on the basis of merit and qualification^.^ The Department of Administration further argues that hiring on the basis of "minimum qualifications" will cause nothing but headaches for the personnel departments of the government. Finally, the City of Missoula and the League of Cities and Towns argue also that the order runs afoul of the Human Rights Act (section 49-1-102, MCA, supra) and that the hiring of personnel based on minimum qualifications will result in the cities being flooded with claims of liability based on the emerging tort of negligent hiring. We view the veterans and disabled civilians preference statute as being in essence an affirmative action program--a program designed to confer certain benefits on those classes covered. The statute covers female veterans as well as male veterans; it covers all disabled civilians. As such, the statue does not single out women to discriminate against. The statute protects women as well as it protects men. Indeed, although it may be true that more men than women are veterans, it follows that more spouses of veterans are women. Spouses are also entitled to the preference, regardless of sex. Insofar as the veterans preference is concerned, in construing a Massachusetts veterans' preference act, the United States Supreme Court aptly summarized the purpose of the preference: "The law remains what it purports to be: a preference for veterans of either sex over nonveterans of either sex, not for men over women." Personnel Administrator of Mass. v. Feeney (1979), 442 U.S. 256, 280. In Feeney, the Supreme Court interpreted a statute granting preferences only to members of the military. The Montana statute goes further to extend the preference to women by including spouses and dependen.ts of veterans as well as disabled civilians. Clearly, the Montana statute is even further from running afoul of equal protection considerations. The Department of Administration claims that the District Court's order prevents it from discharging its duties under section 2-18-102(1) (b) , MCA, that of "foster [ing] and develop [ing] programs for recruitment and selection of capable persons" for state positions. The Department is also charged with implementing and maintaining the State's Equal Employment Opportunity and Affirmative Action programs. Section 49-3-201, MCA. The Department argues that the District Court's order conflicts with section 49-3-201(1), MCA, which provides that: "State and local government officials and supervisory personnel shall recruit, appoint, assign, train, evaluate, and promote personnel on the basis of merit and qualifications without regard to race, color ,religion, creed, political ideas, sex, age, marital status, physical or mental handicap, or national origin. " (Emphasis added. ) We do not, however, view section 49-3-201, MCA, as conflicting with the preference in appointment and employment statute. The Department acknowledges that it has a duty to implement and maintain affirmative action programs, and we view the preference statute as simply being an affirmative action program. Although the Department argues that the absolute preference conflicts with section 49-3-201, the Department does not begin to suggest that section 49-3-201 would likewise bar a relative preference such as argued for by the Library. If section 49-3-201 would not conflict with a relative preference we see no reason why it must conflict with an absolute preference. The preferences in section 10-2-203 were granted by the legislature, and they must be given full effect. The Department of Administration also argues that the term used by the District Court in its order--"minimum qualifications" or "minimally qualifiedw--is a term of art used by personnel specialists and therefore that it will cause nothing but headaches for the personnel divisions of state government. Crabtree agrees that the term used by the trial court may at first glance be confusing and ambiguous, but suggests that the terms were meant to be a short-hand method of designating compliance with the statutory requirement that the applicant possess the "business capacity, competency, and education to discharge the duties of the position involved." Section 10-2-203(2), MCA. We agree. The minimum qualifications are simply those qualifications of capacity, competency and education as defined by the agency for doing the particular job. If, therefore, a preferred applicant meets those qualifications, he has met the "minimum qualifications" for the position and must be hired. Amicus City of Missoula and Montana league of Cities and Towns argue also that an absolute preference conflicts with the Human Rights Act because it discriminates against women who comprise an inordinately small part of the military. We have already rejected this argument in discussing the arguments of the Department of Labor and Industry. The second argument of the local governments is tha-t an absolute preference would expose local governments to an endless barrage of lawsuits based on the emerging tort of negligent hiring. This argument is based on the unfounded assumption that the preferred applicant would not be required to be qualified for the particular job. We have held, however, that the applicant who gets the job, even though entitled to a preference, must still be qualified for the job. Section 10-2-203, MCA, clearly sets forth that requirement. The Library next contends that the remedy ordered by the trial court is too extensive. The trial court ordered the Library to redefine and readvertise the position and to reopen the entire hiring process for this position. The Library contends that the trial court's order goes beyond the remedy provided by section 10-2-206 which authorizes a district court hearing to show cause why the person entitled to a preference should not be employed, after which the court may order the appointing authority to comply with the law in giving the preference. The Library contends that the statutory remedy is limited to the petitioner, but that the trial court has improperly enlarged the remedy to include a class of applicants for the reopened position. The trial court, however, was not faced with a situation where the library position had been properly advertised according to job description and the rating scale used in the selection process. Rather, the job advertisement notice gave all applicants hardly any idea of what factors would be considered in the selection process. Given this situation, it was only fair that not only Crabtree, but that all applicants be given another opportunity to apply for the position with the knowledge of what factors would be relied on in the selection process. The trial court looked at the minimum requirements set forth in the Library's Notice of Position Open and found little correlation between the job description and the rating scale used in the selection process. For example, the notice of position open places a heavy emphasis on library skills and training. However, library skills and training are only given four points out of 100 on the evaluation sheet. None of the three finalists, including the person selected, received any points for library skills and training. On the other hand, voice evaluation skills and ability to conduct workshops were given a great deal of weight on the rating scale, but were not specifically mentioned in the Notice of Position Open. The trial court found other deficiencies with the hiring process which we need not point out here. We agree with the trial court's conclusion that the minimum qualifications for the position were never clearly determined, were not communicated by the Notice of Position Open, and therefore could not have been used as a basis for evaluating Crabtree's application or in according her preference. We hold that the remedy ordered by the trial court is the only way for Crabtree and other applicants to be given a meaningful opportunity to demonstrate their qualifications and for the Library to comply with the preference in appointment and employment statute. The order of the Distri We concur: Chief Justice Mr. Chief J u s t i c e Frank I. d a s w e l l s p e c i a l l y concurring: I concur t h a t t h e s t a t u t e i n q u e s t i o n mandates a n a b s o l u t e p r e f e r e n c e f o r q u a l i f i e d d i s a b l e d p e r s o n s and w i t h t h e remedy o r d e r e d by t h e m a j o r i t y . M y q u a r r e l is t h a t t h e m a j o r i t y o p i n i o n g o e s beyond t h e i s s u e s r a i s e d by t h e l i t i g a n t s i n t h i s case and r u l e s on e x t r a n e o u s matters r a i s e d by a m i c i f o r t h e f i r s t t i m e on a p p e a l . T h i s C o u r t h a s h e l d on many o c c a s i o n s t h a t it w i l l n o t a d d r e s s i s s u e s r a l s e d f o r t h e f i r s t t i m e on a p p e a l , Spencer v. Robertson ( 1 9 6 8 ) , 151 Mont. 507, 445 P.2d 48; C l a r k v. W o r r a l l ( 1 9 6 5 ) , 146 Mont. 374, 406 P.2d 822; S t a t e Highway Comm. v. Milanovich ( 1 9 6 3 ) , 142 Mont. 410, 384 P.2d 752; nor w i l l it c o n s i d e r new arguments and new t h e o r i e s of r e l i e f r a i s e d f o r t h e f i r s t t i m e on a p p e a l , Akhtar v . Van d e Wecering ( 1 9 8 2 ) , Mont. , 642 P.2d 1 4 9 , 39 St.Rep. 400. Furthermore, t h i s C o u r t h a s c o n s i s t e n t l y h e l d t h a t a m i c l c a n n o t r a i s e i s s u e s n o t r a i s e d by t h e p a r t i e s and s u c h i s s u e s w i l l n o t b e a d d r e s s e d by t h i s Court. S t a t e e x r e l . Department of H e a l t h and Environmental S c i e n c e v. La S o r t e ( 1 9 7 9 ) , 182 Mont. 267, 596 P.2d 477; Department o f SRS v. Angel & F i s h e r ( 1 9 7 8 ) , 176 Idont. 293, 577 P.2d 1223; S t a t e ex r e l . Kvaalen v. G r a y b i l l ( 1 9 7 2 ) , 159 Mont. 190, 496 P.2d 1127; S t a t e e x r e l . B e n n e t t v. Bonner ( 1 9 5 0 ) , 123 Mont. 414, 214 P.2d 747. The r e a s o n s f o r t h e s e r u l e s a r e m a n i f o l d : (1) The t h e o r i e s and arguments i n t h e c a s e s h o u l d n o t be changed by a m i c i a t t h e expense o f t h e litigants by i n j e c t i n g new and e x t r a n e o u s i s s u e s i n t h e case. ( 2 ) The t r i a l c o u r t had no o p p o r t u n i t y t o h e a r argument, c o n s i d e r o r r u l e upon new issues raised for the first time on appeal. (3) The ever- present danger that issues and arguments not considered in the trial court and not considered significant or control- ling by the litigants themselves will not be adequately briefed or argued on appeal. For these reasons, I would adhere to the salutary rule heretofore expressed and observed by this Court. Chief Justice &

June 16, 1983

292720ee-6dce-4937-9a3d-10e3c11736b5

BAILEY v LILLY

N/A

83-068

Montana

Montana Supreme Court

NO. 83-68 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 AUSTIN BAILEY & LOIS E. BAILEY, Plaintiffs and Appellants, -vs- JULY-- 1983 GFLEGORY FRANCIS LILLY AND BONITA &krl JJarPidon KATHRYN LILLY, w-Lr12;c C U P R E ~ ~ E COURT s y ~ i ~ : , c ; - ' gC8'CAidA Defendants and Respondents. Appeal from: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellants: Bolinger & Conover, Bozeman, Montana For Respondents: Scully & Lilly, Bozeman, Montana Filed: Submitted on Briefs: June 2, 1983 Decided: July 7 , 1933 Clerk Mr. J u s t i c e John Conway Harrison delivered t h e Opinion of t h e Court. B a i l e y s brought t h i s a c t i o n t o a c c e l e r a t e the balance of t h e purchase p r i c e on a c o n t r a c t between themselves and t h e L i l l y s f o r r e a l e s t a t e located i n West Yellowstone, Montana. A f t e r a t r i a l i n the D i s t r i c t Court of the Eighteenth J u d i c i a l D i s t r i c t , G a l l a t i n County, t h e D i s t r i c t Court entered f i n d i n g s of f a c t , conclusions of law and ordered judgment be entered i n favor of L i l l y s . Baileys appeal. On November 21, 1975, Baileys a s s e l l e r s , and L i l l y s a s buyers, entered i n t o a c o n t r a c t f o r the s a l e of r e a l property l o c a t e d i n West Yellowstone. L i l l y s agreed t o pay Baileys $40,500 f o r t h e purchase of the property t o be paid by a down payment of $12,000, a lump sum payment of $1,000 on January 2, 1976, and t h e balance of $27,500 t o g e t h e r with i n t e r e s t a t t h e r a t e of 8 p e r c e n t per annum for a period of t e n years on a monthly b a s i s . Payments were t o be made by L i l l y s i n t o an escrow account a t F i r s t S e c u r i t y Bank i n West Yellowstone, and t h e escrow agent was t o then d e l i v e r payment t o Baileys. A s of t h e d a t e of t r i a l a l l payments were c u r r e n t . The c o n t r a c t contained t h e following provision: "This Agreement s h a l l apply t o and bind t h e h e i r s , executors, a d m i n i s t r a t o r s , successors and a s s i g n s of the p a r t i e s h e r e t o , s u b j e c t t o t h e p r o v i s i o n t h a t second p a r t i e s s h a l l not a s s i g n t h e i r i n t e r e s t i n s a i d property or t h i s c o n t r a c t without the w r i t t e n consent of t h e p a r t i e s . " I n August 1980, Bonnie L i l l y wrote t o Baileys a s follows: "Greg and I have decided t o move from West Yellowstone and t o put the house up f o r s a l e . W e a r e t r y i n g t o g e t t h e financing of t h e house i n p e r s p e c t i v e and would l i k e t o know i f you would consider carrying a q u a l i f i e d buyer under our o r i g i n a l c o n t r a c t with you. " Lois Bailey responded t o Bonnie L i l l y ' s request a s follows: "Yes, w e would c a r r y a q u a l i f i e d buyer on the o r i g i n a l c o n t r a c t o r , i f you p r e f e r , t h e lending i n s t i t u t i o n . Would l i k e t o s e e you b e f o r e any plans a r e f i n a l i z e d . " L i l l y s placed the property for s a l e i n August 1980. The pro- p e r t y was l i s t e d w i t h a r e a l e s t a t e a g e n t and a d v e r t i s e d . I n J u n e 1981, L i l l y s executed an e a r n e s t money r e c e i p t and agreement f o r sale and purchase w i t h Edward M. and L o r a l e e Hiramoto governing t h e West Yellowstone p r o p e r t y . The s a l e of t h e pro- p e r t y was t o c l o s e J u l y 1, 1981. A f t e r e x e c u t i o n of t h e agreement Greg L i l l y c o n t a c t e d B a i l e y s a t t h e i r home and r e q u e s t e d t h e i r c o n s e n t t o t h e s a l e of t h e r e a l e s t a t e . B a i l e y s r e f u s e d t o c o n s e n t t o t h e s a l e u n l e s s L i l l y s p a i d o f f t h e o r i g i n a l c o n t r a c t i n f u l l . I n mid-July 1981, r e a l e s t a t e a g e n t John C o s t e l l o c o n t a c t e d B a i l e y s t o a s s u r e them t h e Hiramotos were f i n a n c i a l l y sound. B a i l e y s s t i l l r e f u s e d t o c o n s e n t t o t h e s a l e u n l e s s t h e b a l a n c e o f t h e c o n t r a c t was paid i n f u l l . I n late J u l y 1981, L i l l y s and t h e Hiramotos executed a c o n t r a c t f o r sale of r e a l estate. A l l m a t t e r s concerning t h e c o n t r a c t were back-dated t o J u l y 1, 1981, p u r s u a n t t o t h e e a r n e s t money r e c e i p t and agreement t o p u r c h a s e . The o r i g i n a l c o n t r a c t between B a i l e y s and L i l l y s r e q u i r e d L i l l y s t o m a i n t a i n f i r e i n s u r a n c e on t h e premises w i t h B a i l e y s named a s l o s s payees. A f t e r L i l l y s executed t h e e a r n e s t money agreement w i t h Hiramotos, t h e y c a n c e l l e d t h e e x i s t i n g f i r e i n s u r a n c e p o l i c y and purchased a new p o l i c y naming t h e Hiramotos a s i n s u r e d s . Due t o an e r r o r , B a i l e y s were not named on t h e new p o l i c y a s i n s u r e d s f o r a fourteen-day p e r i o d . When t h e e r r o r was d i s c o v e r e d it was c o r r e c t e d and t h e i n s u r a n c e p o l i c y was g i v e n r e t r o a c t i v e e f f e c t a s of J u l y 1, 1981. A f t e r t h e s a l e by L i l l y s t o t h e Hiramotos, a l l payments made by Hiramotos were placed i n a second escrow account a t F i r s t S e c u r i t y Bank of West Yellowstone and money was d i s b u r s e d t o t h e L i l l y s and B a i l e y s ' escrow account. On August 1 3 , 1981, B a i l e y s n o t i f i e d L i l l y s t h e y c o n s i d e r e d them t o have d e f a u l t e d on t h e i r c o n t r a c t w i t h B a i l e y s and demanded a c c e l e r a t i o n of a l l payments. B a i l e y s s e n t a second n o t i c e of d e f a u l t on September 9 , 1981. On November 1 3 , 1981, B a i l e y s f i l e d a complaint i n District Court a l l e g i n g L i l l y s d e f a u l t e d on t h e i r c o n t r a c t by allowing t h e f i r e insurance t o lapse and by s e l l i n g t h e i r i n t e r e s t i n the c o n t r a c t without Baileys w r i t t e n consent. The o r i g i n a l complaint asked t h a t t h e c o n t r a c t be terminated and Baileys be granted immediate possession of the property. O n J u l y 26, 1982, Baileys f i l e d a motion t o amend t h e i r complaint t o r e p l a c e t h e i r demand f o r imme- d i a t e possession with a demand for a c c e l e r a t i o n of t h e balance of t h e purchase p r i c e of the property. P r i o r t o t r i a l , Baileys continued t o accept the payments from t h e escrow account f o r L i l l y ' s o b l i g a t i o n under t h e c o n t r a c t . A f t e r t r i a l t h e D i s t r i c t Court entered f i n d i n g s of f a c t and conclusions of law on September 23, 1982. The D i s t r i c t Court held L i l l y s did not breach t h e i r agreement with Baileys and any r i g h t of Baileys t o demand a c c e l e r a t i o n of t h e balance due was waived a s Baileys accepted L i l l y s payments under the terms of t h e c o n t r a c t up u n t i l the d a t e of t r i a l . The D i s t r i c t Court entered judgment i n favor of L i l l y s on November 22, 1982. Baileys appeal. B a i l e y s r a i s e four i s s u e s on appeal. W e find one issue t o be d i s p o s i t i v e ; whether the D i s t r i c t Court erred i n holding B a i l e y s ' acceptance of payments under t h e i r c o n t r a c t with L i l l y s cons ti- t u t e s a waiver of any d e f a u l t on t h e p a r t of L i l l y s . B a i l e y s r e l y on a d e c i s i o n of t h e Oregon Supreme Court. I n Carrigg v. F a c k r e l l (1980), 44 Or.App. 413, 606 P.2d 636, t h a t Court held acceptance of four monthly i n s t a l l m e n t payments a f t e r a balloon payment was due under the c o n t r a c t did not e s t o p s e l l e r s from contending payment of the balance was still due. The Oregon Supreme Court held the payments made a£ t e r the d a t e t h e balloon payment was due c o n s t i t u t e d a p a r t i a l accord and s a t i s f a c t i o n a s t o the p a r t of the balance which was made by t h e f o u r payments. However, Carriqg involves a t o t a l l y d i f f e r e n t f a c t s i t u a t i o n from t h e p r e s e n t case. Here, we a r e not dealing with acceptance of monthly payments a f t e r a required balloon payment was not made. Baileys accepted monthly payments under the c o n t r a c t af t e r t h e y had given L i l l y s n o t i c e of d e f a u l t . Such acceptance c o n s t i - t u t e s a waiver of t h e i r r i g h t t o sue f o r a c c e l e r a t i o n of t h e e x i s t i n g balance. T h i s Court held i n S h u l t z v. Campbell ( 1 9 6 6 ) , 147 Mont. 439, 445, 413 P.2d 879, 883: "Although by its e x p r e s s terms time is made of t h e e s s e n c e of a c o n t r a c t , and an o p t i o n is r e s e r v e d by t h e vendor t o d e c l a r e it ter- minated f o r f a i l u r e t o pay t h e purchase p r i c e a t t h e d a t e it f a l l s due, o r , i f it is payable i n i n s t a l l m e n t s , a t t h e d a t e t h a t any one of t h e i n s t a l l m e n t s f a l l s due, t h i s p r o v i s i o n may be waived by f a i l u r e t o e x e r c i s e t h e o p t i o n , o r by a c c e p t i n g a payment a f t e r it is due. The vendor cannot t h e r e a f t e r a l l e g e such d e f a u l t a s a ground f o r d e c l a r i n g t h e c o n t r a c t terminated." I n S h u l t z t h e seller a l l e g e d buyer d e f a u l t e d by n o t p r o p e r l y keeping c r o p r e c o r d s and not d e l i v e r i n g p r o p o r t i o n a t e s h a r e s of government payment t o s e l l e r . T h i s Court upheld t h e District C o u r t ' s r u l i n g t h a t s e l l e r had waived any r i g h t t o d e c l a r e d e f a u l t by c o n t i n u i n g t o a c c e p t t h e annual payments a f t e r t h e d a t e of t h e a l l e g e d d e f a u l t . W e f i n d t h i s holding t o be con- s i s t e n t w i t h t h e holding of t h e District Court t h a t B a i l e y s waived any r i g h t t o d e c l a r e a d e f a u l t by c o n t i n u i n g t o a c c e p t L i l l y s ' monthly payments a f t e r t h e d e c l a r a t i o n of d e f a u l t . Judgment of t h e District Court is a f f i r m e d . I W e concur: C h i e f J u s t i c e w

July 7, 1983

a084cf0e-d5a6-49fa-8836-40825f1dd12e

SORLIE v SCHOOL DIST NO 2

N/A

82-402

Montana

Montana Supreme Court

IRENE D. SORLIE, IN THE SUPREME COURT OF THE STATE OF MONTANA VS . SCHOOL DISTRICT NO. 2 , Petitioner and Appellant , CLERK OF S'JPREME COURT STATE OF PALnUFdTAi4A Respondent and Cross-Appellant. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone Honorable Diane Barz. Judae presidina. Counsel of Record: For Appellant: Moses Law Firm, Billin~s, Montana Charles F. Moses aruued, Billinqs, Plontana For Respondent : Holmstrom & Dunaway, Billings, Montana Robert Holmstrom argued Billings, Montana For Cross-Appellant: John Larson argued, Helena, Elontana Submitted: April 2 6 , 1 9 8 3 Decided July 7 , 1 9 8 3 Filed. : Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Irene Sorlie appeals the Yellowstone County Distrlet Court decision affirming the ruling of the State Superinten- dent of Public Instruction that School District # 2 of Yel- lowstone County did not violate tenure laws by reassigning her from an administrative positlon to classroom teacher. The School District, respondent, cross-appeals. We affirm. Sorlie was employed by the School District in 1951. She taught untii 1978 when she accepted an administrator's contract to be Coordinator of Intermediate Education. Her administrative duties included curriculum development and working with teachers of grades 4 through 6 experiencing teaching difficulties. The record indicates that Sorlie had an exemplary record as a teacher and consequently earned the position as Coordinator of Intermediate Education. She was able to use her many years of service to assist other teachers having certain teaching difficulties and estab- lished an excellent record as an administrator. On l a l a r c h 31, 1980, the School District sent Sorlie a reemployment contract which notified her that employment as an administrator for 1980-81 was contingent upon "adequate allocation of state and federal funding and voter approval oi the initial mill levy amount." Sorlie signed the contract and returned it to the School District. The levy failed. The Board of Trustees determined that it would adopt a new budget that would not need an increased mill levy. The development of this budget would require the District Super- intendent to recommend program and staff reductions for 1980-81. Among the proposed cuts was the position held by Sorlie. The Board adopted this recommendation along with others. On June lb, 1980, the reduced mill levy was approved by the voters. On June 27, 1 9 8 0 , Sorlie was informed that she would be assigned as a fourth grade teacher. At her request, she was reassigned to teach the second grade at Poly Drive School. Sorlie requested a hearing before the School Board which was held on September 16, 1980. She alleged that reassigning her to a classroom was a demotion as Lo salary and responsibility and, hence, contrary to Montana tenure laws. The Board affirmed its decision, and Sorlie brought the matter to the County Superintendent of Schools. The County Superintendent found Sorlie's adminis- trative position was not comparable to her teacher's position; that she did not acquire tenure in such adminis- trative position; that the contingency funds available to the School District did not prove that such funds should be used to pay the salary to Sorlie for her administrative position; and that the School District was correct in denying her claim to reinstatement to her admininistrative position. Sorlie then appealed the decision of the County Super- intendent to the State Superintendent of Public Instruction. ,The State Superintendent's order was handed down on September 28, 1981. It concluded as follows: "Clearly from the facts presented to the County Super intendent, Mrs. Sorlie did acquire tenure as a teacher. In fact, both parties do not disagree with this legal conclusion. Further, in view of this state's statute, I hold as a matter of law that the position of elementary teacher is comparable to the position of coordinator of intermediate education for purposes of tenure. [Emphasis added. I "Clearly, under the facts presented to the County Super intendent, Mrs. Sorlie did acquire tenure as a teacher for her service of almost 20 continuous years to Yellowstone County Elementary Districts." The State Superintendent, even though concluding reas- slgnrnent did not violate tenure laws, held that reduction in salary was such a violation. Consequently, appellant was reelected at the same salary provided by her 1979-80 administrator's contract. No mention was made of any subsequent years. Sorlie then appealed to the District Court for judi- cial review. That court affirmed the State Superintendent's declsion on the basis that there is ample authority for the School District to transfer tenured personnel to other posi- tlons for which they are certified and qualified. From the District Court decision, Sorlie appeals. The School Distrlct cross-appeals. Sorlie raises two issues for our consideration: 1. Does the School District have any right to cross- appeal to this Court the salary decision made by the State Superintendent? 2. Was Sorlie's reassignment from administrator to classroom teacher violative of Montana's tenure laws? The School District presents two issues: 1. Is Sorlie entitled to the higher administrative salary, plus increases, for school years subsequent to i380-81? 2. Dld the Distrlct Court commit error by allowing the State Superintendent to intervene in the lower court dc t ion? Sorlie first contends tnat the School District should n o t be allowed t o appeal t h e s a l a r y d e c l s i o n made by t h e S t a t e S u p e r i n t e n d e n t because it d i d n o t d i r e c t l y p e t i t i o n t h e D i s t r i c t Court f o r review. Thus, t h e i s s u e is n o t p r o p e r l y b e f o r e t h i s Court. S e c t i o n 2-4-702, PICA, p r o v i d e s t h a t a p a r t y a g g r i e v e d from an agency r u l i n g must f i l e a p e t i t i o n i n t h e D i s t r i c t Court demanding r e l i e f . Here, t h e School D i s t r i c t d i d n o t p e t i t i o n f o r j u d i c i a l review nor c r o s s - p e t i t i o n from S o r l i e ' s p e t i t i o n . W e hold t h a t t h i s i s s u e is a p p e a l a b l e a s t h e q u e s t i o n of r e v i e w a b i l i t y was p r e v i o u s l y decided by t h i s Court. On November 26, 1982, w e dismissed S o r l i e ' s motion t o d i s m i s s t h e School D i s t r i c t ' s cross-appeal which included t h e s a l a r y i s s u e . F u r t h e r , s e c t i o n 2-4-702(1) ( b ) , MCA, i n d i c a t e s t h a t i s s u e s brought be£ o r e t h e agency proceeding a u t o m a t i c a l l y become s u b j e c t t o j u d i c i a l review. The s a l a r y q u e s t i o n was r a i s e d a t t h e agency l e v e l and reviewed by t h e D i s t r i c t Court. From such d e c i s i o n , t h e School D i s t r i c t , a s an aggrieved p a r t y can appeal. I n a n o t h e r c o n t e x t , S o r l i e ' s p e t i t i o n f o r j u d i c i a l review r a i s e d t h e s a l a r y q u e s t i o n and t h e School D i s t r i c t was aggrieved by t h e D i s t r i c t C o u r t d e c i s i o n on s u c h q u e s t i o n . Consequently, t h e School D i s t r i c t can a p p e a l on t h a t b a s i s . Rule 1, M.R.App.Civ.P. S o r l i e n e x t a s s e r t s t h a t reassignment from adminis- t r a t o r t o classroom t e a c h e r was v i o l a t i v e of Montana t e n u r e laws. She argues t h a t her undisputed t e n u r e a s a t e a c h e r c a r r i e d forward i n t o her a d m i n i s t r a t i v e p o s i t i o n and t h a t t h e School D i s t r i c t v i o l a t e d her t e n u r e r i g h t s by demoting her from Coordinator of I n t e r m e d i a t e Education t o classroom teacher. Sorlie also argues that the burden of proof is on the School District to justify its action; that the financial reasons asserted by the District were not adequate justif i- cation; and that there were sufficient funds to reemploy Sorlie as an administrator. We hold that Sorliels tenure rights were not violated. The basic tenure statute provides in part: "Whenever a teacher has been elected by the offer and acceptance of a contract for the fourth consecutive year of employment by a district in a position requiring teacher certification except as a district superintendent or specialist, the teacher shall be deemed to be re- elected from year to year thereafter as a tenure teacher at the same salary and in the same or a comparable position of employment as that provided by the last executed contract with such teacher. . ." Section 20-4-203, MCA. There is no separate tenure for administrative personnel. Further, section 20-1-101(20), MCA, defines a teacher as: ". . . any person, except a district superintendent, who holds a valid Montana teacher certificate that has been issued by the superintendent of public instruc- tion under the provisions of this title and the policies adopted by the board of public education and who is employed by a district as a member of its instruction- al, supervisory, or adminstrative staff 11 . . . We conclude that tenure acquired as a teacher applies to a subsequent administrative position. Section 20-1- lOl(2U) MCA, clearly provides that a teacher and administra- tor are comparable positions for the purpose of acquiring tenure. If this were not so, an educator could lose tenure rights by accepting a promotion to an administrative position. Sorlie contends that her tenure rights require the School District to reemploy her in the same capacity at the same salary. While the two positions involved here are comparable for purposes of acquiring tenure they are func- tionally dissimilar. However, we conclude that reassignment, without reduction in salary, for legitimate financial constraints, is justifiable and not contrary to tenure laws. In BrownsviPle Area School District v. Lucostic (Pa. 1972), 297 A.2d 516, two former administrators sued the school board for demotion in position and salary, alleging tenure violations. The Commonwealth Court of Pennsylvania held that the action of the school board was proper and, through dicta, approved of demotion pursuant to legitimate program and administrative reorganization. See also, 78 C.J.S., Schools and School Districts, S 205 at 1101; Nagy v . Belle Vernon Area School Dist. (1980), 49 Pa.C. 452, 412 A.2d 172; Black v. Bd. of School Directors (1979), 43 Pa.C. 200, 401 A.2d 1251; McCartin v. School Committee of Lowell et al. (1948), 322 Mass. 624, 79 N.E.2d 192. Local economies are constantly changing; therefore, a school board must have the requisite authority to manage the school district in a financially-responsible manner. This includes eliminating certain programs and activities, and thereby terminating or reassigning personnel. A school board's powers and duties are outlined in sectlon 20-3-324, MCA. This section reads in part: "As prescribed elsewhere in this title, the trustees of each district shall have the power and it shall be their duty to perform the following duties or acts: "(1) employ or dismiss a teacher, princi- pal, or other assistant upon the recom- mendation of the district superintendent, the county high school principal, or other principal as the board may deem necessary, accepting or rejecting such recommendation as the trustees shall in their sole discretion determine, in ac- cordance with the provisions of Title 20, chapter 4; "(2) employ and dismiss administrative personnel, clerks, secretaries, teacher aides, custodians, maintenance personnel, school bus drivers, food service person- nel, nurses, and any other personnel deemed necessary to carry out the various services of the district; "(8) adopt and administer the annual bud- get or an emergency budget of the dis- trict in accordance with the provisions of the school budget system part of this title; "(9) conduct the fiscal business of the district in accordance with the provi- sions of the school financial administra- tion part of this title;" Section 39-31-303, MCA, outlines the management rights of public employers. It reads in part: "Public employees and their representa- tives shall recognize the prerogatives of public employers to operate and manage their affairs in such areas as, but not limited to: "(1) direct employees; "(2) hire, promote, transfer, assign, and retain employees; "(3) relieve employees from duties because of lack of work or funds or under conditions where continuation of such work be inefficient and nonproductive; "(4) maintain the efficiency of govern- ment operations;" In the present case, it can be concluded that appel- lant was removed from her administrative position pursuant to the Board's power to financially manage the School Dis- trict. Further, reassignment was in accordance with section 39-31-303(2) and (3), MCA, cited above. On t h e o t h e r hand, i n Keiser v. S t a t e Bd. of Regents of Higher Education ( 1 9 8 1 ) , Mont. , 630 P.2d 194, 38 St.Rep. 6 7 4 , w e h e l d t h a t a s t a t e u n i v e r s i t y could n o t reduce a department d i r e c t o r ' s s a l a r y when, p u r s u a n t t o a d m i n i s t r a t i v e r e o r g a n i z a t i o n , t h e d i r e c t o r was demoted t o p r o f e s s o r . Our d e c i s i o n was based upon t h e f a c t t h a t t h e d i r e c t o r was t e n u r e d under t h e u n i v e r s i t y system and a c h i e f g o a l of t e n u r e is economic s e c u r i t y . If t e n u r e is achieved b u t s a l a r i e s can be reduced, t h i s g o a l means n o t h i n g . While t e n u r e r i g h t s of primary e d u c a t o r s and c o l l e g e p r o f e s s o r s stem from s e p a r a t e s o u r c e s , t h e i r g o a l s a r e i d e n t i c a l . Thus, r e c o g n i z i n g t h e o b j e c t i v e of economic s e c u r i t y , w e conclude t h a t S o r l i e should m a i n t a i n h e r a d m i n i s t r a t o r ' s s a l a r y . W e a l s o hold t h a t i f a p o s i t i o n s i m i l a r t o t h a t p r e v i o u s l y h e l d by t h e r e a s s i g n e d e d u c a t o r is a v a i l a b l e a f t e r program r e d u c t i o n s o r changes it must be o f f e r e d t o t h a t person. On c r o s s - a p p e a l t h e School D i s t r i c t c o n t e n d s t h a t S o r l i e is o n l y e n t i t l e d t o t h e h i g h e r a d m i n i s t r a t i v e s a l a r y f o r t h e 1980-81 s c h o o l y e a r a s t h e s c o p e of a l l p r o c e e d i n g s covered t h a t year o n l y . W e conclude t h a t t h e h i g h e r a d m i n i s t r a t i v e s a l a r y , p l u s i n c r e a s e s , should be p a i d f o r a l l subsequent y e a r s S o r l i e t e a c h e s . The t e n u r e s t a t u t e r e q u i r e s a t e n u r e d t e a c h e r t o m a i n t a i n t h e same s a l a r y year a f t e r y e a r . W e have h e l d t h a t S o r l i e ' s t e n u r e a s a t e a c h e r c a r r i e d forward i n t o her a d m i n i s t r a t i v e p o s i t i o n . Consequently, s h e was a t e n u r e d a d m i n i s t r a t o r and was e n t i t l e d t o t h e a d m n i s t r a t i v e s a l a r y , p l u s i n c r e a s e s , f o r a l l y e a r s s h e c o n t i n u e s t o t e a c h . See, K e i s e r , s u p r a . The second i s s u e r a i s e d by t h e School D i s t r i c t is w i t h o u t merit and w e do n o t d i s c u s s it h e r e . The c o u r t was c l e a r l y c o r r e c t i n a l l o w i n g t h e i n t e r v e n t i o n . A£ f irmed. \ Chief J u s t i c e W e concur: 1 J u s t i c e s Mr. Justice John C. Sheehy concurring in part and dissenting in part: I concur with the majority insofar as it holds that (1) Irene Sorlie was entitled to tenure for her position of coordinator of intermediate education in School District No. 2, Yellowstone County; (2) that she is entitled to the same salary which she was getting in the last year of her administrative position plus any increments subsequently adhering; (3) that we may consider the school board's cross-appeal here, but find no merit in the same; (4) that Irene D. Sorlie did not waive any rights to tenure by signing the contract which was presented to her and which contained self-exculpatory provisions in favor of the school board. I dissent from the majority, and would hold that Irene D. Sorlie is entitled to a position comparable to that of a coordinator of intermediate education because of her tenured rights; that the school board may not utilize potential financial problems to take away her tenured rights; that the Superintendent of Public Instruction is in error when he claims that a teaching position in the second grade of an elementary school, and the position of coordinator of intermediate education curricula are the same; that she is entitled to such increments as would have accrued to her position from and since her termination by the school board of her administrative position. I will speak to the most important issue first. She was tenured in her position as a coordinator of intermediate education curricula, and thus is entitled now and has been since her termination from that position entitled to a comparable position under her tenure rights. A teaching position in the second grade is not comparable to the position of coordinator of intermediate education. Under the facts in this case, in her administrative position she worked with other elementary grade teachers for the purpose of coordinating, using her 20 years teaching experience, the teaching methods and curricula for those grades. In effect she had a supervisory position as regards curricula. Upon being assigned to a teaching position in the second grade in an elementary school, she has been deprived of all such administrative function, has no further say a.bout the curricula adopted in the system, and must accept the curricula already set in place for her guidance as a teacher. Thus she has not been given a comparable position. She has been demoted. She was once an administrator, she is now a teacher. This case is controlled by the holding in Smith v. School District No. 18 (1943) , 115 Mont. 102, 115, 139 P. 2d 518. In that case, this Court said: "The purpose of enacting the Teacher Tenure Act (citing the statute) is not merely to insure teaching employment but it is also to insure the teachers who have held teaching positions for three or more consecutive years, security in the position, the grade or the status which they have thus attained. "In the instant case the position which appellant had held teaching the upper grades in the Valier Public School had been given to someone else. The new position offered appellant was a demotion. It would remove appellant from the town of Valier and place him 10 miles out in the country. It would remove him from his old position as band instructor. It would remove him from his old position, rank, grade and status of a teacher of the upper grades in a town school and would reduce him to the status of a teacher in an ungraded country school teaching all grades from the primary up. To thus demote a teacher requires the same procedure as removal or dismissal (citing a case). "While a regularly employed teacher may be discharged for a good and sufficient cause yet 'the board has no power to . . . transfer a teacher from a higher to a lower grade. Assigning a teacher to a lower grade is a "removal" and just as much so as a dismissal would be.' (Citing authority.)" From the foregoing, therefore, it is clear that the holding of the majority in this case respecting tenure rights in an administrative position is two-faced: while purporting to recognize that a tenured teacher promoted to an administrative position in the school system is tenured in the administrative position, the majority takes away the tenure right in the guise of holding that the school board for financial reasons may demote the tenured person to a lower position. Such a holding gives only token recognition to the principles of tenure. The applicable statute is section 20-4-203, MCA, which provides in pertinent part: "Whenever a teacher has been elected by the offer and acceptance of a contract for the fourth consecutive year of employment by a district in a position requiring teachers certification . . . the teacher shall be deemed to be reelected from year to year thereafter as a tenure teacher at the same salary and in the same or a comparable position of - - - - - - employment - - as that provided 9 the last executed -- contract with such teacher. . ." (emphasis added) -- Under the statute, tenure has two guaranteed concepts, one salary, and two, status or a comparable position. If a school board may demean a teacher by offering a lesser position, even though the same salary adhered, then tenure is effectively sabotaged. I must say for the credit of the school board here that it recognizes that it did not offer a comparable position to Irene D. Sorlie. Throughout these proceedings, and before this Court, it has insisted that it had the right to offer a less than comparable position because in the view of the school board she was not tenured in her administrative position under section 20-4-202. That at least is an honest approach. *C &I. I/L"- (L ohn C. Sheehy

July 7, 1983

35c53dae-debe-4092-b35c-c061bd9257ef

STATE DEPT OF REVENUE v COUNTRYSI

N/A

82-479

Montana

Montana Supreme Court

NO. 82-479 IN THE SUPREME COURT OF THE STATE OF MONTANA 1983 DEPARTMENT OF REVENUE OF THE STATE OF PIONTANA , Petitioner and Appellant, COUNTRYSIDE VILLAGE, et al., Respondents and Respondents. Appeal from: District Court of the Eighth Judicial District, In and for the County of Cascade Honorable H. William Coder, Judge presiding. Counsel of Record: For Appellant: Larry G. Schuster argued, Helena, Montana For Respondents: Church, Harris, Johnson & Williams, Great Falls, Montana George McCabe argued, Great Falls, Montana Clary & Clary, Great Falls, Yontana Submitted: April 22, 1983 Decided : J u l y 1 2 , 1983 Filed : J U C 1 2 1983 Clerk Mr. Justice John C. Sheehy delivered the Opinion of the Court. The Department of Revenue of the State of Montana (DOR) appeals from an order of the District Court, Eighth Judicial District, Cascade County, dismissing DOR's petition for judicial review of an order of the State Tax Appeal Board dated November 7, 1980. By its ord.er, the State Tax Appeal Board (STAB) had remanded the cause to the Department of Revenue, "for reappraisal of the commercial properties involved in a manner which does not violate the constitutional and statutory requirements for equalization or uniformity with other properties of the same legislative class." We reverse the order of dismissal by the District Court and return the matter to STAB for further proceedings. The glut of 1978 tax protest cases, including the cases involved in this cause, now clogging STAB, DOR and some district courts, arise from the use in 1978 by DOR of the Montana Appraisal Manual to appraise residential property improvements which reflected 1971 replacement costs, while it used the Marshall Valuation Service Manual in 1978 to appraise commercial property improvements which reflected 1976 replacement costs. Both residential and commercial improvements are in the same legislative class for taxation purposes. Section 16-6-134, MCA. The protestors contend that the use of the disparate manuals has resulted in inequitable appraisals of property for taxation, the commercial properties being appraised at or near market value, while the residential properties are appraised substantially below market value. It is DOR's constitutional duty to appraise, assess and equalize the valuation of all property taxed in the state in the manner provided by law. Article 8, Section 3, 1972 Montana Constitution. It is the duty of all taxing jurisdictions in the state to use the assessed valuation of property as established by the state. Article 8, Section 4, Montana Constitution. All taxable property must be assessed at one-hundred percent of its market value (with certain exceptions) and the Department of Revenue may not adopt a lower or different standard of value from market value when making the official assessment. Section 15-8-111, MCA. "Market value" is the value at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. Section 15-8-111 (2) (a) MCA. We had a similar facet of this same problem before us in Department of Revenue v. State Tax Appeal Board, 1980, Mont . , 613 P.2d 691, 37 St.Rep. 1063. In that case, the appeal arose from an order of the same district court which had approved STAB'S blanket reduction of thirty-four percent on commercial improvement appraisals. We set aside STAB'S blanket reduction and remanded the cause for further proceedings before STAB. After remand, STAB issued a notice of August 26, 1980 to the litigants involved in this cause, of a hearing to be held on October 1, 1980. The notice stated: "The sole issue to be determined at this hearing is whether or not the Department of Revenue may lawfully use the 1972 Montana Appraisal Manual for the purpose of determining the value of residential improvements, and at the same time use the 1976 Marshall Valuation Service to determine the value of commercial improvements, when both residential and commercial improvements are presently in Class 4 under Section 15-6-134 MCA, 1979, and both were in Class 11 under Section 15-6-112 MCA, 1978, in 1978. You are referred to the decision of the Montana Supreme Court in Department of Revenue of the State of Montana v. State Tax Appeal Board, Countryside Village, Inc., et. al., 37 St.Rep. 1063. The Montana Supreme Court in that case, at page 1067, adopted the criteria established by the Iowa Supreme Court for determination of unequal appraisals. The hearing will, therefore, be confined to the following evidence: ' ' I 1 ) That there are several other properties within a reasonable area similar and comparable to his; (2) The amount of the assessments on these properties; (3) The actual value of the comparable properties; (4) The actual value of his property; (5) The assessment complained of; (6) That by a comparison his property is assessed at a higher proportion of its actual value than the ratio existing between the assessed and actual valuations of the similar and comparable properties, thus creating discriminations.'" On September 10, 1980, the notice given to the litigants in this case was expanded by a memorandum addressed to all parties having tax protests. The expanded list included some forty-five taxpayers, and approximately sixty-one tax protests. The memorandum stated: "Each county will be heard separately, with the taxpayers presenting their case-in-chief first, and the Department of Revenue going second. Rebuttal will be permitted." The memorandum also requested that any objections to the procedures be filed with the State Tax Appeal Board immediately. On October 1, 1980, the time set for the hearing, the chairperson of STAB announced that the purpose of the hearing on that date would be to determine if, "the Board might find on such hearing that the Department's method is arbitrary, capricious, or otherwise unlawful", quoting from our Countryside decision supra, 613 P.2d1 at 695. Counsel for DOR did not specifically object to that method of procedure at the time, but did point out that STAB, at that time, had jurisdiction of "Countryside Village matter, PT-78-385;, the Colonial Inn case, PT-78-641; East Broadway, Inc., PT-78-65; James T. and Carol Harrison, PT-78-73; and Jerome T. Loendorf, PT-78-77," and that all the other cases were presently pending before district courts. The chairperson announced that nonetheless the hearing would proceed with respect to all the cases with the jurisdictional question "something that may have to be settled later". The hearing then proceeded with the counsel representing various tax protestors from the various counties appearing. Proposed findings and conclusions were presented to STAB after the hearing, and on November 7, 1980 STAB made its findings, conclusion and order. It found that there was a disparity between the assessed values of residential and commercial improvements in the various counties, differing from county to county, but that commercial property was consistently appraised in an amount substantially higher than residential property. DOR had introduced no evidence to justify the disparity and STAB therefore concluded that the appraisal method used by the Department of Revenue violates uniformity, equal protection and due process requirements of the Montana Constitution and statutes, and was, therefore arbitrary, capricious and unlawful. It then entered the following order: "It is hereby ordered that the above matter be and it is remanded to the Department of Revenue for reappraisal of the commercial properties involved in a manner which does not violate the constitutional and statutory requirements for equalization or uniformity with other properties of the same legislative class. It is suggested that one method by which this may be accomplished is by use of the Marshall Valuation Service Manual which reflects 1971 replacement costs.'' DOR appealed the order to the District Court in Cascade County. There STAB's order was sustained and DOR's petition for judicial review dismissed, the District Court noting that no statute or regulation precludes STAB from requiring DOR to remedy its appraisals, nor from fashioning the remedy required in the order of November 7, 1980. In its newest appeal to this Court, DOR contends, (1) that STAB proceeded improperly on remand in hearing all the tax protest cases collectively according to the county in which the property was situated; (2) that the evidence produced as a result of that procedure failed to conform to the standard of proof established by this court in Department of Revenue v. State Tax Appeal Board, supra. 613 P.2d 695; and (3) that the order rendered by STAB to DOR was in excess of STAB's statutory authority. The taxpayers respond that STAB's order is a proper exercise of its power, that evidence supports the findings of STAB and that its order is not arbitrary, capricious or otherwise erroneous. Further substantive issues are DOR's contention that the evidence is insufficient to sustain STAB's order of November 7, 1980, and the taxpayers contention that since this issue is not briefed and argued before the District Court, it may not be raised in appeal. Before determining the legal issues herein, we turn now to recap the evidence educed at the October 1, 1980 hearing before STAB. Yellowstone County We glean from STAB'S expanded Notice of Hearing that there are eight protesting taxpayers in Yellowstone County, comprising eleven cases. On behalf of these tax protestors, a single witness testified, Gene Thornquist. Thornquist testified that he conducted a study to determine the ratio between DORIS appraisal of residential improvements and the market value of those residential improvements. He used the records of Multiple Listing Service in Billings concerning 1,242 residential sales in 1978. To determine the value of the improvements in each instance, he assumed that the land had been fairly appraised by DOR and so subtracted the appraised land value from the sales price, in each instance, so that presumptively in each category, the DOR appraisal and the sales price, he was dealing only with the value of the improvements. He determined in each of the 1,242 instances the ratio between DORIS appraisal of the residential improvements and the sales price of the residential improvements. He also added up all of the figures in each category so as to reach a total for all of DOR's appraisals of the residential improvements, and for all of the sales prices for the same residential improvements. Using this methodology, he reached the following mathematical conclusions: Residential: Total DOR Value of Improvements $26,123,047 Total Sales Value of Improvements $57,601,230 Ratio DOR Value/Sales Value 45.35% In addition, Thornquist testified to the number of sales based on various percentages of DORIS appraised value of the improvements. That effort resulted in the following figures: Residential Properties: % of DOR Value No. of Sales Thornquist also had made a study of forty commercial improvements to realty. He used DOR1s appraisals, subtracting its land value, to obtain DOR1s value of the improvements for taxation purposes. For twenty-eight of the commercial properties he used construction costs for fair market value, for six he used actual sales prices, and for the remaining six he used certified appraisals which he had obtained. Not all of the figures used derived from the year 1978, although most did. He deducted DOR1s appraisal of the land to determine the value of the improvements for the purposes of his study. All six of the certified appraisals of the commercial improvements were substantially below DOR1s appraised values, resulting in ratios ranging from one-hundred three percent to two-hundred twenty-one percent. Thornquist totaled DOR1s appraised value of the improvements in comparison to his determined sale value of those same improvements, which resulted in the following figures: Commercial: Total DOR Value of Improvements $24,912,920 Total Sales Value of Improvements $25,321,128 Ratio DOR Value/Sales Value 98.39% On the basis of these figures, Thornquist concluded that the average difference between DOR appraisals of commercial and residential improvements as to their respective market values, was 53.04 percent. Cascade County Robert P. Goff, one of counsel representing Countryside Village in this case, was the principal witness with respect to the claimed disparities in Cascade County. His method of determining the difference in ratios between sales price and the DOR appraisal of commercial properties, and sale price and the DOR appraisal of residential properties, followed the same pattern as that described by witness Thornquist. From the Multiple Listing Service in Great Falls, Goff took the first 200 sales for 1978 in residential properties and compiled the figures for the same. He discounted the land value both for the DOR appraisal and the sales price before deducting therefrom the appraisal figure set by the DOR. The results of his study are tabulated as follows: COMMERCIAL Total App. Value of Imp. $ 730,030 Total Sale Value of Imp. $1,134,965 ~ a t i o 64.32% Total of Individual Ratios 1161.81 Average of Ratios RESIDENTIAL Total App. Value of Imp. $3,202,994 Total Sale Value of Imp. 8,197,867 Ratio 39.07% Total of Individual Ratios 7619.61 Average of Ratios COMP. OF COMM. & RESIDENTIAL RATIOS Residential Ratio Commercial Ratio Average Residential Ratio 38.29% Average Commercial Ratio 64.54% 59.33% (100% - 59.33% = 40.67%) Goff also testified that he examined six different commercial properties, all apartment buildings, applying first the Montana Manual, and then the Marshall-Swift Manual. By using the depreciation factors provided in each of those manuals, he determined, "a reduction factor required" of 39.9% in the case of the Montana Manual, and 35% in the case of the Marshall-Swift Manual. Goff did not identify the properties to which these specific comparisons were made, except that possibly one of those was a tax protestor in these several actions. Lewis & Clark County The principal witness here was Vern Cougill. Cougill did not do an overall county study, but examined the sales of four commercial properties and compared those sales to an unspecified number of residential properties of similar age. He testified that as to residential properties he discerned a difference in valuation between the assessed valuation and the actual sales price of 31-34%. With respect to the commercial properties he reviewed, he found a disparity between the sales price and the assessed value of the commercial properties ranging from 47% to 80%, which he averaged at just 60%. He then divided 33% by 60% to determine that commercial properties were appraised 55% higher than the residential properties. As far as the record indicates, it does not appear whether Cougill subtracted the land values from the values of the improvements in making his determinations. In addition, Mr. John A. Cooper testified on behalf of Diana Dowling, one of the tax protestors, respecting two fourplexes she owns. Cooper testified that in the case of the "Eastside property1', there was a disparity between the DOR appraisal of land under the fourplex and a single family home next door. The fourplex land was assessed at $3,770 and the single-family home land was assessed at $2,250. In addition, with respect to sales of comparable residential properties, he found two properties which he considered applicable. After considering the sales prices of the two residential properties, and applying varying factors to make them compatible with the fourplexes, he determined that the values on the single-family homes were taxed approximately 30% less than were the fourplexes. Missoula County Attorney Greg Hanson appeared on behalf of tax protestor Village Motor Inn. In a statement to STAB, he indicated that they were prepared to present evidence to compare the Village Motor Inn commercial property with residential properties in its immediate area, but because of the Board's ruling that it did not wish to hear the individual cases at the time of this hearing, he would simply join in the testimony presented by Yellowstone and Cascade Counties for the purposes of the hearing. Flathead County Witness William C. Paullin testified in this instance. He relied on previous testimony presented in connection with tax protestors from Flathead County. His studies had lead him to the conclusion that the DOR appraisals of commercial property in Flathead County are very close to 100% of actual selling price of those properties, and in the case of residential properties, the DOR appraisals are approximately 66% or 65.8% of the sales price of residential property in 1976. He found the 1978 ratio to be 48.2% on actual selling price. Over a full year, looking at commercial sales and residential sales data, he found that DOR appraised at 116.6% of their sales values in the case of commercial properties, and at 63.8% for residential properties. In addition, John M. Heller testified with respect to Flathead County. Using a different methodology, he found that the composite ratio of disparity was 52.9%, compared to Paullin's testimony of 62-63%. He accounts for the difference because he excluded land values, whereas Paullin included land values in making his determinations. Pondera County Janice Hoppes presented testimony respecting a specific grain elevator in Conrad, that of the Equity Cooperative Association. Ms. Hoppes testified that she examined all of the residential sales in her area for the years 1976 to 1980, which totaled seven. From her investigation of the sales prices of these residential properties as compared to the DOR appraisals of the same, she determined, as an average, that the residential properties were assessed at 45% of their market values. With respect to elevators, she explained that she had to look about the state for sales of elevators in order to make a determination. She also explained that elevators are more likely to be valued on bushel capacity rather than any other factor. Ms. Hoppes then testified that, since the residential ratios varied from 17-92%, she would drop the lowest and highest from her computations to determine an average of 40.8% discrepancy between DOR valuations and residential market values. Using commercial property sale of elevators she determined the average sales price was 43.5 cents per bushel capacity, but that all eight elevators that she had examined were assessed at 214% of such average per bushel capacity. She also determined that elevators were assessed five times higher than residential properties, based on their respective market values. In addition, under Pondera County, Charles L. Jacobson representing tax protestors, stated that the property with which he was involved had sold four months after the appraisal at $20,000 less than the DOR appraisal, for which his taxpayers were asking an adjustment. Madison County Attorney Sam Hadden represented protesting taxpayers in Madison County, and made a statement for the record during the hearing before STAB on October 1, 1980. The attorney reported to the Board that a record had been made on his taxpayers' appeal on September 7, 1978, where the taxpayers had presented an appraisal report and testimony on the appraisal. The Board had ordered that DOR make a written response to their appraisal report and testimony by October 15, 1978. The taxpayer was then to have fifteen days after receipt of the Department's material in which to file a response. Since that time, nothing has been done by DOR, according to the attorney. The attorney informed STAB that his taxpayers intend to stand on the record that had already been made, and since DOR had chosen not to respond, to formally ask that the record be closed insofar as his protestors were concerned. On that basis, the Board ruled in accordance with Mr. Hadden's motion. Untangling the Legal Issues It is clear that STAB has not fully appreciated the purposes for which we remanded the proceedings to it in our decision of Department of Revenue v. State Tax Appeal Board, supra, 613 P.2d at 695. It is true that we said that at the next hearing STAB, "might find at such hearing that the Department's appraisal method is arbitrary, capricious or otherwise unlawful. . .". However, we also continued: "If, upon a further hearing, the Board finds the Department's appraisal procedure arbitrary, capricious or unlawful and that a reduction in the appraisals of commercial property is justified, proof of an excessive appraisal must be made by each taxpayer who seeks relief. (citing authority) Each taxpayer should follow the above criteria to establish the amount of reduction the taxpayer is entitled to. This does not mean each taxpayer seeking relief must introduce evidence as to the value of all improvements to real property in a county. The taxpayer must, however, introduce evidence of enough property located near the taxpayer's property and in the same legislative classification so the Board can establish the proper true value to the assessed value ratio for the property without speculation or conjecture. (citing authority) Once the proper ratio has been established, the Board can determine the proper amount to reduce an individual taxpayer's property by applying the ratio to the property." Moreover, STAB'S authority to affirm, reverse or modify any appraisal made by DOR applies only to such protests as are properly before it. If there are protestors whose causes are before the District Court, or not yet before STAB, of course STAB has no authority with respect to those protests until such time as jurisdiction is properly acquired by STAB. It is well to keep in mind the statutory scheme for protest of assessments or valuations in property tax proceedings. The County Tax Appeal Board is the first jurisdictional level for considering protests by taxpayers to assessments, classifications or appraisals. Section 15-15-101. Challenges to an assessment procedure adopted by the Department of Revenue apply only to taxpayers protesting the assessments, and do not apply to all similarly situated taxpayers unless an action is brought in District Court as provided in Section 15-2-307 et seq MCA. Section 15-15-102. MCA . Any person aggrieved by the action of the County Tax Appeal Board may appeal to the State Tax Appeal Board under Section 15-15-104, MCA. Appeals from the County Tax Appeal Board to STAB are governed by Section 15-2-301. The power of STAB in connection with any appeal under Section 15-2-301(4), MCA is to "affirm, reverse or modify any decision" of the County Tax Appeal Board. Although STAB is not a quasi-judicial board, as that term is defined in our statutes, we recognized in Department of Revenue v. Burlington Northern, Inc., (1976) 169 Mont. 202, 545 P.2d 1083 that it could exercise quasi-judicial functions. STAB, however, as an administrative agency, has no mandatory or injunctive powers over DOR, a separate administrative agency. As an administrative agency, STAB has no constitutional or statutory judicial power to remand a matter to the Department of Revenue for reappraisal. When an appeal is taken under Section 15-2-301, MCA, STAB may only affirm, reverse or modify the decision of the County Tax Appeal Board. The statutory procedures for the determination of tax protests must be followed, and in this case they require that STAB proceed to take evidence with respect to the individual protestors to determine if their individual properties have been overvalued in accordance with the criteria which we adopted from Maxwell v. Shivers (1965), 257 Iowa 575, 133 NW.2d 709, 711; Department of Revenue v . State Tax Appeal Board, 613 P.2dI at 695. Based on that evidence, in protests over which STAB now has jurisdiction, it may affirm, modify or reverse the decision of the County Tax Appeal Boards. With respect to those cases which may have passed beyond STAB'S jurisdiction and are now presently being reviewed in district courts, STAB of course has no power to make determinations until and if those cases are returned for further proceedings before it. We have no clear record of what the status of the Madison County property is, relating to protestor Big Sky. If STAB has present jurisdiction of it, it has ordered the closing of the record in that case, and it should proceed to make a determination. In the case of the Dowling property in Lewis & Clark County, if STAB has jurisdiction of those cases, the evidence presented at the October 1, 1980 hearing by counsel and by Ms. Dowling, creates a presumption of arbitrariness in assessing her property to which DOR is entitled to respond in a further hearing. In the case of the elevator in Pondera County, that protestor has established a presumptive showing of arbitrariness, to which DOR is entitled to respond if STAB now has jurisdiction of that cause. In the Missoula County case of Village Motor Inn, that tax protestor, through its counsel, has indicated its readiness to proceed on its individual case. If STAB has jurisdiction of that cause, an appropriate early hearing on that protest should be allowed by STAB. We detect a certain amount of struggling for turf in these cases as between the State Tax Appeal Board and the DOR. The District Court noted this, indicating in its opinion that it was partially approving STAB's order for the reason that responsibility was being placed by STAB upon DOR, brhich apparently caused the difficulty in the first place. One of the members of STAB indicated by a special concurrence that he favored the procedure taken by STAB because it aided small taxpayers to avoid the cost of tax protest proceedings. That objective is commendable, but the statutes which relate to determinations of tax protests are mandatory upon us and upon STAB. We are convinced that the many cases now pending out of the 1978 appraisals will be more expeditiously handled if the statutory procedures are followed. For this reason, the decision of the District Court refusing judicial review is reversed, and this cause is remanded to STAB for further proceedings in accordance with this opinion. Each party to this appeal shall bear its own appeal costs. We find that the evidence in this case is insufficient, but not in the manner contended by DOR. It is insufficient because with respect to each protesting taxpayer, there is nothing of record to show that any single taxpayer has been discriminated against when compared to taxpayers in the same classification; nor has the dollar amount of such discrimination, if any, on which an adjustment could be founded as to any taxpayer. What is lacking in the record is the specific dollar amount of unequal valuation or discrimination applying to the individual protesting taxpayers. It is STAB's duty to determine the individual effect of the discriminatory method of appraisal before STAB can affirm, modify or reverse the County Tax Appeal Board. The taxpayers argue on appeal that insufficiency of the evidence was not briefed or argued by DOR in the District Court and so that issue is unavailable to DOR on this appeal. Nonetheless, the same issue is reached on a ground raised by DOR in the District Court--namely, that STAB failed to follow our directions on remand of Countryside Village, supra, 613 P.2d at 695. We concur: ".4-#,&/,& , , C h i e f Justice Mr. Justice Frank B. Morrison, Jr. dissents as follows: I respectfully dissent. I believe that within the Board's statutory powers to "affirm, reverse or modify" decisions and to not give full effect to Department rules which are "arbitrary, capricious or otherwise unlawful," the Board may exercise quasi-judicial functions which encompass the power of remand. Neither our previous decision in Department of Revenue v. State Tax Appeal Board, supra, or the statutory scheme set forth in Chapter 2, Title 15, MCA, precludes remand to the Department for reassessment of the involved properties. Respondents ably carried their burden by showing that the Department has abrogated its constitutional duty to appraise, assess and equalize the valuation of all property taxed in the state. Therefore, it should be incumbent on the Department to either (1) justify its discriminatory methods (which it did not do in the hearing before the Board) or (2) properly fulfill its duty by coming forward with an assessment method which treats respondents' properties in a manner similar to that of other properties within the same classification. The latter alternative is appropriately accomplished by means of remand. Properties owned by taxpayers who did not protest the Departments use of a discriminatory assessment method should not be subject to reassessment. The unconstitutionality of the method employed does not void heretofore unchallenged assessments. See North Central Services, Inc. v . Hafdahl (19811, Mont . , 625 P.2d 56, 60, 38 St.Rep. I

July 12, 1983

7723ddc0-2386-45d1-b510-8af43ceaaabb

PIONEER CONCRETE FUEL INC v A

N/A

82-147

Montana

Montana Supreme Court

N O . 82-147 I N THE SUPREME COURT O F THE STATE OF MONTANA 1 9 8 3 PIONEER CONCRETE & FUEL, I N C . , a c o r p o r a t i o n , P l a i n t i f f a n d R e s p o n d e n t , v s . APEX CONSTRUCTION, I N C . , a c o r p o r a t i o n ; a n d U N I T E D PACIFIC INSURANCE COMPANY, a c o r p o r a t i o n , D e f e n d a n t s , T h i r d - P a r t y P l a i n t i f f s a n d A p p e l l a n t , VS. DARRELL BIRDSBILL, d / b / a BIRDSBILL CEMENT CONTRACTOR, T h i r d - P a r t y D e f e n d a n t & C r o s s - A p p e l l a n t . A p p e a l f r o m : D i s t r i c t C o u r t o f t h e S e c o n d J u d i c i a l D i s t r i c t , I n a n d f o r t h e C o u n t y o f S i l v e r Bow H o n o r a b l e A r n o l d O l s e n , J u d g e p r e s i d i n g . C o u n s e l o f R e c o r d : F o r D e f e n d a n t s , T h i r d - P a r t y P l a i n t i f f a n d A p p e l l a n t : Gough, S h a n a h a n , J o h n s o n & Waterman, H e l e n a , Montana R o n a l d F . Waterman a r g u e d , H e l e n a , Montana F o r T h i r d P a r t y D e f e n d a n t a n d C r o s s - A p p e l l a n t : J o s e p h C . E n g e l 111, a r g u e d , B u t t e , Montana F o r P l a i n t i f f a n d R e s p o n d e n t : C o r e t t e , S m i t h , Pohlman & A l l e n , B u t t e , Montana K e n d r i c k S m i t h a r g u e d , B u t t e , Montana S u b m i t t e d : A p r i l 7 1 1 9 8 3 D e c i d e d : June 1 6 , 1 9 8 3 ~ i l e d : JUN 1 6 1983 --- - - C l e r k Mr. Justice Fred J. Weber delivered the Opinion of the Court. United Pacific Insurance Company (United) appeals from a January 8, 1980, judgment in the District Court of Silver Bow County in the amount of $17,532.93 in favor of Pioneer Concrete & Fuel, Inc., (Pioneer) against Apex Construction, Inc. , (Apex) , a public works subcontractor. In that judgment, the Court found that United, the bonding company for the subcontractor, was fully obligated for any indebtedness of Apex. Darrell Birdsbill, d/b/a Birdsbill Cement Contractor (Birdsbill), subcontractor of Apex, appeals from a judgment of December 22, 1981 in favor of Apex against Birdsbill in the amount of $13,921.04, and in favor of United against Birdsbill in the amount of $17,532.92. We affirm the judgments of the District Court with the exception that we modify the judgment against Apex so that United is held jointly liable to Pioneer and modify the judgment against Birdsbill so that it grants judgment in the alternative against Apex or United in the amount of $13,921.04. The issues presented: 1. Whether United is liable to Pioneer, supplier of materials to subcontractor Apex, under subcontract bonds issued by United in behalf of Apex under two municipal contracts for street and storm sewer improvements in Butte? 2. In the absence of liability on the part of United under the wording of the subcontract bonds issued in behalf of Apex as subcontractor, can the judgment of the District Court be affirmed on a theory of equitable responsibility of United for the Apex obligation? 3. Is there substantial evidence sufficient to require affirmance of the judgment against Birdsbill? 4. In the event that the judgment against Birdsbill is affirmed, should the judgment in behalf of United be reduced to the same amount as the judgment in behalf of Apex? The facts disclose that Jim Gilman Excavating, Inc. (Gilman) entered into two contracts for street and storm sewer improvements in the city of Butte with Butte-Silver Bow, a municipal corporation. The Bellevue Project was contracted in April 1978, and the Farragut Project was contracted in August 1978. As general contractor, Gilman provided performance bonds which are not at issue in this case. In May 1978, Gilman hired Apex to perform curb, gutter, sidewalk and driveway work on the Bellevue Project and in September 1978 again hired Apex to perform similar work on the Farragut Project. In turn, Apex subcontracted a portion of its work to Birdsbill for handfinishing sidewalks, driveway and curbs on the Bellevue Project in June 1978 and in October 1978 on the Farragut Project. On each project, Apex furnished to Gilman a Subcontract Bond in identical form, which provided that Apex and United were bound to Gilman for the amount of the subcontracts, with reference to the two contracts between Gilman and Butte-Silver Bow. The bonds further provided: "NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, That, if the above bounden Principal shall faithfully perform the work contracted to be done under said Subcontract, and shall idemnify the Said Obligee against all loss or damage which obligee may sustain by reason of the failure of said Principal to pay claims for labor, services or materials, furnished and used or consumed directly in connection with the performance of such Subcontract, then this obligation shall be void; otherwise it shall remain in full force and effect. PROVIDED, HOWEVER, notwithstanding anything in said Subcontract to the contrary, this bond is one of idemnity only and does not inure to the benefit of or confer any right of action upon any person other than the named Obligee." The contracts between Apex and Gilman were on a Standard Subcontract Agreement form prepared by the Associated General Contractors of America. Regarding the payment by Apex for materials and labor, both contracts provided: "That the Subcontractor shall: " (3) Pay for all materials and labor used in or in connection with, the performance of this contract, through the period covered by previous payments received from the Contractor, and furnish satisfactory evidence when requested by the Contractor, to verify compliance with the above requirements." Trying the case without a jury, the District Court found in its findings of fact that Pioneer had furnished ready mix concrete, cement, sand and curing compound to Apex on both the Bellevue and Farragut Projects. The Court further found that the total of the claims for such materials on the two projects was $30,244.84, and that Apex had paid $12,711.91, leaving a balance owing from Apex to Pioneer of $17,532.93. The District Court further found that United was obligated fully under its subcontractor bonds. Judgment was decreed in the amount of $17,532.93. In the same cause, Apex and United had sued Birdsbill as a third party defendant. Initially default judgment was entered against Birdsbill. Subsequently the default was set aside and the third party portion of the action went to trial before the District Court without a jury. The District Court found that $3,611.88 was owing by Apex to Birdsbill which was to be offset against the debt owing from Birdsbill to Apex in the amount of $17,532.92. The District Court therefore concluded that the net amount owed by Birdsbill to Apex was $13,921.04 and entered judgment accordingly. As to United, the District Court concluded that the offset of $3,611.88 was not properly to be allowed, and therefore entered judgment in the full amount of $17,532.92. The first issue is whether United is liable to Pioneer, supplier of materials to Apex, a subcontractor, under subcontract bonds issued by United in behalf of Apex. This issue must be determined by a careful analysis of the wording in both subcontract bonds, which are identical in substance. Pioneer contends that the interpretation required is similar to the bond interpretation made by this Court in Carl Weissman & Sons, Inc. v. St. Paul ire & M. Ins. Co. (1968) , 152 Mont. 291, 448 P.2d 740. In contrast, United contends that the bond interpretation must be construed in accordance with Treasure State Industries Inc. v. Welch (1977), 173 Mont. 403, 567 P.2d 947. We find these cases to be controlling, and conclude that Treasure State Industries requires a conclusion for United. A comparison of the bonds and underlying subcontracts in Weissman, Treasure State Industries and this case discloses significant differences. As pointed out in Treasure State Industries, 173 Mont. at 406, 567 P.2d at 949: "We feel Weissman can be distinguished on the facts. In Weissman the surety bond and the contract contained an express provision to pay materialmen. The bond in the instant case contained no such provision. In Weissman the surety bond contained no condition of indemnification of the named obligee. The subcontract in Weissman did not contain a special provision whereby the subcontractor agreed to indemnify the contractor." The Court in Treasure State Industries then pointed out that although the surety bond and the underlying contract must be read together, the surety's obligations are not coextensive with the obligation of the underlying contract. The Court stated at 173 Mont. 407-08, 567 P.2d 949-50: "This Court made special note of the fact that, unless a promise of the principal is contained in the underlying contract was also specifically mentioned or made a condition in the surety bond, the surety would not have obligations coextensive with and measured by the promises of the principal in the underlying contract. In the instant case, even though there exists a promise on the part of Welch in the subcontract to pay all materialmen, there was no condition in Aetna's bond which would make this obligation on the part of Welch coextensive with the obligations of Aetna. "This decision further supports the rule that the mere fact the underlying subcontract of Welch contained a promise to pay all materialmen in no way creates an obligation on the part of Aetna, the surety, unless the bond itself contains a similar promise to pay the materialmen. ' I (emphasis added. ) As pointed out in Treasure State Industries, the subcontract bond in Weissman obligated the principal to pay the claims of all persons furnishing materials and did not have a provision indemnifying the principal contractor. In contrast, the underlying subcontract in Treasure State Industries required payment of materialmen by the subcontractor, but the bond itself did not contain a direct promise to pay for any materials. Instead, the Treasure State Industries bond contained an obligation of Aetna to indemnify the principal contractor. As previously quoted, the subcontract bond in the present case states, in a manner similar in substance to Treasure State Industries, that Apex shall indemnify Gilman against all loss which Gilman may sustain by reason of the failure of Apex to pay claims for materials furnished. It further expressly provides that the bond is one of indemnity only and does not inure to the benefit of any person other than Gilman. Based upon Treasure State Industries, we therefore conclude that the provisions in the Apex subcontract bonds provide for indemnification of Gilman only and therefore evidence an intent to protect Gilman and not Pioneer, the materialman. As a result, under the express wording of the subcontract bonds, Pioneer has no right of action against United on the subcontract bonds, and therefore cannot recover as a matter of contract law under the bonds themselves. 11. The second issue is whether, in the absence of liability on the part of United under the wording of Apex's subcontract bonds, the judgment of the District Court can be affirmed on a theory of equitable responsibility of United for the Apex obligation. Notwithstanding our analysis of the contract language of the subcontract bonds, a review of the facts discloses equitable considerations which are controlling in a manner similar to that in Weissman. We therefore set forth a summarized chronology of facts to emphasize their significant relationship to one another: 7/17/78. Apex officers and wives executed a continuing Agreement of Indemnity to indemnify United from all loss and expense incident to the bonding of Apex Construction, Inc. 2/5/79. Pioneer, an unpaid materialman, sued Apex and United for supplies furnished. Defendants, Apex and United, were represented by the same attorneys. 1/8/80. Judgment for Pioneer against Apex and United in the amount of $17,532.93. 2/7/80. Defendants Apex and United filed notice of appeal of the Pioneer judgment. 2/16/80. Meeting between attorneys for United and Apex about Apex's financial problems. Agreement reached that United would advance $120,000.00 to pay bonded claims in exchange for the Cricks' (officers and stockholders of Apex) agreement to assign personal as well as corporate assets to United. 4/18/80. Assignment from Apex to United of five claims by Apex amounting to over $28,000.00. On same date, an order was entered dismissing Apex with prejudice from the Supreme Court appeal, based on Apex's lack of assets. 11/1/80. Assignment from Apex, the Cricks and their wives, agreeing to forward future proceeds received by Apex to United, to reimburse United for all disbursements made by United on Apex's behalf, setting forth a monthly payment schedule by each of three Cricks in a cumulative amount of approximately $400.00 per month, and providing that after Apex contract claims and litigation are resolved, the three Cricks would apportion the final accounting of United debts between them in specified percentages. In addition, a security interest was granted by Apex to United in the promissory note payable by James Crick, Jr. for $30,294.58. Mortgages were also given by the Cricks on various real properties individually owned by them. In summary, the facts show that United initially joined with Apex in the trial of the principal case and paid the expenses and attorney fees. Both United and Apex then joined as cross-plaintiffs in suing Birdsbill. United also joined Apex in the appeal. Next United's attorneys secured dismissal with prejudice of the Apex appeal, resulting in an outstanding judgment of the District Court against Apex in the amount of $17,532.92. That judgment was rendered ineffective by a transfer of all assets from Apex. The original transfer of assets from Apex to United was later enhanced by the personal promises of the three Cricks to reimburse United on a monthly payment schedule for all the liabilities of Apex ultimately paid by United. The effect of the actions of the Cricks, as officers and stockholders of Apex, clearly indicates their desire to see that the obligations of Apex were to be paid by United and that United be reimbursed. While we are not suggesting that the transfers were made for the purpose of defrauding creditors, it is apparent that the effect of all of the steps taken eliminated the capacity of Apex to pay the outstanding judgment against it, thereby rendering valueless the judgment by Pioneer against Apex. In addition to the Apex transfer of assets, the individual Cricks agreed to reimburse United for amounts paid in Apex's behalf. We therefore conclude, under basic equitable principles, that United is responsible for the Apex judgment. The third issue is whether there is substantial evidence sufficient to require an affirmance of the judgment against Birdsbill. The basic question raised by Birdsbill is whether or not there are sufficient facts to affirm the judgment of the District Court against Birdsbill. In reviewing the evidence, this Court has set forth the following sta.ndard in Walsh v. Ellingson Agency (1980), Mont. , 613 P.2d 1381, 1384, 37 St.Rep. 1269, 1273: "With regard to the standard of review, this Court has repeatedly stated it will not overturn findings of fact and conclusions of law if supported by substantial evidence and by the law. ~vidence will be viewed in the light most favorable to the prevailing party. Rule 52, M.R.Civ.P.; Luppold v. Lewis (1977), 172 Mont. 280, 563 P.2d 538; Morgen & Oswood Construction Co. v . Big Sky of Montana, Inc. (1976), 171 Mont. 268, 557 P.2d - 1017. The judgment of the District Court is presumed to be correct and will be upheld unless clearly shown to be erroneous; the burden of such showing is upon the appellant. Kamp v. ~ i r s t National Bank and Trust Co. (1973), 161 Mont. 103, 504 P.2d 9 8 7 We have reivewed the contentions on the part of Birdsbill and the record. Essentially the facts in the record are undisputed and clearly constitute substantial evidence sufficient to support the findings of fact and conclusions of law. Nothing has been shown to be clearly erroneous. We therefore affirm the judgment against Birdsbill. IV. The fourth issue is, in the event that issue three is resolved in an affirmance of the judgment, should the judgment in behalf of United be reduced to the same amount as the judgment in behalf of Apex. In view of our determination that United is responsible for the debt of Apex to Pioneer and in view of the transfer of all assets to United, we also conclude that it is appropriate that Birdsbill be allowed the same offset against United as the District Court granted against Apex. As we review the wording of the judgment against Birdsbill, it appears that Birdsbill could. be considered to be responsible for the payment of $13,921.04 to Apex and also $17,532.92 to United Pacific. We therefore direct the District Court to modify the judgment against Birdsbill to provide that Apex and United are entitled to recover the sum of $13,921.04 from Birdsbill. We also note that the District Court found, in the findings of fact of the judgment against Apex, that Apex was indebted to Pioneer and that United was fully obligated for any indebtedness of Apex. However, no further mention is made of United in either the conclusions of law or the order. United raises the technical objection that this judgment is, therefore, against Apex only. In light of the obvious intent of the District Court's findings of fact and our conclusions regarding United's equitable responsibility for the Apex obligation, we direct the District Court to modify the judgment against Apex to provide that both Apex and United are liable to Pioneer in the sum of $17,532.92. We affirm the judgments of the District Court with the above-noted exceptions and remand for modification of the judgments consistent with th is opi We concur: n .

June 16, 1983

4fef797c-d243-4854-a11e-80455ba61f2c

ST PAUL FIRE MARINE INS CO v

N/A

82-279

Montana

Montana Supreme Court

N O . 82-279 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 3 ST. PAUL FIRE and MARINE INSURANCE COMPANY, a c o r p o r a t i o n , P l a i n t i f f a n d R e s p o n d e n t , v s . KEVIN E. CUMISKEY, J O H N E. CUMISKEY, STEPHANIE S . CUMISKEY, a n d K . S . J . , I N C . , a Montana c o r p o r a t i o n , D e f e n d a n t s a n d A p p e l l a n t s , a n d ELIZABETH M . BRADLEY, D e f e n d a n t a n d C r o s s A p p e l l a n t . A p p e a l f r o m : D i s t r i c t C o u r t o f t h e E i g h t e e n t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e C o u n t y o f G a l l a t i n H o n o r a b l e J o s e p h B . G a r y , J u d g e p r e s i d i n g . C o u n s e l o f R e c o r d : F o r A p p e l l a n t : L a r r y W . Moran a r g u e d , Bozeman, Montana F o r C r o s s - A p p e l l a n t : L a n d o e , Brown, P l a n a l p , Kommers & L i n e b e r g e r , Bozeman, Montana Randy K . D i x , a r g u e d , Bozeman, Montana F o r R e s p o n d e n t s : A n d e r s o n , Brown, G e r b a s e , C e b u l l & J o n e s , B i l l i n g s , Montana J a m e s L. J o n e s a r g u e d , B i l l i n g s , Montana S u b m i t t e d : March 1, 1983 D e c i d e d : June 10, 1983 ~ i l e d : JUN 1 0 1 9 8 3 C l e r k Mr. Chief Justice Frank I . Haswell delivered the Opinion of the Court. Cumiskeys and Bradley appeal a judgment upon a Gallatin County jury verdict which set the cost of repairs of fire damaged property, which determined the parties' liabilities to one another and which awarded and set attorney fees. We affirm in part and reverse in part. In early 1978, Kevin Cumiskey contacted Elizabeth Bradley in order to lease West Yellowstone property owned by Bradley as the site of a Mexican restaurant. They entered into a lease agreement prepared by Cumiskey's attorney which required that Cumiskey insure the property to protect Bradley's interest and which specified that fixtures and alterations added by Cumiskey would remain his property. Kevin opened the restaurant, "Chiripa's," for a short 1978 tourist season, closed it for the winter, and then reopened it for summer 1979. From September 1978 to September 1979, the property was insured in the name of Kevin Cumiskey, d/b/a "Chiripa's." During that period, Kevin improved the premises with funds borrowed from his father, John Cumiskey. At no time was Bradley's interest insured. From September 1979 to June 1980, the property was not insured at all. In 1979 the restaurant business was incorporated as K.S.J., Inc. (for Kevin, Stephanie, and John Cumiskey), and the lease was assigned to the corporation. Kevin and his mother, Stephanie, each owned 49 percent of the stock. John owned 2 percent. Kevin is president, John is vice president and Stephanie is secretary. Kevin decided to stay in New York to work for the sum- mer of 1980, so John and Stephanie Cumiskey agreed to spend the summer in West Yellowstone operating the restaurant. Upon their arrival, the Cumiskeys contacted a Bozeman insurance agency to arrange for reissuance of the prior insurance coverage. Again, the insured on the policy was listed as Kevin Cumiskey, d/b/a "Chiripass." John and Stephanie ran the restaurant, which had consistently lost money since its opening, until, on August 10, 1980, a series of explosions accompanied by fire damaged the premises. The fire investigation revealed that the blazes had been intentionally set. Extensive circumstantial evidence focused on John Curniskey as the alleged arsonist. That evidence included serious burns sustained by Cumiskey, a series of inconsistent and uncorroborated stories told by Cumiskey to explain his burns and his actions after the fire, and the fact that his keys to the restaurant and other objects owned by Cumiskey were found in the street outside Chiripass after the explosions. Once the investigation established that the fire had been intentionally set, St. Paul requested that Cumiskeys produce the financial records of the business. John Cumiskey refused to do so for some sixteen months af ter the August 1980 fire. In October 1980, Kevin Cumiskey filed a claim with St. Paul seeking recovery under the policy. St. Paul was told both that the destroyed property belonged to Kevin Cumiskey and that it was the property of K.S. J., Inc. St. Paul also became aware of the Bradley lease, which required that Bradley's interest be insured. John Cumiskey was charged with arson and criminal mischief in connection with the fire and was tried in November 1980. The business records were not a part of the criminal trial. Cumiskey's defense was that he was a wealthy man, t h a t t h e b u s i n e s s was p r o f i t a b l e , and t h a t h e had no motives f o r arson. H e was a c q u i t t e d of both c h a r g e s . Two months a f t e r John Cumiskey's a c q u i t t a l , S t . Paul f i l e d t h i s a c t i o n f o r d e c l a r a t o r y judgment. I n its com- p l a i n t , S t . Paul asked t h e c o u r t t o d e c l a r e Kevin Cumiskey t h e proper r e c i p i e n t of any p o l i c y proceeds, t o d e t e r m i n e t h e r i g h t s and o t h e r l e g a l r e l a t i o n s h i p s of t h e p a r t i e s , t o determine t h e s p e c i f i c amount of recovery t o which Kevin Cumiskey was e n t i t l e d , and t o r e q u i r e t h a t John E. Cumiskey s u b r o g a t e any c l a i m p a i d by S t . Paul. K.S.J., I n c . , was l a t e r added t o t h e a c t i o n by s t i p u l a t i o n of t h e p a r t i e s . B r a d l e y c r o s s - c l a i m e d a g a i n s t Kevin Cumiskey a n d M.S.J., I n c . , f o r f a i l u r e t o i n s u r e her i n t e r e s t i n t h e b u i l d i n g . She a l s o brought a t o r t c l a i m a g a i n s t John Cumiskey f o r d e l i b e r a t e d e s t r u c t i o n of t h e p r o p e r t y . Cumiskeys and K.S.J., I n c . , brought c o u n t e r c l a i m s a g a i n s t S t . Paul f o r t h e company's breach of both s t a t u t o r y and common-law d u t i e s t o s e t t l e t h e i n s u r a n c e c l a i m s i n good f a i t h and f o r l i b e l and s l a n d e r . A number of i s s u e s r a i s e d were d i s p o s e d of b e f o r e t h e c a s e was given t o t h e j u r y . Before t r i a l , t h e D i s t r i c t Court e n t e r e d summary judgment i n f a v o r of Bradley on t h e i s s u e of Kevin C u m i s k e y ' s f a i l u r e t o i n s u r e B r a d l e y ' s i n t e r e s t i n t h e premises. K.S.J., Inc., dropped its c l a i m t o t h e i n s u r a n c e proceeds on t h e day b e f o r e t r i a l . A t t h e o u t s e t of t r i a l , t h e D i s t r i c t Court dismissed Cumiskeys' s t a t u t o r y c o u n t e r c l a i m f o r f a i l u r e t o s t a t e a proper claim. I t a l s o dismissed Cumiskeys' c l a i m of l i b e l and s l a n d e r , which was based upon S t . P a u l ' s f i l i n g of t h i s a c t i o n f o r d e c l a r a t o r y judgment. A t t h e c l o s e of evidence, t h e t r i a l c o u r t e n t e r e d a d i r e c t e d v e r d i c t i n f a v o r of S t . Paul on Cumiskeys' common-law c o u n t e r c l a i m f o r bad f a i t h . The j u r y r e t u r n e d a special. v e r d i c t which determined: (1) S t . Paul and Bradley had proved by a preponderance of t h e evidence t h a t John E. Cumiskey caused t h e f i r e ; ( 2 ) t h e c o s t t o r e p a i r t h e main b u i l d i n g of t h e r e s t a u r a n t was set a t $12,300.00; ( 3 ) t h a t Kevin Cumiskey was e n t i t l e d t o recover $19,910.00 under t h e p o l i c y ; and, ( 4 ) t h a t Bradley was e n t i t l e d t o recover $25,000.00 i n p u n i t i v e damages from John E. Cumiskey. The p a r t i e s s t i p u l a t e d i n t h e p r e t r i a l o r d e r t h a t t h e f i r e had been set i n t e n t i o n a l l y . The j u r y was s o informed and was i n s t r u c t e d t h a t i f it found t h a t John E. Cumiskey set t h e f i r e , S t . P a u l was e n t i t l e d t o recover from him t h e amount it must pay t o Kevin Cumiskey under t h e p o l i c y . Cumiskeys and K.S.J., I n c . , moved f o r a judgment not- w i t h s t a n d i n g t h e v e r d i c t o r i n t h e a l t e r n a t i v e f o r a new trial. The motions were d e n i e d . Cumiskeys now a p p e a l and Bradley c r o s s - a p p e a l s . A p p e l l a n t s , i n t h e i r shotgun approach, b a r r a g e t h i s Court w i t h i s s u e s . W e w i l l a d d r e s s o n l y two of t h o s e i s s u e s . W e w i l l a l s o a d d r e s s c r o s s - a p p e l l a n t ' s claim. W e have c o n s i d e r e d t h e o t h e r e r r o r s advanced by a p p e l l a n t s and f i n d them t o be w i t h o u t m e r i t . W e w i l l n o t concern o u r s e l v e s with t h e s e arguments s i n c e t h e y w i l l n o t change t h e outcome of t h i s a p p e a l . W e a l s o n o t e i n p a s s i n g t h a t a p p e l l a n t s ' b r i e f s , which c o n t a i n more v i t r i o l t h a n s u b s t a n c e , f a i l t o s u b s t a n t i a t e t h e i r c l a i m s w i t h r e f e r e n c e s t o t h e r e c o r d p u r s u a n t t o Rule 2 3 ( a ) and ( e ) , f4.R.App.Civ.P. The i s s u e s w e a d d r e s s a r e : I. Whether t h e D i s t r i c t Court p r o p e r l y d i r e c t e d a v e r d i c t on Cumiskeys' c o u n t e r c l a i m s f o r bad f a i t h ; 2. Whether t h e D i s t r i c t C o u r t p r o p e r l y g r a n t e d summary judgment i n f a v o r of Bradley; and, 3. Whether t h e D i s t r i c t Court c o r r e c t l y c a l c u l a t e d t h e a t t o r n e y f e e s awarded t o Bradley. Kevin Cumiskey f i r s t c h a l l e n g e s d i s m i s s a l of h i s bad f a i t h c o u n t e r c l a i m s a g a i n s t S t . Paul. H e contends t h a t S t . Paul v i o l a t e d both s t a t u t o r y and common-law d u t i e s t o s e t t l e t h e i n s u r a n c e c l a i m s i n good f a i t h . The s t a t u t o r y c l a i m is based upon s e c t i o n 33-18-201(6) and ( 1 3 ) , MCA, of t h e Unfair Trade P r a c t i c e Chapter of t h e I n s u r a n c e Code. I t p r o v i d e s : "Unfair c l a i m s e t t l e m e n t p r a c t i c e s p r o h i - b i t e d . No person may, w i t h such frequency - a s t o i n d i c a t e a g e n e r a l b u s i n e s s p r a c - t i c e , do any of t h e following: " ( 6 ) n e g l e c t t o a t t e m p t i n good f a i t h t o e f f e c t u a t e prompt, f a i r , and e q u i t a b l e s e t t l e m e n t s of c l a i m s i n which l i a b i l i t y h a s become r e a s o n a b l y c l e a r ; " ( 1 3 ) f a i l t o promptly s e t t l e c l a i m s , i f l i a b i l i t y has become r e a s o n a b l y c l e a r , under one p o r t i o n of t h e i n s u r a n c e p o l i c y coverage i n o r d e r t o i n f l u e n c e s e t t l e - ments under o t h e r p o r t i o n s of t h e i n s u r - ance p o l i c y coverage;" (Emphasis added.) The s t a t u t o r y c l a i m was s t r u c k by t h e D i s t r i c t Court p r i o r t o t r i a l on t h e b a s i s t h a t Kevin Cumiskey had n o t pleaded and was n o t going t o p r e s e n t e v i d e n c e t h a t S t . Paul f a i l e d t o s e t t l e c l a i m s "with such frequency t o i n d i c a t e a g e n e r a l b u s i n e s s p r a c t i c e . " D i s m i s s a l of t h e s t a t u t o r y claim on t h a t b a s i s was proper. Klaudt v. F l i n k ( 1 9 8 3 ) , Mont . , 658 P.2d 1065, 40 St.Rep. 64; H a r r i s v. American General L i f e I n s u r a n c e Company of Delaware ( 1 9 8 3 ) , The common-law bad f a i t h c l a i m was d i s p o s e d of w i t h a d i r e c t e d v e r d i c t a t t h e c l o s e o f e v i d e n c e . W e f i r s t recog- n i z e d t h a t an i n s u r a n c e company h a s a d u t y independent of s t a t u t e o r o f i n s u r a n c e c o n t r a c t t o s e t t l e c l a i m s i n good f a i t h w i t h its i n s u r e d s i n L i p i n k s i v. The T i t l e I n s u r a n c e Company ( 1 9 8 2 ) , Mon t . , 655 P.2d 970, 39 St.Rep. 2283. The D i s t r i c t Court h e r e p r o p e r l y allowed Kevin Cumiskey t o p r e s e n t evidence i n s u p p o r t of h i s c l a i m t h a t S t . Paul a c t e d i n bad f a i t h and breached t h a t d u t y . Con- f l i c t i n g evidence was i n t r o d u c e d on whether a g e n t s of S t . P a u l had r e p r e s e n t e d t h a t t h e i n s u r e r would s e t t l e t h e claim. Kevin p r i m a r i l y based h i s c l a i m on t h e a s s e r t i o n t h a t t h e f i l i n g of t h e d e c l a r a t o r y judgment a c t i o n was i n bad f a i t h s i n c e t h e c l a i m should have been p a i d and s i n c e t h e a c t i o n s e r v e d t o d e s t r o y t h e b u s i n e s s r e l a t i o n s h i p b e t w e e n Cumiskeys and B r a d l e y . A t t h e c l o s e o f t h e e v i d e n c e , however, t h e c o u r t d i s m i s s e d t h a t c l a i m w i t h t h e f o l l o w i n g s t a t e m e n t : " I ' m going t o r e v e r s e myself. I am going t o g r a n t t h e motion f o r a d i r e c t e d ver- d i c t on t h e q u e s t i o n of p u n i t i v e damages t o t h e i n s u r a n c e company on t h e i r coun- t e r c l a i m and l e t you go on your a c t u a l damages . . . There was a l e g i t i m a t e q u e s t i o n i n t h i s c a s e on t h e b a s i s of who set t h e f i r e , how t h e f i r e was set, who t h e c l a i m was i n , and t h e i n s u r a n c e com- pany came i n and asked f o r a d e c l a r a t o r y judgment, and t h e o n l y a l t e r n a t i v e is t o make t h e i n s u r a n c e company pay i n any r e s p e c t , and t h e n a t t e m p t t o g e t i t back, and t h e y used t h e p r o c e s s of t h e c o u r t s and w i t h i n r e a s o n a b l e t i m e , and s o you a r e , however, e n t i t l e d t o go on your a c t u a l damages on your claim." The D i s t r i c t Court p r o p e r l y g r a n t e d a d i r e c t e d v e r d i c t i n f a v o r o f S t . Paul on t h o s e grounds. The c o u r t s h o u l d vlew a motion f o r a d i r e c t e d v e r d i c t i n t h e l i g h t most f a v o r a b l e t o t h e p a r t y a g a i n s t whom t h e motion is d i r e c t e d . Dleruf v. Gollaher ( 1 9 7 1 ) , 156 Mont. 440, 481 P.2d 322. Here, even viewed i n t h e l i g h t most f a v o r a b l e t o Kevin Cumiskey, t h e c o u r t found t h a t S t . P a u l ' s d e c i s i o n t o b r i n g t h i s a c t i o n f o r d e c l a r a t o r y judgment was a p p r o p r i a t e . W e a g r e e . An a c t i o n f o r d e c l a r a t o r y judgment may be b r o u g h t f o r t h e purpose of s e t t l i n g and a f f o r d i n g " r e l i e f from uncer- t a i n t y and i n s e c u r i t y w i t h r e s p e c t t o r i g h t s , s t a t u s , and o t h e r l e g a l r e l a t i o n s . " S e c t i o n 27-8-101 e t s e q . , MCA. The a c t i o n , i n o r d e r t o t e r m i n a t e t h e c o n t r o v e r s y a s t o a l l p a r t i e s , should i n c l u d e a s p a r t i e s a l l p e r s o n s who have o r c l a i m any i n t e r e s t t h a t would be a f f e c t e d by t h e d e c l a r a - t i o n . Empire F i r e & Marine I n s . Co. v. Goodman ( 1 9 6 6 ) , 147 Mont. 396, 412 P.2d 569. I f o t h e r w i s e a p p r o p r i a t e , an a c t i o n f o r d e c l a r a t o r y judgment is n o t precluded by t h e e x i s t e n c e of a n o t h e r ade- q u a t e remedy. Rule 57, I4.R.Civ.P. I n a proper c a s e , an i n s u r e r may use t h i s p r o c e d u r a l d e v i c e i n o r d e r t o o b t a i n a d e t e r m i n a t i o n of t h e v a l i d i t y , c o n t i n u a n c e , o r coverage of an i n s u r a n c e p o l i c y ; a d e t e r m i n a t i o n of t h e e x t e n t of l i a b i l i t y ; o r a d e t e r m i n a t i o n of t h e i n s u r e r ' s d u t i e s under t h e p o l i c y . 6A Moore's F e d e r a l P r a c t i c e , l(57.19 a t 57-195 through 57-198. W e hold t h a t i n t h i s c a s e , S t . P a u l p r o p e r l y f i l e d an a c t i o n f o r d e c l a r a t o r y judgment. While Kevin Cumiskey f i l e d a c l a i m f o r p r o c e e d s a s t h e named i n s u r e d , a p o t e n t i a l f o r l i a b i l i t y t o o t h e r p a r t i e s a l s o e x i s t e d . B r a d l e y ' s i n t e r e s t should have been i n s u r e d p u r s u a n t t o t h e l e a s e agreement and was n o t . There was t h e p o s s i b i l i t y t h a t s h e would a t t e m p t t o c l a i m a l l o r p a r t of t h e i n s u r a n c e proceeds. K.S.J., I n c . , i n s i s t e d throughout most of t h e l a w s u i t t h a t it was t h e named i n s u r e d s i n c e S t . P a u l ' s a g e n t s had been informed of t h e i n c o r p o r a t i o n of t h e b u s i n e s s . Not u n t i l t h e day b e f o r e t r i a l was t h a t c l a i m dropped. John Cumiskey's p o s s i b l e c u l p a b i l i t y i n r e g a r d t o t h e f i r e a l s o r a i s e d q u e s t i o n s on t h e i n s u r e r ' s l i a b i l i t y . Where an o f f i c e r , d i r e c t o r , s t o c k h o l d e r , and managing a g e n t of a c o r p o r a t i o n is r e s p o n s i b l e f o r i n t e n t i o n a l l y s e t t i n g a f i r e , t h e i n s u r e r has a v a l i d d e f e n s e t o t h e claim. 18 Couch on I n s u r a n c e , 2d, S 74:671; 5 Appleman I n s u r a n c e Law and P r a c t i c e , S 3113 ( 1 9 7 0 ) . S t . Paul had a s u f f i c i e n t b a s i s b e f o r e t h e f i l i n g of t h i s a c t i o n t o r a i s e t h a t d e f e n s e . John Cumiskey a r g u e s t h a t s e c t i o n 33-24-102, MCA, r e q u i r e s payment of t h e p o l i c y l i m i t where t h e p r o p e r t y is c o n s i d e r e d a t o t a l l o s s and where no c r i m i n a l f a u l t is e s t a b l i s h e d on t h e p a r t of t h e i n s u r e d o r h i s a s s i g n s . T h e r e f o r e , he contends t h a t h i s a c q u i t t a l on t h e a r s o n and c r i m i n a l mischief c h a r g e s r e q u i r e d t h e i n s u r e r t o pay t h e p o l i c y l i m i t s r a t h e r t h a n b r i n g i n g t h i s a c t i o n . H e i g n o r e s t h e complete c o n t r a d i c t i o n i n h i s s t a n c e on t h e i s s u e of t h e amount of t h e l o s s . Cumiskeys t e s t i f i e d a t t r i a l t h a t S t . P a u l ' s a g e n t s had s t a t e d t h a t t h e b u i l d i n g was a t o t a l l o s s and t h e c l a i m would be p a i d i n f u l l . The a g e n t denied making t h a t s t a t e - ment. No o t h e r evidence i n d i c a t e d t h a t t h e b u i l d i n g was a t o t a l l o s s . I n f a c t , w h i l e B r a d l e y ' s e s t i m a t e on r e p a i r s t o t h e b u i l d i n g set t h e c o s t a t approximately $12,500, Cumis- Keys p r e s e n t e d t h e a f f i d a v i t of t h e i r c o n t r a c t o r and a b r i e f i n o p p o s i t i o n t o B r a d l e y ' s motion f o r summary judgment t h a t set t h e r e p a i r c o s t s a t $8,500. A t no time throughout t h e c o u r s e o f t h i s a c t i o n d i d Cumiskeys a g r e e t o s e t t l e B r a d l e y ' s c l a i m i n an amount t h a t would repay h e r f o r t o t a l l o s s of t h e b u i l d i n g . Nor d i d Cumiskeys i n t r o d u c e e v i d e n c e t o d e m o n s t r a t e t h e l o s s t o t h e b u s i n e s s itself. The j u r y r e l i e d upon evldence i n t r o d u c e d by S t . Paul: t h e b u s i n e s s income t a x r e t u r n s and e x p e r t t e s t i m o n y by t h e b u s i n e s s ' s a c c o u n t a n t . N o evidence was p r e s e n t e d t h a t s u g g e s t e d t h e b u s i n e s s was a t o t a l l o s s o t h e r t h a n John Cumiskey's s t a t e m e n t t h a t an a d j u s t o r had s t a t e d : "Well, a s f a r a s I can see, i t ' s a t o t a l l o s s . " S t . Paul a l s o f a c e d a q u e s t i o n on t h e e x t e n t it was l i a b l e t o Kevin Cumiskey a s t h e named i n s u r e d s i n c e t h e p r o p e r t y i n s u r e d i n h i s name had been a s s i g n e d t o K.S.J., Inc. T h i s c r e a t e s an i s s u e on t h e e x t e n t of Kevin's r i g h t t o recover a s s t o c k h o l d e r . See, 3 Couch on I n s u r a n c e , S 24:92; Annot., 39 ALR2d 714; 4 Appleman on I n s u r a n c e , S 2145. The f a c t s of t h i s c a s e p r e s e n t e d a j u s t i c i a b l e con- t r o v e r s y , e x i s t i n g and genuine. The a c t i o n f o r d e c l a r a t o r y judgment was a p p r o p r i a t e l y brought t o d e t e r m i n e t h e l e g a l r i g h t s and r e l a t i o n s h i p s of t h e p a r t i e s . The D i s t r i c t C o u r t p r o p e r l y d i r e c t e d a v e r d i c t on t h e i s s u e of bad f a i t h . Cumiskeys n e x t a r g u e t h a t t h e D i s t r i c t Court e r r e d i n g r a n t l n g summary judgment i n f a v o r of Bradley on t h e i s s u e o t breach of t h e l e a s e agreement. They contend t h a t t h e p r o v i s i o n s o f t h e l e a s e allowed Cumiskeys and K.S.J., I n c . , t o r e t a i n any f i x t u r e s o r o t h e r improvements added t o t h e p r o p e r t y . T h e r e f o r e , Bradley was n o t e n t i t l e d t o summary judgment on t h e i s s u e of l i a b i l i t y f o r f a i l u r e t o i n s u r e because B r a d l e y ' s l o s s was u n c l e a r . W e d i s a g r e e . B r a d l e y ' s m o t i o n f o r p a r t i a l summary judgment r e q u e s t e d t h e D i s t r i c t Court t o f i n d l i a b i l i t y f o r B r a d l e y ' s damages o r l o s s on t h e b a s i s of t h e f a i l u r e t o i n s u r e . The amount of damages were undetermined and were t o be i n c l u d e d a s an i s s u e a t t r i a l . Cumiskeys and K.S.J., I n c . , argued t h a t they had made e x t e n s i v e improvements t o t h e p r o p e r t y which, under t h e terms of t h e c o n t r a c t , remained t h e i r p r o p e r t y . T h e r e f o r e , t h e i r c o n t r a c t l i a b i l i t y t o Bradley under t h e terms of the agreement was u n c l e a r and should be l e f t f o r a j u r y d e t e r m i n a t i o n . T h i s argument is w i t h o u t merit. The l e a s e a g r e e m e n t c l e a r l y r e q u i r e d t h a t K e v i n Cumiskey o r h i s a s s i g n s i n s u r e B r a d l e y ' s i n t e r e s t . They d i d n o t . The D i s t r i c t Court p r o p e r l y found t h a t t h e terms on improvements were ambiguous and used an a p p r o p r i a t e r u l e of c o n s t r u c t i o n t o i n t e r p r e t t h o s e c l a u s e s . The l e a s e provided t h a t "ALTERATIONS" were t o remain t h e p r o p e r t y of t h e l e s s e e s : "The Lessees w i l l be e n t i t l e d t o make, o r w i l l s u f f e r t o be made, any a l t e r a t i o n s which t h e y i n t h e i r s o l e d i s c r e t i o n deem n e c e s s a r y . Any a d d i t i o n s t o , o r a l t e r a - t i o n s o f , a t t a c h e d t o t h e s a i d l e a s e d p r o p e r t y s h a l l n o t become p a r t of t h e r e a l t y b u t w i l l r e m a i n t h e s o l e a n d s e p a r a t e p r o p e r t y of t h e Lessees. The Lessees a g r e e t o a d v i s e L e s s o r s i n w r i t - ing of t h e d a t e upon which such a l t e r a - t i o n s w i l l commence i n o r d e r t o p e r m i t t h e L e s s o r s t o p o s t n o t i c e of nonrespon- s i b i l i t y . The L e s s e e s s h a l l keep t h e demised premises f r e e from any and a l l l i e n s a r i s i n g o u t of any work performed, m a t e r i a l s f u r n i s h e d , o r o t h e r o b l i g a t i o n s i n c u r r e d by t h e Lessees." I t a l s o provided t h a t "FIXTURES1' were t o remain t h e p r o p e r t y of t h e lessees: "It is hereby e x p r e s s l y agreed between t h e p a r t i e s t o t h i s L e a s e t h a t a n y c o u n t e r s , t a b l e s , c h a i r s , s t o v e s , ovens, g r i l l s , i c e machines, s i n k s , o r any o t h e r p e r s o n a l p r o p e r t y belonging t o t h e Les- sees which is brought upon t h e demised p r e m i s e s and a t t a c h e d t h e r e t o , s h a l l n o t become a f i x t u r e and p a r t of t h e r e a l t y . The Lessor hereby e x p r e s s l y g r a n t s p e r - m i s s i o n t o t h e L e s s e e s t o remove any and a l l p e r s o n a l p r o p e r t y which t h e y b r i n g upon s a i d demised premises. L e s s e e s a g r e e t o r e p a i r any damage t o t h e premises which is caused by removal of s a i d p e r - s o n a l p r o p e r t y . " The D i s t r i c t Court found t h a t t h e p r o v i s i o n on a l t e r a - t i o n s was u n c l e a r i n t h a t it d i d n o t s p e c i f y what t y p e of a 1 t e r a t i o n s were i n c l u d e d . The c o u r t t h e r e f o r e found t h a t t h e s p e c i f i c "FIXTURES" c l a u s e c o n t r o l l e d t h e g e n e r a l "ALTERATIONS" c l a u s e and t h a t such an i n t e r p r e t a t i o n was i n conformance w i t h t h e g e n e r a l p r a c t i c e of Montana l a n d l o r d s and t e n a n t s and w i t h Montana s t a t u t e s . W e a g r e e . Where a d d i t i o n s a r e b u i l t o r a f f i x e d t o p r o p e r t y by a t e n a n t w i t h o u t a n agreement t o a l l o w him t o remove t h o s e a d d i t i o n s o r f i x t u r e s , t h e y may n o t be removed i f t h e i r removal w i l l damage t h e premises. S e c t i o n 70-18-102, MCA; Sanders v. B u t t e Motor Co. ( 1 9 6 3 ) , 142 Mont. 524, 385 P.2d 263. Here, an agreement e x i s t s t o a l l o w removal of f i x t u r e s and a l t e r a t i o n s . It is u n c l e a r what was contemplated by its t e r m s , however. The c o n t r a c t was p r e p a r e d by an a t t o r n e y on behalf of Kevin Cumiskey. Kevin p r e s e n t e d it t o Bradley f o r s i g n a t u r e . She d i d n o t t a k e p a r t i n p r e p a r a t i o n of t h e terms. The record a l s o d e m o n s t r a t e s Kevin Cumiskey's i n t e n - t i o n t o use t h e s e c l a u s e s t o c o e r c e Bradley i n t o renewing t h e l e a s e o r s e l l i n g her p r o p e r t y . Bradley t e s t i f i e d t h a t s h e had t o l d Kevin Cumiskey on s e v e r a l o c c a s i o n s t h a t s h e was n o t i n t e r e s t e d i n s e l l i n g t h e p r o p e r t y and had no i n t e n t i o n of doing so. H e t e s t i f i e d a t h i s d e p o s i t i o n t h a t Bradley had agreed t o a l l o w him t o b u i l d a d d i t i o n s on s k i d s s o t h a t he could " p i c k them up and c a r r y them away." H e w a s t h e n asked a b o u t t h i n g s t h a t could n o t be c a r r i e d away: "Q. Those t h i n g s you could n o t p i c k up and c a r r y away I assume you were going t o l e a v e on t h e premises. A. No, I was n o t . "Q. What were you going t o do w i t h t h e t h i n g s you c o u l d n ' t p i c k up and move away? A. I was going t o u s e them a s a l e v e r f o r a new l e a s e . "Q. Could you e x p l a i n what you mean by t h a t ? A. Well, i n my l e a s e , a l l t h e i m p r o v e m e n t s a r e m i n e , and if Mrs. Bradley d i d n ' t want t o i s s u e m e a new l e a s e o r g i v e m e a f i x t u r e s f e e , t h e n I would t a k e them o u t . " I t was c l e a r from K e v i n ' s d e p o s i t i o n testimony t h a t i f Kevin "could b u i l d i n a 'manner where w e could p i c k it up and c a r r y it away, ' it was f i n e w i t h [Bradley] . " The D i s t r i c t Court found ambiguity and c o n f l i c t i n t h e l e a s e p r o v i s i o n s and r u l e d t h a t t h o s e items s p e c i f i c a l l y nained i n t h e "FIXTURES" c l a u s e ( t h e c o u n t e r s , t a b l e s , c h a i r s , etc. ) belonged t o Cumiskeys and e v e r y t h i n g e l s e b e l o n g e d t o B r a d l e y . Kevin Cumiskey a r g u e d t h a t a n y improvements o r a l t e r a t i o n s , i n c l u d i n g w i r i n g i n t h e r o o f , should belong t o him under t h e "ALTERATIONS" c l a u s e . H e h a s f a i l e d t o demonstrate t h a t t h e p a r t i e s i n t e n d e d such a n interpretation of t h e c l a u s e s o r t h a t an agreement a c t u a l l y e x i s t e d t h a t would a l l o w damage t o t h e p r o p e r t y t o remove t h o s e a l t e r a t i o n s . The s p e c i f i c "FIXTURES" c l a u s e c l e a r l y i n d i c a t e d t h a t any damage t o t h e premises caused by removal of f i x t u r e s would be r e p a i r e d . There is no i n d i c a t i o n t h a t t h e p a r r l e s concernplated a l l o w i n g a removal of a 1 t e r a t i o n s t h a t might r e s u l t i n damage t o t h e p r e m i s e s . Where an ambiguous term is u s e d , t h e p a r t i e s ' i n t e n t w i l l govern its c o n s t r u c t i o n and e x t r i n s i c e v i d e n c e can be used t o d i s c o v e r t h a t i n t e n t . Adams v. C h i l c o t t ( 1 9 7 9 ) , 182 Mont. 511, 517, 597 P.2d 1140, 1144. A c o u r t should look t o t h e whole c o n t r a c t and its purpose i n d e t e r m i n i n g i n t e n t and is n o t bound by any s i n g l e p r o v i s i o n o r e x p r e s s i o n . Gropp v. L o t t o n ( 1 9 7 2 ) , 160 Mont. 415, 421, 503 P.2d 661, 664-665. Repugnant p r o v i s i o n s should be i n t e r p r e t e d i n a way t o g i v e them some e f f e c t , s u b o r d i n a t e t o t h e g e n e r a l i n t e n t and purpose of t h e e n t i r e c o n t r a c t . R i i s v. Day (1980) I Mon t . , 613 P.2d 696, 698, 37 St.Rep. 1093, 1096. Where u n c e r t a i n t y i n a w r i t t e n i n s t r u m e n t e x i s t s , t h e provisions should p r o p e r l y be c o n s t r u e d a g a i n s t t h e p a r t y c a u s i n g t h e u n c e r t a i n t y . P a r k h i l l v. F u s e l i e r ( 1 9 8 1 ) , Mon t . , 632 P.2d 1132, 1135, 38 St.Rep. 1424, 1427. Here, t h e p a r t i e s ' i n t e n t was u n c l e a r . I t is n o t c e r t a i n t h a t B r a d l e y i n t e n d e d t o a l l o w Kevin Cumiskey t o damage t h e p r e m i s e s i n removing a l t e r a t i o n s . Cumiskey p r e p a r e d t h e l e a s e agreement and was r e s p o n s i b i l e f o r t h e ambiguity t h a t e x i s t e d . The D i s t r i c t C o u r t p r o p e r l y i n t e r - p r e t e d t h e p r o v i s i o n s t o g i v e some e f f e c t t o each and t o conform w i t h g e n e r a l l a n d l o r d t e n a n t p r a c t i c e s . Cumiskeys t h e n had t h e o p p o r t u n i t y t o p r e s e n t e v i d e n c e o t t h e i r l o s s of b u s i n e s s f i x t u r e s and t o d i s p u t e B r a d l e y ' s c l a i m f o r t h e c o s t of r e p a i r s . They f a i l e d t o do s o . They may n o t now argue t h a t t h e j u r y may have l i m i t e d an award t o Kevin Cumiskey t o t h e amount of B r a d l e y ' s c o s t of r e p a i r s . I t is a p p a r e n t t h a t t h e j u r y d i d n o t . Kevin Cumiskey w a s awarded 519,910, while the cost to repair the building was set at only $12,300. Further, the lease agreement remained in effect until the end of its term in April 1983. At that time, the build- ing was to be returned to Bradley in its original condition. The effect of the District Court's ruling was simply to remove from the jury an issue not properly before it at that time. Attorney fees were awarded pursuant to the terms of the lease agreement. Cross-appellant challenges the calcu- lation of those fees. Bradley's attorneys filed affidavits in support of awarding attorney fees that computed time expended: (1) solely relating to pretrial matters concerning Bradley's claims against Kevin Cumiskey and K.S.J., Inc., and excluding all time spent in preparation of the tort claim against John Cumiskey (39.4 hours at $60 = $2,364); (2) for the entire six days of trial time actually expended (6 days at $750 per day = $4,500); and, (3) for services rendered in connection with the preparation, briefing and attendance at the hearing on the claim for attorney fees ($348). The aggregate amount requested was $7,212. The District Court granted attorney fees for the pretrial preparation, for the work in preparing for the hearing on attorney fees and for one-third of the trial time. In its supporting memorandum, the District Court noted that possibly less than one-third of trial time was actually occupled with Bradley's claim against Kevin Cumiskey and that most of her effort was against John Cumiskey f o r wrongful s e t t i n g of t h e f i r e and d e s t r u c t i o n o f t h e premises. W e hold t h a t t h e D i s t r i c t Court e r r e d i n b o t h t h e c a l c u l a t i o n of t h e a t t o r n e y f e e s and i n t h e r e d u c t i o n o f f e e s f o r t r i a l t i m e t o o n e - t h i r d of t h e r e q u e s t . I n i t s o r d e r , t h e D i s t r i c t Court awarded $2,636, "which r e p r e s e n t s o n e - t h i r d ( 1 / 3 ) of t h e a t t o r n e y s ' f e e s f o r t h e e n t i r e t r i a l " and awarded $348 f o r p r e s e n t a t i o n of t h e h e a r i n g on a t t o r n e y f e e s p l u s an a d d i t i o n a l b r i e f . The sum of $6,864 does n o t r e p r e s e n t t h e f e e s f o r t h e e n t i r e t r i a l . T h a t f i g u r e is t h e t o t a l of both t h e p r e t r i a l p r e p a r a t i o n work d i r e c t l y r e l a t i n g t o t h e c l a i m a g a i n s t Kevin Cumiskey and t h e s i x f u l l days of t r i a l . The D i s t r i c t Court e r r e d i n reducing both f i g u r e s by t w o - t h i r d s where t h e p r e t r i a l work a l l r e l a t e d s p e c i f i c a l l y t o t h e Kevin Cumiskey claim. A t a minimum, t h e award should have i n c l u d e d $2,364 f o r t h e pre- trial work, $ 1 , 5 0 0 f o r two days of t r i a l , and $348 f o r t h e a t t o r n e y f e e s h e a r i n g , f o r a t o t a l of $4,212. W e f u r t h e r hold, however, t h a t it e r r e d i n reducing f e e s awarded f o r t h e t r i a l t i m e by two-thirds. Bradley was f o r c e d t o p u r s u e her c l a i m a g a i n s t Kevin Cu~niskey through t h e t r i a l . She a t t e m p t e d t o r e s o l v e t h e damages i s s u e stemming from K e v i n ' s b r e a c h of t h e l e a s e agreement through a motion f o r summary judgment. Kevin Cumiskey s u c c e s s f u l l y r e s i s t e d t h a t motion on t h e b a s i s of an a f f i d a v i t provided by h i s c o n t r a c t o r t h a t d i s p u t e d t h e Bradley r e p a i r e s t i m a t e s . Bradley and h e r c o u n s e l were t h e r e f o r e f o r c e d t o a t t e n d a six-day t r i a l . She p r e s e n t e d damages t e s t i m o n y t h a t went unchallenged. Kevin Cumiskey i n t r o d u c e d no evidence whatsoever i n d i s p u t e of h e r claim. Here, t h e r e c o r d r e v e a l s t h a t t h e t r i a l s c h e d u l e r e q u i r e d t h a t c o u n s e l f o r Bradley be p r e s e n t throughout t h e s i x d a y s i n o r d e r t o p u r s u e t h e c l a i m a g a i n s t K e v i n Cumiskey. The e n t i r e f i r s t day o f t r i a l was s p e n t i n j u r y s e l e c t i o n . On t h e morning of t h e second day of t r i a l , B r a d l e y ' s c o u n s e l gave h i s opening s t a t e m e n t . On t h e f o u r t h day, a w i t n e s s o f f e r e d by Cumiskeys r e q u i r e d e x t e n s i v e cross-examination on B r a d l e y ' s b e h a l f t o e s t a b l i s h t h a t even Cumiskey's evidence supported t h e amount of damages s h e claimed. On t h e f l f t h day, c o u n s e l was r e q u i r e d t o o b j e c t t o Kevin Cumiskey's a t t e m p t t o t e s t i f y t o t h e b u i l d i n g ' s c o n d i t i o n p r i o r t o a c q u i s i t i o n of t h e l e a s e . Kevin attempted t o i n t r o d u c e t h i s m a t t e r i n s p i t e of a p r e t r i a l r u l i n g t h a t t h e e v i d e n c e was improper. Much of t h e l a s t day of t r i a l was s p e n t i n s e t t l e m e n t of i n s t r u c t i o n s , p r e s e n t a - t l o n of B r a d l e y ' s c a s e - i n - c h i e f , and c l o s i n g arguments. I n t h i s i n s t a n c e it is n o t p o s s i b l e t o c l e a r l y s e g r e - g a t e t h e t r i a l t i m e d u r i n g which Bradley pursued h e r c l a i m s a g a i n s t Kevin Cumiskey i n t o o n e - t h i r d of t h e t i m e expended. W e r e v e r s e t h e D i s t r i c t C o u r t ' s o r d e r on a t t o r n e y f e e s d a t e d March 1 8 , 1982, and hold t h a t Bradley is e n t i t l e d t o a t t o r n e y f e e s i n t h e amount o f $7,212 i n c o n n e c t i o n w i t h t h e proceedings below and an a d d i t i o n a l $1,500 f o r t h e e f f o r t s expended on a p p e a l . W e remand t h i s m a t t e r t o t h e D i s t r i c t Court f o r f u r t h e r p r o c e e d i n g s n o t i n c o n s i s t e n t w i t h t h i s o p i n i o n . Affirmed i n p a r t and r e v e r s e d i n p a r t . 7444, c ; b Q e Chief J u s t i c e W e concur: Mr. Justice John C. Sheehy, concurring in part and dissenting in part: I dissent from that portion of the foregoing opinion which affirms the District Court's dismissal of Kevin Cumiskey's bad-faith action against St. Paul Fire and Marine Insurance Company. Under our recent spate of decisions on the point of bad faith, Kevin's cause of action should have been submitted to the jury. See Klaudt v. Flink, 658 P.2d 1065 40 St.Rep. 64; Lipinski v. The Title Insurance Company (1982) Montana , 655 P.2d 970, 39 St.Rep. 2283. I am also of the opinion that the District Court should have submitted the question of total loss to the jury to determine if the valued policy law, Section 33-24-102, MCA, was applicable to Kevin's claim against St. Paul. The District Court's interpretation of the valued policy law was disadvantageous to Kevin, and would make no difference to St. Paul, since it, under the verdict, would be subrogated for anything it paid to Kevin from John Cumiskey. Otherwise, I concur in the judgment entered in the District Court.

June 10, 1983

6fa37a46-93b7-467b-911e-9fd1fbf56088

WINKEL v FAMILY HEALTH CARE P C

N/A

82-156

Montana

Montana Supreme Court

N O . 82-156 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 3 DENNIS WINKEL, P l a i n t i f f a n d A p p e l l a n t , V S . FAMILY HEALTH CARE, P.C. a n d LOREN VRANISH, D e f e n d a n t a n d R e s p o n d e n t . A p p e a l f r o m : D i s t r i c t C o u r t o f t h e E l e v e n t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e C o u n t y o f F l a t h e a d H o n o r a b l e R o b e r t S y k e s , J u d g e p r e s i d i n g . C o u n s e l o f R e c o r d : F o r A p p e l l a n t : Warden, C h r i s t i a n s e n , J o h n s o n & B e r g , K a l i s p e l l , Montana K r a t t e n , Muchin, Z a v i s , P e a r l & G a l l e r , C h i c a g o , I l l i n o i s F l o y d A.Mandel1 a r g u e d , C h i c a g o , I l l i n o i s F o r R e s p o n d e n t s : Murphy, R o b i n s o n , H e c k a t h o r n a n d P h i l l i p s , K a l i s p e l l , Montana I . J a m e s H e c k a t h o r n a r g u e d , K a l i s p e l l , Montana S u b m i t t e d : May 1 2 , 1 9 8 3 D e c i d e d : July 1 2 , 1 9 8 3 , , - I / & ,'Q/ ~ ~ ~ ~ ~ Y w L k ; c ~ - f l k C l e r k Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e C o u r t . Dennis Winkel f i l e d a complaint May 4, 1979, seeking an a c c o u n t i n g of prof its, damages and i n j u n c t i v e r e l i e f based upon s i x c a u s e s of a c t i o n a r i s i n g from h i s employment w i t h Family H e a l t h Care. Family Health Care counter-claimed f o r u n f a i r and d e c e p t i v e t r a d e p r a c t i c e s and m a l i c i o u s p r o s e c u t i o n . A j u r y t r i a l commenced i n t h e D i s t r i c t Court of t h e Eleventh J u d i c i a l D i s t r i c t , Flathead County, on November 1 6 , 1979. On November 1 9 , 1979, t h e j u r y rendered a s p e c i a l v e r d i c t f o r Winkel, f i n d i n g him e n t i t l e d t o a bonus of $30,942.41 and v a c a t i o n pay of $3,000. The D i s t r i c t Court e n t e r e d judgment a g a i n s t Family H e a l t h Care and V r a n i s h i n t h e amount of $33,942.41, p l u s $33,942.41, i n accordance w i t h s e c t i o n 39-3-206, MCA, and r e a s o n a b l e a t t o r n e y ' s f e e s . On December 4 , 1981, V r a n i s h f i l e d a l t e r n a t i v e motions f o r judgment f o r d e f e n d a n t n o t w i t h s t a n d i n g t h e v e r d i c t , f o r a new t r i a l and t o a l t e r and amend t h e judgment. On J a n u a r y 1 9 , 1982, t h e D i s t r i c t Court e n t e r e d a memorandum o p i n i o n agreeing w i t h t h e j u r y t h a t Winkel was e n t i t l e d t o a bonus and v a c a t i o n pay, b u t d i s a g r e e i n g w i t h t h e j u r y a s t o t h e amount of t h e bonus. F u r t h e r , t h e District Court f a i l e d t o a p p l y t h e s t a t u t o r y p e n a l t i e s f o r unpaid wages and a t t o r n e y ' s f e e s . The o r d e r a l s o s t a t e d t h a t , should Winkel f a i l t o a c c e p t t h e "modified" judgment, V r a n i s h would be e n t i t l e d t o a new t r i a l . Winkel appe a 1 s . Dennis Winkel e n t e r e d i n t o an employment c o n t r a c t w i t h Loren V r a n i s h , a doctor p r a c t i c i n g i n Flathead County. The terms of t h e c o n t r a c t , a s set f o r t h i n a l e t t e r dated February 1 5 , 1977, were a s f o l l o w s : (1) Annual s a l a r y of $26,000 t o be computed a s f o l l o w s : 1st 4 months $1,80O/month 2nd 4 months $2,20O/month 3 r d 4 months $2,50O/month ( 2 ) H o s p i t a l i z a t i o n and m a l p r a c t i c e i n s u r a n c e coverage; ( 3 ) Three weeks v a c a t i o n per y e a r ; ( 4 ) Option f o r f u l l p a r t n e r s h i p a f t e r one year of s a l a r i e d employment. Winkel commenced working f o r V r a n i s h i n J u l y 1977. A t t h a t time Dr. Max Quaas was a l s o working f o r Vranish. I n August 1977, V r a n i s h i n c o r p o r a t e d h i s medical p r a c t i c e under t h e name of Family Health Care, P.C. V r a n i s h was t h e pre- s i d e n t and s o l e s h a r e h o l d e r of t h e c o r p o r a t i o n . A t t h e same time, V r a n i s h conveyed h i s o f f i c e b u i l d i n g t o h i s w i f e , who began c h a r g i n g r e n t t o t h e c o r p o r a t i o n . I n December 1977, D r . Quaas ended h i s employment w i t h Family H e a l t h Care. Winkel's workload i n c r e a s e d g r e a t l y af t e r D r . Quaas l e f t , s o V r a n i s h i n c r e a s e d Winkel 's s a l a r y t o $3 ,OOO/month, s t a r t i n g J a n u a r y 1, 1978. Winkel t e s t i f i e d t h a t i n a d d i t i o n t o t h e s a l a r y i n c r e a s e , t h e following i n c e n t i v e s were o f f e r e d i n c o n s i d e r a t i o n of h i s c o n t i n u i n g a s s o c i a t i o n w i t h Family H e a l t h Care: (1) a p r o f i t s h a r i n g bonus; ( 2 ) a refund t o Winkel of a l l funds c o n t r i b u t e d t o Family H e a l t h C a r e ' s pension p l a n i n t h e e v e n t t h a t Winkel's employment was t e r m i n a t e d ; ( 3 ) f o u r weeks paid v a c a t i o n per y e a r ; and ( 4 ) a 50 p e r c e n t i n t e r e s t i n t h e o f f i c e b u i l d i n g t o Winkel's w i f e . I t was Winkel's understanding t h a t he would not be r e q u i r e d t o "buy i n " t o t h e c o r p o r a t i o n t o r e c e i v e t h e s e i n c e n t i v e s . V r a n i s h d i s a g r e e s . When Winkel's s a l a r y i n c r e a s e d i n J a n u a r y 1978, V r a n i s h t o l d h i s CPA t h a t he wanted t o make Winkel a f u l l and e q u a l s h a r e h o l d e r by August 1, 1978. T h e r e f o r e , V r a n i s h con- t e n d s t h a t t h e p r o f i t - s h a r i n g bonus and o t h e r i n c e n t i v e s were c o n t i n g e n t upon Winkel "buying in" t o t h e c o r p o r a t i o n . N e g o t i a t i o n s commenced toward e f f e c t u a t i n g t h i s "buy i n , " and i n August 1978, t h e p a r t i e s reached a temporary agreement. I t V r a n i s h d e s c r i b e d W i n k e l ' s mood a s " s u r l y " when he came t o work on Monday. T h e r e f o r e , Vranish had t h e r e c e p t i o n i s t c a n c e l Winkel's appointments. Winkel I s p a t i e n t s were given t h e o p t i o n o f s e e i n g V r a n i s h o r w a i t i n g t o s e e Winkel when he opened h i s new o f f ice. Winkel d i d not r e c e i v e t h e v a c a t i o n pay nor t h e $9,600 which V r a n i s h o f f e r e d t o pay i n h i s February 22, 1979, l e t t e r . A t t r i a l , Winkel t e s t i f i e d t h a t h i s c o n t r a c t u a l damages amounted t o $35,000. The j u r y found t h a t Winkel was e n t i t l e d t o v a c a t i o n pay of $3,000 and a p r o f i t - s h a r i n g bonus of $30,942.41. I n a post-judgment o r d e r , t h e District Court amended t h e judgment by d e c r e a s i n g t h e bonus award t o $9,600. The c o u r t s t a t e d : "By r e a s o n of t h e f a c t t h a t t h i s was t h e o n l y bonus considered i n t h e n e g o t i a t i o n s between t h e p a r t i e s and was t o a p p l y on t h e buy-in agreement, n e g o t i a t i o n s l i m i t e d t h e amount due P l a i n t i f f t o t h e sum of $9,607.51. The Defendant Family H e a l t h Care acknowledged t h i s amount by r e a s o n of n e g o t i a t i o n s between t h e two a s a b a s i s of p a r t of t h e P l a i n t i f f ' s p u r c h a s e . A t time of t e r m i n a t i o n , t h e defen- d a n t acknowledged same and o f f e r e d terms f o r payment. P l a i n t i f f agreed t o t h i s amount, b u t claimed a c o n t i n u a l bonus a s p a r t of s a l a r y ; and t h a t same was a c o n t i n u i n g b a s i s f o r employment. " Four i s s u e s a r e on a p p e a l . V r a n i s h a r g u e s t h e u n d e r l y i n g i s s u e f o r purposes of review is whether t h e o r i g i n a l w r i t t e n employment c o n t r a c t was amended a s a m a t t e r of law. V r a n i s h c o n t e n d s Winkel is o n l y e n t i t l e d t o r e c o v e r t h e amount of v a c a t i o n pay owing a t t h e time of Winkel's t e r m i n a t i o n . H e a r g u e s Winkel is n o t e n t i t l e d t o any p r o f i t - s h a r i n g bonus because t h e o r i g i n a l w r i t t e n employment c o n t r a c t d i d not provide f o r prof i t - s h a r i n g bonus and t h e w r i t t e n employment c o n t r a c t was never amended a s a m a t t e r of law. A c o n t r a c t i n w r i t i n g may be a l t e r e d by a c o n t r a c t o r by an executed o r a l agreement and not o t h e r w i s e . S e c t i o n 28-2-1602, MCA. An o r a l agreement a l t e r i n g a w r i t t e n agreement is not an executed o r a l agreement w i t h i n t h e s t a t u t e a u t h o r i z i n g modifica- t i o n of w r i t t e n c o n t r a c t s by an executed o r a l agreement u n l e s s its terms have been f u l l y performed, and performance on one s i d e is n o t s u f f i c i e n t . Stoddard v. Gookin ( 1 9 8 1 ) , Mont. , 625 P.2d 529, 534, 38 St.Rep. 326. An executed c o n t r a c t is one where nothing remains t o be done by e i t h e r p a r t y . An e x e c u t o r y c o n t r a c t is one i n which a p a r t y b i n d s himself t o do o r not t o do a p a r t i c u l a r t h i n g i n t h e f u t u r e . Bauer v. Monroe ( 1 9 4 5 ) , 117 Mont. 306, 316, 1 5 8 P.2d 485, 490. For Winkel t o be e n t i t l e d t o any p r o f i t - s h a r i n g bonus, we must f i n d t h e w r i t t e n employment agreement was a l t e r e d by an exe- c u t e d o r a l agreement. Winkel t e s t i f i e d i n December 1977, he and V r a n i s h reached an o r a l agreement t h a t Winkel would r e c e i v e a p r o f i t - s h a r i n g bonus. Thus t h e q u e s t i o n becomes, was t h i s o r a l agreement executed, i.e., f u l l y performed by both p a r t i e s . The answer comes from Winkel I s own testimony: "Q. And you went t o work under t h e agreement t h a t has been submitted i n evidence which was t h e l e t t e r from Dr. Quaas t o you e x p l a i n i n g what your s a l a r y would be, is t h a t c o r r e c t ? A. [Winkel] Y e s . "Q. And t h a t agreement t h e n a s f a r a s any w r i t i n g is concerned h a s never changed, i s n ' t t h a t c o r r e c t ? Anything o t h e r t h a n t h a t h a s been by word of mouth, been o r a l ? A. Yes. "Q. And t h e o n l y change t h a t was made and h a s been c o m p l e t e l y done, c o m p l e t e l y executed was t h e f a c t t h a t your s a l a r y was r a i s e d t o $3,000 r a t h e r t h a n twenty-two o r some f i g u r e ? A. Yes. "Q. And your testimony is t h a t t h e r e was promises made t o you t h a t something else would be done b u t t h e y have never been p u t i n t o e f f e c t , have t h e y ? They have never been completed? You have never g o t t e n anything o u t o f t h o s e ? A. T h a t is c o r r e c t ." From t h i s testimony w e s e e , a s a m a t t e r of law, t h e o r a l agreement concerning p r o f i t - s h a r i n g bonus was never performed, t h u s t h e o r a l agreement was n o t executed. W e f i n d Winkel was not e n t i t l e d t o any p r o f i t - s h a r i n g bonus when V r a n i s h t e r m i n a t e d Winkel I s employment. T h e r e f o r e , j u r y i n s t r u c t i o n no. 11, a l l o w i n g t h e j u r y t o f i n d Winkel was e n t i t l e d t o a bonus, was r e v e r s i b l e e r r o r and V r a n i s h is e n t i t l e d t o a new t r i a l on t h e i s s u e of accumulated v a c a t i o n time owing a t Winkel's t e r m i n a t i o n . Judgment g r a n t i n g new t r i a l is a££ irmed. Counter-claim is denied and dismissed. We concur: Chie Justice /. Justices 6 2 /& The Honorable R.C. ~c~o,&ouqh, District Judge, sittin6 in- place of the Honorable Frank B. Morrison, Jr. Mr. J u s t i c e John C. Sheehy, d i s s e n t i n g : I d i s s e n t . The o p i n i o n s i s s u i n g from t h i s Court g e t " c u r i o u s e r and c u r i o u s e r . " For example, Vranish cross-appealed i n t h i s c a s e . You w i l l read t h e m a j o r i t y o p i n i o n i n v a i n t o d i s c o v e r t h a t . Winkel r a i s e d f o u r i s s u e s on h i s a p p e a l froin t h e D i s t r i c t C o u r t ' s amended judgment. The m a j o r i t y f a i l s t o mention what t h e y a r e o r d i s c u s s them. I am n o t going t o d i s c u s s them i n d i s s e n t because I t h i n k Winkel is e n t i t l e d t o a r e h e a r i n g i n t h i s c a s e . If I should d i s c u s s them, it might be concluded t h a t t h e m a j o r i t y had c o n s i d e r e d Winkel's i s s u e s s o a s t o deny r e h e a r i n g under Rule 3 4 , M.R.App.Civ.P. 1 w i l l d i s c u s s them i n d e p t h i f t h i s Court d e n i e s r e h e a r i n g . I w i l l , however, d i s c u s s t h e s i n g l e ground on which t h e m a j o r i t y set a s i d e t h e j u r y v e r d i c t , t h e h o l d i n g t h a t Winkel cannot recover because h i s c l a i m is based on an o r a l amendment of a w r i t t e n c o n t r a c t . T h i s is n o t a c a s e of an o r a l amendment t o a w r i t t e n c o n t r a c t . The o n l y w r i t t e n c o n t r a c t i n t h i s c a s e a r i s e s from a l e t t e r d a t e d February 1 5 , 1977, from a Dr. Quaas, w r i t i n g on behalf of Vranish. Under t h a t agreement, Winkel would work f o r a set s a l a r y , and a f t e r one y e a r he would e n t e r i n t o a p a r t n e r s h i p i n c l u d i n g Winkel, Vranish and Quaas. Winkel, under t h e l e t t e r , would be employed by Vranish. T h i s agreement f o r e v e n t u a l p a r t n e r s h i p was never c a r r i e d o u t . I n s t e a d , Winkel came t o work f o r Vranish on J u l y 1, 1977. On August 1, 1977, Vranish i n c o r p o r a t e d himself i n t o Family H e a l t h Care, and from t h a t d a t e on Winkel worked f o r t h e c o r p o r a t i o n and n o t f o r Vranish. Quaas l e f t t h e group i n November of 1977 ( h e a l s o was an employee of t h e corpora- t i o n when h e l e f t ) . When t h e February 1 5 , 1977, l e t t e r f o r p a r t n e r s h i p was w r i t t e n , Vranish owned t h e b u i l d i n g h e p r a c t i c e d i n ana charged no r e n t t o h i m s e l f . A t t h e t i m e of t h e i n c o r p o r a t i o n , he t r a n s f e r r e d t h e b u i l d i n g t o h i s w i f e , who c h a r g e d t h e c o r p o r a t i o n r e n t a l p r o s p e c t i v e l y a n d r e t r o s p e c t i v e l y . Before August 1, 1977, any p r o f i t produced by Winkel over h i s s a l a r y went t o Vranish p e r s o n a l l y . A f t e r August 1, 1977, such p r o f i t from W i n k e l ' s p r o d u c t i o n went t o t h e p r o f e s s i o n a l c o r p o r a t i o n . I t d e f i e s common s e n s e , and t h e law a s I understand it, t o hold t h a t an implied c o n t r a c t of employment by a new e n t i t y is merely an o r a l amendment of a w r i t t e n c o n t r a c t of employment by a former completely d i f f e r e n t e n t i t y . Vranish is a l e g a l e n t i t y ; h i s p r o f e s s i o n a l c o r p o r a t i o n is l e g a l l y a completely s e p a r a t e l e g a l e n t i t y . When Vranish ceased t o h i r e Winkel p e r s o n a l l y , t h e w r i t t e n c o n t r a c t under t h e p a r t n e r s h i p l e t t e r e x p i r e d . When Winkel's employment t r a n s - f e r r e d t o t h e c o r p o r a t i o n , h e began a new employment e x p e r i - ence w i t h a new employer. Winkel's employment by Vranish c a n n o t be i n t e g r a t e d w i t h h i s employment by t h e c o r p o r a t i o n , s o a s t o c o n s i d e r h i s new employment simply an o r a l amend- ment of a former w r i t t e n c o n t r a c t . The p a r t i e s a r e n o t t h e same. A f t e r August 1, 1977, Winkel was working under a completely d i f f e r e n t c o n t r a c t , an o r a l c o n t r a c t based on new promises. Vranish was n o t h i s employer, b u t a co-employee of t h e same c o r p o r a t i o n . Winkel's c a u s e of a c t i o n on a c o n t r a c t b a s i s i n t h i s a c t i o n is a g a i n s t t h e c o r p o r a t i o n and n o t a g a i n s t Vranish. Here, t h e j u r y d e c i d e d t h a t Winkel was d e p r i v e d of a s h a r e of t h e c o r p o r a t i o n ' s p r o f i t s due him under h i s o r a l c o n t r a c t of employment by t h e c o r p o r a t i o n . The m a j o r i t y b r u s h a s i d e t h a t d e c i s i o n by an i n c o r r e c t c o n c e p t i o n of t h e i s s u e s h e r e . I would a t t h e l e a s t r e i n s t a t e t h e j u r y v e r d i c t a g a i n s t t h e c o r p o r a t i o n . The f a c t s of t h i s case show a v a l i d o r a l a b r o g a t i o n o f a w r i t t e n c o n t r a c t and t h e s u b s t i t u t i o n of an e n f o r c e a b l e o r a l c o n t r a c t . W e s h o u l d f o l l o w t h e l e a d o f C a l i f o r n i a i n such c a s e and i g n o r e t h e p r o v i s i o n s of s e c t i o n 28-2-1602, IYCA, t h a t a w r i t t e n c o n t r a c t may be a l t e r e d o n l y by a c o n t r a c t i n w r i t i n g as n o t a p p l i c a b l e . See, P e a r s a l l v. Henry ( 1 9 0 8 ) , 153 Ca1.314, 325, 95 P. 154, 157; K l e i n Norton Co. v. Cohen ( 1 9 3 0 ) , 107 Cal.App. 325, 330, 290 P. 613, 616. Mot t h o u g h t o f , c e r t a i n l y n o t d i s c u s s e d , by t h e m a j o r i t y is t h e t r u e impact of s e c t i o n 28-2-1602, MCA, and its i n t e r p r e t a t i o n by t h i s Court is Dalakow v. Geery ( 1 9 5 7 ) , 132 Mont. 457, 318 P.2d 253. Recognize f i r s t t h a t s e c t i o n 28-2-1602, MCA, is n o t a p a r t of t h e s t a t u t e of f r a u d s , which w e have i n s t a t u t e form i n s e c t i o n 28-2-903, MCA. The p r o v i s i o n t h a t a w r i t t e n con- t r a c t may o n l y be a l t e r e d by a n o t h e r w r i t t e n c o n t r a c t , sec- t i o n 28-2-1602, was "borrowed from t h e l a w governing s e a l e d i n s t r u m e n t s , and now g e n e r a l l y r e l a x e d even a s t o them," i n t h e words of W i l l i s t o n , who c a l l s it an " u n f o r t u n a t e l e g i s - l a t i v e a d o p t i o n f o r w r i t t e n c o n t r a c t s . " 1 5 W i l l i s t o n on C o n t r a c t s ( 3 r d E d . ) 495, f n . 6 , s e c t i o n 1828. C a l i f o r n i a , through t h e n J u s t i c e Traynor, moved away from a h a r s h i n t e r p r e t a t i o n of its c o u n t e r p a r t t o s e c t i o n 28-2-1602. The b a s i s of d i s t i n c t i o n was a d d i t i o n a l c o n s i - d e r a t i o n f o r t h e o r a l m o d i f i c a t i o n . Here, Winkel took o v e r a l a r g e s h a r e of t h e p r a c t i c e when Quaas l e f t t h e employment of t h e c o r p o r a t i o n , a v a l i d c o n s i d e r a t i o n . I n such c a s e , C a l i f o r n i a h e l d i n D.L. Godbey and Sons Const. Co. v. Deane " S e c t i o n 1698 of t h e C i v i l Code p r o v i d e s : ' A c o n t r a c t i n w r i t i n g may be a l t e r e d by a c o n t r a c t i n w r i t i n g , o r by a n executed o r a l agreement, and n o t o t h e r w i s e . ' . . . " S e c t i o n 1698 h a s a d u a l o p e r a t i o n . On t h e o n e hand i t i n v a l i d a t e s o r a l c o n t r a c t s o f m o d i f i c a t i o n t h a t a r e unexecuted, and on t h e o t h e r hand, it v a l i d a t e s executed agreements t h a t might o t h e r w i s e f a i l f o r l a c k of c o n s i d e r a t i o n . . . . "The s i t u a t i o n i s d i f f e r e n t , h o w e v e r , where t h e r e is c o n s i d e r a t i o n f o r t h e o r a l m o d i f i c a t i o n agreement. I n such cases t h e r i g h t s and d u t i e s of b o t h p a r t i e s t o t h e w r i t t e n c o n t r a c t a r e a f f e c t e d , and by performing t h e c o n t r a c t a s modified each p a r t y w i l l be i n a p o s i t i o n t o e x e c u t e t h e o r a l agreement on h i s s i d e . . . S i n c e p l a i n t i f f h a s a l l e g e d an a d e q u a t e c o n s i - d e r a t i o n f o r t h e o r a l m o d i f i c a t i o n and f u l l performance on its p a r t under t h e terms t h e r e o f , it has s t a t e d a c a u s e of action.'' T h i s Court followed t h e l e a d of t h e C a l i f o r n i a Godbey c a s e i n Dalakow, s u p r a , s a y i n g w e would i n t e r p r e t s e c t i o n 28-2-1602 a s d i d C a l i f o r n i a s i n c e w e adopted t h a t s t a t u t e from C a l i f o r n i a . I n Dalakow t h i s Court found t h a t one of t h e p a r t i e s t o a c o n t r a c t o r a l l y agreed t o do something he was n o t bound t o do under t h e w r i t t e n c o n t r a c t , and t h i s s u f f i c e d a s c o n s i d e r a t i o n f o r a n o r a l m o d i f i c a t i o n of t h e w r i t t e n c o n t r a c t . 132 Mont. a t 466-467, 318 P.2d a t 258-259. The s a l u t a r y r u l e of Dalakow i n t e r p r e t i n g s e c t i o n 28-2-1602 h a s by i m p l i c a t i o n been o v e r r u l e d by t h i s d e c i s i o n , w i t h o u t a b r e a t h of d i s c u s s i o n . Henceforth a l l w r i t t e n c o n t r a c t s i n blontana w i l l be g i v e n t h e f o r c e of s e a l e d i n s t r u m e n t s . I r e g a r d t h a t r e s u l t r e g r e s s i v e . a I concur in the foregoing dissent of Mr. Justice Sheehy. Mr. Justice Daniel J. Shea will file a written dissent later.

July 12, 1983

aeb987ba-6158-42c8-80a1-c9806c081a23

HAUGEN TRUST v WARNER

N/A

82-512

Montana

Montana Supreme Court

I N THE SUPREbP COURT OF THE STATE OF PONTAhTA ,ylARIAN HAUGEN TRUST and MARIAN HAUGEN, TRUSTEE, P l a i n t i f f a n d R e s p o n d e n t , MAURICE A. WARNER, J R . , and MARLENE R. WARNER, husband and w i f e , D e f e n d a n t s , T h i r d P a r t y P l a i n t i f f s and A p p e l l a n t s , LAWRENCE E . WALKER and DARLENE E . WALKER, husband and w i f e , JACK HUME a n d MIDDLE C m E K MEADOWS, I N C . , T h i r d P a r t y D e f e n d a n t s a n d R e s p o n d e n t s . A p p e a l f r o m : D i s t r i c t C o u r t of the E i c s h t e e n t h J u d i c i a l D i s t r i c t , I n and f o r the C o u n t y of G a l l a t i n H o n o r a b l e W. W. L e s s l e y , Judge presiding. C o u n s e l of R e c o r d For A p p e l l a n t s : K i r w a n & B a r r e t t , B o z e m a n , M o n t a n a B e r g , C o i l , Stokes & T o l l e f s e n , B o z e m a n Montana F o r R e s p o n d e n t s : L a n d o e e , B r o w n , Planalp, Kommers & L i n e b e r a e r , B o z e m a n , Montana F o r T h i r d P a r t y R e s p o n d e n t s : M o o r e , R i c e , O ' C o n n e l l & R e f l i n g . B o z e m a n , M o n t a n a S u b m i t t e d On B r i e f s : A p r i l 2 1 , 1983 D e c i d e d : June 30, 1 9 5 3 $ul\j ; , 1983 F i l e d : Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. The District Court of the Eighteenth Judicial District issued an order September 13, 1982, dismissing an amended third party complaint against Jack Hume and Middle Creek Meadows. The order also denied third party plaintiffs, Warners, leave to again amend their amended third party complaint. Warners now appeal from that order. We reverse the judgment of the District Court. Jack Hume and Middle Creeek Meadows, Inc., third party defendants, are the developers of Middle Creek Meadows Subdivision in Gallatin County, Montana. The subdivision includes three ponds constructed by the developers primarily for aesthetic purposes. Pond three is the only one currently used for irrigation. Plaintiff Haugen, defendants and third party plaintiffs, Warners and third party defendants, Walkers own property in Middle Creek Meadows Subdivision. Warners' basement was damaged by flooding in 1978 and 1979. They believed the flooding to be caused by leakage of water from ponds one and two. In July of 1979, Warners began to monitor the relationship between the depth of the water in their sump hole and the depth of the water in the ponds. After finding a definite correlation, Warners partially blocked the flow of water into the ponds during the summers of 1979, 1980 and 1981. The obstruction of water flow into the ponds allegedly caused the water remaining to become stagnant. Mosquitoes and other insects began gathering near the ponds. Haugen's home is next to one of the ponds. He filed a complaint July 7, 1981, against Warners for creating a nuisance. FJarners filed an answer October 2, 1981. In 1982, Walkers asserted a right to the pond water and claimed that Warners' obstruction of the flow of water into the ponds deprived them of use of the water. On July 8, 1982, Walkers removed the culvert cap placed by Warners to obstruct the flow of water to ponds one and two. Warners' basement again flooded. On July 9, 1982, Warners filed a third party complaint against Walkers, seeking a permanent injunction enjoining and restraining Walkers from interfering with Warners' attempt to control the flow of waters into the ponds. The third party complaint alleged further that Walkers have negligently and recklessly constructed, used and maintained the ponds and that Walkers' use and maintenance of the ponds have created a nuisance. Walkers filed a motion to dismiss on July 14, 1982. A July 19, 1982 District Court order combined the actions and set the entire cause for trial on the merits on August 26, 1982. Warners filed an amended third party complaint August 2, 1982, adding Jack Hume and Middle Creek Meadows, Inc., as third party defendants. Hume and Middle Creek filed a motion to dismiss the third party complaint against them on August 23, 1982, alleging that the action was barred by the statute of limitations. The statute of limitations is two years. Section 27-2-207, MCA. The complaint was filed in 1982, but only alleged damages for the years 1978 and 1979. Immediately prior to the September 2, 1982, hearing on Hume's and Middle Creek's motion to dismiss, Warners filed, without leave of court, a second amended third party complaint alleging damages in 1982. Third party defendants' motion was granted September 13, 1982, without leave to amend. Warners now appeal that order. The trial on the merits as well as a hearing on a motion for summary judgment have been vacated and continued pending resolution of this appeal. The issues presented to this Court by Warners are: 1. Was leave of court necessary to amend the third party complaint? third statute of limitations? Are third plaintiffs' plaintiffs action barred entitled the punitive damages ? Leave of court was required before Warners could file a second amended third party complaint. Rule 15(a), M.R.Civ.P., states in relevant part: "Amendments. A party may amend his pleadings once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, he may so amend it at any time within 20 days after it is served. Otherwise a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." This rule does not allow one amendment as a matter of course per defendant. Rather, it allows one amendment as a matter of course per pleading. Any other interpretation would violate the purposes for the rule, to prevent poor pleadings and to discourage harassment of the defendant. Wright, Federal Practice and Procedure, Chapter 4, $1480, p. 405. The original third party complaint was amended once, prior to any responsive pleadings, to add Jack Hume and Middle Creek Meadows, Inc., as third party defendants. Leave of court was required before it could be amended again, regardless how many of the amendments affected Jack Hume and Middle Creek Meadows. However, the trial court judge clearly abused his discretion when he denied Warners the opportunity to amend their third party complaint for the second time. Warners failure to allege damages in 1982 was obviously inadvertent. Leave of court to amend a complaint in order to correct a mistake should be freely given when the amendment will not mislead defendants to their prejudice. Besse v. McHenry (1931), 89 Mont. 520, 300 P. 199. The amendment presents no new cause of action, nor does it mislead third party defendants. To deny Warners their day in court because of an inadvertent mistake is tantamount to denying Warners justice. Refusal to permit an amendment to a complaint which should be made in furtherance of justice is an abuse of discretion. State ex rel. Gold Creek Mining Co. v. District Court (1935), 99 Mont. 33, 37, 43 P.2d 249, 250. Apparently, the trial court judgers reason for denying leave to amend the complaint was the supposed futility of the amendment. However, the amendment is not futile because Warners' action against the third party defendants is not barred by the statute of limitations. Even without specific allegations of damages in 1982, Warnersr amended third party complaint alleges negligence in 1982 - the negligent maintenance of the reservoir ponds. Whether that negligence caused any recoverable damages is a question of fact to be decided at a trial on the merits. Jack Hume and Middle Creek Meadows, Inc. allege that the statute of limitations should have begun to run in 1978 because that was when the flooding caused permanent injury. " . . . for permanent injury the statute runs from the time the injury becomes complete to the land's use and enjoyment." Nelson v. C & C Plywood Corp. (1970), 154 Mont. 414, 433, 465 P.2d 314, 324. A permanent injury is one where the situation has "stabilized" and. the permanent damage is "reasonably certain". Blasdel v. Montana Power Co. (1982), Mont . , 640 P.2d 889, 39 St.Rep. 219. The situation in the instant case has not stabilized. Warners' basement continues to periodically flood, allegedly whenever the ponds are allowed to be filled with water from the in-flowing creeks. The extent of the damages to the basement varies from occurrence to occurren.cle,depending on the level of the water in the basement and the condition of the basement at the time of each flood. Further, the nuisance is apparently abatable, as illustrated by the fact that when the water flow from the creeks was blocked in 1980 and 1981, the basement did not flood. Allegedly, the developers could have abated the nuisance themselves through corrective action. That remains a determination to be made at trial. If the flooding is terminable, it cannot be deemed a permanent nuisance. See Harrisonville v. W.S. Dickey Clay Mfg. Co. (1933), 289 U.S. 334, 53 S.Ct 602, 77 L.Ed. 1208, where the Supreme Court held that where the pollution of a creek was terminable, it could not be deemed a permanent nuisance from the time the nuisance was created. The damage is not yet permanent. Therefore, the nuisance is of a temporary and continuous character and gives rise to a separate cause of action each time it causes damage. 39 Am. Jur., Nuisance, $141, p. 403, and quoted in Nelson, 154 Mont. at p. 434, 465 P.2d at pp. 324-325. The applicable statute of limitations is two years. Section 27-2-207, MCA. The Warners may be able to recover damages for injuries suffered two years prior to the date of their original third party complaint, July 9, 1982, if such damages are proven at trial. Finally, this Court has no jurisdiction over issue number three, whether Warners are entitled to punitive damages from Hume and Middle Creek Meadows. The appeal of that issue is premature as there has been no trial on actual damages. The September 13, 1982, order of the District Court is reversed and Warners are granted leave to amend their amended third party complaint. This matter is remanded to the District Court for trial on the merits, consistent with this opinion. We concur: apn-e,~4Q..u~ Chief Justice!

June 30, 1983

4afa4de7-dcd7-4a35-8142-4b332a2db0fd

ESTATE OF HEISER

N/A

83-187

Montana

Montana Supreme Court

No. 83-187 IN THE SUPREME COURT OF THE STATE OF XONTANA 1983 IN THE MATTER OF THE ESTATE OF FLORENCE I. HEISER, a/k/a FLORENCE I . BROWN, Deceased. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Charles Luedke, Judge presiding. COUNSEL OF RECORD: For Appellant: Herndon, Harper & Munro; Rod Hartman argued, Billings, Montana For Respondent : Larry D. Herman argued, Laurel, Montana Submitted: September 19, 1983 Decided: December 8 , 1983 Filed: 9cCd 9j.j Clerk District Court Judge Thomas A. Olson delivered the Opinion of the Court. The Estate of Florence Heiser appeals from an order of the District Court for the Thirteenth Judicial District, Yellowstone County, approving a claim for homestead allowance by the Estate of Frank Hei-ser, the surviving spouse. F J e affirm. Florence had previously been married to Homer Brown. They purchased a house on North 24th Street in Billings, Montana. Homer Rrotin died intestate in 1956, and the 24th Street house passed to Florence and their five children pursuant to the intestacy laws. Most of the children deeded their share to Florence. In December of 1958, Florence Brown married Frank Heiser. Except for a brief period of time, the Heiser's did not live in the 24th Street house. Florence Heiser died intestate on September 6, 1980. At the time of her death, the house had been rented for a substantial period of time. She was survived by Frank Heiser and her five children from her previous marriage. Pursuant to the intestacy statutes, one-third of her estate would pass to the estate of Frank Heiser and two-thirds of her net estate to her children by her previous marriage to Homer Brown. On September 16, 1980, Frank Heiser executed a valid will by which he left his entire estate to a former wife, Ethel Heiser. On October 29, 1980, Frank Heiser died testate. Prior to his death, Frank Heiser made no claim against the Estate of Florence Heiser for the homestead allowance, family allowance, or for exempt personal property. Neither did Frank Heiser execute a waiver of interest in the Estate of Florence Heiser. On June 11, 1981, the Estate of Frank Heiser filed a claim for homestead a.llowance and exempt property with the Estate of Florence I. Heiser. Because of the small size of the estate, the only property which is of sufficient worth to satisfy the homestead allowa.nce claim would be the proceeds from the sale of the 24th Street house. The claim for homestead allowance was denied by the personal representative of the Estate of Florence Heiser on July 9, 1981, and the present action was commenced. The District Court ord.ered that the petition of the Estate of Frank Heiser, for the homestead allowance in the Florence Heiser Estate, be granted. This appeal fol-lows. The sole issue on appeal is whether the homestead allowance vests as a matter of law in the surviving spouse upon outliving the deceased for 120 hours, or whether a surviving spouse personally must first make a claim for the homestead allowance. Montana's homestead allowance statute, section 72-2-801, MCA, provides tha.t a surviving spouse (defined as one who outlives his deceased spouse by 120 hours) who is domiciled in this state is entitled to a homestead allowance of $20,000. Minor or dependent children are also entitled to such an allowance. The homestead allowance is exempt from and has priority over all claims against the estate, and is in addition to any share passing to the surviving spouse or minor or dependent child by the will of the decedent unless otherwise provided, by intestate succession, or by elective share. See sections 72-2-801 and 72-2-205, MCA. Appellant contends that because Frank Heiser failed to make an affirmative, formal claim for the homestead allowance during his lifetime, his estate is barred from making the claim. Appellant argues t.he right to make a claim for a homestead allowance terminates upon the surviving spouse's death. We find no statutory, claim-filing requirement for the homestead allowance to vest, and decline to create such a requirement. As noted, the only statutory condition expressly set forth is that the surviving spouse survive the deceased by 120 hours. Section 72-2-205, MCA; acc. Estate of - - F4erke1 (Mont. 1980), 618 P.2d 872, 877, 37 St.Rep. 1782, 1787. We do not believe it was the intent of the drafters of the Uniform Probate Code that the estate of a surviving spouse would lose the homestead allowance because it was not exercised while the spouse lived. If the drafters wanted such a requirement before the homestead allowance would vest, they could simply have so provided. We are not blind to the fact that a stranger, Frank Heiser's former wife, will receive the sale proceeds of the house that was bought by Homer and Florence Brown. The homestead allowance was created primarily to protect the surviving spouse against creditors and other claims against the estate to the extent of $20,000. It is simply a grant by law to benefit the surviving spouse or his estate. To permit the ultimate decision to be influenced by the equities and sentiments of each particular case trould thus render the homestead allowance meaningless and impossible of interpretation. When the surviving spouse dies, this protection inures to his estate just as the allowance would if it were claimed before his death. Estate of Merkel, supra. - The decision of the District Court is affirmed. Hon. Thomas A. Olson Sitting for Justice Frank B . Morrison, Jr . We Concur: LWk.8 ~& Chief  us ti& Justice c

December 8, 1983

7d549bfb-8a94-4636-a3b0-c7e31288bbdc

DECKER COAL CO v STATE EMPLOYMENT

N/A

82-359

Montana

Montana Supreme Court

N O . 82-359 I N THE SUPREME C O U R T OF THE STATE OF MONTANA 1 9 8 3 DECKER COAL COMPANY, a j o i n t v e n t u r e b e t w e e n W e s t e r n M i n e r a l s , I n c . , a n O r e g o n c o r p o r a t i o n a n d Wytana, I n c . , a D e l a w a r e c o r p o r a t i o n , P e t i t i o n e r a n d R e s p o n d e n t , v s . EMPLOYMENT SECURITY DIVISION OF THE MONTANA STATE DEPARTMENT OF LABOR A N D INDUSTRY a n d THOSE MEMBERS OF THE PROGRESSIVE MINE WORKERS OF AMERICA, S h e r i d a n , Wyoming, who a r e C l a i m a n t s i n B o a r d o f L a b o r A p p e a l s D e c i s i o n No. 2 6 0 1 , R e s p o n d e n t s a n d A p p e l l a n t s . A p p e a l f r o m : D i s t r i c t C o u r t o f t h e T h i r t e e n t h J u d i c i a l , I n a n d f o r t h e C o u n t y o f B i g Horn H o n o r a b l e R o b e r t W i l s o n , J u d g e p r e s i d i n g . C o u n s e l o f R e c o r d : F o r A p p e l l a n t s : H i l l e y a n d L o r i n g , G r e a t F a l l s , Montana E m i l i e L o r i n g a r g u e d , G r e a t F a l l s , Montana R . S c o t t C u r r e y a r g u e d , H e l e n a , Montana F o r R e s p o n d e n t : H o l l a n d & H a r t , B i l l i n g s , Montana C a r e y E . M a t o v i c h a r g u e d , B i l l i n g s , Montana S u b m i t t e d : March 2 4 , 1383 D e c i d e d : ~ u l y 5 , 1 9 8 3 4% -_I_c_ C l e r k Mr. Justice John C. Sheehy delivered the Opinion of the Court. Appellants (collectively hereafter "claimants") appeal from a decision of the District Court, Thirteenth Judicial 3 3 1 ~ deed District, P County, which in effect held that claimants were not entitled to unemployment insurance benefits. Two principal issues arise in this appeal. The first is procedural, raised by us, whether MAPA (Montana Administrative Procedure Act) applies to agency and court handling of claims for unemployment insurance benefits (for brevity "claims"). The second issue is substantive, whether a stoppage of work occurred which disqualified claimants for benefits. We hold that MAPA does not apply to the determination of such claims; and that the claimants in this case are entitled to unemployment insurance benefits. Nearly all members of Local 1972, Progressive Mineworkers of America, employees of Decker Coal Company, filed claims for unemployment compensation benefits for the period from August 15, 1980 to September 15, 1980, during which time the local was engaged in a labor strike at Decker's surface coal mine in Big Horn County, Montana. The claims were submitted for decision to a deputy of the employment security division of the Montana State Department of Labor and Industry, who determined that the claimants were not eligible for such benefits because of a stoppage of work during the strike. The adverse decision of the deputy was appealed by claimants to an appeals referee who after hearing, made a written decision denying the claimants any unemployment insurance benefits, and finding that a work stoppage existed during the period of the strike. The claimants appealed the decision of the appeals referee to the Board of Labor Appeals. The Board reversed the decision of the appeals referee, holding that the claimants were entitled to receive unemployment compensation benefits in accordance with their claims, if otherwise qualified. Decker appealed the Board's decision to the District Court. There the Board was reversed and the decision of the appeals referee was reinstated. A fina.1 order was entered by the District Court accordingly, and this appeal ensued. I. DOES MAPA APPLY TO CLAIMS FOR UNEMPLOYMENT INSURANCE BENEFITS? In this case, the District Court applied the provisions of MAPA, particularly section 2-4-621, MCA, instead of applying the unemployment insurance law. In reversing the holding of the Board of Labor Appeals, the District Court stated in this case: "The Board of Labor Appeals is held to the same standard of review of a fact finder's decision as is this Court. The Board cannot substitute its judgment as to the weight of the evidence on questions of fact for that of the appeals referee. The Board may reverse or modify the decision of the appeals referee only if substantial rights of a party have been prejudiced because administrative findings are 'clearly erroneous in view of the reliable, probative and substantial evidence on the whole record' or is 'affected by other error of law. ' . . . The decision of the Board of Labor Appeals exceeded its scope of jurisdictional authority by substituting its judgment of the facts and the weight of the evidence for that of the appeals referee." Thus the District Court determined, and Decker here contends that the Board of Labor Appeals could not reject or modify the findings of fact of the appeals referee unless the Board first determined from a review of the complete record that the findings of fact of the appeals referee were not based upon competent, substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law. With respect to this issue, this case parallels another case recently before this Court, cause no. 82-106, City of Billings v. State of Montana Board of Labor Appeals, Montana State Department of Labor and Industry, and 325 Members of Local No. 190, Teamsters Union (Decided May 10, 1983) , P.2d , 40 St.Rep. 648. In that case we examined the provisions of MAPA, and of the unemployment insurance law. We refer the reader to that case for our rather complete discussion of the applicability of each set of statutes to the determination of disputed claims for unemployment insurance benefits. It is enough to say here, for the convenience of the reader, that in City of Billings, supra, - we determined: 1. There is contained within the unemployment compensation insurance law itself, without regard to MAPA, a complete procedure for hearing and determining undisputed claims for unemployment insurance benefits, beginning with the deputy of the employment security division, and ending with the Montana Supreme Court. Sections 39-51-2401 through 39-51-2410, MCA. 2. The Board of Labor Appeals, as a quasi-judicial board (section 2-15-1704, MCA) exercises the functions of a quasi-judicial board as outlined in section 2-15-102(9), MCA. As such the Board of Labor Appeals may consider not only the record made before the appeals referee but new evidence produced at the Board hearing. 3. The provisions of MAPA are unworkable when an attempt is made to apply them to determine claims for unemployment insurance benefits. It is an incorrect interpretation of statutory law to hold that the Board has no power to overturn the fact-findings of the appeals referee. 4. The District Court, in reviewing of a decision of the Board of Labor Appeals, is limited by the provisions of section 39-51-2410(5), MCA, which provides: "In any judicial proceeding under 39-51-2406 through 39-51-2410, the findings of the board as to facts, if supported by evidence and in the absence of fraud shall be conclusive and the jurisdiction of said court shall be confined to questions of law I1 . . . We reiterate the foregoing interpretations of statutory law contained in City of Billings, supra, as applied to this - case. It was error for the District Court to limit the power and authority of the Board of Labor Appeals by applying MAPA provisions against it. The powers and duties of the Board of Labor Appeals are to be found in the unemployment insurance law, and in the provisions of law granting it authority to act as a quasi-judicial board. DID A STOPPAGE OF WORK OCCUR WHICH DISQUALIFIED CLAIMANTS? Again we determine, as we did in City of Billings, - - supra, that the appeal by the claimants to this Court in this case squarely places upon us the duty to determine if the findings of the Board of Labor Appeals are supported by evidence as set forth in section 39-51-2410(5), MCA, and if so, whether the Board properly applied the law to those facts. We so hold because it is the intent of the unemployment insurance law that claims for benefits be given accelerated judicial attention (section 39-51-2410(5), MCA) and further because the District Court in this case has already concluded that the decision of the appeals referee (not the Board) was not clearly erroneous and is supported by reliable, probative and substantial evidence on the whole record; and further that the Board of Labor Appeals' decision is erroneous because it is not based upon reliable probative and substantive evidence on the whole record. In those circumstances, the appeal by the claimants to this Court makes it imperative for us to determine if the findings of the Board are supported by evidence and whether the law was properly applied to the facts. If the findings of the Board are supported by evidence, in the absence of fraud, such findings are conclusive, and the jurisdiction of the District Court and, on appeal, this Court, is confined to questions of law. Section At oral argument in this case, a discussion arose as to the kind of evidence which would be deemed supportive of the findings of the Board. We conclude from the regulations of the Board that there must be "substantial evidence". Section 24.7.301(c) (vii) , A.R.M. "Substantial evidence" has been defined by this Court: "We have recently stated substantial evidence is evidence such as will convince reasonable men and about which reasonable men will agree supports the case of the prevailing party. (Citing cases. ) Furthermore, the evidence m a . y be inherently weak and still be deemed substantial, and substantial evidence may conflict with other evidence presented. (Citing cases) . . . " Matter of the Estate of Holm (1979), Mont. , 588 P.2d - 531, 534. By way of preface, Decker Coal Company had two primary customers for its coal from this mine, Commonwealth Edison and Detroit Edison. The coal contracts of Decker are commitments to these utilities, but it is the utilities that determine how much coal is needed by them. Management testified before the appeals referee "[ilf the utilities are not taking coal, it slows our production down. That's why it is not indicative month to month." In the year of the strike, Decker was several million tons under its commitment to the utilities, simply because the utilities were not taking coal. We turn now to the essential facts found by the Board of Labor Appeals to determine if they are supported by substantial evidence in the record. Then it would remain to us to determine if the Board properly found that there was not a "stoppage of work" as that term is used in the unemployment insurance law. The applicable statute is section 39-51-2305(l), MCA: "Effective April 1, 1977, an individual shall be disqualified for benefits for any week with respect to which the department finds that his total unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which he is or was last employed . . ." The Board found that during the strike "the employer continued to supply the needs of its customers in furnishing coal, it being the business of the employer to mine and deliver coal to customers." This finding is substantiated in full by the testimony of management witness Crilley that customers1 needs were supplied during the strike. The Board found that "there is no other substantial evidence, excluding argument, which would indicate anything other than the fact that the employer in this was able to fully supply the needs of its customers during that period." Again that is fully substantiated by the testimony of the management witness Crilley. The Board found "a deliberate effort was made and accomplished to stockpile coal in preparation for the strike so that the functions of the employer would not be interrupted insofar as delivering coal to its customers is concerned." This was substantiated by the labor witnesses, and by the management witness Crilley, who testified that before the strike, the "stockpile was larger than normal." The Board found by "the testimony of Mr. Crilley, the only officer to testify on behalf of the company, that the amount of coal that was removed or delivered from the mine or mining area from the standpoint of number of trains is not indicative of whether or not the strike was having any effect on the operations of the employer and specifically that sworn testimony by Mr. Crilley appears on page 49 of the transcript, lines 1-3, and on page 59 of the transcript, lines 27-29." We have quoted some of that testimony above, and the citations to the transcript bear out the findings of the Board. The Board concluded "therefore any finding as to the percentage of the number of trains in the strike was not in any way supportive of any conclusion as to whether or not there was a substantial reduction in the functioning of the employers mining operation." This is a conclusion of fact and law which the Board as a quasi-judicial board may draw. The Board found "the greater weight of the evidence further establishes that during the testimony of the representatives of the employer, that during the period of the strike, they were able to maintain the necessary everyday maintenance upon the equipment." On this point, the testimony of the management witness was: "Chilton: Were there any breakdowns in equipment? Crilley: Oh yes. "Chilton: Were they major? Crilley: One of them was, yes. "Chilton: What did that entail? Crilley: Just everybody they could find went and got together and fixed it and put in long hours to get it done. "Chilton: How long was the plant shut down? Crilley : I can't recall. I couldn't recall, probably, I don't know. Maybe it was . . . "Chilton: A matter of hours or days? Crilley: Hours. "Chilton: Hours? Crilley: Probably close to a day, I suppose." The Board then found ''the evidence does establish that there was some reduction in the amount of preventive maintenance, however, there is no indication that the reduction in the amount of preventive maintenance in anyway interfered with the continual operation of the mine and delivery of coal." On this finding, the Board is half right. There was no preventative maintenance done according to the testimony of Crilley. However, it is true that there is no showing in the testimony that the reduction in the amount of preventative maintenance interfered with the operation of the mine. The Board further found "the evidence establishes that there was no backlog of orders, no accumulation of work to be done following the strike." On this point, the question by the appeals referee was whether there was a backlog of coal orders after the strike, and Crilley could not give him that information. The Board then found that "the evidence establishes without dispute that shortly after the strike terminated, the work force at the mine was reduced by approximately 64 men (20 or more being maintenance men) and supports the conclusion of fact that both the employer and the claimants conceded that there was an overstaffing of the mine prior to the time that a strike took place." That evidence came from the unsworn testimony of Crilley, who at the Board hearing informed the Board that 22 of the 64 people laid off were maintenance people. The finding bears on the contention of the appeals referee that the "72 people who remained on duty during the strike could not have performed the work of the 441 union members who were on strike." The Board further found "the evidence also establishes that although there was somewhere in excess of 400 employees of the mining operation in the bargaining unit, a number of the operations of the mine were run upon a rotating four-shift basis. Although there may be all of them working for some period of time during any weeks of operation, the number of hours that any one man was working would vary anywhere from one shift to several shifts and that on the average there was always one shift that was not working where there was a four-shift rotation basis, and in addition to that, prior to the time when the strike took place, the mine was on a reduced schedule and those men who were working were working in the area of 32 to 36 hours per week." There can be no dispute about this finding of fact. All through the record there are notations to the effect that the men worked from one to four days per week because they were on rotating crews and the mine was operating on reduced schedules allowing the workers to get 32 to 36 hours per week. As we have indicated, in the year of the strike, Decker was several million tons under their commitment because the utilities were not taking coal. Then the Board found "during the period of the strike, the evidence establishes that there were 72 first line supervisor personnel working in connection with the operation of the mine, and in addition thereto, there were at least 6 persons of administrative personnel who were not first line supervisors who were working in connection with the operation of the mine. Taking into account the first line supervisors and other administrative personnel, the evidence establishes that there was a total of approximately 120 administrative and supervisory personnel working during the course of the strike. " Again this figure comes from the unsworn testimony at the Board hearing in a colloquy between the attorney for the employer and the chairman of the board. It follows: "Houston: Okay now, if you look at the figures which I think I worked up in the reply brief before Mr. Chilton. We assumed 72 supervisors and the 72 supervisors I think first appears in the transcript by Mr. Rinker. Where he gets that figure, I don't know, and then throughout the transcript, the 72 is continually referred to. Perhaps the correct number of supervisors is 62 and there is an additional 6 or however many. Maybe it was 72, but I think the number of people, supervisors, overhead-type people, salaried personnel-actually working during the strike is probably someplace around 72 working on production needs. llWhalen: Now wait a minute. It was Mr. Crilley that shuffled it up to 120 during his testimony. "Houston: 120 reflects everyone out there: secretaries, clerks. "Whalen: He referred to "Houston: The whole gamut. "Whalen: 72 supervisors, first line supervisors, and 120 altogether in my record. That's Mr. Crilley's testimony. "Houston: Right . . . l1 Board Hearing Tr. at 14-15. The Board next found "as to those people working upon the production, the evidence establishes without dispute that during the first few days of the strike, some of them were working as much as 24 hours a day without stopping and after the strike was in progress, it was developed into a schedule where they were working 12 hours shifts, 7 days per week in operating the mine with administrative and supervisory personnel." There are many references to these facts in the transcript and they cannot be disputed. Following this, the Board found "the evidence further establishes without dispute that during the course of the strike, there was a complete shutdown by sabotage which, attributable to person or persons other than the claimants in this case, reduced the production and the ability of the mine to function, however, it was not anything that came about by reason of a stoppage of work arising from the strike." This is an important finding by the Board because the appeals referee failed to take it into account in making his findings . One of Decker's former employees shot out a transformer which cut off power to the Decker mine and closed it down for 3 days during the first week of the strike. Crilley testified: "Crilley: . . . Right, shortly after the strike started, we had the power line shot out by a former employee and it shut the mine down approximately 3 days and at that time we really picked up security operations, and we drew several people from the out of town office which was supporting that too, Decker Coal, and they performed in a security fashion. "Houston : Now you say that he was a former employee? How was he? Was he terminated? "Crilley: Oh, at that time he was still in limbo. The man, we'd laid the man off in April and he filed a grievance against us for the methodology of the layoff and that was in arbitration at the time. We have not reached the decision even, we already had an arbitration, but we were awaiting for an opinion of the arbitrator." It is quite evident that the person who committed the act of sabotage was not one of the claimants and it was not a union-encouraged act. The Board also found "the evidence before this Board and analysis of the figures furnished by the employer and submitted to the Board for the first time during the Board hearing insofar as inventory is concerned establishes that there was not a reduction in excess of the amount of 7 percent of the inventory based upon the period and figures furnished by the employer." We will take this point up later in discussing the appeals referee's finding on this subject. It is enough to say that there was a reduction in inventory during the strike from pre-strike levels of 5.47 percent and that in the period of 9 weeks following the strike, Decker's coal inventory decreased from the average during the strike by 10.08 percent. Next the Board found "the evidence further establishes that there was a reduction in production in the amount of approximatel-y 9 percent." We find this could be true depending upon what week one selected prior to the strike or after the strike. On an average basis, it appears that production during the strike was 23.54 percent less than the pre-strike 9 weeks, and 21.3 percent less than the post-strike 9 weeks. Again we will discuss these figures later with respect to whether a stoppage of work occurred here. The next finding of the Board relates to whether or not there was stripping of overburden. Management testified there was not. Labor witnesses testified that they could see blasting and smoke arising from the overburden which must have been used for the raising of overburden, and that when they went back to work there was less powder in the powder bins which substantiated their claim that powder had been used. We do not regard this finding as having any significance on mine production for the purposes of this case, however. The last finding of the Board is that at the termination of the strike, the stockpile which had been prepared in anticipation of the strike had not been used up at the termination of the strike. This is substantiated by the inventory of the coal company at the termination of the strike which showed 195,500 tons of coal on hand. As we have indicated in the foregoing, the findings of the Board are substantiated on the whole record, using the standard of substantial evidence. We turn now to the findings of the appeals referee, which the Board of Labor Appeals refused to accept, but which the District Court found were supported by "reliable, probative and substantial evidence on the whole record." The District Court went no further than to state the foregoing conclusion. The essential facts found by the appeals referee on which he determined there was a stoppage of work, are contained in the following paragraph: "In an 18-week period, 9 weeks before and 9 weeks after, the employer loaded and shipped an average of 22.8 trains per week. In the strike period, the average was 17 trains per week, a reduction of 25.4 percent. In the same 18-week period, an average of 235,373 tons of coal were mined per week but in the strike period, an average of 142,085 tons of coal were mined per week, a reduction of 37.5 percent. In the week before the strike commenced, the inventories, silos and stockpiles, contained 326,459 tons of coal. In the last week of the strike the inventory was 195,569 tons, a 40.1 percent reduction." During oral argument, counsel for Decker Coal Company contended that the Board of Labor Appeals did not hear the witnesses and see their demeanor and that because thereof the Board should be bound by the findings of the appeals referee. That contention belies what happened in this case. The appeals referee, after the hearing which he conducted, asked for post-hearing exhibits to be supplied by the employer as to the number of trains shipped by Decker pre-strike, during the strike, and post-strike, the number of tons of coal mined for those same periods, and the inventory of the company for the same periods. Following the strike, the employer submitted figures on those items, none of which are sworn to, and upon which there was no cross-examination, and for which the underlying documents were not supplied. Yet all of the conclusions of the appeals referee which we have quoted foregoing are based upon those unsworn figures with no supporting testimony. In such a case, we are "free to make our own examination of the entire case and to make a determination in accordance with what we find." Kostbade v. Metier (1967), 150 Mont. 139, 141, 432 P.2d 382; Estate of Jensen (1969), 152 Mont. 495, 500, 452 P.2d 418. It is true that at the Board hearing, there were no witnesses sworn to testify. However, the Board obviously took into consideration statements made by Houston, the company attorney, Crilley, the company personnel manager, Loring, the labor attorney, and some labor witnesses. There is nothing in the Board regulations which require witnesses before it to be sworn. The whole proceeding before the Board is apparently quite informal. What all this means is that this Court is in as good position as any party to examine the figures from the e x h i b i t s and t o determine f o r ourselves t h e e f f e c t of t h e s t r i k e . W e d i s p l a y some of those f i g u r e s hereunder. W e have, however, disregarded t h e f i r s t week of t h e s t r i k e because t h e mine was s h u t down during t h a t week f o r t h r e e days due t o t h e a c t of sabotage which w e have r e f e r r e d t o . I n e f f e c t we assume tha.t t h e production during t h e f i r s t week, i f t h e a c t of sabotage had not occurred, would average o u t with t h e remaining weeks of t h e s t r i k e . INVENTORY The appeals r e f e r e e found t h a t t h e inventory had been reduced a s a r e s u l t of t h e s t r i k e by 4 0 . 1 percent. The Board of Labor Appeals found t h a t f i g u r e t o be 7 percent. The appeals r e f e r e e a r r i v e d a t h i s percentage f i g u r e by t a k i n g t h e l a s t inventory week before t h e s t r i k e and comparing it with t h e f i r s t inventory week a f t e r t h e s t r i k e had ended. W e t h i n k a f a i r e r way of determining t h e f a c t s r e l a t i n g t o t h e inventory would involve a comparison of t h e 9 weeks p r e - s t r i k e with t h e 9 weeks following t h e s t r i k e t o determine t h e i r usual averages. Decker argues f o r t h i s approach i n its b r i e f s t a t i n g : "The only f a i r way t o compute usual production i s t o balance good weeks with bad weeks. A l l t h e evidence was before t h e appeals r e f e r e e and t h e Board, and both t h e good and t h e bad must be averaged together." The p r e - s t r i k e tonnage of c o a l i n s t o c k p i l e s and s i l o s on hand f o r t h e 9 weeks preceding t h e s t r i k e s follows: 207,915 218,539 246,996 214,105 197,773 139,719 252,196 312,466 326,459 2,116,168 tons The average number of tons on hand for the weeks preceding the strike is 235,129.78 tons. This figure includes the stockpiling that was done prior to the strike and in anticipation of the strike. During the four weeks of the strike, the inventory of the coal on hand is represented by the following figures: 195,569 889,029 tons Therefore, the average number of tons on hand during the strike was 222,257.25 tons. These figures indicate the average number of tons on hand during the strike was only 12,872.53 tons less than the average number of tons on hand for the 9 weeks prior to the strike including stockpiling. The 12,872.53 tons represents a decrease from the pre-strike average of 5.47 percent. In the 9 weeks following the strike, the post-strike inventory of coal is represented by the following figures: 182,803 1,798,645 tons The average of those figures is 199,849.44 tons. In other words, the company had on hand as coal inventory following the strike, a lesser number of tons than it had during the strike. The amount of decrease from the average tons of coal on hand during the strike is 10.08 percent. In fact, in the 9 weeks succeeding the strike, Decker kept on the average 15 percent less coal on hand than it had stockpiled or possessed in silos in the 9 weeks preceding the strike. In the face of these figures, little validity can be attached to the findings of the appeals referee that inventory had been reduced 4 0 . 1 percent. That figure is meaningless. TRAINS SHIPPED OUT The figures for the number of trains of coal shipped out from Decker for the 9 weeks preceding the strike are: 1 3 1 3 1 7 25 32 37 2 1 1 9 20 1 9 7 trains The average shipment per week was 21.9 trains. The number of trains shipped for the 3 good weeks of the strike are: 1 5 20 1 8 - 53 trains The average number of trains shipped out during the strike is 17.67. The difference between 21.9 and 17.67 is 4.23. This difference is a 19.3 percent reduction between trains shipped out during the strike and those shipped out pre-strike. The appeals referee found 25.4 percent. Looking at the trains shipped out post-strike, those figures are as follows: 21 - 1 9 2 trains The average of the 9 weeks post-strike was 21.33 trains. This represents an increase of 3.66 trains per week over the strike average of 17.67 trains. This means a 20.7 percent increase in the number of trains shipped out after the strike. Again this is lower than the 25.4 percent found by the appeals referee. In connection with trains shipped out, we note a factor not for its argumentative force but to let the parties know that we have not overlooked it. The Decker Coal Company mine apparently has a "sister mine" operated by the Big Horn Coal Company. Decker Coal Company is a joint venture. Wytana, Inc., a subsidiary of Peter Kiewit Sons, Inc. is one of the joint venturers and Western Minerals, Inc., an Oregon corporation, which may be a subsidiary of Pacific Power and Light is the other. Big Horn Coal Company is a subsidiary of Peter Kiewit Sons, Inc. The managing or operating partner of the Decker Coal mine is a subsidiary of the same holding company as Big Horn Coal Company. It is to that extent, argued Decker's lawyer at the Board hearing, that the two are "sister companies." They have some of the same customers. Decker submitted among its post-hearing figures to the appeals referee a record of trains shipped out by Big Horn Coal Company. These figures indicate an increase in trains shipped out by Big Horn Coal Company during the period Decker was subject to the strike. The inference to be drawn is that Decker's commitments for coal were being met by Big Horn Coal Company. We disregard, however, the references to Big Horn Coal Company because the appeals referee made no findings with respect to that subject. The Board of Labor Appeals gave it no significance in its consideration. Nothing in the evidence or testimony connects Big Horn Coal Company with Decker's production and operation other than the random statements made by the attorney at the Board hearing and the post-hearing figures submitted. The Big Horn Coal Company figures are unsubstantiated, unconnected, and so are irrelevant to our discussion here. TONS MINED FROM THE PIT The appeals referee found that in the 18 week period before strike and after strike, Decker mined an average of 235,373 tons of coal per week and that during the strike it mined an average of only 142,085 tons of coal per week, a reduction of 37.5 percent. Again, the figures used by the appeals referee are skewed. The intensive stockpiling undertaken by Decker before the strike resulted in a mine production in excess of 300,000 tons in three of the nine weeks before the strike occurred. In the nine weeks following the strike, there was only one week in November when the coal production from Decker exceeded 300,000 tons in a week. The appeals referee also included the week when the mine was down for three days as a result of the power outage induced by sabotage, when production was only 62,693 tons in the week. The use of such figures does not fairly represent the loss of mine tonnage that occurred during the strike. If the one week of the strike is omitted, and all weeks exceeding 300,000 tons, the resulting decrease in mine production from the viewpoint of tons mined is no more than 23.54 percent. RELEVANCE OF FIGURES What we have attempted to demonstrate by the foregoing discussion is that the appeals referee was playing with numbers when he made the findings upon which Decker claims the District Court should be affirmed. We have played with the numbers ourselves to demonstrate that depending upon the methodology, argument can be made to substantiate several positions favorable or not favorable to the claimants in this case. There is no testimonial basis in the record, since the figures were submitted post-trial and without underlying documents or other proof which gives any degree of certitude in relevance to the figures submitted, and how they should be used. In effect there has been a failure of proof, because the figures used by the referee and his calcula.tions therefrom are demonstrably mathematically and statistically unsound. Worse, this playing with numbers distracts the parties and the court from the real purpose of our determination here, did a "work stoppage" occur within the meaning of the unemployment insurance law. As we noted in the recent City of Billings case, supra, - Montana has aligned itself with those courts holding on the question that the phrase "stoppage of work" refers to employer's operations rather than to the individual employee's work, and that strikers may collect benefits under the "American rule" so long as their activities have not substantially curtailed the productive operations of their employer. The record clearly supports the Board of Labor Appeals in its finding that here the business of the employer was to mine and deliver coal to customers and that there is no substantial showing of unfulfilled customer demands nor any curtailment in its deliveries of coal to its two principal customers. This means that a "stoppage of work" as that term is contemplated in the present unemployment insurance law, had not occurred in this case. By that fact, the claims of the claimants for benefits may not be denied. Again we point out, as we did in City of Billings, - supra, that the wisdom or even the fairness of the economic legislation we are considering here is not before us nor do we pass upon its merits. Determination of state economic policy is for the legislature. It is in the arena of the legislature where labor and management can face off that state economic policy in this matter can be decided. Accordingly, the judgment of the District Court is reversed and the order of the Board of Labor Appeals is reinstated. We Concur: Chief Justice Justices Mr. Chief Justice Frank I. Haswell, Justice L. C. Gulbrandson and Justice Fred J. Weber will file separate opinions later. DISSENT NO. 82-359 DECKER COAL COMPANY V. ESD Mr. Chief Justice Frank I. Haswell, Mr. Justice L. C. Gulbrandson and Mr. Justice Fred J. Weber, dissenting. We would remand the case to the District Court for judicial review under the correct standard of review in the Unemployment Compensation Act. Our view in this case on the correct standard of review and the respective functions of the Board of Labor Appeals and the District Court are set forth in our dissent in Cause No. 82-106, City of Billings v. State of Montana Board of Labor Appeals et al., 40 St.Rep. 648.

July 5, 1983

2e46b5bf-eafe-44aa-aa35-26fda0eb49b2

MATTER OF R T

N/A

82-504

Montana

Montana Supreme Court

N O . 82-504 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 3 - I N THE MATTER OF T - , R e s p o n d e n t . A p p e a l f r o m : D i s t r i c t C o u r t o f t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e C o u n t y o f Y e l l o w s t o n e H o n o r a b l e W i l l i a m J . S p e a r e , J u d g e p r e s i d i n g . C o u n s e l o f R e c o r d : F o r A p p e l l a n t : T e r r y L . S e i f f e r t , B i l l i n g s , Montana F o r R e s p o n d e n t : H a r o l d F . H a n s e r , C o u n t y A t t o r n e y , B i l l i n g s , Montana S u b m i t t e d o n b r i e f s : F e b r u a r y 3 , 1 9 8 3 D e c i d e d : June 3 0 , 1 9 8 3 F i l e d : 3 m 3 0 7983 Mr. Justice Frank B. Morrison, Jr. delivered the Opinion of the Court. Respondent R.T. appeals from a commitment order entered in the Thirteenth Judicial District Court, Yellowstone County. The sole issue is whether there was sufficient evidence to find that respondent was "seriously mentally ill" under section 53-21-102(14), MCA. We find the evidence to be legally insufficient and vacate the commitment order. On October 7, 1982 the Yellowstone County Attorney filed a petition for commitment with the Yellowstone County District Court. The allegations contained in the petition were based on a letter from a psychiatric nurse from the South Central Montana Regional Mental Health Center and a "Request for Commitment" submitted to the county attorney by R.T.'s sisters, both of which were filed in conjunction with the commitment petition. The petition alleges that R.T. is a long term patient at the South Central Montana Regional Mental Health Center; that "he is very paranoid and believes that everything - food and water - is poisoned;" that he only eats chicken soup from a can and drinks tea because of his delusion that everything is poisoned; that he refuses to take his medication for his mental condition; that he is very hostile and suspicious; and that he is unable to care for himself and protect his health and safety. The district court found probable cause to believe R.T. was seriously mentally ill and that same day issued orders for his examination and detention pending hearing. A combined adjudicatory and dispositional hearing was held before Judge William Speare the following day. Dr. Thomas Van Dyk, a psychiatrist who had examined R.T. the previous day and treated R.T. for the preceding five years, testified. On the basis of the testimony, Judge Speare found R.T. to be seriously mentally ill as defined in Section 53-21-102, MCA and ordered him committed to Warm Springs State Hospital for a period not to exceed three months. For the purposes of hearing before the trial court and appeal to this court, respondent concedes that he suffers from a mental disorder, specifically paranoid schizophrenia, which is evidenced in part by his belief that his food is poisoned. However, respondent contests the sufficiency of the evidence to establish that his mental disorder has deprived him of the ability to protect his life or health. Section 53-21-127(2), MCA provides for the involuntary commitment of persons who have been found to be "seriously mentally ill." Section 53-21-102(14), MCA defines "seriously mentally ill" as meaning "suffering from a mental disorder which has resulted in self-inflicted injury or injury to others or the imminent threat thereof or which has deprived the person afflicted of the ability to protect his life or health. " The standard of proof required in involuntary commitment proceedings is statutorily bifurcated: (1) with respect to physical facts or evidence, there must be proof beyond a reasonable doubt; and (2) as to all other matters, including the existence of a mental disorder, there must be clear and convincing evidence. In the Matter of N.B. (19801, Mont , 620 P.2d 1228, 37 St.Rep. 2031, construing Section 53-21-126(2), MCA, in light of Addington v. Texas (1979), 441 US 418, 99 S.Ct 1804, 60 L.Ed.2d 323. During the October 8, 1982 hearing, Dr. Van Dyk testified that respondent was seriously mentally ill as defined by Montana law. Such testimony is permitted under Section 53-21-126(4), MCA, but its sufficiency is dependent on accompanying evidence, from either a professional person or someone else, that (1) the person is suffering from a mental disorder, and (2) the mental disorder has deprived the person of the ability to protect his life or health. Respondent maintains Dr. Van Dyk's conclusion, and therefore the district court's finding, is legally insufficient because the record is devoid of any evidence that respondent was unable to protect his life or health - at that time. - - Respondent contends that the definition of "seriously mentally ill" does not provide for, nor include, imminent or prospective inability to protect one's life or health. Respondent contends that under Montana law he cannot be deprived of his liberty on the basis of such an eventuality. We agree. The plain meaning of the language employed in the statutory definition of "seriously mentally ill" does not encompass mental disorders which pose an imminent threat of depriving a person of the ability to protect his life or health. We construe the relevant portion of Section 53-21-104(14), MCA, to require a finding of existing conditions which evince that an individual - is unable to protect his life or health. Because the testimony before the trial court does not clearly and convincingly establish that at the time of hearing respondent was unable to protect his life or health, it is insufficient as a matter of law. At the time of hearing respondent was residing in a hotel in Laurel, Montana, living on his monthly disability income, and eating at the cafe in the hotel. Despite the fact Dr. Van Dyk testified respondent did not eat "properly," he did not further elaborate on facts which would support his conclusion that respondent was unable to protect his life or health. Dr. Van Dyk was twice asked whether respondent was able to care for himself. The gist of one answer was that respondent would be better off in another situation and that Warm Springs was the only place that would take him. Dr. Van Dyk's second response was only that respondent would "take worse and worse care of himself" if the present situation were allowed to continue. Referring to respondent's historical tendency to deteriorate after being released from Warm Springs, Dr. Van Dyk candidly admitted that by the commitment proceeding, they were "trying to do something about it before it gets bad this time." As to respondent's existing condition, Dr. Van Dyk testified that respondent had not been drinking (drinking aggravates his paranoia); he did not manifest suicidal gestures; upon physical examination, he appeared to be "normal," though lacking teeth, well-nourished and attending to his personal hygiene. Respondent testified that he lived at the hotel because it was "the most reasonable place [he] could get in town." He said he got "along okay" when asked if he was eating properly and that he was able to take care of his personal hygiene needs, although he admitted he could do better. The remainder of the testimony regarded the least restrictive alternatives suitable for treating R.T. The evidence simply does not clearly and convincingly prove that respondent's existing condition was such that his mental disorder had deprived him of the ability to protect his life or health. We concur in the sentiments expressed by the Arizona Court of Appeals in construing a statute which defined "gravely disabled," for the purposes of involuntary commitment, to mean a condition in which a person is unable to provide for his basic personal needs for food, clothing and shelter as a result of a mental disorder. The court said: "The statutory definition of 'gravely disabled' is limited to persons who are incapable of providing for their basic survival needs because of a mental disorder. As long as appellant can provide himself with adequate food, clothing and shelter, he does not come within that definition, despite the likelihood that he will decompensate, give away his money, and become dependent on social agencies. It is one thing to commit an individual who cannot function sufficiently to supply basic survival needs, and another to commit an individual who merely 'chooses to live under conditions that most of society would conclude to be substandard . . . (Citation omitted. ) " Pima County v. Kaplan (Ariz. App. 1980) 124 Ariz. 510, 605 The commitment order is h We concur: ?k-4Ld%4 Chief Justice Justices Mr. Justice Fred J. Weber dissents as follows: I respectfully disagree with the essential conclusion of the majority opinion that the evidence does not clearly and convincingly prove that the respondent's existing condition was such that his mental disorder had deprived him of the ability to protect his life or health. The petition alleged that R . T. refuses to take his medication for his mental condition. Dr. Van Dyk, who had treated R. T. for five years testified there was no way to keep R . T. taking his medication when he lives by himself. In response to questions as to the form of medication, he described it. Counsel then asked if it would be possible for a public health nurse to check in once a day to make sure he takes his medication, and Dr. Van Dyk pointed out he had not been able to get that done because they would only come in once a week and he again stated that when R. T. is at own place, there is no way to get him to do anything he doesn't want to do. This is confirmed by R. T. who testified as follows: "Q. When you are at home alone, are you willing to take your medication? "A. I do better without it. "Q. Consequently, even if the doctor recommends it, you prefer not to take it, is that correct? "A. Right. " This uncontradicted evidence establishes that R. T. does refuse to take his medicine and therefore is unable to protect his health by the taking of the necessary medication. The majority opinion also mentions that Dr. Van Dyk had testified that R. T. had not been drinking. (Drinking aggravates his paranoia.) The substance of Dr. Van Dyk's testimony was that R. T. had not been drinking at the time he saw him at the hospital approximately five days before. However, the doctor pointed out that R. T. was drinking, by his own admission, after he had left the state hospital at Warm Springs where he had been sent by the doctor on a voluntary basis. With regard to the place where he recommended treatment, Dr. Van Dyk stated: "Q. Consequently, do you feel that the respondent is able to care for his own needs? "A. I do not feel he is. We have tried him at one of our mental health center group homes, and they were unable to tolerate him. I've been unable to get other nursing homes to take him. I sent him to Warm Springs State Hospital on a voluntary basis, and he only stayed a few days; and that's the reason for this proceeding at present, because he has gotten worse again. -- "Q. Doctor, what would be the least restrictive treatment facility available for the respondent? "A. I believe the State Hospital at Warm Springs would be, because we've not been able to find any other facility to take him and keep him." (emphasis added) Dr. Van Dyk pointed out that a foster home would not tolerate R. T. because of his drinking and that a group home also was unable to tolerate it and that he had been unable to find a nursing home to take care of him. While I agree with the necessity for protecting a person from involuntary commitment, I believe there is both clear and convincing evidence of the inability of R. T . to protect his health. While the testimony may not be a model of proof, it is important to keep in mind that Dr. Van Dyk is a psychiatrist who has attended R. T. for five years, and there was no attempt to submit information to rebut his testimony. This is not a suspect case in which the circumstances suggest an inadequate examination or insufficient consideration of R. T. ' s problem. The record establishes that the treating psychiatrist had attempted a voluntary commitment at Warn Springs which was unsuccessful and has been unable to find a foster home, group home or nursing home which could take him, particularly because of his drinking problem and its aggravation of his mental condition. I would affirm the District Court. We join in the foregoing dissent of Mr. J u s H r Fred J. Weber .

June 30, 1983

e99c5b0f-bc73-48f9-8c1a-8345cbb1f1f4

STATE v BAKER

N/A

82-474

Montana

Montana Supreme Court

Xo. 82-474 Iid THE SUPREME C O U R T OF T H E STATE O F MONTANA 1983 THE STATE O F MONTANA, P l a i n t i f f and Respondent, -vs- MARTIN K. BAKER, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Eighteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of G a l l a t i n , The Honorable W. W. Lessley, Judge p r e s i d i n g . Counsel of Record: For Appellant: Goetz, Madden & Dunn; James Goetz argued, Bozeman, Montana For Respondent: Hon. Mike Greely, Atty. General, Helena, Montana Sarah Power argued, A s s t . Atty. General, Helena A. Michael Salvagni, County Attorney, Bozeman, Montana ---- Submitted: A p r i l 18, 1983 Decided: August 2 , 1983 -- Clerk Mr. Chief J u s t i c e Frank I. Haswell delivered t h e Opinion of t h e Court. Defendant, Martln K. Baker, p l e d g u i l t y t o two c o u n t s of s a l e of dangerous d r u g s on September 1 5 , 1982, b e f o r e t h e E i g h t e e n t h J u d i c i a l D i s t r i c t Court. Following a s e n t e n c i n g h e a r i n g on t h e same day, Baker was sentenced t o t e n y e a r s on each c o u n t , t h e terms t o run c o n s e c u t i v e l y . Baker f i l e d a m o t i o n f o r r e c o n s i d e r a t i o n and r e s e n t e n c i n g which was d e n i e d . I n a d d i t i o n , t h e c o u r t g r a n t e d t h e S t a t e ' s motion f o r f o r f e i t u r e of d e f e n d a n t ' s v e h i c l e . H e now a p p e a l s t h e s e n t e n c e and t h e f o r f e i t u r e . Defendant and two o t h e r s , Nark E l l s w o r t h and Donald Pawlack, were a r r e s t e d a t t h e Ramada Inn i n Bozeman on J a n u a r y 1 3 , 1982, and were charged w i t h c r i m i n a l s a l e of d a n g e r o u s d r u g s . The s a l e had b e e n a r r a n g e d by a n undercover a g e n t who had c o n t a c t e d E l l s w o r t h about buying around 100 pounds of marijuana. The "buy" was scheduled f o r J a n u a r y 1 3 , 1982. Agents S k u l e t i c h and Adamo checked i n t o t h e Ramada Inn t h a t morning and s h o r t l y t h e r e a f t e r r e c e i v e d a c a l l from Ellsworth. A f t e r s e v e r a l meetings back and f o r t h , d e f e n d a n t Baker was g i v e n $29,500 i n exchange f o r 82 pounds of marijuana. Upon h i s a r r e s t , t h e $29,500 was recovered from B a k e r ' s boot. During t h e c o u r s e of t h e meetings, d e f e n d a n t s n o r t e d a l i n e of cocaine and o f f e r e a some t o Agent S k u l e t i c h , who d e c l i n e d . That o f f e r was t h e b a s i s of t h e second count of c r i m i n a l s a l e of a dangerous drug. Other a g e n t s were i n a n o t h e r room a t t h e Kamada Inn l i s t e n i n g t o t h e t r a n s a c t i o n through e l e c t r o n i c s u r v e i l - l a n c e . I t is a l l e g e d t h a t a t a p e r e c o r d i n g of t h e drug d e a l was made b u t never produced. L e t t e r s between d e f e n s e c o u n s e l and t h e p r o s e c u t o r i n d i c a t e t h a t t h e p r o s e c u t i o n d i d n o t have a t a p e of t h e c o n v e r s a t i o n because t h e high l e v e l of background n o i s e i n t h e room whlch made it d i f f i c u l t t o l l s t e n t o t h e c o n v e r s a t i o n s and t h e r e f o r e , " t h e r e is no t a p e r e c o r d i n g of t h e c o n v e r s a t i o n i n t h e room." E l l s w o r t h p l e d g u i l t y t o h i s s a l e s charge and p l e a bargalned by g i v i n g a s t a t e m e n t i m p l i c a t i n g Baker a s t h e "main man." E l l s w o r t h was s e n t e n c e d t o a t h r e e - y e a r d e f e r r e a s e n t e n c e w i t h s e v e n t y d a y s i n t h e county j a i l and a $2,000 f i n e . C o n f l i c t i n g evidence was o f f e r e d a t t h e s e n t e n c i n g h e a r i n g . E l l s w o r t h t e s t i f i e d t h a t he had been purchasing marijuana from Baker monthly s i n c e A p r i l o r May 1981; t h a t he had o b t a i n e d one, two and f i v e pounds of marijuana from Baker; and t h a t he had once purchased a q u a r t e r gram of c o c a i n e from Baker. E l l s w o r t h f u r t h e r t e s t i f i e d t h a t t h e county a t t o r n e y ' s i n v e s t i g a t i o n had been focused on Baker and t h a t when he had been p r e s s u r e d i n t o d i v u l g i n g t h e s o u r c e of h i s marijuana, he gave B a k e r ' s name. Agent d k u l e t i c h ' s testimony t h a t Baker o f f e r e d t o s e l l him a lilgher g r a d e of marijuana o r t h e same g r a d e a t a cheaper p r i c e i f S k u l e t i c h would come t o h i s " w a r e h o u s e " i n Mlssoula c o r r o b o r a t e s E l l s w o r t h ' s identification of Baker a s t h e "main man." Baker, however, t e s t i f i e d t h a t he t o l d S k u l e t i c h h e could probably buy t h e marijuana cheaper i n Missoula because h l s $15 a pound t r a v e l i n g f e e would be e l i m i n a t e d . H e denied supplying E l l s w o r t h with t h e marijuana b u t admitted d e l i v e r - l n g EPlsworth, Pawlack and t h e m a r i j u a n a t o Bozeman f o r $15 per pound of marijuana d e l i v e r e d and a pound of marijuana. O r i g i n a l l y , he was n o t t o have been involved with t h e "buy." H e agreed t o r e p l a c e Pawlack when Pawlack became t o o nervous t o p a r t i c i p a t e . J i m Weinberg c o r r o b o r a t e d B a k e r ' s t e s t i m o n y . H e t e s t i f i e d t h a t on J a n u a r y 6 o r 7 , 1982, he was a t B a k e r ' s house when E l l s w o r t h came over and o f f e r e d t o s e l l marijuana t o them and i n q u i r e d i f e i t h e r of them would g i v e him a r i d e t o Bozeman i n t h e near f u t u r e . J o e S t a a k s a l s o t e s t i f i e d t h a t E l l s w o r t h had o f f e r e d t o s e l l l a r g e q u a n t i t i e s of marijuana t o both he and Baker. The evidence f u r t h e r e s t a b l i s h e d t h a t t h i s was B a k e r ' s f i r s t o f f e n s e ; t h a t he had been a p r o f e s s o r a t Montana S t a t e U n i v e r s i t y and t h e U n i v e r s i t y of Montana; t h a t he had t a k e n s t u d e n t s on a f i e l d t r i p t o Mexico; t h a t he p r e s e n t l y owned a rug and t e x t i l e b u s i n e s s i n Missoula; and t h a t h i s b u s i n e s s r e q u i r e d s e v e r a l t r i p s t o Mexico f o r s u p p l i e s . A t t h e end of t h e s e n t e n c i n g h e a r i n g , t h e judge immediately sentenced Baker, s t a t i n g : "I am convinced t h a t you a r e an o p e r a t o r i n d r u g s and t h a t $29,000 worth of d r u g s may n o t have been r o u t i n e b u t t h a t you've done it f o r a long p e r i o d of t i m e . And t h e abuse t h a t comes and t h a t you a r e a danger t o t h e community and t o t h e s t a t e . The s e l f - a b u s e t h a t comes from t h e use of d r u g s is i n c a l c u l a b l e . I d o n ' t t h i n k w e can stem it b u t when w e g e t someone t h a t d e a l s i n t h i s amount of d r u g s , w e can c e r t a i n l y s e n t e n c e them a n d I--he is remanded t o t h e custody of t h e S h e r i f f who i s n ' t here." A motion f o r r e c o n s i d e r a t i o n was immediately f i l e d . A t t h e h e a r i n g on t h a t motion, t h e s e n t e n c i n g judge admitted t h a t he had r e c e i v e d an anonymous phone c a l l on B a k e r ' s behalf p r i o r t o t h e s e n t e n c i n g and t h a t he t h e n made a s i n g l e phone c a l l t o t h e former department head of t h e S o c i o l o g y Department t o d e t e r m i n e B a k e r ' s l e n g t h of t e n u r e a t MSU. P r i o r evidence had been p r e s e n t e d t h a t i n d i c a t e d Baker had been a t MSU o n l y one q u a r t e r . The phone c a l l e r s t a t e d : " I ' m j u s t a f a c u l t y member and I d o n ' t want t o r e v e a l my i d e n t i t y , b u t , t h i s man is a good man. He's never been i n t r o u b l e b e f o r e and h e ' s been h e r e on campus f o r a long t i m e t e a c h i n g . . ." The p r o f e s s o r t o l d t h e judge t h a t Baker had t a u g h t one q u a r t e r , t h a t he had t a k e n a number of t o u r s i n Mexico, and t h a t he had one youngster who was i n t r o u b l e w i t h m a r i j u a n a i n Mexico. The judge s a i d , " t h a t can happen t o anybody," and hung up. H e a l s o c o n s i d e r e d a l e t t e r s e n t on b e h a l f of Baker. A t t h e s e n t e n c i n g h e a r i n g , t h e judge p e r s o n a l l y q u e s t i o n e d Baker a t l e n g t h r e g a r d i n g t h e s t u d e n t t r i p s t o Mexico. The motion f o r r e c o n s i d e r a t i o n was s u b s e q u e n t l y d e n i e d , and t h e f o r f e i t u r e was g r a n t e d . Baker p r e s e n t s t h r e e i s s u e s on a p p e a l : 1. Whether r e s e n t e n c i n g is r e q u i r e d because t h e judge p e r s o n a l l y o b t a i n e d i n f o r m a t i o n o f f - t h e - r e c o r d ; 2. Whether t h e county a t t o r n e y w i t h h e l d a t a p e r e c o r d i n g t o d e f e n d a n t ' s p r e j u d i c e ; and, 3 . Whether f o r f e i t u r e o f d e f e n d a n t ' s van was p r o p e r l y o r d e r e d . Defendant a r g u e s t h a t t h e o u t - o f - c o u r t c o n t a c t made by t h e s e n t e n c i n g judge i n v a l i d a t e d t h e s e n t e n c i n g p r o c e d u r e , t h a t t h e r e c o r d d o e s n o t s u p p o r t t h e f i n d i n g s and conclu- s i o n s of t h e D i s t r i c t Court, t h a t t h e s e n t e n c e is g r o s s l y d i s p r o p o r t i o n a t e t o t h e o f f e n s e s , and t h a t t h e j u d g e ' s e n t r y of t h e f i n d i n g s and c o n c l u s i o n s some t h i r t y d a y s a f t e r s e n t e n c i n g amounts t o a " p o s t hoc r a t i o n a l i z a t i o n " of h i s " e a r l i e r , h a s t i l y - r e a c h e d " d e c i s i o n . W e a g r e e t h a t t h e out-of-court c o n t a c t made by t h e s e n t e n c i n g judge i n v a l i - d a t e d t h e s e n t e n c i n g p r o c e d u r e , and w e remand f o r r e s e n t e n c - i n g under a d i f f e r e n t D i s t r i c t Court judge. T h i s Court h a s l o n g recognized t h a t a s e n t e n c i n g judge c a n n o t s e n t e n c e on t h e b a s i s of p r i v a t e , o u t - o f - c o u r t i n f o r - mation, communications o r i n v e s t i g a t i o n . Kuhl v. D i s t r i c t C o u r t ( 1 9 6 1 ) , 139 Mont. 536, 3 6 6 P.2d 347; S t a t e v. Simtob ( 1 9 6 9 ) , 154 Mont. 286, 462 P.2d 873; S t a t e v. S t e w a r t ( 1 9 7 7 ) , 175 Mont. 286, 573 P.2d 1138; S t a t e ex r e l . G r e e l y v. D i s t r i c t Court ( 1 9 7 9 ) , 180 Mont. 317, 590 P.2d 1104. The t r i a l judge i n S t e w a r t p e r s o n a l l y i n t e r v i e w e d s e v e r a l p e r s o n s who had t e s t i f i e d a t t r i a l a t u n d i s c l o s e d l o c a t i o n s , o f f t h e r e c o r d , and w i t h o u t n o t i c e t o d e f e n d a n t of t h e c o u r t ' s i n t e n t t o conduct t h e i n t e r v i e w s . T h e r e f o r e , t h i s Court d i s t i n g u i s h e d S t a t e v. Orsborn ( 1 9 7 6 ) , 170 Mont. 480, 555 P.2d 509, where t h e C o u r t had found t h a t i f a d e f e n d a n t was p r o t e c t e d a g a i n s t a s e n t e n c e p r e d i c a t e d upon m i s i n f o r m a t i o n , no d u e p r o c e s s v i o l a t i o n o c c u r r e d when p r e s e n t e n c e i n f o r m a t i o n came from a s o u r c e n o t s u b j e c t t o cross-examination i n c o u r t . I n Orsborn, t h e d e f e n d a n t w a s r e p r e s e n t e d by c o u n s e l , had t h e o p p o r t u n i t y t o r e b u t t h e i n f o r m a t i o n and c h o s e t o a f f i r m t h e i n f o r m a t i o n . I n S t e w a r t , we recognized t h a t t h e t r i a l judge had become i n t i m a t e l y i n v o l v e d i n t h e p r e s e n t e n c e f a c t - g a t h e r i n g p r o c e s s and h e l d t h a t where t h e judge becomes a f a c t g a t h e r e r , as w e l l as a f a c t f i n d e r , he s u b j e c t s t h e defen- d a n t t o an i m p o s s i b l e burden. The p r o p e r c o u r s e is f o r t h e s e n t e n c i n g judge t o d e l e g a t e i n v e s t i g a t i o n r e s p o n s i b i l i t i e s t o o t h e r o f f i c i a l s . I n Simtob, n o t h i n g i n t h e r e c o r d s u p p o r t e d t h e D i s - t r i c t C o u r t ' s f i n d i n g t h a t " t h i s is n o t [ d e f e n d a n t ' s ] f i r s t e x p e r i e n c e i n t h i s s o r t of t h i n g . " T h i s Court s t a t e d t h a t " t h e d i s c r e t i o n of t h e s e n t e n c i n g judge must be based on h i s view of t h e evidence p r e s e n t e d i n open c o u r t . . . and may n o t be e x e r c i s e d on t h e b a s i s of unsworn r e p r e s e n t a t i o n s p r i v a t e l y r e c e i v e d by t h e s e n t e n c i n g judge." F i n a l l y , i n Kuhl, t h e s e n t e n c i n g judge h e l d p r i v a t e c o n f e r e n c e i n chambers w i t h u n s p e c i f i e d p a r t i e s , a l l i n t h e absence o f b o t h d e f e n d a n t and h i s c o u n s e l . Here, it is a p p a r e n t t h a t t h e p r i v a t e out-of-court c o n t a c t by t h e s e n t e n c i n g judge a f f e c t e d t h e s e n t e n c i n g p r o c e s s . D u r i n g t h e s e n t e n c i n g h e a r i n g , t h e j u d g e p e r s o n a l l y q u e s t i o n e d Baker a t l e n g t h a b o u t t h e t r i p he took t o Mexico w i t h s t u d e n t s from Montana S t a t e U n i v e r s i t y and e x h i b i t e d a keen i n t e r e s t i n t h a t t r i p : "Q. [BY THE COURT]: Did you t a k e a t o u r of s t u d e n t s when you were h e r e i n 1980 a t Montana S t a t e C o l l e g e ? A. No s i r , I d i d n ' t . "Q. You d i d n ' t t a k e any t h e n ? A. No. "Q. You w e r e n ' t i n Mexico a t a l l when you were -- w h i l e -- d u r i n g t h a t summer o r j u s t b e f o r e t h a t ? A. I t a u g h t h e r e t h e s p r i n g of '79. "Q. I d o n ' t know -- A. No, I d i d n ' t -- you were -- "Q. You were i n t h e s o c i o l o g y d e p a r t - ment? A. Y e s s i r I was. Those s t u d e n t s t h e n were t o r e t u r n t o t h e United S t a t e s on t h e i r own j u s t a s t h e y were -- j u s t a s t h e y g o t t o Mexico on t h e i r own. "Q. Did any of them g e t i n j a i l ? A. None o f them ended up i n -- "a. For u s i n g marijuana? A. No, none o f them d i d . "Q. Not a one? A. One of them, a woman of 27 o r 28 y e a r s o l d , t h e woman was found i n -- found t o be m e n t a l l y -- s h e was running around somewhere i n Mexico. She was u n s t a b l e and h e r p a r e n t s went t o g e t h e r b u t it t u r n e d o u t a f t e r a l o t o f u p s e t by t h e p a r e n t s t h a t t h e woman had a h i s t o r y of mental i l l n e s s t h a t was n o t d i s c l o s e d t o us p r i o r -- "Q . Was s h e p u t i n j a i l because o f drugs? I d o n ' t c a r e a b o u t h e r mental. A. N o s i r , n o t t h a t I know. "Q. You were n o t -- A. I was never. "Q. You were i n c h a r g e of t h i s group? A. T h i s h a p p e n e d s u b s e q u e n t t o t h e q u a r t e r . "Q. Oh, I s e e . A l l r i g h t . A. She was down t h e r e a f t e r t h e q u a r t e r had ended." The p r i v a t e out-of-court c o n t a c t a f f e c t e d d e f e n d a n t ' s s u b s t a n t i a l r i g h t t o due p r o c e s s d u r i n g h i s s e n t e n c i n g . W e remand f o r r e s e n t e n c i n g . D e f e n d a n t n e x t c h a r g e s p r e j u d i c e b a s e d upon t h e f a i l u r e of t h e S t a t e t o produce a t a p e r e c o r d i n g a l l e g e d l y made of t h e c o n v e r s a t i o n which took p l a c e i n t h e Ramada Inn d u r i n g t h e drug t r a n s a c t i o n . Baker a r g u e s t h a t w h i l e a g e n t S k u l e t i c h t e s t i f i e d t h a t Baker had claimed t o have a "ware- house" i n Missoula, t h e t a p e r e c o r d i n g would tend t o cor- r o b o r a t e h i s c l a i m t h a t he never mentioned a "warehouse." T h e r e f o r e , t h e r e c o r d i n g would r e s o l v e t h e c o n f l i c t i n t e s t i m o n y and could prove t o be e x c u l p a t o r y evidence. T h i s argument is w i t h o u t merit. Where t h e r e is no i n d i c a t i o n t h a t t h e d e f e n d a n t made any w r i t t e n motion t o t h e D i s t r i c t Court t o r e q u i r e produc- t i o n of such a t a p e p u r s u a n t t o s e c t i o n s 46-15-302 o r 46-15- 311, MCA, t h e i s s u e is n o t p r o p e r l y b e f o r e t h i s Court. S t a t e v . Hansen ( 1 9 8 1 ) , Mont. , 633 P.2d 1202, 38 St.Rep. 1 5 4 1 . A s i d e f r o m t h i s p r o c e d u r a l d e f e c t , t h e r e c o r d i n d i c a t e s t h e r e is no t a p e r e c o r d i n g o f t h e c o n v e r s a t i o n . I n response t o d e f e n s e c o u n s e l ' s r e q u e s t f o r t h e p r o d u c t i o n of t h e t a p e , t h e p r o s e c u t o r s e n t t h e f o l l o w i n g response: "You a r e c o r r e c t i n t h a t t h e r e were law enforcement o f f i c e r s a t t h e Ramada Inn i n a n a d j a c e n t room t o where your c l i e n t d e a l t t h e d r u g s t o t h e a g e n t of t h e a t t o r n e y g e n e r a l ' s o f f i c e . O f f i c e r s Green and Tymrak o f t h e Bozeman P o l i c e Depart- ment d i d l i s t e n t o t h e c o n v e r s a t i o n t h a t took p l a c e i n t h e room between Baker, E l l s w o r t h and t h e S t a t e ' s a g e n t . However, w e have no t a p e of t h e c o n v e r s a t i o n . The o f f i c e r s t e l l me t h a t t h e r e was a l o t o f e x t r a n o i s e i n t h e room and t h a t it was d i f f i c u l t f o r them t o l i s t e n t o t h e con- v e r s a t i o n s i n t h e room, t h e r e f o r e , t h e r e is no t a p e r e c o r d i n g of t h e c o n v e r s a t i o n i n t h e room. I a m s u r e t h a t O f f i c e r s Green and Tymrak w i l l be more t h a n happy t o r e l a y t o you what t h e y can r e c a l l of t h e c o n v e r s a t i o n t h a t took p l a c e i n t h e room . . ." (Emphasis added.) There is no d u t y on t h e p a r t of t h e p r o s e c u t i o n t o produce t h a t which does n o t e x i s t . S i n c e t h e r e is no t a p e , g a r b l e d o r o t h e r w i s e , d e f e n d a n t ' s c l a i m of p r e j u d i c e from nonproduc- t i o n t h e r e o f is w i t h o u t merit. D e f e n d a n t ' s f i n a l argument is t h a t f o r f e i t u r e of h i s v e h i c l e p u r s u a n t t o s e c t i o n s 44-12-201 through -203, MCA, is u n c o n s t i t u t i o n a l . H e contends t h a t t h e s t a t u t e s ' r e q u i r e - ment t h a t he f i l e a v e r i f i e d answer on t h e f o r f e i t u r e w i t h i n twenty d a y s a f t e r t h e S t a t e g i v e s n o t i c e of i n t e n t t o i n s t i - t u t e f o r f e i t u r e p r o c e e d i n g s f o r c e s him t o g i v e e v i d e n c e which can be used a g a i n s t himself o r f o r c e s him t o f o r f e i t h i s p r o p e r t y . The f o r f e i t u r e proceeding r e q u i r e s : (1) i n s t i t u t i o n of f o r f e i t u r e p r o c e e d i n g s w i t h i n f o r t y - f i v e d a y s of s e i z u r e of t h e p r o p e r t y ; ( 2 ) f i l i n g of a v e r i f i e d answer by d e f e n d a n t w i t h i n twenty days; and, ( 3 ) h e a r i n g n o t less t h a n t h i r t y days a f t e r t h e v e r i f i e d answer is f i l e d . Baker c o n t e n d s t h a t t h i s c o n f l i c t s w i t h t h e due p r o c e s s r i g h t s of a c r i m i n a l d e f e n d a n t t o remain s i l e n t d u r i n g t h e pendency of t h e c r i m i n a l p r o c e e d i n g s i n c e t h e s t a t u t e r e q u i r e s t h e pro- ceeding t o be completed long b e f o r e most c r i m i n a l c a s e s would be t r i e d . T h i s argument f a i l s . G e n e r a l l y , f o r f e i t u r e s of p r o p e r t y such a s t h e van i n t h e i n s t a n t c a s e a r e p r e d i c a t e d upon t h e l e g a l f i c t i o n t h a t t h e S t a t e is proceeding a g a i n s t t h e v e h i c l e through an i n - rem p r o c e e d i n g because t h e v e h i c l e i t s e l f is g u i l t y of b e i n g used i n drug t r a f f i c k i n g , b o o t l e g g i n g , o r o t h e r c r i m i n a l a c t i v i t y . The Palmyra ( 1 8 2 7 ) , 12 Wheat (U.S.) 1, 6 L.Ed. 531, People v. One 1933 Plymouth Sedan Deluxe Auto. ( 1 9 3 9 ) , 1 3 Cal.2d 565, 90 P.2d 799. The p r o c e e d i n g is c o n s i d e r e d c i v i l r a t h e r t h a n c r i m i n a l and o n l y a c i v i l burden of proof need be e s t a b l i s h e d by t h e S t a t e , even though t h e e f f e c t of t h e s t a t u t e ' s o p e r a t i o n is t o d e p r i v e a d e f e n d a n t of h i s p r o p e r t y based upon its p r o b a b l e u s e i n c r i m i n a l a c t i v i t y . United S t a t e s v. One 1970 P o n t i a c 670, 2-Door Hardtop ( 9 t h C i r . 1 9 7 6 ) , 529 F.2d 65. S t a t u t e s e s t a b l i s h i n g f o r f e i t u r e p r o c e d u r e s g e n e r a l l y a t t e m p t t o b a l a n c e t h e r i g h t of a p r o p e r t y owner t o a h e a r - ing a f t e r s e i z u r e " a t a meaningful t i m e and i n a meaningful manner" w i t h t h e p r i v i l e g e a g a i n s t s e l f - i n c r i m i n a t i o n . Once p r o b a b l e c a u s e is e s t a b l i s h e d t h a t t h e v e h i c l e w a s used i n c r i m i n a l a c t i v i t y , some c o u r t s have p e r m i t t e d immediate s e i z u r e w i t h o u t n o t i c e and h e a r i n g a s long as n o t i c e and h e a r i n g i n a meaningful t i m e and manner is t h e n p r o v i d e d . United S t a t e s v. K i m a k ( 9 t h C i r . 1 9 8 0 ) , 624 F.2d 903. For d i s c u s s i o n s t h a t f a v o r l e a v i n g t h e v a r i o u s a p p l i - c a t i o n o f a l t e r n a t i v e s under t h e s t a t u t e w i t h t h e d i s t r i c t c o u r t , see, United S t a t e s v. U.S. Currency ( 6 t h C i r . 1 9 8 0 ) , 6 2 6 F.2d 11, cert. d e n i e d , 449 U.S. 993; United S t a t e s v. $3,799.00 in U. S. Currency (10th Cir. 1982), 684 F.2d 674. See also, Annot., "Forfeiture of property for unlawful use before trial of individual offender," 3 ALR2d 738; Annot., "Relief to owner of motor vehicle subject to state forfei- ture for use in violation of narcotic laws," 50 ALR3d 172; Annot., "Forfeiture of personal property used in illegal manufacture, processing, or sale of controlled substances under S511 of Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 USCA S881)," 59 A.L.R.Fed. 765. Courts have also held that forfeiture statutes should be strictly complied with and have forfeited the property where a defendant failed to prove a verified answer within the statutory period or to otherwise comply with the statute. Matter of 1969 Ford Truck, Etc. (1979), 122 Ariz. 442, 595 P.2d 674. Here, the statutes require a notice of forfeiture within forty-five days of seizure of the property, Defen- dant must file a verified answer within twenty days of that. The proceeding must then be set for hearing "not less than 30 days" after the answer is filed. We hold that these statutes are not unconstitutional on their face. Nor are they unconstitutional as applied in this case. The statutes afford due process through notice and hearing to the property owner whose possession has been seized. The statutes do not require that a defendant incriminate himself in his verified answer. Nor did defen- dant do so here. Baker filed a general denial. He admitted ownership of the vehicle but refused to respond to the allegations that it had been used in criminal activity. Nor was it necessary to hold forfeiture proceedings p r i o r t o Baker's t r i a l . The p r o c e e d i n g s must be set f o r h e a r i n g " n o t l e s s than" t h i r t y days a f t e r t h e answer. While a f o r f e i t u r e h e a r i n g p o t e n t i a l l y could be set t h i r t y o r more days a f t e r t h e v e r i f i e d answer was f i l e d and s t i l l be h e l d b e f o r e a d e f e n d a n t ' s t r i a l on t h e c r i m i n a l m a t t e r , such was n o t t h e c a s e h e r e . Hearing on t h e f o r f e i t u r e was n o t h e l d u n t i l a f t e r d e f e n d a n t e n t e r e d h i s p l e a of g u i l t y and had been sentenced. W e w i l l n o t hold a s t a t u t e u n c o n s t i t u t i o n a l on t h e premise t h a t it might be a p p l i e d a t some f u t u r e t i m e i n a manner r e q u i r i n g a d e f e n d a n t t o i n c r i m i n a t e h i m s e l f . W e l e a v e a p p l i c a t i o n of t h e s t a t u t e ' s a l t e r n a t i v e s t o t h e D i s t r i c t C o u r t s and w i l l review t h e i r a c t i o n s a s n e c e s s a r y . U n i t e d S t a t e s v . U . S . C u r r e n c y , s u p r a . W e h o l d t h e f o r f e i t u r e of t h e van p r o p e r i n t h i s c a s e . C o n v i c t i o n a f f i r m e d b u t c a u s e remanded f o r r e s e n t e n c - i n g . R-ec $ . & d 4 Chief J u s t i c e W e concur: J u s t i c e s M r . J u s t i c e John C. Sheehy: I concur. T h e r e c o r d d o e s n o t show a t a p e e x i s t e d . Mr. Justice Frank B. Morrison, Jr., concurs in part and dissents in part as follows: I concur with the majority in vacating the sentence and remanding for resentencing. However, I dissent from the majority holding with respect to the tape recording. The majority opinion quotes the County Attorney's letter indicating that no tape was made of the conversation in the motel. I believe that this is refuted by the testimony of Agent Skuletich given at the sentencing hearing. Agent Skuletich testified as follows: "Q. You informed me that there was a tape recorder? A. I didn't say there was, I said there was a microphone in the room and that the tape recorder itself was located two rooms away. Q. Didn't you indicate there was a tape recorder in the drawer A. No, no I did not. Q. But, there was a microphone in the room? A. Yes. Q. Where was the microphone? A. It was under the bed. Q. After you arrested Mr. Baker, you indicated rather gleefully that, 'We have this on tape'? A. I don't recall indicating that. Q. Did you say anything about it, a tape, at that time? A. I don't recall saying anything about a tape. Q. You could have but you just don't recall? A. I don't recall. *** Q. Now, where is the tape of the conversation now? A. I have no idea where it's at. *** Q . Well, you don't know what happened to the tape, I take it? A. I never did see the tape. It was in the -- the instrument that was used to record it was in another room. I never seen the tape." The testimony above-quoted indicates that a tape recording was made of the conversation. Apparently the County Attorney felt the conversations on the tape were garbled. However, production of the tape should be ordered so that defense counsel is permitted to listen to the tape and have the opportunity to have the tape examined by an expert. I should add that counsel for the prosecution was questioned at the time of oral argument concerning the apparent conflict between the County Attorney's letter and the testimony given at the sentencing hearing. The responses reinforced my feeling that a tape does exist but that the position of the County Attorney's office was that the voices were inaudible. Under these circumstances the defendant must be given his opportunity to have the tape listened to by a speech pathologist or other expert trained in unscrambling garbled language. Mr. Justice ~aniel J. Shea: I concur with Mr. Justice Morrison. Mr. Justice Fred J. Weber respectfully concurs and dissents as follows: I concur in the conclusions of the majority opinion with regard to the tape recording and the forfeiture of the defendant's van. I respectfully dissent from the conclusion on the part of the majority that the private out-of-court contact affected the defendant's substantial right to due process during his sentencing and therefore constituted a basis for remanding for resentencing. The majority cites several Montana cases as authority for the conclusion that a sentencing judge cannot sentence on the basis of private, out-of-court information, communications or investigation. The majority does not distinguish between the various cases and the statutes which have been substantially changed over the years. As pointed out by this Court in State v. Orsborn (1976), 170 Mont. 480, 555 P.2d 509, in Kuhl this Court was required to follow the provisions of sections 94-7813 and 7814 R.C.M. 1947 which in substance provided that no affidavit, testimony or representation could be received by the court in aggravation or mitigation of punishment unless these matters had been presented "by the testimony of witnesses examined in open court." This Court concluded that the district judge therefore could not consider reports from the police department, sheriff's records, or other sources because they had not been presented by the testimony of witnesses in open court. However, that rule no longer is appropriate. As pointed out in Orsborn, subsequent to Kuhl these statutory provisions were repealed. The provisions in effect under Orsborn were sections 95-2203, 2204 and 2205, R.C.M. 1947 (now sections 46-18-111, 112, and 113, MCA) . The statutes disclose a distinct change in policy. Section 46-18-113, MCA, in pertinent part states: "The judge may, in his discretion, make the investigative reportor'arts of it available to the defendants or others, while concealing the identity of persons who provided confidential information. If the court discloses the identitv A of persons who provided information, the judge may, in his discretion, allow the defendant to - - cross-examine those who rendered the information." (Emphasis added) Under the old statutes as interpreted in Kuhl, testimony was required by witnesses in open court which guaranteed the right of cross-examination as to all elements of evidence received in either aggravation or mitigation of punishment. In contrast, as enacted in 1967, the present law gives the district judge the discretion to refuse to make the investigative report available and to conceal or disclose identity of persons providing confidential information. In addition, section 46-18-113, MCA, provides that the judge may, in his discretion, allow cross-examination by the defendant if the court has disclosed the identity of persons who provided information. There is no specific right of cross-examination under other circumstances. In making a similar analysis, this Court in Orsborn referred to Kuhl and stated: "However, this does not mean that the spirit of Kuhl is dead. A convicted defendant still has a due process guarantee against a sentence predicated on misinformation. The real question before us is whether defendant received that protection." The court then concluded in Orsborn that the defendant was represented by counsel, had the opportunity to rebut the information and chose to affirm the information, and thus any danger of utilizing this information in sentencing was averted. I would apply the Orsborn test to the present case. Here there initially was an anonymous call from a person speaking favorably of the defendant. Thereafter the trial judge called a university professor of his acquaintance. The details of that telephone conversation with the university professor were disclosed by the trial judge in open court. Following that disclosure, the counsel for defendant had ample opportunity to question the judge and to present any explanatory information which he deemed to be advisable. Note that the information obtained by the judge was not actually significant. At most, as pointed out in the majority opinion, the information may have triggered questions about the defendant's trip to Mexico. While such questions may have been triggered, no misinformation or prejudicial information is shown to have been obtained. As stated in Orsborn, the convicted defendant has a due process guarantee against a sentence predicated on misinformation. No misinformation has been shown here. I agree with the conclusion of the majority that the proper course is for a sentencing judge to delegate investigation responsibilities to others. Even the trial judge here admitted that his single phone call may have been inadvisable. The majority has concluded that the private out-of-court telephone contact affected defendant's substantial right to due process during the sentencing. I am unable to see how that conclusion is substantiated by the facts. I believe the majority is setting up a rule which is not consistent with the procedure provided by the legislature in section 46-18-113, MCA, where the judge may choose not to disclose parts of an investigation report to the defendant and may also choose not to allow cross-examination. I would hold here that no misinformation was received and that in fact no information prejudicial to the defendant was presented by the telephone call and that the due process g u a r a n t e e d e s c r i b e d i n Orsborn w a s a f f o r d e d t h e defendant. I would a f f i r m t h e D i s t r i c t Court.

August 2, 1983

cfe498a7-cac9-402e-8d1c-ac1d845484fb

STATE v WEINBERGER

N/A

82-180(A)

Montana

Montana Supreme Court

No. 82-180 (A) I N T H E SUPREME COURT O F T H E STATE O F MONTANA 1983 STATE O F I4OTJTAIJA1 P l a i n t i f f and Respondent, -vs- ARROW WEINBERGER, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e F i f t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Roosevelt, The Honorable P'I. James S o r t e , Judge p r e s i d i n g . Counsel of Record: For Appellant: Skedd, Ashley, McCabe, Weingartrier & NcCarter ; J. C. Weingartner argued, Helena, &Tontana For Respondent: Hon. Mike Greely, Attorney General, Eel-ena, Montana Chris Tweeten argued, A s s t . Atty. General, Helena, James McCann, County Attorney, Wolf P o i n t , blontana Submitted: January 10, 1983 Decided r June 6 , 1983 F i l e d : 6 1983 Clerk Mr. Chief J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e Court. Defendant Arrow Weinberger was c o n v i c t e d of d e l i b e r a t e homicide by a R o o s e v e l t County j u r y f o r t h e s h o o t i n g d e a t h of Floyd " S c o t t y " Azure a t a C u l b e r t s o n s e r v i c e s t a t i o n on December 5, 1982. D e f e n d a n t ' s twenty-year-old son, Adam, was c o n v i c t e d of f e l o n y murder f o r h i s p a r t i n t h e i n c i d e n t . Arrow was s e n t e n c e d t o s e r v e s e v e n t y y e a r s i n t h e Montana S t a t e P r i s o n and was o r d e r e d t o p a y c e r t a i n e x p e n s e s i n c u r r e d i n t h e p r e s e n t a t i o n of t h e c h a r g e s a g a i n s t him. H i s motion f o r a judgment n o t w i t h s t a n d i n g t h e v e r d i c t o r f o r a new t r i a l was d e n i e d . H e a p p e a l s . W e a f f i r m . The c i r c u m s t a n c e s l e a d i n g up t o t h e s h o o t i n g a t a C u l b e r t s o n s e r v i c e s t a t i o n began sometime e a r l i e r . Adam Weinberger, a r e s i d e n t of F o r t Smith, Arkansas, had been l i v i n g i n n o r t h e a s t e r n Montana. Beginning i n J u n e 1981, h e a t t e m p t e d t o e s t a b l i s h a r e l a t i o n s h i p w i t h Luanne Azure, t h e seventeen-year-old d a u g h t e r of S c o t t y and Gloreen Azure. Azures were opposed t o an involvement between Luanne and Adam because he was o l d e r t h a n Luanne and because of Adam's f a i l u r e t o " a c t l i k e a gentleman." D e s p i t e Azures' opposi- t i o n , Adam and Luanne c o n t i n u e d t o s e e each o t h e r . On November 1 0 , 1981, Luanne r a n away from home w i t h t h r e e f r i e n d s and went t o Havre, Montana. Adam d i d n o t accompany Luanne t o Havre, b u t s h e c a l l e d him from t h e r e and made arrangements t o meet him i n W i l l i s t o n , North Dakota. Azures s e a r c h e d t h e P o p l a r a r e a f o r Luanne w i t h o u t s u c c e s s . On November 1 2 , t h e y t r a v e l e d t o W i l l i s t o n t o look f o r h e r . They found Adam Weinberger, who f a l s e l y t o l d them t h a t he had n o t s e e n Luanne and thought s h e was i n Havre. L a t e r t h a t day Azures d i s c o v e r e d Luanne i n W i l l i s t o n and l e a r n e d t h a t s h e had i n f a c t been w i t h Adam. Azures began t o watch Luanne c l o s e l y t o keep h e r away from Adam. They a l s o f i l e c i a complaint i n T r i b a l Court a l l e g i n g t h a t Adam had c o n t r i b u t e d t o Luanne's d e l i n q u e n c y by e n t i c i n g h e r o u t of t h e f a m i l y r e s i d e n c e a g a i n s t h e r p a r e n t s 1 wishes and a f t e r curfew. The complaint asked t h a t Adam be r e s t r a i n e d from f u r t h e r c o n t r i b u t i n g t o h e r d e l i n - quency and t h a t he be k e p t away from Azures' r e s i d e n c e a t a l l t i m e s . Sometime a f t e r t h e complaint was f i l e d , Arrow W e i n b e r g e r came t o t h e P o p l a r a r e a f r o m F o r t S m i t h , Arkansas. On December 1, Luanne a g a i n r a n away from home. Azures were convinced t h a t Luanne was w i t h Adam based upon t h e W i l l i s t o n i n c i d e n t . They immediately e n l i s t e d t h e h e l p of l o c a l law enforcement o f f i c e r s and began t o s e a r c h f o r Luanne and f o r Weinbergers. A t t h e Azuresl r e q u e s t , p o l i c e stopped Arrow W e i n b e r g e r l s C a d i l l a c t o look f o r Luanne. Both Adam and Arrow l a t e r went t o Azuresl home t o r e g i s t e r t h e i r d i s p l e a s u r e a t being stopped. Arrow was a n g r y and t o l d Azures t h a t he d i d n o t l i k e t o g e t u p s e t "because when I g e t u p s e t , I s t a y u p s e t . . ." Azures c o n t i n u e d t o s e a r c h t h e P o p l a r a r e a f o r Luanne. On t h e evening of F r i d a y , December 4 , t h e y c o n t a c t e d Roy T r o t t i e r , a f e d e r a l I n d i a n p o l i c e o f f i c e r , and s o u g h t h i s h e l p . The n e x t morning, Azures d i s c o v e r e d t h a t Luanne had been s e e n with Adam on t h e day s h e d i s a p p e a r e d . They immediately c o n t a c t e d T r o t t i e r and t o l d him t h a t i f t h e y found Adam they would r e p o r t h i s whereabouts t o t h e p o l i c e and t h a t i f t h e y found Luanne t h e y would b r i n g h e r t o t h e p o l i c e . T r o t t i e r approved t h e p l a n . Luanne had, i n f a c t , been i n c o n t a c t w i t h Adam Weinberger and he knew t h a t s h e was i n t h e B i l l i n g s a r e a . She planned t o go t o F o r t Smith, Arkansas, w i t h him. S c o t t y and Gloreen Azure t h e n began t o s e a r c h f o r Adam Weinberger's c a r . They l a t e r e n l i s t e d t h e h e l p of G l o r e e n ' s s i s t e r , C a r o l Lee Azure, and C a r o l Lee's husband, Rodney. Rodney was S c o t t y A z u r e ' s cousin. C a r o l L e e and Rodney Azure found Adam's c a r i n Brockton t h a t a f t e r n o o n and n o t i f i e d t h e p o l i c e . The p o l i c e d i s p a t c h e r s e n t a n o f f i c e r t o Brockton, b u t he a p p a r e n t l y was unable t o l o c a t e t h e c a r . C a r o l Lee and Rodney t h e n attempted t o f i n d S c o t t y and Gloreen Azure. They encountered t h e Azures f o l l o w i n g Adam Weinberger's c a r on t h e F o r t Kipp Road and t u r n e d around t o f o l l o w t h e c a r s toward C u l b e r t s o n . The t h r e e c a r s were t h e n passed by Arrow Weinberger's w h i t e C a d i l l a c . A t a s i g n a l from Adam, Adam and Arrow p u l l e d t h e i r c a r s t o t h e s i d e of t h e road and stopped. The two Azure c a r s proceeded i n t o C u l b e r t s o n and stopped a t t h e S t a n d a r d g a s s t a t i o n . S c o t t y parked a t t h e s i d e of t h e s t a t i o n . Rodney parked s e v e r a l c a r l e n g t h s behind a r e d p i c k u p t h a t was a l s o parked a t t h e s i d e of t h e s t a t i o n . The two Azure women went i n t o t h e s t a t i o n t o ask t h e a t t e n d a n t t o c a l l t h e p o l i c e d i s p a t c h e r . S c o t t y and Rodney remained o u t s i d e . A t t h e t i m e of t h e r o a d s i d e s t o p , each Weinberger v e h i c l e had two occupants. Arrow Weinberger was accompanied by h i s b r o t h e r , Frank. Adam was accompanied by a h i t c h h i k e r named Thomas Hanzlick. When Adam r e t u r n e d t o h i s c a r a t t h a t s t o p a f t e r t a l k i n g w i t h Arrow, he t o l d Hanzlick t h a t Arrow was going t o ''run down1' t h e Azures and t a l k t o them. The Weinberger v e h i c l e s c o n t i n u e d i n t o C u l b e r t s o n and a l s o stopped a t t h e S t a n d a r d s t a t i o n . Arrow parked h i s c a r almost d i r e c t l y behind S c o t t y A z u r e ' s w i t h a b o u t s i x f e e t of s p a c e between t h e v e h i c l e s . Adam parked h i s c a r a n g l i n g i n t o t h e p a s s e n g e r ' s s i d e of S c o t t y ' s c a r w i t h s e v e r a l f e e t of c l e a r a n c e between t h e v e h i c l e s . The r e d pickup t r u c k was parked p a r a l l e l t o t h e d r i v e r ' s s i d e of S c o t t y ' s c a r a t a d i s t a n c e of n i n e and one-half f e e t away. S c o t t y Azure s t o o d between h i s c a r and t h e red p i c k u p n e a r t h e open d r i v e r ' s door of h i s c a r a s Weinbergers p u l l e d i n t o t h e s t a t i o n . Arrow g o t o u t of h i s c a r and t o l d S c o t t y t o l e a v e h i s son a l o n e . Adam c r o s s e d between S c o t t y ' s c a r and Arrow's C a d i l l a c t o t h e back of t h e red pickup, s a y i n g , " g e t your b a t o u t , Azure." H e t h e n began t o d r a g a l o g g i n g c h a i n o u t of t h e p i c k u p which he doubled over and s t a r t e d t o swing a t S c o t t y . Rodney Azure grabbed t h e o t h e r end of t h e eighteen-£ oot-long c h a i n a s Adam threw t h e c h a i n toward S c o t t y . S c o t t y d e f l e c t e d t h e c h a i n w i t h a b a s e b a l l b a t h e had r e t r i e v e d from h i s c a r . Arrow Weinberger t h e n drew a .25 c a l i b e r p i s t o l and s h o t S c o t t y Azure once i n t h e c h e s t , k i l l i n g him i n s t a n t l y . Arrow claimed t h a t he a c t e d i n self- d e f e n s e a f t e r S c o t t y had h i t him w i t h t h e b a t once and t r i e d t o h i t him a g a i n . Other w i t n e s s e s p l a c e d t h e two a t a d i s t a n c e of f i f t e e n - t o - t w e n t y f e e t a p a r t . The j u r y found Arrow Weinberger g u i l t y of d e l i b e r a t e homicide. Arrow Weinberger p r e s e n t s t h i s Court w i t h s i x i s s u e s on a p p e a l : 1. Whether t h e i n s t r u c t i o n s t a k e n a s a whole c o r - r e c t l y d e f i n e d t h e o f f e n s e o f d e l i b e r a t e homicide; 2. Whether c e r t a i n h e a r s a y t e s t i m o n y should have been s u b m i t t e d t o t h e j u r y ; 3 . Whether " o t h e r crimes" e v i d e n c e was e r r o n e o u s l y i n t r o d u c e d a g a i n s t d e f e n d a n t ; 4. Whether t h e p r o s e c u t i o n ' s t r i a l t a c t i c s d e p r i v e d d e f e n d a n t of a f a i r t r i a l ; 5. Whether s e c t i o n 46-18-232, MCA, which a l l o w s i m p o s i t i o n of t r i a l c o s t s a g a i n s t a c o n v i c t e d d e f e n d a n t , is u n c o n s t i t u t i o n a l ; and 6. Whether d e f e n d a n t was p r o p e r l y s e n t e n c e d . Defendant f i r s t a r g u e s t h a t a j u r y i n s t r u c t i o n d e f i n - i n g d e l i b e r a t e homicide o m i t t e d an e s s e n t i a l element of t h e crime. I n s t r u c t i o n No. 1 1 provided: "You a r e i n s t r u c t e d t h a t t o s u s t a i n t h e c h a r g e o f D e l i b e r a t e Homicide a g a i n s t Arrow Weinberger t h e S t a t e must prove t h a t t h e Defendant Arrow Weinberger pur- p o s e l y o r knowingly performed t h e a c t o r a c t s c a u s i n q t h e d e a t h o f Flovd Azure. " I f you f i n d from your c o n s i d e r a t i o n of a l l t h e evidence t h a t t h i s p r o p o s i t i o n h a s b e e n p r o v e d beyond a r e a s o n a b l e doubt, t h e n you should f i n d Defendant Arrow W e i n b e r g e r g u i l t y o f D e l i b e r a t e Homicide." (Emphasis added.) Defendant c h a l l e n g e s t h i s i n s t r u c t i o n a s incomplete on t h e b a s i s t h a t it allowed t h e j u r y t o c o n v i c t him of d e l i b e r a t e homicide i f it found he i n t e n d e d t o perform t h e a c t which caused d e a t h r a t h e r t h a n i n t e n d i n g d e a t h a s t h e r e s u l t of t h e a c t . W e d i s a g r e e f o r s e v e r a l r e a s o n s . F i r s t , t h i s i n s t r u c t i o n , t a k e n i n c o n t e x t w i t h t h e o t h e r i n s t r u c t i o n s and p l a c e d w i t h i n t h e framework of t h e i s s u e s and arguments p r e s e n t e d throughout t h e t r i a l , d i d n o t a l l o w t h e j u r y t o c o n v i c t Arrow i f it found t h a t he had o n l y i n t e n d e d t o p u l l t h e t r i g g e r . T h i s Court h a s recognized t h a t i n t h e c a s e of d e l i b e r a t e homicide, t h e r e q u i s i t e mental s t a t e a t t a c h e s t o t h e r e s u l t : " I n Montana, a p e r s o n commits t h e o f f e n s e of d e l i b e r a t e homicide i f he p u r p o s e l y o r knowingly c a u s e s t h e d e a t h of a n o t h e r human being . . . The s t a t u t o r i l y d e f i n e d e l e m e n t s of t h e o f f e n s e , each of which t h e S t a t e must prove beyond a r e a s o n a b l e d o u b t , a r e t h e r e f o r e c a u s i n g t h e d e a t h of a n o t h e r human being w i t h t h e knowledge t h a t you a r e c a u s i n g o r w i t h t h e p u r p o s e t o c a u s e t h e d e a t h of t h a t human being." ( E m p h a s i s a d d e d . ) S t a t e v . McKenzie ( 1 9 7 8 ) , 177 Mont. 280, 327-328, 581 P.2d 1205, 1232, v a c a t e d on o t h e r grounds, 443 U.S. 90$$ 99 S.Ct. 3094, 6 1 L.Ed.2d 871. Here, w e f i n d t h a t t h e j u r y was t h o r o u g h l y i n s t r u c t e d and could n o t have c o n v i c t e d Arrow u n l e s s it found t h a t he had performed t h e a c t o r a c t s c a u s i n g A z u r e ' s d e a t h w i t h t h e knowledge t h a t he was c a u s i n g o r t h e purpose t o c a u s e A z u r e ' s d e a t h . A t t h e o u t s e t of t r i a l , t h e j u r y was informed t h a t t h e s p e c i f i c c h a r g e a g a i n s t Arrow was t h a t : ". . . Arrow Weinberger p u r p o s e l y o r knowingly caused t h e d e a t h of Floyd Azure by s h o o t i n g him i n t h e h e a r t a r e a of t h e c h e s t w i t h a .25 c a l i b r e a u t o m a t i c p i s t o l c a u s i n g Floyd Azure t o d i e a l m o s t i n - s t a n t l y from a s e v e r e d pulmonary a o r t i c a r t e r y . . ." From t h a t p o i n t , t h e f o c u s of t h e t r i a l was on t h e e v e n t s l e a d i n g t o Azure's d e a t h and on whether t h e s h o o t i n g was d e l i b e r a t e , a c c i d e n t a l o r an a c t of s e l f - d e f e n s e . Arrow p r e s e n t e d e x t e n s i v e d i r e c t t e s t i m o n y t h a t c o n f l i c t e d w i t h t h e S t a t e ' s e v i d e n c e and he p r e s e n t e d e v i d e n c e through cross-examination t h a t s u p p o r t e d t h e d e f e n s e t h e o r i e s o f a c c i d e n t o r s e l f d e f e n s e . The j u r y was t h o r o u g h l y i n s t r u c t e d on b o t h t h e o r i e s and b o t h were t h o r o u g h l y argued. I n f a c t , no fewer t h a n twelve i n s t r u c t i o n s o f t h e f i f t y - f i v e g i v e n t o t h e j u r y d e f i n e d s e l f - d e f e n s e , t h e c i r c u m s t a n c e s i n which it may be used, and t h e p e r m i s s i b l e amount of f o r c e which may be used. Where " a l l t h e i n s t r u c t i o n s , reviewed as a whole, f a i r l y and a c c u r a t e l y p r e s e n t t h e case t o t h e j u r y , " w e w i l l n o t o v e r t u r n a c o n v i c t i o n . S t a t e v. R i l e y ( 1 9 8 2 ) , Mon t . , 649 P.2d 1273, 1281, 39 St.Rep. 1491, 1501; S t a t e v. Johnson ( 1 9 8 2 ) , Mont . , 646 P.2d 507, 512, 39 St.Rep. 1014, 1020. I n a d d i t i o n t o t h e s e l f - d e f e n s e i n s t r u c t i o n s , t h e j u r o r s were i n s t r u c t e d : t h a t t h e y must c o n s i d e r t h e i n s t r u c - t i o n s a s a whole ( # I ) ; t h a t each m a t e r i a l a l l e g a t i o n and f a c t charged under t h e s p e c i f i c c h a r g e a g a i n s t Arrow must be proved beyond a r e a s o n a b l e d o u b t ( # 8 ) ; t h a t t h e r e q u i s i t e mental s t a t e was " p u r p o s e l y " or "knowingly" w i t h r e g a r d t o t h e r e s u l t of t h e conduct d e s c r i b e d by t h e s t a t u t e d e f i n i n g an o f f e n s e ( # 3 1 , # 3 2 ) ; t h e s t a t u t o r y d e f i n i t i o n of "pur- p o s e l y " and "knowingly" ( # 3 1 , # 3 2 ) ; t h e s t a t u t o r y d e f i n i t i o n of d e l i b e r a t e homicide ( # l o ) ; t h a t b o t h act and m e n t a l s t a t e must be proved beyond a r e a s o n a b l e d o u b t ( # 3 9 ) ; t h a t a p e r - son must have t h e r e q u i s i t e mental s t a t e w i t h r e s p e c t t o each e l e m e n t of t h e o f f e n s e ( # 2 4 ) ; t h a t d e a t h o c c u r r i n g from a c c i d e n t o r m i s f o r t u n e is n o t s u f f i c i e n t t o c o n v i c t of d e l i - b e r a t e homicide ( # 1 5 ) ; t h a t t h e f a c t a d e a t h o c c u r r e d is n o t s u f f i c i e n t p r o o f , s t a n d i n g a l o n e , t h a t a crime was committed ( # 1 6 ) . W e r e j e c t t h e t o r t u r e d i n t e r p r e t a t i o n t h e d i s s e n t e r s g i v e t o I n s t r u c t i o n No. 11. They a r g u e t h a t I n s t r u c t i o n No. 1 1 is i n c o n f l i c t w i t h t h e o t h e r i n s t r u c t i o n s . Viewed i n c o n t e x t of t h e f a c t s of t h i s c a s e , t h e arguments p r e s e n t e d a t t r i a l , and a l l of t h e i n s t r u c t i o n s charged t o t h e j u r y , w e f i n d t h e i r s t a n c e u n t e n a b l e . W e hold t h a t t h e i n s t r u c - t i o n s t a k e n a s a whole f a i r l y and a c c u r a t e l y p r e s e n t e d t h e case t o t h e j u r y and were s u f f i c i e n t . The second b a s i s on which w e r e j e c t a c h a l l e n g e t o I n s t r u c t i o n No. 1 1 is t h a t d e f e n d a n t d i d n o t p r o p e r l y o b j e c t t o it; nor d i d he t a k e t h e o p p o r t u n i t y p r e s e n t e d a t t r i a l t o c u r e any d e f i c i e n c y i n t h e i n s t r u c t i o n . A s i n s t r u c t i o n s were being s e t t l e d , t h e S t a t e o f f e r e d i t s proposed I n s t r u c t i o n No. 8, which was given a s t h e C o u r t ' s I n s t r u c t i o n No. 11. The f o l l o w i n g exchange took p l a c e : "MR. CHARLES MOSES [Defense Counsel] : W e would o b j e c t t o P l a i n t i f f ' s 8 upon t h e f o l l o w i n g g r o u n d s , upon t h e f o l l o w i n g grounds: t h a t t h i s is an element and i s s u e s i n s t r u c t i o n and it is incomplete; t h e S t a t e is r e q u i r e d t o prove, number 1: t h e S t a t e is implying t h a t it was done knowingly o r p u r p o s e l y ; number 2 , t h a t it was done with i n t e n t t o k i l l , which re- q u i r e s under d e l i b e r a t e homicide a s p e c i - f i c purpose t o k i l l under t h e s t a t u t e ; number 3 , t h a t it h a s t o be committed w i t h i n t h e county; number 4 , t h e d e a t h must be a r e s u l t of d e l i b e r a t i o n . "THE COURT: Do you have i n s t r u c t i o n l i k e t h a t i n yours? "MR. CHARLES MOSES: No I d o n ' t have t h a t . "THE COURT: W e l l i f you w i l l p r e p a r e one c h a t h a s a l l o f t h o s e t h i n q s , w e w i l l - ---------- t a k e a look a t it. "MR. MOSES: Okay, Your Honor. "THE COURT: Otherwise, I b e l i e v e I w i l l g i v e t h i s one. "THE COURT: I w i l l g i v e it unless--I d o n ' t t h i n k we have t o a l l e g e t h a t it was i n Roosevelt County, t h a t is a l e g a l q u e s t i o n . Culbertson is i n Roosevelt County, Montana, and t h e a c t was commit- ted i n Roosevelt County, Montana and i n a d d i t i o n I would t a k e j u d i c i a l n o t i c e of t h e f a c t t h a t C u l b e r t s o n is i n Roosevelt County, Montana. I d o n ' t t h i n k t h a t t h e s e i n s t r u c t i o n s have t o have a l l t h a t s t u f f i n it. 8 w i l l be g i v e n . A s I u n d e r s t a n d i t y o u ' r e s a y i n g and i t i s ------ ------- - - y o u r p o s i t i o n t h a t y o u h a v e t o p r o v e ......................... s e e c i f i c i n t e n t i n t h e s t a t u t o r y l a n - - --- - - - -- - - - - - g u a g e , p u r p o s e l y , k n o w i n g l y - ---------- u n d e r t h e United S t a t e s Supreme C o u r t r u l i n u s ? "MR. CHARLES MOSES: Right. " (Emphasis added. ) W h i l e d e f e n d a n t o b j e c t e d on t h e g r o u n d t h a t t h e i n s t r u c t i o n was i n c o m p l e t e , it is a p p a r e n t from t h e d i s c u s - s i o n t h a t t h e n followed t h a t t h e c r u x of t h e o b j e c t i o n was t h a t it d i d n o t r e q u i r e t h a t t h e S t a t e prove a s p e c i f i c i n t e n t t o k i l l b u t t h a t it allowed t h e S t a t e t o imply such a s p e c i f i c i n t e n t w i t h i n t h e s t a t u t o r y mental states of pur- p o s e l y o r knowingly. Defense c o u n s e l argued f i r s t t h a t t h e j u r y be i n s t r u c t e d t h a t d e f e n d a n t must have had a s p e c i f i c purpose t o k i l l and t h a t t h e d e a t h must have been a r e s u l t of d e l i b e r a t i o n . H e a l s o argued t h a t t h e j u r y be i n s t r u c t e d t h a t t h e crime had t o have been committed w i t h i n t h e county. The D i s t r i c t C o u r t took j u d i c i a l n o t i c e o f venue. The f i r s t argument propounded by d e f e n s e c o u n s e l is n o t t h e law i n Montana. The S t a t e need n o t e s t a b l i s h a s p e c i f i c p u r p o s e t o k i l l . Nor must it show t h a t d e a t h was t h e r e s u l t of d e l i b e r - a t i o n o t h e r t h a n t h e d e l i b e r a t i o n i m p l i c i t w i t h i n t h e s t a t u - t o r y d e f i n i t i o n s of "purposely" and "knowingly." S t a t e v. Sharbono ( 1 9 7 7 ) , 175 Mont. 373, 392, 563 P.2d 61, 72-73. See a l s o , C r i m i n a l Law Commission Comments t o s e c t i o n 45-5- 102, MCA. Where a p e r s o n is aware t h a t it is h i g h l y p r o b a b l e t h a t a c e r t a i n r e s u l t w i l l be caused by h i s conduct, he a c t s knowingly w i t h r e s p e c t t o t h e r e s u l t of t h a t conduct. Sec- t i o n 45-2-101(33), MCA. Where it is a p e r s o n ' s c o n s c i o u s o b j e c t t o engage i n c e r t a i n conduct o r t o c a u s e a p a r t i c u l a r r e s u l t he acts p u r p o s e l y w i t h r e s p e c t t o t h a t conduct o r its r e s u l t . S e c t i o n 45-2-101(58), MCA. The C o m p i l e r ' s Comments to section 45-5-102, MCA, at 123, defining deliberate homi- cide, note that: "'Purposely' . . . is the most culpable mental state and implies an objective or design to engage in certain conduct, al- though not Earticularly toward some ---- ------ --__------_------------ result. 'Knowingly' . . . refers to a state of mind in which a person acts, while not toward a certain objective, at least with full knowledge of relevant ------------- facts and circumstances. Toqether these terms replace the concepts of malice and intent . . . premeditation is no longer an element of homicide . . ." (Emphasis added. ) We agree. We have previously recognized the legislative changes in the requirements of mens rea. State v. Sharbono, supra, 175 Mont. at 392-394, 563 P.2d at 72-73; State v. Coleman (1978), 177 Mont. 1, 30-31, 579 P.2d 732, 750, cert. denied, 448 U.S. 914, 101 S.Ct. 34, 65 L.Ed.2d 1177. Here, defendant's objection to Instruction No. 11 on the ground that it was incomplete is founded upon mens rea requirements that are no longer the law in Montana. Defendant also failed to take the opportunity provided by the District Court to draft an alternative instruction. Instead, after instructions had been read to the jury and the State had presented its initial final argument, defense counsel resubmitted its proposed Instruction No. 35: "You are instructed that with respect to the crime alleged of deliberate homicide, a specific purpose to kill is an ele- ment of such a charge and must be proven beyond a reasonable doubt." This proposed instruction was properly refused both times. We conclude that defendant's contention that Instruc- tion No. 11 was incomplete is without merit. Defendant next challenges the introduction of certain hearsay statements into evidence. He raises three separate arguments i n a t t a c k i n g admission of t h e h e a r s a y s t a t e m e n t s . F i r s t , he contends t h a t two p r e s h o o t i n g s t a t e m e n t s were n o t a d m i s s i b l e because t h e y were h e a r s a y o r double h e a r s a y and because t h e y were i r r e l e v a n t . Second, he contends t h a t t h e S t a t e f a i l e d t o g i v e n o t i c e of two admissions p u r s u a n t t o s e c t i o n 46-15-303, MCA, and should t h e r e f o r e n o t have been allowed t o i n t r o d u c e t h e s t a t e m e n t s . T h i r d , he c o n t e n d s t h a t t h e admission of f o u r i n c u l p a t o r y s t a t e m e n t s made by Adam, h i s n o n t e s t i f y i n g codefendant, were Bruton i n f r a c t i o n s t h a t v i o l a t e d t h e c o n f r o n t a t i o n c l a u s e of t h e S i x t h Amend- ment t o t h e United S t a t e s C o n s t i t u t i o n . Bruton v. United S t a t e s ( 1 9 6 8 ) , 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476. The p r e s h o o t i n g h e a r s a y s t a t e m e n t s t h a t were a d m i t t e d and t h a t d e f e n d a n t c h a l l e n g e s were made by Gloreen and Luanne Azure. Gloreen Azure was q u e s t i o n e d d u r i n g c r o s s - examination on h e r b a s i s f o r b e l i e v i n g t h a t Weinbergers might know of Luanne's whereabouts. The S t a t e was allowed t o d e v e l o p t h o s e r e a s o n s on r e d i r e c t examination and testi- mony on Adam's involvement i n Luanne's t r i p t o W i l l i s t o n was a d m i t t e d . Gloreen was a l s o asked why s h e b e l i e v e d t h a t Arrow could be involved w i t h Luanne's d i s a p p e a r a n c e . She answered : "I was t o l d t h a t he was on h i s way up h e r e , and he d i d n ' t c a r e how much money it c o s t him, and he was b r i n g i n g a lawyer and he was going t o prove t h a t h i s s o n was an a n g e l . . ." Luanne was q u e s t i o n e d on Weinbergers' knowledge o f h e r whereabouts d u r i n g e a r l y December. She t e s t i f i e d t h a t s h e and Adam planned t o go t o Arkansas; t h a t s h e l e f t a n o t e t e l l i n g him s h e was going t o B i l l i n g s ; t h a t he showed t h e n o t e t o Arrow; and t h a t Arrow s a i d it "sounded good" t o him. Both s t a t e m e n t s were o b j e c t e d t o a s h e a r s a y , o r as d o u b l e h e a r s a y , p u r s u a n t t o Rule 805, Mont.R.Evid. The District Court p r o p e r l y allowed t h e f i r s t state- ment i n t o e v i d e n c e w i t h an i n s t r u c t i o n t h a t it was n o t o f f e r e d t o prove t h e t r u t h of t h e m a t t e r a s s e r t e d b u t w a s o f f e r e d o n l y t o show why Gloreen a c t e d and b e l i e v e d a s s h e d i d . The s t a t e m e n t was r e l e v a n t t o t h e i s s u e of d e f e n d a n t ' s s t a t e of mind and motive. I n a c a s e where s e l f - d e f e n s e is r a i s e d , t h e s t a t e of mind and i n t e n t of t h e d e f e n d a n t is t h e primary i s s u e . The j u r y is e n t i t l e d t o know, s o f a r as e v i d e n c e is a v a i l a b l e , a l l t h e f a c t s and c i r c u m s t a n c e s which tend t o throw l i g h t upon t h e p a r t i e s and t h e i r r e l a t i o n s and f e e l i n g s toward each o t h e r . S t a t e v. Hollowell ( 1 9 2 7 ) , 79 Mont. 343, 356-357, 256 P. 380, 385. The j u r y was e n t i t l e d t o view S c o t t y A z u r e ' s d e a t h i n t h e c o n t e x t of t h e s e p r i o r e v e n t s . S t a t e v. R i l e y , s u p r a , 649 P.2d a t 1280, 39 St.Rep. a t 1499. Most of Luanne's s t a t e m e n t was n o n o b j e c t i o n a b l e and was p r o p e r l y a d m i t t e d . Only t h e second p a r t o f t h e s t a t e m e n t ( A r r o w ' s knowledge a n d a p p r o v a l o f L u a n n e ' s t r i p t o B i l l i n g s ) should n o t have been a d m i t t e d i n t o e v i d e n c e . Defendant c o n t e n d s t h a t viewed i n t h e c o n t e x t o f G l o r e e n ' s s t a t e m e n t and t h e r e f e r e n c e made t o t h e t r i b a l c o m p l a i n t f i l e d a g a i n s t Adam, t h e comment was p r e j u d i c i a l . W e w i l l a d d r e s s t h i s c o n t e n t i o n w i t h i n t h e framework of d e f e n d a n t ' s argument on " o t h e r crimes" e v i d e n c e . Defendant a r g u e s t h a t Luanne's s t a t e m e n t c o n s t i t u t e s e v i d e n c e of o t h e r c r i m e s and t h a t it d o e s n o t meet t h e f o u r - prong test of a d m i s s i b i l i t y t h a t t h i s C o u r t s e t f o r t h i n S t a t e v. J u s t ( 1 9 7 9 ) , Mont. , 602 P.2d 957, 36 St.Rep. 1649. We agree that it does not meet the Just test. It need not. We reject defendant's contention that it constitutes evidence of other crimes. Defendant failed to object to admission of the statement at trial on these grounds and may not do so now. State v . Campbell (1981), Mont . , 622 P.2d 200, 202, 38 St.Rep. 19, 22. Nor has Arrow convinced us that the jury would recognize as "another crime" the tenuous connection he attempts to draw between: (1) a complaint filed against Adam in Tribal Court; (2) Adam's plan to take Luanne to Arkansas; (3) Arrow's knowledge that Luanne left a note saying she went to Billings; and, (4) Arrow's statement that "it sound[ed] good to [him] . " The connection appears to be too flimsy to merit serious consideration. In a criminal case where prejudice is alleged, it must be established from the record that a substantial right was denied. State v . Dupre (1982), Mon t . , 650 P.2d 1381, 1386, 39 St.Rep. 1660, 1666; section 46-20-701, MCA. Defendant has failed to demonstrate such prejudice. Defendant next challenges the introduction of several statements which were not included within the "Notice of Confessions and/or Admissions" filed by the State in response to defendant's motion requesting production of such statements. Defendant contends that the District Court erred in ruling that the motion was moot as a result of the notice filed. We agree. Section 46-15-303, MCA, provides: "Motion to produce confession or admis- sion. (1) On motion of a defendant in any criminal case made prior to trial, the court shall order the state to furnish the defendant with a copy of any written confession or admission and a list of the witnesses to its making. If the defendant has made an oral confession or admission, a list of t h e w i t n e s s e s t o i t s making s h a l l be f u r n i s h e d . " ( 2 ) The list o f w i t n e s s e s may, upon n o t i c e and motion, be amended by t h e s t a t e p r i o r t o t r i a l . " ( 3 ) No s u c h c o n f e s s i o n o r a d m i s s i o n s h a l l be r e c e i v e d i n e v i d e n c e w h i c h h a s n o t b e e n f u r n i s h e d i n c o m p l i a n c e w i t h ------------ s u b s e c t i o n (1) u n l e s s t h e c o u r t is s a t i s - f i e d t h a t t h e p r o s e c u t o r was unaware o f t h e e x i s t e n c e o f s u c h c o n f e s s i o n o r ad- m i s s i o n ~ r i o r t o t r i a l and t h a t he c o u l d n o t have become aware of such i n t h e e x e r c i s e of due d i l i g e n c e . " (Emphasis added. ) The r e c o r d d o e s n o t s u p p o r t a f i n d i n g by t h e D i s t r i c t Court t h a t t h e p r o s e c u t o r was unaware of t h e e x i s t e n c e o f t h e s t a t e m e n t s . The District Court t h e r e f o r e had no d i s c r e - t i o n t o a l l o w t h e s t a t e m e n t s i n t o evidence. The f i r s t s t a t e m e n t was made by Adam i n t h e s e r v i c e s t a t i o n a f t e r t h e s h o o t i n g . H e s a i d , "What do you e x p e c t , t h e y were t a i l g a t i n g us." The p r o s e c u t o r f a i l e d t o p r o v i d e t h i s s t a t e m e n t t o d e f e n d a n t s i n c e he f i r s t became aware of it a f t e r t h e "Notice of C o n f e s s i o n s and/or Admissions" was f i l e d . The D i s t r i c t Court p r o p e r l y provided d e f e n s e c o u n s e l t h e o p p o r t u n i t y t o i n t e r v i e w a l l p o s s i b l e w i t n e s s e s t o t h e making of t h e s t a t e m e n t b e f o r e it was allowed i n t o e v i d e n c e . The second s t a t e m e n t was made by Adam t o t h e h i t c h h i k e r , Hanzlick. A s Adam stopped a t t h e s e r v i c e s t a t i o n , he asked: "Are you ready t o f i g h t ? " Defense c o u n s e l o b j e c t e d t o t h e S t a t e ' s a t t e m p t t o i n t r o d u c e t h i s s t a t e m e n t i n its c r o s s - examination of Hanzlick. A f t e r d i s c u s s i o n o u t s i d e t h e p r e s e n c e of t h e j u r y , t h e D i s t r i c t Court s t r u c k t h e s t a t e - ment and used an admonishment framed by d e f e n s e c o u n s e l t o i n s t r u c t t h e j u r y t o d i s r e g a r d it. No motion f o r m i s t r i a l was made. The e x i s t e n c e of a s i m i l a r s t a t e m e n t ("we might see a f i g h t " ) had been provided i n an a f f i d a v i t s u p p o r t i n g t h e amended complaint and its admission had been argued e a r l i e r i n t h e t r i a l . Defendant h a s f a i l e d t o d e m o n s t r a t e p r e j u d i c e a r i s i n g from t h e f a i l u r e t o p r o v i d e n o t i c e of t h e s e s t a t e m e n t s a s d i s t i n g u i s h e d f r o m t h e i n t r o d u c t i o n o f t h e s t a t e m e n t s themselves. The purpose of t h e s t a t u t e r e q u i r i n g p r o d u c t i o n of c o n f e s s i o n s and a d m i s s i o n s is t o a l l o w t h e d e f e n d a n t t o p r e p a r e a d e f e n s e t o t h e s t a t e m e n t s . Here, d e f e n d a n t was g i v e n t h e o p p o r t u n i t y t o i n t e r v i e w any p o s s i b l e w i t n e s s e s t o t h e making of t h e f i r s t s t a t e m e n t b e f o r e it was i n t r o d u c e d . The second s t a t e m e n t was n o t a d m i t t e d , and t h e j u r y was admonished w i t h an i n s t r u c t i o n p r e p a r e d by d e f e n s e c o u n s e l . While t h e s u b s t a n c e of t h e s t a t e m e n t s may have been d e t r i - mental t o d e f e n d a n t , he has n o t demonstrated p r e j u d i c e stemming from t h e S t a t e ' s f a i l u r e t o produce t h e s t a t e m e n t s p r i o r t o t r i a l . Defendant f i n a l l y a r g u e s t h a t f o u r s t a t e m e n t s a t t r i - buted t o h i s n o n t e s t i f y i n g codefendant were a d m i t t e d i n v i o l a t i o n of t h e c o n f r o n t a t i o n c l a u s e of t h e United S t a t e s C o n s t i t u t i o n . The f o u r out-of-court s t a t e m e n t s were i n t r o - duced through f o u r w i t n e s s e s . Gloreen Azure t e s t i f i e d t h a t a f t e r t h e s h o o t i n g Adam s a i d t o h e r , "I hope you a r e s a t i s f i e d , you caused a l l of t h i s t r o u b l e . " Rodney Azure t e s t i f i e d t h a t a f t e r t h e shoot- i n g Adam s a i d t o him, "What d i d you e x p e c t , t h e y were t a i l - g a t i n g us." The t h i r d s t a t e m e n t was i n t r o d u c e d through t h e testimony of Arthur Sarnow, who t r a n s p o r t e d t h e Weinbergers and Tom Hanzlick from t h e s c e n e of t h e s h o o t i n g . H e testi- f i e d t h a t Adam t u r n e d toward Arrow Weinberger, Frank Wein- b e r g e r , and Hanzlick and s a i d , " T h a t ' s one and f o u r t o go." The l a s t of t h e s t a t e m e n t s was H a n z l i c k l s s t r i c k e n state- ment. Adam a s k e d , " [a] re you r e a d y t o f i g h t ? " as t h e y drove i n t o t h e s e r v i c e s t a t i o n . Arrow c o n t e n d s t h a t t h e s e s t a t e m e n t s v i o l a t e t h e r u l e announced i n Bruton. I n Bruton t h e United S t a t e s Supreme Court h e l d t h a t "where t h e p o w e r f u l l y i n c r i m i n a t i n g e x t r a j u d i c i a l s t a t e m e n t s of a codefendant who s t a n d s accused side-by-side w i t h t h e d e f e n d a n t , a r e d e l i b e r a t e l y s p r e a d b e f o r e t h e j u r y i n a j o i n t t r i a l , " l i m i t i n g i n s t r u c t i o n s t o t h e j u r y t o d i s r e g a r d t h e s t a t e m e n t s i n c u l p a t i n g t h e d e f e n d a n t a r e i n a d e q u a t e . Bruton, s u p r a , 391 U . S . a t 135-136, 88 S.Ct. a t 1628, 20 L.Ed.2d a t 485. The f a c t s i n Bruton a r e c l e a r l y d i s t i n g u i s h - a b l e from t h e c a s e b e f o r e us. I n Bruton t h e n o n t e s t i f y i n g c o d e f e n d a n t , Evans, con- f e s s e d o r a l l y t h a t h e and Bruton committed a robbery. The c o n f e s s i o n was a d m i t t e d , and t h e j u r y w a s i n s t r u c t e d t h a t it was competent o n l y a g a i n s t Evans. The C o u r t r e v e r s e d based upon, f i r s t , t h e f a c t t h a t t h e s t a t e m e n t s were " p o w e r f u l l y i n c r i m i n a t i n g " and " d e v a s t a t i n g " t o Bruton and, second, upon t h e recognized m o t i v a t i o n t o s h i f t blame o n t o o t h e r s . I t concluded t h a t : "The u n r e l i a b i l i t y of such e v i d e n c e is i n t o l e r a b l y compounded when t h e a l l e g e d accomplice, a s h e r e , d o e s n o t t e s t i f y and c a n n o t be t e s t e d by cross-examination. I t was a g a i n s t such t h r e a t s t o a f a i r t r i a l t h a t t h e C o n f r o n t a t i o n C l a u s e was d i r e c t e d . " Bruton, s u p r a , 391 U.S. a t 136, 88 S.Ct. a t 1628, 20 L.Ed.2d a t 485. E x t r a j u d i c i a l s t a t e m e n t s o f a n o n t e s t i f y i n g codefen- d a n t d o n o t always r e q u i r e r e v e r s a l . S t a t e v. Powers ( 1 9 8 2 ) , Mon t . , 645 P.2d 1357, 1363, 39 St.Rep. 989, 996; H a r r i n g t o n v. C a l i f o r n i a ( 1 9 6 9 ) , 395 U.S. 250, 89 S.Ct. 1726, 23 L.Ed.2d 284; Schneble v. F l o r i d a ( 1 9 7 2 ) , 405 U.S. 427, 92 S.Ct. 1056, 3 1 L.,Ed.2d 340. A c r i m i n a l d e f e n d a n t is e n t i t l e d t o a f a i r t r i a l . b u t n o t a p e r f e c t one. S t a t e v. Powers, s u p r a ; Bruton v. United S t a t e s , s u p r a . I n a c c o r d , .i.~r,z.~)< -I&hmirv. United S t a t e s ( 1 9 5 3 ) , 344 U.S. 604, 73 S.Ct. 481, 97 L.Ed. 593; Brown v. U n i t e d S t a t e s ( 1 9 7 3 ) , 411 U.S. 223, 93 S.Ct. 1565, 36 L.Ed.2d 208; Michigan v. Tucker ( 1 9 7 4 ) , 417 U.S. 433, 94 S.Ct. 2357, 41 L.Ed.2d 182. Where a s t a t e m e n t h a s been e d i t e d t o remove s p e c i f i c r e f e r e n c e s t o c o d e f e n d a n t s , it is a d m i s s i b l e i n a j o i n t t r i a l . United S t a t e s v. S t e w a r t ( 5 t h C i r . 1 9 7 8 ) , 579 F.2d 356, cert. d e n i e d , 439 U.S. 936, 99 S.Ct. 332, 58 L.Ed.2d 332; United S t a t e s v. Holleman ( 7 t h C i r . 1 9 7 8 ) , 575 F.2d 139; U n i t e d S t a t e s v. Dady ( 6 t h C i r . 1 9 7 6 ) , 536 F.2d 675 ( p e r c u r i a m ) ; United S t a t e s v. Wingate (2nd C i r . 1 9 7 5 ) , 520 F.2d 309, c e r t . d e n i e d , 423 U.S. 1074, 96 S.Ct. 858, 47 L.Ed.2d 84; United S t a t e s v. A l v a r e z ( 3 r d C i r . 1 9 7 5 ) , 519 F.2d 1052, c e r t . d e n i e d , 423 U.S. 914, 96 S.Ct. 221, 46 L.Ed.2d 1 4 3 ; . U n i t e d S t a t e s v. P a n e p i n t o ( 3 r d C i r . 1 9 7 0 ) , 430 F.2d 613, cert. d e n i e d , 400 U.S. 949, 9 1 S.Ct. 258, 27 L.Ed.2d 256; United S t a t e s v. L i p o w i t z ( 3 r d C i r . 1 9 6 9 ) , 407 F.2d 597, cert. d e n i e d , 395 U.S. 946, 89 S.Ct. 2026, 23 S i m i l a r l y , w h e r e a s t a t e m e n t i s n o t p o w e r f u l l y i n c r i m i n a t i n g b u t i m p l i c a t e s t h e complaining d e f e n d a n t " o n l y t o t h e e x t e n t t h a t t h e j u r y may make i n f e r e n c e s based on o t h e r c l e a r l y a d m i s s i b l e e v i d e n c e , " it d o e s n o t v i o l a t e t h e B r u t o n r u l e . U n i t e d S t a t e s v. B e l l e ( 3 r d C i r . 1 9 7 9 ) , 593 F.2d 487, 495 ( e n b a n c ) , cert. d e n i e d , 442 U.S. 911, 99 2 7 7 S.Ct. 2825, 61 L.Ed.2d 4343; c f . , U n i t e d S t a t e s v. Winograd ( 7 t h C i r . 1 9 8 1 ) , 656 F.2d 279, 283, c e r t . d e n i e d , 455 U.S. 989; United S t a t e s v. DiGregorio (1st C i r . 1 9 7 9 ) , 605 F.2d 1184, 1190, c e r t . d e n i e d , 444 U.S. 937, 100 S.Ct. 287, 62 L.Ed.2d 197; E n g l i s h v. United S t a t e s ( 7 t h C i r . 1 9 8 0 ) , 620 F.2d 150, 153, cert. d e n i e d , 449 U.S. 859, 1 0 1 S.Ct. 160, 66 L.Ed. 2d 75. Winograd, DiGregorio and E n g l i s h each a n a l y z e d whether t h e s t a t e m e n t was v i t a l l y i m p o r t a n t t o t h e govern- m e n t ' s case or whether it was simply l i n k a g e t e s t i m o n y t h a t was i n c r i m i n a t i n g o n l y i n c o n j u n c t i o n w i t h o t h e r f a c t s . See a l s o , S t i n s o n v. S t a t e ( A 1 a . C r i m . A ~ ~ . 1 9 8 1 ) , 401 So.2d 257, 261; Commonwealth v. Rawls ( 1 9 8 0 ) , 276 Pa.Super. 89, 419 A.2d 109, 111-112. Here, we must examine t h e f o u r c h a l l e n g e d s t a t e m e n t s i n t h e c o n t e x t of t h e e n t i r e t r i a l . Defendant a r g u e s t h a t he was d e n i e d h i s r i g h t t o c o n f r o n t h i s a c c u s o r s a s guaran- t e e u by t h e S i x t h Amendment of t h e United S t a t e s C o n s t i t u - t i o n . W e d i s a g r e e . The f o u r s t a t e m e n t s were i n t r o d u c e d through f o u r of twenty-three w i t n e s s e s p r e s e n t e d by t h e S t a t e . Defendant p r e s e n t e d seven w i t n e s s e s , i n c l u d i n g h i s own testimony. Defense c o u n s e l was a f f o r d e d f u l l o p p o r t u n i t y t o c r o s s - examine a l l of t h e S t a t e ' s w i t n e s s e s . The s t a t e m e n t s were n o t c r i t i c a l t o t h e S t a t e ' s case a g a i n s t Arrow i n l i g h t o f e y e w i t n e s s t e s t i m o n y d e s c r i b i n g t h e f i n a l c o n f r o n t a t i o n between Arrow and t h e v i c t i m . Nor were t h e y " p o w e r f u l l y i n c r i m i n a t i n g " t o Arrow. None of t h e s t a t e m e n t s d i r e c t l y i m p l i c a t e d Arrow by name. None d i r e c t l y connected him w i t h A z u r e ' s murder. None of t h e f o u r s t a t e m e n t s was c h a l l e n g e d on t h e b a s i s of a d e n i a l of c o n f r o n t a t i o n . W e w i l l examine each s t a t e m e n t and its admission i n t o e v i d e n c e i n t u r n . The f i r s t s t a t e m e n t d e f e n d a n t c h a l l e n g e s was i n t r o - duced through Gloreen Azure on r e d i r e c t examination. The p r o s e c u t o r asked Gloreen: "Q. Do you r e c a l l t a l k i n g t o Adam Wein- b e r g e r , t h e d e f e n d a n t , a t t h a t t i m e , s t a t i n g t o him t h a t 'you had k i l l e d him'? A. H e s a i d I hope you a r e s a t i s f i e d , you caused a l l of t h i s t r o u b l e . " No o b j e c t i o n was r a i s e d a t t r i a l t o t h e admission o f t h i s s t a t e m e n t . On a p p e a l , d e f e n d a n t f a i l s t o d e m o n s t r a t e t h a t its admission c o n s t i t u t e s p r e j u d i c i a l e r r o r . A t most, t h i s s t a t e m e n t can be viewed as l i n k a g e t e s t i m o n y t h a t is i n c r i m i n a t i n g o n l y i n c o n j u n c t i o n w i t h o t h e r f a c t s . I t d o e s n o t d e m o n s t r a t e a c o d e f e n d a n t ' s " r e c o g n i z e d m o t i v a t i o n t o s h i f t blame o n t o o t h e r s . " Bruton v. United S t a t e s , 391 U.S. a t 136, 88 S.Ct. a t 1628, 20 L.Ed.2d a t 485. I f a n y t h i n g , t h e s t a t e m e n t s e r v e s as a n admission a g a i n s t i n t e r e s t t h a t t e n d s t o i n c r i m i n a t e Adam h i m s e l f . Rule 8 0 1 ( d ) ( 2 ) ( A ) , Mont.R.Evid. T h i s s t a t e m e n t was n o t v i t a l t o t h e S t a t e ' s case a g a i n s t Arrow. W e f i n d no p r e j u d i c e . Nor d o w e f i n d t h a t a d m i s s i o n o f t h e second s t a t e m e n t was p r e j u d i c i a l . I t was i n t r o d u c e d through t h e d i r e c t examination of Rodney Azure. Defense c o u n s e l f i r s t o b j e c t e d t o its i n t r o d u c t i o n on t h e b a s i s t h a t no n o t i c e was p r o v i d e d t o t h e d e f e n d a n t s of t h e s t a t e m e n t . The District C o u r t r e m e d i e d t h a t o m i s s i o n by a l l o w i n g d e f e n s e c o u n s e l t o subpoena and i n t e r v i e w any p o s s i b l e w i t n e s s e s t o t h e making of t h e s t a t e m e n t . Counsel n e x t o b j e c t e d on t h e b a s i s of l a c k of foundation. The w i t n e s s t h e n provided t e s t i m o n y on t h e t i m e , p l a c e and p e o p l e p r e s e n t . F i n a l l y , t h e w i t n e s s , Rodney Azure, t e s t i f i e d a s f o l l o w s : "Q. And d i d you h e a r him make any s t a t e - ments a t t h a t t i m e , Adam Weinberger? A. I heard it yes. "Q. You d i d hear him make a s t a t e m e n t ? A. Y e s . "Q. And t o whom were t h e y d i r e c t e d ? A. I d o n ' t know who t h e y were d i r e c t e d t o , it seems l i k e he was j u s t g l a r i n g . "Q. And what d i d he say? A. H e s a i d 'What do you e x p e c t , t h e y were t a i l g a t i n g u s ' . " No f u r t h e r o b j e c t i o n was r a i s e d . Nor h a s p r e j u d i c e been demonstrated. T h i s s t a t e m e n t a g a i n can s e r v e a t most a s l i n k a g e testimony. Without t h e e s t a b l i s h m e n t of o t h e r f a c t s , Adam's comment is n o t p o w e r f u l l y i n c r i m i n a t i n g t o Arrow. Nor, i n l i g h t of t h e o t h e r evidence produced a t t r i a l , is it v i t a l t o t h e S t a t e ' s c a s e a g a i n s t Arrow. I t d o e s n o t s h i f t blame from Adam t o Arrow. W e f i n d no Bruton v i o l a t i o n . The t h i r d s t a t e m e n t , t h e most i n c r i m i n a t i n g of t h e f o u r , is s t i l l i n c r i m i n a t i n g o n l y i n l i g h t of o t h e r c l e a r l y a d m i s s i b l e evidence p r e s e n t e d a t t r i a l and is t h e r e f o r e mere l i n k a g e testimony. It was i n t r o d u c e d through t h e t e s t i m o n y of Arthur Sarnow, a G.V.W. o f f i c e r f o r t h e Montana Highway Department. Sarnow was asked by a s h e r i f f ' s deputy t o a s s i s t i n moving t h e t h r e e Weinbergers and Tom Hanzlick from t h e scene of t h e s h o o t i n g . The o n l y o b j e c t i o n r a i s e d by defen- d a n t a s t o Sarnow's testimony was t h e f o l l o w i n g o b j e c t i o n on t h e b a s i s of foundation: "Q. Okay, and while you were i n t h e p a t r o l c a r , d i d you h e a r one of t h e s e two d e f e n d a n t s s a y anything t o t h e o t h e r one? A. Y e s s i r I d i d . "Q. And who d i d you hear s a y something? A. The young boy i n t h e pink t h e r e . "Q. And who d i d he s a y it t o ? A. To t h e back s e a t where t h e o t h e r t h r e e peo- p l e were s i t t i n g . "Q. And t h a t is where t h e o t h e r d e f e n d a n t was s e a t e d ? A. Y e s , i n t h e middle i n t h e back, yes. "Q. And do you r e c a l l what he s a i d ? "MR. S. MOSES: Your Honor, I am going t o ask f o r a f u r t h e r f o u n d a t i o n a s t o who was s i t t i n g i n t h e c a r . "MR. RACICOT: W e have a l r e a d y d i d t h a t , Your Honor. "MR. S. MOSES: You o n l y t a l k e d about t h e d e f e n d a n t s though. "THE COURT: Okay, who was t h e d r i v e r and SO on. "A. Duane Rasmussen, Roosevelt County deputy s h e r i f f was d r i v i n g . "Q. And you were s i t t i n g where? A. On t h e passenger s i d e , a g a i n s t t h e window. "Q. And where was t h e d e f e n d a n t Adam Weinberger, t h e young son s i t t i n g ? A. The young one was between Duane and I i n t h e f r o n t s e a t . "Q. And what d i d he s a y when he t u r n e d around t o t h e back s e a t ? A. H e t u r n e d towards m e t o t h e back s e a t and he s a i d ' T h a t ' s one and f o u r t o g o ' . " Again, t h i s testimony i n c r i m i n a t e s Arrow o n l y when l i n k e d w i t h o t h e r f a c t s i n t r o d u c e d a t t r i a l . I t does n o t a t t e m p t t o s h i f t blame from Adam t o Arrow. I t r a t h e r t e n d s t o i n c r i m i n a t e Adam h i m s e l f . No Bruton o b j e c t i o n was r a i s e d . W e f i n d no v i o l a t i o n . The l a s t s t a t e m e n t d e f e n d a n t c h a l l e n g e s was i n t r o d u c e d through t h e following recross-examination of t h e h i t c h h i k e r , Tom Hanzlick: "Q. Do you r e c a l l when you p u l l e d up w i t h Adam W e i n b e r g e r i n t h e c a r a n d t e l l i n g m e t h a t Adam Weinberger s a i d , when you p u l l e d up i n t h e c a r and parked a t t h e C u l b e r t s o n s t a t i o n ? A. Y e s , do I r e c a l l it, y e s s i r . " Q . What d i d he s a y t o you? "MR. S. MOSES: Your Honor, was it what Adam s a i d ? "MR. RACICOT: R i g h t , what Adam Weinberger s a i d . "THE COURT: I t d o e s n ' t r e f e r t o someone e l s e ? "MR. RACICOT: I t d o e s n ' t r e f e r t o anybody e l s e , it is what Adam Weinberger s a i d t o you. H e asked you 'Are you ready t o f i g h t ? ' d i d n ' t he? A. Y e s s i r , h e d i d . " Defense c o u n s e l c l a r i f i e d t h a t t h e s t a t e m e n t was made by Adam, p o t e n t i a l l y a n o n t e s t i f y i n g c o d e f e n d a n t , and allowed t h e q u e s t i o n t o be asked and answered w i t h o u t o b j e c t i o n . Then o b j e c t i o n was r a i s e d . I t was d i r e c t e d o n l y t o l a c k o f n o t i c e , however. A f t e r l e n g t h y d i s c u s s i o n and c o n s u l t a t i o n of l e g a l t e x t b o o k s i n chambers, t h e D i s t r i c t Court gave t h e f o l l o w i n g i n s t r u c t i o n , which was formulated by d e f e n s e c o u n s e l : "THE COURT: A l l r i g h t , I am going t o i n s t r u c t t h e J u r y t h a t t h e l a t e s t s t a t e - ment t h a t was t e s t i f i e d t o concerning-- made by Adam Weinberger t o t h i s w i t n e s s should be d i s r e g a r d e d by t h e J u r y . You may proceed." T h i s f o u r t h s t a t e m e n t ("Are you ready t o f i g h t ? " ) d o e s no more t h a n s e r v e t o l i n k Arrow w i t h t h e o t h e r e v i d e n c e , i f t h a t . I t c e r t a i n l y d o e s n o t s h i f t blame from Adam t o Arrow. Nor is it p o w e r f u l l y i n c r i m i n a t i n g . I t is damaging p r i m a r i l y t o Adam h i m s e l f . W e h o l d t h a t d e f e n d a n t h a s f a i l e d t o demon- s t r a t e p r e j u d i c e i n t h e admission of t h e s e f o u r s t a t e m e n t s . I n Dutton v. Evans ( 1 9 7 0 ) , 400 U.S. 7 4 , 91 S.Ct. 210, 27 L.Ed.2d 213, t h e United S t a t e s Supreme Court a d d r e s s e d a t l e n g t h t h e c o n f l i c t between t h e r i g h t of c o n f r o n t a t i o n and evidence admitted under a h e a r s a y e x c e p t i o n . The s a f e g u a r d s t h e Court recognized a s p r e s e n t i n t h e s t a t e m e n t a d m i t t e d i n Evans a r e s i m i l a r t o t h o s e w e see h e r e . The d e f e n d a n t i n Dutton v. Evans, s u p r a , was charged w i t h two o t h e r men, Wade T r u e t t and Venson W i l l i a m s , f o r t h e e x e c u t i o n - s t y l e murder of t h r e e p o l i c e o f f i c e r s . Evans was t r i e d s e p a r a t e l y . T r u e t t t e s t i f i e d a t E v a n s ' t r i a l . W i l l i a m s d i d not. One of t h e twenty p r o s e c u t i o n w i t n e s s e s was an inmate from a f e d e r a l p e n i t e n t i a r y i n A t l a n t a , Georgia. The inmate t e s t i f i e d t h a t he and W i l l i a m s had been f e l l o w p r i s o n e r s a t t h e p e n i t e n t i a r y when W i l l i a m s was t a k e n t o Gwinnett County f o r a r r a i g n m e n t i n t h e murder c h a r g e s . Upon W i l l i a m s 1 r e t u r n , t h e inmate asked: "How d i d you make o u t i n c o u r t ? " W i l l i a m s responded, " I f it h a d n ' t been f o r t h a t d i r t y son-of-a-bitch Alex Evans, w e w o u l d n ' t be i n t h i s now." 400 U.S. a t 7 7 , 9 1 S.Ct. a t 214, 27 L.Ed.2d a t 220. Defense c o u n s e l o b j e c t e d t o t h i s s t a t e m e n t on t h e b a s i s t h a t it was h e a r s a y and t h u s v i o l a t e d Evans' r i g h t of c o n f r o n t a - t i o n . The United S t a t e s Supreme C o u r t upheld t h e i n t r o d u c - t i o n of t h e s t a t e m e n t on a number of grounds. The C o u r t f i r s t d i s t i n g u i s h e d a l i n e of c a s e s i n which s t a t e c o u r t c o n v i c t i o n s were r e v e r s e d because of a d e n i a l of t h e r i g h t of c o n f r o n t a t i o n . The Court t h e n p a r t i c u l a r l y examined Bruton and e n u n c i a t e d t h e d i f f e r e n c e s between it and t h e Evans case. I n Bruton an e n t i r e c o n f e s s i o n of t h e n o n t e s t i - f y i n g c o d e f e n d a n t was a d m i t t e d w i t h o u t o p p o r t u n i t y t o e f f e c - t i v e l y cross-examine f o r t h e t r u t h o f t h e m a t t e r s c o n t a i n e d w i t h i n t h e c o n f e s s i o n . The C o u r t i n Evans emphasized t h a t t h e r e was no "recognized e x c e p t i o n t o t h e h e a r s a y r u l e " b e f o r e it i n Bruton. 400 U.S. a t 8 6 , 9 1 S.Ct. a t 218, 27 L.Ed.2d a t 225, and t h e n r e f u s e d t o e q u a t e t h e S i x t h Arnend- ment C o n f r o n t a t i o n C l a u s e and t h e e v i d e n t i a r y h e a r s a y r u l e , although it acknowledged t h a t both stem from t h e same r o o t s . I n d i s t i n g u i s h i n g Evans from o t h e r c o n f r o n t a t i o n c l a u s e c a s e s , t h e Court noted t h a t t h e inmate's testimony was not ''crucial" or "devastating1'; it d i d not involve t h e use or misuse of a confession made i n t h e c o e r c i v e atmos- phere of o f f i c i a l i n t e r r o g a t i o n ; it d i d n o t involve a sug- g e s t i o n of p r o s e c u t o r i a l misconduct o r negligence; it d i d n o t involve admission of a paper t r a n s c r i p t of proceedings i n which cross-examination was nonexistent or inadequate; and, f i n a l l y , it did not involve wholesale d e n i a l of cross- examination. Evans, 400 U.S. a t 87, 91 S.Ct. a t 219, 27 Evans a l s o d i d not involve a j o i n t t r i a l , a s had Bruton. However, t h e n a t u r e of t h e statement and t h e s a f e - guards recognized a s p r e s e n t i n Evans apply t o Adam Wein- b e r g e r ' s statements. The Court noted t h a t : "Evans was not deprived of any r i g h t of c o n f r o n t a t i o n on t h e i s s u e of whether W i l l i a m s a c t u a l l y made t h e s t a t e m e n t r e l a t e d by Shaw. Neither a hearsay nor a c o n f r o n t a t i o n q u e s t i o n would a r i s e had Shawls testimony been used t o prove mere- l y t h a t t h e statement had been made. The h e a r s a y r u l e d o e s n o t p r e v e n t a w i t n e s s from t e s t i f y i n g a s t o what h e h a s h e a r d ; i t i s r a t h e r a r e s t r i c t i o n on t h e proof of f a c t through e x t r a j u d i c i a l statements. From t h e v i e w p o i n t o f t h e Confrontation Clause, a w i t n e s s , under o a t h , s u b j e c t t o cross-examination, and whose demeanor can be o b s e r v e d by t h e t r i e r of f a c t , is a r e l i a b l e informant n o t only a s t o what he h a s s e e n b u t a l s o a s t o w h a t h e h a s ................................... heard." (Emphasis added.) Evans, 400 U.S. a t 88, 91 S.Ct. a t 219, 27 L.Ed.2d a t 226. S i m i l a r l y , Arrow Weinberger was n o t denied any r i g h t of c o n f r o n t a t i o n on t h e i s s u e of whether o r not t h e s t a t e - ments were made by Adam and overheard by each of t h e four witnesses. While none of t h e s t a t e m e n t s were challenged on t h e b a s i s of Bruton o r a s h e a r s a y , t h e "state-of-mind" ex- c e p t i o n t o t h e h e a r s a y r u l e o r Montana's t r a n s a c t i o n r u l e would have provided t h e "recognized e x c e p t i o n t o t h e h e a r s a y r u l e " t h a t was n o t p r e s e n t i n Bruton. Bruton, n. 3, 391 U.S. a t 128, 88 S.Ct. a t 1623-1624; Rule 8 0 3 ( 3 ) , M0nt.R.Evid.i S t a t e v. C l a r k ( 1 9 3 6 ) , 102 Mont. 432, 58 P.2d 276; I n R e P e t i t i o n of P e t e r s o n ( 1 9 7 0 ) , 155 Mont. 239, 467 P.2d 281. I n Evans, t h e United S t a t e s Supreme C o u r t s t a t e d t h a t t h e c o n f r o n t a t i o n i s s u e a r o s e "because t h e j u r y was b e i n g i n v i t e d t o i n f e r t h a t Williams had i m p l i c i t l y i d e n t i f i e d Evans as t h e p e r p e t r a t o r of t h e murder when he blamed Evans f o r h i s predicament." Evans, 400 U.S. a t 88, 9 1 S.Ct. a t 219, 27 L.Ed.2d a t 227. I n c o n c l u d i n g t h a t t h e r e was no d e n i a l of t h e r i g h t of c o n f r o n t a t i o n , t h e Court c o n s i d e r e d s e v e r a l f a c t o r s . I t noted t h a t t h e s t a t e m e n t d i d n o t c o n t a i n an e x p r e s s a s s e r t i o n a b o u t p a s t f a c t ; t h a t W i l l i a m s ' p e r s o n a l knowledge of t h e i d e n t i t i e s and r o l e s of t h e o t h e r murder p a r t i c i p a n t s had been a b u n d a n t l y e s t a b l i s h e d by o t h e r e v i d e n c e ; a n d , t h a t t h e p o s s i b i l i t y Williams' s t a t e m e n t was founded on f a u l t y r e c o l l e c t i o n was remote i n t h e extreme. F i n a l l y , t h e c i r c u m s t a n c e s provided w i d e l y recognized i n - d i c i a of r e l i a b i l i t y where, as h e r e , t h e s t a t e m e n t was spon- t a n e o u s and where it w a s a g a i n s t W i l l i a m s ' p e n a l i n t e r e s t t o make it. Those same f a c t o r s a p p l y h e r e . None o f t h e s t a t e m e n t s c o n t a i n e d a n e x p r e s s a s s e r t i o n a b o u t p a s t f a c t . Adam's knowledge of Arrow's r o l e i n t h e s h o o t i n g was s o l i d l y e s t a b - l i s h e d through o t h e r evidence. The chance t h a t Adam's state- ments were founded upon f a u l t y r e c o l l e c t i o n is remote i n t h e extreme. The s t a t e m e n t s were spontaneous and were made a g a i n s t Adam's p e n a l i n t e r e s t . The Court ended by s t a t i n g : "The d e c i s i o n s of t h i s C o u r t m a k e it c l e a r t h a t t h e m i s s i o n o f t h e Confronta- t i o n C l a u s e is t o advance a p r a c t i c a l concern f o r t h e a c c u r a c y of t h e t r u t h - d e t e r m i n i n g p r o c e s s i n c r i m i n a l t r i a l s by a s s u r i n g t h a t ' t h e t r i e r of f a c t [ h a s ] a s a t i s f a c t o r y b a s i s f o r e v a l u a t i n g t h e t r u t h of t h e p r i o r s t a t e m e n t . ' C a l i f o r n i a v. Green, 399 U.S. a t 1 6 1 . . . "Almost 40 y e a r s ago, i n Snyder v. Massa- c h u s e t t s , 291 U.S. 9 7 , Mr. J u s t i c e Cardozo w r o t e an o p i n i o n f o r t h i s C o u r t r e f u s i n g t o set a s i d e a s t a t e c r i m i n a l c o n v i c t i o n because of t h e claimed d e n i a l o f t h e r i g h t of c o n f r o n t a t i o n . The c l o s - ing words of t h a t o p i n i o n a r e worth re- p e a t i n g h e r e : " ' T h e r e is danger t h a t t h e c r i m i n a l law w i l l be brought i n t o contempt--that d i s - c r e d i t w i l l even touch t h e g r e a t immuni- t i e s a s s u r e d by t h e F o u r t e e n t h Amendment --if gossamer p o s s i b i l i t i e s of p r e j u d i c e t o a d e f e n d a n t a r e t o n u l l i f y a s e n t e n c e pronounced by a c o u r t of competent j u r i s - d i c t i o n i n o b e d i e n c e t o l o c a l law, and set t h e g u i l t y f r e e . ' [ C i t a t i o n omit- t e d . ] " 400 U.S. a t 89-90, 9 1 S.Ct. a t 220, 27 L.Ed.2d a t 227. W e a g r e e . Arrow Weinberger h a s f a i l e d t o d e m o n s t r a t e p r e j u - d i c e i n t h e admission of t h e s e s t a t e m e n t s . W e h o l d t h a t h i s r i g h t t o c o n f r o n t a t i o n was n o t v i o l a t e d . Defendant a l s o a r g u e s t h a t t h i s C o u r t should r e c o g n i z e as p l a i n e r r o r any a l l e g e d Bruton v i o l a t i o n and s h o u l d t h e r e f o r e c o n s i d e r t h e s e a l l e g e d v i o l a t i o n s even where n o t p r e s e r v e d by contemporaneous o b j e c t i o n . W e d e c l i n e t o do s o . The D i s t r i c t Court was never g i v e n an o p p o r t u n i t y t o r u l e on admission of t h e s t a t e m e n t s o r t o c o r r e c t itself if admission w a s n o t p r o p e r . W e w i l l n o t p u t t h e t r i a l c o u r t i n e r r o r where it h a s n o t been g i v e n such a chance. S t a t e v. Walker ( 1 9 6 6 ) , 148 Mont. 216, 223, 419 P.2d 300, 304. Here, d e f e n s e c o u n s e l was f a m i l i a r w i t h t h e Bruton o b j e c t i o n and used it s u c c e s s f u l l y t o p r e v e n t admission o f a n o t h e r s t a t e m e n t . No such o b j e c t i o n was r a i s e d t o t h e s e f o u r s t a t e m e n t s . D e f e n d a n t ' s c o n t e n t i o n t o t h e c o n t r a r y n o t w i t h s t a n d i n g , w e a l s o n o t e t h a t both d e f e n s e c o u n s e l were p r e s e n t a t t r i a l when t h r e e of t h e f o u r s t a t e m e n t s were a d m i t t e d . W e r e j e c t h i s r e p r e s e n t a t i o n t h a t less e x p e r i e n c e d t r i a l c o u n s e l f a i l e d t o make o b j e c t i o n s which would have been made had b o t h c o u n s e l been p r e s e n t . W e a l s o r e f u s e t o a d o p t a p l a i n e r r o r r u l e t h a t would a l l o w d e f e n d a n t s t o l a y i n t h e g r a s s and c r e a t e Bruton v i o l a t i o n s by f a i l i n g t o o b j e c t and t h e n w i t h h o l d i n g one c o d e f e n d a n t from t h e w i t n e s s s t a n d . Defendant 's f o u r t h argument is t h a t t h e p r o s e c u t i o n ' s t r i a l t a c t i c s d e p r i v e d him of a f a i r t r i a l . He a r g u e s t h a t t h e S t a t e s h o u l d n o t h a v e i n t r o d u c e d e v i d e n c e of t h e v i c t i m ' s good c h a r a c t e r i n its c a s e - i n - c h i e f ; t h a t e v i d e n c e of d e f e n d a n t s ' c h a r a c t e r and t h e i r p l a n t o t a k e Luanne t o Arkansas should n o t have been a d m i t t e d ; t h a t evidence of t h e r e a s o n a b l e n e s s of t h e v i c t i m ' s and h i s f a m i l y ' s a c t i o n s should n o t have been a d m i t t e d ; t h a t t h e S t a t e " c a r e f u l l y t a i l o r e d " its c a s e t o avoid c a l l i n g w i t n e s s e s who would t e s t i f y t h a t t h e v i c t i m was t h e f i r s t a g g r e s s o r ; and t h a t t h e S t a t e improperly e l i c i t e d t e s t i m o n y d u r i n g i t s c a s e on t h e c o n d i t i o n of a d e f e n s e w i t n e s s a t t h e t i m e of t h e s h o o t i n g and improperly sympathized o r agreed w i t h s t a t e - ments made by w i t n e s s e s . W e r e j e c t t h e s e arguments o u t o f hand. No o b j e c t i o n s were r a i s e d a t t r i a l on any of t h e p o i n t s d e f e n d a n t now c h a l l e n g e s . Nor, t a k e n i n t o t o , do t h e s e i n c i d e n t s evidence misconduct t h a t p r e j u d i c e d defen- d a n t . Most of t h e evidence d e f e n d a n t c h a l l e n g e s was p r o p e r l y a d m i t t e d t o p r o v i d e t h e j u r y w i t h a l l of t h e f a c t s and cir- cumstances n e c e s s a r y t o shed l i g h t upon t h i s case. C h a r a c t e r e v i d e n c e of a v i c t i m ' s p e a c e f u l n a t u r e may be a d m i t t e d by t h e p r o s e c u t i o n t o r e b u t evidence t h a t t h e v i c t i m was t h e f i r s t a g g r e s s o r . Rule 4 0 4 ( a ) ( 2 ) , Mont.R.Evid. Here, t h e p r o s e c u t i o n i n t r o d u c e d t h e evidence through t h e f i r s t w i t n e s s i n its case-in-chief b e f o r e t h e d e f e n d a n t had i n t r o d u c e d evidence t h a t t h e v i c t i m was t h e f i r s t a g g r e s s o r . Where t h e d e f e n s e r a i s e s t h e i s s u e of s e l f - d e f e n s e through cross-examination t h a t t e n d s t o d e m o n s t r a t e t h a t t h e v i c t i m was t h e f i r s t a g g r e s s o r , n o t h i n g p r e c l u d e s t h e S t a t e from r e b u t t i n g t h a t argument i n its case-in-chief w i t h e v i d e n c e of t h e v i c t i m ' s p e a c e f u l n a t u r e . However, t h e S t a t e s h o u l d n o t i n t r o d u c e e v i d e n c e of t h e v i c t i m ' s p e a c e f u l n a t u r e i n a n t i c i p a t i o n o f such a n argument. Here, no o b j e c t i o n was r a i s e d a t t r i a l and t h e d e f e n d a n t ' s c l a i m of s e l f - d e f e n s e was c l e a r l y a t i s s u e throughout t h e t r i a l . Defendant h a s a g a i n f a i l e d t o d e m o n s t r a t e p r e j u d i c e . I n h i s l a s t two arguments, d e f e n d a n t c h a l l e n g e s im- p o s i t i o n of t r i a l c o s t s and expenses a s p a r t of h i s s e n t e n c e a s u n c o n s t i t u t i o n a l and r e q u e s t s t h a t h i s s e n t e n c e be v a c a t - ed s i n c e it was based upon e r r o n e o u s i n f o r m a t i o n c o n c e r n i n g p r i o r c o n v i c t i o n s . H e a r g u e s , f i r s t , t h a t s e c t i o n 46-18-232, MCA, is p a t e n t l y u n c o n s t i t u t i o n a l s i n c e it enhances punish- ment i n r e t r i b u t i o n f o r a d e f e n d a n t ' s e x e r c i s e of a funda- mental c o n s t i t u t i o n a l r i g h t . W e r e j e c t t h i s c o n t e n t i o n . S e c t i o n 46-18-232, MCA, p r o h i b i t s recoupment a g a i n s t an i n d i g e n t d e f e n d a n t and a l l o w s a d e f e n d a n t t o be r e l i e v e d from payment of such c o s t s upon p e t i t i o n t o t h e s e n t e n c i n g c o u r t " [ i l f it a p p e a r s t o t h e s a t i s f a c t i o n of t h e c o u r t t h a t payment of the amount due will impose manifest hardship on the defendant or his immediate family . . ." Statutes that allow such a discretionary imposition of costs have been upheld against the due process argument marshalled by defen- dant. Fuller v. Oregon (1974), 417 U.S. 40, 51-54, 94 S.Ct. 2116, 2123-2125, 40 L.Ed.2d 647, 653-655; United States v. Glover (2nd Cir. 1978), 588 F.2d 876, 878-879; People v. Estate of Scott (1977), 66 111.2d 522, 363 N.E.2d 823, 825; cf., Olson v. James (10th Cir. 1979), 603 F.2d 150 (invali- dating a Kansas statute imposing obligation to repay costs of appointed counsel regardless of defendant's ability to pay). Montana's statute does no more than deprive "a finan- cially able defendant of available funds which, in fairness, should be remitted to the public coffers." Glover, 588 F.2d at 879, quoting United States v . Bracewell (2nd Cir. 1978), 569 F.2d 1194, 1197. Nor do we accept defendant's argument that his sentence should be vacated based upon inaccurate information in his sentencing report. A defendant's right to be sentenced on the basis of accurate information is protected where he is represented by counsel at sentencing and is given the opportunity to rebut any inaccuracies. State v. Trangsrud (1982), Mont. , 651 P.2d 37, 40, 39 St.Rep. 1765, 1768. He then has an affirmative duty to present evidence to show such inaccuracies. State v. Radi (19791, Mont . , 604 P.2d 318, 320, 36 St.Rep. 2345, 2347. Here, defendant was represented by counsel and was presented with an opportunity to rebut the report. He did not do so. Rather, defense counsel reviewed the report and deemed it "appropriate." Defendant should address any chal- l e n g e t o t h e e q u i t y of t h e s e n t e n c e t o t h e Sentence Review D i v i s i o n . T h i s C o u r t w i l l c o n s i d e r o n l y l e g a l i s s u e s r a i s e d by t h e s e n t e n c e . I n c o n c l u s i o n w e a l s o a d d r e s s t h e d i s s e n t e r s ' concern w i t h a p o t e n t i a l c o n f l i c t of i n t e r e s t stemming from b o t h d e f e n d a n t s being r e p r e s e n t e d by one law f i r m . W e r e j e c t t h e i r argument. W e n o t e , f i r s t , t h a t b o t h d e f e n d a n t s a g r e e d t o j o i n t r e p r e s e n t a t i o n and, i n f a c t , h i r e d t h e same l a w f i r m a s p r i v a t e c o u n s e l . Both d e f e n d a n t s waived a s e p a r a t e t r i a l . Both d e f e n d a n t s r e c o n s i d e r e d t h e i r d e c i s i o n t o be j o i n t l y r e p r e s e n t e d d u r i n g t h e c o u r s e of t h e t r i a l and r e a f - f i r m e d t h a t d e c i s i o n . N e i t h e r t h e d e f e n d a n t nor t h e d i s s e n t e r s d e m o n s t r a t e an a c t u a l c o n f l i c t of i n t e r e s t . A d e f e n d a n t h a s t h e burden of e s t a b l i s h i n g t h a t such r e p r e s e n t a t i o n i n f a c t c r e a t e d a n a c t u a l c o n f l i c t of i n t e r e s t t h a t p r e j u d i c e d t h e d e f e n d a n t . The law d o e s n o t r e q u i r e an a f f i r m a t i v e i n q u i r y i n t o whether c o d e f e n d a n t s a g r e e t o j o i n t r e p r e s e n t a t i o n . S t a t e v. Henry ( 1 9 7 8 ) , 177 Mont. 426, 431, 582 P.2d 321, 323-324. A d e f e n - d a n t may waive t h e r i g h t t o demand r e t r i a l on t h e i s s u e of c o n f l i c t of i n t e r e s t of c o u n s e l . S t a t e v. G a l l a g h e r ( 1 9 7 3 ) , 162 Mont. 155, 161, 509 P.2d 852, 855. Where, as h e r e , t h e d e f e n s e s p u t f o r t h by t h e two d e f e n d a n t s are n o t i n con- f l i c t , a d e f e n d a n t is n o t d e p r i v e d of e f f e c t i v e a s s i s t a n c e of c o u n s e l by j o i n t r e p r e s e n t a t i o n . S t a t e v. Henry, s u p r a , 177 Mont. a t 431, 582 P.2d a t 324. W e r e j e c t t h e d i s s e n t e r s ' o b j e c t i o n s as mere s p e c u l a t i o n . Affirmed. Chief J u s t i c e We concur: Mr. Justice Daniel J. Shea dissenting: My dissent is a long one, and I do not apologize for the delay. It will be filed when it is ready. Mr. Justice John C. Sheehy concurring with the dissent of Justice Daniel J. Shea, and stating further in dissent: I would reverse the conviction of Arrow Weinberger. The instructions in relation to him were in hopeless conflict. Under section 45-5-101, MCA, a person commits the offense of criminal homicide if he purposely, knowingly, or negligently "causes the death of another human being." A person commits deliberate homicide under section 45-5-102, MCA, if the criminal homicide is committed "purposely" or "knowingly". The District Court, in instructing the jury with respect to deliberate homicide, followed the statutes when it instructed the jury in instruction no. 10: "A person commits the offense of deliberate homicide if: "(1) He purposely or knowingly causes the death of another human being . . ." (Emphasis added.) Under the statutory definition, and the portion of instruction no. 10 which we have quoted, the inquiry for the jury was, who caused the death of Azure? Obviously if Azure caused his own death, as in the case of Arrow Weinberger acting in self defense, then the crime has not been committed. It is the statutory scheme that the jury search for the cause of the death in homicide cases. In this case the District Court elaborated on the statutory definition. In instruction no. 11, it instructed the jury: "You are instructed that to sustain the charge of deliberate homicide against Arrow Weinberger, the State must prove that the defendant Arrow Weinberger purposely or knowingly performed the - act or acts causing the death of Floyd Azure . . ." (Emphasis added.) Thus the District Court, by giving instruction no. 11 changed the nature of the inquiry for the jury. Instead of searching for the cause of Azure's dea-th, the jury was instructed to find who performed the acts causing the death of Azure. Instruction no. 11 created a crime not defined in the Montana statutes, and for Arrow Weinberger, wiped out any self defense. Under instruction no. 11, since Arrow Weinherger performed the acts (even though he may have been acting in self defense) which caused Azure's death, he was guilty of homicide. Under instruction no. 11, the mere performance of the acts causing Azure's death constitutes a forcible felony. Instruction no. 47 then wiped away completely any self defense available to Arrow Weinberger: "You are instructed that the defense of self defense or justifiable use of force is not available to a person who is attempting to commit or committing a forcible felony. A forcible felony is any felony which involves the use or threat of physical force or violence against any individual." The State admits in its brief that court's instruction no. 11 "failed to define completely the crime charged," but the State contends that the failure of definition of court's instruction no. 10 was cured by other instructions given in the case. Our annals are full of cases in which we have said that if an instruction is "not as full as it might have been," but the instructions taken as a whole fairly present the case to a jury, we will not reverse the conviction because of an incomplete instruction. However, this rule applies only to incomplete instructions, not to erroneous instructions or those which are at cross purposes with each other. The cases relied upon by the State and by the majority in this case do not meet the situation here where the court erroneously defined the elements of the crime in instruction no. 11. If there is any single item of instruction that needs to be straight-forwardedly presented in the criminal case, it must be the elements of the crime. We said in State v. Lundblade (19811, Mont . , 625 P.2d 545, 548,38 St.Rep. 441: "At a minimum, the District Court must explain or define the crime -- for the jury, (Citing a case.) In determining whether the instructions did this, we are guided by certain settled principles. First, we must view the instructions as a whole (citing a case) and we will find no error if the instructions as a whole fully and fairly instruct on the law applicable to the case (citing cases) . " Here there is a hopeless conflict in the instructions concerning deliberate homicide in Arrow Weinberger's case. The instructions as a whole do not fully and fairly instruct on the applicable law but confuse the elements of deliberate homicide and strip any meaning from the self defense instructions. I could cite other instructional conflict, but it would serve no purpose here and would only take up space. It is enough to say that court's instructions no. 24, 31, and 32 do not cure the instructional failure, as the majority contends or the State argues, because in each of those instructions, there is a phrase used "described by a statute defining an offense" to inform the jury how to apply purposely or knowingly as a requisite for mental state. Nowhere in the instructions in this case did the court specifically tell the jury a particular statute that defined the offense. In other words, under instructions 24, 31 and 32, the jury was told to look to a statute for the elements, but the statute was not given to them. For t h e s e and t h o s e reasons set f o r t h by J u s t i c e Shea, I d i s s e n t . Q. & J u s t i c e I concur i n t h e foregoing d i s s e n t of M r . J u s t i c e Sheehy.

June 6, 1983

c2dcf37e-77e5-4c2c-a73f-c90e88add133

MARRIAGE OF VANCE

N/A

81-493

Montana

Montana Supreme Court

N O . 81-493 I N THE SUPREME COURT OF THE STATE O F M O N T A N A 1 9 8 3 I N RE THE MARRIAGE O F HAZEL J . V A N C E , k/n/a SUE STARFORD, P e t i t i o n e r a n d R e s p o n d e n t , v s . RUSSELL L . VANCE, A p p e l l a n t and R e s p o n d e n t . Appeal from: D i s t r i c t C o u r t o f t h e E i g h t e e n t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e County o f G a l l a t i n H o n o r a b l e J o s e p h B . G a r y , J u d g e p r e s i d i n g . C o u n s e l o f R e c o r d : F o r A p p e l l a n t : S t e v e n D . N e l s o n a r g u e d , Bozeman, Montana F o r R e s p o n d e n t : S t e v e n B a r r e t t a r g u e d , Bozeman, Montana S u b m i t t e d : March 4, 1 9 8 3 D e c i d e d : June 6 , 1983 P i l e d : J U N 6 5 9 8 3 Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of the Court. The District Court of the Eighteenth Judicial District issued an order September 29, 1980, dissolving the marriage of Hazel J. Vance and Russel L. Vance and changing Hazel's name to Sue Starford. Findings of fact, conclusions of law and an order distributing the marital estate were issued June 24, 1981. Amended findings and conclusions were issued July 15, 1981, pursuant to a motion by Russel Vance. Now, Russel Vance appeals the July 17, 1981, judgment which incorporated those amendments. Sue Starford and Russel Vance were married in Tampa, Florida, on December 12, 1974. It was the third marriage for each of them, the second to each other. They moved to Montana immediately after their marriage and lived in several places temporarily before locating permanently in Bozeman, Montana, in June of 1976. Mr. Vance was voluntarily retired at the time of the marriage and held only occasional odd jobs throughout the marriage. His time was spent managing his considerable financial assets, performing household chores, tending his ranch and hunting. Ms. Starford was unemployed until February of 1977, when she began working as a secretary at Montana State University. Her entire earnings were used for family expenses. Substantial testimony was presented to the District Court concerning the assets each party brought into the marriage, the changes in those assets, the assets accumulated during the marriage and the value of all the assets at the time of dissolution. At the time of the marriage, Ms. Starford owned a house in Tampa, Florida. Her house payments were approximately $65.00 a month, as she had acquired the house at a very low interest rate. When she moved to Montana, Ms. Starford began renting her Florida house. Net rental income of approximately $150.00 per month was used for family expenses until 1978 when the house was sold for a net profit of $27,200.00. Mr. Vance used those proceeds to pay a portion of the debt in his Merrill Lynch account in Tampa. The sum represented twenty-four percent of the total securities in the account. Mr. Vance brought assets into the marriage totalling $292,968.00. Of that amount, $159,974.00 consisted of the amount outstanding on a contract for the sale of a Culligan business Mr. Vance had owned from 1957 until 1975. The remaining $132,994.00 consisted primarily of stocks, bonds and vehicles. Once settled in Bozeman, Ms. Starford and Mr. Vance made the major purchase of their marriage, a house and out buildings on forty acres of land. The house and land were purchased in 1976 for approximately $85,000.00. Mr. Vance borrowed $30,000.00 from his mother for the down payment. The monthly payments were paid out of the principal portion of the Culligan contract payments. There is a balance due on the house of $42,000.00. At the time of dissolution, $83,700.00 remained outstanding on the Culligan contract. The District Court held that balance to be a separate asset of Russel Va.nce, free and clear of any claims by Sue Starford. Further, at the time of dissolution, the parties entered into the following stipulation regarding the value of many of their marital assets: ASSETS FAIR MARKET VALUE INDEBTEDNESS NET VALUE Itemized and Appraised $ 17,977.00 -0- 17,977.00 Personal Property- Mandeville Appraisal Itemized and Appraised Personal Property- Cindy Nelson Appraisal Additional Personal Property Items Stocks Owned by the Parties The valuation of the remaining assets was disputed by the parties. Specifically, those assets are: the Bozeman home and accompanying forty acres; 1400 shares of Sunbird Aviation stock; a 1979 GMC "Jimmy"; Ms. Starford's retirement fund; and the crop of hay harvested from the Bozeman land after the parties separated. Each of the parties hired a professional appraiser to determine the value of the Bozeman house and forty acres. Ms. Starford's appraiser placed the value at $160,000.00 while Mr. Vance's appraiser valued the property at $140,000.00. Ms. Starford testified that she believed the property to be worth $160,000.00. Mr. Vance thought it was worth $110,000.00. The District Court, stating no reasons, adopted the $160,000.00 value. Mr. Vance testified at length regarding the financial history of Sunbird Aviation. Because of the company's financial difficulties, he valued the stock at $5000.00. No opposing testimony was presented. The District Court adopted the $5000.00 value. The GMC "Jimmy" was valued at $7300.00 with an indebtedness of $7300.00, for a net value of $0.00. Therefore, the "Jimmy" added no value to the marital estate. Since Mr. Vance was awarded the "Jimmy", if its net value is greater than $0.00, he received a windfall and has no grounds for complaint. Ms. Starford's retirement fund and the cut hay have values of $2,025.00 and $500.00, respectively. Although not 4 mentioned in the original findings, they were included in the marital estate in the court's amended findings and conclusions of July 15, 1981. In the original order of June 24, 1981, the following distribution of marital assets was made: FAIR MARKET VALUE INDEBTEDNESS NET VALUE -- TO WIFE: Cash received for stock at separation Personal property to he retained by petitioner Wife's personal effects Stocks or cash to be transferred to wife TOTAL TO HUSBAND: Balance of personal property-Mandeville, Exhibit #16, Cindy Nelson & Stipulated Exhibit #11 $33,149.00 -0- 33,149.00 Sunbird Aviation Stock 5,000.00 5,000.00 1979 Jimmy vehicle 7,800.00 7,800.00 -0- Husband's personal effects -0- -0- -0- Family home & 40 acres $160,000.00 $42,000.00 $118,000.00 Balance of stocks 98,465.00 -0- 98,465.00 TOTAL $304,414.00 $49,800.00 $254,614.00 On July 1, 1981, Mr. Vance filed a motion requesting the District Court to correct or amend several aspects of its order. Specifically, he requested that: 1. The net value of the family home and forty acres be adjusted to reflect the $30,000.00 owed by Mr. Vance to his mother for the down payment she loaned him. 2. The fair market value of the family home be amended to $150,000.00, the average of the two professional appraisals. 3. Ms. Starford's retirement benefits be included in the marital estate. 4. The cash received by Ms. Starford for stock be amended to the correct amount as reflected in the exhibits presented at trial, $24,424.00, not $22,449.00. That amount represents twenty-four per cent of the total securities in the Merrill Lynch account. 5. The distribution of the stocks owned by the parties be changed to accurately reflect the total stock owned by the parties, $173,469.61, not $200,914.00. In response, an amended order was filed July 17, 1981, distributing the marital estate between the parties as follows: FAIR MARKET NET VALUE INDEBTEDNESS VALUE TO WIFE: Cash received for stock at separation Personal Property to be retained by petitioner (Exhibit #14) 6,155.00 Wife's personal effects -0- Retirement Fund 2,025.00 Stocks or cash to be transferred to wife 76,000.00 TOTAL TO HUSBAND: Balance of personal property-Mandeville, Exhibit #16, Cindy Nelson, & stipulated Exhibit #11 $33,149.00 Sunbird Aviation Stock 5,000.00 1979 Jimmy vehicle 7,300.00 Husband's personal effects -0- Family home & 40 acres $160,000.00 72,000.00 88,000.00 Balance of stocks 73,045.00 -0- 73,045.00 TOTAL $278,994.00 $79,300.00 $199,694.00 In his appeal of the amended order, Mr. Vance alleges five specific abuses of discretion by the District Court. 1. The court incorrectly valued the family home and forty acres. 2 . The court incorrectly treated the property acquired prior to marriage. 3. The court failed to properly apply the criteria mandated by section 40-4-202(1), MCA. 4. The court considered irrelevant factors or factors not supported by the record in dividing the marital estate. 5. The court improperly divided the marital estate in its amended order. The total decrease in the amended value of the marital estate was deducted from the portion of the marital estate originally awarded Mr. Vance. Finally, Mr. Vance asserts that the division of the marital estate violated his constitutional right of equal protection under Montana law. We find no abuse of discretion by the District Court and no violation of Mr. Vance's right of equal protection. The amended findings, conclusions and order of July 15 and 17, 1981, are affirmed. The District Court did not abuse its discretion when it adopted the appraised figure of $160,000.00 as the value of the family home and forty acres. We held in Wolfe v. Wolfe (19831, Mont . P I - , 659 P.2d 259, 262, 40 St.Rep. 211, 214, that: "Where there are 'widely conflicting valuations' between different appraisers, the District Court shall give reasons why one value is selected over the others." In Wolfe, the "widely conflicting valuations" were 7 $1,649,166.00, $1,184,725.50 and $450,000.00. The District Court chose the $450,000.00 figure. Our decision in Wolfe was predicated upon another recent decision, Peterson v. Peterson (1981), Mont . - I I 636 P.2d 821, 823, 38 St.Rep. 1723, 1726, where we stated: "At trial the parties presented conflicting evidence regarding the value of the home ranch. Appellant offered the testimony and appraisal report of a professional certified appraiser who concluded the value of the home ranch to be $740,000 as of September 1980. The respondent offered the testimony of a local rancher and real estate buyer. He valued the ranch at $402,500. The District Court, without stated reasons, accepted the lower figure. The District Court is free to follow one appraisal and reject another. However, here there is a wide disparity in valuation, and we are unable to review for abuse of discretion in the absence of findings by the trial court supporting the valuation selected." In comparison, the appraisals in the instant case are not "widely conflicting valuations." Under these circumstances, it is not necessary for the District Court set forth specific reasons. Further, appellant's eight assertions of error in the adopted appraisal have no merit. The valuation was presented by a professional appraiser. She thoroughly discussed her reasons for arriving at the $160,000.00 figure. The appraisal was supported by substantial credible evidence. The appraised value of the property adopted by the District Court is affirmed. Appellant's second, third and fourth allegations of abuse of discretion by the District Court concern the court's application of section 40-4-202(1), MCA to the instant facts. Section 40-4-202 (1) , MCA, states in part: "In disposing of property acquired prior to the marriage . . . the court shall consider those contributions of the other spouse to the marriage, including: (a) the nonmonetary contribution of a homemaker; (b) the extent to which such contributions have facilitated the maintenance of this property; and (c) whether or not the property disposition serves as an alternative to maintenance arrangements." In distributing property acquired prior to the marriage, the court is not limited solely to consideration of the above listed factors. Those considerations are set forth to specifically benefit the homemaker who does not work outside the home. The court is also free to consider the other factors set forth in section 40-4-202(1), MCA. It did so. In awarding Ms. Starford $76,000.00 in stocks or cash as her equitable portion of Mr. Vance's stocks, the court considered all of Ms. Starford's contributions to the family unit. She completed her fair share, if not more, of the household chores. She also worked fulltime outside the home, thus enabling Mr. Vance to devote his time to the management of his financial affairs. Mr. Vance would like to have his marriage to Sue Starford treated as a business relationship. It was not. Equitable distribution of the assets of a marriage depends upon more than just each party's initial financial contribution to the relationship. Many other relevant factors are found in section 40-4-202(1), MCA. It is evident from the court's orders and accompanying memorandums of June 24, 1981 and July 15, 1981, that it considered those statutory factors in distributing the marital estate. Consideration was given to the parties' occupations, amounts and sources of income, vocational skills, employability, estates, needs and opportunities for future acquisition of capital assets and income. The District Court specifically refused to consider any allegations regarding Mr. Vance's marital misconduct. We find no abuse of discretion and affirm the distribution of the marital estate between the parties. 9 Next, Mr. Vance contends the court abused its discretion when it deducted the total amended decrease in the value of the marital estate from the portion originally awarded him. Again, we do not agree. The court stated in its memorandum accompanying the amended order that the court originally "made error in computation" and that the court "was in error in the amount of stocks still in the hands of the respondent [Mr. Vance] ." Clearly, the court was merely correcting errors which had unintentionally benefited Mr. Vance. Finally, the District Court judge stated: "It is still a man's world as far as income is concerned and I have recognized this fact in the distribution of assets." That statement is a description of the present relative economic status of men and women. It is a realistic observation. Applying the observation to the distribution of the marital estate between these parties did not violate Mr. Vance's constitutional right of equal protection. His contention is meritless. Affirmed. We concur: 8 ! A L J *@d4q Chief Justice file a written dissent later.

June 6, 1983

ee2833e5-2c03-439a-b65b-3800a86483f9

SORENSON v DRILCON INC

N/A

82-263

Montana

Montana Supreme Court

NO. 82-263 I N T H E S U P R E M E C O U R T O F T H E STATE OF D W N T A N A 1983 LARRY A. SOWNSON, Claimant and Appellant, DRILCON, INC., Employer, and E M P L O Y E R S C A S U A L T Y C O D I P A N Y , Defendant and Respondent. Appeal from: Workers' Compensation Court Honorable Tim Reardon, Judge presidin?. Counsel of Record: For Appellant: Carol A. Flitchell, Missoula, Montana Garlington, Lohn & Robinson, Pliissoula, Montana For Respondent. David E. Bauer, Great F a l l s , Fontana - - - - Submitted on b r i e f s : December 9 , 1982 Decided - June 2 , 19 8 3 Filed: Mr. Justice Daniel J. Shea delivered the Opinion of the Court. Claimant, Larry A. Sorenson, appeals from two post-judgment orders in Workers' Compensation Court involving the amount of the attorney fee awarded and the costs incurred in pursuing his successful claim for compensation and denial of a hearing on the matter. After the Workers1 Compensation Court awarded compensation to claimant, claimant's attorney filed a detailed affidavit setting forth a claim of attorney fees in the amount of $11,372 arrived at on the basis of a $60 per hour charge. The claimed costs were $3,491.52. The Workers1 Compensation Court, without holding a hearing, awarded an attorney fee of $5,750 and set the recoverable costs at $2,951.53. Upon entry of this order claimant's attorney petitioned the court for a hearing on the setting of an attorney fee and costs. Among other things, the petition alleged that with the exception of $1,340.50, counsel for the employer and insurance company had agreed to the reasonableness of the attorney fee and the costs. With no explanation given, the Court, referring only to its discretionary powers in setting fees, denied the motion for a hearing. We vacate the order and hold that an evidentiary hearing is required. In entering the order setting attorney fees the court simply held that "this court, considering the time spent, the result achieved, and the complexity of the case, finds that a reasonable sum to be paid is . . . " After this order was entered claimant's attorney filed a petition for a hearing, and alleged, among other things, that counsel for opposing sides had reached agreement on the amount of the attorney fee and recoverable costs. Counsel for the employer and insurance company wrote a letter to the court denying any agreement. In refusing to hold a hearing or reconsider the order setting attorney fees and costs, the court relied on our language in Continental Ins. Co. v. Horton (1980), Mont. , 613 P.2d 1011, 1013, 37 St.Rep. 1244, 1246, where we stated that: "The method used to fix attorney fees is discretionary with the Workers' Compensation judge, and the matter of allowing a hearing considering attorney fees is also discretionary." We did not mean, however, that the discretion of the Workers' Compensation Court was unbounded. Here the court awarded a fee of $5,750 without ever stating why it disregarded the claim of the attorney to a fee of $11,372, based on an hourly charge of $60. The order reducing costs recovered was also not explained. The error of the court is compounded here because a factual dispute exists as to whether opposing counsel had agreed to the amount of the attorney fee and the amount of costs. This factual dispute was never resolved before the court entered its order denying the motion for a hearing. Clearly, this was an abuse of discretion. In Wight v. Hughes Livestock Company (Decided May 16, 1983) Mont. P.2d 40 St.Rep. 696 we - I - modified our holding in Continental on the attorney fee question and the requirement of holding a hearing. Under our guidelines set forth in Continental, we recognized the occasional necessity for an evidentiary hearing. Although our holding in Continental is not directly applicable to this factual situation, the fact remains that the issues involved here can be resolved only by an evidentiary hearing. Under Wight whatever fee is awarded must be paid entirely by the insurance carrier. The orders of the Workers' Compensation Court are vacated and. the cause remanded for an evidentiary hearing. r, We concur:

June 2, 1983

a63df789-11d0-42cf-81f1-6e7403808f3a

LEE v ANDREWS

N/A

82-326

Montana

Montana Supreme Court

No. 82-326 IN TEIE SUPREIE COURT OF THE STATE OF MONTANA 1983 JAMES LEROY LEE, Plaintiff, Respondent and Cross-appellant, -vs- JAPlES R. APJDREWS, Defendant and Appellant. Appeal from: District Court of the Fourth Judicial District, In and for the County of Ptissoula, The IIonorable James B . Wheelis , Judge presiding. Counsel of Record: For Appellant: Worden, Thane & Haines; Ronald Bender argued, Missoula, Montana For Respondent r Garlington, Lohn & Xobinson; Sherman Lohn argued, 1/Iissoula, Montana Paul Meismer argued, ?4issoula, Montana Submitted: April 25, 1983 Decided: July 5, 1983 Clerk Mr. J u s t i c e L. C. Gulbrandson d e l i v e r e d t h e Opinion of t h e Court. A f t e r e n t e r i n g judgment f o r d e f e n d a n t , Andrews, upon a spe- c i a l j u r y v e r d i c t , t h e D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , Missoula County, g r a n t e d p l a i n t i f f L e e ' s motion f o r new t r i a l . Andrews a p p e a l s from t h e new t r i a l o r d e r , and Lee cross- a p p e a l s , c l a i m i n g t h e D i s t r i c t Court should have d i r e c t e d v e r d i c t o r e n t e r e d judgment n o t w i t h s t a n d i n g t h e v e r d i c t f o r him. P l a i n t i f f , James Lee, and d e f e n d a n t , James Andrews, had been f r i e n d s f o r over t e n y e a r s . They were neighbors, played g o l f t o g e t h e r , and saw each o t h e r f r e q u e n t l y . Over t h e y e a r s , they had been involved i n s e v e r a l minor b u s i n e s s d e a l s . Andrews is an i n s u r a n c e a g e n t , and h a s worked f o r S t a t e Farm I n s u r a n c e Company f o r about twenty-one y e a r s . Lee had purchased automobile i n s u r a n c e from Andrews i n t h e 1 9 6 0 1 s , b u t had l e t many o f t h e s e p o l i c i e s l a p s e a f t e r s i x months. I n 1977, Lee had two f i r e i n s u r a n c e p o l i c i e s and one l i f e i n s u r a n c e p o l i c y purchased t h r o u g h Andrews. The c o n t r o v e r s y h e r e is based upon L e e ' s c l a i m t h a t Andrews breached an o r a l agreement t o p r o c u r e car i n s u r a n c e . On September 28, 1977, Lee was d r i v i n g h i s Oldsmobile Toronado and c o l l i d e d w i t h a motorcycle d r i v e n by E a r l Wilson. Wilson brought s u i t a g a i n s t Lee and obtained a judgment of about $152,000. Meanwhile, Lee had r e q u e s t e d S t a t e Farm t o r e p r e s e n t him i n t h e a c t i o n brought by Wilson. S t a t e Farm r e f u s e d and brought a d e c l a r a t o r y judgment a c t i o n i n f e d e r a l District Court, c l a i m i n g it had no o b l i g a t i o n t o defend Lee o r pay damages i n t h e Wilson a c t i o n . A f t e r a j u r y t r i a l , t h e f e d e r a l D i s t r i c t Court concluded t h a t S t a t e Farm had no o b l i g a t i o n toward L e e . On September 27, 1979, Lee f i l e d a complaint i n t h e s t a t e District C o u r t , a g a i n s t Andrews, a l l e g i n g breach of a n o r a l c o n t r a c t , t o r t , and g e n e r a l promissory e s t o p p e l . On February 1 6 , 1982, a p r e - t r i a l o r d e r was f i l e d reducing t h e c l a i m t o breach of c o n t r a c t . Lee c l a i m s t h a t an o r a l c o n t r a c t t o p r o c u r e i n s u r a n c e a r o s e from t h e f o l l o w i n g c i r c u m s t a n c e s . I n e a r l y J u n e 1977, Lee n e g o t i a t e d w i t h c a r d e a l e r , Michael Dolce, f o r t h e l e a s e of an Oldsmobile Toronado. Dolce t o l d Lee h e would need i n s u r a n c e and Lee t o l d Dolce t o c a l l Andrews' I n s u r a n c e Agency. Lee t e s t i f i e d t h a t he had t o l d Andrews he was going t o l e a s e a c a r and would need i n s u r a n c e . According t o Lee, Andrews had r e p l i e d t h a t he "would t a k e c a r e of i t . " They d i d n o t d i s c u s s t h e amount of coverage, t h e terms of t h e p o l i c y , t h e amount of t h e premium, o r t h e names of t h e i n s u r e d s . Dolce t e s t i f i e d t h a t b e f o r e d e l i v e r y of a v e h i c l e financed t h r o u g h GMAC, he was r e q u i r e d t o complete an i n s u r a n c e v e r i f i c a - t i o n form and v e r i f y t h a t t h e i n f o r m a t i o n given him by h i s p r o s p e c t i v e customer was c o r r e c t . On J u n e 1 5 , 1977, Dolce c a l l e d Andrews' o f f i c e and t a l k e d w i t h Mrs. Andrews t o v e r i f y t h e i n s u r a n c e coverage. Based on t h e i n f o r m a t i o n r e c e i v e d from Mrs. Andrews, Dolce completed t h e i n s u r a n c e v e r i f i c a t i o n form. H e wrote i n p o l i c y l i m i t s of $100,000/$300,000 f o r b o d i l y i n j u r y , and $25,000 f o r p r o p e r t y damage. H e t e s t i f i e d t h a t Mrs. Andrews t o l d him " i t would be t a k e n c a r e of." Mrs. Andrews admitted r e c e i v i n g t h e c a l l from Dolce. She made a n o t e t h a t Lee wanted automobile i n s u r a n c e , l i s t i n g t h e y e a r , make, model, and s e r i a l number of t h e c a r . Although s h e n o r m a l l y handled c a r i n s u r a n c e h e r s e l f , she placed t h e n o t e on h e r husband's desk because she r e a l i z e d t h a t Lee's i n s u r a n c e would not be handled i n t h e o r d i n a r y manner. She a l s o t e s t i f i e d t h a t she assumed L e e would come i n t o t h e i r o f f i c e and complete i n s u r a n c e a p p l i c a t i o n forms. B a r b a r a Sharp, an a g e n t f o r GMAC, w r o t e "confirmed 6/20" on t h e i n s u r a n c e v e r i f i c a t i o n form completed by Dolce. Although s h e d i d n o t r e c a l l t h e p a r t i c u l a r c o n v e r s a t i o n , Barbara Sharp t e s t i f i e d t h a t she would not have w r i t t e n "confirmed" on t h e form had s h e n o t c a l l e d ~ n d r e w s ' I n s u r a n c e and confirmed i n s u r a n c e coverage on t h e l e a s e d v e h i c l e . While Lee and Andrews saw and spoke t o each o t h e r many times over t h e n e x t few months, Lee never completed an i n s u r a n c e a p p l i - c a t i o n form nor paid any premium. Based on t h e above evidence, t h e j u r y r e t u r n e d a s p e c i a l ver- d i c t form w i t h t h e following f i n d i n g s : 1. Did J i m Lee r e q u e s t i n s u r a n c e f o r t h e 1977 Oldsmobile Toronado from J i m Andrews? ANSWER: Yes 8 , No 4 2. Did J i m Andrews a g r e e t o p r o c u r e i n s u r a n c e f o r J i m Lee? ANSWER: Y e s 9 , N o 3 3 . W a s t h e r e s u f f i c i e n t i n f o r m a t i o n r e g a r d i n g L e e ' s i n s u r a n c e needs so t h a t J i m Andrews could have, using r e a s o n a b l e c a r e and s k i l l i n making i n q u i r i e s and assembling i n f o r m a t i o n , o b t a i n e d t h e d e t a i l s n e c e s s a r y t o c a r r y any agreement. ANSWER: Y e s 9 , No 3 4 . Did J i m Andrews f a i l t o e x e r c i s e o r d i n a r y c a r e and r e a s o n a b l e d i l i g e n c e i n procuring t h e i n s u r a n c e ? ANSWER: Yes 8 , N o 4 5. Did J i m Lee, by any f a i l u r e of coopera- t i o n , o r by h i s a c t i o n s o r i n a c t i o n s , p r e v e n t J i m Andrews from procuring t h e i n s u r a n c e ? ANSWER: Yes 1 2 , N o 0 6 . Did J i m Andrews f a i l t o p r o c u r e i n s u r a n c e f o r t h e Toronado a s he agreed? ANSWER: Yes 8, NO 4 7. Did J i m Andrews r e c e i v e any c o n s i d e r a t i o n from Lee f o r undertaking t o p r o v i d e such i n s u r a n c e coverage? ANSWER: Yes 8 , No 4 I n f i n d i n g s 8 - 12, t h e j u r y found t h a t Lee and Andrews had n o t agreed on t h e s p e c i f i c terms of t h e c o n t r a c t , such a s , t h e amount of i n s u r a n c e , who would be i n s u r e d , and who would be r e s p o n s i b l e f o r t h e premiums. While t h e j u r y found t h a t Lee b e l i e v e d he had i n s u r a n c e , t h e j u r y a l s o found t h a t t h i s b e l i e f was unreasonable. The j u r y t h e n awarded Lee $80,150 i n damages. S e v e r a l weeks a f t e r t h e v e r d i c t , and a f t e r d i s c u s s i o n w i t h c o u n s e l f o r both p a r t i e s , t h e District Court e n t e r e d judgment f o r Andrews. Lee f i l e d s e v e r a l p o s t - t r i a l motions, seeking i n t h e a l t e r n a t i v e , judgment notwithstanding t h e v e r d i c t , amendment of t h e judgment, o r a new t r i a l . The District Court granted L e e ' s motion f o r new t r i a l , and d i d n ' t d i s c u s s t h e motions f o r amended j udgment and j udgmen t n o t w i t h s t a n d i n g t h e v e r d i c t . The District Court granted a new t r i a l on t h e grounds t h a t Lee had been denied h i s r i g h t t o a f a i r t r i a l . Lee had t h e r i g h t t o choose h i s form of a c t i o n and had chosen t o pursue s o l e l y t h e breach of c o n t r a c t a c t i o n . C o u r t ' s i n s t r u c t i o n 10 d e s c r i b e d t h e d u t y of an agent or broker i n terms of n e g l i g e n c e , n o t c o n t r a c t . The District Court reasoned t h a t t h e j u r y was o b v i o u s l y confused because it d i d n ' t g r a n t t h e t o t a l amount of u n c o n t r a d i c t e d dama- g e s introduced i n t o evidence. By a p p o r t i o n i n g damages, t h e j u r y seemingly a p p l i e d comparative n e g l i g e n c e p r i n c i p l e s . Lee was t h e r e b y denied h i s r i g h t t o a f a i r t r i a l and a new t r i a l was g r a n t e d . Lee on cross-appeal argues t h a t t h e D i s t r i c t Court e r r e d by n o t g r a n t i n g him a d i r e c t e d v e r d i c t o r judgment n o t w i t h s t a n d i n g t h e v e r d i c t . H e argues t h a t t h e r e is no evidence t o s u p p o r t t h e j u r y f i n d i n g t h a t Lee p r e v e n t e d Andrews from procuring i n s u r a n c e . ( F i n d i n g # 5 ) Absent t h i s f i n d i n g , Lee c l a i m s t h a t t h e v e r d i c t s u p p o r t s a judgment f o r him. ( S e e , i n p a r t i c u l a r , f i n d i n g s #2 and # 3 ) W e a g r e e w i t h Lee's c o n t e n t i o n . There is no evidence i n t h e record t o s u p p o r t t h e j u r y ' s f i n d i n g t h a t Lee p r e v e n t e d Andrews from procuring t h e i n s u r a n c e . Applying t h e d o c t r i n e of c o l l a t e r a l e s t o p p e l from t h e f i n d i n g s i n S t a t e Farm's f e d e r a l a c t i o n , t h e D i s t r i c t Court s u s t a i n e d objec- t i o n s t o any testimony i n d i c a t i n g t h a t Andrews had t o l d Lee t o come i n t o h i s o f f i c e and complete an a p p l i c a t i o n . I n f a c t , t h e o n l y evidence on t h i s p o i n t was L e e ' s own testimony denying t h a t Andrews t o l d him he would have t o come i n t o t h e o f f i c e and complete an a p p l i c a t i o n . Excluding t h e f i n d i n g t h a t L e e prevented Andrews from pro- c u r i n g i n s u r a n c e , t h e remaining f i n d i n g s s u p p o r t judgment f o r Lee. W e t h e r e f o r e o r d e r t h a t L e e be granted judgment not- w i t h s t a n d i n g t h e v e r d i c t , and remand f o r a new t r i a l on t h e i s s u e of damages only. Andrews argues t h a t on remand t h i s Court should l i m i t t h e e v i d e n c e of damages t o t h e l i m i t s of t h e a l l e g e d i n s u r a n c e p o l i c y . Lee, on t h e o t h e r hand, argues t h a t damages should be l i m i t e d o n l y by t h e o p e r a t i o n of s e c t i o n 27-1-311, MCA, which p r o v i d e s t h a t t h e measure of damages f o r breach of c o n t r a c t " i s t h e amount which w i l l compensate t h e p a r t y aggrieved f o r a l l t h e d e t r i m e n t which was p r o x i m a t e l y caused t h e r e b y o r i n t h e o r d i n a r y c o u r s e of t h i n g s would be l i k e l y t o r e s u l t therefrom." I n Gay v. Lavina S t a t e Bank ( 1 9 2 1 ) , 61 Mont. 449, 202 P. 753, t h i s Court s t a t e d : "And a s between t h e insured and h i s own a g e n t o r broker a u t h o r i z e d by him t o p r o c u r e i n s u r a n c e t h e r e is t h e usual o b l i g a t i o n on t h e p a r t of t h e l a t t e r t o c a r r y o u t t h e i n s t r u c - t i o n s given him and f a i t h f u l l y d i s c h a r g e t h e t r u s t reposed i n him, and he may become l i a b l e i n damages f o r breach of duty. --- I f he is i n s t r u c t e d t o p r o c u r e s p e c i f i c i n s u r a n c e and - f a i l s --- t o do s o , he is l i a b l e t o h i s p r i n c i p a l f o r t h e damage suffered-by r e a s o n o f t h e want --- o f such i n s u r a n c e . The l i a b i l i t y o f t h e - a g e n t w i t h r e s p e c t t o t h e l o s s is t h a t which would - - - - - - - have f a l l e n u p o n t h e company had t h e i n s u r a n s been e f f e c t e d a s contemplated. . . ." 202 P. - - a t 755. (emphasis added) Andrews is t h e r e f o r e p o s s i b l y l i a b l e f o r a l l damages S t a t e Farm would have p a i d . S t a t e Farm would have been r e s p o n s i b l e f o r t h e d e f e n s e of Lee i n Wilson's s u i t a g a i n s t him, and r e s p o n s i b l e f o r t h e damages awarded i n t h a t a c t i o n t o t h e amount of i t s p o l i c y . F u r t h e r , had S t a t e Farm completed t h e s e o b l i g a t i o n s , Lee would not have had t o borrow money a t 20 p e r c e n t i n t e r e s t . Under Gay, t h e n , damages from t h e Wilson judgment, a t t o r n e y s f e e s i n t h a t a c t i o n , and t h e damages r e s u l t i n g from having t o borrow money a t 20 p e r c e n t i n t e r e s t a r e a l l proper evidence of damages. W e remand f o r e n t r y of judgment n o t w i t h s t a n d i n g t h e v e r d i c t i n f a v o r of Lee, and f o r a new t r rile concur: - Chief J u s t i c e Justices Mr. Justice Fred J. Weber dissents as follows: The majority opinion overruled the order of the District Court granting the plaintiff's motion for a new trial on all issues and requires the entry of judgment for the plaintiff Lee, with a new trial to be limited to a determination of plaintiff's damages. I respectfully dissent. In its Opinion and Order granting the new trial, the District Court pointed out that plaintiff initially sought damages on the basis of a breach of an oral contract, tort and general promissory estoppel; but pursuant to the change in contentions on the part of the plaintiff, the plaintiff reduced "his cause of action for trial to the single claim of breach of oral contract. " The District Court therefore concluded that the only cause of action on which the plaintiff was entitled to proceed and recover was the breach of an oral contract. Notwithstanding that limitation of issues, at the request of the defendant, the District Court gave the following instruction No. 10 on negligence to the jury: "Negligence on behalf of an agent or broker is the failure to exercise skill, care and diligence of a reasonable and prudent agent or broker under the circumstances." Upon consideration of the post-trial motions, the District Court concluded that a new trial was necessary. The District Court referred to section 25-11-102 (1) , MCA, which provides : "The former verdict or other decision may be vacated and a new trial granted . . . for any of the following causes materially affecting the substantial rights of such party: " (1) irregularity in the proceedings of the court . . . or any order of the court . . . by which either party was prevented from having a fair trial; " (6) insufficiency of the evidence to justify the verdict or other decision or that is against the law. " In reaching its conclusion that the new trial was warranted the District Court stated: "This Court grants plaintiff's Motion for a new trial solely on the ground that its giving of defendant's instruction regarding negligence on behalf of an agent or broker as well as allowing into evidence testimony of witnesses directed at demonstrating the defendant's exercise of reasonable care improperly interjected negligence concepts; this error resulted in jury confusion which prevented plaintiff from having a fair trial and is inconsistent with substantial justice. M.C.A. 525-11-102(1) (1981) ; Mont. R. Civ. P. 61. For these reasons, this Court will neither consider nor discuss plaintiff's argument that there is insufficient evidence to support the findings of the jury . " Having concluded that there was such an irregularity, the District Court then addressed the issue of whether the irregularity materially affected the plaintiff's substantial rights by depriving him of a fair trial. Rasmussen v. Siebert (1969) , 153 Mont. 286, 456 P. 2d 835. The ~istrict Court analyzed the instructions, including the above instruction No. 10 and the conclusions on the part of the jury as to the damages to be awarded, and concluded that the jury was confused by the negligence instruction and erroneously applied negligence concepts and comparative negligence principles. In conclusion the District Court stated: "The giving of the negligence instruction materially affected a substantial right of the plaintiff and this court's refusal to reject the instruction was inconsistent with substantial justice. MCA, 525-11-102 (1) , (1981) ." The District Court has set forth a comprehensive analysis of the problems and of its conclusions upon which the award of a new trial was based. The standard which is to be applied by this Court in reviewing that order granting a new trial is of long standing and is set forth in Moen v. Peter Kiewit & Sons' Co. (1982) , Mont . , 655 P.2d 482, 487, 39 St.Rep. 2209, 2215 as follows: ". . . This decades-old standard has been fleshed out by caselaw establishing that the decision to grant or deny a new trial is within the sound discretion of the trial court, Fredericksen v. Fredericksen (1980), Mont. 605 P.2d 1135, 1137 3 7 St.Rep. 191, 193, and will not be overturned absent a showing df a manifest abuse of that discretion. Giles v. Flint Val Forest Products (1979), 179 Mont. 382, 588 ~.2d 535, 538, 36 St.Rep. 23, 26." The majority opinion has not set forth any showing which can be construed as a "manifest abuse of discretion" by the trial court. In addition, I agree with the analysis of the District Court in concluding that the negligence instruction No. 10 was of necessity confusing to the jury. The special verdict form cited in the majority opinion was also confusing. Verdict question No. 4 stated: "Did Jim Andrews [defendant] fail to exercise ordinary care and reasonable diligence in procuring the insurance? Answer: Yes-8, No-4" That question injected a negligence standard rather than a standard relating to the breach of oral contract. Finding ample facts and law to sustain the order, and in the absence of any showing of manifest abuse of discretion, I would affirm the order granting new trial;_*--..-, \ , .. . . ' Mr. Chlef J u s t i c e Frank I. Haswell, d i s s e n t i n g : I concur i n t h e f o r e g o i n g d i s s e n t of Mr. J u s t i c e Weber. I would add t h a t t h e j u r y was a r g u a b l y confused by I n s t r u c t i o n No. 10 and t h e s p e c i a l i n t e r r o g a t o r i e s . The D i s t r i c t Court s o found, and t h e r e is no abuse of d i s c r e t i o n i n g r a n t i n g a new t r i a l under such circumstances. On r e t r i a l , p l a i n t i f f ' s damages should n o t be l i m i t e d t o t h e l i a b i l i t y l i m i t s of t h e supposed p o l i c y . Montana law p r o v i d e s t h a t t h e measure of damages f o r breach of c o n t r a c t " i s t h e amount which w i l l compensate t h e p a r t y aggrieved f o r a l l t h e detriment which was p r o x i m a t e l y caused t h e r e b y o r i n t h e o r d i n a r y c o u r s e of t h i n g s would be l i k e l y t o r e s u l t therefrom." S e c t i o n 27-1-311, MCA. Chief ~ u s t i c e " --- M r . J u s t i c e Daniel J. Shea d i s s e n t s and w i l l f i l e a w r i t t e n d i s s e n t later.

July 5, 1983

b6c5dd40-cb43-4a5e-911b-c6dcd322fe8c

DERENBERGER v LUTEY

N/A

82-324

Montana

Montana Supreme Court

NO. 82-324 I N THE SUPREllE COURT O F THE STATE O F MOPJTAPJA 1983 RITA DERENBURGER, Guardian A d Litem of RAYMOND DEMNBURGER, a minor, P l a i n t i f f and Respondent, IIURBERT JOHN LUTEY, Defendant and Appellant. APPEAL FROM: D i s t r i c t Court of t h e Third J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Deer Lodge, The Honorable Robert J. Boyd, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Lyrnan II. Eennett, 111, argued, Bozeman, P.lontana For Respondent: Poore, Roth & Robinson, B u t t e , Montana Rick Anderson & Urban Roth argued, Butte Submitted: March 2 4 , 1983 Decided: November 1 7 , 1983 F i l e d : NOV 11 7 9 8 3 Clerk Mr. Chief Justice Frank I. Haswell delivered the Opinion of the Court. Appellant Hurbert Lutey appeals a Deer Lodge County jury verdict awarding Raymond Derenberger, respondent, $110,000 in damages he suffered in an automobi-le accident. Respondent was riding as a passenger in his own vehicle which the appellant was driving. We reverse and remand. On November 5, 1979, Ray Derenberger, Hurb Lutey and their girlfriends went to a movie in Anaconda. They drove in Ray's vehicle. Prior to and during the movie, Ray, Hurb and one of the girls consumed approximately eighteen beers. At about 10:OO p.m., before the movie was over, Ray and Hurb left the theater to purchase more beer. Initially, Ray drove; however, upon Hurb's request, he relinquished control of the vehicle to Hurb. There was testimony indicating that Ray told Hurb to "see what it [the car] would do." Hurb testified that they were going quite fast through town. The vehicle was traveling down Park Street, through a 25 m.p.h. zone, at approximately 55 to 60 miles per hour. The car crossed some railroad tracks that were laid on a grade higher than Park Street, causing the car to raise somewhat, possibly even leave the ground. Hurb lost control of the vehicle, and it struck a house on 1100 East Park. At the time of the accident, the road was drv and the record indicates that the car was in good condition. As a result of the accident, Ray suffered a severe brain concussion which caused organic brain damage, broken facial bones, a broken arm, a broken leg and several scrapes and lacerations. Hurb pleaded guilty to driving while intoxicated and was fined $300. At the time of the accident Ray was sixteen yers old and Hurb was nineteen. Ray's mother brought an action for Ray as his guardian ad litem. She alleged that Hurb's reckless, gross, willful and wanton negligence in driving the vehicle caused Ray's in juries. At trial, Ray's lawyer introduced evidence that Hurb had pleaded guilty to two separate charges of "endangering the welfare of children" by supplying them with intoxicating beverages. Hurb's counsel made a motior in limine to prevent - admission of this evidence on the grounds of irrelevance and prejudice. In response to the motion, Ray's counsel stated: "Your Honor, we are asking for punitive damages in this case. The two incidents I wish to put in evidence throuqh cross-examination if he admits independently that the Defendant one month earlier had been arrested for buying intoxicating beverages for an underage girl, some 16 years of age, and in an automobile. He plead guilty to that offense and was fined $75.00. Approximately one month after this accident, when obviously he purchased intoxicating beverages for a minor, he again was charged with, convicted and plead guilty to the same offense. 1 : submit to the Court that under the criteria which relate to and the material facts which relate to the issue of punitive damages, that the actions of the Defendant on both the occasion in question and like conduct are close enough in time to show in effect a total disregard for the type of conduct he engaged in that eveninq, i.e., purchasing intoxicating beverages for a minor, is relevant on that issue as going to the amount of damages and the willfulness and wantonness of that conduct on that particular evening." The motion was denied and the evidence was admitted. By special verdict the jury found that Hurb was guilty of willful or wanton misconduct. They also found that Ray was contributorily negligent in the amount of 25 percent. However, the court instructed the jury that if Hurb's misconduct was willful or wanton, ordinary contributory negligence would not reduce Ray's recovery (Instruction No. 14). Thus, the jury awarded $100,000 in total damages and $10,000 in punitive damages. Hurb Lutey brings this appeal and raises two issues for our consideration: 1. Was it error for the District Court to instruct the jury that respondent's recovery should not be reduced by his contributory negligence if the appellant is guilty of wil-lful or wanton misconduct? 2. Was i . t error for the District Court to allow the admission of evidence regarding the appel-lant's guilty pleas to charges of supplying liquor to minors? Lutey first argues that the District Court erred by instructing the jury that Derenberger's recovery could not be reduced by his own contributory negligence if they found Lutey guilty of willful or wanton misconduct. He contends that the legislative enactment of the comparative negligence doctrine abolished this rule; thus, Derenberger's own contributory negligence should reduce his recovery. Support for this is found in the fact that the harshness of the all-or-nothing rule has been eliminated by comparative negligence. Further, plaintiffs can recover punitive damages, which cannot be reduced by their own negligence. Derenberger asserts that Montana has always distinguished ordinary or gross negligence from willful or wanton misconduct. Hence, the use of the word "negliqence" in the comparative negligence statute indicates that the legislature did not intend a comparison between plaintiff's negligence and defendant's willful misconduct to reduce plaintiff's recovery. We hold that the comparative negligence statute does not contemplate a comparison between ordinary negligence and. willful or wanton misconduct. The comparative negligence statute mandates that the negligence of the plaintiff does not bar recovery so long as it is not greater than that of the defendant. However, his recovery is reduced by his own contributory negligence. Section 27-1-702, MCA. The statute reads: "Contributory negligence shall not bar recovery in an action by any person or his legal representative to recover damages for negligence resulting in death or injury to person or property if such negligence was not greater than the negligence of the person against whom recovery is sought, but any damages allowed shall be diminished in the proportion to the amount of negligence attributable to the person recovering." The definition of negligence is found in section 1-1-204(4), MCA, which reads: "'Neglect', 'negligence', 'negligent', and 'negligently' denote a want of the attention to the na.ture or probable consequences of the act or omission that a prudent man would ordinarily give in acting in his own concerns." On the other hand, the term "will.fully" has a different meaning. It is defined in section 1-1-204(5), MCA: "'Willfully', when applied to the intent with which an act is done or omitted, denotes a purpose of willingness to commit the act or make the omission referred to. It does not require any intent to violate the law, to injure another, or to acquire any advantage." Furthermore, section 27-1-701, MCA, separately establishes that one is liable for willful acts as well as negligent acts. The statute reads: "Everyone is responsible not only for the results of his willful acts but also for an injury occasioned to amother by his want of ordinary care or skill in the management of his property or person except so far as the latter has willfully or by want of ordinary care brought the injury upon himself." The defense clause of this statute does not change our decision a-s we interpret it to limit a comparison of plaintiff's acts only when defendant has committed acts of a similar kind. When section 27-1-701, MCA, accompanied contributory negligence, this Court held that a plaintiff's ordinary contributory negligence would not bar recovery for in juries from the defends-nt ' s willful or wanton misconduct. Wollaston v. Burlington Northern, Inc. (Mont. 1980), 612 P.2d 1277, 37 St.Rep. 1015; Mallory v. Cloud (1975), 167 Mont. 115, 535 P.2d 1270; Mihelich v. Butte Electric Railway Co., et al. (1929), 85 Mont. 604, 281 P. 540. Further, under comparative negligence, this would remain so because section 27-1-702, MCA, mandates a comparison of negligence, which we find is separate and distinct from willful or wanton misconduct. The Nevada Supreme Court interpreted the term "gross negligence" in Nevada's comparative negligence statute in Davies v. Butler (1979), 95 Nev. 763, 602 ~ . 2 d 605. They found that the legislature, by including the term "gross negligence" in the comparative negligence statute, determined that the concept of gross negligence is comparable to and subject to comparison with ordinary negligence, but left the law unchanged with regard to conduct in which defendant's culpability more closely approaches that of one who intentionally inflicts damage. Under this interpretation, our statute which only applies to "negligence" would not encompass willful or wanton misconduct as gross negligence is a more aggrava.ted form of negligence. The above statutory construction indicates to us that mere negligence and willful and wanton misconduct are different in kind, rather than degree. Consequently, we find that the legislature did not intend that they be compared under Montana's comparative negligence statute. This Court has distinguished the two terms on several occasions. In Cashin v. Northern Pacific Railway Co. (1934), 96 Mont. 92, 28 P.2d 862, we were to determine whether the evidence of the case provided a basis for exemplary damages. Finding it did, we concluded that ". . . in this jurisdiction something more than gross negligence must be shown in order to justify such an award; that is, the act must be wanton . . . or willful, or warrant the designation of that act as malicious." 96 Mont. at 111, 28 P.2d at 869. Exemplary damages were warranted on the theorv that the act was knowingly done, in reckless disregard of the rights of others. The fact that willful or wanton misconduct establishes a basis for exemplary damages indicates to us that such misconduct is distinct from negligence. See also, Hannigan v. Northern Pacific Rv. Co. (1963), 142 Mont. 335, 384 P.2d 493. Other jurisdictions have come to a similar conclusion. In a personal injury action the Oregon Supreme Court held that wanton misconduct is different in kind, not merely degree, from ordinary or gross negligence. It further concluded that one guilty of wanton misconduct is subject to liability greater in scope than that which applies to negligent persons, and contributory negligence is no defense. Falls v. Mortensen (1955 ) , 207 Or. 130, 295 P.2d 182. In a wrongful death action against the City of Seattle, the Washington Supreme Court found that willful or wanton misconduct d.oes not arise out of negligence and thus is not within the meaning of the term negligence. Adkisson v. City of Seattle (1953), 42 Wash.2d 676, 258 P.2d 461. The Washington court stated: ". . . Negligence and willfulness imply radically different mental states. Negligence conveys the idea of neglect or inadvertence, as distinguished from premeditation or formed intention. An act into which knowledge of danger and willfulness enter is not negligence of any degree, but is willful misconduct. As long as the element of inadvertence remains in conduct, it is not properly rega.rded was willful. Wanton misconduct is positive in nature, while mere negligence is materially negative." 258 P.2d at 465. Prosser distinguishes the two concepts of culpability. In defining willful, wanton and reckless conduct, he states, " [tl hey have been grouped together as an. aggravated form of negligen.ce, differing - in 2uality rather than degree from ordinary lack of care." W. Prosser, Torts § 34 at 184 (4th --- ~ d . 1971). (Emphasis added.) We find the above authority persuasive and further indication that willful or wanton misconduct is different in kind from negligence. The term negligence in the comparative negligence statutes does not encompass willful or wanton misconduct and in an action based on such conduct the comparative negligence statute is inapplicable and the plaintiff's own contributory negligence should not reduce his recovery. V. Schwa.rtz, Comparative Negligence, S 5.3 at 107 Prior to the enactment of comparative negligence, Montana clearly followed the rule that contributory negligence of the plaintiff is no bar to his recovery for injuries caused by willful or wanton misconduct of the defendant. Wollaston v. Burlington Northern, Inc., supra; Mallory v. Cloud, supra; Mihelich v. Butte Electric Railway Co., supra. Since comparative negligence was established to ameliorate the harshness of the contributory negligence defense, we believe that allowing assertion of the defense under the statute when it would be no defense prior to enactment of comparative negligence would thwart this legislative purpose. Schwartz, supra, S 5.3 at 107. This same rationale prevents reduction of plaintiff's recovery when the defendant's acts are willful. In a wrongful death action the Supreme Court of Wyoming determined that the plaintiff's recovery would not be reduced by his own negligence since the defendant's actions were willful and wanton. Danculovich v. Brown (Wyo. 1979), 593 P.2d 187. The court said: "The conclusion, then, is that S 1-1-109 does not mandate reduction of damages on the basis of comparative negligence of the plaintiff if defendant's misconduct is willful and wanton. To hold otherwise would. be inconsistent with the purpose behind the doctrine of comparative negligence. The doctrine is designed to ameliorate the harshness of the contributory negligence bar. The court decisions which have not applied the contributory negligence bar to willful and wanton misconduct had the same purpose. Damages resulting from wil-lful and wanton misconduct are not ' damages for negligence' as that term is used in 5 1-1-109." 593 P.2d at 194. In Davies v. Butler, supra, the Nevada High Court found that a defenda.nt whose culpability is so close to intentional wrongdoing should not have the benefit of the contributory negligence defense. The court concluded that this rule was unchanged by comparative negligence. Lutey next contends that the evidence of guilty pleas to contributing to the delinquency of minors is irrelevant. Derenberger asserts that punitive damages can be awarded to punish the appellant for malicious or wrongful acts and malice can be implied from a course of conduct that is known to be harmful or unlawful. Further, in awarding punitive damages, the jury may take into account whether Luteyls acts were of such a nature as to amount to a reckless disregard of the rights of others. Essentially, Lutey should be held to know that his prior criminal activity was harmful or unlawful. Thus, the malice necessary to a-ward punitive damages can be implied. We hold that the evidence of Luteyls prior guilty pleas is irrelevant with respect to (1) proving that his misconduct on the night of the accident was willful or wanton, and (2) establishing a basis for punitive damages. Consequently, we reverse and remand the case for further proceedings. It is well settled that all relevant evidence is admissible and irrelevant evidence is inadmissible. Rule 402, M0nt.R.Evi.d. Relevant evidence is defined by Rule 401, Mont.R.Evid. It states: "Relevant evidence means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Relevant evidence may include evidence bearing upon the credibility of a witness or hearsay declarant." This Court has adopted the test of relevance stated by the Commission on Evidence. The test is: ". . . whether an item of evidence will have any value, as determined by logic and experience, in proving the proposition for which it is offered. The standard used to measure this acceptable probative value is ' any tendency --- to make the existence of any . . . more probable or less prbbable -- _ _ This it would be without - the evidence.' standard rejects more stringent ones which call for evidence to make the fact or proposition for which it is offered more probable than a.ny other. It is meant to allow wide admissibility of circumstantial. evidence limited only by Rule 403 or other special relevancy rules in Article IV." State v. Fi.tzpatrick (Mont. 1980), 606 P.2d 1343, 1354, 37 St.Rep. 194, 207. (Emphasis added.) Respondent was attempting to prove that appellant was d.riving the vehicle recklessly, at a high rate of speed, and that such action was willful and wanton misconduct, and further, that such misconduct was the cause of respondent's injuries. Evidence of appellant's prior criminal activity does not have the tendency to make the existence of defendant's alleged willful a.nd wanton misconduct while driving a vehicle on the night of November 5, 1979, more or less probable. In other words, the issue was not whether appellant was supplying liquor to minors but whether his actions were in wi1.lful and wanton disregard for others. Hence, evidence regarding the defendant supplying alcohol to minors is irrelevant. Punitive damages can be awarded in accordance with section 27-1-221, MCA. The statute reads: "When exemplary d.amages allowed. In any action for a breach of obligation not arising from contract where the defendant ha.s been guilty of oppression, fraud, or malice, actual or presumed, the jury, in addition to the actual damages, may give da.mages for the sake of example and by way of punishing the defendant." In the case at bar we conclude that evidence of appellant's prior guilty pleas was also irrelevant with respect to establishing a basis for punitive damages. The law is clear that to award punitive damages oppression, fraud or malice must be a.ssociated with the act complained of. Here, the act complained of was appellant's operation of the vehicle in a reckless fashion. The fact that appellant has purchased alcoholic beverages for minors is irrelevant to the act complained of and thereby irrelevant to establishing a basis for punitive damages. It did not have a tendency to make any requisite factors for punitive damages more or less probable. Reversed and remanded for a new trial. V A ~ $ ! & , A @ Chief Justice We concur: Justices Mr. Justice L.C. Gulbrandson, dissenting and specially concurring: I concur in the holding that it was reversible error to allow admission of evidence regarding appellant's guilty pleas to charges of supplying liquor to minors. I respectfully dissent from the holding that respondent's recovery should not be reduced by his contributory negligence, if appellant is guilty of willful or wanton misconduct. In Lawrence v . Harvey (Mont. 1980), 607 P.2d 551, 556, 37 St.Rep. 370,374, this Court stated: "Montana follows the rule of statutory construction that where a statute is adopted form a sister state, it is ordinarily presumed that the legislature borrows the construction placed upon it by the highest court of the state from which it is borrowed, although such construction is not binding upon this Court. Continental Oil Co. v. Board of Labor Appeals (1978), Mont., 582 P.2d 1236, 1240, 35 St.Rep. 1153, 1156; J.T. Miller Co. v . Made1 (1978), Mont., 575 P.2d 1321, 1322, 35 St.Rep. 263, 265; State v . Murphy (1977), Mont., 570 P.2d 1103, 1105, 34 St.Rep.1174, 1177; State ex rel. Mankin v . Wilson (1977), Mont., 569 P.2d 922, 924, 34 St.Rep. 1075, 1078 * * * " The Supreme Court of the State of Wisconsin, the sister state from whom the Montana legislature borrowed the exact language of the comparative negligence statute, has confronted the precise issue that is now before this Court. In Bielski v. Schulze, (1962), 16 Wis.2d 1, 114 N.W.2d 105 111-113, the Supreme Court of Wisconsin analyzed this issue as follows: "The history of the development of gross negligence, its reason for existing, the content of the concept, and t h e i n e q u i t a b l e r e s u l t s and consequences of its a p p l i c a t i o n have l e d us t o d e c i d e t h e d o c t r i n e of g r o s s n e g l i g e n c e , a s w e know it, should be i n t e r r e d i n t h e limbo of j u r i s p r u d e n c e along s i d e t h e d o c t r i n e of a s s u m p t i o n o f r i s k i n n e g l i g e n c e c a s e s . See McConville v. S t a t e Farm Mut. Automobile Ins. Co. ( 1 9 6 2 ) , 1 5 Wis.2d 3 7 4 , 113 N.W.2d 14. Gross n e g l i g e n c e is an anomaly and c o n t r a d i c t i o n i n terms, and a p p a r e n t l y c o n s i d e r e d i n terms of d e g r e e r a t h e r t h a n kind o f n e g l i g e n c e i n our e a r l y c a s e s . I t g r a d u a l l y waxed s t r o n g i n f l e s h and s p i r i t on such terms a s ' s u c h a d e g r e e o f r a s h n e s s o r wantonness which evinced a t o t a l want of c a r e , ' o r a ' w i l l i n g n e s s t o harm a l t h o u g h such harm may n o t have been i n t e n d e d , ' ' r a s h l y , ' ' r e c k l e s s l y , ' and 'wantonly,' ' l i t t l e less t h a n an i n t e n t i o n a l wrong, ' ' w i l l i n g n e s s t o p e r p e t r a t e i n j u r y ' o r ' a p u r p o s e t o t a k e known c h a n c e s o f p e r p e t r a t i n g an i n j u r y . G r a d u a l l y , g r o s s n e g l i g e n c e a c q u i r e d by metamorphosis a new nature:--Ordinary n e g l i g e n c e l a y i n t h e f i e l d o f i n a d v e r t e n c e b u t g r o s s n e g l i g e n c e i n t h e f i e l d of a c t u a l o r c o n s t r u c t i v e i n t e n t t o i n j u r e , and t h e two d i d n o t g r a d e i n t o each o t h e r . When t h e d r i n k i n g c a s e s i n c r e a s e d i n number, w e reached t h e p o i n t t h a t t h e concurrence o f c a u s a l o r d i n a r y n e g l i g e n c e and i n t o x i c a t i o n , a s a m a t t e r of law, was g r o s s negligence. "One of t h e main r e a s o n s f o r t h e g r o w t h o f t h e d o c t r i n e o f g r o s s n e g l i g e n c e was t o a m e l i o r a t e t h e h a r d s h i p s of t h e common law d o c t r i n e of c o n t r u b u t o r y n e g l i g e n c e which b a r r e d r e c o v e r y f r o m a t o r t f e a s o r t o o n e n e g l i g e n t l y c a u s i n g , however s l i g h t l y , h i s own i n j u r y . However, g r o s s n e g l i g e n c e being d e f i n e d a s d i f f e r e n t i n kind and n o t i n d e g r e e , could n o t be compared t o o r d i n a r y n e g l i g e n c e a n d , hence, c o n t r i b u t o r y n e g l i g e n c e was no b a r t o recovery. "The d o c t r i n e of g r o s s n e g l i g e n c e a s a v e h i c l e of s o c i a l p o l i c y no l o n g e r f u l f i l l s a p u r p o s e i n c o m p a r a t i v e negligence. Much o r what c o n s t i t u t e d g r o s s n e g l i g e n c e . w i l l b e f o u n d t o c o n s t i t u t e a h i g h p e r c e n t a g e of o r d i n a r y n e g l i g e n c e c a u s i n g t h e harm. Obviously, w e a r e s t r e s s i n g t h e b a s i c g o a l of t h e l a w o f n e g l i g e n c e , t h e e q u i t a b l e distribution of the loss in relation to the respective contribution of the faults causing it." In Li v. Yellow Cab Company of California (1975), 13 Cal.3d 804, 825-26, 532 P.2d 1226, 1241, 119 Cal.Rptr. 858, 873, the Supreme Court of California addressed the issues as follows: "Finally there is the problem of the treatment of willful misconduct under a system of comparative negligence. In jurisdictions following the 'all-or-nothing' rule, contributory negligence is no defense to an action based upon a claim of willful misconduct (see Rest.2d Torts, Section 503; Prosser, Torts, supra, Section 65, p . 426), and this is the present rule in California. (Williams v. Carr (1968) 68 Cal.2d 579, 583, 68 Cal.Rptr. 305, 440 P.2d 505.) As Dean Prosser has observed, ' [this] is in reality a rule of comparative fault which is being applied, and the court is refusing to set up the lesser fault against the greater.' (Prosser, Torts, supra, Section 65, p. 426. ) The thought is that the difference between willful and wanton misconduct and ordinary negligence is one of kind rather than degree in that the former involves conduct of an entirely different order, and under this conception it might well be urged that comparative negligence concepts should have no application when one of the parties has been guilty of willful and wanton misconduct. It has been persuasively argued, however, that the loss of deterrent effect that would occur upon application of comparative fault concepts to willful and wanton misconduct as well as ordinary negligence would be slight, and that a comprehensive system of comparative negligence should allow for the apportionment of damages in all cases involving misconduct which falls short of being intentional. (Schwartz, supra, Section 5.3, p. 108.) The law of punitive damages remains a separate consideration. (See Schwartz, supra, Section 5.4 pp. 109-111.)" Subsequent to the California Supreme Court's decision in Li v. Yellow Cab Company of California, supra, the California Court of Appeals, Fifth District, expanded upon said decision in Sorenson v. Allred (1980), 112 Cal.App.3d 717, 725-26, 169 Cal.Rptr. 441, 446, as follows: "In summary, we conclude that no defensible reason exists for categorizing willful and wanton misconduct as a different kind of negligence not suitable for comparison with any other kind of negligence. The adoption of comparative negligence in Li rendered such a separate category unnecessary since contibutory negligence on the part of the plaintiff was no longer a total bar to recovery for a tortious injury. We apply an old axiom, 'when the need for a rule ceases, the rule ceases.' "The important by-product of the abolition of shades of negligence or other categorizations of fault would be the streamlining of the trial of cases. The submission to the triers of fact, particularly juries, of issues of liability upon the simply stated question, 'Whose fault was it, and if both are at fault, what are the degrees of fault of each' places the issues in a context more readily understood. The greater the elimination of such 'buzz' words as willful misconduct, last clear chance, [assumption of the risk], etc., the more the focus will be upon the real issues as we have noted above. The elimination of willful misconduct as a bar to recovery offers justice to both plaintiffs and defendants in situations where it now is all or nothing. Witness Ewing v. Cloverleaf Bowl, supra, 20 Cal.3d 398, 143 Ca1.Rptr. 13, 572 P.2d 1155, where plaintiff would be the beneficiary of the elimination of willful misconduct as a total bar to recovery. "For the reasons discussed, we conclude that the doctrine of comparitive negligence should apply where either party's conduct is of the type traditionally described as willful and wanton. * * * " The Court of Appeals, Second District, in Southern Pac. Transp. Co. v . State (1981), 115 Cal.App.3d 116, 121, 171 Cal.Rptr. 187, 191 concurred with Sorenson, supra: "The second unresolved issue in Li, the - role of willful misconduct under comparative negligence, was recently addressed by the Court of Appeal in the Fifth District, which concluded that willful misconduct does not preclude application of the comparative-negligence rule. (Sorenson v. Allred (1980) 112 Cal.App.3d 717, 169 Cal.Rptr. 441.) In reaching its conclusion, the court noted that the contributory-negligence rule and the willful-misconduct rule together amount to a rule of comparative fault under which the lesser fault does not bar the greater. The court said that no defensible reason exists for categorizing willful misconduct as a kind of negligence not comparable with any other kind of negligence, and it concluded that the adoption of a rule of comparative negligence rendered superfluous the separate category of negligence described as willful misconduct. (p. 725, 169 Cal.Rptr. 441. ) "We agree with the Court of Appeal's reasoning that the need for a separate category of negligence identified as willful misconduct, which was designed to alleviate the inequity of the all-or-nothing contributory negligence rule, has disappeared with the adoption of a rule of comparative negligence. The concept of willful misconduct remains viable only for an intentional injury which justifies punitive damages. Unless a defendant has intentionally injured a plaintiff, he is entitled to a reduction in his liability to the plaintiff to the extent plaintiff's own negligence has contributed to the injury . . . . Under the comparative negligence dispensation, every party remains liable for his proportionate share of fault, whether his conduct is described as simple negligence or as willful misconduct. (See Li v . Yellow Cab, supra, 13 Cal.3d, p. 829, 119 Cal.Rptr. 858, 532 P.2d 1226; American Motorcycle Association v . Superior Court, supra, 20 Cal.3d p . 588, 146 Cal.Rptr. 182, 578 P.2d 899.) This Court has ruled that punitive damages cannot be reduced by the percentage of plaintiff's contributory negligence. In Shahrokhfar v . State Farm Mutual Automobile Insurance Company (Mont. 1981), 634 P.2d 653, 658-59, 38 St.Rep. 1669, 1675, this Court held: "This court has not previously ruled on the question of whether punitive damages can be reduced by the percentage of plaintiff's contributory negligence. Since the purpose of punitive damages is to punish the defendant and not to compensate the plaintiff, we find that such an award bears no reasonable relationship to the plaintiff's conduct. Therefore, we hold that punitive damages cannot be reduced by the percentage of plaintiff's contributory negligence. This holding is supported by other jurisdictions. Amoco Pipeline Co. v . Montgomery (W.D.Ok1. 1980), 487 F.Supp. 1268; Tampa Electric Co. v. Stone & Webster Engineering Corp. (M.D. Fla., Tampa Div., 1973), 367 F.Supp. 27." The jury in this case awarded punitive damages in the sum of $100,000, in addition to compensatory damages. The holding that the compensatory damage award may not be reduced by the percentage of plaintiff's negligence appears inequitable to me. If the defendant's conduct is "willful" or "wanton," the percentage of plaintiffs negligence will be determined to be much smaller in comparison, and a reduction in the compensatory award would be in line with the principle of comparative negligence, while leaving an award for punitive damages intact. Such a holding would prevent the plaintiff from profiting by his own negligence, but would preserve the policy of punishing "willful" or "wanton" acts. In view of the majority holding that negligence and willful and wanton misconduct are different in kind, rather than degree, the Montana legislature may wish to resolve this problem, in the light of this Court's past planetary usage of words such as ordinary negligence, gross negligence, willful negligence, wanton misconduct, reckless, h e e d l e s s and m a l i c i o u s negligence. I would f i n d t h a t t h e Montana l e g i s l a t u r e i n t e n d e d t h e a p p o r t i o n m e n t o f damages i n c a s e s i n v o l v i n g a c t s o f n e g l i g e n c e which f a l l s h o r t of being i n t e n t i o n a 5 . . . , ' / _I' Mr. Justice John C. Sheehy, dissenting: I dissent from the foregoing decision. The majority returned this case to the District Court for further trial solely upon the grounds that the District Court erred in admitting evidence of prior instances when Lutey supplied minors with drinks, going to the issue of punitive damages. The effect of the majority view here is to adopt a strict rule as to the kinds of evidence that may be admitted to show the character, malice or disposition of a defendant and his willful disregard for the rights of others. In my opinion, Luteyl s supplying of beer to minors, particularly to Ray Derenberger, was part a-nd parcel of the whole transaction that led to the grievous injuries that Ray Derenberger sustained. On the evening in question here, he had purchased beer with which to ply Ray Derenberger, and undoubtedly Raymond's senses were dulled by this criminal act of Lutey. It is relevant, therefore, in showing his malice and willful disregard for the rights of Derenberger, that he plied minors with liquor a month before the accident or the month after the accident without any showing of remorse by those acts for what he had done to Raymond Derenberger. Punitive damages may be awarded by the jury against the defendant where he has been quilty of oppression, fraud or malice, such damages to be for the sake of example and by way of punishing the defendant. Section 27-1-221, MCA. Here, the majority limits the fact issues in this case to whether Lutey was driving the vehicle recklessly, at a high rate of speed and whether that action was willful and wanton misconduct. The majority ignores, however, a concomitant fact issue, that Derenbergerls senses may have been dulled when this sixteen-year-old was unlawfully plied with liquor in such a manner that he did not appreciate the danger of driving with Lutey. It was most certainly relevant to this issue that Lutey had acted in the same way on prior and succeeding occasions to show his wanton disregard for any minors that came within his influence. Certainly the jury was entitled to consider such evidence in determining the punitive damages. This Court has usua.lly held that it will leave the admission of evidence to the sound discretion of the trial court subject to review only in cases of manifest abuse. Cech v. State (1979), 183 Mont. 75, 604 P.2d 97; Pierce Packing Company v. John Morrell (9th cir. 1980), 633 F.2d 1362. I would affirm the judgment of the District Court. c A ' / I concur with Justice Sheehy's dissent.

November 17, 1983

11c3de5b-182f-4624-87d2-96e9d07350ff

MORRISON v HIGBEE

N/A

82-507

Montana

Montana Supreme Court

PETER A. MORRISON, e t a l . , P l a i n t i f f s , ERWIN F. HIGBEE, e t a i . , Defendants. ..................................... T H O ~ ~ S MILLER AND LEWIS IIUGKES, Appellants, V S . JAMES E. ROBERTSON and OPA M E G E E and ROSE M. MEGEE, I n t e r v e n o r s arid Respondents. Appeal from: D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t , i n and f o r t h e County of Yadison, The honorable Pi. W. Lessley, Judge p r e s i d i n g . Counsel of Record: For Appellants: Korrow & Sedivy; Terry Sckaplow, Bozeman, Montana For Respondents: !100re, Rice, OIConnell and Refling; avid C. ?.loon, Bozeman, Montana - - Submitted on B r i e f s : March 17, 1983 Decided: June 30, 1983 Mr. J u s t i c e L . C. Gulbrandson d e l i v e r e d t h e Opinion of t h e Court. Water u s e r s , M i l l e r and Hughes, appeal from a judgment o r d e r i n g them t o remove t r e e s and brush from along t h e i r i r r i g a - t i o n d i t c h e s and t o a l l o w respondents, Robertson and Megee, t o r e p a i r and m a i n t a i n t h e d i t c h e s . The judgment was e n t e r e d i n t h e D i s t r i c t Court of t h e F i f t h J u d i c i a l District, Madison County. The two p a r a l l e l d i t c h e s i n q u e s t i o n d i v e r t water o u t of South Meadow Creek, which rises i n South Meadow Creek Lake i n t h e Beaverhead N a t i o n a l F o r e s t , flows e a s t e r l y , and t h e n empties i n t o Ennis Lake. The d i t c h used by a p p e l l a n t s , M i l l e r and Hughes, is t h e f i r s t d i t c h of t h e two p a r a l l e l d i t c h e s t o t a k e water o u t of South Meadow Creek. The second d i t c h , s e v e r a l f e e t below t h e Miller-Hughes d i t c h , is used by respondents, Robertson and Megee. A p p e l l a n t Miller d i v e r t s h i s water o u t of t h e upper d i t c h . The two d i t c h e s t h e n meet c a r r y i n g t h e water f o r Megee, Hughes, and Robertson. A f t e r t h e two d i t c h e s meet, respondent Megee's d i t c h d i v e r t s water a c r o s s M i l l e r ' s land t o Megee's land. The water remaining i n t h e main d i t c h c o n t i n u e s t h e n p a s t Hughes' house and t o R o b e r t s o n ' s land. Robertson is t h e l a s t water u s e r on t h e d i t c h system. The p r e s e n t appeal a r i s e s from t h e District C o u r t ' s o r d e r r e q u i r i n g removal of mature t r e e s and brush along t h e banks of t h e d i t c h e s . A p p e l l a n t s , Hughes and M i l l e r , c l a i m t h a t t h e d i t c h e s w i l l wash away i f t h e brush is removed. Respondents, Robertson and Megee, c l a i m t h a t t h e brush and t r e e s impede d i t c h maintenance and consume l a r g e amounts of w a t e r . To understand how t h i s c o n t r o v e r s y a r o s e , w e must look t o a d i s s a t i s f i e d water u s e r ' s a c t i o n begun i n 1977. On J u n e 22, 1977, two downstream water u s e r s on South Meadow Creek f i l e d a complaint a g a i n s t t h e water commissioner, seeking proper d i s t r i b u t i o n of water under a 1912 d e c r e e . The complainants a l l e g e d t h a t t h e water measuring d e v i c e s upstream were d e f e c t i v e , improperly p l a c e d , o r locked, t h e r e b y p r e v e n t i n g proper d i s t r i b u t i o n of w a t e r . Under s e c t i o n 85-5-301, MCA, t h e Honorable Frank E. B l a i r o r d e r e d a hearing t o determine t h e proper enforcement of t h e 1912 d e c r e e . A f t e r t h e h e a r i n g , Judge B l a i r ordered t h e appointment of C h a r l e s C. Bowman a s c o u r t r e f e r e e . On A p r i l 20, 1979, t h e D i s t r i c t Court adopted t h e recommen- d a t i o n s of t h e c o u r t r e f e r e e and f i l e d f i n d i n g s of f a c t , conclu- s i o n s of law, and a d e c r e e r e q u i r i n g , among o t h e r t h i n g s , t h a t a p p e l l a n t s and respondents remove brush from t h e i r d i t c h banks. The c l e r k of c o u r t c e r t i f i e d t h a t c o p i e s of t h e f i n d i n g s , conclu- s i o n s and d e c r e e had been s e n t t o a l l i n t e r e s t e d p a r t i e s . N o document l a b e l e d " n o t i c e of e n t r y of judgment" was f i l e d o r mailed by t h e c l e r k of c o u r t . I n t h e f a l l of 1979, Judge B l a i r asked t h e c o u r t r e f e r e e t o i n v e s t i g a t e whether t h e p a r t i e s had complied w i t h h i s o r d e r . I n A p r i l 1980, Judge B l a i r s e n t l e t t e r s t o t h e p a r t i e s p o i n t i n g o u t d e f i c i e n c i e s found by t h e c o u r t r e f e r e e . I n p a r t i c u l a r , Judge B l a i r informed M i l l e r and Hughes t h a t brush had not been c u t a l o n g t h e Miller-Hughes d i t c h . On May 5 , 1980, i n response t o t h e l e t t e r from Judge B l a i r , M i l l e r and Hughes f i l e d a p e t i t i o n f o r m o d i f i c a t i o n of o r d e r and f i n d i n g s . M i l l e r and Hughes claimed t h a t t h e d i t c h banks would wash o u t i f brush were removed. They a l s o moved f o r s u b s t i t u t i o n of t h e judge. The Honorable W. W. Lessley assumed j u r i s d i c t i o n and s e t a hearing on t h e p e t i t i o n f o r October 1, 1980. On September 24, 1980, Robertson and Megee p e t i t i o n e d t o i n t e r v e n e i n t h e proceedings f o r m o d i f i c a t i o n of t h e 1979 o r d e r . A p r e - t r i a l hearing was not held u n t i l November 1 9 , 1981, a f t e r which Judge L e s s l e y appointed a Water Master t o hold a hearing on t h e merits of t h e m o d i f i c a t i o n p e t i t i o n . On A p r i l 23, 1982, Robertson and Megee f i l e d a motion t o d i s m i s s t h e p e t i t i o n f o r m o d i f i c a t i o n , on t h e grounds t h a t t h e p e t i t i o n was a motion t o amend judgment and t h a t t h e t i m e l i m i t s of Rule 5 2 ( b ) , M.R.Civ.P., had not been followed. The D i s t r i c t Court denied t h e motion and set t h e d a t e f o r a hearing b e f o r e t h e Water Master. On May 11 and May 1 9 , 1982, t h e Water Master conducted h e a r i n g s . She heard testimony, accepted e x h i b i t s , and p e r s o n a l l y viewed t h e d i t c h e s . On J u l y 1 9 , 1982, t h e Water Master f i l e d her f i n d i n g s of f a c t , c o n c l u s i o n s of law, and d e c r e e . She found t h a t t h e brush a l o n g t h e banks impeded maintenance of t h e d i t c h e s . She s t a t e d i n her memorandum t h a t l i t t l e evidence was presented t o show t h a t t h e brush prevented e r o s i o n of t h e d i t c h banks. Most impor- t a n t l y , she found t h a t t h e aggregate e f f e c t of t h e brush l i n i n g t h e d i t c h banks r e s u l t e d i n consumption of l a r g e amounts of water which would o t h e r w i s e be a v a i l a b l e f o r o t h e r water u s e r s on t h e South Meadow Creek. She t h e n ordered t h e p a r t i e s t o develop a s c h e d u l e of maintenance t o remove t h e mature brush from t h e s i d e s of t h e d i t c h e s , e x c e p t i n g t h e l a r g e t r e e s l o c a t e d i n t h e Hughes' y a r d . On J u l y 16, 1982, t h e District Court adopted t h e Water M a s t e r ' s d e c i s i o n . No n o t i c e of e n t r y of judgment was f i l e d . On J u l y 30, M i l l e r and Hughes moved t o amend t h e M a s t e r ' s f i n d i n g s under Rules 5 2 ( b ) and 5 3 ( e ) , M.R.Civ.P. On August 2 , Robertson and Megee moved t o amend t h e judgment under Rule 59 ( g ) , M.R.Civ.P. On August 16 and August 30, t h e motions were argued. The D i s t r i c t Court asked f o r b r i e f s and t h e m a t t e r was deemed sub- m i t t e d September 9 , 1982. On September 20, 1982, t h e D i s t r i c t Court f i l e d an amended judgment and memorandum. On October 8 , 1982, a f i n a l judgment was f i l e d . A n o t i c e of e n t r y of judgment was f i n a l l y f i l e d on October 1 2 , 1982. M i l l e r and Hughes f i l e d a n o t i c e of appeal November 1 0 , 1982. The t h r e e main i s s u e s on appeal a r e : 1. whether t h e appeal is t i m e l y ; 2. whether t h e c o u r t r e f e r e e i n i t i a l l y had t h e a u t h o r i t y t o recommend removal of t h e b r u s h ; and 3. whether t h e evidence s u p p o r t s t h e o r d e r t h a t t h e brush should be removed. Respondents have made s e v e r a l s t r o n g arguments regarding t h e t i m e l i n e s s of t h i s appeal. They c l a i m t h a t t h e c e r t i f i e d m a i l i n g of Judge B l a i r ' s o r i g i n a l f i n d i n g s of f a c t , c o n c l u s i o n s of law, and d e c r e e by t h e clerk of c o u r t c o n s t i t u t e d n o t i c e of e n t r y of judgment w i t h i n t h e meaning of Rule 7 7 ( d ) , M.R.Civ.P. They t h e n a r g u e t h a t t h e p e t i t i o n f o r m o d i f i c a t i o n f i l e d one year l a t e r was a motion t o amend judgment and n o t t i m e l y under Rule 5 9 ( g ) , M.R.Civ.P. Even i f t h e p e t i t i o n was timely, r e s p o n d e n t s argue t h a t s i n c e t h e p e t i t i o n was n o t n o t i c e d f o r hearing o r heard w i t h i n t h e time l i m i t a t i o n s of Rule 5 9 ( d ) , it was deemed denied a s of May 15, 1980. The time f o r appeal t h e n expired J u n e 1 7 , 1980. L a s t l y , respondents argue t h a t t h e motion t o amend judgment f i l e d on J u l y 30, 1982, was a l s o n o t heard w i t h i n t h e time r e q u i r e m e n t s of Rule 5 9 ( d ) , and was t h e r e f o r e deemed denied on August 1 0 , 1982. The time f o r appeal expired t h e n on September 1 2 , 1982. Respondents' p r o c e d u r a l arguments must f a i l simply because no n o t i c e of e n t r y of judgment was f i l e d u n t i l October 1 2 , 1982. The n o t i c e of appeal f i l e d on Novemer 1 0 , 1982, was t h e r e f o r e t i m e l y . I f a n o t i c e of e n t r y of judgment had been f i l e d , respondents' argument t h a t t h e time f o r appeal began t o run when p o s t - t r i a l motions were deemed denied would be compelling, e s p e c i a l l y i n l i g h t of t h e c a s e s s t a t i n g t h a t a D i s t r i c t Court l a c k s j u r i s d i c - t i o n a f t e r t h e motions a r e deemed denied. See Winn v. Winn (1982) I Mont. , 651 P.2d 51, 39 St.Rep. 1831, and c a s e s c i t e d t h e r e i n . Moreover, t h e adoption of respondents' argument would l e a d t o a fundamental c o n t r a d i c t i o n . I f t h e t h i r t y - d a y time f o r appeal began t o run a f t e r t h e p o s t - t r i a l motions were deemed d e n i e d , t h e n t h e D i s t r i c t Court would l o s e j u r i s d i c t i o n p r i o r t o its n o t i c e of e n t r y of judgment. T h i s Court has c o n s i s t e n t l y s t a t e d t h a t it is t h e f i l i n g of t h e n o t i c e of e n t r y of judgment t h a t begins t h e running of t h e t i m e l i m i t a t i o n s f o r f i l i n g a n o t i c e of a p p e a l . Haywood v. S e d i l l o ( 1 9 7 5 ) , 167 Mont. 101, 535 P.2d 1014; P i e r c e Packing Co. v . D i s t r i c t Court ( 1 9 7 8 ) , 177 Mont. 50, 579 P.2d 760. T h i s r u l e h a s been t e c h n i c a l l y a p p l i e d i n o r d e r t o a s s u r e proper n o t i c e and a n understanding of when t h e time f o r appeal begins t o run. I n b o t h Haywood and P i e r c e Packing, we concluded t h a t a c t u a l n o t i c e was n o t s u f f i c i e n t . A s i n P i e r c e Packing, we a r e a g a i n led t o a t e c h n i c a l a p p l i c a t i o n of t h e r u l e , and f i n d t h a t t h e appeal is t i m e l y . One f u r t h e r c o n s i d e r a t i o n has i n f l u e n c e d our c o n c l u s i o n t h a t t h e appeal is timely. T h i s a c t i o n began under s e c t i o n 85-5-301, MCA, a s a d i s s a t i s f i e d water u s e r ' s a c t i o n . The procedure governing such an a c t i o n is q u i t e i n f o r m a l . No formal response p l e a d i n g s o r motions a r e r e q u i r e d . See A l l e n v. Wampler ( 1 9 6 4 ) , 1 4 3 Mont. 486, 491, 392 P.2d 82, 85, q u o t i n g Gans and K l e i n Investment Co. v. Sanford ( 1 9 3 2 ) , 91 Mont. 512, 8 P.2d 808; and S a i n v. Montana Power Co. ( 1 9 3 6 ) , 84 F.2d 126. S i n c e s t a n d a r d t r i a l p r o c e d u r e s a r e not followed i n t h e s e i n f o r m a l , summary pro- c e e d i n g s , t h e time l i m i t s governing p o s t - t r i a l p r o c e d u r e s should n o t be s t r i c t l y a p p l i e d . A p p e l l a n t s argue t h a t t h e c o u r t r e f e r e e lacked t h e a u t h o r i t y t o recommend t h e removal of brush along t h e d i t c h banks. S i n c e t h e D i s t r i c t Court adopted t h e r e f e r e e ' s f i n d i n g s , a p p e l l a n t s a r e a c t u a l l y c h a l l e n g i n g t h e a u t h o r i t y of t h e D i s t r i c t Court. A s noted above, t h i s a c t i o n began a s a d i s s a t i s f i e d water u s e r ' s a c t i o n provided f o r i n s e c t i o n 85-5-301, MCA. The purpose o f a d i s s a t i s f i e d water u s e r ' s a c t i o n is t o e n f o r c e t h e o r i g i n a l d e c r e e , and o v e r s e e t h e water commissioner's d i s t r i b u t i o n of w a t e r through p r o p e r l y maintained d i t c h e s , headgates, and o t h e r w a t e r measuring d e v i c e s . See s e c t i o n s 85-5-301, and 85-5-302, MCA; Luppold v. L e w i s ( 1 9 7 7 ) , 172 Mont. 280, 563 P.2d 538; and A l l e n , s u p r a . Here, t h e D i s t r i c t Court ordered t h e removal of trees and brush on t h e d i t c h banks i n o r d e r t o f a c i l i t a t e d i t c h maintenance and t o conserve t h e water absorbed by t h e t r e e s and b r u s h f o r o t h e r water u s e r s . The District C o u r t ' s o r d e r does n o t h i n g more t h a n enhance t h e method of d i s t r i b u t i o n by o r d e r i n g a w e l l maintained d i t c h system. The evidence s u p p o r t s t h e Water M a s t e r ' s f i n d i n g s t h a t remo- v a l of t h e mature brush and t r e e s would not cause s i g n i f i c a n t e r o s i o n . The evidence a l s o s u p p o r t s t h e f i n d i n g s t h a t c e r t a i n b r u s h and trees need t o be removed t o e n s u r e proper d i t c h main- t e n a n c e . The District C o u r t ' s judgment t We concur:

June 30, 1983

c3437d15-cb32-4a39-b45c-d2be40a4a275

STATE v HAMMONS

N/A

82-472

Montana

Montana Supreme Court

No. 82-472 I N T H E SUPREME COURT O F THE STATE O F FONTANA 1983 TIIE STATE O F MONTANA, P l a i n t i f f and Respondent, CHARLES PRESTON M A ! ' I M O N S , a/k/a C.P. H A M J l O N S , Defendant and Appellant. Appeal from: District Court of t h e Nineteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County of Lincoln, The Honorable Robert & I . H o l t e r , Judge p r e s i d i n g . Counsel of Record: For Appellant: Sverdrup & Spencer, Libby, Xontana For Respondent: Eon. !.like Greely, Attorney General, Helena, Islontana W i l l i a m A. Douglas, County Attorney, Libby, ilgontana Submitted on B r i e f s : !larch 10, 1 9 8 3 Decided: June 9 , 1983 Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. Defendant appeals from a conviction by a jury in Lincoln County, Montana, of theft, a felony. We affirm the conviction. During the night of February 28 - March 1, 1982, defendant and four other persons were drinking and riding around the Libby area of Lincoln County. Robert DeWayne Anderson was driving his pickup. Tracy Anderson, James Hammons, Lisa Gostnell, and the defendant, C.P. Hammons, were passengers. Tracy Anderson suggested that they go to the "Buck" Jordan residence to steal old car batteries to sell for beer and gasoline money. When they arrived at the Jordan residence, which is located in an isolated area near Libby, Robert Anderson and James Hammons headed for the house. Tracy Anderson and the defendant started up the hill where the batteries were. While Tracy and defendant were on the hill trying to steal the batteries and "goofing around with the dog," Robert Anderson and James Hammons entered the residence through a kitchen window and began to remove numerous items from the house. The defendant admitted seeing Robert Anderson and James Hammons going through the window of the house. Lisa Gostnell stayed outside, but helped load some of the property removed by Robert Anderson and James Hammons into the truck. Defendant denied going into the house himself. He testified that the plan to steal the batteries was abandoned when Tracy Anderson and he discovered that they were too heavy to bring down the hill to Robert Anderson's pickup. Defendant admitted seeing someone put deer horns into the truck and seeing Tracy Anderson put some brass into the back of the pickup. Both Robert Anderson and James Hammons testified that they saw the defendant in the bedroom of the house. Norman "Buck" Jordan testified that, among other things, two "Old Timer" pocket knives were stolen in the burglary. One was turned over to a Sheriff's Deputy by James Hammons. The other pocket knife was in defendant's possession when he was arrested on the evening following the burglary. Jordan testified that the knife found in the defendant's possession was stolen from a gun rack in the bedroom of his home. The defendant testified that he got the knife from the dashboard of Robert Anderson's pickup after the burglary had been completed. It is undisputed that Robert Anderson and James Hammons took numerous items from the house, including pistols, knives, tools, a knapsack, and some relatively rare currency. The aggregate value of the stolen property far exceeds $150. The State prosecuted the defendant for theft on the theory that he either obtained or exerted unauthorized control over this property or was accountable for the conduct of Robert Anderson and James Hammons. James Hammons, the defendant's brother, testified against defendant under the terms of a deferred prosecution agreement. Lisa Gostnell testified under a grant of immunity from prosecution. Robert Anderson received no favors in exchange for his testimony. The court submitted the case to the jury on charges of burglary, felony theft, and misdemeanor theft. The jury acquitted the defendant of the burglary charge, but found him guilty of the offense of theft, a felony. He was sentenced to four years imprisonment at the State Prison. From this verdict, the defendant appeals. The issues presented on appeal are: 1. Was the accomplice testimony of Robert Anderson, James Hammons , and Lisa Gostnell adequately corroborated by independent evidence? 2. Was the felony theft conviction sufficiently supported by the evidence? Appellant argues that there are only two pieces of evidence that the jury could consider corroborative: his own testimony that he attempted to carry some batteries down the hill and the fact that Buck Jordan's knife was found in his possession. He argues that neither supplies corroboration for the accomplice testimony since (1) defendant was charged with theft of numerous other items, not battery theft or attempted battery theft; (2) defendant provided an explanation for possessing the knife; and ( 3 ) his acquittal of the burglary charge establishes that the jury believed his testimony as to how he got the knife. The defendant testified that he got the knife from the dashboard of Robert Anderson's pickup and that he was not aware that any knives were taken from the Jordan place. Accomplices Robert Anderson and James Hammons testified that the defendant participated in the burglary and the theft. Robert Anderson testified that he and James Hammons ransacked the Jordan house, that James Hammons unlocked the back door of the house to let the defendant in, and that he saw the defendant in the bedroom of the house. James Hammons testified that he took one "Old Timer" pocket knife and one large Bowie knife from the Jordan residence, and that he saw the defendant in the bedroom during the burglary. Lisa Gostnell testified that all four men (the Hammons brothers and the Anderson brothers) participated in the decision to steal Jordan's property. She stated that in execution of that plan, Robert Anderson and James Hammons entered the house while the defendant and Tracy Anderson went up a nearby hill to get car batteries. Since Lisa Gostnell, Robert Hammons and James Anderson all participated in removal of property from Jordan's house, they are accomplices in the offense of theft. To support defendant's conviction, their testimony must be corroborated by other evidence. Section 46-16-213, MCA, states: "A conviction cannot be had on the testimony of one responsible or legally accountable for the same offense, as defined in 45-2-301, unless the testimony is corroborated by other evidence which in itself and without the aid of the testimony of the one responsible or legally accountable for the same offense tends to connect the defendant with the commission of the offense. The corroboration is not sufficient if it merely shows the commission of the offense or the circumstances thereof." The quantum and. character of proof required to corroborate accomplice testimony was summarized in State v. Kemp (1979), 182 Mont. 383, 387, 597 ~ . 2 d 96, 99: "To be sufficient, corroborating evidence must show more than that a crime was in fact committed or the circumstances of its commission. State v. Keckonen (1938). 107 Mont. 253, 263, 84 P.2d 3 4 1 ; 345. It must raise more than a. suspicion of the defendant's involvement in, or opportunity to commit, the crime charged. State v. Gangner (1957) , 130 Mont. 533, 535, 305 P.2d 3 3 8 , 3 3 9 . But corroborative evidence need not be sufficient, by itself, to support a defendant's conviction or even to make out a prima facie case against him. State v . Ritz (1922), 65 -- Mont. 180, 186, 211 P. 298, 300; State v . Stevenson - (1902), 26 Mont. 332, 334, 67 P. 1001, 1002. Corroborating evidence may be circumstantial (State v. Harmon (1959), 135 Mont. 227, 233, 340 P.2d 128, - 131) and can come from the defendant or his witnesses. State v. Phillips (1953), 127 Mont. 381, 387, 264 P.2d 1 m 9 , 1012." As stated more recently in State v . Forsyth (1982), Mont . , 642 P.2d 1035, 1039, 39 St.Rep. 540, 544, quoted in State v. Lamere (19831, Mont . , 658 P.2d 376, "Under section 46-16-213, MCA, it must be evidence which in itself and without the aid of the testimony of the one responsible or legally accountable for the same offense tends to connect the defendant with the commission of the offense." Corroborative evidence "need only tend to connect the defendant with the commission of the offense." State v. Morigeau (19821, Mont . , 656 P.2d 185, 187, 39 St.Rep. 2311, 2314. With these principles in mind, we examine the corroborative evidence that supports the accomplice testimony. Defendant, by his own testimony, corroborated his accomplices' statements. He admitted knowledge of the p1a.n "to go get some batteries" from the Jordan place. He saw Robert Anderson and James Hammons climbing through the window into the Jordan residence. He saw stolen property being loaded into the back of the pickup. He abandoned his own efforts to steal batteries after he discovered they were too heavy to bring down the hill. He admitted having possession of the stolen knife. These admissions by defendant tend to connect the defendant with the commission of the offense of theft. Buck Jordan also corroborated Anderson's and Hammons' testimony that the defendant participated in the burglary and the theft. Jordan testified that two "Old Timer" pocket knives were taken from his house and that the knife that the defendant possessed at the time of his arrest was stolen from a gun rack in Jordan's bedroom. The strongest corroborating evidence was defendant's possession of the stolen pocket knife. Possession of the "Old Timer" knife certainly connected the defendant to the crime. It constituted circumstantial evidence that the jury had a right to consider. State v. Laubach (1982), Mont . , 653 P.2d 844, 846, 39 St.Rep 2074, 2076. Defendant's possession of the stolen knife was sufficient as a matter of law to corroborate the accomplice testimony. "Whether the defendant's explanation was sufficient to explain away the possession was a factual question for the jury." State v. Rose (1980), Mont . , 608 P.2d 1074, 1078, 37 St.Rep. 642, 647. We hold that there was sufficient, independent evidence to satisfy the statutory requirements and to corroborate the testimony of Anderson, Hammons and Gostnell. Defendant's next contention is that the evidence does not sufficiently support his conviction of felony theft. Section 45-6-301, MCA defines theft and related offenses. That statute defines four ways the offense of theft can be committed, including an actual taking (section 45-6-301 (I-) , MCA) and possession of stolen property (section 45-6-301 (3) , MCA) . The amended information charged the defendant with alternative counts of felony burglary and theft. All the items taken from the Jordan residence, outbuildings and property were listed on the information. There is no dispute that defendant's brother and companion burglarized the Jordan residence and that the property taken exceeded $150 in value. Defendant was charged and prosecuted for theft on alternate theories that he either took the property himself or was legally accountable for the conduct of his accomplices. Section 45-2-302, MCA, provides in part that: "A person is Legally accountable for the conduct of another when: " ( 3 ) either before or during the commission of an offense with the purpose to promote or facilitate such commission, he solicits, aids, abets, agrees, or attempts to aid such other person in the planning or commission of the offense." We must therefore assess the sufficiency of the evidence to show whether or not defendant aided, agreed, or attempted to aid his brother and Robert Anderson in the planning or commission of the theft. In assessing the sufficiency of the evidence, this Court must give it all of the probative effect toward conviction that it will support. State v. Fitzpatrick (1973), 163 Mont. 220, 227, 516 P.2d 605, 610. We have long adhered to the principle that more than mere presence is necessary to establish criminal responsibility. State v. McComas (1929), 85 Mont. 428, 433, 278 P. 993, 995. A reasonable juror could be convinced of defendant's guilt by evidence other than the mere fact that he was present at the Jordan place when the offenses occurred. The defendant agreed with the other three men to steal Jordan's property. He may or may not have entered the house, but he definitely received a fruit of the crime. Robert Anderson testified that while they were in jail, the defendant told him that "of all the stuff that we took out of the house, all he had gotten was a knife. " This statement after arrest strongly suggests more than mere presence at the scene of the crime. The evidence supports the conclusion that the defendant was part of the common criminal enterprise, which resulted in felony theft. The fact that he abandoned his specific intent to steal Jordan's batteries does not vitiate his attempts to aid in the planning or commission of the theft. The fact that the weight of the batteries caused appellant to abort his attempt to steal them before his companions finished ransacking the house does not nullify his participation in the commission of the offense of theft. The fact that he did not enjoy a proportionate share of the spoils is also unconvincing. In State ex rel. Murphy v. McKinnon (1976), 171 Mont. 120, 556 P.2d 906, we stated that failure to restrain companions who were committing a crime within defendant's presence was not sufficient evidence of defendant's criminal design and encouragement of the offense. We noted that a more active role was necessary in order for a person to be charged under the accountability statute. In State v. Lamere (1983), Mont . , 658 P.2d 376, 40 St.Rep. 110, appellant was not permitted to transfer legal accountability for his crimes to a companion who received property stolen by appellant from a hardware store. Appellant had gained entry to the store by driving his companion's car through a large window. We concluded that where there was no evidence that the companion had any prior knowledge or involvement with appellant's actions, he was not responsible for the acts of appellant. Since the companion did not know about the appellant's plan when he relinquished the car to him, he did not cause the appellant to commit the crimes, nor did he aid or abet the appellant to facilitate commission of the crimes. Lamere, 658 P.2d at 379, 40 St.Rep. at 113. Here, appellant had prior knowledge of the group's plan to steal Jordan ' s property. With knowledge that his companions were in the process of burglarizing the residence, appellant attempted to steal the batteries. This affirmative conduct on appellant's part constitutes more than mere presence. Appellant's active participation and attempts to aid in the effectuation of the group's plan exceeded negative acquiescence or mere failure to restrain. We find the evidence sufficient to hold the appellant legally accountable for the actions of his companions in crime. When viewed i n a l i g h t most favorable t o t h e S t a t e , t h e evidence shows t h a t t h e defendant i s l e g a l l y accountable under s e c t i o n 45-2-302(3), MCA, f o r t h e conduct of h i s brother and Robert Anderson. Both before and during t h e commission of t h e t h e f t , defendant aided, agreed and attempted t o a i d h i s brother and Anderson i n both t h e planning and commission of t h e offense of t h e f t . The defendant argues t h a t h i s a c q u i t t a l of t h e burglary charge implies t h a t t h e jury must have concluded t h a t h i s possession of t h e k n i f e was innocent. The defendant need not have been found t o have personally taken t h e k n i f e t o be g u i l t y of t h e f t . The jury could have e n t e r t a i n e d a reasonable doubt a s t o whether t h e defendant a c t u a l l y entered t h e building, thereby a c q u i t t i n g him of t h e burglary charge, and y e t a l s o have concluded t h a t t h e defendant was g u i l t y of t h e f t because he was accountable f o r t h e conduct of h i s brother and Anderson. The judgment of t h e D i s t r i c W e concur: ?4.&-&4 Chief J u s t i c k

June 9, 1983