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9b058319-bd43-4991-ad00-909c0d3bf589	COWAN v COWAN	2004 MT 68	02-780	Montana	Montana Supreme Court	No. 02-780 IN THE SUPREME COURT OF THE STATE OF MONTANA 2004 MT 68 ARDEN COWAN, Petitioner and Appellant, v. KATHY COWAN, Respondent and Respondent. APPEAL FROM: District Court of the Twenty-First Judicial District, In and for the County of Ravalli, Cause No. DR-00-122, The Honorable John W. Larson, Judge presiding. COUNSEL OF RECORD: For Appellant: Jennifer B. Lint, Boatwright Law Office, P.C., Hamilton, Montana For Respondent: Evonne Smith Wells, Attorney at Law, Missoula, Montana Submitted on Briefs: October 9, 2003 Decided: March 23, 2004 Filed: __________________________________________ Clerk 2 Justice John Warner delivered the Opinion of the Court. ¶1 Appellant appeals from the Amended Findings of Fact, Conclusions of Law, and Decree of Dissolution entered in the Twenty-First Judicial District Court, Ravalli County, which ordered the sale of a parcel of property, and apportioned part of the proceeds to Respondent. Appellant contends that Respondent held the property in trust for his benefit and thus, she should not have been awarded any of the proceeds from its sale. ¶2 Five issues were raised on appeal. However, we hold the Appellant’s claim to the property in question barred by judicial estoppel, therefore, we need not reach the remaining issues. FACTUAL AND PROCEDURAL BACKGROUND ¶3 Arden Cowan (Arden) is the son of Elmer and Pauline Cowan. Arden has been married three times. He was first married to, and had children with, Joyce Cowan (Joyce). After he and Joyce divorced, Arden married Karen Cowan (Karen). After he and Karen divorced, Arden married Kathy Couchois Cowan (Kathy) on November 24, 1989. Arden and Kathy separated on May 7, 2000, and on August 9, 2002, an Amended Decree of Dissolution was entered, dissolving Arden and Kathy’s marriage. In the dissolution action, the District Court determined that Kathy owned a tract of approximately 170 acres, dubbed the Stevensville/Bell Crossing property by the parties. Approximately eleven of these acres were purchased by Arden and Joyce in 1979, and approximately 110 of these acres were purchased by Arden and Karen in the early to mid-eighties. Title to the property, however, was never placed in Arden’s name. Legal title was always held by either Arden’s parents, or one of Arden’s wives. At the outset of the marriage to Kathy, the property consisted of 3 a 110-acre tract and an 11.14-acre tract. During the marriage, Arden and Kathy invested in additional acreage, and at the time of the dissolution, the entire 170 acres was subject to an agreement for sale with third-party buyers. The property was sold shortly after the Decree of Dissolution was entered, and the proceeds of the property were apportioned to Kathy and Arden as set forth in the decree. STANDARD OF REVIEW ¶4 We review a district court’s division of marital property to determine whether the findings on which it relied are clearly erroneous. If the findings are not clearly erroneous, we will affirm the distribution of property unless the district court abused its discretion. In a marriage dissolution proceeding, the test for an abuse of discretion is whether the district court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. Marriage of Engen, 1998 MT 153, ¶ 26, 289 Mont. 299, ¶ 26, 961 P.2d 738, ¶ 26. DISCUSSION ¶5 Arden’s foremost argument is that the District Court erred when it found that his parents’ transfer of the Stevensville property to Kathy was a gift to Kathy. He argues that his parents’ intent in transferring the property was to establish Kathy as trustee of the property for Arden’s benefit. There is evidence tending to support Arden’s trust theory. However, we agree with the District Court that Arden is judicially estopped from establishing that Kathy held the property in trust and that he is the beneficiary of that trust, because he repeatedly and unequivocally denied that he had any interest in the property whatsoever in a prior lawsuit against him for past due child support. 4 ¶6 Arden and his first wife, Joyce, were divorced in 1982. Arden’s initial monthly child support payments were $100 per child, and were later increased to $200 per child. Arden attempted to make his support payments, but for health-related reasons, began falling behind. Eventually, the total arrearage reached roughly $18,000. ¶7 In 1993, or early 1994, Joyce filed a suit against Arden for past due support. At trial, in 1994, Arden testified as to his assets. Concerning the Stevensville property, Arden said that he and his second wife, Karen, bought the property in 1987, and placed it in her name. When he and Karen were divorced, Karen owed Arden’s parents money and she deeded the property to them in lieu of a cash payment. Arden further testified that when he married Kathy, his parents deeded the property to her. Joyce’s attorney questioned Arden about the reasons why Arden’s parents deeded the property to Kathy and not to him: Q: Now, why would they deed it – this to your wife and not to you? A: Well, my medical liabilities are extreme at this point. If you’re not familiar with Post-Polio Syndrome, I have got a thing - a medical . . . Q: Just answer the question. A: Okay. Basically, I’m in a real bad position because of all the medical problems being created by my condition. My parents wouldn’t give me anything just because the liabilities of what’s going to happen medically are - could be pretty extreme, so they - anything they’re doing in disbursing their estate they’re giving to Kathy. And Kathy and I have an antenuptial agreement saying all of our stuff is separate, so that she won’t suffer the - you know, the legal liabilities if I end up in medical - you know, medical problems here. Q: So this transfer, then, was done to basically protect access to and from your medical bills; is that correct? A: Well, I can’t state - I can’t state a state of mind of my parents, they just said we’re giving this to Kathy, not to you. Q: It’s not in your name? A: Right. It never has been in my name. Q: Do you have any siblings, any sisters, brothers? A: I have got two sisters. Q: Did your parents likewise deed some property to your two sisters that 5 you’re aware of? A: Yeah, they have. They try to keep everything pretty much even, so they’ve been kind of evenly distributing their estate between the three kids - or the two kids and Kathy. They feel that she’s one of their kids. ¶8 Later in the questioning, Joyce’s attorney asked Arden why he hadn’t considered selling some of his personal property, or made other arrangements, to help make child support payments. The following dialogue ensued: Court: Well, in transferring all this property, why didn’t you do something to protect your children? A: In an awful lot of the property transfers I had - I had little choice in - as far as when Karen and I got divorced, she said I want this, you take that. And she was the one that ended up doing the paperwork and transferring to my parents. Through the divorce she was trying to protect me, and the divorce was a direct result of the actions taken by Joyce Cowan. Q (by attorney): Did you ever tell your parents about your obligation to support your children . . . ? A: Yeah, I’m sure they were aware of that. Q: Did you tell them that it might be . . . instead of transferring the property to Kathy, to transfer it . . . to yourself, so you could meet this obligation to these two children? A: No, Kathy has - Kathy would have the option of doing that if she so desired. Q: So basically what it comes down to, Mr. Cowan, is you did your best to make sure that these properties were not going to be available for any obligation that you had from any other party, medical, financial, to your children? A: Yeah, medically I - they’re to try to protect me medically. ¶9 Jumping ahead to 2002, and the trial of this case, Arden was again questioned about his assets and the ownership of the Stevensville property. He testified that beginning in the mid-seventies, he began to have serious concerns about his medical condition, and the large medical bills he might incur. To insulate his property from the possibility of execution by creditors he began to invest in real estate, but he always placed title to the properties in other peoples’ names. He said that while he recognized that legal title was in someone else, he 6 always believed that he was the true owner of the properties. Specifically regarding the Stevensville property: Q: So at about that time, Karen . . . deeded it over to your parents. A: Yeah. Q: Okay. During the time that Karen held the property, for whose benefit was she holding it? A: She was holding it for my benefit. Q: And at your request, she transferred it to your folks. A: Yes, that’s correct. Q: Okay. And likewise when your parents held the property, for whose benefit were they holding it? A: They were holding it for my benefit . . . . Q: Okay. Now, Arden, have you been asked about your ownership of the Bell Crossing property at hearings before? A: Yes, I have. Q: Okay. And at the time that you testified as to that subject, did you testify that you owned the Bell Crossing property? A: The - I didn’t testify that I owned it, because it was in another party’s name. You know, they were the owner of record. So I testified that they - that they owned it. Q: When we first started working on this case a number of months ago and we talked about who owned the property, what was your view? A: Well, my view was that I owned the property, but it was in somebody else’s name . . . . Later, when asked about the antenuptial agreement and the extent of his property holdings at the time he and Kathy signed the agreement, Arden testified: Q: What did you own on the day you married Kathy when you signed - that day you signed the prenuptial agreement, what did you own? A: What I believed I owned on the day I signed the antenuptial agreement is three parcels in Alaska and the two parcels at Bell Crossing, and I believe even though they were in my parents’ legal ownership I believed they were holding them for me . . . . Q: So it’s your testimony today that you owned the Stevensville property, two parcels, and three parcels in Alaska on the day that you married Kathy . . . ? A: That - yeah, that’s my testimony. Q: Okay. Even though your testimony is that 110 acres was never in your name, you’re saying here today that you owned that property on the date of your marriage to Kathy. 7 A: Well, I didn’t legally own it. What I need to - it’s kind of hard to explain. I felt that it was being held for me by another party so I don’t know as I can claim that I legally own it. It’s just I felt I own it - owned it. ¶10 The doctrine of judicial estoppel binds a party to his judicial declarations, and precludes a party from taking a position inconsistent with previously made declarations in a subsequent proceeding. Kauffman-Harmon v. Kauffman, 2001 MT 238, ¶ 15, 307 Mont. 45, ¶ 15, 36 P.3d 408, ¶ 15. A party seeking to utilize the doctrine must show that: 1) the estopped party had knowledge of the facts at the time he took the original position; 2) the estopped party succeeded in maintaining the original position; 3) the position presently taken is inconsistent with the original position; and 4) the original position misled the adverse party, so that allowing the estopped party to change his position would injure the adverse party. Kauffman, at ¶ 16. ¶11 The four elements of judicial estoppel are present in this case. First, Arden knew that both legal and equitable title to the property passed from his second wife to his parents to Kathy, allowing him to claim he had no interest in the property. Second, Arden’s assertions succeeded in that Joyce was unable to levy execution on the property to satisfy Arden’s child support debt to her. Third, after asserting absolutely no interest in the property, Arden now claims that he has had a beneficial interest in the property all along, and that Kathy was merely a trustee. Fourth, Arden’s original position, that he had no interest in the property, misled Kathy so that allowing Arden to change his position would injure her. Kathy, having already married Arden when the property was deeded to her, knew that she had legal title to the property and was clearly led to believe that it at least belonged to both her and Arden. The District Court had substantial evidence from which to find that because of Arden’s 1 No one can take advantage of his own wrong. 8 original position in the 1994 lawsuit, Kathy used her separate money to help pay off the debt on the property and for upkeep on the property. Additionally, she spent substantial amounts of money she inherited to buy additional acreage that is included in the parcel that Arden now claims is entirely his. Allowing Arden to reverse his position in this case would substantially alter Kathy’s share of the marital distribution after she helped support him and helped add to the value of the property by purchasing additional acreage, which he now contends is solely his. ¶12 A court of equity will not aid one who has caused title to his property to be transferred to another for the purpose of defrauding creditors. Kauffman, at ¶ 22. While one may properly protect oneself and one’s property through the use of various trust arrangements and estate planning techniques, there is a strong public policy against avoiding one’s child support obligations by secret arrangements. The District Court was clearly justified in finding, from Arden’s conflicting positions, that at the time of his original testimony he wanted to hide his interest in the property from Joyce. He successfully accomplished that goal. And while he ultimately paid Joyce all he owed her, we will not reverse the District Court’s finding that he is to be left where he has placed himself by his purposeful deception. Nullus commodum capere potest de injuria sua propria.1 Section 1-3-208, MCA. See also 1 Sir Edward Coke, A Commentary on Littleton, §148b, (1853). ¶13 The property division ordered by the District Court is affirmed. ¶14 Kathy asks for her fees on appeal. Where there is a reasonable ground for appeal, a respondent is not entitled to recover attorney’s fees under Rule 32, M.R.App.P. Bailey v. 9 Ravalli County (1982), 201 Mont. 138, 147, 653 P.2d 139, 144. We hold that Arden’s decision to appeal the judgment of the District Court was not unreasonable. Therefore, Kathy’s cross-appeal for attorney’s fees and costs is denied. /S/ JOHN WARNER We Concur: /S/ KARLA M. GRAY /S/ JAMES C. NELSON /S/ PATRICIA O. COTTER /S/ JIM RICE	March 23, 2004
81668801-26fe-4fee-a8e6-d42281ba8393	State v. MacGregor	2013 MT 297, 2013 MT 297A	DA 11-0498	Montana	Montana Supreme Court	DA 11-0498 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 297A STATE OF MONTANA, Plaintiff and Appellee, v. JEREMY STEVEN MacGREGOR, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDC 2010-142 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender, Koan Mercer, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General; Helena, Montana Leo J. Gallagher, Lewis and Clark County Attorney, Tara Harris, Deputy County Attorney; Helena, Montana Submitted on Briefs: September 18, 2013 Decided: October 15, 2013 Amended: November 26, 2013 Filed: __________________________________________ Clerk November 26 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Judge Jeffrey M. Sherlock (Judge Sherlock) of the First Judicial District Court, Lewis and Clark County, presided over the trial of Jeremy MacGregor (MacGregor) for two counts of attempted deliberate homicide. The jury returned a verdict of guilty on both counts. Judge Sherlock denied MacGregor’s motions to dismiss for lack of speedy trial and for juror misconduct. MacGregor appeals from these dismissals as well as from numerous alleged errors at trial. We affirm. STATEMENT OF ISSUES ¶2 Issue One: Did the District Court correctly deny MacGregor’s motion for a new trial based on juror misconduct? ¶3 Issue Two: Did the District Court err by failing to inquire into MacGregor’s ineffective assistance of counsel claim and the voluntariness of his decision to represent himself? ¶4 Issue Three: Did the District Court correctly deny MacGregor’s speedy trial claim? ¶5 Issue Four: Did the District Court err by admitting evidence of MacGregor’s prior assault of his wife? ¶6 Issue Five: Should we exercise plain error review of MacGregor’s claim that the District Court gave an erroneous instruction on mitigated deliberate homicide? ¶7 Issue Six: Did the District Court improperly impose parole conditions? FACTUAL AND PROCEDURAL BACKGROUND ¶8 On April 15, 2010, MacGregor shot and nearly killed his unarmed wife, Jennifer MacGregor (Jennifer) and their live-in nanny, Betsy Mart (Betsy). He was arrested and charged with two counts of attempted deliberate homicide. After brief representation by a 3 public defender, MacGregor demanded that he represent himself pro se and the court allowed him to do so with standby counsel. ¶9 Before trial, MacGregor filed numerous motions with the court, including a motion to dismiss for lack of speedy trial. The District Court denied the motion to dismiss for lack of speedy trial. Trial commenced on February 22, 2011. ¶10 At trial, MacGregor made vague claims about his general non-violent nature and argued that he had not been in a fight for a number of years. The State introduced evidence that MacGregor had assaulted Jennifer in the past, seeking to rebut his statements of non- violence. The District Court admitted this prior assault to rebut MacGregor’s claim of non- violent character and his statement that he had not been in fights for many years. ¶11 The court submitted instructions to the jury for attempted deliberate homicide and attempted mitigated deliberate homicide. MacGregor failed to object to the instructions. The jury found MacGregor guilty of both counts of attempted deliberate homicide. ¶12 MacGregor’s standby counsel filed a motion for new trial based on juror misconduct. The District Court conducted a hearing concerning juror Justin Wearley’s (Wearley) communication with his family about the trial, his reading of a newspaper during trial, and his failure to reveal at voir dire that he had been a victim of domestic violence. The District Court heard testimony from Wearley, his wife, and their two children, and denied the motion upon a finding that MacGregor could not show prejudice. STANDARDS OF REVIEW ¶13 Appropriate standards of review will be discussed as they arise in this opinion. 4 DISCUSSION ¶14 Did the District Court correctly deny MacGregor’s motion for a new trial based on juror misconduct? ¶15 This Court reviews motions for new trial based on juror misconduct for abuse of discretion, and a district court will not be overturned unless a defendant demonstrates he was deprived of a fair and impartial trial. State v. Rennaker, 2007 MT 10, ¶ 29, 335 Mont. 274, 150 P.3d 960. I. Failure to Disclose at voir dire. ¶16 Section 46-16-115, MCA, lists a number of appropriate challenges for cause in evaluating prospective jurors. Unless a juror falls within one of those statutory categories, the juror will not be removed for cause without a showing of partiality. State v. Hendricks, 171 Mont. 7, 11, 555 P.2d 743, 746 (1976). In Rennaker, we reviewed a misconduct claim in a trial for sexual assault wherein two jurors failed to disclose their prior experience of sexual abuse. Rennaker, ¶ 35. We held that the nondisclosure of their experiences only constituted misconduct if it amounted to intentional concealment, or other further evidence of bias was proven. Rennaker, ¶ 35. ¶17 The District Court properly concluded that Juror Wearley’s failure to disclose was not intentional and no other evidence of bias was presented. Although the defense inquired during voir dire about experiences with domestic violence, a juror could have believed that the defense was inquiring about whether those experiences “would influence how you judge this case . . . .” Indeed, that was the very question asked of another juror, who was not 5 challenged for cause or bias. We further note that past experiences with a similar crime are not listed as legitimate challenges for cause in § 46-16-115, MCA. The defense, therefore, can only show misconduct by proving some evidence of bias. Section 46-16-115(2)(j), MCA; State v. Dunfee, 2005 MT 147, ¶ 16, 327 Mont. 335, 114 P.3d 217. ¶18 MacGregor urges that we recognize Wearley’s implied bias based on the similarities between his experiences and the facts of the case, relying on Gonzales v. Thomas, 99 F.3d 978, 987 (10th Cir. 1996). But our holding in Rennaker requires more than similarities between the juror’s experiences and the crime alleged. MacGregor can point to no evidence of bias other than the fact that Wearley had been a victim of domestic violence. In fact, testimony of Wearley’s family revealed that he sympathized with MacGregor. Therefore, the District Court did not abuse its discretion in determining that Wearley was an impartial juror who unintentionally concealed his experience with domestic violence. II. The Newspaper. ¶19 MacGregor argues that Wearley was exposed to prejudicial extraneous information when he had his family read a newspaper article about the trial to him. Juror misconduct based on extraneous communications must be reviewed on a case-by-case basis, and in the context of the entire record. United States v. Maree, 934 F.2d 196, 202 (9th Cir. 1996) (rev’d in part on other grounds, United States v. Adams, 432 F.3d 1092, 1095 (9th Cir. 2006). The trial court is uniquely qualified to appraise whether extraneous information resulted in prejudice, and we accord substantial weight to that determination. Stebner v. 6 Associated Materials, Inc., 2010 MT 138, ¶ 23, 356 Mont. 520, 234 P.3d 94; Maree, 934 F.2d at 202. ¶20 Where a juror is exposed to extraneous information, a rebuttable presumption of prejudice exists. Stebner, ¶ 17. This presumption is not absolute, and arises only when the information shows a natural tendency to prejudice. Allers v. Riley, 273 Mont. 1, 8, 901 P.2d 600, 605 (1995). In cases concerning prejudice from pretrial newspaper publicity, we held that a “juror’s knowledge of the case and publicity, without more, is insufficient to warrant a change of venue since it cannot be equated with prejudice.” State v. Devlin, 2009 MT 18, ¶ 32, 349 Mont. 67, 210 P.3d 791 (emphasis added) (quoting State v. Fuhrman, 278 Mont. 396, 409, 925 P.2d 1162, 1170 (1996)). Juror misconduct and the resulting prejudice may be evaluated by considering juror testimony and affidavits concerning the misconduct. Stebner, ¶¶ 17, 22; Harry v. Elderkin, 196 Mont. 1, 7-8, 637 P.2d 809, 813 (1981). ¶21 Here, the District Court did not abuse its discretion when it determined that Wearley’s communications with his family did not have a tendency to prejudice. The fact that Wearley was exposed to publicity alone does not constitute a showing of prejudice. The District Court considered testimony from Wearley and his family indicating that he sympathized with MacGregor and did not feel that the article influenced his view of the trial. The court concluded that the headline “Shooter Blames Demonic Forces,” presented no new information that had not been divulged in MacGregor’s trial because his opening argument stated that “demonic forces somehow got these things to happen where apparently I have done these horrible, horrible things to my family.” MacGregor points to no falsehood or bias 7 produced by the article and has not shown any facts demonstrating that the article has a natural tendency to prejudice. The District Court did not abuse its discretion in determining that the information did not prejudice the outcome of the trial. III. Wife’s Comments. ¶22 MacGregor also argues that Wearley was exposed to prejudicial extraneous information when his wife said that MacGregor was “making excuses” for his conduct. We have held that a district court is within its discretion to deny a retrial when an assertion of prejudice has no grounds in the record. State v. White, 2008 MT 129, ¶ 13, 343 Mont. 66, 184 P.3d 1008 (“Although White asserts that Lindbergh’s impermissible comment prejudiced the jury . . . his claim of prejudice fades when the record is considered.”). Testimony at the District Court’s inquiry indicated that Wearley’s statements occurred in the midst of a civics lesson with his children about the trial, and Wearley himself did not express his opinion or seek the opinion of his wife. No evidence was presented that Wearley was persuaded or influenced by his wife’s opinion of the trial. The District Court properly concluded that Wearley was not exposed to any statement that would prejudice his view of MacGregor’s position at trial. ¶23 Did the District Court err by failing to inquire into MacGregor’s ineffective assistance of counsel claim and the voluntariness of his decision to represent himself? I. Ineffective Assistance of Counsel Inquiry. ¶24 MacGregor complains that his attorney failed to form a strategy or contact him while he was at the Montana State Hospital. At the time the trial court ordered the competency evaluation, MacGregor already had requested to represent himself. The court deferred 8 decision on MacGregor’s request until the evaluation was completed. MacGregor later complained that “representation was forced upon him during the state’s mental evaluation,” while simultaneously criticizing Scott for failing to contact MacGregor while he was hospitalized. Given the District Court’s familiarity with MacGregor’s requests and its decision to postpone ruling on MacGregor’s motion to represent himself, it did not err in failing to conduct additional inquiry into his complaint. ¶25 MacGregor also alleged before and during trial that his attorneys had colluded with the prosecution to his detriment. The record is unclear whether he was referring to conduct occurring before or after his appointed counsel was designated as standby counsel. When a defendant alleges ineffective assistance of counsel during trial, we review whether the district court made an inquiry into those complaints to determine whether they are substantial. State v. Gallagher, 1998 MT 70, ¶ 15, 288 Mont. 180, 955 P.2d 1371; State v. Hammer, 2013 MT 203, ¶ 14, 371 Mont. 121, 305 P.3d 843. In reviewing a district court’s inquiry, we do not examine whether counsel was ineffective, but instead, whether the district court’s inquiry into the claim was adequate. Hammer, ¶ 14; State v. Dethman, 2010 MT 268, ¶ 16, 358 Mont. 384, 245 P.3d 30; State v. Weaver, 276 Mont. 505, 511, 917 P.2d 437, 441 (1996). ¶26 A district court’s inquiry is adequate when it considers the defendant’s factual complaints together with counsel’s explanations addressing the complaints. Gallagher, ¶ 15; Dethman, ¶ 16. If the district court’s adequate inquiry finds that the defendant’s complaints are insubstantial, it is not required to hold a hearing on the issue. Hammer, ¶ 14. A 9 complaint is substantial when it makes some showing of fact indicating that counsel’s performance was deficient, and that the deficient performance prejudiced the defendant. Bomar v. State, 2012 MT 163, ¶ 7, 365 Mont. 474, 285 P.3d 396; State v. Miner, 2012 MT 20, ¶ 11, 364 Mont. 1, 271 P.3d 56. Those facts must make a showing of deficiency to overcome the presumption that a defendant was provided with effective assistance of counsel. State v. Morsette, 2013 MT 270, ¶¶ 19-21, 372 Mont. 38, ___P.3d___. ¶27 Here, MacGregor’s primary claim was that his counsel colluded with the prosecution by sharing details about the defense and otherwise talking with each other. The District Court noted that the defense discusses details of the case with prosecutors “in every single criminal case, and there is nothing shown that would create a breach of confidentiality.” The court held that discussions between the defense and prosecutors were not sufficient to overcome the presumption that counsel was effective, and did not reveal any indication of prejudice towards the case. MacGregor points to no other facts indicating that his lawyer’s conduct was unprofessional or incorrect. Accordingly, the District Court made an adequate inquiry to establish that MacGregor’s claims had no merit. II. Voluntariness of Waiver. ¶28 This Court has recognized the Sixth Amendment right to self-representation, but we are also mindful of the disadvantages confronting pro se parties. Halley, ¶ 20. A District Court may only allow a defendant to waive the right to counsel when the record establishes that the defendant is fully aware of the dangers and disadvantages of self-representation, and made the waiver knowingly with “eyes wide open.” State v. Colt, 255 Mont. 399, 406, 843 10 P.2d 747, 751 (1992); Faretta v. California, 422 U.S. 806, 835, 95 S. Ct. 2525, 2541 (1975). So long as substantial credible evidence exists to support the district court’s decision that the defendant made a voluntary, knowing and intelligent waiver, it will not be disturbed on appeal. State v. Plouffe, 198 Mont. 379, 385, 646 P.2d 533, 536 (1982). ¶29 The District Court here ensured that MacGregor knew the disadvantages of self- representation, warning him that it could decrease the effectiveness of representation and that he would need to follow court deadlines. The District Court also ordered a competency evaluation and refused to allow MacGregor to proceed pro se until the evaluation was completed. After evaluators at the Montana State Hospital (MSH) determined that MacGregor was competent to stand trial, the court again explained the dangers of self- representation. MacGregor still insisted on waiving counsel. The record clearly reflects that the District Court took adequate precautions to ensure that MacGregor waived counsel voluntarily and knowingly. ¶30 Did the District Court correctly deny MacGregor’s speedy trial claim? ¶31 We apply two standards when reviewing a district court’s ruling on a speedy trial motion. First, we review factual findings to determine whether those findings are clearly erroneous. State v. Couture, 2010 MT 201, ¶ 47, 357 Mont. 398, 240 P.3d 987. Second, we examine de novo whether the district court correctly interpreted and applied constitutional law to the facts at issue. Couture, ¶ 47. ¶32 This Court evaluates speedy trial claims by considering the relevant facts in four key areas, and then assessing whether those facts demonstrate a denial of the right to speedy trial. 11 Morsette, ¶ 12 (citing State v. Ariegwe, 2007 MT 204, ¶ 34, 338 Mont. 442, 167 P.3d 815). The relevant factors include the length of delay, the reasons for delay, the accused’s responses to the delay, and prejudice to the accused. Ariegwe, ¶¶ 106-11. No single factor in this balancing test is indispensable or dispositive, and we recognize that district courts must engage in a difficult, sensitive, often subjective balancing process. State v. Johnson, 2000 MT 180, ¶ 14, 300 Mont. 367, 4 P.3d 654; State v. Highpine, 2000 MT 368, ¶ 14, 303 Mont. 422, 15 P.3d 938. I. Length and Responsibility for Delay. ¶33 A trial delay of longer than 200 days triggers the four factor balancing test in Ariegwe. Ariegwe, ¶ 62. However, the length of delay alone does not amount to a speedy trial violation. We must also consider the reasons for the delay and attribute portions of the delay to certain parties. Ariegwe, ¶ 64. Delay requested by a particular party may be attributable to the other party. State v. Diaz, 2006 MT 303, ¶¶ 32-33, 334 Mont. 479, 148 P.3d 628; Ariegwe, ¶ 66. When the State causes a delay in the trial, we must evaluate whether a valid reason justified the delay. Ariegwe, ¶ 67 (quoting Barker v. Wingo, 407 U.S. 514, 531, 92 S. Ct. 2182, 2192 (1972)). Those delays resulting from the State’s lack of diligence are weighed significantly against the State. Couture, ¶ 72. “Institutional delays” that are inherent in the criminal justice system are valid reasons for delay and we do not weigh those delays heavily against the State. Morsette, ¶ 13. Delay may be attributed to the defendant when the defendant attempts to change counsel, request a continuance, or request mental health evaluations. Morsette, ¶ 14. 12 ¶34 MacGregor was arrested on April 15, 2010. On July 27, 2010, MacGregor gave notice of his defense of mental incapacitation and not having a particular state of mind. That notice referenced § 45-2-203, MCA, providing that intoxication is not a defense to mental state unless the defendant did not knowingly consume an intoxicating substance. MacGregor filed a motion requesting evaluation of his mental state on July 30, and the State moved for the same evaluation at the Montana State Hospital. MacGregor withdrew his motion for evaluation on August 3, and then again filed the motion for psychological evaluation on August 6, noting “I understand this motion may delay trial.” MacGregor returned from evaluation at MSH on November 3, 2010, and on November 15, 2010, a status hearing set a trial date for February 7, 2011. ¶35 The District Court calculated that 314 days had passed between arrest and trial. Of those days, the court found that MacGregor was responsible for a seven-day continuance and the 90-day mental health evaluation at MSH. MacGregor now disputes the assignment of responsibility for the mental health evaluation, as it was requested by the State. We agree with the District Court’s conclusion that the request was a direct response to MacGregor’s intoxication defense and his request for private evaluation. The court also held that the rescheduling of trial dates resulting from the mental health evaluation could also be attributed to MacGregor, amounting to 175 days. This was not in error, as the State had been prepared for trial on the original date and the court was forced to reschedule only as a result of MacGregor’s actions. Finally, the court correctly attributed 131 days to the State as 13 institutional delay resulting from continuances and preparation for trial, as no evidence demonstrated a lack of diligence on the State’s behalf. II. Assertion of the Right. ¶36 When a defendant raises a speedy trial issue, we must evaluate whether the defendant truly wants a speedy trial, or whether he is attempting to have his case dismissed on speedy trial grounds. State v. Steigelman, 2013 MT 153, ¶ 15, 370 Mont. 352, 302 P.3d 396; State v. Billman, 2008 MT 326, ¶ 31, 346 Mont. 118, 194 P.3d 58. MacGregor was arrested on April 15, 2010, and at a hearing on November 15, 2010, the trial was scheduled for February 7, 2011. MacGregor was incarcerated for 214 days, at which time he was told that he would be incarcerated for 84 more days before trial would begin. MacGregor then filed a motion on November 22, 2010, indicating that he wanted a speedy trial, but that the court should not do any speedy trial balancing yet. MacGregor then filed a motion on January 11, 2011, requesting that the court perform the speedy trial balancing test and dismiss his case. ¶37 The District Court concluded that MacGregor asserted his right to speedy trial only to avoid trial. MacGregor could have easily brought the motion to dismiss when he first complained of the delay on July 15, or at the rescheduling hearing at November 15, or even in his motion filed on November 22. Instead, the timing of MacGregor’s motion comes just before his trial, but long after the rescheduling hearing or his first complaint of delay. We agree with the District Court’s conclusion that this tactic was disingenuous, and that MacGregor likely did not raise it earlier because he wanted to give more weight to his motion to dismiss. 14 III. Prejudice to the Defendant. ¶38 As a final matter, we must consider prejudice to the accused resulting from the delay of trial. The impairment of the accused’s defense from a speedy trial violation constitutes the most important factor in our prejudice analysis. Steigelman, ¶ 29; City of Billings v. Bruce, 1998 MT 186, ¶ 19, 290 Mont. 148, 965 P.2d 866. We must also consider a defendant’s interest in minimizing impairment of liberty and shortening the disruption of daily life. Ariegwe, ¶ 87; United States v. MacDonald, 456 U.S. 1, 8, 102 S. Ct. 1497, 1502 (1982). In Morsette, we considered a defendant who was housed in solitary confinement during a 662-day trial delay, but no evidence showed any impairment to the defendant’s case. Morsette, ¶ 13. We upheld the District Court’s finding that the State had overcome the presumption of prejudice to the defendant because his defense had not been impaired. Morsette, ¶ 15. The conditions of incarceration are also relevant in assessing the oppressiveness and prejudice to the defendant. Ariegwe, ¶ 97. ¶39 Here, MacGregor points to no evidence that the delay of trial impaired his defense. At the speedy trial hearing, MacGregor alleged that video surveillance of the bowling alley had been unattainable due to the delay, and that some witnesses lacked memory of the events at the bowling alley. But MacGregor made no showing that the loss of evidence prejudiced his case. Namely, he never demonstrated that the video evidence ever existed, that the video evidence could ever have been obtained, that the video was destroyed as a result of the delay, or that the video would have helped his case at trial. The same problems exist with his friends’ recollections of the bowling alley events. MacGregor never alleged that his friends 15 remembered incorrectly or that a clearer memory would have benefitted his case. Like the court in Morsette, the District Court considered all of MacGregor’s allegations of prejudice and found no evidence that his defense had been impaired. Since impairment of the defense is the most important factor in determining prejudice from delay, we see no reason to disturb the court’s finding that MacGregor did not suffer prejudice. ¶40 As a final matter, MacGregor contends that he was subjected to oppressive conditions while he was incarcerated, including prison overcrowding and malfunctioning of the heat system. We do not condone the conditions that MacGregor endured during his incarceration. Those conditions alone, however, do not warrant a finding of oppressive pretrial incarceration sufficient to establish the prejudice factor of speedy trial analysis. Morsette, ¶ 16. IV. Balancing. ¶41 In Ariegwe, trial was delayed for more than 400 days and nearly all of the delay was attributable to the government, but we found that no speedy trial violation existed when considered in the context of other circumstances. Ariegwe, ¶ 134. In Morsette, we affirmed a District Court’s finding that there was no substantial prejudice to the defendant, even though a 321-day delay was attributable to the State. Morsette, ¶¶ 15-16; See also, Steigelman, ¶ 14 (426-day delay not violation of speedy trial on balance). Federal courts have also declined to dismiss on speedy trial grounds when violations extended far beyond 200 days because other factors controlled. Barker, 407 U.S. at 534, 92 S. Ct. at 2192 (delay 16 of four years did not trigger speedy trial dismissal when defendant was free on bond for that time); United States v. King, 483 F.3d 969, 976 (9th Cir. 2007) (two-year delay “not excessive”). ¶42 In considering the totality of the circumstances, we find that the District Court properly determined that all four factors weighed against MacGregor’s speedy trial claim. The majority of the delay in trial was attributable to MacGregor’s trial tactics, and he failed to vigorously and genuinely assert his right to speedy trial. Only 131 days were attributable to the State, and all of that delay was for valid institutional purposes. MacGregor cannot show prejudice to his position at trial resulting from the delay. The District Court correctly employed the balancing test to conclude that MacGregor was not deprived of his right to speedy trial. ¶43 Did the District Court err by admitting evidence of MacGregor’s prior assault of his wife? ¶44 This Court reviews evidentiary rulings for abuse of discretion. State v. McOmber, 2007 MT 340, ¶ 10, 340 Mont. 262, 173 P.3d 690. The State sought to use evidence of MacGregor’s assault on his wife, Jennifer, occurring two years prior to this incident. The District Court ruled that such evidence could only be used to rebut character evidence presented by MacGregor, pursuant to M. R. Evid. 404(a)(1). MacGregor contends that he never made any statements about nonviolence towards his wife, so the State improperly introduced the assault. 17 ¶45 A defendant puts his character at issue when making unnecessary or self-serving statements about his character which he knows to be untrue. State v. Gowan, 2000 MT 277, ¶ 24, 302 Mont. 127, 13 P.3d 376. The State may rebut character evidence by cross- examining the defendant’s character or by calling witnesses of its own. Gowan, ¶ 23. In State v. Clark, 209 Mont. 473, 492-93, 682 P.2d 1339, 1349-50 (1984) a defendant charged with sexual intercourse without consent stated that he was generally a nonviolent and truthful person. We held that this opened the door to rebuttal evidence concerning the defendant’s violent and untruthful past. Clark, 209 Mont. at 489, 682 P.2d at 1348. ¶46 During MacGregor’s trial, he argued that he was unusually violent on the night in question. He noted that he picked fights with friends on that night even though he was “not a violent man” and had not been in a fight in many years. MacGregor blamed his sudden outburst of violence on the combination of stress, a “spiritual assault,” and his intense intoxication. MacGregor hoped to persuade the jury that this amounted to “extreme mental or emotional stress for which there is reasonable explanation or excuse” and justified a verdict for attempted mitigated deliberate homicide. Section 45-5-103(1), MCA. The general theme of MacGregor’s argument was, “I wasn’t acting like myself.” ¶47 The prosecution cross-examined MacGregor to show that he regularly became belligerent when intoxicated. MacGregor denied becoming violent when intoxicated, other than the night in question; “I don’t recall any other incidents.” In response to this, the State asked whether MacGregor had drunkenly assaulted his wife two years earlier. This evidence directly rebuts MacGregor’s assertion that he was not himself, not violent, and not aware that 18 he was especially belligerent when intoxicated. MacGregor plainly opened the door to character evidence when he made general claims about his nonviolent nature and his unusual behavior when intoxicated that night. The District Court properly admitted the prior conviction to rebut MacGregor’s character evidence. ¶48 Should we exercise plain error review of MacGregor’s claim that the District Court gave an erroneous instruction on mitigated deliberate homicide? ¶49 MacGregor argues that the District Court gave an incorrect instruction on attempted mitigated deliberate homicide. That instruction correctly stated that mitigated deliberate homicide contained the elements of deliberate homicide, and that mitigation should be found if “the Defendant was acting under the influence of extreme mental or emotional stress for which there is reasonable explanation or excuse.” Section 45-5-103(1), MCA. The instruction also stated that “you should first consider the verdict on the greater offense of attempted deliberate homicide. If you find the Defendant guilty of attempted deliberate homicide, you need go no further as you will have reached a verdict in this case.” Both parties admit that this part of the instruction was incorrect as a matter of law, because mitigated deliberate homicide requires a preliminary finding of deliberate homicide. Demontiney v. Mont. Twelfth Judicial Dist. Crt., 2002 MT 161, ¶ 16, 310 Mont. 406, 51 P.3d 476; State v. Scarborough, 2000 MT 301, ¶¶ 48-50, 302 Mont. 350, 14 P.3d 1202. MacGregor, who drafted and submitted this instruction to the court, did not object to it. We generally do not review jury instructions unless they are specifically objected to at trial. State v. Earl, 2003 MT 158, ¶ 23, 316 Mont. 263, 71 P.3d 1201. We may exercise plain 19 error review if the claimed error implicates a defendant’s fundamental constitutional rights and results in a manifest miscarriage of justice. Earl, ¶ 25. ¶50 MacGregor contends that the incorrect instruction prevented the jury from considering mitigated deliberate homicide as a charge, and this constitutes a miscarriage of justice. MacGregor alleges mitigation because he was intoxicated on marijuana and alcohol; he was upset about an incident where his dog knocked over his child; his child had been diagnosed with a minor ailment; he had fired someone recently; he had quit cigarettes, marijuana, and alcohol (although not that day); he had worked 60-hour work weeks; he had cut his hand; and his wife forgot their anniversary. But mitigating factors arise from some sort of direct provocation, not simply the buildup of stress and anger. Hans v. State, 283 Mont. 379, 399, 942 P.2d 674, 686 (1997). We have previously ruled that extreme intoxication does not constitute a mitigating factor, nor do the stresses that accompany living in hard times. State v. Goulet, 283 Mont. 38, 42, 938 P.2d 1330, 1333 (1997) (showing of intoxication or anger insufficient to support mitigation); State v. Martin, 2001 MT 83, ¶¶ 33-34, 305 Mont. 123, 23 P.3d 216 (unemployment, homelessness, pregnant girlfriend do not support mitigation). MacGregor presented no evidence demonstrating provocation of his anger other than the challenges that naturally accompany sobriety, fatherhood, and marriage. Nor did any of MacGregor’s witnesses corroborate his involuntary intoxication defense. ¶51 MacGregor claims that he only fired shots when his wife threatened to leave him, and that this constitutes a mitigating factor. Testimony at trial revealed that Jennifer refused to live with MacGregor without their live-in nanny, saying that if Betsy were fired, “I can’t live 20 like this” and “[i]f she goes, I go.” MacGregor then began to threaten Jennifer by putting the gun to her forehead and under her chin. When Jennifer pushed him away and began to run out the door, MacGregor shouted “[w]ait baby, please don’t do this.” When Jennifer stopped and turned to face MacGregor, he shot her in the chest, and went on to shoot Betsy. ¶52 Jennifer’s insistence on a live-in nanny is distinguishable from the passions and jealousies ignited when a romantic partner ends a relationship. See State v. Gratzer, 209 Mont. 308, 682 P.2d 141 (1984); State v. Azure, 2002 MT 22, 308 Mont. 201, 41 P.3d 899. The fact that one’s spouse wants a nanny is not a reasonable excuse for extreme mental or emotional distress that results in deadly violence. Because MacGregor did not prove any mitigating factors as a matter of law, the instruction did not rise to a level of plain error. ¶53 Did the District Court improperly impose parole conditions? ¶54 Finally, we review sentences for legality to determine whether they are within statutory parameters. State v. Hicks, 2006 MT 71, ¶ 41, 331 Mont. 471, 133 P.3d 206. At sentencing, the District Court imposed a period of incarceration, restitution to Betsy and Jennifer, and prohibited MacGregor from seeing Betsy or Jennifer. While the parole board has sole authority to impose conditions of release upon parole, the original judgment may impose conditions for the entirety of an individual’s sentence, even when they are later paroled. State v. Burch, 2008 MT 118, ¶¶ 22-29, 342 Mont. 499, 183 P.3d 66; § 46-23-216, MCA, (“The period served on parole must be considered service of the term of imprisonment . . . .”). Where a district court lacks statutory authority to impose a sentence, its conditions may be considered recommendations to the parole board if parole is granted. State v. 21 Heafner, 2010 MT 87, ¶ 6, 356 Mont. 128, 231 P.3d 1087 (“[T]he District Court did not have the power to impose conditions upon a future parole that might be granted to Heafner. If Heafner is paroled then the Board of Pardons and Parole may impose conditions of parole and may consider those listed by the District Court as recommendations.”); State v. Holt, 2011 MT 42, ¶ 18, 359 Mont. 308, 249 P.3d 470. ¶55 MacGregor contends that the District Court unlawfully imposed conditions upon parole by stating that his sentence conditions would apply even if released on parole. MacGregor points to no specific condition, but only contests that the conditions of his sentence should not apply to him if he is later paroled. While the District Court may not impose conditions of parole, it is statutorily authorized to impose some of the conditions in the order, such as the requirement that he pay restitution to his victims. Section 46-18- 201(5), MCA. It would be illogical for the District Court to require MacGregor to pay restitution only when he was incarcerated and not when paroled, and the court properly exercised its authority in imposing that condition. To the extent the conditions imposed govern his behavior on parole, the conditions may be viewed as the District Court’s recommendations to the parole board. Only the parole board, however, may impose conditions on MacGregor for the purposes of parole. The District Court properly exercised its authority in adopting the PSR’s recommended conditions. CONCLUSION ¶56 For the reasons stated above, the MacGregor’s convictions and sentence are affirmed. 22 /S/ MICHAEL E WHEAT We Concur: /S/ MIKE MCGRATH /S/ JIM RICE /S/ BETH BAKER /S/ BRIAN MORRIS	November 26, 2013
df6d41ed-5a52-4eef-9e81-d4f2efe7836a	Burnett et al. v. PPL et al.	2013 MT 362N	DA 13-0130	Montana	Montana Supreme Court	DA 13-0130 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 362N RICHARD BURNETT, JERRY BURNETT, MICHAEL JASON BURNETT, DAVID BURNETT, Individually and; COLSTRIP PROPERTIES, INC., WHISKY GULCH SALOON, and CHERRY STREET GRILL, Plaintiffs and Appellants, v. PPL MONTANA, LLC, WESTERN ENERGY COMPANY, COLORADO ENERGY MANAGEMENT, LLC, ROSEBUD OPERATING SERVICES, INC., WESTMORELAND RESOURCES, INC., Defendants and Appellees. APPEAL FROM: District Court of the Sixteenth Judicial District, In and For the County of Rosebud, Cause No. DV-11-42 Honorable Gary L. Day (deceased), Presiding Judge COUNSEL OF RECORD: For Appellants: Brad L. Arndorfer; Arndorfer Law Firm, P.C.; Billings, Montana For Appellees: Richard S. Mandelson; Baker & Hostetler, LLC; Denver, Colorado (for PPL Montana, Inc.) Laurence R. Martin; Felt, Martin, Frazier & Weldon, P.C.; Billings, Montana (for Rosebud Operating Systems, Inc.) Jason S. Ritchie, Michael Manning; Holland & Hart; Billings, Montana (for Western Energy Company and Westmoreland Resources, Inc.) December 3 2013 2 Submitted on Briefs: October 23, 2013 Decided: December 3, 2013 Filed: __________________________________________ Clerk 3 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Richard Burnett is the father of co-plaintiffs Jerry, Michael Jason, and David Burnett. He is also the owner of Colstrip Properties, Whisky Gulch Saloon, and the Cherry Street Grill. From November 1989 until March 2002, Richard worked for PPL Montana. Richard’s sons also worked in the electricity generating industry in Montana. ¶3 While employed by PPL, Richard led a group of co-employees and local residents who sued PPL and other defendants for violations of various environmental laws. PPL and its co-defendants settled the lawsuit by agreeing to pay approximately $25 million in damages. Prior to settlement, it terminated Richard’s employment and as part of settlement, Richard agreed to never seek employment with PPL again. ¶4 Richard and his sons claim they have been unable to obtain work in the electricity generating industry in Montana since the environmental suit was filed. They claim that defendants/appellees PPL, Western Energy, Colorado Energy,1 Rosebud Operating, and 1 The District Court record does not contain any indication that Colorado Energy Management, LLC, was served with the Complaint or the First Amended Complaint. No attorney of record is listed in the case register nor did Colorado Energy make an appearance. For these reasons, reference to “defendants” in this Opinion shall be to PPL, Rosebud, Westmoreland and Western Energy and not to Colorado Energy. 4 Westmoreland entered into a conspiracy whereby these companies refused to employ Richard or his sons. Richard eventually obtained work out of state. Richard also claims that PPL conducted a pervasive campaign of boycotting his businesses, and the businesses of other plaintiffs, to punish them for pursuing the environmental lawsuit. ¶5 Richard and sons filed the case at bar against PPL and the other defendants in July 2011 in the Sixteenth Judicial District Court. They alleged civil conspiracy, unlawful restraint of trade, tortious interference with business opportunity, intentional interference with prospective economic advantage, and prima facie tort. Richard also asserted a blacklisting claim against PPL. Richard and his co-plaintiffs requested compensatory and punitive damages, injunctive relief, declaratory relief and attorney fees and costs. ¶6 On March 19, 2012, the District Court dismissed all claims against Western Energy, Westmoreland, and Rosebud with prejudice. The court also dismissed all claims against PPL with the exception of the blacklisting allegation. PPL moved for summary judgment on the blacklisting claim, and on December 4, 2012, the District Court granted summary judgment in favor of PPL and ordered all claims against PPL dismissed with prejudice. Final judgments in favor of all defendants were then entered. Richard and his co-plaintiffs appeal. ¶7 We review de novo a district court’s order to dismiss an action for failure to state a claim. A district court’s determination that a complaint failed to state a claim presents a conclusion of law, which we review for correctness. Kananen v. South, 2013 MT 232, ¶ 10, 371 Mont. 289, 307 P.3d 309. We review de novo a district court’s ruling on a 5 motion for summary judgment, using the same criteria applied by the district court under M. R. Civ. P. 56 (Rule 56). Estate of Irvine v. Oaas, 2013 MT 271, ¶ 12, 372 Mont. 49, 309 P.3d 986. ¶8 Richard argues on appeal that the conspiratorial actions of defendants in refusing to hire him and his sons denied them their fundamental constitutional right to employment. The defendants counter that Richard’s claim of conspiracy requires a wrongful act on their parts and they committed no wrongful acts. “The elements of a civil conspiracy are (1) two or more persons, and for this purpose, a corporation is a person; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful overt acts; and (5) damages as the proximate result thereof.” Schumacker v. Meridian Oil Co., 1998 MT 79, ¶ 18, 288 Mont. 217, 956 P.2d 1370 (emphasis added). Defendants claim that failing to employ Richard or his sons was not a wrongful or unlawful overt act, and therefore Richard could not establish the elements of his conspiracy claim. ¶9 Similarly, Westmoreland and Western Energy assert that as non-governmental employers, they could not violate Richard or his sons’ Montana constitutional right to pursue employment. Moreover, they distinguish the right to pursue employment from the right to obtain employment with a particular employer. Westmoreland and Western Energy argue that they had no duty to hire the Burnetts and “were perfectly free to reject their job applications for any non-discriminatory reason.” 6 ¶10 Richard also appeals the District Court’s ruling on his “tortious interference with a business” claim. He argues that the defendants, in concert, intentionally boycotted his businesses. He maintains that the boycotts were calculated to cause damage to his businesses, were done with unlawful purposes and resulted in damages. Maloney v. Home Inv. Ctr., Inc., 2000 MT 34, ¶ 41, 298 Mont. 213, 994 P.2d 1124. The defendants counter that even if representatives of the various defendant companies chose to stop patronizing establishments owned by Richard, such was not unlawful activity and cannot form the basis of a cause of action—whether entitled boycotting, tortious interference with a business, or unlawful restraint of trade. ¶11 As noted in Maloney, “the focus of the legal inquiry is on the intentional acts of the ‘malicious interloper’ in disrupting a business relationship. . . . Under this theory, ‘a person who is involved in an economic relationship with another, or who is pursuing reasonable and legitimate prospects of entering such a relationship, is protected from a third person’s wrongful conduct which is intended to disrupt the relationship.’ ” Maloney, ¶ 42 (citations omitted). Richard failed to present any evidence that any employees of the defendants were involved in an economic relationship with him or were pursuing prospects of entering into such a relationship. As a result, Richard has failed to establish the necessary elements of his claim for tortious interference with a business. ¶12 Richard also appeals the court’s dismissal of his claim that defendants committed a prima facie tort. Richard argues that the defendants “show[ed] an intentional malicious act to harm [him] for simply exercising [his] rights to use the courts and make complaints 7 to governmental agencies.” Acknowledging that this Court has not recognized a separate cause of action for prima facie tort, he urges us to conclude that his case “is the perfect case for such a claim.” Again, as defendants point out, Richard’s claim requires that defendants committed some intentional wrongful act. While Richard has made numerous conclusory statements, he has presented no evidence of a wrongful act that could support his claim. ¶13 As did the District Court, we conclude that Richard failed to establish that the defendants committed any unlawful or wrongful acts; therefore, his conspiracy claims pertaining to employment, interference with his businesses, and prima facie tort must fail. ¶14 Lastly, Richard appeals the District Court’s grant of summary judgment in favor of PPL on his blacklisting claim. However, Richard presented no evidence, other than his own deposition, that PPL blacklisted him within the three-year statute of limitations set forth in § 27-2-204, MCA, or at any other time. The District Court determined that without the presentation of evidence that PPL engaged in blacklisting, Richard failed to establish that a genuine issue of material fact vis-à-vis this issue existed. Without a genuine issue of material fact, summary judgment is appropriate when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56(c). ¶15 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The 8 issues in this case are legal and are controlled by settled Montana law which the District Court correctly interpreted. We therefore affirm the District Court. /S/ PATRICIA COTTER We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JIM RICE	December 3, 2013
65fa8d43-09a2-4834-affd-d209525d6305	Wise v. Polejewski	2013 MT 351N	DA 12-0752	Montana	Montana Supreme Court	DA 12-0752 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 351N HAROLD and MARY WISE, Plaintiffs and Appellees, v. PAM POLEJEWSKI, Defendant and Appellant. APPEAL FROM: District Court of the Nineteenth Judicial District, In and For the County of Lincoln, Cause No. DV 12-266 Honorable James B. Wheelis, Presiding Judge COUNSEL OF RECORD: For Appellant: Pamela Jo Polejewski, self-represented; Great Falls, Montana For Appellees: L. Charles Evans, Attorney at Law; Libby, Montana Submitted on Briefs: October 30, 2013 Decided: November 19, 2013 Filed: __________________________________________ Clerk November 19 2013 2 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Pam Polejewski (Pam) appeals from an order of the Nineteenth Judicial District Court, Lincoln County, in which the District Court concluded Pam did not have record title to the subject property and was properly removed from the property by the Lincoln County Sheriff. We affirm. ¶3 Harold and Mary Wise (the Wises) entered into a contract for deed with Pam in June 2007. In the contract for deed, Pam agreed to purchase, and the Wises agreed to sell, real property located at 476 Blue Mountain Road, Libby, Montana. Pam and her co-purchaser, Michael Lee Hanson (Michael), failed to make the required payments and to rectify the missed payments within the time allowed. Pursuant to the contract for deed, the Wises had received a grant deed conveying Pam and Michael’s interest in the property to them. On August 20, 2012, the deed was recorded by the Lincoln County Clerk and Recorder. On August 24, 2012, the Wises gave Pam written notice that she had thirty days to vacate the premises. ¶4 On September 27, 2012, the Wises’ attorney informed Pam that the Wises would file an action for her eviction in justice court if she did not immediately vacate the property. Pam did not vacate the premises, and the Wises accordingly filed a complaint 3 in the justice court on October 1, 2012. Pam filed a counterclaim alleging that she was not in default, and that the Wises were not the lawful owners of the property. Citing § 25-23-16(B), MCA, the justice court dismissed the counterclaim due to Pam’s failure to appear at trial. At the time of the trial, Pam had not moved and had “approximately 12 horses, several goats, several pigs and an estimated 40 dogs on the property.” On November 1, 2012, the justice court entered judgment in favor of the Wises. Following trial, Pam was removed from the property, and some of her animals were taken into care by Lincoln County. ¶5 Pam appealed the justice court’s decision to the District Court, and the District Court heard the matter de novo. On December 5, 2012, the District Court entered its findings of fact and conclusions of law and issued an accompanying order. The District Court determined that record title to the property was vested with the Wises, and that Pam and her animals were properly removed from the property by the Lincoln County Sheriff.1 Pam then filed an appeal with this Court. ¶6 On appeal, Pam contends jurisdiction in justice court was improper. Pam argues that her due process rights were violated because the District Court failed to consider her counterclaims or motions. Pam maintains that she should have been allowed to argue that the Wises breached the contract, that she qualified for relief from forfeiture because there was asbestos on the property, and that she sustained damages after being exposed to asbestos for six years. 1 In its order, the District Court stated that it would issue a judgment in accord with its order after considering the amount of attorney’s fees. That judgment is not contained in the record before us. 4 ¶7 The Wises point out that the appeal to the District Court prompted a de novo trial limited to the propriety of Pam’s eviction. They argue that Pam could not raise arguments in justice court about title, the condition of the property, and whether the Wises dealt with her in good faith, as these were beyond the jurisdiction of the justice court, pursuant to § 25-31-101, MCA. The Wises further argue that because the justice court could only address the eviction issue, the case on appeal to the District Court was properly limited to review of that single issue. ¶8 The District Court’s findings of fact were supported by substantial evidence, and its conclusions of law were correct. The justice court did not have jurisdiction over Pam’s counterclaim but had jurisdiction over the action for unlawful detainer. See § 3- 10-302, MCA. “Justices’ courts are of limited jurisdiction, having only such powers as are conferred upon them by statute.” State ex rel. Skrurud v. Dist. Ct., 71 Mont. 570, 574, 230 P. 1089, 1090 (1924) (internal citations omitted). Section 25-31-101, MCA, specifically excludes questions of title or possession of real property from a justice court’s jurisdiction. On appeal, the District Court’s review was limited to the eviction issue as that was the only issue over which the justice court had jurisdiction. Clark v. Great N. Ry., 30 Mont. 458, 464, 76 P. 1003, 1005 (1904) (internal citations omitted) (“When a cause is transferred on appeal from a justice of the peace court to the district court, it must be tried anew in the district court. That language is susceptible of only one construction, namely, that only such questions as were raised and presented in the justice of the peace court can be tried in the district court.”). The District Court correctly concluded it could not address Pam’s arguments about asbestos, good faith, and damages 5 for exposure to asbestos. Its findings of fact and conclusions of law regarding the eviction were supported by the record and were correct. ¶9 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶10 For the foregoing reasons, we affirm the District Court’s decision. /S/ PATRICIA COTTER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ LAURIE McKINNON	November 19, 2013
2dc2305c-2a76-4974-bd13-6f77bd59dfb1	Roberts v. Lame Deer Sch. Dist. No. 6	2013 MT 358	DA 13-0307	Montana	Montana Supreme Court	DA 13-0307 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 358 SHERRI ROBERTS, Plaintiff and Appellant, v. LAME DEER PUBLIC SCHOOL DISTRICT #6, Rosebud County, Defendant and Appellee. APPEAL FROM: District Court of the Sixteenth Judicial District, In and For the County of Rosebud, Cause No. DV 2010-64 Honorable George Huss, Presiding Judge COUNSEL OF RECORD: For Appellant: Richard O. Harkins; Attorney at Law; Ekalaka, Montana For Appellee: Jeff A. Weldon; Felt, Martin, Frazier & Weldon, P.C.; Billings, Montana Submitted on Briefs: October 30, 2013 Decided: December 3, 2013 Filed: __________________________________________ Clerk December 3 2013 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Sherri Roberts (Roberts) appeals from an order of the Sixteenth Judicial District Court, Rosebud County, denying her petition to have an arbitration award vacated, modified, or corrected. We affirm. ISSUE ¶2 The dispositive issue on appeal is whether the District Court’s refusal to vacate, modify, or correct the arbitration award was an abuse of discretion. BACKGROUND ¶3 Beginning in the fall of 2005, Roberts was employed as a vocational agriculture instructor at the Lame Deer High School. She also served as faculty adviser for the school’s chapter of the National FFA Organization (formerly known as Future Farmers of America). She was suspended with pay on August 12, 2009, and her employment was terminated on November 16, 2009. Roberts appealed her termination to binding arbitration pursuant to the terms of a collective bargaining agreement between the Lame Deer Education Association, MEA-MFT, of which Roberts was a member, and Lame Deer School District No. 6 (School District). The parties selected Arbitrator Michael D. McDowell (Arbitrator), and he conducted hearings on August 10, 11, and 13, 2010. ¶4 On November 13, 2010, the Arbitrator issued a decision denying Roberts’ grievance. The Arbitrator concluded that the School District had afforded Roberts due process of law, the School District had good cause to discipline Roberts, and the discipline of discharge should not be reduced. On December 20, 2010, Roberts filed a petition to vacate, modify, or correct the arbitration award in the District Court. The 3 District Court denied Roberts’ petition and upheld the arbitration award on April 1, 2013. The District Court concluded that the Arbitrator had not exceeded his powers, and that Roberts had failed to meet her statutory burden of proving that a ground for vacating, correcting, or modifying the award existed. The District Court acknowledged Roberts’ argument that a different result could have been reached by the Arbitrator, but declined to substitute its determination for that of the Arbitrator or to revisit the merits of the controversy. ¶5 Roberts contends on appeal that the District Court abused its discretion in failing to vacate or modify the award because the District Court did not carefully evaluate the facts found by the Arbitrator and failed to “properly scrutinize all prior proceedings by the sweeping determination that the arbitrators [sic] facts and findings were conclusive.” Roberts argues that the School District fraudulently misled her, that her actions did not constitute insubordination, and that the School District did not have good cause to suspend her. She argues the suspension was based on an improper and illegal motive. ¶6 The School District counters that the District Court properly upheld the award because Roberts failed to establish any of the limited grounds upon which modification or correction may be premised under § 27-5-313(1), MCA, and failed to meet her burden of proving a ground to vacate the award under § 27-5-312(1), MCA. STANDARD OF REVIEW ¶7 Judicial review of an arbitration award is strictly limited by statute in Montana. Colstrip Energy L.P. v. N.W. Corp., 2011 MT 99, ¶ 17, 360 Mont. 298, 253 P.3d 870 (internal citations omitted). When a matter has been submitted to binding arbitration, 4 courts are not permitted to review the merits of the controversy, but may only confirm, vacate, modify, or correct an arbitration award pursuant to §§ 27-5-311, -312, and -313, MCA. Colstrip Energy, ¶ 17 (internal citations omitted). We review a trial court’s decision to confirm an arbitration award to determine if the court abused its discretion. The test for an abuse of discretion is whether the trial court acted arbitrarily, without employment of conscientious judgment, or exceeded the bounds of reason resulting in substantial injustice. Colstrip Energy, ¶ 18 (internal citations omitted). We can only review whether the District Court abused its discretion in confirming the arbitration award; we cannot review the merits of the controversy. Colstrip Energy, ¶ 19 (internal citations omitted). DISCUSSION ¶8 Whether the District Court’s refusal to vacate, modify, or correct the arbitration award was an abuse of discretion. ¶9 The party seeking to vacate, modify, or correct an arbitration award bears the burden of proving that one of the statutorily enumerated grounds exists. Colstrip Energy, ¶ 17 (internal citations omitted). Therefore, in order to trigger the District Court’s authority to review the arbitration award, Roberts had to properly raise one of the specific grounds set forth in §§ 27-5-312 or -313, MCA. While she couches her argument in the language of § 27-5-312(1)(c) by claiming that “the arbitrator exceeded his powers,” what she actually asks is that we reweigh the facts and the merits of the controversy. ¶10 Roberts presented the District Court with four grounds for vacating or modifying the arbitration award: (1) the Arbitrator exceeded his power in not following the 5 collective bargaining agreement’s requirement that good cause exist before there may be a suspension with or without pay; (2) the Arbitrator exceeded his power in allowing the School District to consider alleged insubordination from before and after Roberts’ termination; (3) the Arbitrator exceeded his power by not differentiating between Roberts’ teaching contract and her FFA advisor contract; and (4) the Arbitrator exceeded his power in asserting that Roberts was in control of funds that belonged to the FFA when she was only an advisor. ¶11 “An arbitrator exceeds his powers when he decides matters which were not submitted to him.” Terra W. Townhomes, L.L.C. v. Stu Henkel Realty, 2000 MT 43, ¶ 27, 298 Mont. 344, 996 P.2d 866. Here, the parties agreed to the issues that would be submitted to arbitration, namely whether Roberts was dismissed for good cause, and if not, what the appropriate remedy was. These were the only matters the Arbitrator decided; thus, the District Court did not abuse its discretion by refusing to vacate or modify the award on the basis that the Arbitrator had exceeded his powers. ¶12 Roberts contends that notice and a hearing were required before she could lawfully be suspended. In Geissler v. Sanem, 285 Mont. 411, 416, 949 P.2d 234, 237-38 (1997), we adopted the “manifest disregard of the law” standard of review for vacating arbitration decisions. For reversal under this standard, an arbitrator must have been aware of a clearly governing principle of Montana law, but “blatantly refused to follow it.” Paulson v. Flathead Conserv. Dist., 2004 MT 136, ¶ 24, 321 Mont. 364, 91 P.3d 569 (internal citation omitted). The District Court determined Roberts failed to meet the Geissler standard because she could not demonstrate a clearly governing principle in 6 Montana law that suspensions with pay require prior notice and hearing. It naturally follows that she failed to establish the two following requirements of Geissler, and thus, the District Court did not abuse its discretion in declining to vacate the award under this standard. ¶13 As for the factual grounds Roberts raised for modifying or vacating the arbitration award, the District Court concluded that these had been considered and expressly addressed by the Arbitrator, and that it was not the role of the court to substitute its determination for that of the Arbitrator or to revisit the merits of the controversy. As the District Court noted, modification or correction under § 27-5-313, MCA, was inappropriate because Roberts “essentially seeks a reversal of the award, which clearly would go to the merits of the decision rather than to matters of form.” The District Court did not abuse its discretion in declining to revisit these issues. Requiring the District Court to conduct its own evidentiary hearing on an issue previously submitted to and determined in binding arbitration would undermine the finality and expediency provided by arbitration. See Dick Anderson Constr., Inc. v. Monroe Constr. Co., LLC, 2009 MT 416, ¶ 38, 353 Mont. 534, 221 P.3d 675. ¶14 For the foregoing reasons, we conclude that the District Court did not abuse its discretion in refusing to modify, correct, or vacate the Arbitrator’s award. We therefore affirm the decision of the District Court. /S/ PATRICIA COTTER 7 We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JIM RICE	December 3, 2013
b2db66ac-8d25-4caa-998a-f7114e71b4e9	State v. MacGregor	2013 MT 297, 2013 MT 297A	DA 11-0498	Montana	Montana Supreme Court	1 IN THE SUPREME COURT OF THE STATE OF MONTANA DA 11-0498 _________________ STATE OF MONTANA, Plaintiff and Appellee, v. JEREMY STEVEN MACGREGOR, Defendant and Appellant. O R D E R _________________ On October 15, 2013, we issued an Opinion in the above-entitled action affirming the decision of the First Judicial District Court. Appellant Jeremy Steven MacGregor (MacGregor) filed a Petition for Rehearing with this Court on November 8, 2013. While we denied the Petition for Rehearing, we determined to make minor changes to this Court’s Opinion. The changes to the Opinion set forth below are reflected in the attached Amended Opinion. Accordingly, IT IS ORDERED that paragraphs 24 and 50 of the Opinion in this matter are AMENDED as follows. Strikeouts are deleted and underlined language is added: ¶24 MacGregor complains that his attorney failed to form a strategy or contact him while he was at the Montana State Hospital. But these complaints concerned his attorney’s activity after he had been designated “standby counsel.” Standby counsel does not constitute counsel for Sixth Amendment purposes. Halley v. State, 2008 MT 193, ¶ 22, 344 Mont. 37, 186 P.3d 859 (quoting United States v. Taylor, 933 F.2d 307, 313 (5th Cir. 1991). Because standby counsel does not fulfill the Sixth Amendment right to effective counsel, MacGregor cannot claim that standby counsel’s action or inaction violated his right to effective assistance. At the time the trial court ordered the competency evaluation, MacGregor already had requested to represent himself. The court deferred decision on MacGregor’s request until the evaluation was completed. MacGregor later complained that “representation was forced upon him during the state’s mental evaluation,” while simultaneously criticizing Scott for failing to contact MacGregor while he was hospitalized. Given the District Court’s familiarity with November 26 2013 2 MacGregor’s requests and its decision to postpone ruling on MacGregor’s motion to represent himself, it did not err in failing to conduct additional inquiry into his complaint. ¶50 MacGregor contends that the incorrect instruction prevented the jury from considering mitigated deliberate homicide as a charge, and this constitutes a miscarriage of justice. MacGregor alleges mitigation because he was intoxicated on marijuana and alcohol; he was upset about an incident where his dog knocked over his child; his child had been diagnosed with a minor ailment; he had fired someone recently; he had quit cigarettes, marijuana, and alcohol (although not that day); he had worked 60-hour work weeks; he had cut his hand; and his wife forgot their anniversary. But mitigating factors arise from some sort of direct provocation, not simply the buildup of stress and anger. Hans v. State, 283 Mont. 379, 399, 942 P.2d 674, 686 (1997). We have previously ruled that extreme intoxication does not constitute a mitigating factor, nor do the stresses that accompany living in hard times. State v. Goulet, 283 Mont. 38, 42, 938 P.2d 1330, 1333 (1997) (showing of intoxication or anger insufficient to support mitigation); State v. Martin, 2001 MT 83, ¶¶ 33-34, 305 Mont. 123, 23 P.3d 216 (unemployment, homelessness, pregnant girlfriend do not support mitigation). MacGregor presented no evidence demonstrating provocation of his anger other than the challenges that naturally accompany sobriety, fatherhood, and marriage. Nor did any of MacGregor’s witnesses corroborate his involuntary intoxication defense. IT IS FURTHER ORDERED that this Court’s October 15, 2013 Opinion in this matter is amended as set forth above. An Amended Opinion is issued herewith. The Clerk is directed to provide copies of this Order to all counsel of record. DATED this _____ day of November, 2013. _________________________________ Chief Justice	November 26, 2013
fda1f2a4-4832-4c53-9cca-d54ce6e10039	Pilgeram v. Greenpoint Mortgage Funding, Inc.	2013 MT 354	DA 12-0629	Montana	Montana Supreme Court	DA 12-0629 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 354 TROY A. PILGERAM and TERESA A. PILGERAM, husband and wife, Plaintiffs and Appellants, v. GREENPOINT MORTGAGE FUNDING, INC., a California corporation; COUNTRYWIDE HOME LOANS, INC., a Texas corporation; MANN MORTGAGE, LLC, a Montana limited liability company; and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., an Iowa Corporation, Defendants and Appellees. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 09-948A Honorable Ted O. Lympus, Presiding Judge COUNSEL OF RECORD: For Appellant: Eric Hummel, Attorney at Law, PLLC; Kalispell, Montana W. Jeff Barnes (argued), W.J. Barnes, P.A.; Boca Raton, Florida For Appellee: Charles K. Smith, Poore, Roth & Robinson, P.C.; Butte, Montana Robert J. Pratte (argued), Brent R. Lindahl, Fulbright & Jaworski, L.L.P.; Minneapolis, Minnesota Argued and Submitted: September 25, 2013 Decided: November 25, 2013 Filed: __________________________________________ Clerk November 25 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Troy A. Pilgeram and Teresa A. Pilgeram (the Pilgerams) appeal from the orders of the Eleventh Judicial District Court, Flathead County, granting GreenPoint Mortgage Funding, Inc., Countrywide Home Loans, Inc., and Mortgage Electronic Registration Systems, Inc.’s (the Lenders’) motion for summary judgment and denying the Pilgerams’ motion to amend judgment. We reverse. ¶2 The dispositive issue on appeal is: Did the District Court err in granting the Lenders’ motion for summary judgment? BACKGROUND ¶3 On September 7, 2006, the Pilgerams obtained a fixed rate home loan from Mann Mortgage (Mann) for $512,000 and executed a deed of trust (DOT) naming Citizen’s Title & Escrow trustee and Mann lender. Also on September 7, 2006, the Pilgerams signed a promissory note, which Mann endorsed to GreenPoint Mortgage Funding, Inc., (GreenPoint) on the same day. ¶4 The DOT provided that the promissory note could be sold without advance notice to the borrower. The DOT also provided that the loan services entity could be changed with written notice to the borrower. Pursuant to the promissory note, the Pilgerams waived their rights of presentment and notice of dishonor. Mortgage Electronic Registration Systems, Inc., (MERS) was not named in the promissory note but was identified in the DOT as “[t]he beneficiary of this Security Instrument . . . solely as a nominee for Lender and Lender’s successors and assigns.” 3 ¶5 After several transfers of the interest in the DOT and promissory note, the Pilgerams defaulted on the note in April 2008. On July 29, 2008, MERS assigned its interest in the DOT to GreenPoint, which subsequently held the interests in both the promissory note and the DOT. Also on July 29, 2008, GreenPoint appointed and substituted Charles J. Peterson (Peterson) as the successor trustee. In November 2008, the Pilgerams received notice that GreenPoint was assigning the servicing rights to Countrywide effective December 1, 2008. In early December, the Pilgerams received notice from Countrywide that it was now the loan servicing entity and that future payments were to be made in the manner indicated in the notice. They also received notice that the loan was in default and had been accelerated and/or was in foreclosure. They were informed of the manner in which they could bring the note current. ¶6 Following a series of cancelled foreclosure sales, the Pilgerams filed a complaint in the District Court, alleging the Lenders lacked the authority to foreclose. The Lenders moved for summary judgment,1 and the District Court granted the motion on December 13, 2011, reasoning that MERS qualified as a “beneficiary” under Montana’s Small Tract Financing Act (STFA). On January 25, 2012, the Pilgerams filed a motion to amend judgment. The District Court denied this motion on April 20, 2012, because “the time for ruling expired 60 days after the motion was filed.” The Pilgerams subsequently filed an appeal in this Court in October 2012. ¶7 On appeal, the Pilgerams argue that the Lenders failed to meet their burden for summary judgment, and that the complicated assignments between and among MERS, 1 Mann was not a party to the motion for summary judgment. 4 GreenPoint, and Countrywide create genuine issues of material fact. The Lenders counter that the Pilgerams “fail to explain what facts are supposedly in dispute, and why they are material” (emphasis in original). The Lenders argue that the District Court correctly concluded there was “no impediment prohibiting Countrywide from foreclosing the loan and from instructing” Peterson, the successor trustee, “to sell the property to satisfy the default.” ¶8 The Pilgerams further argue MERS “is not, was not, and could never be the ‘beneficiary’ of the DOT.” Thus, it “had no authority to endorse a note which it never owned” or “to assign the Pilgerams’ deed of trust.” According to the Lenders, the DOT specifically provided that MERS was a beneficiary, allowing MERS to act as the agent of the lender and of the lender’s successors and assigns. STANDARD OF REVIEW ¶9 We review de novo a district court’s grant or denial of summary judgment, applying the same criteria of M. R. Civ. P. 56 as a district court. Fisher v. State Farm Mut. Auto. Ins. Co., 2013 MT 208, ¶ 11, 371 Mont. 147, 305 P.3d 861. We review a district court’s conclusions of law to determine whether they are correct and its findings of fact to determine whether they are clearly erroneous. Brookins v. Mote, 2012 MT 283, ¶ 22, 367 Mont. 193, 292 P.3d 347 (internal citation omitted). DISCUSSION ¶10 Did the District Court err in granting the Lenders’ motion for summary judgment? ¶11 The District Court granted summary judgment in favor of MERS solely on the grounds that MERS qualified as a beneficiary under the STFA. Although never addressed 5 by the District Court, MERS asserts on appeal that they are special agent of the lender. We find that neither theory warrants summary judgment in favor of MERS. ¶12 Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show there is no genuine issue as to material fact and that the movant is entitled to judgment as a matter of law.” Feller v. First Interstate Bancsystem, Inc., 2013 MT 90, ¶ 16, 369 Mont. 444, 299 P.3d 338 (citing M. R. Civ. P. 56(c)(3)). We construe all facts in favor of the non-movant in determining whether an issue of material fact exists. LaTray v. City of Havre, 2000 MT 119, ¶ 15, 299 Mont. 449, 999 P.2d 1010. If the movant demonstrates the absence of any material issue of fact and entitlement to judgment, the non-movant must establish with substantial evidence that a genuine issue of material fact does exist or that the movant is not entitled to prevail under the law. Semenza v. Kniss, 2008 MT 238, ¶ 18, 344 Mont. 427, 189 P.3d 1188; Prindel v. Ravalli County, 2006 MT 62, ¶ 19, 331 Mont. 338, 133 P.3d 165. Where the undisputed evidence concerning the relationship of parties is reasonably susceptible to but a single inference, the question of their legal relationship is one purely of law. Elkins v. Husky Oil Co., 153 Mont. 159, 166, 455 P.2d 329, 332 (1969); Estates of Milliron v. Francke, 243 Mont. 200, 204, 793 P.2d 824, 827 (1990); Semenza, ¶ 19. MERS is not a beneficiary under Montana’s STFA. ¶13 The Pilgerams argue that MERS had no authority to assign the Pilgerams’ DOT and request that we follow other jurisdictions that have determined MERS did not qualify as a beneficiary under their trust deed acts. The Lenders argue the Pilgerams ignore the express language of the trust deed and the plain language of the definition of beneficiary under § 71- 6 1-303(1), MCA. They further argue the Pilgerams disregard Montana authority holding MERS may serve as a beneficiary and have instead “cherry-picked” out-of-state authority. ¶14 This case raises an issue we have not yet addressed, namely whether Montana’s STFA permits MERS to be the designated beneficiary in a trust indenture.2 We are mindful this is an area of law that is still developing, with state and federal courts in different jurisdictions reaching different results. Federal court decisions in the District of Montana on these issues are instructive, as are the decisions of state district courts and state courts in other jurisdictions. We note that the District Court in this case was not the only Montana state district court to consider similar trust language and conclude that MERS qualified as a beneficiary. See Waide v. U.S. Bank Natl. Assn., DV-10-1763, slip op. at 10 (Watters, J., Yellowstone County Dist. Ct., June 28, 2011) (Court Doc. 8-5 at 1-17). ¶15 The STFA defines “beneficiary” as “the person named or otherwise designated in a trust indenture as the person for whose benefit a trust indenture is given or the person’s successor in interest, who may not be the trustee.” Section 71-1-303(1), MCA. “When interpreting a statute, we seek to implement the intention of the Legislature.” Williamson v. Mont. Pub. Serv. Commn., 2012 MT 32, ¶ 36, 364 Mont. 128, 272 P.3d 71 (citing § 1-2-102, 2 “MERS is a private electronic database, operated by MERSCORP, Inc., that tracks the transfer of the ‘beneficial interest’ in home loans, as well as any changes in loan servicers. After a borrower takes out a home loan, the original lender may sell all or a portion of its beneficial interest in the loan and change loan servicers. The owner of the beneficial interest is entitled to repayment of the loan. For simplicity, we will refer to the owner of the beneficial interest as the ‘lender.’ The servicer of the loan collects payments from the borrower, sends payments to the lender, and handles administrative aspects of the loan. Many of the companies that participate in the mortgage industry—by originating loans, buying or investing in the beneficial interest in loans, or servicing loans—are members of MERS and pay a fee to use the tracking system.” Joseph v. Bank of America, N.A., 2012 U.S. Dist. LEXIS 97869, ** 10-11 (D. Mont., April 23, 2013)(citing Jackson v. Mortg. Elec. Registration Sys., Inc., 770 N.W.2d 487, 490 (Minn. 2009)). 7 MCA). We first look to the plain meaning of the statute’s words. Williamson, ¶ 36. If the language is clear and unambiguous, we will not resort to other means of interpretation. Williamson, ¶ 36 (citing Rocky Mt. Bank v. Stuart, 280 Mont. 74, 80, 928 P.2d 243, 246-47 (1996)). If the language is unclear or ambiguous, however, we resort to rules of statutory construction to discern and give effect to the intention of the legislature. Mont. Contractors Assn. v. Dept. of Hwys., 220 Mont. 392, 394, 715 P.2d 1056, 1058 (1986) (internal citations omitted). ¶16 We find that the definition of “beneficiary” is clear and unambiguous. The section lends itself to only one interpretation, namely that the beneficiary is “the person named . . . in a trust indenture as the person for whose benefit a trust indenture is given or the person’s successor in interest” (emphasis added). Section 71-1-303, MCA. The Lenders argue that MERS received a “benefit” from the DOT even though MERS did not lend the money and has no right to repayment. The alleged benefit is title to the property in the event of foreclosure. However, the DOT was not given for the benefit of MERS but for the benefit of the lender. MERS may ultimately obtain some benefit based on its relationship with the Lenders but that benefit is not granted by the DOT. See Edwards v. MERS, 300 P.3d 43, 49 (Idaho 2013) (“The deed of trust was not given for the benefit of MERS or to secure an obligation owing to MERS. It was given for the benefit of Lehman Brothers to secure the obligation owing to it. Although MERS may obtain a benefit based upon its relationship with Lehman Brothers, the deed of trust was not granted in order to provide MERS with that benefit.”). 8 ¶17 The question of the statutory meaning of “beneficiary” does not depend on the parties’ intent or application of common law principles of contract to the DOT. Rather, “beneficiary” must be interpreted in the context of legislative intent and whether the STFA authorizes nonjudicial foreclosure only when certain statutory conditions are met. The meaning of “beneficiary” is determined by statute and is thus incorporated into the parties’ agreement and may not be otherwise altered. See, R. Lord, 11 Williston on Contracts § 30:24 (4th ed. 1999) (“[i]ncorporation of existing law may act to supersede inconsistent clauses purporting to define the terms of the agreement. For instance, where a statute regulates the amount the government is to pay for a particular service, the statute controls despite a contract between the government and the provider of the service agreeing to lay a lower rate.”). References to “beneficiary” throughout the STFA make it clear that the beneficiary is the entity to whom the secured obligation flows. Section 71-1-305, MCA (“For the purpose of applying the mortgage laws, the grantor in a trust indenture is deemed the mortgagor and the beneficiary is deemed the mortgagee.”); § 71-1-310, MCA (providing that a title insurer is liable to the beneficiary as stated); § 71-1-312(1), (3), MCA (referencing payments made to the beneficiary)). Here, the lender, not MERS, is the entity to whom the secured obligation flows. ¶18 Under the STFA, the beneficiary “may not be the trustee.” Section 71-1-303(1), MCA. A “trustee” is “a person to whom the legal title to real property is conveyed by a trust indenture . . . .” Section 71-1-303(7), MCA. GreenPoint appointed Peterson as the trustee, and the Pilgerams acknowledge “[i]t is undisputed that MERS is not the trustee.” However, the DOT identifies MERS as an entity holding legal title to real property and as the 9 “nominee.” A nominee is “[a] party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1149 (Bryan A. Garner ed., 9th ed., West 2009). MERS holds only legal title to real property and receives no benefit or secured obligation from the DOT. Since § 71-1-303(1), MCA, prohibits holders of legal title from assuming the beneficiary role, we conclude that MERS does not meet the STFA’s definition of “beneficiary.” As the Pilgerams argue, “MERS was not the lender, did not extend any credit, and is nothing more than an electronic tracking entity.” MERS’ agency relationship with lenders is not sufficiently established to warrant summary judgment. ¶19 We next address the Lenders’ argument that even if MERS is not a beneficiary, it may properly execute the documents in question because it is a special agent of the lender under § 28-10-102, MCA. That argument, raised by Appellants for the first time on appeal, is not sufficiently grounded in the record to satisfy the exacting standards of summary judgment. ¶20 It is well established that we do not consider new arguments or legal theories for the first time on appeal, even in the agency law context. State v. Ferguson, 2005 MT 343, ¶ 38, 330 Mont. 103, 126 P.3d 463; State v. Peterson, 2002 MT 65, ¶ 24, 309 Mont. 199, 44 P.3d 499; Schlemmer v. N. Cent. Life Ins. Co., 2001 MT 256, ¶ 22, 307 Mont. 203, 37 P.3d 63; Unified Indus., Inc. v. Easley, 1998 MT 145, ¶¶ 15-17, 289 Mont. 255, 961 P.2d 100; Snetsinger v. Mont. Univ. Sys., 2004 MT 390, ¶ 120, 325 Mont. 148, 104 P.3d 445 (Rice, J. & Gray, C.J., dissenting). In Service Funding v. Craft, 234 Mont. 431, 434, 763 P.2d 1131, 1133 (1988), appellants asserted the existence of a principle-agent relationship for the first 10 time on appeal. This Court refused to “apply the law of agency in addition to that which was presented to the District Court.” Service Funding, 234 Mont. at 434, 763 P.2d at 1133. We further held that we are “unwilling to determine the existence of an agency relationship for the first time on appeal.” Service Funding, 234 Mont. at 434, 763 P.2d at 1133. ¶21 This restraint is “rooted in fundamental fairness to the parties . . . .” Gary & Leo’s Fresh Foods, Inc. v. State, 2012 MT 219, ¶ 16, 366 Mont. 313, 286 P.3d 1218; See also, Brookins, ¶ 24; Day v. Payne, 280 Mont. 273, 276-77, 929 P.2d 864, 866 (1996); Payne v. McLemore’s Wholesale & Retail Stores, 654 F.2d 1130, 1144 (5th Cir. 1981). It is fundamentally unfair for a party to withhold an argument at trial, take a chance on a favorable outcome, and then assert a separate legal theory when the trial strategy fails. Day, 280 Mont. at 276-77, 929 P.2d at 866. New issues should only be reviewed on appeal if extenuating circumstances justify the party’s failure to assert their legal theory at trial, such as the emergence of new precedent on the issue. Marcus Daly Memorial Hosp. Corp. v. Borkoski, 191 Mont. 366, 369, 624 P.2d 997, 999 (1981); State v. Carter, 2005 MT 87, ¶ 13, 326 Mont. 427, 114 P.3d 1001. ¶22 Appellees make no mention of an agency theory in any of their answers to the complaint or in their motions for summary judgment and the District Court made no finding of fact or conclusion of law concerning an agent-principal relationship. MERS submitted no evidence to support the agency relationship, nor have the Pilgerams been afforded an opportunity to refute that relationship with evidence of their own. Put simply, the record has not been developed to determine whether agency existed. This fact is especially troubling on summary judgment because a finding of agency requires consideration of all facts and 11 circumstances between the parties, not merely the plain language of the document in question. Dick Anderson Constr., Inc., v. Monroe Prop. Co., 2011 MT 138, ¶ 22, 361 Mont. 30, 255 P.3d 1257. We cannot fault the Pilgerams for mishandling the agency argument in their reply brief and failing to raise sufficient evidence to defeat summary judgment on the agency issue. Instead, we find that these omissions demonstrate the patent unfairness that results when a party is ambushed with a new legal argument on appeal. We refuse to punish the Pilgerams for failing to raise a material fact concerning an issue that never existed in this litigation. ¶23 Nor do extenuating circumstances or new developments in the law justify MERS’ complacency in asserting an agency theory at the trial level. In March 2009, the Supreme Court of Arkansas determined that MERS was the “mere agent” of a lender. Mortgage Elec. Registration Sys. v. Southwest Homes of Ark., 301 S.W.3d 1, 3 (Ark. 2009). The Supreme Court of Kansas considered MERS’ agency relationship with lenders in August 2009. Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 166 (Kan. 2009). Prior to either of those decisions, MERS’ agent status was evaluated by the bankruptcy courts of California and Idaho. In re Vargas, 396 B.R. 511, 516 (Bankr. C.D. Cal. 2008); In re Sheridan, 2009 Bankr. LEXIS 552, 14 (Bankr. D. Idaho 2009). After all of this litigation concerning MERS’ agent status, MERS’ motion for summary judgment in July 2010, makes no mention of an agency theory. MERS remained silent about this legal theory at the summary judgment hearing and, correctly predicting that the Court would disagree with the District Court’s reasoning, now asserts a new legal theory where its first one failed. This surprise appeal unfairly prejudices the Pilgerams’ position and is prohibited by precedent. 12 ¶24 We are especially wary of new arguments in the context of summary judgment. We construe all facts in favor of the non-movant in determining whether an issue of material fact exists. LaTray, ¶ 15. If the movant demonstrates the absence of any material issue of fact and entitlement to judgment, the non-movant must establish with substantial evidence that a genuine issue of material fact does exist or that the movant is not entitled to prevail under the law. Semenza, ¶ 18; Prindel, ¶ 19. Because the issue was never raised at the trial level, the movant never demonstrated an absence of fact and entitlement to judgment on this issue, nor did the non-movant have a chance to present substantial evidence refuting that absence or entitlement. ¶25 With a more complete record, other courts have refused to recognize MERS’ agent status on summary judgment. A New York Bankruptcy Court refused to grant MERS agent status because its membership agreement with lenders contained no grant of authority to MERS. In re Agard, 444 B.R. 231, 252 (Bankr. E.D.N.Y. 2011). That membership agreement is notably absent from this record, even though a principal-agent relationship requires consideration of all facts and circumstances between the parties. Dick Anderson Constr., Inc., ¶ 22. The membership agreement could be dispositive in this case as actual authority requires the principal’s manifestation of assent to the agent’s action. Restatement (Third) of Agency § 3.01; § 28-10-201, MCA. The Supreme Court of Oregon also found that MERS had not sufficiently established its agency theory because no evidence showed “who ultimately holds the relevant interest in the notes and trust deeds, and whether that person and each of its predecessors in interest conferred authority on MERS to act on their behalves in the necessary respects.” Brandrup v. Recontrust, Co., 303 P.3d 301, 323 (Or. 2013). That 13 evidence is missing here as well; the DOT only states that “Borrower understands and agrees” that MERS’ was a nominee of the lenders, not that the lenders themselves granted MERS authority. ¶26 But even if we decided the agency issue using only the language of the DOT, that evidence is reasonably susceptible to more than one inference, therefore, the legal relationship between MERS and the Lenders is not purely a question of law. Elkins, 153 Mont. at 166, 455 P.2d at 332; Estates of Milliron, 243 Mont. at 204, 793 P.2d at 827. MERS relies on the Supreme Court of Idaho’s conclusion that since MERS was identified as the nominee in the DOT, and one definition of nominee is “agent,” then MERS was indisputably an agent as a matter of fact and law. But “nominee” is subject to more than one interpretation based on the context of its use. Landmark Nat’l Bank, 216 P.3d at 166. While “nominee” may mean “agent,” another definition is the one discussed above; “a party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary at 1149. This definition does not necessitate an agent-principal relationship as a matter of law. MERS appears to fit this definition, as the DOT itself states that “MERS holds only legal title to the interest granted by Borrower” (emphasis added) and MERS presumably holds this title for the benefit of the mortgagee/lender. Further, the Supreme Court of Oregon found that the deed of trust only obfuscated MERS’ agent status by first granting the narrow designation of “nominee” holding “only legal title” but then also granting the right to “exercise any or all” interests of the lender “as necessary.” Brandrup, 303 P.3d at 323. MERS relies on the same vague and confusing claim of authority as dispositive for the agency issue in this case. Especially when 14 construed in the Pilgerams’ favor, the facts of this case are susceptible to a determination that MERS was the kind of nominee that is not an agent. ¶27 We refuse to grant a motion for summary judgment based on an issue never raised below and against a party that never had an opportunity to rebut the facts and law of the issue. We reverse and remand this case to the District Court for further findings of fact regarding MERS’ principal-agent relationship with the lenders. /S/ MICHAEL E WHEAT We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ BRIAN MORRIS Justice Patricia Cotter, dissenting. ¶28 I concur in the Court’s Opinion through ¶ 18. I dissent from the remainder of the Court’s Opinion with respect to the role of MERS as an agent of the lender, and would affirm the decision of the District Court. ¶29 I would conclude that even though MERS does not qualify as a beneficiary, it may properly execute the documents in question because it is a special agent of the lender. Section 28-10-102, MCA, provides: “An agent for a particular act or transaction is called a special agent. All others are general agents.” ¶30 The Pilgerams’ DOT provided that “MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns.” The DOT described the nominee’s authority as follows: “if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests [granted by the borrower in the Deed of Trust], including, but not limited 15 to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and cancelling this Security Instrument.” As noted, § 28-10-102, MCA, specifically contemplates that one may act as an agent for a particular act or transaction. This is precisely the role that MERS fills under the DOT. ¶31 A nominee is “[a] person designated to act in place of another, usu. in a very limited way.” Black’s Law Dictionary at 1149. An agent is one who represents another. Section 28-10-101, MCA. A nominee is a form of agent. See Edwards, 300 P.3d at 49 (“As the definitions indicate, a nominee is merely a form of agent.”). ¶32 Given the language of the DOT naming MERS a nominee and listing the actions it is authorized to take, I would conclude that MERS was the lender’s agent. Several other courts have reached the same conclusion. See Joseph, 2012 U.S. Dist. LEXIS 97869 at * 33 (“MERS was Countrywide’s agent, cloaked with authority to act on the lender’s behalf under the Deed of Trust.”); Heffner v. Bank of Am., 2012 U.S. Dist. LEXIS 64668, * 12 (D. Mont., May 8, 2012); (“As in Joseph, the Deed of Trust here reflects that America designated MERS as its agent and gave it full authority to act as a nominee for America and its successors and assigns.”); Edwards, 300 P.3d at 49 (“The lender, Lehman Brothers, had the authority to designate an agent to act in its behalf, and the actions of its agent, MERS, were the actions of Lehman Brothers.”). MERS could, as the lender’s agent, assign the beneficial interest in the deed of trust to GreenPoint, who could in turn appoint a successor trustee. See Joseph, 2012 U.S. Dist. LEXIS 97869 at * 36 (“The Court thus concludes that MERS could and did, as Countrywide’s nominee/agent, assign the beneficial interest in the deed of trust to BOA-HLS.”); Heffner, 2012 U.S. Dist. LEXIS 64668 at * 12 (The STFA does not permit 16 MERS to be the beneficiary in a trust indenture as the lender’s nominee, but MERS could assign the beneficial interest in the deed of trust.); Restatement (Third) of Agency § 1.04(2) (an agent may act on behalf of both a disclosed principal, i.e., the original lender, and a later unidentified principal, i.e., original lender’s successor and assign). This conclusion is consistent with Montana law allowing an indenture trustee, performing duties under the STFA, to delegate those duties to another party. Knucklehead Land Co., Inc. v. Accutitle, Inc., 2007 MT 301, ¶¶ 12, 15, 340 Mont. 62, 172 P.3d 116; See also Diehl v. Reconstruct Co., N.A., 2010 U.S. Dist. LEXIS 52404, ** 11, 13 (D. Mont., April 22, 2010) (adopted by Diehl v. Reconstruct Co., N.A., 2010 U.S. Dist. LEXIS 52403 (D. Mont., May 27, 2010)) (Section 71-1-315(3), MCA, did not prohibit First American and Reconstruct from designating an agent to conduct the foreclosure sales of the plaintiffs’ real properties, even if the agent did not separately qualify as a trustee under § 71-1-306, MCA; the agent could perform any act First American and Reconstruct could perform.); Joseph, 2012 U.S. Dist. LEXIS 97869 at * 35 (“No ‘contrary intention clearly appears’ in the STFA that would preclude the lender from designating an agent to act on the lender’s behalf to exercise all pertinent authority of a beneficiary under the trust indenture.”). ¶33 The Court opines that the question of whether MERS was the agent of the lender was raised for the first time on appeal and therefore should not be considered. Notably, neither Pilgerams nor the other parties raised this concern; rather, the Court has done so sua sponte. In fact, the parties debated the agency question in their appellate briefs and also extensively addressed agency during oral argument before this Court without ever asserting the issue was not properly before us. As the issue was thoroughly argued with the consent of the parties, 17 the concerns about unfairness repeatedly voiced by the Court are unfounded. As we have frequently stated, this Court generally does not resolve a case on grounds not raised or supported by the parties. Citizens for Balanced Use v. Maurier, 2013 MT 166, ¶ 15, 370 Mont. 410, 303 P.3d 794 (citing State v. Andersen-Conway, 2007 MT 281, ¶ 14, 339 Mont. 439, 171 P.3d 678); Pinnow v. Mont. State Fund, 2007 MT 332, ¶ 15, 340 Mont. 217, 172 P.3d 1273. It bears noting that while there is no counterpart in the Montana Rules of Appellate Procedure, M. R. Civ. P. 15(b)(2) provides that “[w]hen an issue not raised by the pleadings is tried by the parties’ express or implied consent, it must be treated in all respects as if raised in the pleadings.” The same rationale should apply to arguments presented by agreement on appeal. ¶34 The Court also concludes that resolution of the agency issue requires a more complete record and “further findings of fact regarding MERS’ principal-agent relationship with the lenders.” Opinion, ¶ 27. With due respect, I believe the Court exaggerates the complexity of the agency issue. The question of whether MERS may properly be deemed the agent of the lender is driven by the language of the DOT and the law of agency. The question is one of law, not fact, and therefore remand for further findings of fact is wholly unnecessary. The DOT language is not complicated or ambiguous, and the law of agency as well as the precedent cited herein clearly supports a determination that an agency relationship between MERS and the lender exists under these circumstances. I would therefore affirm the decision of the District Court. I dissent from our refusal to do so. /S/ PATRICIA COTTER 18 Justice Beth Baker joins in the dissenting Opinion of Justice Cotter. /S/ BETH BAKER Justice Jim Rice, dissenting. ¶35 I believe the definition of “beneficiary” under the STFA is broader and more flexible than the Court concludes. That provision, § 71-1-303(1), MCA, states: “Beneficiary” means the person named or otherwise designated in a trust indenture as the person for whose benefit a trust indenture is given or the person’s successor in interest, who may not be the trustee. ¶36 The flexibility of this statute comes from the words that the Court does not emphasize: the beneficiary is the person “named or otherwise designated” in the trust indenture “as the person” for whose benefit the indenture is given. Except for its exclusion of the trustee, and any other restriction at law, this provision broadly permits any other person to be “named or designated” in the trust indenture “as the person” for whose benefit the trust indenture is given. The statute says nothing about limiting the beneficiary to lenders, or requiring that the beneficiary be “the entity to whom the secured obligation flows.” Opinion, ¶ 17. This provision is not about lenders; it is about designating someone “as the person” to hold a beneficial interest in the trust indenture. The provision’s purpose is to permit flexibility in financial arrangements consistent with the constitutional right of contract and assignment. Here, the “person” so designated under this broad authority is MERS. ¶37 This definition of beneficiary, similar to the one in Oregon’s statutes, does not evince a legislative intent to 19 preclude the parties to a trust deed from designating the agent of the lender and its successors as the beneficiary. We should be hesitant to find in that run- of-the-mill definition a limitation on the parties’ customary authority to structure their transactions as they see fit, unless the text, context, or history of that definition requires it. . . . Certainly, nothing in the text of the definition expressly forecloses the parties from designating the lender’s agent as the beneficiary in the trust deed. Brandrup v. ReconTrust Co., N.A., 303 P.3d 301, 324 (Or. 2013) (Kistler, J., Balmer, C.J., concurring in part and dissenting in part). ¶38 MERS was identified here as the lender’s “nominee” under the DOT and, in the terms of the statute, could likewise have been identified as the “designee.” The DOT states: “MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the beneficiary under this [DOT].” (Emphasis added.) Under the section entitled “Transfer of Rights in the Property” it states: “[t]he beneficiary of this [DOT] is MERS (solely as nominee for Lender and Lender’s successors and assigns) and the successors and assigns of MERS.” It goes on to provide that “Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this [DOT], but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this [DOT].” (Emphasis added.) This language clearly demonstrates that at the time the trust indenture was entered into, the parties designated MERS as the beneficiary of the DOT and granted MERS the authority to act as the beneficiary. 20 ¶39 As noted, the only limitation within the STFA definition of beneficiary is that the beneficiary “may not be the trustee.” Section 71-1-303(1), MCA. The Court acknowledges that “[i]t is undisputed that MERS is not the trustee” but nonetheless holds that MERS is actually the trustee by equating a dictionary definition of “nominee” with a definition of “trustee” from the STFA. Opinion, ¶ 18. However, this analysis strays from the clear language of both the STFA and the DOT. Here, MERS is not a trustee for purposes of the DOT, nor does it claim to be. Rather, Citizens Title & Escrow Co. is specifically designated as trustee. Thus, the limitation in the STFA does not exclude MERS as beneficiary.1 ¶40 When construing a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted. Where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all. Section 1-2-101, MCA. Since the definition of “beneficiary” under the STFA does not preclude designation of MERS as beneficiary, and the STFA, taken as a whole, does not preclude MERS from serving as a beneficiary if so designated, I would affirm the District Court’s conclusion that the “undisputed facts reflected in the documents as well as Montana statutes, [sic] establish that MERS, as beneficiary, had the statutory authority to appoint a successor trustee and could do so without notice to Plaintiffs as borrowers.” Given the broad 1Additionally, § 71-1-306, MCA, requires that a trustee be either an attorney licensed to practice law in Montana; a bank, trust company, or savings and loan association authorized to do business in Montana; or a title insurer or title insurance producer or agency authorized to do business in Montana. MERS is clearly not an attorney, a bank, a savings and loan association, or a title insurer. Under § 32-1-107, MCA, a “trust company” is defined as “any corporationthat is incorporated under the laws of this state” for one or more of a list of designated purposes. MERS is incorporated under the laws of Delaware, not Montana; nor is it even registered as an active corporation in this state. Aside from this issue, MERS does not meet any of the listed purposes for which it must be formed to be a “trust company.” Thus, MERS could not, even if it wanted to, be a trustee under the DOT. 21 language of the statute, I would not disregard the parties’ beneficiary designation absent legislative intent to the contrary. /S/ JIM RICE	November 25, 2013
ccc118de-72ec-4906-897a-6531aefb2ad4	Matter of L.W.N.	2013 MT 325N	DA 12-0593	Montana	Montana Supreme Court	DA 12-0593 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 325N IN THE MATTER OF: L.W.N., A Youth in Need of Care. APPEAL FROM: District Court of the Seventeenth Judicial District, In and For the County of Valley, Cause No. DV 07-004 Honorable John C. McKeon, Presiding Judge COUNSEL OF RECORD: For Appellant: Elizabeth Thomas, Attorney at Law; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General; Helena, Montana Anne Sheehy Yegen, Assistant Attorney General, Child Protection Unit; Billings, Montana Nick Murnion, Valley County Attorney; Glasgow, Montana Submitted on Briefs: October 16, 2013 Decided: November 5, 2013 Filed: __________________________________________ Clerk November 5 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 L.N., the Mother, appeals from the Order of Montana Seventeenth Judicial District Court, Valley County, terminating her parental rights to her son, L.W.N. We affirm. ¶3 The Mother’s two older brothers sexually abused her from when she was five to when she was sixteen. A.N., one of the brothers, is L.W.N.’s father. The Department of Public Health and Human Services (the Department) filed its initial petition for Emergency Protective Services and Temporary Investigative Authority on July 24, 2007, when L.W.N. was five days old. Both the Mother and L.W.N. were adjudicated as youth in need of care (YINC) and the Department was granted Temporary Legal Custody (TLC) over both. ¶4 The Mother and L.W.N. resided in foster care together until the Mother reached the age of majority, in 2009. After the Mother reached the age of majority, the court approved a treatment plan for the Mother, which included the Mother’s agreement to enter, with L.W.N., into the Florence Crittenton Home in Helena. After entering the Florence Crittenton Home, the Mother sought out equine therapy and attended at least three sessions. The equine therapist she worked with testified that there seemed to be “a conflict with Florence Crittenton’s willingness to allow her to proceed,” but that the therapy “seemed to be a really good fit.” The State could not pay for equine therapy on top of specialized talk therapy to deal with her sexual abuse history, and the therapist had to provide equine therapy pro bono. 3 ¶5 In 2011, the Mother was discharged from the Florence Crittenton Home, and the Department removed L.W.N. from her custody, because she was not making progress in talk therapy and the Department felt it was not in L.W.N.’s best interests to remain in her care unsupervised. Shortly thereafter, the Department filed its first petition to terminate the Mother’s parental rights. The District Court denied that petition and extended TLC in April 2011. In its order, the District Court required a new last-chance treatment plan be put in place. The plan mentioned the Mother’s preference for equine therapy but noted the Department did not have funding to pay for that therapy. The Mother never objected to the treatment plan, even though she knew that the plan did not provide the Department would pay for equine therapy. She signed the treatment plan on May 6, 2011. The court approved the treatment plan on May 17, 2011. ¶6 The Mother appeared to be making progress on the treatment plan. The Mother had an unsupervised overnight visit with L.W.N. at the end of October 2011. After the visit, L.W.N. reported that he and the Mother had “bumped bottoms” and he did not like it. No charges were filed against the Mother, but contact between the Mother and L.W.N. was reduced to twice weekly phone calls. ¶7 After this visit, the Mother’s progress in therapy ceased. In February 2012, the Department filed a second petition to terminate the Mother’s parental rights. In August 2012, the District Court issued an order terminating the Mother’s parental rights. ¶8 We review a district court’s decision to terminate parental rights for an abuse of discretion. In re E.Z.C., 2013 MT 123, ¶ 19, 370 Mont. 116, 300 P.3d 1174. This Court will not disturb a district court’s decision on appeal unless there is a mistake of law or a finding 4 of fact not supported by substantial evidence that would amount to a clear abuse of discretion. In re D.B., 2012 MT 231, ¶ 17, 366 Mont. 392, 288 P.3d 160 (internal quotation omitted). We review a district court’s findings of fact to determine whether they are clearly erroneous and its conclusions of law to determine whether they are correct. In re E.Z.C., ¶ 19. ¶9 A district court may order termination of a parent-child legal relationship when the court makes a finding that the child is an adjudicated YINC and both of the following exist: (1) an appropriate treatment plan that has been approved by the court has not been complied with by the parent, or has not been successful; and (2) the conduct or condition of the parent rendering the parent unfit is unlikely to change within a reasonable time. Section 41-3- 609(1)(f), MCA. Factors a court must consider in determining whether a parent’s conduct or condition rendering the parent unfit are likely to change include “emotional illness, mental illness, or mental deficiency of the parent of a duration or nature as to render the parent unlikely to care for the ongoing physical, mental, and emotional needs of the child within a reasonable time.” Section 41-3-609(2)(a), MCA. ¶10 The Mother alleges that the State violated its duty of good faith in executing the last- chance treatment plan. She argues that, since talk therapy had not worked for her, a good faith effort by the Department should have included paid-for equine therapy. ¶11 The Mother’s argument regarding the State’s good faith necessarily incorporates an allegation that the treatment plan was somehow inappropriate. “A parent who does not object to a treatment plan's goals or tasks waives the right to argue on appeal that the plan was not appropriate.” In re D.S.B., 2013 MT 112, ¶ 10, 370 Mont. 37, 300 P.3d 702 5 (quotation and citation omitted). Where a parent fails to object to a treatment plan in a timely manner, the parent waives any argument regarding the propriety of the treatment plan. See In re A.A., 2005 MT 119, ¶¶ 21-28, 327 Mont. 127, 112 P.3d 993. Here, the Mother never objected to the treatment plan. She signed the treatment knowing it did not provide that the State would pay for equine therapy. We will not consider the Mother’s argument regarding her treatment plan’s propriety, or the State’s good faith, because she failed to object to the treatment plan in a timely manner. ¶12 The Mother also argues that the District Court erred in finding that the Mother’s difficulty in addressing her history of abuse rendered her unfit and unlikely to change within a reasonable time. ¶13 When considering whether a parent’s conduct is likely to change within a reasonable time, “the court shall give primary consideration to the physical, mental, and emotional conditions and needs of the child.” Section 41-3-609(3), MCA. Here, despite having had a treatment plan in place since 2009, the Mother had shown little progress towards processing her abuse. The District Court found, based on the expert testimony of several therapists, that “it is not in the child’s best interest to wait the years necessary for [the Mother] . . . to appropriately process the abuse [she suffered] . . . .” The District Court found that, in the meantime, her failure to progress towards understanding her abuse was placing the child “at great risk of harm while under her sole care and custody.” The record provides substantial evidence to support these determinations. ¶14 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The issues 6 in this case are controlled by the statutes and precedent. The District Court did not abuse its discretion in terminating the Mother’s parental rights. Although these circumstances are tragic, the Mother’s healing cannot occur at the child’s expense. L.W.N. and his Mother need to move forward with separate lives. ¶15 Affirmed. /S/ MICHAEL E WHEAT We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ BRIAN MORRIS	November 5, 2013
04fa9379-7111-44ae-8f96-653ac68c39cb	Sangwin v. State	2013 MT 373	DA 12-0712	Montana	Montana Supreme Court	DA 12-0712 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 373 STEVE SANGWIN and AMY SANGWIN WICKS, Individually and For the Benefit of Their Minor Daughter, M.S., Plaintiffs and Appellees, v. STATE OF MONTANA and BLUE CROSS AND BLUE SHIELD OF MONTANA, INC., Defendants and Appellants. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. BDV-10-0566(C) Honorable Kenneth R. Neill, Presiding Judge COUNSEL OF RECORD: For Appellants: Maxon R. Davis; Davis, Hatley, Haffeman & Tighe, P.C.; Great Falls, Montana (for State of Montana) Michael F. McMahon; Stefan T. Wall; Bernard F. Hubley; McMahon, Wall & Hubley, PLLC; Helena, Montana (for Blue Cross and Blue Shield of Montana) For Appellees: Alexander (Zander) Blewett, III; Anders Blewett; Hoyt & Blewett, PLLC; Great Falls, Montana Submitted on Briefs: August 14, 2013 Decided: December 13, 2013 Filed: __________________________________________ Clerk December 13 2013 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Steve Sangwin is an employee of the State of Montana and a qualified subscriber and beneficiary of the State of Montana Employee Benefits Plan (Plan). Blue Cross and Blue Shield of Montana, Inc. (BCBS) administers the Plan. McKinley Sangwin, the daughter of Steve Sangwin and Amy Sangwin Wicks, is also a beneficiary under the Plan. This case arises out of a dispute over the denial of a preauthorization request for a medical procedure for McKinley on the grounds that the procedure was “experimental for research.” The State appeals the order of the Eighth Judicial District Court, Cascade County, granting the Sangwins’ motion for class certification. We affirm the court’s order defining the class, but reverse and remand with respect to the question certified for class treatment. ISSUES ¶2 A restatement of the issues on appeal is: ¶3 1. Did the District Court abuse its discretion in certifying the class under Rule 23(a), Montana Rules of Civil Procedure? ¶4 2. Did the District Court abuse its discretion in certifying the class under Rule 23(b), Montana Rules of Civil Procedure, and specifying for class treatment the question of whether the State breached its contract of insurance with the plaintiffs? FACTUAL AND PROCEDURAL BACKGROUND ¶5 Steve Sangwin is a teacher at the Montana School for the Deaf and Blind in Cascade County, Montana. As an employee of the State, Steve is a qualified subscriber and beneficiary of the Plan. Steve and Amy’s daughter, McKinley, is also a beneficiary under the Plan. McKinley was diagnosed with a severe degenerative disk disease, and 3 when she was sixteen years old, her physicians recommended that she undergo artificial disk replacement surgery. The Sangwins requested preauthorization for the procedure from BCBS, the Plan administrator. BCBS denied the request in an October 8, 2009 letter and explained that, because McKinley was a minor, BCBS considered the operation “investigational.” The Plan expressly excluded investigational procedures. The letter contained a reference to the exclusions and limitations section of the Employee Benefits Summary Plan Document, which stated: “The following services and expenses are not covered: Services or procedures that are experimental procedures, as defined in Chapter 9, which are for research.”1 Under Chapter 9, an experimental procedure or service is defined as a procedure or service that “is experimental, investigational, unproven, or not a generally acceptable medical practice in the predominate [sic] opinion of independent experts utilized by the administrator of each plan.” ¶6 The Sangwins appealed the decision to the BCBS Medical Review Staff. In a December 8, 2009 letter, BCBS explained that the Medical Review Staff and Associate Medical Director had reviewed the documentation related to the preauthorization request and had decided to uphold the original denial. The Associate Medical Director further clarified that artificial disks were not Food and Drug Administration approved for patients under the age of 18. The Sangwins then filed an appeal with the State of Montana. After a meeting of the Health Care and Benefits Division appeals committee on May 6, 2010, the State upheld the denial, stating that there was “no documentation 1 In December 2011, the State revised its Employee Benefits Summary Plan Document to eliminate the phrase “which are for research.” 4 from the Food and Drug Administration showing this procedure is appropriate for someone under the age of 18.” Thus, the State considered it an experimental or investigational procedure that was specifically excluded under the Plan. After the denial, the Sangwins nonetheless proceeded with the proposed surgery, which was successful, incurring medical bills exceeding $55,000. ¶7 On June 8, 2010, the Sangwins initiated this action by filing a complaint in the Eighth Judicial District Court, Cascade County. The Sangwins filed an amended complaint in November 2010 and set forth five counts. The only relevant count for the purposes of this appeal is the request for certification of a class action. The Sangwins alleged that McKinley’s artificial disk replacement surgery was not experimental or for research. They further alleged that BCBS and the State “have been denying the claims of participants and beneficiaries based on the experimental exclusion for research for years and years when the surgeries and other procedures were in no way meant for research and when, at best, the experimental exclusion for research is ambiguous and must be construed against Defendants.” The Sangwins defined class members as “other participants and/or beneficiaries of any such Plan in Montana which have had their employee benefits denied by the State of Montana based on the experimental exclusion for research” in the past eight years. ¶8 On September 20, 2012, the District Court granted the Sangwins’ motion for class certification. On November 23, 2012, the District Court entered an order defining the class as: 5 “All persons who were participants, subscribers and/or beneficiaries of the State of Montana Employee Health Plan, including the State of Montana’s Blue Cross Blue Shield Managed Care Plan, the Traditional Indemnity Plan and any other health plan affiliated with the State of Montana, who have had medical benefits denied by BCBS and/or the State of Montana based on the contention that the benefits were experimental, investigational, unproven, or not generally acceptable medical practice under the language of the State of Montana Employee Benefits Summary Plan Document unless such medical benefits were ‘for research’ from January 1, 2003, through December 18, 2011. The class includes those individuals whose claims were denied prior to medical benefits being rendered as well as those individuals whose claims were denied after the medical benefits were rendered.” The District Court certified four claims for class treatment, including whether the State breached its contract, whether BCBS acted as an agent of the State and acted wrongfully, whether BCBS intentionally interfered with the contract between the State and Plaintiffs, and whether BCBS acted with malice. The District Court’s order directed BCBS and the State to provide the Sangwins’ counsel with the names and last known addresses of every potential class member. ¶9 On September 19, 2012, the District Court granted the Sangwins’ motion for partial summary judgment and determined the Sangwins could pursue general tort damages against the State if they prevailed on their claim for breach of the covenant of good faith and fair dealing. That ruling is not subject to this interlocutory appeal. BCBS filed its notice of appeal on November 28, 2012, but later entered into a settlement with the Sangwins. BCBS is therefore not a party to this appeal. This being so, of the four issues certified for class treatment, the sole issue remaining so certified is whether the 6 State breached its contract. The State filed its notice of appeal on December 6, 2012. The State challenges the District Court’s order certifying the class. STANDARD OF REVIEW ¶10 We review a district court’s decision on a motion for class certification for an abuse of discretion. Chipman v. N.W. Healthcare Corp., 2012 MT 242, ¶ 17, 366 Mont. 450, 288 P.3d 193. The question is not whether this Court would have reached the same decision, but whether the district court acted arbitrarily without conscientious judgment or exceeded the bounds of reason. Chipman, ¶ 17 (quotation marks omitted). When reviewing a decision on class certification, we afford the trial court the broadest discretion because it “is in the best position to consider the most fair and efficient procedure for conducting any given litigation.” Jacobsen v. Allstate Ins. Co., 2013 MT 244, ¶ 25, 371 Mont. 393, 310 P.3d 452 (quoting Chipman, ¶ 17). DISCUSSION ¶11 1. Did the District Court abuse its discretion in certifying the class under Rule 23(a), Montana Rules of Civil Procedure? ¶12 The class action is “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Comcast Corp. v. Behrend, ___ U.S. ___, ___, 133 S. Ct. 1426, 1432 (internal citation omitted). Departure from the usual rule is justified if the class representative is part of the class and has the same interest and injury as the class members. Jacobsen, ¶ 27. “[C]lass action suits save the resources of courts and parties by permitting an issue potentially affecting every [class 7 member] to be litigated in an economical fashion . . . .” Jacobsen, ¶ 27 (internal citation omitted). ¶13 The propriety of a class action is governed by Rule 23 of the Montana Rules of Civil Procedure. Because the Montana version of Rule 23 is identical to the corresponding federal rule, federal authority on the issue of class certification is instructive. Chipman, ¶ 43. Rule 23(a) sets forth four prerequisites necessary to sustain a class action: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. ¶14 The party seeking certification bears the burden of establishing each element of Rule 23(a). Chipman, ¶ 43 (citation omitted). Failure to establish the requisite elements is fatal to class certification. Chipman, ¶ 43. In addition to satisfying the requirements of Rule 23(a), a party must satisfy at least one of the provisions of Rule 23(b). M. R. Civ. P. 23(b). ¶15 When deciding whether to certify a class, a district court should not assess any aspect of the merits unrelated to a Rule 23 requirement. Chipman, ¶ 44. It “may be necessary for the court to probe behind the pleadings before coming to rest on the certification question.” Comcast Corp., ___ U.S. at ___, 133 S. Ct. at 1432 (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, ___, 131 S. Ct. 2541, 2551 (2011) (internal quotation omitted)). “[C]ertification is proper only if the trial court is satisfied, after a 8 rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied.” Comcast Corp., ___ U.S. at ___, 133 S. Ct. at 1432 (quoting Wal-Mart, 564 U.S. at ___, 131 S. Ct. at 2551 (internal quotation omitted)). A “rigorous analysis” frequently entails some “overlap with the merits of the plaintiff’s underlying claim” because the “class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff’s cause of action.” Comcast Corp., ___ U.S. at ___, 133 S. Ct. at 1432 (quoting Wal-Mart, 564 U.S. at ___, 131 S. Ct. at 2551-52 (internal quotation marks omitted)). Actual, not presumed, conformance with Rule 23(a) is indispensable. Wal-Mart, 564 U.S. at ___, 131 S. Ct. at 2551 (internal citation omitted). ¶16 In evaluating the Rule 23 requirements, the District Court properly looked beyond the pleadings to the extent necessary to determine the propriety of class certification. The District Court reviewed numerous briefs, motions, objections, and over 150 of the proposed class members’ preauthorization request denial letters. The District Court also held a hearing on the motion for class certification where attorneys for the Sangwins, the State, and BCBS appeared and presented arguments. We hold that the District Court did not abuse its discretion in certifying this lawsuit as a class action. Each relevant aspect of the Rule 23(a) inquiry is discussed below in further detail. A. Rule 23(a)(1)—Numerosity ¶17 The State does not dispute that the number of Plan participants, subscribers, or beneficiaries denied preauthorization requests for procedures that were allegedly experimental, investigational, unproven, or not generally acceptable meets the numerosity 9 requirement. Rule 23(a)(1) requires a proposed class to be “so numerous that joinder of all members is impracticable.” “[P]laintiffs must present some evidence of, or reasonably estimate, the number of class members.” Diaz v. Blue Cross & Blue Shield, 2011 MT 322, ¶ 31, 363 Mont. 151, 267 P.3d 756. Though the parties dispute the number of potential class members and the requirements for inclusion in the class, the District Court concluded it was “clear that the numerosity element is met because the State and BCBS denied benefits based upon the ‘experimental for research’ exclusion in the State Plan and Managed Care Supplement Plan well over one-hundred times.” The District Court determined the large number of potential class members made joinder impracticable. We conclude the District Court did not abuse its discretion in concluding that the Sangwins have successfully satisfied the numerosity requirement. B. Rule 23(a)(2)—Commonality ¶18 The State does not dispute that the commonality requirement is met. The element of commonality requires “questions of law or fact common to the class.” M. R. Civ. P. 23(a)(2). Though the requirement has historically placed a relatively low burden on plaintiffs, Jacobsen, ¶ 31, the U.S. Supreme Court “significantly tightened the commonality requirement” in Wal-Mart. Chipman, ¶ 47. The claims of class members and class representatives “must depend upon a common contention” that is “of such a nature that it is capable of classwide resolution,” “mean[ing] that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart, 564 U.S. at ___, 131 S. Ct. at 2551. 10 ¶19 The District Court determined that the class members raised common questions of fact and law. The District Court identified both a uniform course of conduct by the State and BCBS in denying benefits based upon the “experimental for research” exclusion and a common question of law of whether such denial was unlawful. The District Court concluded that the questions of fact and law raised by the Sangwins were sufficient to satisfy the commonality requirement and support class certification. Though the District Court relied upon the standard Montana followed prior to Wal-Mart, this requirement is met even under Wal-Mart’s more stringent standard. All class members are connected by the denial of a preauthorization request based on the same exclusion. These common facts are related to the ultimate resolution of the dispute, namely the determination of whether such denial was wrongful. ¶20 We conclude that the court correctly found that the class members are connected by the denial of a preauthorization request based upon the same exclusion, and that this common connection satisfies the commonality requirement. For the reasons set forth below, however, we do not agree that there exists a predominant question of whether the denial was wrongful. C. Rule 23(a)(3)—Typicality ¶21 To satisfy the typicality element, a plaintiff must demonstrate that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” M. R. Civ. P. 23(a)(3). The typicality requirement is designed to ensure that the interests of the named plaintiffs align with the interests of the class members, “the rationale being 11 that a named plaintiff who vigorously pursues his or her own interests will necessarily advance the interests of the class.” Mattson v. Mont. Power Co., 2012 MT 318, ¶ 21, 368 Mont. 1, 291 P.3d 1209 (Mattson III) (citing Chipman, ¶ 53). Typicality is not a demanding standard, and a named plaintiff’s claim is typical if it “stems from the same event, practice, or course of conduct that forms the basis of the class claims and is based upon the same legal or remedial theory.” Diaz, ¶ 35 (quotation omitted; emphasis in original). The event, practice, or course of conduct need not be identical. Diaz, ¶ 35. The typicality requirement “tends to merge” with the commonality requirement. Jacobsen, ¶ 51 (internal citation omitted). It “prevents plaintiffs from bringing a class action against defendants with whom they have not had any dealings.” Jacobsen, ¶ 51 (citing Diaz, ¶ 35). ¶22 The District Court concluded the Sangwins successfully established typicality. It was irrelevant to the District Court that McKinley had surgery despite the preauthorization denial because the Sangwins still suffered the same harm as the class members. The District Court found a patterned course of conduct similar to the course of conduct in Diaz. Typicality was satisfied in Diaz because the State’s practice of employing its exclusion to third-party liability coverage constituted an event, practice, or course of conduct that the class representatives shared with the class. Diaz, ¶ 36. ¶23 The State argues that the Sangwins mistakenly equate commonality with typicality, and that the facts behind the Sangwins’ claims are unique. Specifically, it notes that the Sangwins decided to go forward with treatment and incur medical bills, 12 presumably unlike many potential plaintiffs, and that McKinley was the only underage patient for whom coverage was sought for implanting artificial intervertebral discs from 2003 to 2010. The State argues no typicality exists because the procedures denied by BCBS varied greatly and some denials were made properly. According to the State, this requirement is not met because each denial will require individual review. ¶24 The Sangwins contend “[t]he State has simply ignored the law on typicality under almost identical facts,” including our decision in Diaz. The Sangwins acknowledge that facts vary among the class members. For example, the amount of damages, the desired procedure, and the timing of the denial inevitably vary. However, they argue that the Sangwins had the same dealings with the State as the putative class members, and that they all were wrongly denied benefits under the same exclusion, an exclusion the State misconstrued and misapplied in the same manner for each claim. The Sangwins argue typicality is not destroyed by the individual assessment of damages or by some variation between the claims of the Sangwins and the class members. ¶25 In its reply brief, the State counters that the Sangwins mistakenly rely on Diaz when the issues and relief sought differ. The State again argues that the Sangwins’ decision to proceed with the surgery and incur medical bills destroys typicality. According to the State, the District Court did not engage in the required “rigorous analysis.” ¶26 The State misses the point of the typicality requirement by raising issues with the specific facts of the Sangwins’ claim. “Typicality refers to the nature of the claim or 13 defense of the class representative, and not to the specific facts from which it arose or the relief sought.” Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir. 1992) (citation omitted). The Sangwins are members of the class as defined by the District Court. McKinley was denied preauthorization for a medical procedure under the “experimental for research” exclusion. The Sangwins allege the State systematically applied the exclusion to wrongfully deny benefits. The Sangwins’ claim is based on the same legal theory as the proposed class members’ claims. Despite the State’s contentions, the specifics of McKinley’s injuries or treatment do not render her atypical of the class. The District Court conducted a “rigorous analysis;” it probed beyond the pleadings and determined this element actually was met. We conclude the District Court did not abuse its discretion in concluding that the Sangwins have met the typicality requirement. D. Rule 23(a)(4)—Adequate Representation ¶27 The State does not dispute that this requirement is met. Montana Rule of Civil Procedure 23(a)(4) requires that “the representative parties will fairly and adequately protect the interests of the class.” Adequate representation requires that the named representatives’ attorney is qualified, competent, and able to conduct the litigation, and that the named representatives’ interests are not antagonistic to the class interests. Chipman, ¶ 57 (citation omitted). ¶28 The District Court determined the law firm of Hoyt & Blewett PLLC was qualified and competent counsel. The District Court further determined the Sangwins’ interests were aligned with the class’s interests. We conclude that counsel will 14 adequately represent the class, and that no conflicts exist between the Sangwins and the class members. ¶29 2. Did the District Court abuse its discretion in certifying the class under Rule 23(b), Montana Rules of Civil Procedure, and specifying for class treatment the question of whether the State breached its contract of insurance with the plaintiffs? ¶30 Having determined that the Rule 23(a) prerequisites are satisfied, we now turn our inquiry to Rule 23(b). The District Court determined that the proposed class met the two requirements of Rule 23(b)(3). It is on the basis of the requirements of this rule that we reverse and remand with respect to the certified question. ¶31 Rule 23(b)(3) requires a court to “find[] that the questions of law or fact common to the class members predominate over any questions affecting only individual members.” In addition, a court must find that “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” M. R. Civ. P. 23(b)(3). Matters pertinent to these findings include the class members’ interests in individually controlling separate actions, the extent and nature of any already existing litigation concerning the controversy, the desirability or undesirability of concentrating the litigation in a particular forum, and likely difficulties in managing a class action. M. R. Civ. P. 23(b)(3)(A)-(D). A central concern of the Rule 23(b)(3) predominance test is whether adjudication of common issues will help achieve judicial economy. Mattson III, ¶ 39 (citing Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 944 (9th Cir. 2009) (internal quotation omitted)). 15 ¶32 The District Court determined class certification was appropriate because class members may not have the knowledge or resources to bring the claims individually or may be subject to the requirement of exhausting administrative remedies prior to seeking judicial relief. The District Court noted that there was no other litigation concerning the issue, and that a class action suit would be conducive to complex healthcare litigation. After acknowledging the existence of individual issues, such as damages, the District Court concluded that common questions of law or fact nonetheless predominated because BCBS and the State engaged in systematic conduct and the Sangwins and the class members suffered the same or similar injuries. ¶33 The State argues the District Court failed to make any findings of fact for Rule 23(b)(3) purposes. The State contends that common issues do not predominate because there were 158 temporally different decisions, and preauthorization denials and damages will need to be investigated individually. ¶34 The Sangwins contend that individual calculation of damages should not preclude class determination when common liability issues predominate. They further argue the District Court’s finding was supported by its “determination that the State’s systematic conduct of misconstruing the exclusion and denying claims under the same exclusion is the predominant issue of law and fact and that Sangwin and every putative plaintiff suffered a similar injury.” The State counters that the District Court only superficially analyzed the predominance factors and failed to meet the federal standard set forth in Wal-Mart and Comcast. 16 ¶35 As indicated, the Sangwins contend the court properly certified the question of whether the State breached its contract with the plaintiffs, and that common liability issues predominate. In this connection, they maintain in their response brief that “[i]f individuals’ claims were properly denied because the medical service was ‘for research,’ those members will not be a part of the class specially defined by the [District Court.]” Otherwise stated, only those individuals whose requested services were not for research will remain in the class, and the court can then decide if the denial of services to these persons constituted a breach of contract. Herein lies the problem with the question certified by the District Court for class resolution. ¶33 In order to make the determination of whether an individual’s claims were properly denied, each claim—together with its underlying documentation including the Consent Form and supporting affidavits—will have to first be separately analyzed. As the Sangwins concede, this will have to be done before there can be a determination as to whether the individual will be part of the class, and it will clearly have to be done before there can be an assessment of whether the State breached its contract with that individual. ¶34 Because factual questions must be answered on an individual basis before the plaintiffs will be in a position to establish liability, the predominance requirement under Rule 23(b)(3) is not met. In re Bank of Am. Home Affordable Modification Program (HAMP) Contract Litig., 2013 U.S. Dist. LEXIS 126028, 30-39 (D. Mass., Sept. 4, 2013) (where factual questions are not susceptible to routine resolution and must be answered on an individual basis before the plaintiffs can establish liability, predominance is not 17 satisfied). Again, Rule 23(b)(3) requires a court to “find[] that the questions of law or fact common to the class members predominate over any questions affecting only individual members.” Common issues must therefore be more prevalent than individual issues. While we agree with the plaintiffs that the necessity to assess damages on an individual basis does not necessarily defeat class action treatment, here there is undeniably a preliminary need for an individual determination of whether each individual qualifies as a class member. As we observed in Chipman, ¶ 48, class determination is appropriate when the class members’ claims “depend on a common contention that is capable of classwide resolution.” The question certified by the District Court is whether the State breached its contract with the plaintiffs. This question cannot be answered until after individual assessments are made; therefore, the certified question is incapable of being resolved on a classwide basis. ¶35 This is not to say that the class itself was improperly certified. Rather, it is the formulation of the certified issue that results in individual issues predominating over common questions. There is seemingly one common issue of law critical to the entire class, and that is the construction of the State Plan’s exclusion language. The construction of the language in the exclusion and definitions sections of the Plan may well present a common issue of law that would be appropriate for class consideration. However, it is not the province of this Court to formulate the certified question. ¶36 For the foregoing reasons, we decline to disturb the District Court’s certification of the class under the Rule 23(a). However, we reverse the District Court’s certification 18 of the plaintiffs’ claim as to “[w]hether the State of Montana breached its contract” because it fails to satisfy the predominance requirement of Rule 23(b)(3). We remand to allow the District Court to consider whether a particular issue may be certified for which individual questions would not predominate. CONCLUSION ¶37 Affirmed in part and reversed in part. /S/ PATRICIA COTTER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ BRIAN MORRIS Justice Laurie McKinnon, concurring in part and dissenting in part. ¶38 The Court reverses the District Court’s certification of a class claim—namely, “[w]hether the State of Montana breached its contract”—because this claims fails to satisfy the predominance requirement of Rule 23(b)(3). Opinion, ¶ 36. I agree with this holding. Our conclusion that “factual questions must be answered on an individual basis before the plaintiffs will be in a position to establish liability,” Opinion, ¶ 34, is correct and is fatal to class certification under Rule 23(b)(3)’s requirement “that the questions of 19 law or fact common to the class members predominate over any questions affecting only individual members.” ¶39 The Court, however, affirms the District Court’s certification of the class under Rule 23(a). Opinion, ¶ 36. I dissent from this holding. I do not agree that the requirements of commonality and typicality have been met, and I also disagree with our conclusion that class certification is appropriate before a plausible common question of law or fact has even been identified. Although the Court reverses the District Court for certifying the question of whether the State breached its contract with the proposed class members, finding that this question “is incapable of being resolved on a classwide basis,” Opinion, ¶ 34, the Court nevertheless determines that commonality has been met because “[a]ll class members are connected by the denial of a preauthorization request based upon the same [policy] exclusion,” Opinion, ¶ 19, and that typicality has been met because the Sangwins’ claim “is based on the same legal theory as the proposed class members’ claims,” Opinion, ¶ 26.2 It is my opinion that the Court goes astray in determining that a class action may be certified despite the absence of a common question of law or fact capable of generating an answer meaningful to the litigation. I cannot reconcile our analysis with that set forth in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, 131 S. Ct. 2541 (2011), and other decisions evaluating compliance with Rule 23’s requirements. ¶40 The State’s liability to the Sangwins for insurance benefits “arises from the terms of the insurance contract, and its contractual relationship with its insured.” Farmers 2 Other than breach of contract, I have been unable to discern any other legal theory offered by the Sangwins. 20 Alliance Mut. Ins. Co. v. Holeman, 1998 MT 155, ¶ 21, 289 Mont. 312, 961 P.2d 114. “[I]f the language is clear and explicit this Court may not rewrite an insurance contract, but must enforce it as written.” Lee v. USAA Cas. Ins. Co., 2001 MT 59, ¶ 30, 304 Mont. 356, 22 P.3d 631. The Plan expressly excluded “experimental procedures or services,” which are defined in Chapter 9 of the Plan’s benefits as follows: Treatment, which is considered experimental because it meets one of the following criteria: 1. Prescription drugs not approved by the FDA to be lawfully marketed for the proposed use, and it is not identified in the American Hospital Formulary Service, the AMA Drug Evaluation, or the Pharmacopoeia as an appropriate use. 2. It is subject to review or approval by an institutional review board (meaning that a hospital considered it experimental and put it under review to meet federal regulations, or review is required and defined by federal regulations, particularly those of the FDA or Department of Health and Human Services). 3. It is the subject of an ongoing clinical trial that meets the definition of a Phase 1, 2, or 3 clinical trial set forth in FDA regulations, regardless of whether it’s an FDA trial. 4. It has not been demonstrated through prevailing, peer-reviewed medical literature to be safe and effective for treating or diagnosing the condition or illness for which its use is proposed. 5. The predominant opinion among experts as expressed in the published authoritative literature is that further research is necessary in order to define safety, toxicity, and effectiveness (or effectiveness compared with conventional alternatives), and/or that usage should be substantially confined to research settings. 6. It is not a covered benefit under Medicare as determined by the Centers for Medicare and Medicaid Services (CMMS, formerly HCFA) because it is considered experimental, investigational, or unproven. 21 7. It is experimental, investigational, unproven, or not a generally acceptable medical practice in the predominate opinion of independent experts utilized by the administrator of each plan. 8. It is not experimental or investigational in itself pursuant to the above and would not be medically necessary, but it is being provided in conjunction with the provision of a treatment, procedure, device, or drug which is experimental, investigational, or unproven. ¶41 McKinley Sangwin, a beneficiary under the Plan, was denied preauthorization because she was a minor and the procedure for which she sought coverage—artificial disc replacement—was considered experimental. It was explained to the Sangwins that artificial discs were not FDA-approved for patients under 18 and that the procedure was therefore excluded from coverage. The denial letter stated: “Per BCBSMT medical policy, the patient must be greater than 18 years of age and skeletally mature to qualify for benefits. Therefore, this is considered investigational. There are significant questions remaining about potential long-term complications in such a young patient.” ¶42 Of the 158 claims that BCBS denied because they were for experimental procedures, McKinley’s claim is the only one denied for a minor seeking an artificial disc replacement. Dr. M.E. Berner, BCBS’s Medical Director, provided his affidavit setting forth the variety of services, supplies, drugs, or devices that were denied because they were considered to be investigational: Clinical Trial - Chemotherapy (MRI-Echo, ECG, CT Scan, Labs, UA); PET Scan (breast cancer, ovarian cancer, renal cell cancer, prostate cancer, bladder cancer, lung nodules); Ketamine; GlucoWatch; Hyperbaric Oxygen Pressurization; Mercury Detoxification and Chelation Therapy; Endocinch Procedure (gastroesophageal reflux disease); Group Therapy and 22 Craniosacral Therapy; Outpatient Pain Clinic; Lengthen Roux Limb of Small Intestine; Cool Touch Laser Treatment (acne); Botox injections (myofacial pain syndrome, headache, migraines, neck pain, neck spasm, whiplash, back pain, neuromuscular pain, Raynaud’s disease, excessive salivation); Orthotripsy ESW (Plantar Fasciitis); Allergen Specific Food lgG Quantitative or Semiquantitive Testing; Neuromuscular Stimulator; Extracorporeal Shockwave Therapy; Hyperthermic Procedure; IV Therapy with Albumin; F-Scan; gait analysis; Phentermine; NM III 2 Channel Muscular Stimulator (muscle strengthening); Physical Performance Test; L4-5 Anterior Exposure Artificial Disc Placement; Genetic Testing; Computerized Dynamic Posturography; Sclerotherapy; Physical Therapy (chronic pelvic pain syndrome and chronic prostatitis); Laser Treatment (Rosacea); Hormone Pellet Implant; Virtual Colonoscopy; High-Dose Indium-111 (Octreotide) Therapy; Ocular Motor Therapy; BRAVO pH Study (catheter-free, wireless esophageal monitoring); Neurofeedback; X STOP Procedure; Meniett Device (Menieres disease); Nucleoplasty (Percutaneous Diskectomy) with Fluoroscopic Guidance; Sublingual Immunotherapy; LifeVest Automatic Wearable Defibrillation System; Pulsed Dye Laser Treatments (acne); MRI (breast); Second Radiofrequency Ablation and Travel (ablation of metastatic liver tumors); Avastin (ovarian cancer); Cognitive Therapy; CT Angiogram-Coronary (coronary arteries, atypical chest pain, abnormal stress test); Contrast-Enhanced Computed Tomographic Angiography; Phototherapeutic Keratectomy (PTK) (recurrent corneal erosions); Cervical Disk Replacement; Y-90 Mesenteric Mapping (cancer); Mobile Cardiac Outpatient Telemetry (MCOT) (event monitor); Synvisc Injection (hip joint); Oral Immunoglobulin Therapy (Norwalk Virus); Rituxan (Lupus); NESS L300 Foot Drop System Lower Extremity Stimulator Unit (muscle strengthening); Laparoscopic Cryoablation (renal mass); B-39 Study (breast cancer); Reclast (osteoporosis); Internal Radiation Therapy; Continuous Passive Motion Device (shoulder); Implantable Neurostimulator (occipital neuralgia); Thermography (breast screening); Posture Pump; Biofeedback (bladder outlet obstruction); Steriotactic Radiosurgery (metastic phyllodes tumor of breast); Remicade (arthritis); Magnetic Treatment (incontinence); Collection & Storage of Peripheral Blood Stem Cells (brain tumors); X-Stop (distraction/decompression device); Stereotactic Body Radiation Therapy (metastatic lung tumors); Artificial Disc; Excimer Laser Treatment 23 (vitiligo); Avastin; BRCA Testing (genetic testing); Zometa (bisphosphonates); IMRT (radiation therapy); Vest Compression Device/Supplies (secretions and upper respiratory infection); Neuromuscular Electrical Stimulation Device (muscular weakness); Stereotactic Surgery (brain surgery to treat melanoma); BEST Clinical Trial; Sublingual Allergy Drops; IMRT (breast); Avastin and Abraxane (ovarian cancer); Transcatheter Closure of PFO; Stem Cell Transplant; Cetuximab (metastatic cholangiocarcinoma); Pharmacogenetic Testing; Occipital Nerve Stimulator. ¶43 I have set forth the above factual matters because we are required to “probe behind the pleadings” to the extent necessary to decide the certification question.” Gen. Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 160, 102 S. Ct. 2364, 2372 (1982). “[A]ctual, not presumed, conformance with Rule 23(a) remains . . . indispensable.” Falcon, 457 U.S. at 160, 102 S. Ct. at 2372. Rigorous analysis is necessary because, as has been observed, “ ‘[a]ny competently crafted class complaint literally raises common “questions.” ’ ” Wal-Mart, 131 S. Ct. at 2551 (brackets in original) (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 131-32 (2009)). Examples of such questions include: “Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay? Is that an unlawful employment practice? What remedies should we get?” Wal-Mart, 131 S. Ct. at 2551. Reciting these sorts of questions “is not sufficient to obtain class certification.” Wal-Mart, 131 S. Ct. at 2551. “Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury,” which “does not mean merely that they have all suffered a violation of the same provision of law”—or, as here, the same provision of a contract. Wal-Mart, 131 24 S. Ct. at 2551 (internal quotation marks omitted). Because the class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only, Wal-Mart, 131 S. Ct. at 2550, the class action device is appropriate only where “[t]he issues involved are common to the class as a whole” and “[t]hey turn on questions of law [or fact] applicable in the same manner to each member of the class,” Califano v. Yamasaki, 442 U.S. 682, 701, 99 S. Ct. 2545, 2557 (1979). ¶44 Here, although the District Court and this Court conclude that there exists “a uniform course of conduct by the State and BCBS in denying benefits based upon the ‘experimental for research’ exclusion,” Opinion, ¶ 19, alleging that the State uniformly applied a provision of the insurance contract, absent anything more, does not create a common question of law or fact. A common question of law or fact is not generated merely by the Sangwins’ allegations that they are part of a group of insureds who have had a particular contract provision applied adversely to them. Moreover, the Sangwins’ allegation that they were wrongfully denied coverage does not advance their claim that a class action is appropriate. No legal theory, programmatic exclusion, policy, pattern, practice, or conduct that could establish a wrong or liability to the class as a whole has been alleged. The Sangwins’ contention is indistinguishable from any insured who alleges that she was wrongfully denied benefits under the Plan and who, for that reason alone, proposes a class action and asserts commonality by virtue of being an insured. ¶45 A review of the Plan’s applicable policy provisions and the reasons for denials clearly demonstrates that the language of the “experimental”-exclusion provision is both 25 detailed and factually driven, and that the denials of the 158 claims were based on assessments of each individual illness and the type of procedure for which coverage was sought. The Court recognizes this fact in observing that, “[i]n order to make the determination of whether an individual’s claims were properly denied, each claim— together with its underlying documentation including the Consent Form and supporting affidavits—will have to first be separately analyzed.” Opinion, ¶ 33. Yet, contrary to the requirement of a “rigorous analysis,” Comcast Corp. v. Behrend, 569 U.S. ___, 133 S. Ct. 1426, 1432 (2013) (internal quotation marks omitted), nothing has been alleged or demonstrated here which supports a determination by the District Court that a program or practice exists for the denials, thereby generating a common question. ¶46 The facts of this case are distinguishable from our prior cases in which we have held that a class action is appropriate. See McDonald v. Washington, 261 Mont. 392, 862 P.2d 1150 (1993) (common question of law as to whether the defendant breached a duty owed to class members to provide adequate water and service rendered class action appropriate); Ferguson v. Safeco Ins. Co. of Am., 2008 MT 109, 342 Mont. 380, 180 P.3d 1164 (class action appropriate to determine whether insurer programmatically breached the duty to conduct a made-whole determination prior to subrogation); Diaz v. Blue Cross & Blue Shield of Mont., 2011 MT 322, 363 Mont. 151, 267 P.3d 756 (whether employees’ made-whole rights were violated by the State’s programmatically failing to conduct a made-whole analysis before exercising subrogation rights was appropriate for class action); Chipman v. Northwest Healthcare Corp., 2012 MT 242, 366 Mont. 450, 26 288 P.3d 193 (whether an enforceable standardized group employment contract exists and what the parties’ legal obligations are under the contract would generate common answers applicable to all class members); Mattson v. Mont. Power Co., 2012 MT 318, 368 Mont. 1, 291 P.3d 1209 (whether the power company operated Kerr Dam unreasonably and caused unreasonable damage to shoreline properties was incapable of being resolved on an individual basis and was appropriate as a class action). ¶47 In all of these cases, there was a question of law or fact common to each member of the class that advanced, to some degree, the litigation of each class member’s claim. In Ferguson and Diaz, the insurer’s obligation of to conduct a made-whole analysis prior to subrogation applied to everyone and existed whether or not the insurance contract addressed made-whole rights. The common question was generated by the insurer’s alleged programmatic conduct of subrogating first, ahead of the insured’s made-whole rights. In McDonald, everyone in the class was drinking the same water in Butte. In Mattson, the dam operator could select only one elevation at which to maintain the lake at any given time, and that elevation necessarily applied to and affected all shoreline properties simultaneously. In Chipman, common questions concerning the employment contract applied to everyone equally and concerned coverage issues that were not factually driven by individual circumstances. The answer to the various common questions advanced the litigation as a whole and, to some degree, each class member’s claim. The distinction to be drawn between these cases and the current dispute is that, here, the Sangwins have presented no common contention “that it is capable of classwide 27 resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart, 131 S. Ct. at 2551. Merely being “connected” by the denial of a preauthorization request based on the “experimental” exclusion, Opinion, ¶ 20, does not generate a common question where, as the Court acknowledges, the question of whether class members’ claims were improperly denied under this exclusion must be made on an individual basis, Opinion, ¶¶ 33-34. ¶48 I understand the desire of the Plaintiffs to have this matter proceed as a class action. The denial of benefits for an admittedly successful medical procedure on behalf of a child cries out for a remedy and a method to prevent future hardship. Such a plea, however, without anything more than a denial under a particular policy exclusion, does nothing to further the requirements of Rule 23(a). In Falcon, for example, the Supreme Court acknowledged that “racial discrimination is by definition class discrimination.” 457 U.S. at 157, 102 S. Ct. at 2370. However, the Supreme Court concluded: [T]he allegation that such discrimination has occurred neither determines whether a class action may be maintained in accordance with Rule 23 nor defines the class that may be certified. Conceptually, there is a wide gap between (a) an individual’s claim that he has been denied a promotion on discriminatory grounds, and his otherwise unsupported allegation that the company has a policy of discrimination, and (b) the existence of a class of persons who have suffered the same injury as that individual, such that the individual’s claim and the class claims will share common questions of law or fact and that the individual’s claim will be typical of the class claims. For respondent to bridge that gap, he must prove much more than the validity of his own claim. Even though evidence that he was passed over for promotion when several less deserving whites were advanced may support the conclusion that respondent was denied the promotion because of his national origin, such evidence would not necessarily justify the 28 additional inferences (1) that this discriminatory treatment is typical of petitioner’s promotion practices, (2) that petitioner’s promotion practices are motivated by a policy of ethnic discrimination that pervades petitioner’s Irving division, or (3) that this policy of ethnic discrimination is reflected in petitioner’s other employment practices, such as hiring, in the same way it is manifested in the promotion practices. Falcon, 457 U.S. at 157-58, 102 S. Ct. at 2370-71 (footnote omitted). ¶49 As indicated, the crux of this case is the lack of a question of law or fact common to the class, as required by Rule 23(a)(2), and whether the Sangwins’ claim is typical of the class claims pursuant to Rule 23(a)(3). Although the State argues the impropriety of class certification primarily under the headings of “typicality” and “predominance,” the State’s substantive arguments include discussions of “commonality.” In this regard, we have recognized that the requirements of Rule 23 tend to merge given the facts of the particular case. Opinion, ¶ 21.3 The State, moreover, urges this Court to apply the commonality standard set forth in Wal-Mart rather than the less stringent commonality standard set forth in cases such as Ferguson. We again avoid this issue by holding (incorrectly, in my view) that commonality is met under either standard. Opinion, ¶ 19; see also Jacobsen v. Allstate Ins. Co., 2013 MT 244, ¶ 33, 371 Mont. 393, 310 P.3d 452. 3 See also Falcon, 457 U.S. at 157 n. 13, 102 S. Ct. at 2370 n. 13 (“The commonality and typicality requirements of Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff’s claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence. Those requirements therefore also tend to merge with the adequacy-of-representation requirement, although the latter requirement also raises concerns about the competency of class counsel and conflicts of interest.”); McDonald, 261 Mont. at 402, 862 P.2d at 1156 (typicality is closely related to both commonality and adequacy of representation). 29 ¶50 In any event, it is the responsibility of the trial court to determine whether all requirements of Rule 23(a) and (b) have been satisfied. Opinion, ¶ 15 (citing Comcast, 133 S. Ct. at 1432, and Wal-Mart, 131 S. Ct. at 2551). This Court must review a district court’s determinations despite our perception that a party has not disputed a particular requirement. Here, in my view, we create confusion in our class-action jurisprudence by, on one hand, reversing the District Court’s articulation of a common question of law or fact (breach of contract) while, on the other hand, affirming the District Court’s conclusion that commonality and typicality have been met. While certainly there may exist a factual scenario that substantiates the existence of commonality and typicality, but not predominance, that scenario cannot exist where, as here, the District Court has been reversed on its determination of the common question. In bifurcating the common question required by Rule 23(a)(2) from the common question that must predominate under Rule 23(b)(3)—an approach for which our Opinion cites no authority—I fear we have made it difficult for the District Court in this litigation to know how to proceed, have failed to provide clear guidance regarding the parameters of class-action litigation, and have created inconsistencies within Rule 23 itself. ¶51 Therefore, although I agree with the Court’s holding that Rule 23(b)(3)’s predominance requirement is not met here, I disagree with our conclusion that the commonality and typicality requirements of Rule 23(a)(2) and (a)(3) have been satisfied. While the Court remands “to allow the District Court to consider whether a particular issue may be certified for which individual questions would not predominate” pursuant to 30 Rule 23(b)(3), Opinion, ¶ 36, I believe the District Court necessarily must determine first, as a threshold matter, whether there is a question of law or fact common to the class under Rule 23(a)(2) and whether the Sangwins’ claim is typical of the class claims under Rule 23(a)(3). I would reverse the District Court’s certification order in its entirety and remand accordingly. ¶52 I concur and dissent. /S/ LAURIE McKINNON Justice Jim Rice joins the Concurrence and Dissent of Justice Laurie McKinnon. /S/ JIM RICE	December 13, 2013
3e6c210c-34e0-4c7b-ab5f-3ea7c78dde64	Earl v. Pavex	2013 MT 343	DA 12-0466	Montana	Montana Supreme Court	DA 12-0466 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 343 JAMES EARL and RACHEL E. EARL, Plaintiffs, Appellees, & Cross-Appellants, v. PAVEX, CORP., an Arizona corporation licensed to do business in Montana, Defendant, Appellant, & Cross-Appellee. APPEAL FROM: District Court of the Sixteenth Judicial District, In and For the County of Rosebud, Cause No. DV 08-66 Honorable Joe L. Hegel, Presiding Judge COUNSEL OF RECORD: For Appellant: Gerry P. Fagan, Brandon JT Hoskins, Moulton Bellingham PC, Billings, Montana For Appellees: Steven W. Jennings, Crowley Fleck PLLP, Billings, Montana Submitted on Briefs: May 15, 2013 Decided: November 12, 2013 Filed: __________________________________________ Clerk November 12 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 James and Rachel Earl commenced this action against Pavex Corporation in the Sixteenth Judicial District Court, Rosebud County. The Earls sought declaratory rulings concerning two overlapping easements—one 100 feet in width, the other 30 feet in width—that burden the Earls’ land for the benefit of Pavex’s land. The Earls conceded the 30-foot-wide easement but disputed the 100-foot-wide easement. They asserted that the latter easement is unenforceable because it does not appear in the chain of title to the Earls’ property. In the alternative, even if the 100-foot-wide easement is valid, the Earls alleged that they are not required to remove structures and cropland that encroach upon the 30-foot-wide and 100-foot-wide easements. ¶2 The District Court concluded that the 100-foot-wide easement does not burden the Earls’ property and, thus, granted summary judgment to the Earls on this issue. The court further concluded that the Earls may be required to remove structures and cropland from the easements—the 30-foot-wide easement, as well as the 100-foot-wide easement if this Court found the latter easement valid—to the extent necessary to effectuate the purposes of the easements. The court thus granted summary judgment to Pavex on this issue. ¶3 Pavex now appeals from the District Court’s ruling that the 100-foot-wide easement does not burden the Earls’ property, and the Earls cross-appeal from the court’s ruling that encroachments may need to be removed. We address two issues: (1) whether Pavex’s 100-foot-wide easement was extinguished by failure to properly record it, and (2) whether encroachments need to be removed from Pavex’s easements. We reverse as to Issue 1, affirm as to Issue 2, and remand for further proceedings as specified below. 3 BACKGROUND ¶4 The two parcels of land at issue in this case were previously held by Edward, Mattie, Robert, Mary, Benjamin, and Kathyrn Keim as a single 390.841-acre tract designated “Tract 1” on Certificate of Survey No. 85486, which is shown here:1 ¶5 There is a 30-foot-wide easement over Tract 1 beginning at Rosebud County Road #S-447 and running in easterly and northerly directions, as shown by the dashed line on the diagram above. It appears from documents in the record that one of the Keims’ 1 The diagrams contained in this Opinion are part of the record in this case, with some labeling added for clarity. Tract 1 COS 85486 Tract 1 COS 85486 Tract 1 COS 85486 Rosebud County Road #S-447  Rosebud County Road #S-447   30-foot-wide easement 30-foot-wide easement 30-foot-wide easement  30-foot-wide easement  4 predecessors in interest (Tongue River Farms, LLC) granted this easement in 1999 for purposes of ingress, egress, and utilities to land north and west of Tract 1. As noted, there is no dispute concerning the validity of this easement, although there is a dispute concerning the need for the Earls to remove encroachments from it. ¶6 In 2006, the Keims executed Amended Certificate of Survey No. 85486/99927, which divided Tract 1 into a 275.940-acre parcel designated Tract 1A and a 52.828-acre parcel designated Tract 2A. (It appears the southernmost 62.073 acres of original Tract 1 had already been severed.) Amended Certificate of Survey No. 85486/99927 shows the same 30-foot-wide easement over what is now Tract 2A and Tract 1A. Tract 1A Tract 1A Tract 2A 30-foot-wide easement  30-foot-wide easement   30-foot-wide easement 30-foot-wide easement Rosebud County Road #S-447  5 ¶7 The Keims filed Amended Certificate of Survey No. 85486/99927 with the Rosebud County Clerk and Recorder on August 16, 2006. Nine days later, on August 25, the Keims conveyed Tract 1A to Pavex by a warranty deed which referenced Amended Certificate of Survey No. 85486/99927. The Keims retained Tract 2A. In the deed, the Keims granted Pavex a 100-foot-wide easement over Tract 2A, described as follows: together with a non-exclusive, perpetual easement, 100 feet in width, running with the land, for ingress and egress, and for the installation, maintenance, repair and replacement of utilities, from the Tongue River Road to the aforesaid Tract 1A of COS 99927 along, over and beneath an existing roadway on the southerly boundary of [Tract 2A] . . . . ¶8 It appears from the foregoing description that the 100-foot-wide easement follows the same course as the existing 30-foot-wide easement. Pavex’s owner, Siamak Samsam, filed an affidavit in the present lawsuit stating that he insisted on the 100-foot-wide easement over Tract 2A when he purchased Tract 1A. He explained that the extra width is necessary to enable the passage of farm equipment and semi-trucks and trailers and that the 30-foot-wide easement, in its existing configuration, is insufficient for this purpose. ¶9 The Keims-Pavex warranty deed was filed with the Rosebud County Clerk and Recorder on September 15, 2006. Seven months later, in April 2007, the Keims entered into a contract for deed for the sale of Tract 2A to the Earls. The contract for deed refers to Amended Certificate of Survey No. 85486/99927 but makes no mention of the 100-foot-wide easement granted in the Keims-Pavex warranty deed. ¶10 The Earls assert that when they purchased Tract 2A, they had knowledge of the 30-foot-wide easement but were unaware of the 100-foot-wide easement. The Earls state that they became aware of the latter easement in April 2008 when James Earl stopped a 6 motorist who was using the roadway over Tract 2A in order to reach Tract 1A. When James asked the motorist what he was doing, the motorist (an associate of Pavex) replied that Pavex holds a 100-foot-wide easement over the southern portion of Tract 2A and that the Earls would need to remove their encroachments from this easement. ¶11 Following this encounter, the Earls contacted Pavex’s title company and inquired about the alleged easement. The title company sent the Earls a copy of the deed in which the Keims had granted Pavex the 100-foot-wide easement. The Earls then contacted their own title company. They asserted that their title company had “missed” the Keims-Pavex deed in the title search and demanded that the title company “fight to get this easement off our land.” ¶12 The instant action was filed on July 1, 2008, seeking to invalidate Pavex’s claimed 100-foot-wide easement or, in the alternative, to obtain a ruling that the Earls are not required to remove their structures and cropland from Pavex’s easement(s). The parties filed cross-motions for summary judgment on both issues. The proceedings were stayed for approximately 20 months while the parties attempted to settle the dispute; however, when such efforts proved unsuccessful, the District Court proceeded to issue its rulings from which the parties now appeal and cross-appeal. The District Court’s reasoning will be discussed below. STANDARD OF REVIEW ¶13 We review a district court’s ruling on a motion for summary judgment de novo, applying the criteria set forth in M. R. Civ. P. 56. Gordon v. Kuzara, 2012 MT 206, ¶ 13, 366 Mont. 243, 286 P.3d 895. Summary judgment “should be rendered if the pleadings, 7 the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c)(3). At the summary judgment stage, the court does not make findings of fact, weigh the evidence, choose one disputed fact over another, or assess the credibility of witnesses. Rather, the court examines the pleadings, the discovery and disclosure materials on file, and any affidavits to determine whether there is a genuine issue as to any material fact relating to the legal issues raised and, if there is not, whether the moving party is entitled to judgment as a matter of law on the undisputed facts. Andersen v. Schenk, 2009 MT 399, ¶ 2, 353 Mont. 424, 220 P.3d 675. DISCUSSION ¶14 Issue 1. Whether Pavex’s 100-foot-wide easement was extinguished by failure to properly record it. ¶15 As discussed, the Keims held Tract 1A and Tract 2A in common ownership. In August 2006, they sold Tract 1A to Pavex and retained Tract 2A for themselves. In the deed, the Keims granted Pavex an easement 100 feet in width over Tract 2A for the benefit of Tract 1A. There is no dispute that this was an enforceable easement as between the Keims and Pavex. ¶16 The problem arose eight months later when the Keims sold Tract 2A to the Earls, without any mention of Pavex’s 100-foot-wide easement in the Keims-Earls deed. This not uncommon situation has been described in a leading treatise as follows: A landowner may convey Blackacre and grant therewith an easement, such as a right of way over his adjoining lot, Whiteacre, to which he retains title; or he may agree not to use Whiteacre in a certain way or for certain purposes. In either case, he has created a servitude which is an 8 encumbrance against Whiteacre. Is a subsequent purchaser of the latter, who has no actual notice of the easement or restriction, bound by the record of the deed of Blackacre?[2] American Law of Property vol. 4, § 17.24, 601-02 (Little, Brown & Co. 1952). ¶17 Whether a subsequent purchaser of the servient estate is bound by the servitude depends on the recording statutes and the required scope of the title search. Laws governing the recording of instruments of conveyance are in force in all the states. Joyce Palomar, Patton and Palomar on Land Titles vol. 1, § 4, 14 (3d ed., West 2003); see generally Title 70, chapter 21, MCA. These laws generally serve three purposes: to secure prompt recordation of all conveyances by according priority of right to the purchaser who is first to record her conveyance; to protect subsequent purchasers against unknown conveyances and agreements regarding the land; and to preserve an accessible history of each title so that anyone needing the information may reliably ascertain in whom the title is vested and any encumbrances against it. Palomar, Patton and Palomar on Land Titles § 4, 14; see also Blazer v. Wall, 2008 MT 145, ¶ 73, 343 Mont. 173, 183 P.3d 84 (a central depository of instruments affecting title to real property “enables a prospective purchaser to determine what kind of title he or she is obtaining without having to search beyond public records”); Erler v. Creative Fin. & Invs., 2009 MT 36, ¶ 21, 349 Mont. 207, 203 P.3d 744 (the recording system “imparts constructive notice to subsequent purchasers that there exists another interest in the property”). 2 There is some disagreement between the Earls and Pavex about whether the Earls had “actual notice” of the 100-foot-wide easement in April 2007 when they executed the contract for deed. As discussed below, such notice (if it existed) would preclude the Earls from disputing the easement’s validity. However, we need not consider the issue of actual notice because we conclude, for the reasons which follow, that the Earls had constructive notice of the easement. 9 ¶18 To effectuate these purposes, the recording acts provide that certain instruments are ineffective or void as to certain parties unless the instruments are duly recorded. Palomar, Patton and Palomar on Land Titles § 5, 24-25. Of relevance here, when multiple purchasers hold conflicting interests in a given property, the recording acts will accord priority of right based on one of three approaches. Under the “race” recording system, the purchaser who records first has priority of right. Thus, to preserve her rights, an earlier purchaser must record her conveyance before a later purchaser records his conflicting conveyance, and this is true even if the later purchaser has knowledge of the prior conveyance. Palomar, Patton and Palomar on Land Titles §§ 6, 7, at 27-30, 33. This has been termed a “race to the courthouse” system of recordation. Wede v. Niche Mktg. USA, LLC, 52 So. 3d 60, 63 n. 6 (La. 2010). Under the “notice” recording system, in contrast, a subsequent purchaser with actual notice of a prior unrecorded conveyance cannot claim priority over the prior purchaser. However, a subsequent purchaser without actual notice of a prior conveyance has priority over an earlier purchaser who fails to record her conveyance before the later purchase occurs. Palomar, Patton and Palomar on Land Titles § 7, 31-34. Lastly, under the “race-notice” recording system, a subsequent purchaser has priority over an earlier purchaser if the subsequent purchaser (1) lacks notice of the prior conveyance and (2) records his conveyance before the prior conveyance is recorded. Palomar, Patton and Palomar on Land Titles § 8, 35-39. About one-third of the states—including Montana—have a race-notice recording system. See Palomar, Patton and Palomar on Land Titles § 8, 36-37 & n. 8; §§ 70-20-303, 70-21-304, MCA; Hastings v. Wise, 91 Mont. 430, 435-36, 8 P.2d 636, 638-39 (1932). 10 ¶19 The significance of the recording acts in the present case is that the failure to duly record an express easement may result in the easement’s termination—which is what the District Court essentially determined had occurred to Pavex’s 100-foot-wide easement. In a state with a notice recording system, an unrecorded express easement is extinguished when a bona fide purchaser acquires title to the servient estate without notice of the easement. The same result occurs in a jurisdiction [such as Montana] with a race-notice recording statute if the bona fide purchaser without notice also records the deed to the servient estate before the easement is recorded. Jon W. Bruce & James W. Ely, Jr., The Law of Easements and Licenses in Land § 10:32, 10-90 to 10-92 (Thomson Reuters 2013) (footnotes omitted); accord Restatement (Third) of Property: Servitudes § 7.14 (2000); Herbert T. Tiffany, The Law of Real Property vol. 3, § 828, 397-99 (3d ed. 1939 & Supp. 1998); Richard R. Powell, Powell on Real Property vol. 4, § 34.21[2], 34-197 to 34-198 (LexisNexis Mathew Bender 2013). “In either recording system, an easement holder can preserve the easement simply by recording the easement instrument immediately upon receiving it, thereby imparting constructive notice of the servitude to subsequent purchasers of the servient estate.” Bruce & Ely, The Law of Easements and Licenses in Land § 10:32, 10-92. ¶20 There is no question that the Keims-Pavex deed was recorded in September 2006, seven months before the Earls entered into the contract for deed with the Keims for the purchase of Tract 2A. However, of further significance to this case, it has been held that a prior conveyance is not “of record” unless and until it is recorded in such a way that a subsequent purchaser may find it in a chain-of-title search. See Palomar, Patton and Palomar on Land Titles § 8, 39-40 (citing Keybank N.A. v. NBD Bank, 699 N.E.2d 322 11 (Ind. App. 1st Dist. 1998)). As the court explained in Keybank, [t]he recording of an instrument in its proper book is fundamental to the scheme of providing constructive notice through the records. . . . A person charged with the duty of searching the records of a particular tract of property is not on notice of any adverse claims which do not appear in the chain of title; because, otherwise, the recording statute would prove a snare, instead of a protection[, to subsequent purchasers]. . . . Constructive notice is provided when a deed or mortgage is properly acknowledged and placed on the record as required by statute. However, an otherwise valid instrument which is not entitled to be recorded, improperly recorded, or recorded out of the chain of title does not operate as constructive notice, although binding upon persons having actual notice. 699 N.E.2d at 327 (citations and paragraph break omitted). ¶21 At this point, it is necessary to briefly explain the indexing system. Traditionally, jurisdictions have used one of two methods of index preparation: tract indices or grantor/grantee name indices. Palomar, Patton and Palomar on Land Titles § 67, 223. Montana uses a grantor/grantee indexing system. As each instrument is received by the county clerk, the name of the grantor is placed alphabetically on the appropriate page of the grantor index, followed by the name of the other party to the document, the book and page of the record, description of the property, dates, etc. At the same time, there is entered alphabetically in a separate grantee index the name of the grantee, with identical information about the document. Palomar, Patton and Palomar on Land Titles § 67, 225; §§ 7-4-2613, -2617, -2619, -2620, MCA. These alphabetical indices make it possible to run a chain of title, either forward or backward, from any known owner: A searcher may begin with the name of the present owner and work backward under the proper letter of the grantee index until finding the name of that party as grantee in a deed for the land involved. The data regarding the deed is copied from the index and the process repeated as to the grantor in that deed, thus finding the earlier deed in which he was grantee, and so 12 on back for a certain number of years or back to the original grant from a sovereignty. In order to ascertain mortgages and other encumbrances, the grantor indices must then be run forward as to each name for the period that said party owned the premises. Another method of search is to run the grantor indices, running the name of an early owner until the deed from him is found, then running the name of party to whom he conveyed and so on down to the date of search, noting en route the encumbrance given by the respective owners. Palomar, Patton and Palomar on Land Titles § 67, 225-26 (footnotes omitted). ¶22 The crux of the issue in this case is whether Pavex’s 100-foot-wide easement was recorded in such a way that the Earls should have found it in a chain-of-title search. “There are two lines of authority on the question whether a servitude created by a common grantor in the deed to the benefited parcel is in the chain of title of the burdened lot.” Restatement (Third) of Property: Servitudes § 7.14, Reporter’s Note: Chain of Title; see also Palomar, Patton and Palomar on Land Titles § 72, 240; American Law of Property § 17.24, 602; Tiffany, The Law of Real Property vol. 5, § 1266, 23-25. According to the Restatement, “[t]he majority view is that the chain of title includes all servitudes created by the common grantor prior to parting with title to the parcel in question.” Restatement (Third) of Property: Servitudes § 7.14, cmt. b. Under this approach, a prospective purchaser is on constructive notice not only of conveyances to the prior owners of the parcel, but also of conveyances from the prior owners of the parcel during each of their respective periods of ownership. Pavex advocates for this broad chain-of-title concept. Conversely, “the minority view restricts the required title search to conveyances of the parcel in question.” Restatement (Third) of Property: Servitudes § 7.14, cmt. b. The Earls advocate for this narrow chain-of-title concept. 13 ¶23 New York applies the narrow approach; hence, an owner of land is bound by encumbrances (of which he does not have actual notice at the time of his purchase) only if the encumbrances “appear in some deed of record in the conveyance to himself or his direct predecessors in title.” Buffalo Acad. of the Sacred Heart v. Boehm Bros., Inc., 196 N.E. 42, 45 (N.Y. 1935) (emphasis added); accord Witter v. Taggart, 577 N.E.2d 338, 340-42 (N.Y. 1991); Simone v. Heidelberg, 877 N.E.2d 1288, 1290 (N.Y. 2007). In explaining the rationale underlying this approach, the Witter court reasoned that [t]o impute legal notice for failing to search each chain of title or “deed out” from a common grantor would seem to negative the beneficent purposes of the recording acts and would place too great a burden on prospective purchasers. Therefore, purchasers . . . should not be penalized for failing to search every chain of title branching out from a common grantor’s roots in order to unearth potential [encumbrances]. They are legally bound to search only within their own tree trunk line and are bound by constructive or inquiry notice only of [encumbrances] which appear in deeds or other instruments of conveyance in that primary stem. 577 N.E.2d at 341 (citation and some internal quotation marks omitted). The court opined that the dominant landowner or the common grantor could safeguard against the encumbrance’s extinguishment “by recording in the servient chain the conveyance creating the [encumbrance] so as to impose notice on subsequent purchasers of the servient land.” Witter, 577 N.E.2d at 341. Other cases adopting a similar view include Hancock v. Gumm, 107 S.E. 872, 877 (Ga. 1921), Glorieux v. Lighthipe, 96 A. 94, 95-96 (N.J. 1915), and Spring Lakes, Ltd. v. O.F.M. Co., 467 N.E.2d 537, 539-40 (Ohio 1984). ¶24 Pavex cites Dukes v. Link, 315 S.W.3d 712 (Ky. App. 2010), in support of the broad chain-of-title concept. The Dukes court held that “the recording of the instrument that grants an easement by a common grantor binds a subsequent purchaser of the tract 14 burdened by the easement regardless of whether it is included in the purchaser’s deed.” 315 S.W.3d at 717. The court reasoned that “to hold otherwise would leave the holders of easements subject to the whim of a common grantor who could defeat that interest by conveying the same interest to multiple grantees by omitting the easement from the deeds.” Dukes, 315 S.W.3d at 717. In addition, the court noted that a landowner cannot convey a greater right or estate than he actually possesses, and that the recording statutes protect purchasers against adverse claims of which they “could not have been reasonably aware.” Dukes, 315 S.W.3d at 717. Other cases similarly holding that a purchaser is on notice of recorded encumbrances from a common grantor during the time he held title to the premises in question include Hamilton v. Smith, 208 S.W.2d 425, 427 (Ark. 1948), Szakaly v. Smith, 544 N.E.2d 490, 492 (Ind. 1989), Beins v. Oden, 843 A.2d 147, 151-52 (Md. Spec. App. 2004), Guillette v. Daly Dry Wall, Inc., 325 N.E.2d 572, 574-75 (Mass. 1975), McQuade v. Wilcox, 183 N.W. 771, 773-74 (Mich. 1921), Duxbury-Fox v. Shakhnovich, 989 A.2d 246, 252-53 (N.H. 2009), Cullison v. Hotel Seaside, Inc., 268 P. 758, 760 (Or. 1928), Piper v. Mowris, 351 A.2d 635, 639 (Pa. 1976), and Moore v. Center, 204 A.2d 164, 167 (Vt. 1964). “The rule is based generally upon the principle that a grantee is chargeable with notice of everything affecting his title which could be discovered by an examination of the records of the deeds or other muniments of title of his grantor.” Piper, 351 A.2d at 639 (internal quotation marks omitted). ¶25 We conclude that the broad approach strikes the appropriate balance between the interest of the owner of the dominant property in retaining her easement and the interest of the purchaser of the servient property in ascertaining whether that land is encumbered. 15 The narrow chain-of-title concept creates an unacceptable risk that an otherwise valid and recorded easement will be extinguished through mere failure to mention the easement in a deed conveying the servient property. This result is contrary to the recording system’s purpose of “impart[ing] constructive notice to subsequent purchasers that there exists another interest in the property.” Erler, ¶ 21. The general rule in Montana is that “[e]very conveyance of real property acknowledged or proved and certified and recorded as prescribed by law, from the time it is filed with the county clerk for record, is constructive notice of the contents thereof to subsequent purchasers and mortgagees.” Section 70-21-302(1), MCA; see also § 70-21-301, MCA (defining “conveyance” to embrace “every instrument in writing by which any estate or interest in real property is created, aliened, mortgaged, or encumbered or by which the title to real property may be affected, except wills”). Refusing to impute legal notice of recorded encumbrances given by a landowner while he held title to the servient parcel would negate the broad constructive notice contemplated by these statutes. ¶26 Furthermore, we are not persuaded that it would “negative the beneficent purposes of the recording acts” or “place too great a burden on prospective purchasers,” Witter, 577 N.E.2d at 341, to require that they search for and examine recorded conveyances by prior owners of the premises in question to ascertain whether encumbrances or servitudes were placed on the property. “The practical effect of the [recording] acts is that an intending purchaser of land may, by reference to the record, determine whether his vendor has previously disposed of any interest in the land.” Tiffany, The Law of Real Property vol. 5, § 1262, 14. The intending purchaser may do the same with respect to 16 preceding owners of the land during their respective periods of ownership. Tiffany, The Law of Real Property vol. 5, § 1262, 14-15. The searcher beginning his chain of title uses as a starting point the name of the present owner. By following that name back in the grantee index, the examiner will usually find the grantor from whom he acquired title. Then the name of that party is used in tracing back till the name of the previous owner is ascertained, and the process is repeated till one has traced the chain as far back as practical safety requires, or as far as the records are intelligible to the examiner. . . . Having thus made a skeleton chain of title, it is necessary to run the grantor indices as to each name for the period that each party owned the property. This should furnish confirmation of the skeleton and also provide a list of the recorded encumbrances, junior interests, and clouds. In turn, it may be necessary to “grantor” the names of these donees in order to ascertain assignments and releases. American Law of Property § 18.1, 656-57 n. 3 (emphases added, cross-reference and paragraph breaks omitted). The ability to conduct such searches is made possible by the maintenance of grantor indices and grantee indices in the county clerk offices throughout this State. See §§ 7-4-2613, -2617, -2619, -2620, MCA. Indeed, that is a key function of the two indices. Here, had the Earls properly examined the grantor index for the period during which the Keims owned the land now comprising Tract 2A, they would have found the recorded deed from the Keims to Pavex in which the Keims granted Pavex an easement 100 feet in width over Tract 2A. A purchaser cannot ignore such deeds issued by a common grantor, or fail to search for them, on the theory that the deeds are outside the servient estate’s “chain of title.” To hold otherwise would undermine the broad constructive notice afforded recorded conveyances under the recording statutes. ¶27 At this juncture, it is necessary to address our decision in Nelson v. Barlow, 2008 MT 68, 342 Mont. 93, 179 P.3d 529. The Earls rely on Nelson in support of the narrow 17 chain-of-title concept, and the District Court found Nelson “controlling” in resolving this case. In Nelson, the Cedar Hills Partnership owned lots in the Cedar Hills Subdivision, which bordered Flathead Lake. The Partnership sold Tract 1 to Nelson in 1990. In the deed, which was recorded, the Partnership granted Nelson a “roadway easement as shown on Certificate of Survey No. 4377 for access to Lot 8 of Cedar Hills Subdivision.” The Partnership still owned Lot 8 at the time. In 1996, the Partnership sold several lots, including Lot 8, to Barlow. Barlow’s deed contained no mention of the easement granted in Nelson’s deed. A dispute later arose over the parameters of Nelson’s easement. Nelson claimed that “access to Lot 8” meant that he was entitled to cross Lot 8 to access Flathead Lake, while Barlow claimed that Nelson had access along Cedar Hills Drive up to the northern boundary of Lot 8, but not across Lot 8. Nelson, ¶¶ 3-7, 10-11. ¶28 The case was decided on the pleadings. Nelson, ¶ 9. This Court concluded that “access to Lot 8” was susceptible to two reasonable but conflicting meanings and, as such, was ambiguous. Nelson, ¶¶ 14-15. The Court further concluded, however, that the easement was unenforceable in any event because Nelson had failed to allege in his complaint that the easement appeared in Barlow’s chain of title or that Barlow otherwise had knowledge of the easement. Nelson, ¶ 18. In this regard, the Court cited New York precedent for the proposition that, “ ‘ “[i]n the absence of actual notice before or at the time of . . . purchase or of other exceptional circumstances, an owner of land is only bound by restrictions if they appear in some deed of record in the conveyance to [that owner] or [that owner’s] direct predecessors in title.” ’ ” Nelson, ¶ 16 (brackets and ellipsis in original) (quoting Puchalski v. Wedemeyer, 586 N.Y.S.2d 387, 389 (N.Y. App. 18 Div. 3d Dept. 1992), in turn quoting Witter, 577 N.E.2d at 340); accord Waters v. Blagg, 2008 MT 451, ¶ 7 n. 2, 348 Mont. 48, 202 P.3d 110. ¶29 Based on the foregoing language in Nelson, the Earls argue that “chain of title” includes only deeds of record in the conveyance “to” a landowner or that landowner’s direct predecessors in title (the narrow chain-of-title concept). Thus, because Pavex’s 100-foot-wide easement does not appear in a deed of record “to” the Earls or their direct predecessors in title (the Keims), the Earls assert they are not bound by this easement. The District Court agreed with this reasoning in granting summary judgment to the Earls. ¶30 On appeal, Pavex argues that Nelson is distinguishable from the present case and that we should apply the broad chain-of-title approach here. However, we perceive no principled distinction between this case and Nelson. In Nelson and the present case, the land that would become the dominant parcel and the land that would become the servient parcel were held in common ownership. In both cases, the common grantor sold the dominant parcel and retained the servient parcel. In both cases, the deed for the dominant parcel referred to a certificate of survey that did not give notice of the claimed easement. In both cases, the deed for the dominant parcel contained language granting the claimed easement over the common grantor’s retained property. In both cases, the common grantor subsequently sold the retained property without any mention of the previously granted easement. In both cases, the purchaser of the servient parcel apparently had no actual knowledge of the easement. In both cases, had the purchaser searched the record for encumbrances given by the common grantor during the time he owned the servient land, the purchaser would have discovered the claimed easement. 19 ¶31 Thus, we are faced with either perpetuating the narrow chain-of-title rule that the Court imported from New York in the Nelson case, or overruling Nelson in favor of the broad chain-of-title rule. The Court in Nelson, and again in Waters, gave no reasoning to support its application of the narrow chain-of-title rule. Under the narrow approach, as explained, a prospective purchaser is not required to search the records for servitudes created by her grantor prior to parting with title to the parcel. The purchaser, in other words, is not on constructive notice of recorded encumbrances given by her grantor while he owned the property. She is on constructive notice only of conveyances “to” her grantor, not “from” her grantor. This approach is in direct contradiction of Montana law, which provides that every instrument in writing by which any estate or interest in real property is created, aliened, mortgaged, or encumbered, or by which the title to real property may be affected, “is constructive notice of the contents thereof to subsequent purchasers and mortgagees” from the time it is filed with the county clerk for record. Sections 70-21-301, -302(1), MCA. Having considered the rationales underlying the two chain-of-title concepts and the purposes of the recording statutes, we conclude that the broad chain-of-title rule strikes the appropriate balance between the dominant landowner’s interest and the servient purchaser’s interest and is consistent with the broad constructive notice that recorded conveyances are afforded under § 70-21-302(1), MCA. For these reasons, Nelson and Waters are overruled to the limited extent that these cases support the narrow chain-of-title rule. ¶32 In addition to New York precedent, the Court in Nelson, ¶ 16, also cited three Montana cases as examples of the narrow chain-of-title rule: Rigney v. Swingley, 112 20 Mont. 104, 113 P.2d 344 (1941), Goeres v. Lindey’s, Inc., 190 Mont. 172, 619 P.2d 1194 (1980), and Loomis v. Luraski, 2001 MT 223, 306 Mont. 478, 36 P.3d 862. Upon closer examination, however, we conclude that these cases are not controlling here. ¶33 First, Rigney concerned a mortgage on an automobile. The mortgage had been executed by an individual who was not the automobile’s owner. This Court, therefore, held that the mortgage was not in the automobile’s chain of title. Rigney, 112 Mont. at 106-09, 113 P.2d at 346-47. That is entirely distinguishable from the present case and Nelson, where the servitude was granted by the undisputed owner of the land in question. ¶34 Second, Goeres—which the Earls cite several times in their brief on appeal— involved a covenant that restricted certain subdivision lots to noncommercial use. Although defendant Lindey’s title insurer had found the restriction in its examination of the records, Goeres, 190 Mont. at 174, 619 P.2d at 1195-96, the plaintiffs nevertheless conceded that the restriction was not part of Lindey’s chain of title, Goeres, 190 Mont. at 178, 619 P.2d at 1198. The plaintiffs instead sought enforcement of the restriction on equitable grounds. Goeres, 190 Mont. at 175-76, 619 P.2d at 1196-97. On the particular facts of the case, however, this Court concluded that “[e]quity . . . requires more if this Court is to restrict the use of land by mere implication.” Goeres, 190 Mont. at 179, 619 P.2d at 1198. This holding does not mandate a narrow chain-of-title approach. ¶35 Lastly, Loomis involved a “stranger to the deed” issue. The Kolbs sold a portion of their land to the Luraskis. In the deed, the Kolbs reserved a 30-foot-wide easement over the Luraskis’ parcel, which was depicted on a referenced certificate of survey. The Kolbs included this reservation to provide access to other property, which the Kolbs did 21 not then own, located directly north of the Kolbs’ property. The Kolbs had thought they might purchase the property to the north, but when they realized they were not going to be able to do so, they recorded an amended certificate of survey which did not include the 30-foot-wide easement over the Luraskis’ parcel. Loomis, ¶¶ 6-15. Later, the Loomises came into ownership of a portion of the northern property and sought to establish an easement over the Luraskis’ parcel, for the benefit of the Loomises’ land, based on the reservation in the Kolbs-Luraskis deed. Loomis, ¶¶ 16, 27. Yet, neither the Loomises nor their predecessors had been parties to that deed, which did not pertain to the Loomises’ property and was outside the Loomises’ chain of title. Loomis, ¶ 28. This Court held, therefore, that the Loomises had the burden to show that the Kolbs intended to reserve an easement for the benefit of a stranger to the deed. Loomis, ¶¶ 32-33. And because the Loomises had failed to meet this burden, the Court concluded that they held no easement rights over the Luraskis’ parcel. Loomis, ¶¶ 34-37. This holding does not support a narrow chain-of-title approach; it simply reaffirms settled law that an easement generally cannot be reserved in favor of a stranger to the deed. Loomis, ¶ 31. ¶36 Accordingly, consistent with §§ 70-21-301 and -302(1), MCA, we hold that a prospective purchaser is on constructive notice of recorded servitudes and encumbrances granted by the existing and prior owners of the parcel in question during the respective periods when each owner held title to the parcel. Had the Earls properly searched and examined the grantor index for conveyances by the Keims during their ownership of the land now comprising Tract 2A, the Earls would have discovered Pavex’s 100-foot-wide easement. The Earls purchased Tract 2A prior to our decision in Nelson and cannot claim 22 reliance on Nelson in failing to discover the 100-foot-wide easement. The Earls, thus, were on constructive notice of the easement, and the easement is enforceable against the Earls. To the extent that Nelson v. Barlow and Waters v. Blagg are inconsistent with this conclusion, they are overruled. Correspondingly, the District Court’s grant of summary judgment to the Earls, and denial of summary judgment to Pavex, is reversed as to this issue. ¶37 Issue 2. Whether encroachments need to be removed from Pavex’s easements. ¶38 In August 2006, when the Keims executed the warranty deed conveying Tract 1A to Pavex and granting Pavex a 100-foot-wide easement over Tract 2A, there were several structures located on Tract 2A, including a rental house, a barn, a well house, and animal sheds. Some of these structures are situated partially within the 30-foot-wide easement. At certain points, the structures restrict the easement to 19 feet of clearance. There also is cropland within the 30-foot-wide easement. Likewise, depending on the precise position of the 100-foot-wide easement, the structures and cropland may encroach upon that easement as well. The Earls maintain, however, that they are not required to remove the structures and cropland because (1) Pavex took its easements over Tract 2A subject to open and obvious encroachments that existed at the time of sale and (2) “the owners of Tract 2A (the Earls) have an implied easement within Pavex’s easement for the purpose of using their structures and cropland.” ¶39 The District Court ruled in favor of Pavex on this issue. The court reasoned that the plain language of the documents creating the easements is controlling. The court observed that the easements were granted for ingress and egress and for the installation, 23 maintenance, repair, and replacement of utilities. The court noted that there is no language otherwise limiting the dominant estate’s use of the easements to the fullest extent. The court further reasoned that had the grantors wished to limit the easements to accommodate structures or cropland, “they could have included such restrictions in the document creating the easement. They did not and the Court is not willing to imply or insert that which was not included by the grantor.” Finally, the court rejected the Earls’ claim of an implied easement, noting that an owner of land cannot hold an easement on his own land. See Albert G. Hoyem Trust v. Galt, 1998 MT 300, ¶ 22, 292 Mont. 56, 968 P.2d 1135. Thus, the District Court concluded that the encroachments would need to be removed to the extent necessary to effectuate the purposes of Pavex’s easements. ¶40 On appeal, the Earls contend that the District Court erred because Pavex took its easements subject to the encroachments and because the Earls hold an implied easement within Pavex’s easements. Pavex, conversely, argues that the District Court’s decision is correct because any obstructions which interfere with an easement must be removed. Notably, the parties’ citations in support of these arguments are, for the most part, not on point. Pavex cites various authorities—such as Musselshell Ranch Co. v. Seidel-Joukova, 2011 MT 217, ¶ 26, 362 Mont. 1, 261 P.3d 570—for the proposition that the owner of a servient estate may not erect or place physical obstructions within the easement. Yet, the Earls did not erect or place the physical obstructions at issue in Pavex’s easements; the obstructions were already there at the time Tract 2A became burdened with the easements benefitting Tract 1A. Likewise, the Earls cite various authorities concerning easements implied from existing use, see Yellowstone River, LLC v. Meriwether Land Fund I, LLC, 24 2011 MT 263, ¶ 30, 362 Mont. 273, 264 P.3d 1065 (explaining such easements), and easements which occupy the same physical location. Yet, with one exception discussed below, none of these authorities contemplate an easement on the servient property, for the benefit of the servient property, consisting of a permanent physical obstruction within the dimensions of the easement expressly granted to the dominant property. ¶41 The one case cited by the Earls that arguably is analogous to the present case is Newton v. N.Y., New Haven & Hartford R.R. Co., 44 A. 813 (Conn. 1899). There, the court recognized that a landowner whose property abuts a highway owns the soil to the center of the highway in fee. As such, the landowner has not only the rights that all others of the community have to travel on the highway, but also certain privileges that are not common to the public generally, such as the right to construct a sidewalk, set hitching posts, and place stepping stones within the right-of-way as it passes in front of the landowner’s property. The court characterized this as “an easement upon an easement.” Newton, 44 A. at 815-16. Even so, however, the court noted that any such obstructions must not interfere with the highway or render it unfit for its purpose (public travel). Newton, 44 A. at 815. We conclude that the same principle is controlling here. ¶42 Absent an express provision in a grant or reservation, “[t]he owner of the servient estate may utilize the easement area in any manner and for any purpose that does not unreasonably interfere with the rights of the easement holder.” Bruce & Ely, The Law of Easements and Licenses in Land § 8:20, 8-63 to 8-65; accord Sampson v. Grooms, 230 Mont. 190, 196-97, 748 P.2d 960, 964 (1988); Strahan v. Bush, 237 Mont. 265, 268-69, 773 P.2d 718, 721 (1989); Gabriel v. Wood, 261 Mont. 170, 177, 862 P.2d 42, 46 (1993); 25 Mason v. Garrison, 2000 MT 78, ¶ 49, 299 Mont. 142, 998 P.2d 531. In the present case, Tongue River Farms granted an easement 30 feet in width over land now comprising Tract 2A. The Keims granted an easement 100 feet in width over that same land. The use of these easements is expressly limited to ingress, egress, and utilities, but there is no express reservation of a right by the servient landowners (Tongue River Farms and the Keims, and now the Earls) to maintain physical obstructions within the easements, and the Earls have shown neither a legal nor a factual basis for implying such a reservation. Indeed, it is implausible that Tongue River Farms and the Keims, on one hand, granted easements for ingress, egress, and utilities but, on the other hand, intended obstructions which unreasonably interfere with the use of these easements to remain in place. ¶43 Unreasonable interference with an easement holder’s use of the servient estate is a form of trespass and constitutes an infringement upon a valuable property right. See Bruce & Ely, The Law of Easements and Licenses in Land §§ 8:21, 8:32, 8-70, 8-91. Consequently, an easement holder is entitled to equitable relief against a servient owner’s unlawful interference with the easement holder’s enjoyment of the servitude, particularly when the obstruction is of a permanent character. Bruce & Ely, The Law of Easements and Licenses in Land § 8:32, 8-91 to 8-92; see e.g. Strahan, 237 Mont. at 269, 773 P.2d at 721; Mason, ¶¶ 46-49. We therefore agree with the District Court that the structures and cropland must be removed from the two easements to the extent these encroachments constitute unreasonable interference with Pavex’s easement rights. This is a question of fact that will need to be determined on remand. See Musselshell Ranch, ¶ 19 (whether interference is reasonable depends on the factual circumstances of the case). 26 ¶44 We emphasize that the determination whether the encroachments must be removed from the easement requires a balancing of the parties’ interests, with reasonableness being the controlling standard. Mattson v. Mont. Power Co., 2009 MT 286, ¶ 52, 352 Mont. 212, 215 P.3d 675 (“[W]e presume that the parties intended a fair balance of their interests.”); Musselshell Ranch, ¶ 19 (“The balancing of rights . . . incorporates a standard of reasonableness.”). Unless otherwise stated in the terms of the servitude, the parties to an express easement are deemed to have contemplated both (1) that the easement holder may do whatever is reasonably convenient or necessary in order to fully enjoy the purposes for which the easement was granted, though he may not cause unreasonable damage to the servient estate or interfere unreasonably with its enjoyment, and (2) that the servient owner may utilize the servient estate, including the easement area, in any manner and for any purpose that does not unreasonably interfere with the easement holder’s enjoyment of the servitude. Mattson, ¶¶ 44, 52; Flynn v. Siren, 219 Mont. 359, 361, 711 P.2d 1371, 1372 (1986); Bruce & Ely, The Law of Easements and Licenses in Land §§ 8:3, 8:20, 8-13, 8-65; Restatement (Third) of Property: Servitudes §§ 4.9, 4.10. We have recognized the necessity of balancing these interests in various cases. See e.g. Sampson, 230 Mont. at 197, 748 P.2d at 964 (“The subject easement must be used only for purposes that do not unreasonably burden the servient tenement and which do not interfere with the use and right reserved to the dominant tenement.”); Gabriel, 261 Mont. at 177, 862 P.2d at 46 (“[A] gate may be constructed across the easement if it is necessary for the reasonable use of the servient estate and does not interfere with reasonable use of the right-of-way.”). Again, what constitutes reasonable use and 27 unreasonable interference is a question of fact, and uniform rules are difficult to formulate. Bruce & Ely, The Law of Easements and Licenses in Land §§ 8:3, 8:21, 8-13 to 8-14, 8-70. “Some permanent encroachments may not justify a finding of unreasonable interference. The particular facts of a situation are always controlling, and what is reasonable or unreasonable is often a close call.” Musselshell Ranch, ¶ 27. ¶45 As a final matter, the Keims-Pavex deed describes the 100-foot-wide easement as located “along, over and beneath” the 30-foot-wide easement. It thus is clear that the 100-foot-wide easement generally follows the same course as the 30-foot-wide easement. This does not necessarily mean that the centerlines of the two easements line up over the entire length of Tract 2A, however. Indeed, it appears from the depiction on Amended Certificate of Survey No. 85486/99927 that the 30-foot-wide easement, at certain points, runs along Tract 2A’s outer boundaries, which may cause the 100-foot-wide easement to encroach on land outside Tract 2A if the centerlines of the two easements were lined up. ¶46 Therefore, it will be necessary for the District Court on remand to determine the precise location of the 100-foot-wide easement relative to the 30-foot-wide easement. Various factors may be relevant to this analysis, including the purposes of the easement, the geographic relationship of the properties, the uses of the dominant and servient estates, the benefit to the easement holder compared to the burden on the servient estate owner, and any admissions of the parties. See Bruce & Ely, The Law of Easements and Licenses in Land § 7:6, 7-13 to 7-17; Broadwater Dev., LLC v. Nelson, 2009 MT 317, ¶ 22, 352 Mont. 401, 219 P.3d 492 (“For purposes of interpreting a writing granting an interest in real property, evidence of the surrounding circumstances, including the 28 situation of the property and the context of the parties’ agreement, may be shown so that the judge is placed in the position of those whose language the judge is to interpret.”). CONCLUSION ¶47 As to Issue 1, the Earls had constructive notice of the 100-foot-wide easement over Tract 2A for the benefit of Tract 1A, and the easement is thus enforceable against the Earls. Pavex is entitled to summary judgment on this issue, and the District Court’s contrary conclusion is accordingly reversed. As to Issue 2, the structures and cropland that encroach upon the 30-foot-wide easement and/or 100-foot-wide easement must be removed to the extent they constitute unreasonable interference with Pavex’s easement rights. The District Court’s grant of summary judgment to Pavex on this legal question is accordingly affirmed. ¶48 However, whether the structures and cropland actually interfere unreasonably with the two easements is a question of fact that will need to be determined on remand. In conjunction with this determination, the District Court will also need to determine the precise location of the 100-foot-wide easement relative to the 30-foot-wide easement based on the factors set out above and any other circumstances the court deems relevant. ¶49 Affirmed in part, reversed in part, and remanded for further proceedings. /S/ LAURIE McKINNON We Concur: /S/ BRIAN MORRIS /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ MIKE McGRATH /S/ JIM RICE	November 12, 2013
6a0b9acc-dcc5-4968-b95d-5d491ed57e34	Lincoln County Port Auth. v. Allianz Global Risks US Ins. Co.	2013 MT 365	DA 12-0519	Montana	Montana Supreme Court	DA 12-0519 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 365 LINCOLN COUNTY PORT AUTHORITY, Plaintiff and Appellee, v. ALLIANZ GLOBAL RISKS US INSURANCE COMPANY, Defendant and Appellant. APPEAL FROM: District Court of the Nineteenth Judicial District, In and For the County of Lincoln, Cause No. DV 11-194 Honorable James B. Wheelis, Presiding Judge COUNSEL OF RECORD: For Appellant: Robert J. Phillips (argued), Phillips Haffey PC; Missoula, Montana G. Brian Odom, Kerry K. Brown, David B. Winter, Zelle Hofmann Voelbel & Mason LLP; Dallas, Texas Gary M. Zadick, Ugrin, Alexander, Zadick & Higgins PC; Great Falls, Montana For Appellee: R. Allan Payne (argued), Jacqueline R. Papez, Doney Crowley Payne Bloomquist P.C.; Helena, Montana For Amicus Curiae: Michael W. Sehestedt, General Counsel for the Montana Association of Counties; Helena, Montana Argued: September 20, 2013 Submitted: September 25, 2013 Decided: December 10, 2013 Filed: __________________________________________ Clerk December 10 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Appellant Allianz Global Risks US Insurance Company (Allianz) appeals the decision of the Nineteenth Judicial District Court, Lincoln County. The District Court entered summary judgment in favor of Appellee Lincoln County Port Authority (Port) on the issue of whether the Port qualified as an insured under the Allianz insurance policy. The District Court also granted the Port’s motion to dismiss Allianz’s counterclaim that had sought to reform the insurance policy. We affirm in part, reverse in part, and remand. ¶2 We address the following issues on appeal: 1. Whether the Port is an “insured” as contemplated by the Allianz policy. 2. Whether sufficient collateral evidence entitles Allianz to reformation of the policy. 3. Whether the District Court correctly valued the Plywood Plant Building. 4. Whether prejudgment interest began to accrue on the date of the fire at the Plywood Plant Building. PROCEDURAL AND FACTUAL BACKGROUND ¶3 The Montana Association of Counties (MACo) is a nonprofit corporation that acts on behalf of Montana’s 56 counties. MACo represents the interests of county governments before the Montana legislature, administrative agencies, and the federal government. ¶4 MACo created a property and liability self-insured risk pool, the Montana Association of Counties Joint Powers Insurance Authority (MACo/JPIA), in the 1980s. Through MACo/JPIA, MACo self-insures its member counties and related entities. MACo/JPIA obtained catastrophic property insurance to supplement its pooled fund of public monies used for self-insurance. The catastrophic insurance serves as excess insurance designed to 3 mitigate MACo’s loss on large claims that exceed a designated amount. MACo/JPIA purchased the catastrophic insurance from Allianz to cover damages over $100,000. ¶5 Lincoln County is a MACo member. Lincoln County created the Port as a separate public body pursuant to § 7-14-1104, MCA. The Port seeks to foster economic development in Lincoln County through its operation of an industrial facility in Libby, Montana. The industrial facility consists of several buildings associated with a former lumber mill. The lumber mill includes a Plywood Plant Building. The Port insured the Plywood Plant Building, along with its other buildings at the lumber mill, through the MACo/JPIA self- insured risk pool. ¶6 Part of the roof of the Port’s Plywood Plant Building collapsed from heavy snow during the winter of 2007-2008. The Port submitted an insurance claim for damages caused by the collapse of the roof. Allianz assessed the damage to the Plywood Plant Building at 29% of its value. Allianz paid the Port over $3 million for the loss of this portion of the Plywood Plant Building consistent with its coverage obligations under the catastrophic insurance policy with MACo/JPIA. ¶7 MACo/JPIA thereafter informed the Port in a June 24, 2008, letter that it no longer would insure the Plywood Plant Building. The 2009-2010 schedule of insured locations omitted the Plywood Plant Building. This omission coincided with the Port’s decision to demolish the part of the Plywood Plant Building that had collapsed due to the heavy snowfall. The Port intended to renovate the part of the Plywood Plant Building that remained standing after the roof collapsed. 4 ¶8 The Port was in the process of demolishing the damaged part of the Plywood Plant Building when a fire destroyed the building entirely on February 25, 2010. The Port submitted an insurance claim for damages caused by the fire to the Plywood Plant Building. MACo/JPIA and Allianz refused to cover this loss. The Port filed this suit against Allianz. ¶9 The District Court granted summary judgment in favor of the Port. The District Court determined that the Allianz policy insures the Port and ordered the parties to conduct appraisal proceedings. The District Court also granted the Port’s motion to dismiss Allianz’s counterclaim that had sought to reform Allianz’s policy to exclude coverage of the Plywood Plant Building. ¶10 During the following appraisal, the parties disagreed whether the valuation provision in Allianz’s policy limited the Port’s recovery for that portion of the Plywood Plant Building that had been slated for demolition to the increased cost of demolition. The District Court issued an order on May 22, 2012, that clarified that the valuation provision did not apply in appraisal proceedings. ¶11 The District Court entered its final judgment on July 31, 2012. The District Court awarded a principal amount of $6,060,980 based on the findings of the appraisal panel and the parties’ stipulation to the value of certain other damages, $1,474,560 in prejudgment interest beginning on the date of the fire, and $2,511,847 in attorneys’ fees and costs. The total award with fees and interest now exceeds $10 million. STANDARD OF REVIEW ¶12 We review de novo a district court’s ruling on a motion for summary judgment. Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. 5 We review de novo a district court’s ruling on a M. R. Civ. P. 12(b)(6) motion to dismiss. White v. State, 2013 MT 187, ¶ 15, 371 Mont. 1, 305 P.3d 795. We review for correctness a district court’s legal determination. N. Cheyenne Tribe v. Roman Catholic Church, 2013 MT 24, ¶ 21, 368 Mont. 330, 296 P.3d 450. DISCUSSION ¶13 Whether the Port is an “insured” as contemplated by the Allianz policy. ¶14 The Port argues that it qualifies as an insured under the Allianz policy’s definition. The Port claims that the policy’s definition of “insured” includes the MACo counties and any other entities that receive insurance through MACo/JPIA. Allianz argues that it intended this language to cover only MACo and MACo/JPIA. ¶15 We begin our analysis by examining the insurance contract’s plain language. We will not rewrite clear and explicit language in an insurance contract. Monroe v. Cogswell Agency, 2010 MT 134, ¶ 15, 356 Mont. 417, 234 P.3d 79. We interpret an insurance contract’s terms “according to their usual, common sense meaning,” that is, how they would be understood by “a reasonable consumer of insurance products.” Steadele v. Colony Ins. Co., 2011 MT 208, ¶ 18, 361 Mont. 459, 260 P.3d 145. ¶16 The Allianz policy defines the “insured” as MACo “and its subsidiary, associated or allied company, corporation, firm, organization.” All of the terms used by Allianz describe one single entity, not multiple entities. The language of the contract would lead us to believe that the policy’s definition of “insured” covers only MACo and one other entity, presumably MACo/JPIA. Steadele, ¶ 18. 6 ¶17 This understanding of “insured,” however, cannot be reconciled with other provisions in the Allianz policy. We construe an insurance policy in accordance with the entirety of its terms and conditions. Lambert Well Serv. v. Wellington Specialty Ins. Co., 2008 MT 212, ¶ 11, 344 Mont. 204, 186 P.3d 1255. In other words, we read the Allianz policy as a whole and attempt to reconcile its various parts to give the entire policy meaning and effect. Lambert, ¶ 11. ¶18 The Allianz policy defines “insured property” to include real property and personal property. The personal property covered by the policy includes personal property of the following type: (1) “owned by the Insured,” (2) “of officers and employees of the Insured,” and (3) “of others in the Insured’s custody.” The substitution of “MACo and MACo/JPIA” for the term “insured” in each of these provisions would undermine the policy’s definition of “insured property.” MACo counties and other associated entities owned the personal property insured by the policy. MACo or MACo/JPIA did not own the personal property in question. MACo’s or MACo/JPIA’s employees did not own the personal property in question. And none of the personal property contemplated by the policy resided in the custody of MACo or MACo/JPIA. ¶19 We note further that portion of the policy that sets forth the action to be taken in the event of a loss. The policy obligates the insured to protect the subject property from further loss or damage. The insured also must provide an inventory of lost, destroyed, or damaged items. MACo lacks the ability to undertake the protection of the insured’s properties or to prepare inventories of lost, destroyed, or damaged items. The owner of the property in question undertakes these duties. 7 ¶20 The use of “insured” under the policy’s discussion of “insured property” and “requirements in case of loss” conflict with Allianz’s claim that only MACo and MACo/JPIA qualify as insureds under the policy. These provisions of the policy raise ambiguities. We must reconcile these seemingly contradictory provisions to give meaning and effect to the entire policy. Lambert, ¶ 11. The disconnect between the policy’s definition of “insured” and its definition of “insured property” and “requirements in case of loss” creates ambiguity regarding the policy’s definition of “insured.” This ambiguity requires us to look beyond the plain language of the Allianz policy’s definition of “insured.” ¶21 We consider extrinsic evidence to interpret this ambiguous provision and determine who qualifies as an intended “insured” under the policy. Estate of Irvine v. Oaas, 2013 MT 271, ¶ 22, 372 Mont. 49, 309 P.3d 986 (allowing a court to consider extrinsic evidence when it interprets a contract that contains ambiguous terms). The extrinsic evidence demonstrates that MACo exists for the express purpose of serving as a single entity to represent Montana’s counties, including Lincoln County, before the Montana legislature, administrative agencies, and the federal government. MACo has no existence separate from the collection of Montana counties that comprise its membership. ¶22 Lincoln County created the Port pursuant to § 7-14-1104, MCA. Section 7-14-1104 provides that the Port’s purpose involves “public and governmental functions.” These governmental functions include promoting economic development. Section 7-14-1104(1), MCA. Subsection 2 further authorizes the Port to use any property that it owns as security to issue bonds “for an essential public and governmental purpose.” Section 7-14-1104(2), 8 -1133(4), MCA. This statute indicates that the Port, as a subunit of Lincoln County, exists in “associat[ion] or alli[ance]” with Lincoln County. ¶23 The fact that the Port qualified for insurance through the MACo/JPIA insurance pool in the first place further suggests an “associat[ion] or alli[ance]” between the Port and MACo. The Port submitted its insurance applications, information, and premium payments to MACo/JPIA, similar to any other MACo/JPIA-member county. MACo/JPIA processed the Port’s application and readily accepted its premium payment. MACo/JPIA, one of MACo’s insurance pools, serves as an extension of MACo. The Port’s interactions with MACo/JPIA support the Port’s claim of its “associat[ion] or alli[ance]” with MACopursuant to the terms of the Allianz policy. ¶24 Additionally, MACo/JPIA admitted to having adopted the language for its own property insurance policy form directly from the Allianz insurance policy form. MACo/JPIA and Allianz used insurance policy forms with identical language. MACo/JPIA conceded that it insured the Port’s property. The Port’s satisfaction of the definition of “insured” under MACo/JPIA’s policy suggests that the Port also would satisfy the definition of “insured” under the same language as used in the Allianz policy. ¶25 “Associated” as used in insurance policies often connotes entities closely joined with others in a common purpose. Old Colony Ins. Co. v. Jeffery’s Mill & Warehouse, Inc., 146 F. Supp. 277, 279 (N.D. Cal. 1956). “Associated” further implies “participation by each of the individuals . . . in the achievement of a common purpose.” Old Colony Ins. Co., 146 F. Supp. at 279. The Port performs public and governmental functions that include economic development in Lincoln County. Section 7-14-1104, MCA. Lincoln County, a political 9 subdivision of Montana, created the Port to allow it to pursue these public and governmental functions related to economic development in Lincoln County. The Port and Lincoln County share the common purpose of performing public and governmental functions directly for the benefit of the residents of Lincoln County. The Port and Lincoln County each participate in the achievement of this common purpose. ¶26 The Port operates under the auspices of Lincoln County. Section 7-14-1104, MCA. Lincoln County, along with other counties in Montana, in turn, created MACo to represent the interests of its member counties. MACo, too, operates under the auspices of Lincoln County and its other member counties as MACo performs its functions directly for the benefit of Lincoln County and its other member counties. These relationships comport with the common purpose and participation contemplated by the Court in Old Colony Ins. Co., 146 F. Supp. at 279. ¶27 The Court in Travelers Indem. Co. v. United States, 543 F.2d 71, 76 (9th Cir. 1976), explained that “affiliated” and “associated” as used in an insurance policy should be interpreted “to make them applicable to persons, things, or entities of the same general nature or class” as those entities owned or controlled by the insured. The court relied on this analysis to reject a claim by the United States, acting through the Bonneville Power Administration (BPA), that a subrogation waiver clause in an insurance contract shielded it from subrogation efforts by an insurer for a private electric power company. Travelers, 543 F.2d at 73. The insurer sought subrogation from BPA following an explosion at a power generation facility operated by BPA that had destroyed the private company’s property. Travelers, 543 F.2d at 73-74. The Court determined that, as a governmental entity, BPA had 10 “objectives and responsibilities apart from those of private power companies.” Travelers, 543 F.2d at 76. ¶28 The Port and Lincoln County perform public and governmental functions. Section 7- 14-1104, MCA. MACo promotes the effective operation of its members—local political subdivisions. Entities of the same general nature possess similar responsibilities as contemplated by subrogation waiver clauses. Travelers, 543 F.2d at 76. Extrinsic evidence leads us to conclude that the Port and Lincoln County would fit within the scope of entities of the same general nature as MACo as all three exist to promote county governmental functions. ¶29 Further analysis of the policy also leads us to conclude that the Allianz policy does not constitute reinsurance. A policy of reinsurance with the Port, as an “original insured,” generally would bar the Port from bringing a direct claim against Allianz as a mere “reinsurer.” See Steven Plitt, Daniel Maldonado & Joshua D. Rogers, Couch on Insurance vol. 1A, § 9:30 (3d ed., West 2010) [hereinafter Couch on Insurancy]. The evidence instead suggests that Allianz simply provided an excess carrier high-deductible plan for the MACo/JPIA self-insurance pool. ¶30 MACo/JPIA’s authorizing statute provides that political subdivisions that elect to procure insurance pursuant to the section “may obtain excess coverage from a surplus lines insurer.” Section 2-9-211(1), MCA (emphasis added). The statute indicates that the political subdivisions themselves would be the insured under any excess coverage policy. The joint powers agreement that established MACo/JPIA further supports this proposition. The agreement provides that member counties decided to create a joint risk-sharing pool to self- 11 insure and “to purchase catastrophe, excess and/or aggregate stop loss insurance when deemed prudent.” Section 2-9-211(1), MCA, authorizes this type of insurance arrangement. ¶31 The operation of the joint-insurance pool also supports the notion that Allianz provided excess insurance. MACo/JPIA listed Allianz as an insurer on the declarations page of the Port’s policy. The Port negotiated directly with Allianz in handling an earlier claim. All of these items of extrinsic evidence offer further indicia that Allianz served as an excess insurance carrier, rather than as a reinsurer. Allianz’s status as an excess insurance carrier normally would allow the Port to bring a claim directly against Allianz as an insured. See Tex. Dept. of Ins. v. Am. Nat’l Ins. Co., 55 Tex. Sup. J. 705 (Tex. 2012) (providing that excess insurance represents “an agreement to indemnify against any loss that exceeds the [insured’s] amount of primary or other coverage”). ¶32 The Port would not necessarily be precluded from bringing a claim against Allianz even if Allianz had served as a reinsurer. The record indicates that the Port dealt directly with Allianz when the Plywood Plant Building’s roof collapsed. Consistent direct contact between an original insured (the Port) and a reinsurer (Allianz) may waive a reinsurer’s right to immunity from being sued by an original insured. Allstate Ins. Co. v. Administratia Asigurarilor De Stat, 948 F. Supp. 285, 307-08 (S.D.N.Y. 1996); Couch on Insurance at § 9:30. ¶33 We must construe ambiguous language in a contract against the contract’s drafter. Mary J. Baker Revocable Trust v. Cenex Harvest States, Coops., Inc., 2007 MT 159, ¶ 34, 338 Mont. 41, 164 P.3d 851. Allianz drafted the policy. We construe against Allianz the Allianz policy’s use of “associated or allied” when combined with the policy’s discussion of 12 “insured property” and “requirements in case of loss.” Mary J. Baker, ¶ 34. We agree with the District Court’s determination that the Port qualifies as an insured under the terms of the Allianz policy. ¶34 Whether sufficient collateral evidence entitles Allianz to reformation of the policy. ¶35 Allianz argues that Allianz and the Port both understood that the Allianz policy would not cover the Plywood Plant Building. Allianz relies primarily upon the notice from MACo/JPIA to the Port that the Plywood Plant Building no longer would be insured. Allianz seeks to reform the contract to conform to what it describes as the parties’ original intent. Allianz seeks to add language to the Allianz policy that specifically would exclude the Plywood Plant Building from any coverage. ¶36 The District Court determined that § 33-15-302, MCA, prohibits reformation of insurance policies. The Port suggests that we need not determine whether § 33-15-302, MCA, bars reformation of an insurance contract as reformation cannot be used to correct an unforeseen legal effect of an insurer’s policy. The Port underscores that the Allianz policy provides insurance for any “location” listed on the latest schedule. The policy also provides that “[i]nsured [l]ocation(s) includes the area within one thousand (1,000) feet of such ‘location.’” The Plywood Plant Building sat within 1,000 feet of an insured building included on the schedule of insured locations. ¶37 We will revise a contract when, through fraud, mutual mistake of the parties, or a mistake of one party which the other at the time knew or suspected, a written contract does not truly express the intention of the parties. Thibodeau v. Bechtold, 2008 MT 412, ¶ 22, 347 Mont. 277, 198 P.3d 785 (citing § 28-2-1611, MCA). To obtain judicial reformation, the 13 parties must have reached a mutual understanding and executed a written contract in furtherance of that understanding, but made a mistake incorporating the understanding that they had reached into the contract that they executed. Thibodeau, ¶ 22. ¶38 The record makes Allianz’s and the Port’s intent clear: to exclude the Plywood Plant Building, and only the Plywood Plant Building, from coverage under the 2009-2010 Allianz policy. Allianz had paid coverage for the Plywood Plant Building following the collapse of the roof in 2008. Allianz canceled coverage for the Plywood Plant Building after the roof’s collapse. ¶39 The Trust Administrator for MACo/JPIA attested that “MACo/JPIA [had] sent a letter to Tom Wood, the local insurance agent, cancelling property coverage and premise liability coverage for the Plywood Plant Building.” (Emphasis added). MACo/JPIA subsequently informed the Port in writing on June 24, 2008, that the “[p]roperty and [l]iability coverage for the Plywood [P]lant [B]uilding for the Lincoln Port Authority . . . is cancelled effective July 1, 2008.” (Emphasis added). This letter mentions only the Plywood Plant Building. ¶40 Thomas Wood (Wood), the owner of the insurance agency that had helped the Port obtain insurance coverage, forwarded another copy of MACo/JPIA’s letter to the Port with his own cover letter on June 26, 2008. Wood attested in his affidavit that his letter had “advis[ed the Port] that there were no other insurance markets that would insure the Plywood Plant Building.” (Emphasis added). Wood further attested that the Port prepared a “revised S.O.V. [Statement of Values] removing the Plywood Plant Building” that was “[b]ased on MACo/JPIA’s advisement that it would no longer insure the Plywood Plant Building.” (Emphasis added). 14 ¶41 The Port understood that no coverage existed for the Plywood Plant Building, and acted accordingly. The Port submitted a Statement of Values following the notice of canceled coverage under the 2009-2010 Allianz Policy. The Port’s Statement of Values included each building that had been in the prior Statement of Values with the specific omission of the Plywood Plant Building. This sole omission clarified the Port’s understanding of the canceled coverage under the 2009-2010 Allianz Policy. ¶42 Publicity surrounding the fire that destroyed the Plywood Plant Building is further informative. The Missoulian reported the Port’s belief on February 26, 2010, that “the building itself was not insured . . . ‘ever since the snow collapsed parts of the roof, the insurance company dropped us.’” (Emphasis added). Libby’s The Western News reported the industrial site manager’s statement on March 8, 2010, that “the industrial site’s insurance on the building had been dropped when the company paid a $3.2 million settlement after the roof collapsed two years ago.” (Emphasis added). The record makes clear that the parties mutually understood that coverage for the Plywood Plant Building, and only the Plywood Plant Building, no longer existed. Thibodeau, ¶ 22. ¶43 The parties created a revised contract based upon their shared understanding. The 2009-2010 Allianz policy incorporated the Port’s revised Statement of Values, which specifically had excluded the Plywood Plant Building from the schedule of covered properties. The revised schedule of covered properties in the 2009-2010 Allianz policy represents the parties’ incorporation of their mutual understanding into the writing. Thibodeau, ¶ 22. Allianz now claims, however, that both parties also intended the Allianz 15 policy to exclude coverage of the area within the 1,000 foot radius of other buildings. We disagree. ¶44 The record contains no indication that either Allianz or the Port intended to exclude coverage of the area within the 1,000 foot radius of other covered buildings, regardless of what that area contained. The parties agreed that the Plywood Plant Building itself would no longer be covered. They did not agree that any salvage materials located within 1,000 feet of other covered buildings would not be covered. The parties reached a mutual understanding that Allianz no longer would cover the Plywood Plant Building, and only the Plywood Plant Building. The parties committed that understanding to writing in the 2009-2010 Allianz policy. ¶45 The evidence in the record upon which Allianz relies to argue for reformation to exclude the 1,000 foot radius fails to indicate any intent to exclude that radius. Allianz relies heavily upon the facts that the Port did not include the Plywood Plant Building in the Statement of Values and that the Port did not pay any premium to Allianz for the Plywood Plant Building. The Port undertook both of these actions, however, in furtherance of its understanding that Allianz would not provide coverage for the Plywood Plant Building in the 2009-2010 Allianz policy. ¶46 Allianz does not identify any other evidence in the record that would indicate the parties’ mutual intent to exclude the 1,000 foot radius. Allianz has failed to establish that the 2009-2010 insurance policy expressed anything other than what the parties mutually had intended. We decline to reform the 2009-2010 Allianz policy. 16 ¶47 We need not reach Allianz’s arguments that Montana law allows reformation of an insurance policy. Reformation as a contract remedy remains available only in those situations where a discrepancy exists between the understanding that parties reached and the contract that they executed. Thibodeau, ¶ 22. The absence of a discrepancy eliminates reformation as a remedy. Thibodeau, ¶ 22. ¶48 In the absence of a discrepancy, “the language of a contract governs its interpretation if that language is clear and explicit.” Heggem v. Capitol Indem. Corp., 2007 MT 74, ¶ 22, 336 Mont. 429, 154 P.3d 1189 (citing § 28-3-401, MCA). The Port and Allianz each agreed to a contract that specified that “[i]nsured [l]ocation(s) include[] the area within one thousand (1,000) feet of such ‘location,’” referring to any location listed in the 2009-2010 schedule of coverage. The Port paid a premium to Allianz in order to receive this 1,000-foot coverage under Allianz’s policy. Neither party disputes that the remnants of the Plywood Plant Building fall squarely within the 1,000-foot radius covered by Allianz’s policy. The language in the 2009-2010 Allianz policy clearly and explicitly indicates that Allianz will provide coverage to the area within 1,000 feet of any covered location. Allianz must provide that coverage. The language of the Allianz policy provides the Port with coverage for the remnants of the Plywood Plant Building. ¶49 The Dissent posits that the parties never intended for the general provision that insures property within 1,000 feet of an insured location to cover locations deleted from coverage. (J. Rice Dissenting, ¶ 73.) Allianz would not need to seek reformation if the policy clearly stated as much. The fact that Allianz seeks reformation of the policy represents a tacit acknowledgment that the policy as written covers the Plant remnants. The Dissent further 17 maintains that under this Court’s interpretation, coverage for a particular property never could be deleted unless the parties rewrote the policy. Any required rewrite would be simple and easily applied along the following lines: “Insured Location(s) includes the area within one thousand (1,000) feet of such ‘location,’ unless the location for which recovery is sought specifically has been deleted from coverage.” ¶50 Perhaps Allianz neglected to change its policy to reflect its apparent belief that the Plywood Plant Building would not be covered under any circumstances. Equity does not require us “to reform a contract to correct an error . . . when due diligence would have uncovered and corrected the error.” Martin v. Crown Life Ins. Co., 202 Mont. 461, 469, 658 P.2d 1099, 1104 (1983). The defendant in Martin, an insurance company, waited more than a year to correct an error that it had made in its insurance policy and certificate of insurance. Martin, 202 Mont. at 469, 658 P.2d at 1103. We refused to reform the contract to correct the insurance company’s mistake in the absence of its own due diligence. Martin, 202 Mont. at 469, 658 P.2d at 1104. ¶51 Allianz, too, waited more than a year to modify its policy to eliminate any ambiguity whether it covered the Plywood Plant Building as being located within 1,000 feet of an insured building. Allianz’s exercise of due diligence should have discovered any error in the content of its insurance policy. Allianz has failed to establish that its insurance policy expressed something other than what the parties mutually had intended. ¶52 Whether the District Court correctly valued the Plywood Plant Building. ¶53 The District Court ordered Allianz and the Port each to select an appraiser to determine how much Allianz owes the Port under the policy. Allianz argues that the 18 adjustment procedure in the valuation section of its policy should have guided the appraisers in determining the amount of loss that the Port should receive. The adjustment procedure in section 10(f) addresses property scheduled for demolition. Allianz maintains that section 10(f) limits the Port’s recovery to the “increased cost of demolition” for the portion of the Plywood Plant Building that the Port had slated for demolition. ¶54 The section of Allianz’s policy that addresses appraisal does not require appraisers to follow Allianz’s valuation scheme. Indeed, the section provides no limitations on the valuation of property scheduled for demolition. The valuation provision for property scheduled for demolition applies only when the parties agree on the amount of loss. The valuation provision has no relevance when the parties agree to submit their valuation to an appraiser. ¶55 The fact that the appraisers do not have to follow the Allianz policy’s adjustment procedures does not relieve their valuation of the Plywood Plant Building of all restrictions. Allianz’s policy stipulates that appraisers will determine the amount of loss based upon “actual cash value” and “replacement cost.” Allianz’s policy defines “actual cash value” as the cost of replacement minus depreciation. Allianz’s policy dictates that the insured shall receive “actual cash value” if an insured fails to repair or replace its damaged property within two years. An insured receives “replacement cost” only if the insured repairs or replaces within two years. ¶56 The parties disagree whether the Port should receive “replacement costs” for those portions of the Plywood Plant Building that the Port had slated for demolition. This disagreement revolves around the $1,925,000 that the appraisers have determined represents 19 the “replacement cost” for those portions of the Plywood Plant Building that had been slated for demolition. ¶57 The District Court allowed the Port to choose “replacement cost” even for those portions of the Plywood Plant Building that the Port had slated for demolition. The District Court waived the requirement in the policy that the Port had to repair or replace the damaged building within two years. This two-year repair window had lapsed since the 2010 fire. The District Court relied on the fact that Allianz’s wrongful denial of coverage had stymied any efforts by the Port to rebuild. ¶58 The District Court cited numerous cases to support its determination. The cases focus on the fact that insurers’ refusals to pay recovery to their insureds prevented the insureds from repairing or replacing as the insureds lacked sufficient money for such efforts. See Zaitchick v. American Motorists Ins. Co., 554 F. Supp. 209, 217 (S.D.N.Y. 1982), aff’d, 742 F.2d 1441 (2d Cir. 1983); Columbia Mut. Ins. Co. v. Sanford, 920 S.W.2d 28, 30 (Ark. App. 1996); Pollock v. Fire Ins. Exch., 423 N.W.2d 234, 236-37 (Mich. App. 1988). In two of the cited cases—Conrad Bros. v. John Deere Ins. Co., 640 N.W.2d 231, 242 (Iowa 2001) and Bailey v. Farmers Union Coop. Ins. Co., 498 N.W.2d 591, 598-99 (Neb. App. 1992)— courts determined that the insured parties would have rebuilt, but for repudiation of their policies by their insurers. ¶59 The Port never intended to rebuild the damaged portions of the Plywood Plant Building before the 2010 fire. The Port received over $3 million for the damage to the Plywood Plant Building after the roof collapsed during the winter of 2007-2008. The Port in 20 fact affirmatively intended to demolish those portions of the Plywood Plant Building that had been damaged from the roof collapse before the 2010 fire. ¶60 The Port apparently did not replace or repair any portions of the Plywood Plant Building that had been slated for demolition within two years of the fire. The Port would receive far more for the Plywood Plant Building than it had contemplated under the policy if we allow the Port to elect to receive “replacement cost” for those portions of the Plywood Plant Building that it had not intended to repair or replace. ¶61 Property insurance serves to place the insured in the same position in which he would have been had there been no loss. See Lee v. Providence Wash. Ins. Co., 82 Mont. 264, 276, 266 P. 640, 644 (1928). The Port would land in a better place than it would have without the fire if we allow the Port to receive “replacement cost” for those portions of the Plywood Plant Building that it had slated for demolition. The Port should receive only “actual cash value” for those portions of the Plywood Plant Building that it had slated for demolition. Most likely “actual cash value” for those portions of the Plywood Plant Building that the Port had slated for demolition will amount only to salvage value as these portions of the building have depreciated greatly. We reverse the District Court’s determination that the Port should receive “replacement cost” for the portions of the Plywood Plant Building that had been slated for demolition. ¶62 Whether prejudgment interest began to accrue on the date of the fire at the Plywood Plant Building. ¶63 The Port seeks to recover interest, pursuant to § 27-1-211, MCA, from the date of the fire that destroyed the Plywood Plant Building. Section 27-1-211, MCA, allows an insured 21 party to recover interest under certain circumstances. A party must fulfill three prerequisites: (1) “an underlying monetary obligation must exist,” (2) “the amount of recovery must be capable of being made certain,” and (3) “the right to recover must vest on a particular day.” Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, Inc., 2008 MT 2, ¶ 99, 341 Mont. 33, 174 P.3d 948. ¶64 Conversely, an award of prejudgment interest would not be available “when the amount of a party’s damages is uncertain or disputed.” Crumleys, ¶ 99. The insurer in Crumleys had breached its duty to indemnify its insured’s loss that had resulted from a leak in an underground diesel tank. Crumleys, ¶ 1. The parties could not ascertain the amount of damages that had occurred as a result of the breach until the date that the jury returned a verdict and awarded damages. Crumleys, ¶ 100. Under those circumstances, “no interest can run until a fixed amount of damages has been arrived at, either by agreement, appraisal, or judgment.” Crumleys, ¶ 100 (quoting Northern Mont. Hosp. v. Knight, 248 Mont. 310, 321, 811 P.2d 1276, 1282 (1991)). ¶65 Allianz disputed whether it insured the Plywood Plant Building from the time that the Port submitted its claim. The amount of damages remains uncertain. The complexity of this case prevents the Port from invoking § 27-1-211, MCA, in order to argue that prejudgment interest should have begun to accrue on the date of the fire. ¶66 The Port argues alternatively that § 27-1-312, MCA, not § 27-1-211, MCA, controls the outcome. Section 27-1-312, MCA, provides that the “detriment caused by the breach of an obligation to pay money only is deemed to be the amount due by the terms of the 22 obligation with interest thereon.” The “amount due by the terms of the obligation” in this case remains, however, far from clear. ¶67 We agree that Allianz must pay interest. The language of both § 27-1-211, MCA, and § 27-1-312, MCA, indicates that Allianz must pay interest on the amount that it owes the Port. Section 27-1-312, MCA, remains silent as to the date on which interest should begin to accrue. Section 27-1-312, MCA, refers to “the amount due by the terms of the obligation.” Section 27-1-312, MCA, provides no guidance regarding timing. On the other hand, § 27-1- 211, MCA, entitles a party to recover damages once they are “certain or capable of being made certain by calculation.” We must rely on § 27-1-211, MCA, to determine wheninterest began to accrue on the amount of damages that Allianz must pay to the Port. ¶68 The date of the fire cannot mark the date that interest began to accrue. See Crumleys, ¶ 99. The amount of damages remained incapable of being made certain by calculation at the time of the fire. A numerical amount for damages actually must be calculated, or be capable of calculation, before interest can begin to accrue. Section 27-1-211, MCA; see also, Northern Mont. Hosp., 248 Mont. at 320-21, 811 P.2d at 1282. For example, in Northern Montana Hospital we determined that the right to recover interest vested only on the date that the jury returned a verdict for the monetary amount of $1,750,000. Northern Mont. Hosp., 248 Mont. at 321, 811 P.2d at 1282. Here, the parties could not agree on how the appraisers should calculate the damages. No amount could be assigned for the damages to the portion of the Plywood Plant Building that the Port had slated for demolition. ¶69 The District Court on remand will determine the amount of damages that Allianz owes the Port for those portions of the Plywood Plant Building that had been slated for 23 demolition. The damages at that point will be “capable of being made certain by calculation.” Section 27-1-211, MCA. The Port will receive “actual cash value” for the portions of the Plywood Plant Building that it had slated for demolition. The appraisers can calculate this value. The District Court’s adoption of the appraiser’s new valuation on remand will mark the point at which interest shall begin to accrue. The Port’s loss entitles it to post-judgment interest, but not prejudgment interest for those portions of the Plywood Plant Building that had been slated for demolition. Section 27-1-211, MCA. CONCLUSION ¶70 We affirm the District Court’s determination that Allianz’s policy provides coverage for the Plywood Plant Building based upon its location within 1,000 feet of a covered building. We also affirm the District Court’s refusal to reform the Allianz policy. We reverse, however, the District Court’s award of “replacement cost” for those portions of the Plywood Plant Building that the Port had slated for demolition. We further remand to allow the District Court to calculate post-judgment interest owed to the Port for the damages owed under the policy. ¶71 Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER 24 Justice Jim Rice, dissenting. ¶72 I agree with the Court that the parties clearly intended to exclude the Plywood Plant Building from coverage, clearly acted to implement this intention, and that the consequence of their action was that coverage for the Building “no longer existed.” Opinion, ¶ 42. However, I disagree with the Court’s further conclusion that the parties nonetheless did not exclude “the remnants of the Plywood Plant Building” from coverage—as if the remnants of the Building somehow acquired a different character than the Building itself, a conclusion for which no support is offered. Opinion, ¶ 48 (emphasis added). Thomas Wood’s June 26, 2008 letter advised the Port “that there is NO COVERAGE (property or liability) on the old plywood plant location” (caps in original, italics added). Following the cancellation of coverage, the Port’s property insurance premium went down from $19,210 to $7,004. Thus, there was no consideration for coverage for the Building. The Court declares Allianz to be an excess insurer, Opinion, ¶ 31, but there can be no excess coverage if there was no consideration for primary coverage. I disagree with the District Court’s conclusion that an insurance contract cannot be reformed. Although we should affirmatively declare that there was no coverage at all because of the failure of consideration, Allianz is at least entitled to reformation of the contract to conform it to the parties’ clear intentions. ¶73 I further disagree that the parties’ specific action to delete the Building from coverage was counteracted by the general provision insuring property within 1,000 feet of an insured location, and that it was legally impossible to delete coverage for a particular building unless Allianz “change[d] its policy to reflect its apparent belief that the Plywood Plant Building 25 would not be covered under any circumstances.” Opinion, ¶ 50. Under the Court’s policy interpretation, coverage for a particular property could never be deleted unless the policy was rewritten. This lacks any sense. ¶74 I would reverse and enter judgment for Allianz. /S/ JIM RICE Justice Beth Baker joins in the dissenting Opinion of Justice Rice. /S/ BETH BAKER Justice Laurie McKinnon, dissenting. ¶75 I dissent from the decision of the Court holding that the Lincoln County Port Authority (Port) was an insured party under the terms of the Allianz policy. The plain, unambiguous language of the Allianz policy does not include the Port as an insured party. Nevertheless, the Court concludes that the policy is ambiguous and moves on to an analysis of the extrinsic evidence. In so doing, the Court mischaracterizes the relationship between the Montana Association of Counties (MACo) and the Port. The result reached by the Court disregards the general intent of the contract and is supported by neither the facts nor the law. ¶76 When this Court is asked to interpret a written contract, “the intention of the parties is to be ascertained from the writing alone if possible . . . .” Section 28-3-303, MCA. As the Court observes, the plain language of the Allianz policy identifies the insured as MACo “and its subsidiary, associated or allied company, corporation, firm, [or] organization.” Opinion, ¶ 16. The use of the singular form of “subsidiary, associated or allied company, corporation, 26 firm, [or] organization” indicates that the parties contemplated only one such associated or allied entity, specifically, Montana Association of Counties Joint Powers Insurance Authority (MACo/JPIA). Opinion, ¶ 16. The plain language definition of “insured” in the Allianz policy clearly indicates that the parties did not intend each of the counties and special districts insured by MACo/JPIA to be named as insured in the Allianz policy. ¶77 Had the parties intended for each county or public entity to be insured directly by Allianz, the policy itself provided a clear way of expressing this intent. The policy includes separate designations for “Insured” and “First Named Insured” parties. The “First Named Insured” bears responsibility for payment of premiums and is authorized to cancel the policy. The parties could, therefore, have listed the Port and other entities insured by MACo/JPIA as the “Insured” on the Allianz policy and designated MACo as the “First Named Insured” responsible for management of the policy. The parties did not do so, and instead chose to designate MACo as both the “Insured” and the “First Named Insured.” The contract, on its face, evidences the parties’ intent to name only MACo and its single associated entity, MACo/JPIA, as the insured. ¶78 The Court concludes that the policy’s definition of insured personal property is ambiguous, and therefore proceeds to consider extrinsic evidence of the parties’ intent. Opinion, ¶¶ 20-21. This Court has not been asked to construe the policy as applied to personal property, however, and the Court disregards completely the definition of insured real property. The policy’s definition of insured real property is unambiguous and fully consistent with the designation of MACo and MACo/JPIA as the named insured. The Allianz policy states that the insured property includes “[r]eal property in which the Insured 27 has an insurable interest.” An insurable interest in property is “any actual, lawful, and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage or impairment.” Section 33-15-205(2), MCA. An insurable interest need not be an ownership or possessory interest. Rather, “any person has an insurable interest in property, by the existence of which he will gain an advantage, or by the destruction of which he will suffer a loss . . . .” Harrison v. Fortlage, 161 U.S. 57, 65, 16 S. Ct. 488, 490 (1896); Atlas Assurance Co. v. Harper, Robinson Ship. Co., 508 F.2d 1381, 1386, (9th Cir. 1975); Bird v. Central Mfrs. Mut. Ins. Co., 168 Ore. 1, 6, 120 P.2d 753, 755 (1942) (“It is sufficient to constitute an insurable interest in property that the insured is so situated with reference to the property that he would be liable to loss should it be injured or destroyed by the peril against which it is insured.”). As an insurer of the Port, MACo/JPIA was financially liable for losses resulting from the destruction of property owned by the Port. Therefore, MACo/JPIA had an insurable interest in real property owned by the Port. Section 33-15-205(2), MCA. The policy’s clear designation of MACo and MACo/JPIA as the insured parties is fully consistent with the policy’s definition of insurable real property. The terms require no additional interpretation. ¶79 The Court also concludes that the duties to be undertaken by the insured in the event of a loss are inconsistent with a reading of MACo and MACo/JPIA as the insured. Opinion, ¶ 19. The policy requires the insured to protect the property from further loss or damage and to provide an inventory of lost or damaged property. The Court concludes, with no analysis, that MACo and MACo/JPIA lack the ability to undertake these duties. Opinion, ¶ 19. The Joint Powers Agreement establishing MACo/JPIA, however, authorizes MACo/JPIA to 28 “establish reasonable and necessary loss reduction and prevention procedures to be followed by the members” and to “provide risk management and claim adjustment.” Members are obligated to allow MACo/JPIA “reasonable access to all premises of the member and all member records.” Members must also “cooperate fully” with MACo/JPIA for the adjustment of claims, “follow [. . .] loss reduction and prevention procedures,” and provide MACo/JPIA with “information on the value of buildings and contents.” Members may be expelled from the MACo/JPIA pool for failure to comply with loss prevention procedures or failure to provide reasonable access to all facilities and records. ¶80 With these powers in place, there is no reason to think that MACo and MACo/JPIA would be incapable of providing to Allianz an inventory of damaged property or acting to prevent further loss or damage to that property. Indeed, preparing an inventory of damaged property would appear to be essential to the exercise of MACo/JPIA’s enumerated power to “provide risk management and claim adjustment.” MACo/JPIA is explicitly authorized to gain access to the premises of its members and to impose loss prevention procedures, which its members are required to follow. The provisions of the policy defining the responsibilities of the insured are not inconsistent with the designation of MACo and MACo/JPIA as insured parties. ¶81 Moreover, the Court, having determined that consideration of extrinsic evidence is necessary to interpret the policy, mischaracterizes the nature of that evidence. The Court concludes that MACo and the Port are “associated or allied” because each had a relationship with Lincoln County and because the Port paid insurance premiums to MACo/JPIA. This 29 conclusion is not only inconsistent with case law defining the terms “associated or allied.” It also defies common sense. ¶82 The Court states that MACo exists to represent Montana counties before the state legislature, administrative agencies, and the federal government. Opinion, ¶ 21. The Court goes on to state that the Port exists for the purpose of promoting economic development in Lincoln County. Opinion, ¶ 22. The Court then concludes that these two organizations can be considered “associated or allied” because they serve the common purpose of “promot[ing] county governmental functions.” Opinion, ¶ 28. This is an unrealistically broad depiction of the purposes of MACo and the Port. MACo represents the general interests of Montana counties, not only Lincoln County. The Port, on the other hand, serves the limited purpose of promoting commerce and economic development exclusively within Lincoln County. While one does not wish to doubt the existence of collegiality among the governments of Montana counties, it is nevertheless apparent that the economic interests of a single county will not always be identical to the general interests of counties throughout the state. The facts do not support the conclusion that MACo and the Port have a common purpose. ¶83 Nor does the law support the conclusion that MACo and the Port are “associated or allied.” The Court relies on Old Colony Insurance for the proposition that a common purpose is sufficient to establish an association or alliance, but ignores the facts of that case, which established that two entities were associated when they had entered mutual agreements and traded shares of stock in such a way that one entity was effectively placed within the control of the other. Opinion, ¶¶ 25-26; Old Colony Ins. Co. v. Jeffery’s Mill & Warehouse, Inc., 146 F. Supp. 277, 279-80 (N.D. Cal. 1956). Old Colony Insurance also 30 defined “associated” entities not simply as those possessing a common purpose, but as those “[c]losely connected or joined in a united action for a common purpose, interest, activity, objective, or the like.” Old Colony Ins. Co., 146 F. Supp. at 279. Undisputedly, MACo did not control the Port, and the Port did not control MACo. MACo and the Port each have a relationship with Lincoln County, but they serve distinct purposes. They are not closely connected or joined, and they are not participants in a united action. ¶84 In Travelers Indemnity Co. v. United States, the terms “affiliated” and “associated” were interpreted to “envision an intimate business relationship in which significant aspects of financial and managerial control of the insured and the affiliate or associate are integrated. More is required than common ownership and a limited sharing of facilities which aids each owner to pursue his independent and separate objectives.” Travelers Indem. Co. v. United States, 543 F.2d 71, 76 (9th Cir. 1976). The Ninth Circuit then concluded that “mutuality of interest” was not sufficient to establish an association between “independent entities each pursuing separate and distinct objectives.” Travelers Indem. Co., 543 F.2d at 76. Here, MACo and the Port have no common ownership. MACo and the Port have no integration of financial and managerial control. Although MACo and the Port share some mutuality of interest, they are independent entities each pursuing separate objectives. The law does not support the conclusion that the Port was a “subsidiary, associated or allied company, corporation, firm, [or] organization” of MACo. ¶85 The Court also addresses the only direct relationship between MACo and the Port: the contractual relationship between MACo/JPIA and the Port. The Court suggests that by submitting an insurance application and premium payments to MACo/JPIA, the Port became 31 “associated or allied” with MACo. Opinion, ¶ 23. It is clear, however, that “an arm’s length contractual relationship would not constitute an association or affiliation.” Travelers Indem. Co., 543 F.2d at 76 n. 5 (citing In re Marine Sulphur Transp. Corp., 312 F. Supp. 1081, 1103 (S.D.N.Y. 1970), aff’d in part and rev’d in part on other grounds, 460 F.2d 89 (2d Cir. 1972)). The commonplace act of paying an insurance bill simply cannot be enough to establish a relationship as a “subsidiary, associated or allied company, corporation, firm, [or] organization.” The Court’s holding would transform ordinary consumers into corporate subsidiaries. ¶86 Having concluded that the Port is the insured party under the Allianz policy, the Court then characterizes the policy as excess insurance, to be paid directly to the Port only after it has exhausted its primary coverage. Opinion, ¶¶ 29-32. This raises the question of what primary insurance coverage, if any, the Port had. The Court notes that MACo/JPIA has conceded that it insured the Port’s property. Opinion, ¶ 24. If the Allianz policy is to be applied as excess coverage, as the Court asserts, then Allianz’s liability would arise only after MACo/JPIA’s liability had been exhausted. ¶87 The declarations page of the policy issued by MACo/JPIA to the Port reads: “[A]uthority agrees to provide coverage as follows: . . . Real & Personal Property Blanket Replacement $100,000,000/occurrence.” The second page of the policy sets out the “Limits of Liability” for the policy, and states: “Property Blanket Replacement at $100,000,000/occurrence to building/contents.” The following page defines the deductible for the MACo/JPIA policy, stating that MACo/JPIA’s liability “shall not be charged within the first $1,000 for any loss arising under Section[ ] I,” which includes the real and personal 32 property coverage. The MACo/JPIA policy clearly indicates that MACo/JPIA is the Port’s primary insurer with a liability limit of $100,000,000. ¶88 The Allianz policy provides up to $100,000,000 in coverage with a $100,000 deductible. The policy states that if the insured has primary insurance with coverage greater than $100,000, the Allianz policy will apply “only after the limits of liability of such other insurance has been exhausted.” The Court does not address when Allianz’s liability as an excess insurer would arise, but appears to assume that Allianz is liable for amounts in excess of the $100,000 deductible. Opinion, ¶ 29. ¶89 It is clear from the terms of the Allianz policy, however, that if the Port is insured by both MACo/JPIA and Allianz, Allianz’s liability would arise only after the Port had exhausted its MACo/JPIA policy. As stated on the face of the MACo/JPIA policy and noted in the affidavit of MACo/JPIA’s trust administrator, that liability limit is $100,000,000, not $100,000. In order to support its construction of the Allianz policy as excess insurance to be paid directly to the Port, the Court must either rewrite the MACo/JPIA policy to establish a liability limit of $100,000—which appears nowhere in the text of the MACo/JPIA policy— or hold MACo/JPIA solely responsible for property insurance coverage up to $100,000,000. ¶90 The liability limits established by the Allianz and MACo/JPIA policies are easily reconciled if the Allianz policy is treated as reinsurance. MACo/JPIA insures the Port for $100,000,000, charging the Port its own deductible. Allianz, in turn, insures MACo and MACo/JPIA for $100,000,000. For any loss over $100,000, the amount of the Allianz deductible, MACo/JPIA submits a claim to Allianz to cover its own liability. This 33 conclusion is not only consistent with the plain terms of both the Allianz and MACo/JPIA policies; it is also consistent with how MACo/JPIA describes its own operations. ¶91 Our statutes provide that “[a] contract may be explained by reference to the circumstances under which it was made and the matter to which it relates.” Section 28-3- 402, MCA. Therefore, a consideration of the MACo/JPIA insurance program is appropriate. MACo/JPIA administers a joint risk management pool for the benefit of its members, including the Port. The relationship between MACo/JPIA and the members it insures is governed by a Joint Powers Agreement which authorizes MACo/JPIA to purchase insurance coverage “to cover losses borne by the joint risk management pool,” not losses borne by individual entities. It is pursuant to this authority that MACo/JPIA obtained the Allianz policy. MACo/JPIA is responsible for insuring its members up to the $100,000,000 policy limit. Claims under $100,000 are paid from the joint risk management pool. For claims that exceed $100,000, MACo/JPIA submits its own claim under the Allianz policy. ¶92 By structuring its insurance program in this way, MACo/JPIA achieves several cost- saving measures beneficial to Montana counties and other public entities. MACo/JPIA negotiates for the purchase of insurance based on the combined value of all properties in the pool, giving the pool greater leverage and bargaining power than any single purchaser. The loss history of program participants is also pooled, so that counties with numerous losses, who would otherwise pay more for insurance, are balanced out by counties with fewer losses. The loss history is further stabilized because MACo/JPIA pays all claims under $100,000 from the pool, thus reducing the number of claims that are presented to the insurer. MACo/JPIA assumes the burden of adjusting claims, ensuring that the insurer is presented 34 only with those claims that are meritorious. In the event of a catastrophic loss affecting multiple program participants, MACo/JPIA also allocates insurance funds fairly to each of the affected counties, rather than allowing each to make its own claim to the insurer and potentially exhaust the coverage. ¶93 The Port asserts that self-insurance pools, like MACo/JPIA, are not allowed to purchase reinsurance. This argument mischaracterizes both the plain language and the intent of § 2-9-211(1), MCA, which provides that “[p]olitical subdivisions that elect to procure insurance jointly (pooled fund) under this section may obtain excess coverage from a surplus lines insurer . . . .” There is no reason to conclude that authorization of excess coverage implicitly prohibits reinsurance coverage. The language authorizing “excess coverage from a surplus lines insurer” was added in 1995 not to specifically authorize the purchase of excess or reinsurance coverage, which was already common practice, but to permit the purchase of such coverage from insurance carriers not licensed in the state. H. Local Govt. Comm., Hearing on H. Bill 54, Jan. 5, 1995; Sen. Bus. & Ind. Comm., Hearing on H. Bill 54, Jan. 26, 1995. There is no indication in the record of any intent to prohibit reinsurance. H. Local Govt. Comm., Hearing on H. Bill 54, Jan. 5, 1995; Sen. Bus. & Indus. Comm., Hearing on H. Bill 54, Jan. 26, 1995. Discussion of earlier amendments to § 2-9-211, MCA, indicates that reinsurance was considered essential to the viability of self-insurance pools. Sen. Local Govt. Comm., Hearing on Sen. Bill 2, March 25, 1986; H. State Admin. Comm., Hearing on Sen. Bill 2, March 27, 1986. The Port’s argument that reinsurance is prohibited is without merit. 35 ¶94 When interpreting a contract as a whole, we must “give effect to every part if reasonably practicable,” § 28-3-202, MCA, but only insofar as “it can be done without violating the intention of the parties,” § 28-3-201, MCA. Particular clauses must be treated as subordinate to the contract’s general intent. Section 28-3-307, MCA. The Court allows an ambiguity in the definition of personal property, not at issue in determining the coverage of the Port’s real property, to subvert the general intent of the contract and, as a result, restructure MACo/JPIA’s insurance program. The plain language of the Allianz policy, the definition of “associated or allied,” the facts of the relationship between MACo and the Port, the terms of the MACo/JPIA policy, and the circumstances under which the Allianz policy was issued all support the conclusion that the Port was not, and was never intended to be, an insured party as defined by the Allianz policy. I respectfully dissent from the decision of this Court holding that the Port qualifies as an insured under the terms of the Allianz policy. /S/ LAURIE McKINNON	December 10, 2013
904c56d5-237c-4184-9e15-4b531ad359bb	Cavanaugh v. Citimortgage, Inc.	2013 MT 349	DA 13-0183	Montana	Montana Supreme Court	DA 13-0183 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 349 STEVEN L. CAVANAUGH, Plaintiff and Appellant, v. CITIMORTGAGE, INC., ABN AMRO MORTGAGE GROUP, INC., MORTGAGE ELECTRONIC REGISTRATION SYSTEM, INC., HOLLAND AND HART LLP, SCOTT MITCHELL, MICHELLE SULLIVAN, KATIE SCOTT and ERIN THEOBALD, Defendants and Appellees. ___________________________________________ CITIMORTGAGE, INC., Counterclaimant and Third-Party Plaintiff and Appellee, v. STEVEN L. CAVANAUGH, Counterclaim Defendant and Appellant, and SUSAN L. CAVANAUGH, FIRST INTERSTATE BANK and CAPITAL ONE BANK (USA), N.A., Third-Party Defendants. ______________________________________________ SUSAN L. CAVANAUGH, Third-Party Counterclaimant and Appellant, v. CITIMORTGAGE, INC., and ABN AMRO MORTGAGE GROUP, INC., Third-Party Counterclaim Defendants and Appellees. November 19 2013 2 APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV-11-506A Honorable Holly Brown, Presiding Judge COUNSEL OF RECORD: For Appellants: Steven L. Cavanaugh (Self-Represented), Belgrade, Montana Susan L. Cavanaugh (Self-Represented), Belgrade, Montana For Appellees: W. Scott Mitchell; Michelle M. Sullivan, Holland & Hart, LLP, Billings, Montana Submitted on Briefs: October 30, 2013 Decided: November 19, 2013 Filed: __________________________________________ Clerk 3 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Steven L. Cavanaugh and Susan L. Cavanaugh appeal from the judgment and decree of foreclosure issued by the Eighteenth Judicial District Court, Gallatin County, denying them the right to redeem the foreclosed property. We affirm. ¶2 The following issues are presented on appeal: ¶3 Issue One: Whether the Cavanaughs are entitled to a right of redemption because their property was foreclosed by judicial procedure, rather than by advertisement and sale? ¶4 Issue Two: Whether the Cavanaughs are entitled to a right of redemption because their property is a multi-family residence? PROCEDURAL AND FACTUAL BACKGROUND ¶5 On December 22, 2006, Susan Cavanaugh executed a promissory note to ABN AMRO Mortgage Group, Inc., in the amount of $316,000. The same day, she and her husband, Steven Cavanaugh, executed a deed of trust pledging their home in Belgrade, Montana, as security for the note. On her loan application, Susan stated that the purpose of the loan was to refinance her primary residence. She did not identify any rental income and indicated that the property had only one unit. In 2007, ABN AMRO merged with CitiMortgage, Inc. CitiMortgage was the surviving entity and the beneficiary of the deed of trust. ¶6 In December 2008, Susan did not submit a monthly payment, and the loan entered default. Susan did not cure the default, and after a period of negotiation, a trustee’s sale 4 was scheduled for February 22, 2010. The Cavanaughs began a series of attempts to avoid foreclosure, culminating in the filing of a complaint and request for injunctive relief. The trustee’s sale was canceled pending resolution of the action. On August 31, 2010, the Cavanaughs and CitiMortgage entered a settlement agreement, as part of which they stipulated to the dismissal of the complaint. CitiMortgage agreed to forbear from exercising its right to foreclosure for a period of up to six months. The Cavanaughs agreed to make payments to CitiMortgage in the amount of $550 per month beginning August 31, 2010, and ending January 31, 2011. ¶7 The Cavanaughs failed to make the required payments, and a second trustee’s sale was scheduled for June 20, 2011. Steven filed a second lawsuit on May 17, 2011, and the trustee’s sale was again canceled. CitiMortgage named Susan as a third-party defendant and asserted a counterclaim and third-party claim for judicial foreclosure. Susan responded and also asserted a counterclaim. ¶8 On August 30, 2012, CitiMortgage moved for summary judgment on its counterclaim and third-party claim for judicial foreclosure, counts one through four of Steven’s complaint, and all counts of Susan’s third-party counterclaim. The District Court granted CitiMortgage’s motions on December 21, 2012, and entered a judgment and decree of foreclosure on February 7, 2013. The judgment stated that the Cavanaughs were not entitled to a statutory right of redemption, and CitiMortgage was not entitled to a deficiency judgment. The Cavanaughs appeal only that portion of the judgment stating that they are not entitled to redeem the property. STANDARD OF REVIEW 5 ¶9 We review a district court’s conclusions of law de novo, to determine whether they are correct. First Security Bank v. Abel, 2008 MT 161, ¶ 13, 343 Mont. 313, 184 P.3d 318. DISCUSSION ¶10 Issue One: Whether the Cavanaughs are entitled to a right of redemption because their property was foreclosed by judicial procedure, rather than by advertisement and sale? ¶11 The Cavanaughs urge that because the foreclosure of their property was by judicial procedure, rather than by “advertisement and sale” as contemplated in the Small Tract Financing Act, §§ 71-1-301 to 321, MCA, they are entitled to the right of redemption that attends the foreclosure of a traditional mortgage. ¶12 Following the foreclosure of a conventional mortgage, the borrower is entitled to redeem the property from the purchaser at any time within one year after the sale. Section 25-13-802, MCA. The borrower is also entitled to remain in possession of the property during this one-year redemption period. Section 25-13-821, MCA. In 1963, the banking industry found that this one-year period discouraged potential investment in and development of foreclosed properties. First State Bank of Forsyth v. Chunkapura, 226 Mont. 54, 57, 734 P.2d 1203, 1205 (1987). The industry therefore proposed a “quid pro quo” to the Legislature: lenders would give up their deficiency judgment rights, in exchange for which borrowers would give up their rights of redemption and possession. Chunkapura, 226 Mont. at 57, 734 P.2d at 1205. The Legislature adopted this proposal 6 as part of the Small Tract Financing Act. Chunkapura, 226 Mont. at 57-58, 734 P.2d at 1205. ¶13 The Small Tract Financing Act now provides for real property up to 40 acres to be secured by a deed of trust, rather than a conventional mortgage. Section 71-1-304(1), MCA. Under the Small Tract Financing Act, a lender may elect to foreclose by “advertisement and sale,” or by judicial procedure. Section 71-1-304(3), MCA. The Small Tract Financing Act specifically states that when a lender forecloses by advertisement and sale, the lender is not entitled to a deficiency judgment, § 71-1-317, MCA, and the purchaser is entitled to take possession of the property ten days after the sale, § 71-1-319, MCA. ¶14 We have previously been asked to interpret the provisions of the Small Tract Financing Act to determine what remedies apply when a property secured by a deed of trust is foreclosed on by judicial procedure. Chunkapura, 226 Mont. at 55, 734 P.2d at 1203. Our holding in Chunkapura made clear that when a lender elects to foreclose by judicial procedure, rather than by advertisement and sale, “the lender (mortgagee) may not recover a deficiency judgment against the borrower (mortgagor), and the borrower has no right of redemption as is accorded borrowers in judicial foreclosures of conventional mortgages.” 226 Mont. at 55, 734 P.2d at 1203. We have periodically confirmed our holding in Chunkapura, and it is now well-settled that regardless of the manner of foreclosure, when a property is secured by a deed of trust, the Small Tract Financing Act does not entitle a lender to a deficiency judgment or a borrower to a right of redemption. See Abel, ¶ 26; Midfirst Bank v. Ranieri, 257 Mont. 312, 315, 848 P.2d 7 1046, 1048 (1993); First Federal Sav. & Loan Ass’n of Missoula v. Anderson, 238 Mont. 296, 300, 777 P.2d 1281, 1283 (1989). ¶15 Here, after two forestalled attempts at a trustee’s sale, CitiMortgage elected to proceed by judicial foreclosure, as was its right under § 71-1-304(3), MCA. The judicial foreclosure of a deed of trust does not bring the foreclosure action outside the scope of the Small Tract Financing Act, as the Cavanaughs claim. Chunkapura, 226 Mont. at 55, 734 P.2d at 1203. Whether the foreclosure occurs by trustee’s sale or judicial procedure, the remedies must be consistent with the provisions of the Small Tract Financing Act. Chunkapura, 226 Mont. at 55, 734 P.2d at 1203. Therefore, the Cavanaughs are not entitled to a one-year right of redemption. ¶16 Issue Two: Whether the Cavanaughs are entitled to a right of redemption because their property is a multi-family residence? ¶17 The Cavanaughs next argue that the rule stated in Chunkapura is not applicable to their property, because at the time of foreclosure, it was not a single family residence. Our holding in Chunkapura was limited on rehearing to “occupied, single family residential propert[ies].” 226 Mont. at 66, 734 P.2d at 1210. The character of a property as an “occupied, single family residential property” is determined at the time that the deed of trust is executed. Anderson, 238 Mont. at 301, 777 P.2d at 1284. Where a property is a single family residential home at the time the deed of trust is executed, but is briefly used as a rental property prior to a foreclosure sale, the property is still considered a single family residence. Ranieri, 257 Mont. at 316, 848 P.2d at 1048 (citing Anderson, 238 Mont. at 301, 777 P.2d at 1284). 8 ¶18 Here, Susan’s loan application indicated that the home was her primary residence, not an investment property. She stated that the home had only one unit. She did not report receiving any rental income from the property. The Cavanaughs’ home was a single family residence at the time the deed of trust was executed. Its character at the time of foreclosure is immaterial. Anderson, 238 Mont. at 301, 777 P.2d at 1284. The rule stated in Chunkapura governs here, and therefore, the Cavanaughs are not entitled to a right of redemption. ¶19 Affirmed. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ JIM RICE	November 19, 2013
6473f36a-40c0-4874-a5cd-e0cadb9fc12c	State v. Golie	2013 MT 321N	DA 12-0454	Montana	Montana Supreme Court	DA 12-0454 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 321N STATE OF MONTANA, Plaintiff and Appellee, v. ANDREW DAVID GOLIE, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC 11-30 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellant: Colin M. Stephens, Smith & Stephens, P.C.; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General; Helena, Montana William E. Fulbright, Ravalli County Attorney; Hamilton, Montana Submitted on Briefs: September 26, 2013 Decided: October 29, 2013 Filed: __________________________________________ Clerk October 29 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Andrew David Golie (Golie) appeals from the Judgment of the Montana Twenty-First Judicial District Court, Ravalli County, finding him guilty of felony witness tampering and sentencing him to twenty years in the Montana State Prison, with five suspended. We affirm. ¶3 In January 2011 a pawn shop in Hamilton, Montana was burglarized. Various items were taken, including a unique necklace with a broken clasp. Law enforcement responded and investigated, but no suspect was identified. In March 2011 the owner of the pawn shop (Dodd) called law enforcement to report that Josh Edmondson (Edmondson) had come into the shop trying to sell the necklace with the broken clasp. Dodd reported that when confronted about the stolen necklace, Edmondson said that a friend named Andrew had given him the necklace, but he did not know Andrew’s last name. After being confronted by Dodd, Edmondson called Golie who admitted that the necklace was stolen and told Edmondson that he was stupid for having tried to pawn it. The following day, Golie showed up at Edmondson’s house around 10:30 p.m., along with a friend, Wilkins, who made Edmondson nervous. Golie told Edmondson to confess that he stole the necklace. He reminded Edmondson that he knew where Edmondson’s child slept, where Edmondson’s 3 dog slept, and where Edmondson lived. Edmondson decided to contact law enforcement because he feared for his family’s safety. ¶4 Following the police investigation, Golie was charged with felony intimidation and felony witness tampering. The case was tried to a jury in March 2012. Sasha Brownlee (Brownlee) represented Golie. At the conclusion of the trial, the parties agreed on jury instructions. Among the agreed-upon instructions were Instructions 16 and 17, on witness tampering. Instructions 16 and 17 incorporated a conduct-based definition of the mental state element, set forth in Instruction 18, for the crime of witness tampering. Neither counsel objected to the instructions. The jury had difficulty reaching consensus, but ultimately found Golie guilty of witness tampering and acquitted him of intimidation. The court sentenced him to twenty years in Montana State Prison, with five suspended. ¶5 Golie now appeals, alleging that Brownlee was ineffective for failing to object to the State’s mental state instruction for the offense of witness tampering. He contends that a result-based mental state instruction was required. He further alleges that the District Court committed plain error in allowing the flawed instruction and that this Court should exercise plain error review to overturn the District Court’s decision. We disagree. ¶6 We recently explained that: To make . . . [the determination of whether an IAC claim is more properly raised in postconviction proceedings], we ask ‘why’ counsel did or did not perform as alleged and then seek to answer the question by reference to the record. If the claim is based on matters outside of the record, we will refuse to address the issue on appeal. Only through a petition for postconviction relief may the record be developed to explain “why”ounsel acted as alleged, which 4 then allows a reviewing court to determine whether counsel's performance was ineffective or merely a tactical decision. State v. Aker, 2013 MT 253, ¶ 34, 371 Mont. 491, ___ P.3d ___ (internal quotations and citations omitted). The failure of counsel to offer a particular jury instruction, generally, is a non-record matter. State v. White, 2001 MT 149, ¶ 19, 306 Mont. 58, 30 P.3d 340. Failure to object, in some contexts, has been considered record-based, although this Court has also recognized that decisions regarding the “timing and number” of objections are within counsel’s tactical discretion. White, ¶¶ 15-16. ¶7 The record here simply does not allow us to undertake an adequate review of Golie’s IAC allegation and, therefore, he must seek postconviction relief (PCR). It is unclear from the record why Brownlee did not object to the conduct-based “knowingly” jury instruction. Brownlee’s actions may well have been taken within her tactical discretion; inquiry into the reasons for her decision may properly occur in PCR. At that time, the District Court may “receive proof of affidavits, depositions, oral testimony, or other evidence . . . [and] order the petitioner brought before the court for the hearing.” Section 46-21-201(5), MCA. With regards to the legal argument Golie raises as to the mental state jury instruction, the interests of justice will require he be represented by a public defender, if he qualifies for one, to make sure that issue is fully briefed by both parties. See § 46-21-201(2), MCA. ¶8 This Court may discretionarily review claimed errors that implicate a criminal defendant’s constitutional rights, even if no contemporaneous objection was made, where failing to review the error might result in a manifest miscarriage of justice, leave unsettled 5 the question of the fundamental fairness of the trial, or compromise the integrity of the judicial process. State v. Daniels, 2003 MT 247, ¶ 20, 317 Mont. 331, 77 P.3d 224. Plain error review should be used “sparingly” and “pursuant to narrow circumstances.” Daniels, ¶ 20. We are not convinced that the mental state jury instruction so undermined the integrity of the proceedings as to require that we exercise plain error review. We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our Internal Operating Rules, which provides for noncitable memorandum opinions. ¶9 Affirmed. /S/ MICHAEL E WHEAT We concur: /S/ BRIAN MORRIS /S/ JIM RICE /S/ LAURIE McKINNON /S/ BETH BAKER	October 29, 2013
98e1a246-e047-47da-ab4e-8ab7959c9b1b	Schuster v. NorthWestern Energy Co.	2013 MT 364	DA 13-0044	Montana	Montana Supreme Court	DA 13-0044 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 364 LARRY G. SCHUSTER, Plaintiff and Appellant, v. NORTHWESTERN ENERGY COMPANY, Defendant and Appellee. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 12-0021 Honorable Mary Jane Knisely, Presiding Judge COUNSEL OF RECORD: For Appellant: Larry G. Schuster; self-represented; Billings, Montana For Appellee: Sarah N. Norcott; Attorney at Law; Helena, Montana Submitted on Briefs: November 20, 2013 Decided: December 3, 2013 Filed: __________________________________________ Clerk December 3 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Larry Schuster (Schuster) appeals from the order of the Thirteenth Judicial District Court, Yellowstone County, dismissing his complaint against NorthWestern Energy (NWE) based on lack of subject-matter jurisdiction. The District Court concluded the Public Service Commission (PSC) had the power to hear Schuster’s complaint against NWE, a public utility, and only after the PSC acted could Schuster seek judicial relief. Because Schuster had failed to exhaust this administrative remedy, the court determined it was without jurisdiction to hear the claim. We reverse and remand. FACTUAL AND PROCEDURAL BACKGROUND ¶2 As alleged, Schuster was an electric service customer of NWE (formerly Montana Power Company) for a residence he owned in Great Falls from 1991 to 2009. On or around January 9, 2009, NWE disconnected electric service to Schuster’s residence based on an outstanding balance of $16 on his utility bill. Schuster alleges the termination of service caused the furnace to fail, which led to water pipes freezing and bursting. The water damage to the property resulted in damages of approximately $100,000 to real property, and $40,000 to personal property. ¶3 Schuster filed an action in district court alleging property damage due to NWE’s negligence and negligence per se in terminating his electric service. Specifically, Schuster alleged that NWE terminated his service without legal justification and in violation of Admin. R. M. 38.5.1402 (termination without justification), 38.5.1405 3 (failure to give notice prior to termination), and 38.5.1410 (termination when temperature expected to fall below freezing). ¶4 NWE filed a motion to dismiss based on lack of subject-matter jurisdiction for Schuster’s failure to exhaust administrative remedies before the PSC. NWE argued that the PSC was the entity that must determine whether it had violated the administrative rules or its tariff1 with the PSC. The District Court granted NWE’s motion and dismissed the action. Schuster filed a motion for relief from judgment pursuant to M. R. Civ. P. 60(b), which was deemed denied after 60 days. This appeal followed. ¶5 Following dismissal of his complaint in District Court, Schuster filed a formal complaint with the PSC. That matter is pending.2 STANDARD OF REVIEW ¶6 A district court’s determination that it lacked subject-matter jurisdiction is a conclusion of law. We review a lower court’s dismissal of a complaint based on lack of subject-matter jurisdiction to determine whether the court’s interpretation of law is correct. Mt. Water Co. v. Mont. Dept. Pub. Serv. Reg., 2005 MT 84, ¶ 8, 326 Mont. 416, 110 P.3d 20. 1 A tariff is a published schedule of rates or charges with associated rules, regulations, and other information issued by a public utility which must be filed with and approved by the Public Service Commission. See § 69-3-301, MCA; Admin. R. M. 38.2.601(1)(o); 38.5.2601. 2 Docket No. D2012.9.92. 4 DISCUSSION ¶7 Subject-matter jurisdiction is the power of a court to hear and determine a particular class of cases. State ex rel. Morgan v. State Bd. of Examiners, 131 Mont. 188, 212, 309 P.2d 336, 349 (1957). If a court lacks subject-matter jurisdiction it “cannot acquire it even by consent of the parties.” Stanley v. Lemire, 2006 MT 304, ¶ 31, 334 Mont. 489, 148 P.3d 643. Courts “have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Stanley, ¶ 32 (quoting Arbaugh v. Y & H Corp., 546 U.S. 500, 514, 126 S. Ct. 1235, 1244 (2006)). The district courts are courts “of general jurisdiction, unquestionably possessed [of] authority, pursuant to Mont. Const. Art. VII, § 4, to hear a negligence claim.” LaPlante v. Town Pump, Inc., 2012 MT 63, ¶ 15, 364 Mont. 323, 274 P.3d 724. ¶8 The District Court held that “before a party can seek declaratory relief in district court, it must exhaust its administrative remedies,” citing Mt. Water Co., ¶ 14. However, Schuster is not seeking declaratory relief. Rather, he claims that NWE was negligent in the manner that it turned off his service, causing damages for which he seeks recovery. ¶9 The PSC is an administrative agency created by statute. Section 69-1-102, MCA. It has the power to supervise, regulate, and control public utilities in this state. Section 69-3-102, MCA. The PSC is charged with “inquir[ing] into any neglect or violation of the laws of this state by any public utility” and enforcing the regulations through referral to the attorney general for prosecution if necessary. Section 69-3-110(1), MCA. However, the PSC is not vested with judicial powers. Section 69-3-103(1), MCA. 5 ¶10 In State ex rel. Public Service Commission v. District Court, 107 Mont. 240, 84 P.2d 335 (1938), a group of farmers filed a complaint with the PSC alleging that Montana Power Company unreasonably and unlawfully stored water during irrigation seasons, depriving them of their water rights. The district court issued a writ prohibiting the PSC from assuming jurisdiction over the matter. We upheld the writ of prohibition, holding that the PSC had no authority over the dispute because “[t]he relief sought has nothing to do with the regulation of public utilities as contemplated by the statutes. The statutes were enacted for the benefit of the consumers of the utilities’ products, and not to arbitrate controversies between utilities and private persons.” State ex rel. PSC, 107 Mont. at 242, 84 P.2d at 335. Although this reasoning was stated too broadly to constitute a general rule, the holding remains that, despite the PSC’s power to regulate the Montana Power Company, it was not empowered to hear a dispute involving the administration of water rights and the Montana Power Company’s storage of water. State ex rel. PSC, 107 Mont. at 243, 84 P.2d at 336. ¶11 Here, the PSC has no authority to decide whether Schuster is entitled to recover damages from NWE, a conclusion necessarily involving the adjudication of the legal rights and responsibilities of each party. Though one of Schuster’s theories of recovery posits that NWE violated certain rules promulgated by the PSC, that does not divest this controversy of its essential nature—a claim for monetary damages for NWE’s allegedly negligent actions, a controversy over which the PSC has no authority. 6 ¶12 Even though an administrative proceeding may exist, exhaustion of administrative remedies is not required where it would be futile. In Local Union No. 400 v. Bosh, 220 Mont. 304, 309, 715 P.2d 36, 39 (1986), we held that union members were not required to exhaust an administrative remedy before filing an action in district court alleging breach of fiduciary duty by union officials and seeking return of misappropriated funds. Because the only available relief from intra-union procedures was discipline and possible expulsion of the officials for violation of their obligations, we held that resort to the administrative process would be futile. The union did not have authority to order recovery of the misappropriated funds. Local Union No. 400, 220 Mont. at 309, 715 P.2d at 39. ¶13 NWE argues that Schuster’s claim for monetary damages does not negate the PSC’s authority over the matter.3 It cites several cases for the proposition that “even when a money judgment is requested the administrative appeals process” must be followed, including Throssell v. Bd. of Trustees of Gallatin Co. Sch. Dist., 232 Mont. 497, 500, 757 P.2d 348, 350 (1988) (retired school administrator sought decision that his contract with the school district entitled him to the same benefits as teachers under the new retirement plan); Pryor Sch. Dist. v. Superintendent of Pub. Instr., 218 Mont. 73, 707 P.2d 1094 (1985) (principal reinstated through administrative proceeding following 3 We note that in the proceeding pending before the PSC, NWE filed a motion to dismiss alleging Schuster “failed to state a cause of action for which the [PSC] can grant relief. Specifically, [Schuster] . . . lacks standing to file a claim.” NWE’s motion argued that the remedy Schuster seeks—property damages—cannot be granted by the PSC, and that Schuster is not “directly affected” by any action of NWE and thus cannot bring a claim before the PSC. Though the motion was denied by the PSC, NWE’s conflicting positions would leave Schuster with no recourse for its alleged wrongdoing. 7 wrongful dismissal and awarded compensation at contract rate for time lost during the appeal); and Harris v. Bauer, 230 Mont. 207, 749 P.2d 1068 (1988) (following court decision that discharged school psychologist had tenure, administrative board held hearing and awarded back wages and benefits since the date of dismissal). However, in each of these cases, the administrative agency had authority to grant the monetary damages being sought in the civil action. Here, the PSC has no authority to grant damages caused by NWE’s alleged negligence. ¶14 For a regulatory violation, the PSC has authority to (1) fine the utility pursuant to § 69-3-209, MCA, (2) order a refund of money collected for services pursuant to § 69-3-330(2), MCA, (3) report a violation to the attorney general pursuant to § 69-3-110(1), MCA, (4) issue an order citing NWE for a violation of the law, or (5) require NWE to reinstate service. None of these remedies can provide the relief sought by Schuster, and would thus be futile. Although NWE asserts that “Schuster’s recourse to administrative remedies is not futile as there are several available remedies, including one that could redress the harm,” the PSC has no authority to adjudicate Schuster’s damage claim. ¶15 Several cases illustrate that a negligence action seeking damages can be maintained against the power company in district court. In Stout v. Montana Power Co., 234 Mont. 303, 304, 762 P.2d 875, 875-76 (1988), we affirmed a jury verdict awarding plaintiffs damages for their building that was destroyed by a fire. The jury determined that the fire was caused by the power company’s failure to inspect and maintain its power 8 equipment and service lines. The jury heard the issue even though maintenance of utility equipment falls under PSC regulation, § 69-4-201, MCA; Admin. R. M. 38.5.2101(1). Similarly, Hash v. Montana Power Co., 164 Mont. 493, 524 P.2d 1092 (1974), and Farmers Union Grain Terminal Assn. v. Montana Power Co., 216 Mont. 289, 700 P.2d 994 (1985), involved damage actions filed in the district court for the power company’s negligent maintenance of equipment. In both Barmeyer v. Montana Power Co., 202 Mont. 185, 657 P.2d 594 (1983), and Martel v. Montana Power Co., 231 Mont. 96, 752 P.2d 140 (1988), the jury determined whether the power company failed to satisfy the National Electrical Safety Code in its construction of equipment, as required by § 69-4- 201, MCA, and whether damages should be awarded to the plaintiffs. Though exhaustion of administrative remedies was not raised in these cases, the courts implicitly proceeded on the assumption that subject-matter jurisdiction existed. ¶16 The PSC has authority to investigate and hear complaints by customers against a public utility. Section 69-3-110(1), MCA. If the PSC determines NWE has acted in violation of its tariff or the administrative rules, it can take action against NWE for that violation as mentioned above. We recognize that one of the parties may seek to introduce any tariff determination made by the PSC into litigation before the District Court. That issue is not before us here and it will be up to the District Court, in the first instance, to determine what effect, if any, a PSC determination will have on the proceeding before it. 9 ¶17 We reverse the District Court’s dismissal of Schuster’s complaint, and remand for further proceedings consistent with this opinion. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER /S/ MICHAEL E WHEAT	December 3, 2013
521019ad-efb6-410d-abcf-b753adb5ac66	Burcalow Family, LLC v. The Corral Bar, Inc.	2013 MT 345	DA 12-0716	Montana	Montana Supreme Court	DA 12-0716 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 345 BURCALOW FAMILY, LLC, Plaintiff and Appellant, v. THE CORRAL BAR, INC., Defendant, Appellee and Cross-Appellant. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 10-379B Honorable Mike Salvagni, Presiding Judge COUNSEL OF RECORD: For Appellant: Michael J. Lilly, Berg, Lilly & Tollefsen, P.C.; Bozeman, Montana For Appellee: Arthur V. Wittich, Margaret M. Reader, Wittich Law Firm, P.C.; Bozeman, Montana Submitted on Briefs: September 18, 2013 Decided: November 14, 2013 Filed: __________________________________________ Clerk November 14 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Appellant Burcalow Family, LLC, (Burcalow) appeals the decision of the Eighteenth Judicial District Court, Gallatin County, that determined that The Corral Bar, Inc. (the Corral) possesses a prescriptive easement over Burcalow property and that entitled the Corral to rescind a license agreement between the parties. The Corral cross-appeals that the District Court has not entered a final judgment. We reverse and remand. ¶2 We address the following issues on appeal: 1. Whether the Corral possesses a prescriptive easement over Burcalow’s property. 2. Whether allegedly fraudulent representations by Burcalow’s counsel entitled the Corral to rescind the parties’ license agreement. 3. Whether the November 2, 2012, judgment constituted a final judgment. PROCEDURAL AND FACTUAL BACKGROUND ¶3 The Corral Bar sits in the Gallatin Canyon along Highway 191 to the south of the popular skiing destination at Big Sky, Montana. The Corral property consists of a bar, restaurant, and motel on 0.563 acres of land. The bar and restaurant have been in operation since the 1940s. The Corral Bar employs between 35 and 40 people. It serves annually approximately 50,000-80,000 patrons. ¶4 The Corral purchased the Corral Bar and motel property in 1988. The property sits contiguous to property formerly owned by the United States Forest Service (Forest Service). In fact, part of the restaurant building, a storage shed, a well and water transmission line, a satellite television system, a propane tank, and a sanitation system consisting of a dosing 3 tank actually sit on property formerly owned by the Forest Service. The Corral obtained a special use permit from the Forest Service to use this land. ¶5 The United States Congress in the 1990s authorized the Forest Service to trade property in the Big Sky area with private property owners. The Forest Service and Big Sky Lumber Company entered into an exchange agreement pursuant to these acts. The Forest Service agreed to trade property that it owned in exchange for land that the Big Sky Lumber Company owned. The Forest Service included in the exchange with Big Sky Lumber Company property that the Corral used pursuant to its special use permit. The Forest Service advised the Corral of the proposed exchange in December 1998. The Forest Service informed the Corral that its special use permit would be terminated as of December 31, 1998. ¶6 Burcalow purchased certain lots in Section 28 and additional adjoining property from the Big Sky Lumber Company on September 1, 1999. This property sits adjacent to the Corral Bar and includes the former Forest Service land that the Corral had been using. After Burcalow’s purchase of the land, Larry Burcalow (Larry), an owner of Burcalow, and the Corral discussed the Corral’s possible purchase of the property used by the Corral. Larry also had conversations with Devon White (Devon), an owner of the Corral, and Devon’s business partner, David House, before September 1, 1999, in which Larry assured the two that the parties could reach an agreement for the purchase of a portion of Section 28 so that the Corral could complete its expansion plans. Larry testified at trial that he told Devon that if Burcalow bought Section 28, he would “make it right” with the Corral. 4 ¶7 The parties eventually agreed to a common boundary realignment. The Corral exchanged the north and south corners of its land for a similar area of Burcalow’s land to the west of the Corral’s property. The Corral’s property included in this trade to Burcalow enjoyed direct access to Highway 191. The Corral used the land that it acquired from Burcalow to expand its kitchen. This exchange did not provide the Corral with sufficient land, however, for its drain field or well. The Corral nevertheless continued to use the land with its drain field and well. ¶8 Burcalow’s counsel wrote to the Corral on July 6, 2004. Burcalow’s counsel informed the Corral that its special use permit had expired on the date that the Forest Service conveyed its interest in the land to a private entity. As a result, the letter pointed out that the Corral “ha[d] been using the 1.79 acres covered by the special use permit without express authority to do so.” ¶9 Burcalow’s counsel proposed that the Corral and Burcalow execute an agreement for the Corral’s continued use of that 1.79 acres. The letter warned, however, that the Corral and Burcalow must reach an agreement “or a lawsuit [will be] filed to quiet the title to the property not later than August 15, 2004.” The letter concluded with counsel’s assurance that Burcalow was “interested in amicably working out an agreement” for the Corral’s continued use of the land in question. Burcalow’s counsel cautioned the Corral that Burcalow “must take legal action by August 15, 2004, to protect its interests in the event an agreement cannot be reached.” 5 ¶10 The parties signed a license agreement effective August 1, 2004. The Corral agreed to pay Burcalow $250.00 per year beginning on August 1, 2004, for the use of Burcalow’s property pursuant to the agreement. The license agreement expired in August 2009. The parties failed to negotiate the Corral’s purchase of the land. ¶11 Burcalow filed a suit against the Corral in 2010 in which it alleged claims for trespass and a declaratory judgment. The Corral answered and asserted six counterclaims: prescriptive easement, detrimental reliance, mistake, negligent misrepresentation, fraud, and breach of the covenant of good faith and fair dealing, and requested that the license agreement be rescinded. ¶12 Burcalow filed a motion for separate trials. It requested a bench trial on the equitable claims for declaratory judgment, rescission (i.e. mistake and fraud), estoppel (i.e. detrimental reliance), and prescriptive easement. It requested a jury trial for the remaining legal issues of trespass, negligent misrepresentation, and breach of the covenant of good faith and fair dealing. The District Court granted Burcalow’s motion to bifurcate. ¶13 The District Court issued findings of fact, conclusions of law, and an order on October 12, 2012. The District Court determined that the Corral possessed a prescriptive easement over and across Burcalow’s property. The District Court also rescinded the license agreement. Thus, the District Court estopped Burcalow from relying upon the license agreement and ordered Burcalow to refund the $1,250.00 in fees that the Corral had paid under the license agreement. The District Court entered a judgment on November 2, 2012, in accordance with its October 12, 2012, order. 6 ¶14 The District Court conducted a hearing on May 1, 2013, to address whether its November 2, 2012, order constituted a final order. The Corral argued that it never had the chance to present its remaining counterclaims to a jury, including its claims for negligent misrepresentation, detrimental reliance, fraud, and breach of the covenant good faith and fair dealing. The District Court disagreed and deemed its November 2, 2012, judgment to be final. In doing so, the District Court implicitly dismissed the Corral’s counterclaims. STANDARD OF REVIEW ¶15 We review for clear error a district court’s findings of fact. Boyne USA, Inc. v. Spanish Peaks Dev., LLC, 2013 MT 1, ¶ 28, 368 Mont. 143, 292 P.3d 432. We review for correctness a district court’s legal determination. N. Cheyenne Tribe v. Roman Catholic Church, 2013 MT 24, ¶ 21, 368 Mont. 330, 296 P.3d 450. DISCUSSION ¶16 Whether the Corral possesses a prescriptive easement over Burcalow’s property. ¶17 Burcalow argues that the Corral cannot meet the five-year statutory requirement needed to establish a prescriptive easement on Burcalow’s property. Burcalow first claims that the Forest Service owned the Burcalow property at the time that the District Court concluded that the Corral’s adverse possession began. Burcalow emphasizes that adverse use cannot run against the federal government. Burcalow next maintains that the Corral’s use of Burcalow’s land cannot be characterized as adverse in light of the mutual agreement by the parties to allow the Corral’s use of the land as set forth in the license agreement. 7 ¶18 A prescriptive easement claim requires exclusive, continuous, uninterrupted, open, notorious, and adverse use of a piece of property for five years. Section 70-19-404, MCA; Brown & Brown of MT, Inc. v. Raty, 2012 MT 264, ¶ 19, 367 Mont. 67, 289 P.3d 156. A party cannot obtain title to government property through adverse possession or use under Montana law. Davis v. Hall, 2012 MT 125, ¶ 34, 365 Mont. 216, 280 P.3d 261. Other jurisdictions routinely have recognized that private entities cannot acquire a right to use property owned by the government via prescription. United States v. California, 332 U.S. 19, 39-40, 67 S. Ct. 1658, 1669 (1947), superseded on other grounds, 43 U.S.C. § 1301; United States v. Osterlund, 505 F. Supp. 165, 168 (D. Colo. 1981); State v. Hutchison, 721 N.W.2d 776, 782 (Iowa 2006). Courts understand that the federal government lacks the resources to monitor continuously whether people adversely are using its vast land holdings. Restatement (Third) of Property: Servitudes § 2.17 cmt. e (2000). ¶19 The District Court determined that the Corral’s adverse use began on December 31, 1998, and, as a result, concluded that the Corral had met the five-year statutory requirement for a prescriptive easement. Thus, the District Court found that the Corral’s adverse use ran from December 31, 1998, the date that the Corral’s special use permit terminated, until August 1, 2004, the effective date of the license agreement. The District Court recognized, though, that the Forest Service owned the property in question from December 31, 1998, until August 23, 1999. ¶20 The District Court distinguished Davis and other federal and state court decisions in order to determine that the Corral’s adverse use started on December 31, 1998. The District 8 Court acknowledged that a party cannot acquire a prescriptive easement against the federal government. The Court reasoned, however, that the Corral was not seeking to acquire a prescriptive easement against the federal government. The District Court pointed outthat the Corral instead asserted a prescriptive easement on Burcalow’s privately owned land. ¶21 A private party cannot obtain a prescriptive easement against the federal government. See Davis, ¶ 34. Accordingly, a private party’s adverse use of property cannot begin to run while the federal government owns that property. See Pines, Inc. v. Bossingham, 963 P.2d 397, 400 (Idaho App. 1998); Sandmaier v. Tahoe Dev. Group, 887 A.2d 517, 518-19 (Me. 2005); Kiowa Creek Land & Cattle Co. v. Nazarian, 554 N.W.2d 175, 176-77 (Neb. App. 1996); Herbertson v. Iliff, 775 P.2d 754, 756 (N.M. App. 1989). These courts have recognized the inability of the federal government to monitor whether a private party has been using its property without permission. Consequently, to allow a party’s adverse use to run against the federal government would create problems if the government ever sold any land. One court opined that it “would be impossible” for a new buyer to defend against a claim of a prescriptive easement on a piece of land formerly owned by the government. Kiowa Creek, 554 N.W.2d at 177. “No one could purchase that land from the government without the land being subject to the possibility of an easement immediately upon sale.” Kiowa Creek, 554 N.W.2d at 177. We agree. The Corral’s adverse use of the property in question could not have begun to accrue until the Forest Service conveyed title to the property to a private entity on August 23, 1999. 9 ¶22 The Corral argues in the alternative that even if its adverse use did not begin until August 23, 1999, the license agreement effective on August 1, 2004, was invalid. The theory of prescriptive easement requires adverse use. Brown & Brown, ¶ 19. A party cannot acquire a prescriptive easement if the owner of the servient estate shows that use had been permissive. Pederson v. Ziehl, 2013 MT 306, ¶ 13, 372 Mont. 223, __P.3d___; Brown & Brown, ¶ 19. Burcalow permitted the Corral to use its property pursuant to the license agreement. A valid license agreement would establish permissive use and defeat the Corral’s claim of adversity. Pederson, ¶ 13. ¶23 The District Court invalidated the license agreement due to what it deemed false representations in Burcalow’s July 6, 2004, letter. The District Court focused on Burcalow’s representations that the Corral had no right to use Burcalow’s property. The District Court determined that the Corral did have a right to use Burcalow’s property due to its possession of a prescriptive easement over the property. ¶24 The Corral lacked a prescriptive easement at the time Burcalow’s counsel sent the letter on July 6, 2004. The parties entered into a license agreement effective on August 1, 2004. The five-year statutory period for adverse use would not have passed until August 23, 2004—five years after the Forest Service transferred the property to a private party. Burcalow’s counsel sent the letter to the Corral on July 6, 2004. Burcalow’s counsel made no false representations under these circumstances. ¶25 Nothing estops Burcalow from relying on the license agreement. The license agreement defeats the Corral’s claims of adverse use. Pederson, ¶ 13. Burcalow permitted 10 the Corral’s use of its land pursuant to the agreement. The Corral cannot demonstrate that it has used Burcalow’s property adversely for the requisite five-year period required to establish a prescriptive easement. Heller v. Gremaux, 2002 MT 199, ¶ 12, 311 Mont. 178, 53 P.3d 1259. We reverse the District Court’s determination that the Corral possesses a prescriptive easement over Burcalow’s land. ¶26 Whether allegedly fraudulent representations by Burcalow’s counsel entitled the Corral to rescind the parties’ license agreement. ¶27 Burcalow contends that the District Court improperly rescinded the license agreement, and, as a result, that it should not have to return the Corral’s payments made pursuant to the agreement. The District Court found that the elements for fraud, mistake of fact, and mistake of law had all been met. The District Court appears to base this decision largely on the July 6, 2004, letter that Burcalow’s counsel sent to the Corral. The District Court focused on Burcalow’s counsel’s claims that the Corral did not have authority to use Burcalow’s property and Burcalow’s threatened legal action if the Corral did not enter into a license agreement. ¶28 The Corral must establish nine elements to make out a prima facie case for fraud, including the falsity of a representation relied upon by the hearer to his detriment. McCulley v. Am. Land Title Co., 2013 MT 89, ¶ 32, 396 Mont. 433, 300 P.3d 679. The Corral cannot fulfill the false representation element required to establish a prima facie case for fraud. The letter from Burcalow’s counsel’s contains no false representations. McCulley, ¶ 32. The 11 Corral possessed no prescriptive easement on July 6, 2004. Burcalow’s counsel accurately described the Corral’s lack of authority to use Burcalow’s property. ¶29 Montana law addresses two kinds of mistake—(1) mistake of fact and (2) mistake of law. Section 28-2-408, MCA. A mistake of fact entails, in part, the belief in the present existence of a thing material to the contract that “does not exist or in the past existence of such a thing which has not existed.” Section 28-2-409(2), MCA. A mistake of law often arises from “a misapprehension of the law by all parties,” in which all parties made “substantially the same mistake as to the law.” Section 28-2-410(1), MCA. ¶30 Burcalow’s counsel made no mistake of fact when he claimed that the Corral lacked the authority to use Burcalow’s property. The Corral did not possess a prescriptive easement in July 2004. For the same reason, the Corral also cannot invoke the mistake of law doctrine. Burcalow’s counsel correctly represented the respective legal positions of the parties as of the date of the letter. We reverse the District Court’s decision to rescind the license agreement. ¶31 Whether the November 2, 2012, judgment constituted a final judgment. ¶32 The Corral argues that the District Court’s November 2, 2012, judgment deprived it of a jury trial on its negligent misrepresentation claim. The District Court relied upon what it characterized as the Corral’s certification that the case could be concluded in its response to Burcalow’s motion for separate trials. The Corral had opposed bifurcation based upon the fact that “the issues in this case are not distinct and separate but have many common facts.” The Corral further contended that all of the claims, especially those that are based in fraud, 12 “are so intertwined, the judge in a judge trial would hear similar testimony to the jury in a jury trial.” ¶33 The Corral provided three scenarios for the District Court to consider in its response to Burcalow’s motion for separate trials. The Corral first posited that the jury could decide that fraud on the part of Burcalow supported a decision to rescind the license agreement and that the Corral possessed a prescriptive easement. The Corral argued that the case would be “over” under that scenario. The District Court indeed deemed the case to be “over” based upon its decision to rescind the license agreement and award a prescriptive easement to the Corral. ¶34 The District Court based its final judgment ruling on its impression that the Corral had woven its counterclaims with its request to rescind the license agreement. The District Court thus reasoned that its decision to rescind the license agreement, as requested by the Corral, had rendered moot the Corral’s remaining counterclaims. By the Corral’s own representation in its response to Burcalow’s motion for separate trials this outcome resolved all disputes and rendered a final judgment. M. R. App. P. 4(1)(a). ¶35 Our decision on appeal, however, upends the finality of the District Court’s order. We have reversed the District Court’s decision to rescind the license agreement and we have reversed the District Court’s award of a prescriptive easement to the Corral. This outcome has resuscitated the Corral’s remaining counterclaims. The District Court’s entry of a final judgment deprived the Corral of the chance to have a jury resolve its counterclaims. The 13 District Court must provide the Corral with the opportunity to present its remaining claims to a jury for resolution. ¶36 The Corral’s claim for negligent misrepresentation remains unresolved. To establish a negligent misrepresentation claim, the Corral must show that: (1) Burcalow made a representation about a material fact, (2) the representation was untrue, (3) Burcalow did not have any reasonable ground for believing it to be true, (4) Burcalow made the representation with the intent to induce the Corral to rely on it, (5) the Corral was unaware of the falsity of the representation and justifiably relied upon the representation, and (6) the Corral must have sustained damage because of this reliance. Harpole v. Powell County Title Co., 2013 MT 257, ¶ 28, 371 Mont. 543, 309 P.3d 34. ¶37 The Corral alleges in its counterclaim that Burcalow had represented to the Corral numerous times that Burcalow would take care of the Corral and the Corral’s business and that Burcalow would sell the property at issue to the Corral at a reasonable price. The District Court discussed in its findings of fact that Larry had assured the Corral that Burcalow and the Corral could reach an agreement for the purchase of a portion of Section 28. Larry testified at trial that he told Devon that he would “make it right” with the Corral if Burcalow bought Section 28. ¶38 The Corral contends that it traded property with Burcalow in 1999 in anticipation of future resolution regarding the disputed property. The Corral further claims to have relied upon Larry’s representations when it reconstructed its kitchen and drilled a well on 14 Burcalow’s property. These allegations state a claim for negligent misrepresentation. Harpole, ¶ 28. ¶39 We remand to the District Court to allow the Corral to proceed with its counterclaim based upon Burcalow’s alleged negligent misrepresentations and any other valid claims previously asserted. See Zavarelli v. Might, 239 Mont. 120, 125-26, 779 P.2d 489, 493 (1989) (stating, “On remand, the trial court may consider or decide any matters left open by the appellate court, and is free to make any order or direction in further progress of the case, not inconsistent with the decision of the appellate court, as to any question not presented or settled by such decision.”). The same allegations by the Corral that Burcalow promised to sell land to the Corral at a fair price also may support a counterclaim for detrimental reliance if the Corral can demonstrate that Burcalow’s alleged promise induced it to take steps to its detriment. The Corral’s counterclaim for its alleged breach of the covenant of good faith and fair dealing also flows from this same alleged promise by Burcalow as this notion of good faith underlies every contract. Phelps v. Frampton, 2007 MT 263, ¶ 29, 339 Mont. 330, 170 P.3d 474. Finally, the Corral’s counterclaim for fraud also stems from its allegation that Burcalow made material representations upon which Burcalow intended from the Corral to rely. Western Sec. Bank v. Eide Baily LLP, 2010 MT 291, ¶ 56, 359 Mont. 34, 249 P.3d 35. ¶40 Reversed and remanded for further proceedings in accordance with this opinion. /S/ BRIAN MORRIS We concur: 15 /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JIM RICE Justice Laurie McKinnon, concurring. ¶41 I agree with the Court’s analysis and conclusion that a party cannot obtain title to government property through adverse possession or use. The distinction drawn by the District Court that the Corral was not attempting to acquire a prescriptive easement against the federal government, but rather against a private landowner, is inconsistent with this well- established principle. I further agree that, based upon the findings of fact made by the District Court pertaining to fraud in the license agreement, our decision that there was no prescriptive easement requires reversal of the District Court’s order rescinding the license agreement. I write separately to highlight procedural problems which I perceive occurred in the District Court and which, as a result, have caused the proceedings before this Court to be similarly difficult to sort through. ¶42 The difficulties appear to have started with the November 17, 2011 Pretrial Order, which identified as an unresolved issue the question as to which of the parties’ claims would be decided by the court and which would be decided by a jury. Burcalow had not requested a jury trial on its claims, but the Corral had demanded a jury trial on its counterclaims. In response to the Pretrial Order, Burcalow filed a Motion for Order Resolving Legal Issue Prior to Trial. Burcalow asserted that a jury should resolve all factual issues associated with 16 Burcalow’s trespass claim, the Corral’s negligent misrepresentation claim, and the Corral’s claim for breach of the covenant of good faith and fair dealing. Burcalow further asserted that the court should resolve the Corral’s rescission claim and the Corral’s prescriptive easement claim. As authority for bifurcating the claims in this manner, Burcalow cited City of Great Falls v. Forbes, 2011 MT 12, ¶ 18, 359 Mont. 140, 247 P.3d 1086, which states that “[a] party has a right to a jury trial only on the legal claims even in litigation involving both equitable and legal claims.” When the Corral failed to file a response to Burcalow’s motion, the District Court granted the motion. ¶43 Bifurcation of the proceedings arose again, this time on the District Court’s initiative, during the parties’ oral argument on Burcalow’s motion for summary judgment. As a result, the parties submitted post-hearing briefs with differing proposals as to how the various claims should be tried. At this point, the various bifurcation scenarios contemplated by the parties were muddled and confusing—both as to the parties’ positions as well as the claims being considered on the issue of bifurcation. Burcalow requested, first, a judge trial on the equitable claims, which were identified as Burcalow’s claim for declaratory judgment and the Corral’s claims for rescission, estoppel, and prescriptive easement. This was to be followed, if necessary, by a jury trial on the legal claims, which were identified as Burcalow’s claim of trespass and the Corral’s claims for negligent misrepresentation and breach of the covenant of good faith and fair dealing. The Corral, on the other hand, argued that there should be a jury trial on all claims because the issues were so intertwined and there existed the potential for conflicting findings of fact from the judge and the jury. The Corral 17 objected to bifurcation and maintained its right to have all factual issues tried by a jury. See Gray v. City of Billings, 213 Mont. 6, 12-14, 689 P.2d 268, 271-72 (1984). At the same time, however, the Corral conceded that the court should make certain initial determinations prior to trial—namely, whether the Corral’s use of Burcalow’s property while it was owned by the Forest Service could be included within the period of prescriptive use, and what position the parties would be in if the license agreement were to be rescinded. ¶44 It seems that all of the confusion surrounding bifurcation stems from the parties’ competing interests in having or not having their claims heard by a jury and a vehicle by which to accomplish that result. I can only assume that Burcalow perceived a judge trial would benefit its interests while the Corral, conversely, desired to have all claims resolved by a jury. In any event, it appears the main concern of counsel and the court regarded the prescriptive easement and the license agreement. While the parties disputed whether a prescriptive easement claim should be decided by a judge or a jury, they both agreed that the ultimate issue needing to be resolved concerned prescriptive use against the Forest Service. This issue very simply could have been decided by the court, as a matter of law and undisputed fact, and the parties then could have proceeded to a jury trial with argument thereafter being made about how to appropriately instruct the jury. ¶45 The District Court granted Burcalow’s motions for separate trials pursuant to M. R. Civ. P. 42(b). The case proceeded to a two-day judge trial starting June 5, 2012. Thereafter, the District Court entered findings of fact and conclusions of law. The court determined that the Corral has a prescriptive easement over Burcalow’s property, that the 18 parties’ license agreement should be rescinded, and that Burcalow should be estopped from relying on the license agreement. The court entered judgment in favor of the Corral on these claims, including an award of damages, on November 2, 2012, but indicated that the case would proceed to trial on the remaining claims. Nevertheless, Burcalow filed a notice of appeal, to which the Corral objected on the ground that it was premature since the District Court had not yet entered a final judgment as to all claims. ¶46 In its May 7, 2013 Decision and Order, the District Court concluded that its November 2, 2012 judgment was a final judgment which conclusively determined the parties’ rights and settled all claims. The court reasoned that by declaring a prescriptive easement in favor of the Corral and by rescinding the license agreement, there no longer were any factual or legal grounds supporting the parties’ other claims. We have not addressed the propriety of this reasoning; however, given the nature of these proceedings, I agree with our decision finding that the District Court implicitly dismissed the Corral’s remaining counterclaims. Opinion, ¶ 34. The District Court conducted a substantive analysis on the election of remedies, drew conclusions regarding the various causes of action set forth in the Corral’s counterclaims, and determined that none of the Corral’s counterclaims survived. No other conclusion can be drawn from the District Court’s action except that the Corral’s remaining claims were denied and dismissed. ¶47 We have reaffirmed today that, as a matter of law, a party cannot claim prescriptive use against government-owned property. Opinion, ¶¶ 18, 21. We have also made clear that the Corral has a right to a jury trial on any valid claims previously asserted, other than the 19 claim of a prescriptive easement and the claim of fraud in the license agreement based on representations that there was no prescriptive easement. Opinion, ¶¶ 35, 39. Finally, our finding that the District Court implicitly dismissed the Corral’s remaining counterclaims, thereby rendering this matter final for purposes of appeal, is supported by the District Court’s May 7, 2013 Decision and Order. Hopefully these proceedings are now on solid footing and may progress forward to a resolution. ¶48 I concur. /S/ LAURIE McKINNON	November 14, 2013
2e46d65f-5340-441a-b558-f1e3d65dd128	Ellison v. State	2013 MT 376	DA 13-0198	Montana	Montana Supreme Court	DA 13-0198 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 376 LIONEL SCOTT ELLISON, Petitioner and Appellant v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 11-306 Honorable Mary Jane Knisely, Presiding Judge COUNSEL OF RECORD: For Appellant: Elizabeth J. Honaker, Honaker Law Firm; Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General; Helena, Montana Scott Twito, Yellowstone County Attorney, Julie Mees, Deputy County Attorney; Billings, Montana Submitted on Briefs: November 13, 2013 Decided: December 20, 2013 Filed: __________________________________________ Clerk December 20 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Lionel Ellison pleaded no contest to arson, a felony. He subsequently obtained new counsel and moved to withdraw his no contest plea. The District Court denied his motion to withdraw, which this Court affirmed. State v. Ellison, 2009 MT 408N, 354 Mont. 393 (table), 222 P.3d 645 (table). Ellison then petitioned for postconviction relief, alleging ineffective assistance of counsel, and that the District Court misinterpreted the arson statute. The District Court denied Ellison’s petition, and he now appeals. We affirm. BACKGROUND ¶2 On October 23, 2007, Ellison was charged with arson in violation of § 45-6-103(1)(a), MCA (2005), after a vehicle belonging to Dee Ames sustained fire damage.1 On April 1, 2008, Ellison appeared with counsel Jeffrey Michael (“Michael”) and entered a no contest plea to the arson charge. Ellison also filed an acknowledgement of waiver of rights, which indicated that the State would recommend a five-year suspended sentence pursuant to a plea agreement, but that Ellison could argue for a lesser or deferred sentence. ¶3 During the offer of proof at the change of plea hearing, the prosecutor stated that Ellison damaged a vehicle, and that the value of the vehicle exceeded $1,000. Prior to the hearing, Ellison had obtained an appraisal of the vehicle, which identified its market value as $500. Michael, however, determined that the value of the vehicle was irrelevant 1 Ellison’s offense was committed on May 19, 2007, and thus the 2005 Montana Code Annotated applies. State v. Stoner, 2012 MT 162, ¶ 12, 365 Mont. 465, 285 P.3d 402 (we apply the law in effect at the time the crime was committed). 3 to the arson charge based upon his interpretation of the statute, and therefore did not object to the prosecutor’s offer of proof. ¶4 The prosecutor also proffered that had the State gone to trial it would have presented a surveillance video that showed an individual at the trunk of Ames’ parked vehicle shortly before the fire started. The proffer continued that while it was difficult to make out the identity of the individual seen on the video, the video was completely inconsistent with Ellison’s version of events. In an affidavit Michael later gave in response to Ellison’s petition for postconviction relief, Michael swore that he had reviewed the surveillance video and made the video available to Ellison prior to the hearing. Michael advised Ellison that the surveillance video was inconsistent with Ellison’s story and that the State had enough evidence to find Ellison guilty beyond a reasonable doubt at trial. Michael also explained to Ellison that the State had evidence that Ellison offered to pay a potential witness to tell the same story as Ellison about the fire, and that entering a plea to the arson charge would ensure that the State would not charge him with witness tampering. Michael thus determined that the negotiated plea agreement was in Ellison’s best interest, and advised him to enter a no contest plea. ¶5 After the change of plea hearing, Ellison substituted Michael with attorney Herbert “Chuck” Watson (“Watson”). Watson then filed a motion to withdraw Ellison’s no contest plea, arguing that Ellison did not enter it knowingly and voluntarily. The District Court denied Ellison’s motion, finding that Ellison had been aware of the consequences of his decision to enter a no contest plea, and that it was not improperly induced. On May 26, 2009, Ellison was sentenced to five years with all time suspended. Ellison next 4 appealed the denial of his motion to withdraw his no contest plea to this Court and raised the singular issue of whether Ellison’s plea was knowingly and voluntarily entered.2 On November 25, 2009, we affirmed the District Court’s ruling. ¶6 In February of 2011 Ellison filed a petition for postconviction relief, followed by an amended petition, arguing that the arson statute only applied to property valued at over $1,000, and since the vehicle at issue was worth less than that, there was no factual basis for his no contest plea. His petition outlined three grounds for relief: 1) the District Court erred by accepting a plea on an insufficient factual basis; 2) Michael provided ineffective assistance of counsel by allowing Ellison to enter a plea for a charge that had an insufficient factual basis; and 3) Watson provided ineffective assistance of counsel for failing to raise the issue of the sufficiency of the factual basis of the arson charge on direct appeal. In an affidavit supporting his petition, Ellison swore that Michael never saw the surveillance video, and that Michael did not make the video available for Ellison to view. ¶7 In its response, the State contended that Ellison’s claims were invalid and procedurally barred. It attached affidavits of attorneys Michael and Watson to refute the ineffective assistance of counsel allegations. On March 15, 2013, the District Court denied Ellison’s petition on the merits, concluding that pursuant to the plain language of 2 Ellison’s grounds for arguing that his no contest plea was not knowingly and voluntarily entered were as follows: there was new exculpatory evidence, the State had lost potentially exculpatory evidence, his plea was induced by a threat to charge him and his mother with witness tampering, and his plea was induced by the misrepresentation that he could receive a deferred sentence. 5 the statute, the value of a vehicle is irrelevant to the charge of arson. The District Court summarized its reasoning for denying the petition: Petitioner has failed to demonstrate to this Court that he is entitled to Postconviction Relief. Petitioner entered a knowing and voluntary plea, as determined previously by this District Court as well as the Supreme Court of Montana, waiving all right to challenge nonjurisdictional defects. Regardless, this Court has examined the merits of Petitioner’s claim, and found that Petitioner’s assertion that the State’s offer of proof was insufficient is without merit. Petitioner erroneously interprets the arson statute, arguing that the State was required to demonstrate that the vehicle was valued in excess of $1,000. The plain meaning of the statute proves otherwise. As such, Petitioner cannot demonstrate that the offer of proof was insufficient, nor that his representation was ineffective. Ellison now appeals the District Court’s denial of his petition for postconviction relief. STANDARD OF REVIEW ¶8 We review a district court’s denial of a petition for postconviction relief to determine whether the court’s findings of fact are clearly erroneous, and whether its conclusions of law are correct. Camarillo v. State, 2005 MT 29, ¶ 8, 326 Mont. 35, 107 P.3d 1265. Ineffective assistance of counsel claims present mixed questions of law and fact that are reviewed de novo. Miller v. State, 2012 MT 131, ¶ 9, 365 Mont. 264, 280 P.3d 272. DISCUSSION ¶9 Ellison argues on appeal that the District Court erred in its interpretation of the arson statute, and in finding that Ellison’s defense counsel did not provide ineffective assistance. Two different attorneys have represented Ellison relative to the arson charge: trial counsel Michael, and appellate counsel Watson. Ellison alleges that both provided 6 ineffective assistance of counsel. For reasons discussed below, we do not find either of Ellison’s arguments convincing. ¶10 Whether the District Court Erred in its Interpretation of the Arson Statute ¶11 The Court’s first step in interpreting a statute is to look at its plain language. State v. Letasky, 2007 MT 51, ¶ 11, 336 Mont. 178, 152 P.3d 1288. “In the construction of a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted.” Section 1-2-101, MCA. If legislative intent can be determined by the plain meaning of the words, the Court may go no further in applying any other meaning or interpretation. State v. Booth, 2012 MT 40, ¶ 11, 364 Mont. 190, 727 P.3d 89 (citing State v. Stiffarm, 2011 MT 9, ¶ 12, 359 Mont. 116, 250 P.3d 300). ¶12 Section 45-6-103(1)(a), MCA, states that a person commits the offense of arson when, by means of fire or explosives, the person knowingly or purposely . . . damages or destroys a structure, vehicle, personal property (other than a vehicle) that exceeds $1,000 in value, crop, pasture, forest, or other real property that is property of another without consent. [Paragraph break omitted.] Ellison argues that the District Court erred in concluding that the arson statute clearly and unambiguously states that the $1,000 threshold only applies to personal property. He proposes that “$1,000” modifies all preceding categories of property listed in the statute, including vehicles, and since the fire-damaged vehicle was worth less than $1,000, there was an insufficient factual basis for which to enter a no contest plea to arson. 7 ¶13 In considering § 45-6-103(1)(a), MCA, in its entirety, the plain language clearly states that the $1,000 threshold applies only to the category of “personal property,” which does not include vehicles. As the District Court correctly noted, “vehicles are clearly not included in the category of personal property, plainly evidenced by the phrase ‘other than a vehicle.’” Ellison’s interpretation of the statute, which he concedes is not supported by case law, is based on a partial reading of the statute which omits all the categories of property that follow “personal property.”3 Such an interpretation violates our precedent establishing that “statutes must be read and considered in their entirety and the legislative intent may not be gained from the wording of any particular section or sentence, but only from a consideration of the whole.” State v. Heath, 2004 MT 126, ¶ 27, 321 Mont. 280, 90 P.3d 426 (citing Home Bldg. & Loan Ass’n of Helena v. Fulton, 141 Mont. 113, 115, 375 P.2d 312, 313 (1962)). Ellison’s interpretation of the statute also violates § 1-2-101, MCA, because it does not rely on the plain language of the statute, and instead relies on the omission of the remaining categories of property. See State v. Cooksey, 2012 MT 226, ¶ 74, 366 Mont. 346, 286 P.3d 1174; State v. Gould, 273 Mont. 207, 219-20, 902 P.2d 532, 540-41; In re R.L.S., 1999 MT 34, ¶ 12, 293 Mont. 288, 977 P.2d 967; State v. Incashola, 1998 MT 184, ¶ 13, 289 Mont. 399, 961 P.2d 745; Schuff v. A.T. Kelmens & Sons, 2000 MT 357, ¶¶ 115-126, 303 Mont. 274, 16 P.3d 1002. The statute is clear on its face, and therefore we may go no further in applying any other meaning or interpretation. 3 Ellison’s statutory analysis is premised on only the following portion of § 45-6-103(1)(a), MCA, the remainder of which he presumably omits to make his argument appear tenable: “A person commits the offense of arson when, by means of fire or explosives, the person knowingly or purposely: damages or destroys a structure, vehicle, personal property (other than a vehicle) that exceeds $1,000 in value, . . . without consent.” 8 As such, the District Court did not err in determining that the threshold of $1,000 for property crimes does not apply to vehicles. ¶14 Whether the District Court Erred in Finding that Ellison’s Attorneys were not Ineffective ¶15 The right to effective assistance of counsel is guaranteed by both the United States and the Montana Constitutions. U.S. Const. amend. VI; Mont. Const. art. II, § 24. A two part test determines when counsel is ineffective. First, a defendant must show that counsel’s performance was deficient. Counsel is deficient when his or her conduct falls below an objectively reasonable standard measured under prevailing professional norms and in light of the surrounding circumstances. Whitlow v. State, 2008 MT 140, ¶ 20, 343 Mont. 90, 183 P.3d 861. Second, the defendant must also show that the deficient performance prejudiced the defense. Prejudice occurs when counsel’s errors were so serious that they deprived the defendant of a fair trial. Wilson v. State, 1999 MT 271, ¶ 12, 296 Mont. 465, 989 P.2d 813 (citing Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2205, 2064 (1984)). In the context of a guilty plea, a petitioner establishes prejudice by showing that there is a reasonable probability that, but for counsel’s errors, he or she would not have pleaded guilty and would have insisted on going to trial. State v. Henderson, 2004 MT 173, ¶ 9, 322 Mont. 69, 93 P.3d 1231. A defendant must satisfy both parts of this test in order to prevail on an ineffective assistance of counsel claim. Thus, if an insufficient showing is made regarding one part of the test, there is no need to address the other part. Whitlow, ¶ 11 . 9 ¶16 Ellison bases his ineffective assistance of counsel claims on Michael’s and Watson’s failure to advance at trial and on appeal, respectively, Ellison’s interpretation of “value” in the arson statute. Additionally, Ellison argues that Michael did not review the surveillance video or obtain an expert analysis prior to the change of plea hearing, and that Watson did not raise the issue of the surveillance video on appeal. ¶17 Value of the Vehicle ¶18 Ellison maintains that both Michael and Watson were ineffective for not addressing the factual sufficiency of Ellison’s no contest plea. He again argues that the fact the vehicle was valued at less than $1,000 means that he could not have been charged with arson pursuant to § 45-6-103(1)(a), MCA. As previously explained, this is an incorrect interpretation of the plain meaning of the statute. A claim of constitutionally ineffective assistance of counsel will not succeed when predicated upon counsel’s failure to make motions or objections which, under the circumstances, would have been frivolous, which would have been, arguably, without procedural or substantive merit, or which, otherwise, would likely not have changed the outcome of the proceeding. Heddings v. State, 2011 MT 228, ¶ 33, 326 Mont. 90, 265 P.3d 600; see e.g. State v. Hildreth, 267 Mont. 423, 432-33, 884 P.2d 771, 777 (1994); State v. Maki, 2004 MT 226, ¶¶ 10-12, 322 Mont. 420, 97 P.3d 556; State v. Frasure, 2004 MT 305, ¶ 12, 323 Mont. 479, 100 P.3d 1013; Adams v. State, 2007 MT 35, ¶¶ 36-37, 336 Mont. 63, 153 P.3d 601; Foston v. State, 2010 MT 281, ¶ 13, 358 Mont. 469, 245 P.3d 1103. Because the value of the vehicle is immaterial to the arson charge, it would have been frivolous for either of Ellison’s attorneys to object or appeal on this issue. Thus, because Ellison 10 cannot prove that either attorney was deficient in his decisions regarding the value of the vehicle, he cannot establish an ineffective assistance of counsel claim on this basis. ¶19 Surveillance Video ¶20 Ellison also argues that Michael was deficient for failing to obtain an expert analysis of the surveillance video prior to the change of plea hearing, and for failing to object to its mention during the prosecutor’s offer of proof. Ellison further contends that Watson was deficient for not raising this issue on appeal. Ellison relies on a report by an expert in surveillance systems, obtained in support of his petition for postconviction relief, which states that the surveillance video showed fire and smoke coming from an unidentified vehicle, followed by the appearance of “one and two or even three barely visible” unidentifiable individuals in the vicinity of the fire. The report notes, “it is truly impossible to determine anything even remotely associated with actions taken or intent.” Even though the report clearly states that the surveillance video is unreliable due to its quality, Ellison nonetheless relies on the video to corroborate Ellison’s version of events. ¶21 Counsel has a duty to conduct reasonable investigations or to make a reasonable decision that particular investigations are unnecessary. “In any ineffectiveness case, a particular decision not to investigate must be directly assessed for reasonableness in all the circumstances, applying a heavy measure of deference to counsel’s judgments.” Dawson v. State, 2000 MT 219, ¶ 75, 301 Mont. 135, 10 P.3d 49. Here, Michael’s decisions not to object to the prosecutor’s reference to the surveillance video at the change of plea hearing, or get an expert analysis of the video prior to the hearing, are reasonable under the circumstances. Michael swore in his affidavit that he watched the 11 video prior to the hearing, and that he explained to Ellison that its contents were damaging to Ellison. The fact that an expert witness later would conclude that the video was not reliable does nothing to establish that Michael’s representation fell below an objectively reasonable standard. In fact, it confirms that Michael’s decision not to retain an expert in video surveillance was reasonable. Ellison therefore fails to establish that Michael’s actions concerning the surveillance video were deficient. ¶22 For the same reasons, Watson’s decision not to raise the issue of the video on appeal was also objectively reasonable under the circumstances. Furthermore, it is well established that appellate counsel need not raise every colorable issue on appeal. Rose v. State, 2013 MT 161, ¶ 28, 370 Mont. 398, 304 P.3d 387. Our presumption of effective assistance of appellate counsel will be overcome only when “ignored issues are clearly stronger than those presented.” Rose, ¶ 28. Watson’s affidavit states that he believed Ellison had waived all challenges to the sufficiency of the State’s offer of proof by entering the no contest plea, and thus chose to argue what he believed was Ellison’s strongest argument—that his plea was not knowingly or voluntarily entered. Ellison has presented no evidence that overcomes the presumption that Watson’s representation was effective. Thus, Watson’s representation of Ellison cannot be deemed deficient. ¶23 Because Ellison cannot establish the deficiency portion of the ineffective assistance of counsel test, we need not proceed with the prejudice analysis. As such, Ellison’s ineffective assistance of counsel claims necessarily fail. 12 CONCLUSION ¶24 The District Court properly interpreted § 45-6-103(1)(a), MCA, when it found that knowing or purposeful fire damage to a vehicle, regardless of the vehicle’s value, constitutes arson. Therefore, the District Court did not err in its interpretation of the statute. Additionally, Ellison is unable to prove that either Michael or Watson provided ineffective assistance. In sum, we affirm the District Court’s denial of Ellison’s petition for postconviction relief. /S/ LAURIE McKINNON We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE	December 20, 2013
dec0367e-6b1d-43b1-8d54-32481f2f22b7	Main Jr. v. State	2013 MT 350N	DA 13-0168	Montana	Montana Supreme Court	DA 13-0168 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 350N JAMES MAIN, JR., Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Twelfth Judicial District, In and For the County of Hill, Cause No. DV 11-094 Honorable John C. McKeon, Presiding Judge COUNSEL OF RECORD: For Appellant: James Main, Jr., self-represented; Shelby, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Mardell Ployhar, Assistant Attorney General; Dan Guzynski, Special Deputy Hill County Attorney; Helena, Montana Gina Dahl, Hill County Attorney; Havre, Montana Submitted on Briefs: October 16, 2013 Decided: November 19, 2013 Filed: __________________________________________ Clerk November 19 2013 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 James Main, Jr., (Main) appeals the order of the Twelfth Judicial District Court, Hill County, denying his petition for postconviction relief. We affirm. ¶3 In February 2009, a jury convicted Main of deliberate homicide. Main appealed his conviction to this Court, and we affirmed in State v. Main, 2011 MT 123, ¶ 1, 360 Mont. 470, 255 P.3d 1240. We concluded, inter alia, that the ineffective assistance of counsel claims Main raised would be more appropriately addressed in a postconviction proceeding. Main, ¶ 50. In April 2012, Main sent a letter to the District Court in which he requested counsel and made complaints about his trial and appellate counsel. The District Court construed the letter as a petition for postconviction relief. The State responded to the petition in July 2012. After the District Court issued a Gillham Order, Main’s trial lawyer, Kenneth Olson (Olson), filed an affidavit addressing Main’s claims. The State filed a supplemental response in December 2012 after reviewing Olson’s affidavit. Main filed a reply to the State’s supplemental response on December 21, 2012, and the District Court denied Main’s motion for postconviction relief and his request for counsel on January 4, 2013. 3 ¶4 A restatement of the dispositive issue on appeal is whether the District Court erred in denying Main’s petition for postconviction relief. ¶5 In his petition for postconviction relief, Main alleged that Olson was ineffective for failing to call Main to testify and failing to present proper evidence to the jury. He further alleged that Olson had a conflict of interest, did not provide adequate pre-trial preparation, and did not adequately cross-examine witnesses. On appeal, Main argues: (1) that his trial and appellate counsel were ineffective because they failed to address prosecutorial misconduct and judicial bias; (2) that “defense counsel failed to investigate and effectively present potentially exculpatory evidence”; and (3) that he did not have, and could not have had, an impartial jury and fair trial given the racial profiling and media bias in his case. ¶6 The State counters that the District Court correctly denied Main’s petition because it failed to comply with the pleading requirements for such petitions under § 46-21-104(2), MCA. The State argues the petition failed to clearly set forth the claims that were raised and was not accompanied by supporting documentation as required by statute. The State further argues that Main’s claims on appeal should be rejected because they are insufficiently pleaded and lack sufficient support in the record. The State points out that only the claim that trial counsel failed to adequately investigate and present exculpatory evidence was preserved in the trial court. ¶7 The standard of review of a district court’s disposition of a petition for postconviction relief is whether the district court’s findings of fact are clearly 4 erroneous and whether its conclusions of law are correct. State v. Beach, 2013 MT 130, ¶ 8, 370 Mont. 163, 302 P.3d 47 (citation omitted). “A defendant bears a heavy burden in seeking to overturn a district court’s denial of postconviction relief based on ineffective assistance of counsel claims” and “must ground his or her proof on facts within the record and not on conclusory allegations.” Baca v. State, 2008 MT 371, ¶ 16, 346 Mont. 474, 197 P.3d 948 (internal quotations and citations omitted). ¶8 The District Court concluded Main’s petition did not meet the procedural requirements for a petition for postconviction relief because Main did not identify the proceedings in which he was convicted or include the date of the final judgment. Moreover, he only made conclusory statements in support of his allegations and did not attach any of the required materials, such as affidavits, records, or other evidence substantiating his claims. The District Court concluded Main’s “petition fails as a matter of law for failure to state a claim for relief because it is insufficiently plead and lacks the statutory requirements for a petition for postconviction relief, pursuant to Mont. Code Ann. § 46-21-104(1).” The District Court did not err in concluding that Main failed to satisfy the heavy burden imposed when seeking postconviction relief based on ineffective assistance of counsel. ¶9 Moreover, the State correctly points out that two of the three claims Main raises on appeal were not raised in the District Court. Thus, we decline to address these claims. See § 46-21-105(1)(a), MCA (“All grounds for relief claimed by a 5 petitioner under 46-21-101 must be raised in the original or amended original petition.”). The remaining claim is conclusory and fails to meet the requirements for a claim brought in a postconviction relief petition. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶11 For the foregoing reasons, we affirm the District Court’s decision. /S/ PATRICIA COTTER We concur: /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ BETH BAKER /S/ BRIAN MORRIS	November 19, 2013
ee20d9d3-ceb9-454c-a926-0e60a655a186	State v. Calvert	2013 MT 374	DA 13-0280	Montana	Montana Supreme Court	DA 13-0280 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 374 STATE OF MONTANA, Plaintiff and Appellee, v. WILLIAM CALVERT, Defendant and Appellant. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DC 11-187B Honorable Mike Salvagni, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Gregory Hood, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Jonathan M. Krauss, Assistant Attorney General; Helena, Montana Marty Lambert, Gallatin County Attorney; Deborah Pratt, Deputy County Attorney; Bozeman, Montana Submitted on Briefs: November 20, 2013 Decided: December 17, 2013 Filed: __________________________________________ Clerk December 17 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 The State charged William R. Calvert (Calvert) with a fourth offense of driving under the influence of alcohol, a felony. The District Court for the Eighteenth Judicial District, Gallatin County, denied Calvert’s motion to dismiss the felony charge, and Calvert subsequently pled guilty, reserving the right to appeal the District Court’s ruling. We restate Calvert’s sole issue on appeal as follows: ¶2 Did the District Court err by denying Calvert’s motion to dismiss the felony DUI charge on the ground that two of his prior offenses were imposed under a Nevada statute not sufficiently similar to Montana’s DUI statutes? FACTUAL AND PROCEDURAL BACKGROUND ¶3 On September 2, 2011, Officer Courtis of the Bozeman Police Department received a tip from a pedestrian that a visibly intoxicated man was attempting to wash his car at the Chevron Super Save. Officer Courtis located the vehicle and followed it to a residence. Upon making contact with the driver, who eventually proved to be Calvert, Officer Courtis noticed a strong smell of alcohol emanating from the vehicle. Calvert stated that he had had “too much” to drink and provided a breath sample registering .223 blood alcohol content (BAC). Officer Courtis then arrested Calvert and took him to the police station for booking where he registered .226 BAC. ¶4 On September 23, 2011, the State charged Calvert with fourth-offense DUI, a felony pursuant to § 61-8-731(1), MCA. As the basis for the felony charge, the State cited Calvert’s three prior DUI convictions in Nevada: 3 1. Carson City Justice Court, Nevada: Case No. A-09096, violation on March 7, 1996 (conviction on October 16, 1997), pursuant to Carson City Municipal Code 10.22.020. 2. First Judicial District Court, Carson City, Nevada: Case No. 98- 00523C, violation on July 17, 1996 (convicted on July 20, 1998), pursuant to Nevada Revised Statutes 484.379. 3. Second Judicial District Court, Washoe County, Nevada: Case No. CR01-2520, violation on August 12, 2001 (convicted on March 1, 2002), pursuant to Nevada Revised Statutes 484.379. Calvert admitted to these convictions, but moved to dismiss the felony charge on the ground that his second and third DUI convictions were premised on a Nevada statute that was not sufficiently similar to Montana’s DUI and DUI per se statutes to constitute prior convictions for purposes of supporting a felony charge.1 The District Court rejected Calvert’s argument, concluding that the Nevada statute was “sufficiently similar” to Montana’s statutes, and denied the motion to dismiss. ¶5 Calvert then pled guilty to felony DUI, reserving his right to appeal the District Court’s ruling on his motion to dismiss. The District Court sentenced him to a thirteen month commitment to the Department of Corrections for placement in an appropriate correctional facility or program, followed by a consecutive four-year term that was suspended with conditions. Upon Calvert’s motion, the District Court stayed execution of the sentence pending this appeal. 1 Calvert did not challenge his first DUI conviction under Carson City’s Municipal Code. 4 STANDARD OF REVIEW ¶6 “Whether a prior conviction may be used for sentence enhancement is generally a question of law.” State v. Maine, 2011 MT 90, ¶ 12, 360 Mont. 182, 255 P.3d 64. This Court reviews a District Court’s conclusions of law when applying a statute for correctness. State v. McNally, 2002 MT 160, ¶ 5, 310 Mont. 396, 50 P.3d 1080 (citations omitted). DISCUSSION ¶7 Did the District Court err by denying Calvert’s motion to dismiss the felony DUI charge on the ground that two of his prior offenses were imposed under a Nevada statute not sufficiently similar to Montana’s DUI statutes? ¶8 Pursuant to Montana’s statutory scheme, driving under the influence of alcohol is “generally charged under either § 61-8-401, MCA (DUI),2 or § 61-8-406, MCA (DUI per se).” McNally, ¶ 7. A fourth or subsequent conviction under either of these statutes constitutes a felony. Section 61-8-731(1), MCA. For purposes of this provision, “conviction” includes a conviction under “a similar statute or regulation in another state.” Section 61-8-734(1)(a), MCA. In evaluating whether another state’s statutes are similar to Montana’s statutes, we compare the statutes in effect at the time the offense was committed. See State v. Polaski, 2005 MT 13, ¶¶ 16-17, 325 Mont. 351, 106 P.3d 538. It matters not whether another state organizes its statutes differently than Montana, so long as they contain analogous provisions. State v. Hall, 2004 MT 106, ¶ 20, 321 Mont. 78, 2 Calvert’s guilty plea in this case resulted from a charge under § 61-8-401, MCA. 5 88 P.3d 1273. However, if another state allows a defendant to be convicted “using a lesser standard than would be required in Montana for a conviction, the statutes are not similar for purposes of § 61-8-734(1)(a), MCA.” Polaski, ¶ 22 (citing McNally, ¶ 22). ¶9 Calvert’s second (1996) and third (2001) DUI charges, and his later convictions on these charges, were based on violations of Nevada Revised Statutes § 484.379. The record does not clearly demonstrate under which specific subsection of this Nevada statute Calvert was charged and convicted in either instance. In 1996, the statute provided: 1. It is unlawful for any person who: (a) Is under the influence of intoxicating liquor; (b) Has 0.10 percent or more by weight of alcohol in his blood; or (c) Is found by measurement within 2 hours after driving or being in actual physical control of a vehicle to have 0.10 percent or more by weight of alcohol in his blood, to drive or be in actual physical control of a vehicle on a highway or on premises to which the public has access. Nev. Rev. Stat. § 484.379(1) (1995). The statute also provided that “it is an affirmative defense under paragraph (c) of subsection 1 that the defendant consumed a sufficient quantity of alcohol after driving or being in actual physical control of the vehicle, and before his blood was tested, to cause the alcohol in his blood to equal or exceed 0.10 percent.” Nev. Rev. Stat. § 484.379(3) (1995). By 2001, all references to “in his blood” had been amended to include “in his blood or breath.” 6 ¶10 Turning to our law, in 1996, Montana’s DUI statute provided: (1) It is unlawful . . . for any person who is under the influence of: (a) alcohol to drive or be in actual physical control of a vehicle upon the ways of this state open to the public; . . . (3) “Under the influence” means that as a result of taking into the body alcohol, drugs, or any combination thereof, a person’s ability to safely operate a motor vehicle has been diminished. Section 61-8-401, MCA (1995). Montana’s DUI per se statute then provided: It is unlawful . . . for any person to drive or be in actual physical control of a vehicle upon the ways of this state open to the public while the person’s alcohol concentration, as shown by analysis of the person’s blood, breath, or urine, is 0.10 or more. Section 61-8-406, MCA (1995). Both of these statutes remained largely unchanged through 2001.3 ¶11 Calvert argues that Nevada’s statute is not sufficiently similar to Montana’s DUI and DUI per se statutes to support his felony conviction of fourth or subsequent DUI. He focuses on the language in subsection 1(c) of Nevada’s statute, which criminalizes the act of having a BAC of 0.10 or higher within two hours after driving “regardless of whether it was over the limit while driving.” See Nev. Rev. Stat. § 484.379(1)(c). Calvert contrasts this subsection with Montana’s DUI per se statute, which criminalizes the act of maintaining a BAC of 0.10 or higher while driving. See § 61-8-406, MCA. Calvert 3 In 2003, the Legislature lowered the per se BAC standard to 0.08. 7 asserts that the Nevada statute proscribes behavior that would be legal in Montana, and argues that this distinction creates a “lesser standard of culpability” for conviction under Nevada law. He offers a scenario wherein Nevada’s statute would criminalize conduct that Montana’s would not. He contends that a defendant could consume alcohol either before or during driving, but never actually exceed the legal limit until after driving, due to rising blood alcohol levels. In this situation, he explains, a person would be liable for exceeding the legal limit within two hours after driving in Nevada, but would not be liable for exceeding the legal limit while driving in Montana. For support, Calvert cites the Nevada Supreme Court’s statement in Sereika v. State, 955 P.2d 175, 179 (Nev. 1998) that “a defendant’s blood alcohol level at the time of driving is simply irrelevant to his violation of NRS 484.379(1)(c).” ¶12 We, however, view Calvert’s distinction as contrived and not realistic. The Nevada Supreme Court’s further comments in Sereika demonstrate that the function of the Nevada statute, like Montana’s statute, is to criminalize high alcohol levels while driving. “[T]he state has a legitimate interest in prohibiting people from driving at the onset of inevitably impending intoxication.” Sereika, 955 P.2d at 180. Noting that “[w]hen people step behind the wheel of a car, they have no certain knowledge of the time that will be required to reach their destination,” the Nevada Court reasoned that the Nevada statute served the State’s interest “in preventing people from driving after ingesting any substance that will render them incapable of driving safely at any time in 8 the following several hours.” Sereika, 955 P.2d at 180 (emphasis added). The statutes are thus similar in their function. ¶13 Regarding culpability, both statutes require the State to prove that a defendant was driving or in actual physical control of a vehicle, and that his BAC was at or above the legal limit in relation to his driving. See Nev. Rev. Stat. § 484.379(1)(c); § 61-8-406, MCA. As the State notes, neither the Nevada nor the Montana statute actually requires the State to prove the precise BAC level that existed during the time of driving. In Montana, law enforcement may administer tests within a “reasonable amount of time after the alleged act of driving while under the influence” in order to satisfy the burden of proof. State v. McGowan, 2006 MT 163, ¶ 17, 332 Mont. 490, 139 P.3d 841. We reasoned in McGowan that requiring law enforcement “to determine a person’s alcohol concentration while driving” would be impossible and lead to absurd legal results. McGowan, ¶ 17. While we recognize a temporal distinction between criminalizing the act of being intoxicated within two hours after driving and admitting the results of a test administered within “a reasonable amount of time after” driving to prove intoxication while driving, McGowan, ¶ 17, we agree with the District Court that this difference between the two statutes is not significant for purposes of § 61-8-734(1)(a), MCA, and that the statutes are sufficiently similar to support Calvert’s felony conviction under Montana law. 9 ¶14 Further, our cases generally analyze culpability in regard to the level of impairment a statute criminalizes. McNally, ¶ 22 (determining that impairment “to the slightest degree” under Colorado law was a lesser standard than “diminished” under Montana law); Hall, ¶¶ 19-22 (determining that “lessened in any appreciable degree” along with a 0.10 percent per se subsection under Washington law was not a lesser standard than under Montana law). Here, the level of impairment under subsection 1(c) of Nevada’s statute is the same as in Montana’s DUI per se statute—0.10 percent. ¶15 Lastly, Calvert argues that in situations where a defendant does not start drinking until after driving, but is tested within two hours of driving, Nevada’s statute creates a lower standard of culpability by shifting the burden to the defendant to prove that he started drinking after driving. See Nev. Rev. Stat. § 484.379(3). Calvert argues that, in Montana, the State always bears the burden of proving that the defendant actually drove with a BAC above the legal limit. ¶16 Notably, when the Nevada Supreme Court was presented with a constitutional challenge to the statute under this “drinking after driving” scenario, it refused to undertake review of the issue, reasoning that there was no evidence the statute “has ever been enforced” in this manner and that “we can conceive of no rational basis for enforcement of [the statute] in such a situation. . . . [W]e decline to strike down an otherwise valid statute based on the unsubstantiated possibility of unconstitutional enforcement.” Sereika, 955 P.2d at 180. The Court further concluded that such an 10 interpretation of the statute would lead to “absurd or unreasonable results.” Sereika, 955 P.2d at 180 (citations omitted). Calvert has presented no evidence that he started drinking only after he ceased driving in either of his Nevada convictions. Again, we do not believe that this distinction provides a realistic basis to conclude the statutes are not similar. ¶17 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ BETH BAKER	December 17, 2013
dd35d7f3-b924-48e5-aadb-e12832a639b6	Todd v. Todd	2013 MT 333N	DA 13-0375	Montana	Montana Supreme Court	DA 13-0375 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 333N VALMA TODD, a Protected Person, Petitioner and Appellant, v. EDWARD TODD, individually and as Trustee of the Robert L. Todd Sr. Trust, Respondent and Appellee. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DV 13-72 Honorable C.B. McNeil, Presiding Judge COUNSEL OF RECORD: For Appellant: November 8 2013 2 Julie R. Sirrs; Boone Karlberg, P.C.; Missoula, Montana For Appellee: Patrick D. Dougherty; Worden Thane P.C.; Missoula, Montana Robert Long; Long Law Office; Polson, Montana Submitted on Briefs: October 23, 2013 Decided: November 8, 2013 Filed: __________________________________________ Clerk 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Valma Todd (Valma) appeals the order of the Twentieth Judicial District Court, Lake County, denying her petition to remove the trustee of her family trust and to appoint a successor trustee. We affirm in part and reverse and remand in part. ¶3 Valma is the current beneficiary of the Robert L. Todd, Sr. Trust (Trust)—a trust established by her late husband Robert Todd (Robert) in 1976. As amended in 2002, the Trust’s stated purpose is “to provide for the financial security for the Trustor and his wife VALMA B. TODD, and to provide for the ultimate distribution of the residue of the Trust Estate [equally to Robert’s two sons and grandson]. . . .” Following payment of expenses of the Trust, the Trust document provides that “[a]ll income to the Trust . . . shall be available to the Trustor and his wife, and to the survivor, for their use and benefit for the remainder of their lifetimes . . . .” The Trust document allows invasion of the principal if the income is considered by the trustees to be insufficient for the support, maintenance and care of the beneficiary. In that case, the trustees are to pay such amounts from the principal “as the Trustees shall deem sufficient for such purposes.” The Trust document further provides: “The Trustees may pay income or principal to the Trustor or beneficiary or for his or her benefit, and shall have no obligation to confirm the use of such payments to which the beneficiary may put such payments.” In 2003, Robert created a separate document emphasizing the trustee’s right to use the principal for the benefit of the beneficiary. It clarified that the Trust document “authorizes the Trustee(s) of said trust to use both 3 principal and income of said trust for the benefit of Trustor, Robert L. Todd, Sr. and his wife, Valma B. Todd during their lifetimes.” All the beneficiaries acknowledged and signed the clarification. ¶4 Robert died in 2004, leaving Valma as the sole primary beneficiary. Edward Todd (Ed), Robert’s grandson, became the sole trustee. In 2008, after breaking her hip, Valma moved to California where two of her sisters could take care of her. Although they originally agreed to care for Valma for the same amount of money that Ed’s parents were being paid for that purpose, the sisters soon realized they needed an increase in funds. Ed agreed to distribute $2,200 a month to cover Valma’s care. In January 2012, after apparently becoming concerned that the Trust assets were depleting too quickly, Ed notified the sisters that he would be decreasing his distribution to Valma to $1,100 per month. Valma’s third sister, Truella Hicks, joined the sisters in California and was appointed as Valma’s conservator in January 2013. Adult Protective Services (APS) of Montana was contacted to conduct an investigation of the Trust distributions. Upon investigation, Janice Hinze of APS reported that Ed’s refusal to provide sufficient distributions from the Trust to meet Valma’s needs indicated elder financial exploitation and neglect. ¶5 Alleging numerous breaches of fiduciary duties, Valma filed a verified petition on March 19, 2013, to remove Ed as trustee and to appoint a successor trustee.1 The District Court held a hearing on the petition on April 10, 2013; Hinze and Ed testified and Hinze’s report was admitted into evidence, along with the April 4, 2013 letter of Barnet G. Meltzer, M.D., a spreadsheet of expenses prepared by the sisters for APS, some expense receipts, and Ed’s initial e-mail exchange with Valma’s sister establishing $1,150 in monthly expenses. The court issued its findings of fact, conclusions of law and 1 Valma’s counsel signed the verification in her absence. 4 order on May 7, 2013, denying all of Valma’s requests. If Valma’s conservator believes she needs additional funds, the District Court ordered that she provide all medical documentation to Ed, who then may choose a physician to make a recommendation as to her care and potential return to Montana if he determines those costs to be more reasonable. ¶6 We review a district court’s findings of fact to determine whether they are clearly erroneous and its conclusions of law for correctness. In re Baird, 2009 MT 81, ¶ 7, 349 Mont. 501, 204 P.3d 703. A finding is clearly erroneous when it is not supported by substantial evidence, the district court misapprehended the effect of the evidence, or if, after reviewing the record, we are left with a firm conviction that a mistake has been made. In re Guardianship of Saylor, 2005 MT 236, ¶ 10, 328 Mont. 415, 121 P.3d 532. We review a district court’s decision denying a petition to remove a trustee for abuse of discretion. Baird, ¶ 11. Interpretation of a trust agreement is a question of law, reviewed for correctness. In re Charles M. Bair Family Trust, 2008 MT 144, ¶ 32, 343 Mont. 138, 183 P.3d 61. ¶7 On appeal, Valma first argues that the District Court erred in determining that Ed did not breach his fiduciary duties, beginning with his duty to carry out the intent of the Trust and exercise his discretion reasonably. The District Court relied on what it considered conflicting letters from physicians—one stating that Valma suffered from a terminal diagnosis with less than a year to live and one stating that Valma was released from hospice care to complete physical therapy—and found that “no clear evidence was presented to the court that additional caregiver costs were even necessary.” Upon review of the record, we conclude that the court misapprehended the effect of the evidence. First, the letters were not conflicting but instead sequential. The second letter, from Valma’s primary care physician, explained her condition and specifically stated that she needed a caregiver twenty-four hours a day. Second, the court completely disregarded the evidence supplied from Hinze. Her report, 5 admitted into evidence by the court, stated that “Valma . . . cannot be left alone; someone must be with her 24/7. She requires assistance to toilet, dress and groom herself . . . .” Hinze calculated that such caregiver costs alone could be over $6,000 a month in Valma’s locality. In light of the evidence presented, the court’s finding that increased caregiver costs had not been substantiated is clearly erroneous. ¶8 The District Court also interpreted the Trust document incorrectly as a matter of law. Even when a trust confers sole discretion in a trustee, the trustee “may not act in disregard of the purposes of the trust.” Section 72-34-130, MCA (2011). The trustor’s intent controls our interpretation of a trust agreement, and we attempt to discern the trustor’s intent from the language of the entire trust, rather than from a particular word or phrase. Bair, ¶ 32. In Bair, we held that viewing the trust document as a whole, the primary purpose of the trust was to establish a museum even though the section of the trust outlining its purpose spoke of a more general philanthropic mission. Bair, ¶ 35. Here, Ed argues and the District Court concluded that because the Trust’s purpose is dual—to provide for Valma for the rest of her life and then be distributed to the remaindermen—Ed has a duty to preserve the Trust to fulfill both purposes. While the Trust requires Ed to carry out both purposes, it is apparent that Valma’s care constitutes the primary purpose of the Trust. This is shown by the fact that it is a more specific purpose than leaving a remainder interest to residuary beneficiaries, the Trust document does not restrict the distributions to meet Valma’s needs in order to save Trust assets for the remainder, and the Trustor expressly clarified that the principal could be invaded for the benefit of the primary beneficiaries. ¶9 The court also incorrectly interpreted the phrase allowing invasion of the principal of the Trust “as the Trustees shall deem sufficient for such purposes” to allow Ed unfettered discretion over Valma’s care. While a trustee has a duty to preserve trust property, § 72-34-107, MCA (2011), the court went so 6 far as to allow Ed to “choose a physician to evaluate Valma and make a recommendation as to the appropriate care and possible return to Montana, if such costs of care in Montana would be more reasonable . . . .” The Trust does not require that Valma live in Montana or accept the least expensive option for her care. Rather, the Trust’s language suggests a more liberal distribution by stating that the trustee “shall have no obligation to confirm the use of such payments to which the beneficiary may put such payments” and by specifically allowing an invasion of the Trust’s principal to care for Valma. Ed is not Valma’s guardian or conservator, nor is he the arbiter of where she lives and who provides her medical care. It is evident from the testimony that there was considerable mistrust between Ed and the sisters, one of whom is Valma’s conservator, regarding the uses to which the Trust distributions were being put. When asked by his counsel to justify his decision to cut the distributions in half, Ed answered that he returned to the $1,100 monthly distribution because “that was what I provided up here in Montana” five years earlier. Ed did not trust the sisters’ representations regarding costs of rent and vitamins for Valma. ¶10 Whatever the source of mistrust between the family members, there was no evidence to contradict the opinion of Dr. Meltzer and the report of Ms. Hinze that Valma’s present condition requires twenty-four hour care. The effect of the evidence admitted at hearing, along with the District Court’s reading of the Trust document to give the trustee broader powers than it specifies, lead us to conclude that Ed breached his duty to administer the Trust according to the Trust instrument and to exercise his discretion reasonably for Valma’s benefit. Valma articulates further reasons to find a breach of duty, but because such analysis will not change the outcome, we decline to address her additional arguments. 7 ¶11 Valma also argues that the District Court erred in failing to remove Ed as Trustee. Section 72-33- 618(2)(a), MCA (2011), states that a trustee may be removed “if the trustee has committed a breach of the trust.” Even though removal is discretionary by the trial court, in light of our conclusion above and under the circumstances of this case, we conclude that the District Court should have removed Ed as trustee. Although a remainder beneficiary is not automatically disqualified from managing a trust, the evident breakdown in communications, friction and hostility between Ed and Valma’s caregivers (see Rst. (Third) of Trusts § 37(e)(1), Removal of Trustee), and the immediacy of the need to address objectively the amounts required for Valma’s care and support call for appointment of an independent trustee. We therefore reverse the ruling denying Ed’s removal as trustee and remand to the District Court with instructions to appoint an appropriate, independent trustee. We decline to name a successor trustee or to require the trust to reimburse Valma’s legal fees and caregivers, as those are matters best determined, respectively, by the court on remand and by an independent trustee upon review of the Trust’s assets. ¶12 Finally, Valma appeals the District Court’s refusal to compel Ed to complete an accounting of the Trust for the years prior to 2012. Valma asserts that the District Court’s ruling is incorrect because § 72- 34-126, MCA (2011), requires annual statements, and this requirement may only be waived in writing. Section 72-34-127(3), MCA (2011). The parties agree that Valma verbally waived Ed’s requirement to provide annual accountings. The District Court held that the failure to provide an annual accounting amounted to a “technical” violation that could be remedied by completing accountings for the succeeding years. In light of our holding on the other issues, we need not address Valma’s claim that prior accountings are needed to further explore Ed’s breach of fiduciary duties as trustee. We affirm the District Court’s order requiring accountings to be completed only after 2012. 8 ¶13 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for memorandum opinions. It is manifest on the record before us that the District Court erred in its interpretation and application of the Trust document and abused its discretion in failing to remove Ed as trustee. We therefore reverse and remand its denial of Valma’s petition to remove trustee, but we affirm its refusal to require that Ed provide accountings for the years prior to 2012. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT Justice Jim Rice, concurring in part, and dissenting in part. ¶14 I concur with the majority’s decision regarding accountings for prior years, however I dissent from its holding on the remaining issues. ¶15 Whether a trustee has breached his or her fiduciary duty generally presents a question of fact. Bair, ¶ 47. Findings of fact must be upheld unless they are clearly erroneous. “The evidence is reviewed in the light most favorable to the prevailing party, and the credibility of witnesses and the weight 9 assigned to their respective testimony are up to the trial court.” In re Estate of Bradshaw, 2001 MT 92, ¶ 11, 305 Mont. 178, 24 P.3d 211. It is the district court’s place to weigh the evidence, and our standard is to determine whether substantial evidence supports the findings, not to determine whether the evidence would support other findings. In re Estate of Bradshaw, ¶ 20. ¶16 There was conflicting evidence presented in this case as to who was acting improperly. Valma presented evidence that Ed had acted improperly in denying her requests for additional funds, while Ed presented evidence that his refusal to pay the costs as demanded by Valma’s sisters was due to lack of substantiation of costs and increasing concern that the money was not being applied to Valma’s care. Specifically, the evidence presented demonstrated that Ed initially began to question the amounts requested when he learned that one of Valma’s sisters was personally selling Valma vitamins at $200 per month, charging Valma $900 per month to rent a room in her house when she only charged the other roommates $350 per month, and had been writing checks to herself out of Valma’s checking account (where the trust funds were deposited) as “loans” from the trust. Ed was further concerned that the significant amount of money requested for twenty-four hour care was to be paid directly to the sisters and other family members, not to a licensed caregiver, and the need for this twenty-four hour care was not substantiated by the sisters (the medical letters discussed at Opinion, ¶ 7, were presented for the first time at the hearing). ¶17 The District Court, after hearing all the evidence, determined that Ed’s concerns due to the lack of substantiated costs were reasonable. The court found that “Ed’s testimony was credible.” The court noted the results of the APS investigation; however, it still concluded that the evidence weighed in favor of concluding that Ed “has acted reasonably as the Trustee.” As the District Court was in the position to 10 weigh the evidence and judge the credibility of witnesses, I would hold that these findings were not clearly erroneous. ¶18 I also disagree with the Court’s holding requiring the removal of Ed as trustee. The trustor’s intent controls the interpretation of a trust agreement, and “we attempt to discern the trustor’s intent from the language of the entire trust agreement, rather than from a particular word or phrase.” Bair, ¶ 32. It is clear from the trust documents in this case that the trustor intended for family to be in charge of administering the trust. Having named Ed as the co-trustee, eventually the sole trustee after Valma’s resignation, the trustor was aware that a residuary beneficiary was responsible for administering the trust for Valma’s benefit during her lifetime. This was clearly his intention despite the inherent conflict of interest involved. Additionally, the trustor listed several other family members to serve as successor trustees should any trustee resign or become unable to serve. This Court should not circumvent the trustor’s clear intention to have a family member trustee. ¶19 Additionally, as trustee, Ed has dual responsibilities towards the primary and residuary beneficiaries of the trust. Though the primary purpose of the trust is to provide for Valma during her lifetime, the trust specifically sets out an additional purpose of providing the residue to the remaindermen. As trustee, if Ed depleted the principal of the trust at Valma’s request, without ascertaining that such spending is necessary to “sufficient[ly]” provide for her “support, maintenance and care,” he could incur liability to the remainder beneficiaries. ¶20 Here, the District Court made findings that Ed “reasonably retained the [vacant] lots as the Trust has had sufficient liquid assets to pay its expenses and make income and principal distributions”; “reasonably made the decision to decrease the amount of distributions after he was no longer receiving Valma’s [social security check]”; “never refused to pay any verified medical expense”; “was reasonably 11 concerned as to the level of care and whether the cost for the additional caregivers was necessary”; and “[w]ithout additional information, including medical records, [he] could not reasonably determine that any additional cost of the caregivers was appropriate.” ¶21 I disagree with the Court’s characterization that the District Court concluded Ed could choose a medical professional for Valma and require her to live in Montana to receive trust funds. Opinion, ¶ 9. The District Court conclusion referenced by the Court states in full: Because Valma’s medical and care needs are important, the Court orders [Valma’s conservator], to the extent she believes Valma needs additional medical care or caregivers, to provide Ed with all documentation regarding Valma’s medical condition, and medical and caregiver needs. To the extent Ed is not persuaded by the medical records, Ed can choose a physician to evaluate Valma and make a recommendation as to the appropriate care and possible return to Montana, if such costs in Montana would be more reasonable and still meet the “sufficient” standard for discretionary distributions of Trust principal at that time. [Emphasis added.] This finding immediately follows conclusions that Valma, through her conservator, has failed to provide any medical records or bills to substantiate the significant increase in requested funds. Contrary to the Court’s interpretation that this conclusion makes Ed “the arbiter of where she lives and who provides her medical care,” Opinion, ¶ 9, I would hold it was reasonable for the court to require some evidence to substantiate the claimed expenses given the trustee’s duty to ensure that trust funds are being used for their designated purpose, and to allow for the possibility that the same level of care could be obtained for less money in Montana in order to fulfill the primary trust purpose of providing for Valma for her lifetime. ¶22 Having concluded the court’s findings of fact were not clearly erroneous, I would also hold that the District Court did not abuse its discretion in making these conclusions in light of all the evidence presented. Based on the court’s findings of fact and conclusions of law, I would uphold the District 12 Court’s conclusion that Ed did not violate his duties as trustee, and its decision not to remove Ed as trustee. /S/ JIM RICE	November 8, 2013
2b7fbbbc-ee58-46b0-acc5-7819c94349ad	Matter of K.G. YINC	2013 MT 352N	DA 13-0147	Montana	Montana Supreme Court	DA 13-0147 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 352N IN THE MATTER OF: K.G., A Youth in Need of Care. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADN 11-001 Honorable Greg Pinski, Presiding Judge COUNSEL OF RECORD: For Appellants: Anne-Marie K. Simeon, Attorney at Law; Billings, Montana (Attorney for Mother) Nancy G. Schwartz, NG Schwartz Law, PLLC; Billings, Montana (Attorney for Father) For Appellee: Timothy C. Fox, Montana Attorney General, Pamela C. Collins, Assistant Attorney General; Helena, Montana Theresa Diekans, Assistant Attorney General, Child Protection Unit; Great Falls, Montana Submitted on Briefs: October 9, 2013 Decided: November 19, 2013 Filed: __________________________________________ Clerk November 19 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 The State of Montana filed a petition in the Eighth Judicial District Court, Cascade County, to grant permanent legal custody of an Indian child (referred to herein as K.G.) to the Department of Public Health and Human Services and to terminate the parental rights of K.G.’s mother and father (Mother and Father, respectively). Mother and Father now appeal. We affirm. ¶3 K.G. was born January 1, 2011. Mother had fresh track marks on her arms while in the hospital giving birth to K.G., and it was determined that K.G. had been exposed to methamphetamine while in utero. K.G. was removed from Mother’s care on January 4, 2011, prior to leaving the hospital. ¶4 The State commenced the present proceedings on January 11, 2011, with the filing of a petition for temporary investigative authority and emergency protective services. K.G.’s tribal affiliation is the Blackfeet Tribe. Accordingly, pursuant to the Indian Child Welfare Act of 1978 (ICWA), 25 U.S.C. §§ 1901-1963, the State sent notice of these proceedings to the Blackfeet Tribe on January 20, 2011. The Tribe intervened in the case but ultimately chose not to transfer the case to tribal court. Neither Mother nor Father requested that the case be transferred to tribal court. 3 ¶5 On March 16, 2011, the District Court granted the Department temporary investigative authority. On July 20, 2011, the District Court adjudicated K.G. a youth in need of care and granted the Department temporary legal custody. On January 25, 2012, the District Court extended the temporary legal custody and approved the Department’s proposed treatment plans for Mother and Father. The court found the treatment plans “reasonable and appropriate” and ordered Mother and Father to complete the plans. ¶6 On July 23, 2012, the State filed the petition for permanent legal custody and termination of parental rights, citing abandonment and failure of court-ordered treatment. See § 41-3-609(1)(b), (f), MCA. The District Court held a hearing on January 18, 2013. Present at the hearing were Father, represented by counsel; Mother (by Vision Net), represented by counsel; counsel for K.G.; the guardian ad litem; counsel for the State; and a social worker. Mother and Father contested the State’s petition. The District Court received testimony from Father, from the social worker, and from an ICWA expert. The District Court thereafter entered findings of fact and conclusions of law. Based on those findings and conclusions, the court terminated the parent-child relationship and granted permanent legal custody of K.G. to the Department. ¶7 Mother and Father both argue on appeal that the State failed to present sufficient evidence to justify termination of their parental rights. Under Montana law, a district court may terminate parental rights if the child is adjudicated as a youth in need of care, an appropriate treatment plan has been approved by the court, the parent has not complied with the treatment plan or the treatment plan has not been successful, and the conduct or condition 4 of the parent rendering him or her unfit is unlikely to change within a reasonable time. Section 41-3-609(1)(f), MCA; In re D.S.B., 2013 MT 112, ¶ 12, 370 Mont. 37, 300 P.3d 702. When ICWA applies, the court also must be satisfied that active efforts have been made to provide remedial services and rehabilitative programs designed to prevent the breakup of the Indian family, that these efforts have proved unsuccessful, and that continued custody of the child by the parent or Indian custodian is likely to result in serious emotional or physical damage to the child. 25 U.S.C. § 1912(d), (f). The determination of serious emotional or physical damage to the child must be supported by evidence beyond a reasonable doubt, including testimony of qualified expert witnesses. 25 U.S.C. § 1912(f). ¶8 Based on the record before us, we agree with the State that sufficient evidence supports the District Court’s findings on each of these factors. The record establishes that Mother and Father failed to complete or comply with various components of their respective court-ordered treatment plans. In particular, Mother failed to complete chemical dependency treatment, in part because she used cannabis while in treatment. Mother never submitted to urinalysis testing to confirm whether she had become sober or was maintaining sobriety. Mother failed to maintain a safe and stable home environment, in part because she was in and out of jail for substantial lengths of time. In November 2012, she was sentenced to the Department of Corrections for three years, with two years suspended. Mother did not request regular updates about K.G. while incarcerated, she did not seek or follow through with regular visitations with K.G. when not incarcerated, and she failed to maintain regular contact with the social worker. 5 ¶9 Father successfully completed a treatment program but failed to provide evidence that he is maintaining sobriety (e.g., by submitting to urine tests). Father also failed to maintain contact with the social worker and, as a result, the safety and stability of his home environment was unknown. Father additionally failed to respond to messages left by the social worker, failed to attend regular visitations with K.G., demonstrated a lack of interest in seeing K.G., and failed to sign all necessary releases of information to the Department. ¶10 Anna Fisher (the ICWA expert) testified that continued custody of K.G. by Mother and Father would likely result in serious emotional or physical damage to K.G. Fisher based this opinion on Mother’s history of drug abuse, Mother’s inability to maintain sobriety during the pendency of this case, Father’s lack of communication, and Father’s lack of effort throughout the pendency of this case. ¶11 At the time the District Court entered its decision, K.G. had been in the custody of the Department since she was four days old. She was in a kinship foster home and had been in this placement for nearly the entirety of her life. She had never resided with either Mother or Father. The social worker (Kami Moore) testified that K.G. is a happy two-year-old who is doing very well in her stable foster home environment. Moore further testified that K.G. has never been removed from the kinship foster home and that the Department had no concerns about the home. ¶12 The District Court determined that Mother is unfit, unable, or unwilling to give K.G. adequate parental care given Mother’s present incarceration, her history of incarceration, her failure to successfully complete drug treatment, and her history of drug abuse and failed 6 treatment programs. The District Court reached the same conclusion regarding Father based on his history of incarceration, his history of drug abuse, and his failure to submit to urinalyses or provide other proof of successful completion of drug treatment. The District Court further determined, based on proof beyond a reasonable doubt, that the conduct or conditions of Mother and Father rendering them unfit are unlikely to change within a reasonable time, that K.G.’s best interests would be served by termination of the parent-child legal relationship, and that continued custody of K.G. by Mother and Father would likely result in serious emotional or physical damage to K.G. ¶13 Finally, the District Court stated it was satisfied that the social worker made active efforts to provide remedial services and rehabilitative programs to prevent the breakup of the Indian family. The Court heard testimony that the social worker repeatedly attempted to keep in contact with the parents and offered visitation, treatment, UA testing, transportation to visitation, and other services to [Mother] and [Father]. [Mother] and [Father] failed to participate in their treatment plans or to work with the social worker. The Court is therefore satisfied, by proof beyond a reasonable doubt, that DPHHS’s efforts have proven unsuccessful. The evidence presented to the District Court supports the court’s findings. ¶14 Mother argues one other issue on appeal: that the State failed to comply with ICWA’s notice requirement. Under 25 U.S.C. § 1912(a), the State was required to notify the Blackfeet Tribe, by registered mail with return receipt requested, of the pending proceedings and of the Tribe’s right of intervention. Mother concedes that the State gave proper notice to the Tribe at the outset of these proceedings and that the Tribe intervened in the action. In its May 5, 2011 Notice of Intervention, the Tribe stated that all papers may be served upon the 7 Tribe’s ICWA Department, and identified Raquel Vaile as the ICWA Coordinator. In its February 22, 2012 Amended Notice of Intervention, the Tribe still identified Vaile as “[t]he ICWA contact person,” but stated that all papers may be served upon the address of the Tribe’s counsel of record. Mother thus contends that because the State sent its July 23, 2012 petition for termination of parental rights to the ICWA coordinator by certified mail, rather than sending it to the Tribe’s counsel of record by registered mail with return receipt requested, the State thereby failed to comply with ICWA’s notice requirement. Mother fails, however, to cite any language in the statute or any caselaw requiring the State to file multiple notifications under 25 U.S.C. § 1912(a) within the same pending proceeding. The State unquestionably gave proper notice at the outset, and the State sent the petition for termination to the Tribe’s “ICWA contact person.” Consequently, it appears the purpose of the statute was satisfied. ¶15 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶16 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT 8 /S/ JIM RICE /S/ BRIAN MORRIS	November 19, 2013
42a427b2-84d1-47d9-8545-defa48218135	State v. Peltier	2013 MT 344N	DA 12-0363	Montana	Montana Supreme Court	DA 12-0363 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 344N STATE OF MONTANA, Plaintiff and Appellee, v. JOSHUA JEREMY PELTIER, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC 2010-536 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Colin M. Stephens, Smith & Stephens, P.C.; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General; Helena, Montana Fred Van Valkenburg, Missoula County Attorney, Jason Marks, Deputy Missoula County Attorney; Missoula, Montana Submitted on Briefs: October 23, 2013 Decided: November 13, 2013 Filed: __________________________________________ Clerk November 13 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Appellant Joshua Jeremy Peltier (Peltier) appeals his conviction from the Fourth Judicial District, Missoula County. We affirm. ¶3 Peltier followed C.B., a 26-year-old female, in his “pretty old car,” while C.B. rode her bike to work on the evening of November 26, 2010. Peltier eventually parked his car ahead of C.B. When she rode nearer to his car, Peltier knocked C.B. off her bike. Peltier then “punched [her] several times and also bashed [her] head into the pavement.” Peltier unsuccessfully attempted to remove C.B.’s pants. Peltier forced his hands into C.B.’s pants and penetrated C.B.’s vagina with his finger. A car drove up and parked nearby which resulted in Peltier taking C.B.’s backpack and “jogg[ing] away.” C.B. then used her cell phone to call 911. Missoula police responded and interviewed C.B. about the assault. ¶4 Five days later on December 1, 2010, Peltier attacked a second victim. K.P., a 29- year-old-female, was walking her dog near the Orange Street underpass structure in Missoula before an early morning work shift. Peltier approached K.P, “grabbed [her] and started shoving [her] toward his car.” Peltier failed to force K.P. into his car, but nonetheless “pulled [K.P.’s] pants down a little bit,” “put his fingers inside” “both [her] vagina and [her] anus,” and “put his penis inside both [her] vagina and [her] anus.” 3 ¶5 Peltier left K.P. and drove away after the assault. Peltier had taken the dog’s leash and collar, K.P.’s cell phone, K.P.’s bag, and K.P.’s coat. K.P. walked to Saint Patrick’s Hospital in Missoula. Hospital personnel admitted K.P., took a rape kit and called a police officer to interview K.P. ¶6 Missoula Police Detective Jamie Merifield located Peltier’s vehicle on the next day, December 2, 2010, based upon descriptions from C.B. and K.P. Detective Merifield’s search of Peltier’s vehicle, home, and the surrounding areas produced that property which had been taken from C.B. and K.P. Missoula Police Detetive Guy Baker interviewed Peltier on the same day. Detective Baker observed recent injuries on Peltier’s neck and hand. Peltier consented to a DNA test. The results of the DNA test could not exclude Peltier as a contributor to the DNA collected as part of K.P.’s rape kit. ¶7 Detective Richard Chrestenson also interviewed Peltier on December 2, 2010. During the interview Peltier admitted “being involved in both of those attacks [on C.B. and K.P.]” Peltier also claimed that he had imbibed large quantities of alcohol on the night that he assaulted K.P. Peltier admitted that he had approached K.P, but claimed that he was unable to remember the night of the assault on K.P. due to the alcohol. Peltier further claimed that he had tried to reach into C.B.’s pockets to take money, but that he accidentally had reached down the front of her pants instead. ¶8 The State of Montana (State) charged Peltier on December 16, 2010, with two counts of robbery, one count of sexual assault, one count of sexual intercourse without consent, one count of attempted kidnapping, and one count of tampering with evidence. Peltier proceeded 4 to trial on January 5, 2012. The District Court instructed the jury on the definitions of “purposely” and “knowingly.” The District Court drafted the instructions. Neither party objected to the District Court’s instructions. The jury found Peltier guilty of all counts. Peltier appeals. ¶9 Peltier argues that the District Court failed in its jury instructions to distinguish between conduct oriented offenses and result oriented offenses. Peltier cites the fact that the District Court did not instruct the jury about the purposely and knowingly element of each offense. Peltier further argues that the District Court effectively lowered the State’s burden of proof by not requiring the State to prove that Peltier purposely or knowingly had committed each element of each offense. Peltier finally argues that he received ineffective assistance of counsel when his counsel failed to object to the District Court’s jury instructions. ¶10 We review for abuse of discretion jury instructions to determine whether the jury instructions, as a whole, fully and fairly instructed the jury on the law applicable to the particular case. State v. Johnston, 2010 MT 152, ¶ 7, 357 Mont. 46, 237 P.3d 70. We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our 1996 Internal Operating Rules, as amended in 2006, that provide for memorandum opinions. ¶11 Peltier attacked two women in their mid-twenties on separate occasions. Peltier forcibly attempted to remove each woman’s pants. He inserted his hands into each woman’s vagina and anus. Peltier penetrated one woman’s vagina and anus with his penis. He stole property that belonged to both women. Peltier fails to demonstrate that he did not knowingly 5 or purposely engage in any of the conduct. The jury clearly understood what it meant to intend to engage in some conduct, and to do so with purpose. It is manifest on the face of the briefs and the record before us that the District Court did not abuse its discretion in instructing the jury as it did. ¶12 Affirmed. /S/ BRIAN MORRIS We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JIM RICE	November 13, 2013
90ce03a1-683f-4ad8-9cde-d1095d4f155c	State v. Sebastian	2013 MT 347	DA 13-0018	Montana	Montana Supreme Court	DA 13-0018 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 347 STATE OF MONTANA, Plaintiff and Appellee, v. VICTOR GAYLEN SEBASTIAN, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC 10-58 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellant: Julie Brown, Montana Legal Justice, PLLC; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Pamela P. Collins, Assistant Attorney General; Helena, Montana William E. Fulbright, Ravalli County Attorney, Thorin Geist, Deputy Ravalli County Attorney; Hamilton, Montana Submitted on Briefs: October 30, 2013 Decided: November 19, 2013 Filed: __________________________________________ Clerk November 19 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Victor Gaylen Sebastian (Sebastian) appeals from the Order of the Montana Twenty- First Judicial District Court, Ravalli County, revoking his suspended sentence, committing him to the custody of the Department of Corrections and recommending he be screened for the most intensive chemical dependency treatment program available. We affirm. ¶2 We address the following issue: Did the District Court abuse its discretion by denying Sebastian’s motion to continue the revocation hearing when the evidence against him had not been fully disclosed, violating his right to due process? FACTUAL AND PROCEDURAL BACKGROUND ¶3 In 2011, Sebastian was found guilty of felony burglary and misdemeanor criminal mischief, for breaking into a church. He was committed to the supervision of the Department of Corrections for five years, all suspended, to run concurrently with a six- month suspended sentence related to another offense; and placed under the rules and regulations of the Adult Probation and Parole Bureau. The conditions of his probation included the following: (i) The Defendant must comply with all municipal, county, state, and federal laws and ordinances, and conduct himself/herself as a good citizen . . . (j) The Defendant is prohibited from using or possessing alcoholic beverages and illegal drugs . . . (dd) The Defendant will not knowingly associate with probationers, parolees, prison inmates . . . (l) The Defendant will pay all fines and fees as ordered and directed by the Court. 3 ¶4 Sebastian has an unusually severe case of Crohn’s disease. He has had over thirty operations due to this condition, lost three toes to it, and had eleven pounds of his intestines removed. Sebastian has been prescribed hydrocodone and methadone as well as other medications, to help him live with Crohn’s disease. He admits to using marijuana medicinally for this condition, although he is no longer legally-authorized to do so. He admits to crushing and snorting his hydrocodone and methadone because, he says, Crohn’s disease otherwise causes him to pass the medications before they are absorbed by his system. The instructions on the medications provide they are to be taken orally. ¶5 On August 10, 2012, Sebastian was stopped for driving erratically. The responding officer said that when he came up to the vehicle, Sebastian appeared to be sleeping and kept closing his eyes and putting his head back. Sebastian passed field sobriety tests. He initially agreed to a blood test, but changed his mind. Significantly later, he passed a drug recognition test. He was not cited for driving under the influence. ¶6 On August 15, 2012, Sebastian admitted to his probation officer that he was taking too much of his medication. He stated he was crushing up and snorting the medication and that he had a problem. Based on these disclosures, his probation officer told him she was going to file a revocation and that she felt he needed long term inpatient treatment, to which, she said, Sebastian agreed. ¶7 On August 23, 2012, Sebastian was involved in a motor vehicle accident with a jeep near Corvallis on Eastside Highway at the 6.9 mile marker. The driver of the jeep fled the scene and the responding officer pursued. Sebastian left the scene in the opposite direction. 4 State Trooper Tamra Winchell eventually caught up with Sebastian at a trailer court. When she spoke to Sebastian, it appeared to her that he was “under the influence of something.” Half an hour to forty-five minutes after she arrived at the scene she said Sebastian became sick. He was sweating and complaining of pain; she had to open the door of her patrol car for him to throw up. Winchell transported Sebastian to the hospital. There, he submitted to blood tests. The preliminary blood tests were positive for marijuana and a methamphetamine component. At the time of the revocation hearing, the results of the blood tests had not come back yet and Sebastian could only be charged with careless driving. ¶8 Sebastian’s probation officer also arrived at the scene on August 23. She testified that he told her his car had been parked all day at the trailer park. He did not report the accident to her and denied having any knowledge of the accident. She also stated he appeared to be under the influence of something—nodding off at times, appearing very awake at times, and periodically turning “extremely aggressive.” She stated that Sebastian also told her on August 23 that he had been misusing his medications. ¶9 At the time of these events, Sebastian was dating a woman who lived with her father. Her father was on probation. She stated that Sebastian came over the house all the time but had very little interaction with her father. Neither the father’s probation officer nor Sebastian’s probation officer had approved the two having contact. ¶10 Finally, Sebastian stated at his hearing that, because he does not have the money, he has not been paying his court-ordered supervision fees. 5 ¶11 In a letter to the District Court, received September 11, 2012, Sebastian admitted to crushing and snorting his medications because of his Crohn’s disease. He also admitted to the fact that he did not have a medical marijuana card, although he still needs the drug. ¶12 On September 7, 2012, the State filed a petition to revoke Sebastian’s suspended sentence. The State alleged that Sebastian had violated his probation by driving under the influence of hydrocodone and methadone; refusing to provide a bodily fluid sample requested by a law enforcement officer; and driving a vehicle while under the influence of narcotics, being involved in an accident, and lying about being involved in the accident. The State also alleged that Sebastian violated his probation on at least two occasions by crushing up his medications and snorting them, rather than taking them as directed by a physician. In addition, it alleged Sebastian had been associating with another probationer without permission and failing to pay court-ordered restitution. ¶13 Sebastian’s revocation hearing was scheduled for October 23, 2012. On October 22, 2012, Sebastian moved for a continuance of the hearing. His motion explained that a “substantial amount of discovery, including blood test results, suspect and witness statement videos or audio recordings, drug recognition expert evaluation reports, 911 call recordings, histories and notes, and names of investigating officers” had not yet been produced. The District Court denied this motion on October 23, 2012. After the hearing, the District Court ordered Sebastian’s suspended sentence revoked; ordered him committed to the Department of Corrections for five years; and recommended he be screened for the most intensive chemical dependency treatment program the Department of Corrections had to offer. 6 Sebastian appeals, alleging that his right to due process was violated when the District Court revoked his suspended sentence after denying his motion to continue the revocation hearing, pending full disclosure of the evidence against him. STANDARD OF REVIEW ¶14 “A district court’s ruling on a motion to continue is subject to the district court’s discretion, and this Court reviews the ruling to determine whether the district court abused its discretion.” State v. Morrison, 2009 MT 397, ¶ 5, 353 Mont. 407, 220 P.3d 659 (citing State v. Anderson, 1999 MT 58, ¶ 10, 293 Mont. 472, 977 P.2d 315). “A district court abuses its discretion when it acts arbitrarily without the employment of conscientious judgment or exceeds the bounds of reason, resulting in a substantial injustice.” State v. Goff, 2011 MT 6, ¶ 20, 359 Mont. 107, 247 P.3d 715. Generally, this Court reviews a district court’s decision to revoke a suspended sentence to determine whether it was supported by a preponderance of the evidence and whether the district court abused its discretion. State v. Gillingham, 2008 MT 38, ¶ 17, 341 Mont. 325, 176 P.3d 1075. Where a defendant presents a question of law related to constitutional rights, however, this Court’s review is plenary. Gillingham, ¶ 17. DISCUSSION ¶15 Did the District Court abuse its discretion by denying Sebastian’s motion to continue the revocation hearing when the evidence against him had not been fully disclosed, violating his right to due process? 7 ¶16 Section 46-18-203, MCA, permits a district court to order a hearing on revocation of a suspended sentence if the State files a petition for revocation which demonstrates probable cause that the probationer has violated any condition of a suspended sentence. When such a hearing occurs, the offender must be brought before a judge and advised of: “(a) the allegations of the petition; (b) the opportunity to appear and to present evidence in [sic] the offender's own behalf; (c) the opportunity to question adverse witnesses; and (d) the right to be represented by counsel at the revocation hearing[.]” Section 46-18-203(4), MCA. The State must prove, by a preponderance of the evidence, that the offender has violated the probation conditions. Section 46-18-203(6)(a), MCA. A preponderance of the evidence is “such evidence as, when weighed with that opposed to it, has more convincing force and the greater probability of truth.” State v. Stuit, 176 Mont. 84, 89, 576 P.2d 264, 267 (1978) (citing People v. Condley, 69 Cal. App. 3d 999 (1977)). If the court finds the State has carried this burden, it is within the court’s discretion to determine an appropriate action in response to the violation. State v. Pedersen, 2003 MT 315, ¶ 17, 318 Mont. 262, 80 P.3d 79 (citing § 46-18-203(7), MCA); See § 46-18-203(7), MCA. ¶17 The Fourteenth Amendment of the United States Constitution protects individuals from State action that would deprive them of life, liberty, or property without due process of law. U.S. Const. amend. XIV, § 1. Montana’s Constitution also protects this right. Mont. Const. art. II, § 17. At stake in a probation revocation proceeding is a probationer’s conditional liberty interest. Gagnon v. Scarpelli, 411 U.S. 778, 781, 93 S. Ct. 1756, 1759 (1973). 8 ¶18 “The minimum requirements of due process are extended to sentence revocation hearings.” Pedersen, ¶ 21 (citing State v. Nelson, 225 Mont. 215, 218, 731 P.2d 1299, 1302 (1987)). “What is needed is an informal hearing structured to assure that the finding of a parole [or probation] violation will be based on verified facts and that the exercise of discretion will be informed by an accurate knowledge of the parolee’s [or probationer’s] behavior.” Morrissey v. Brewer, 408 U.S. 471, 484, 92 S. Ct. 2593, 2602 (1972) (although Morrissey involved revocation of parole, the United States Supreme Court observed in Gagnon, 411 U.S. at 782, 93 S. Ct. at 1759-60, that there is no difference relevant to the guarantee of due process between revocation of parole and revocation of probation; the same standards apply to both). A defendant is entitled to notice of all alleged violations leading to the petition to revoke. Nelson, 225 Mont. at 218-19, 731 P.2d at 1302. In addition, a defendant is, upon his request, entitled to question a person who has given adverse information on which parole or probation revocation is to be based. Morrissey, 408 U.S. at 487, 92 S. Ct. at 2603. ¶19 A probationer’s right to due process in a revocation proceeding is different from the right to due process in a criminal proceeding. We have explained: The revocation hearing is not a criminal trial but a summary hearing to establish a violation of the conditions of the prisoner's probation. The probationer already stands convicted of a crime no matter what the grounds for the revocation may be[.] State v. Triplett, 2008 MT 360, ¶ 16, 346 Mont. 383, 195 P.3d 819 (quoting State v. Kingery, 239 Mont. 160, 165, 779 P.2d 495, 498 (1989)). As a result, the revocation hearing is not 9 subject to the Montana Rules of Evidence, although it must be fundamentally fair. Pedersen, ¶ 20; M. R. Evid. 101(c)(3). ¶20 Sebastian argues that his right to due process was violated at his revocation hearing because the evidence against him was not fully disclosed. For instance, Sebastian argues, the District Court’s decision that he had violated the terms of his probation was based partially on the assumption that Sebastian had been driving under the influence on August 10 and August 23. The blood tests from the August 23 incident could have established conclusively whether Sebastian was guilty of the offense charged. The recordings of the 911 calls and disclosure of the witnesses against Sebastian could have helped shed light on whether or not Sebastian was actually intoxicated in these incidents. Without this evidence, or the names of the witnesses against him, Sebastian argues, he was not able to call for testimony that might have corroborated his explanation for the events. Finally, Sebastian argues that he was not provided with a copy of his probation officer’s chronological notes, which “should have contained the admissions that [he] allegedly made about some of the condition violations.” The lack of disclosure denied Sebastian the ability to put on a proper defense and rendered the revocation hearing fundamentally unfair, he alleges. ¶21 Sebastian argues that disclosure of the evidence against a probationer is one of the requirements necessary to satisfy the “minimal” due process required at a probation revocation hearing. Pedersen, ¶ 21. He analogizes to this Court’s decision in Pedersen, in which we held that the district court erred when it admitted certain drug test results, when the State had not notified Pedersen that the violations would be used against him at his 10 revocation hearing. Pedersen, ¶ 22. Pedersen challenged evidence of his drug use presented during his probation revocation hearing, when drug use had not been mentioned as a reason for revocation in the pre-hearing documents. Pedersen, ¶ 16. Pedersen argued that he was not on notice that the State would introduce the drug test evidence and, therefore, he had no reason to request the results. Pedersen, ¶ 16. This Court held that, although the District Court committed error in allowing the evidence of Pedersen’s drug test results, the District Court did not rely on that evidence in making its findings and so the error was harmless. Pedersen, ¶ 22. ¶22 Here, Sebastian’s probation officer told him that she would be filing a revocation after he admitted to her that he had been misusing his medications and that he had a problem. Sebastian was aware of the allegations in the petition; and that those allegations included allegations he had been driving under the influence. It was for precisely that reason that he moved for a continuance. Unlike Pedersen, Sebastian had the notice of the allegations against him that his “minimal” due process right and § 46-18-203(4), MCA, demanded. The State also points out that the record reflects that Sebastian’s counsel had received Sebastian’s probation officer’s chronological notes and was aware of the witnesses to the August 23 accident at the time of the hearing. ¶23 Sebastian’s failure to receive the other evidence he alleges would have been relevant to his defense against the charged violations did not prejudice him, given the weight of the uncontroverted evidence presented at the hearing and his own admissions. The District Court specifically found that the State had not proved that Sebastian drove under the 11 influence of hydrocodone and methadone related to his August 10 driving incident. As for the August 23 offense, the blood test results were not required to establish that he had violated his conditions of probation. Rather, the testimony of the officer who spoke to him following that incident; his probation officer’s observations; and his admissions to his probation officer about his drug use were enough to show by a preponderance of the evidence that he had driven under the influence, in violation of his probation conditions. The use of the officers’ testimony to establish the violation by a preponderance of the evidence did not offend Sebastian’s right to due process because he was able to question both of these individuals. ¶24 Even if there was additional evidence that had not been produced, the court’s decision to revoke Sebastian’s suspended sentence on the basis that he violated his probation conditions was not an abuse of discretion. “A single violation of the conditions of a suspended sentence is sufficient to support a district court’s revocation of that sentence.” Gillingham, ¶ 28. To establish a violation, the State only had to show by a preponderance of the evidence that Sebastian violated a single condition of suspension. See § 46-18-203(6), MCA. Sebastian himself admitted to crushing and snorting his medications—an illegal method of using them—in his letter to the District Court. He also admitted that he had crushed and snorted his medications and used non-prescribed marijuana to his probation officer. Sebastian’s own admissions would be sufficient to support a determination that he had violated the conditions of his probation pertaining to illegal drug use. 12 ¶25 The District Court did not abuse its discretion in denying Sebastian’s motion to continue or in revoking his suspended sentence. A preponderance of the evidence supported the District Court’s determination that Sebastian had violated the conditions of his probation and that revocation of his suspended sentence was necessary. The undisclosed evidence was unnecessary to the District Court’s determination. No violation of Sebastian’s right to due process occurred. As the District Court observed, “[t]he Defendant clearly has serious medical issues, but he also clearly has severe addiction issues and has never found a successful way to manage his medications without resorting to extra illegal means to do so.” ¶26 As a final note, we held in abeyance the State’s motion to strike new issues Sebastian raised for the first time in his reply brief. Sebastian argued in his reply brief that the evidence he requested would have given him the opportunity to present circumstances in mitigation of the sentence to be imposed upon revocation. “The reply brief must be confined to new matter raised in the brief of the appellee.” M. R. App. P. 12(3). Legal theories raised for the first time in an appellant’s reply brief are outside the scope of such a brief and this Court has repeatedly refused to address them. State v. Sattler, 1998 MT 57, ¶ 47, 288 Mont. 79, 956 P.2d 54; State v. Hagen, 283 Mont. 156, 159, 939 P.2d 994, 996 (1997). We agree that this argument was raised for the first time in Sebastian’s reply brief and do not consider it further. CONCLUSION 13 ¶27 The District Court did not abuse its discretion, or violate Sebastian’s right to due process, when it revoked Sebastian’s probation without requiring full disclosure of all evidence against him. Serving his sentence will give Sebastian the opportunity to complete chemical dependency treatment that it seems he sorely needs. ¶28 Affirmed. /S/ MICHAEL E WHEAT We concur: /S/ PATRICIA COTTER /S/ JIM RICE /S/ BETH BAKER /S/ LAURIE McKINNON	November 19, 2013
9b9f7abb-8167-40cc-925f-2d13d64378da	O Connell v. Glastonbury	2013 MT 359N	DA 13-0439	Montana	Montana Supreme Court	DA 13-0439 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 359N DANIEL K. O’CONNELL & VALERIE A. O’CONNELL, Plaintiffs and Appellants, v. GLASTONBURY LANDOWNERS ASSOCIATION, INC., BOARD OF DIRECTORS, Defendants and Appellees. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause Nos. DV-2012-220, and DV-2012-164 Honorable Brenda R. Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellants: Daniel K. O’Connell, (Self-Represented); Valery A. O’Connell (Self-Represented), Emigrant, Montana For Appellees: Michael P. Heringer; Seth M. Cunningham, Brown Law Firm, P.C., Billings, Montana Submitted on Briefs: November 13, 2013 Decided: December 3, 2013 Filed: __________________________________________ Clerk December 3 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Daniel and Valery O’Connell appeal from the District Court’s “Order on Plaintiffs’ Motion for Summary Judgment and Defendants’ Cross Motions for Summary Judgment,” filed June 19, 2013. We affirm. ¶3 The O’Connells reside in one of the two Glastonbury subdivisions located near Emigrant, Montana. In the last few years the O’Connells have filed several legal actions challenging decisions of the Glastonbury Landowners Association. In the current action the O’Connells request multiple forms of relief including injunction, mandamus and declaratory judgment against the Association.1 ¶4 In the present action the O’Connells sought relief based upon their claims that the Association wrongly granted a variance to another landowner in the other Glastonbury subdivision several miles from the O’Connells’ residence (the Erickson Variance issue); that the Association improperly applied several provisions of the By-Laws in its annual assessment from residents (the Guest House Assessment issue); that the Association 1 These requests for relief are contained in two actions filed in District Court under cause Nos. DV-2012-220 and DV-2012-164. The District Court’s order that the O’Connells appeal from considered and disposed of all of the O’Connells’ claims in both actions. 3 improperly entered a contract with an outside entity to provide administrative functions (the Minnick Contract issue); and that the Association improperly applied the By-Laws regarding the number of votes allowed to each membership (the Election Procedures issue). The parties moved for summary judgment and the District Court received extensive briefing and exhibits on these issues and held a hearing. The District Court fully considered and rejected the O’Connells’ contentions on each issue and granted summary judgment in favor of the Association. ¶5 The District Court found that there were no disputed facts as to the Erickson Variance issue; that applicable rules gave the Association the discretion to approve or deny variance requests; that only the O’Connells had objected to the variance; and that the O’Connells had not demonstrated any basis for overturning the decision. The District Court found that there were no disputed facts as to the Guest House Assessment issue and that the Association had engaged in a “straightforward interpretation” of the applicable covenants. The District Court found that the Association had the authority under state law and its By-Laws to enter the Minnick contract and that doing so was necessary to its operation. The District Court determined that the Association has the authority under its By-Laws to administer elections, and that the current method of allocating votes to members has been in place since 1997 without objection from the O’Connells. We find that the District Court properly considered the applicable facts and law and properly granted summary judgment to the Association on all issues. ¶6 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for memorandum opinions. The District 4 Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶7 Affirmed. /S/ MIKE McGRATH We concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ PATRICIA COTTER /S/ JIM RICE	December 3, 2013
d162cf8e-0d6a-4f86-b230-9db9a7956bba	State v. Burwell	2013 MT 332	DA 12-0518	Montana	Montana Supreme Court	DA 12-0518 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 332 STATE OF MONTANA, Plaintiff and Appellee, v. ANTHONY JAMES BURWELL, Defendant and Appellant. APPEAL FROM: District Court of the Fifth Judicial District, In and For the County of Beaverhead, Cause No. DC-11-3445 Honorable Loren Tucker, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Jacob Q. Johnson, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Jonathan M. Krauss, Assistant Attorney General, Helena, Montana Jed Fitch, Beaverhead County Attorney, Dillon, Montana Submitted on Briefs: October 16, 2013 Decided: November 6, 2013 Filed: __________________________________________ Clerk November 6 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Anthony James Burwell appeals from his conviction of the crime of criminal distribution of dangerous drugs in the Fifth Judicial District Court, Beaverhead County. We reverse. ¶2 The issue presented for review is whether the State presented sufficient evidence at trial to prove that Burwell committed the offense of criminal distribution of dangerous drugs. PROCEDURAL AND FACTUAL BACKGROUND ¶3 On August 31, 2011, while in police custody, Jennifer Jones wrote a list of “people to narc on.” The list included a statement that about a month earlier, a man whose name she could not remember had given her marijuana in exchange for babysitting. She did not provide officers with the alleged marijuana, because she had already consumed it. She gave a somewhat vague physical description of the man. She said that he lived next door to a close friend of hers and described his residence. Officers concluded that Jones’s statement referred to Burwell. They also discovered that Burwell had a medical marijuana card. Based on this information, on October 6, 2011, Burwell was charged with criminal distribution of dangerous drugs. Officers never searched Burwell’s residence, never attempted a controlled buy, and never discovered any marijuana in his possession. ¶4 At trial, Jones testified that the night before she was to babysit, she and Burwell stood in the alley near his house and “smoked a bowl” of a substance she identified as 3 marijuana. Burwell then gave her a small plastic baggie of a substance that was “green with orange hairs.” She testified that she knew the substance was marijuana because she had smoked marijuana before. She smoked the substance that night and throughout the next day. The officer to whom Jones had given her statement testified that Burwell had a medical marijuana card, which Burwell confirmed. The State did not present any other evidence to identify the substance as marijuana. ¶5 At the close of evidence, defense counsel moved to dismiss on the grounds that the evidence presented was insufficient to support a verdict of guilty, pursuant to § 46-16-403, MCA. The District Court denied the motion. Burwell was convicted of criminal distribution of dangerous drugs and sentenced to the Department of Corrections for ten years, with five years suspended. STANDARD OF REVIEW ¶6 This Court reviews the question of whether sufficient evidence supports a conviction de novo. State v. Swann, 2007 MT 126, ¶ 19, 337 Mont. 326, 160 P.3d 511. The evidence is considered in the light most favorable to the prosecution to determine whether “ ‘any rational trier of fact could have found all the essential elements of the offense beyond a reasonable doubt.’ ” State v. Torres, 2013 MT 101, ¶ 16, 369 Mont. 516, 299 P.3d 804 (quoting State v. Trujillo, 2008 MT 101, ¶ 8, 342 Mont. 319, 180 P.3d 1153). DISCUSSION ¶7 Burwell argues that the State failed to prove the required elements of criminal distribution of dangerous drugs, § 45-9-101, MCA, because it did not produce sufficient 4 evidence that the substance given to Jones was marijuana, a dangerous drug. The State responds that although the substance was never tested, Jones’s testimony and the fact that Burwell had a medical marijuana card were sufficient to prove that the substance was marijuana. ¶8 The failure to have a suspected drug substance tested by the state crime lab does not always render the evidence insufficient to support a conviction. State v. Salois, 235 Mont. 276, 279-80, 766 P.2d 1306, 1309 (1988). Although we have repeatedly stated that testing at a state crime lab is preferred, the testimony of witnesses experienced in identifying dangerous drugs may provide sufficient evidence to support a conviction. Salois, 235 Mont. at 281-82, 766 P.2d at 1310; State v. Ostwald, 180 Mont. 530, 540, 591 P.2d 646, 652 (1979). Circumstantial evidence may also support the conclusion that a substance is a dangerous drug. State v. Henrich, 268 Mont. 258, 269, 886 P.2d 402, 409 (1994) (citing State v. Dunn, 155 Mont. 319, 472 P.2d 288 (1970)). ¶9 Very few of our cases addressing the identification of a substance as a dangerous drug, however, have involved a substance that was never even seen by law enforcement officers. Rather, the majority of our cases have addressed challenges to field identifications by experienced officers. In Paulson, a substance suspected to be marijuana was seized by an officer with experience in nearly 200 drug possession cases. State v. Paulson, 167 Mont. 310, 313, 538 P.2d 339, 341 (1975). He was able to identify marijuana by sight and smell and had been trained in the use of a field test kit. Paulson, 167 Mont. at 313, 538 P.2d at 341. He performed a field test which identified the substance as marijuana. Paulson, 167 Mont. at 313, 538 P.2d at 341. His identification 5 was corroborated by a second officer with similar experience who was present at the scene and observed the substance. Paulson, 167 Mont. at 313, 538 P.2d at 341. ¶10 In Ostwald, officers seized two cigarettes which they suspected contained marijuana. 180 Mont. at 532, 591 P.2d at 648. The substance was field tested by an officer, with positive results. Ostwald, 180 Mont. at 532, 591 P.2d at 648. The officer testified that he was experienced in drug possession cases, and that his identification of the substance was based on his recognition of “the characteristic odor of marijuana” in addition to the results of the field test. Ostwald, 180 Mont. at 540, 591 P.2d at 652. ¶11 In Salois, officers conducted a search of a home and discovered 71 bags of marijuana in the master bedroom, a 423-gram “block” of marijuana in the closet, rolling papers in the living room and kitchen, a plastic bag of marijuana and a pipe in the back bedroom, and another pipe in the defendant’s vehicle. 235 Mont. at 278, 766 P.2d at 1307-08. Officers detected the “strong aroma of marijuana smoke” upon entering the residence. Salois, 235 Mont. at 277, 766 P.2d at 1307. The 71 bags and the 423-gram “block” of marijuana were tested at the state crime lab, but the contents of the plastic bag found in the back bedroom were not. Salois, 235 Mont. at 279, 766 P.2d at 1308-09. The bag was produced at trial and an officer trained in drug investigations testified to his opinion that the structure and color of the seeds, stems, and leaves was consistent with marijuana. Salois, 235 Mont. at 280, 766 P.2d at 1309. A forensic scientist from the state crime lab, who had performed an estimated 2,000 tests to identify marijuana, also examined the substance and testified to her opinion that it was marijuana. Salois, 235 Mont. at 280-81, 766 P.2d at 1309-10. 6 ¶12 In Godsey, an officer seized a plastic bag containing what appeared to be marijuana from the front seat of a vehicle. State v. Godsey, 202 Mont. 100, 102, 656 P.2d 811, 812 (1982), overruled on other grounds, State v. Loh, 275 Mont. 460, 914 P.2d 592 (1996). The defendant challenged the sufficiency of the evidence when the contents of the bag were not introduced at trial. Godsey, 202 Mont. at 106, 656 P.2d at 814. The substance had already been tested by the state crime lab, however, and determined to be marijuana. Godsey, 202 Mont. at 107, 656 P.2d at 815. The marijuana was not offered at trial because the parties agreed to stipulate that evidence from a suppression hearing, including the bag of marijuana, would be deemed to have been submitted at trial. Godsey, 202 Mont. at 107, 656 P.2d at 815. ¶13 In only one case have we held that there was sufficient evidence to establish that a suspected substance was a dangerous drug, despite the fact that the substance had never been in the possession of law enforcement officers. Dunn, 155 Mont. at 334-35, 472 P.2d at 297-98. In Dunn, the defendant was convicted of the criminal sale of dangerous drugs after allegedly supplying LSD to two teenage girls. 155 Mont. at 321-22, 472 P.2d at 290-91. The suspected substance was not available for analysis because the girls had ingested it immediately. Dunn, 155 Mont. at 322, 472 P.2d at 291. One girl testified that she consumed half of a small orange pill, after which she experienced an effect that she described as “time speeded up.” Dunn, 155 Mont. at 332, 472 P.2d at 296. The effects of the substance lasted for several hours. Dunn, 155 Mont. at 332, 472 P.2d at 296. She also testified that the second girl had taken a whole pill. Dunn, 155 Mont. at 332, 472 P.2d at 296. 7 ¶14 The second girl corroborated that she had taken a whole pill. Dunn, 155 Mont. at 332, 472 P.2d at 296. She experienced an effect consistent with that described by her friend, but more pronounced. Dunn, 155 Mont. at 332, 472 P.2d at 296. She testified that she could see vibrations around her body, and colors and sounds were intensified. Dunn, 155 Mont. at 333, 472 P.2d at 296. Her pupils were “extremely dilated.” Dunn, 155 Mont. at 333, 472 P.2d at 296. The effects lasted until early the next morning. Dunn, 155 Mont. at 333, 472 P.2d at 296. ¶15 The girls’ description of the substance and its effects was further corroborated by the father of one of the girls, who had observed that his daughter was “completely disoriented.” Dunn, 155 Mont. at 333, 472 P.2d at 296. The girls’ account was also analyzed by an expert witness, who gave his medical opinion, based on his past experience and observations, that the pills were LSD or a similar hallucinogenic drug. Dunn, 155 Mont. at 333, 472 P.2d at 297. ¶16 By contrast, in the only other case in which we have addressed the identification of a substance that was never observed by law enforcement officers, we held that the evidence was insufficient where the State offered only the testimony of a single lay witness, supported by evidence that the defendant had access to a dangerous drug for medical reasons. Henrich, 268 Mont. at 269-70, 886 P.2d at 409. ¶17 In Henrich, the defendant was charged with endangering the welfare of a child by supplying his daughter with methamphetamine that had been prescribed to him. 268 Mont. at 269, 886 P.2d at 408-09. The substance was not available for analysis because the girl had consumed it. Henrich, 268 Mont. at 269-70, 886 P.2d at 409. The State did 8 not produce the pill bottle or an expert analysis of the girl’s description of the substance. Henrich, 268 Mont. at 269-70, 886 P.2d at 409. The girl testified only that after ingesting the substance, “she shook, was wide awake, and . . . her hair tingled . . . .” Henrich, 268 Mont. at 270, 886 P.2d at 409. There were no other lay witnesses, as in Dunn, to corroborate her testimony. Henrich, 268 Mont. at 270, 886 P.2d at 409. We held that this evidence was not sufficient to support a conviction. Henrich, 268 Mont. at 270, 886 P.2d at 409. ¶18 In this case, as in Henrich, the State presented only the uncorroborated testimony of a single lay witness, Jones, supported by evidence that Burwell had access to marijuana for medical reasons. Unlike in Dunn, no expert witness analyzed Jones’s description of the substance; no additional lay witnesses corroborated her testimony; and she did not describe the effects of the substance, the duration of those effects, or the amount of the substance she ingested. Jones is not an officer trained in the identification of dangerous drugs or an experienced lab technician. She did not perform a field test. She did not describe the characteristic leaf or aroma of marijuana. She did not even testify that she got high from smoking it. She testified only that the substance was “green with orange hairs.” We hold that this evidence was insufficient to allow a rational trier of fact to conclude beyond a reasonable doubt that the substance in question was a dangerous drug. ¶19 For the reasons stated above, Burwell’s conviction of criminal distribution of dangerous drugs is reversed. 9 /S/ MIKE McGRATH We concur: /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ BRIAN MORRIS Justice Jim Rice, dissenting. ¶20 In an analysis of the sufficiency of the evidence, it is particularly important to examine all the evidence before the trier of fact, yet the Court ignores significant circumstantial evidence that was presented at trial. A conviction may be overturned for insufficient evidence only after viewing all the evidence presented, in the light most favorable to the prosecution, to determine whether a rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Henrich, 268 Mont. at 268, 886 P.2d at 408. The weight and credibility of evidence is exclusively within the province of the jury. Henrich, 268 Mont. at 268, 886 P.2d at 408. “A single witness’ testimony is sufficient to prove a fact, and the State may use circumstantial evidence to prove any element of an offense.” State v. Kaske, 2002 MT 106, ¶ 25, 309 Mont. 445, 47 P.3d 824 (citation omitted). “When circumstantial evidence is susceptible to two interpretations, one which supports guilt and the other which supports innocence, the trier of fact determines which is the most reasonable.” State v. Bernhardt, 249 Mont. 30, 32, 813 P.2d 436, 437 (1991). Conflicting testimony does not render the evidence 10 insufficient to support a conviction. State v. Wood, 2008 MT 298, ¶ 43, 345 Mont. 487, 191 P.3d 463. ¶21 At trial, it was undisputed that Jones babysat for Burwell while he went to work at a fencing job. Additional testimony, not mentioned by the Court, is as follows. Burwell asserted that he agreed to pay Jones in cash for the babysitting after he was paid for the fencing job. He had not worked any other job for the entire summer so did not have any money with which to pay her until after he was paid for this job. However, in addition to admitting that he did not pay Jones in cash that night, he claimed that Jones simply failed to ever return to collect her cash payment for the babysitting job, so he never paid her anything. From its beginning, Burwell’s story made no sense, and it is not surprising that the jury rejected it. ¶22 Additionally, Burwell admitted that at the time Jones stated she received the marijuana from him, he and his son “were allowed to grow [their] own plants by state law. And after the law changed, we got rid of our plants and stuff; but at that time we were able to grow our own.” Thus, the substantial amount of marijuana in the home at that time provided further circumstantial evidence against Burwell. ¶23 It was up to the jury to decide whether to believe Jones’s version of events or Burwell’s. The jury accepted Jones’s version, and as such there needed to be sufficient evidence from which they could conclude that the substance Burwell gave to Jones was marijuana and not some other substance. Unlike the situation in Henrich, where a minor with no prior history of methamphetamine use testified as to the identity of the substance with no other circumstantial evidence, Jones testified to having experience with 11 marijuana and its effects, necessarily including familiarity with the appearance, smell, and characteristics. Jones’s direct testimony that she recognized the substance she received from Burwell as marijuana due to her prior experience with smoking marijuana, along with her testimony that she and Burwell smoked some together is sufficient for a rational trier of fact to conclude that the substance she received was in fact marijuana. Additionally, Jones’s testimony was supported by circumstantial evidence that Burwell did not have money to pay Jones in cash due to only having one odd job all summer, never paid her or attempted to pay her in cash, and had access to marijuana plants due to being a medical marijuana cardholder who, at that time, grew his own plants. ¶24 “[M]arijuana is not difficult to characterize without chemical analysis.” Salois, 235 Mont. at 282, 766 P.2d at 1310 (citations omitted); State v. Nichols, 1998 MT 271, ¶ 7, 291 Mont. 367, 970 P.2d 79; State v. Ostwald, 180 Mont. 530, 540, 591 P.2d 646, 652 (1979) (citing William A. Harrington, Sufficiency of Prosecution Proof that Substance Defendant is Charged with Possessing or Selling, or Otherwise Unlawfully Dealing in, is Marijuana, 75 A.L.R.3d 717 (1977)); see also In re Ondrel M., 918 A.2d 543 (Md. Spec. App. 2007) (“A witness need only to have encountered the smoking of marijuana in daily life to be able to recognize the odor.”). We have previously held that matters of common knowledge and observation, such as intoxication, can be presented to the jury by a lay witness so long as the lay witness testifies from personal knowledge. Meinecke v. Intl. Transp. Co., 101 Mont. 315, 322, 55 P.2d 680, 681 (1936); State v. Carter, 285 Mont. 449, 456, 948 P.2d 1173, 1177 (1997). Similar to allowing a lay witness to testify about the nature of alcohol and intoxication, I would hold the testimony 12 here, of a lay witness identifying marijuana from prior experience with the drug, along with the confirming circumstantial evidence, is sufficient to establish the identity of the substance. ¶25 While Burwell’s version of events clearly differs from Jones’s, it was up to the jury to determine the facts. Upon consideration for sufficiency of the evidence, I would hold that sufficient evidence was presented for the jury to find Burwell guilty beyond a reasonable doubt of criminal distribution of dangerous drugs. ¶26 I dissent. /S/ JIM RICE	November 6, 2013
01609200-d38c-45b0-9cd0-33dbc6d8f7e6	SUN MOUNTAIN SPORTS INC v GORE	2004 MT 56	02-640	Montana	Montana Supreme Court	No. 02-640 IN THE SUPREME COURT OF THE STATE OF MONTANA 2004 MT 56 SUN MOUNTAIN SPORTS, INC., Plaintiff and Respondent, v. PAULA L. GORE, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV 2002-258, Honorable Ed McLean, Presiding Judge COUNSEL OF RECORD: For Appellant: Nikolaos G. Geranios, Dye & Moe, P.L.L.P., Missoula, Montana For Respondent: Cory R. Laird, Boone Karlberg, P.C., Missoula, Montana Submitted on Briefs: January 30, 2003 Decided: March 9, 2004 Filed: __________________________________________ Clerk 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Paula L. Gore (Gore) appeals the denial of her motion to set aside a default and default judgment entered against her, and in favor of Sun Mountain Sports, Inc. (Sun Mountain), by the Fourth Judicial District Court, Missoula County. We conclude that her motion was improperly denied and reverse. ¶2 The sole issue presented is whether the District Court abused its discretion when it denied Gore’s motion to set aside the default and default judgment. FACTUAL AND PROCEDURAL BACKGROUND ¶3 The crux of this dispute is Sun Mountain’s claim that Gore is liable for the cost of merchandise which Sun Mountain, a Montana corporation, sold and delivered to Golf Emporium Superstore, Inc., in San Antonio, Texas. The basis of Sun Mountain’s claim is a Personal Guaranty executed by Gore on November 15, 1996, as Secretary Treasurer for Ocean Club, Inc., d/b/a Golf Emporium. Gore, a resident of Texas, contends the Personal Guaranty which she executed was for Ocean Club, Inc., only, a Texas corporation which ceased doing business in 1997, and that she did not sign a Personal Guaranty on behalf of Golf Emporium Superstore, Inc., and is not responsible for the debts of that entity. ¶4 On March 18, 2002, Sun Mountain filed an action against Gore in the Fourth Judicial District Court to recover by way of the Personal Guaranty she had executed, and caused a summons to be issued which was personally served upon Gore in Bexar County, Texas, on March 22, 2002. Gore retained Texas counsel to initiate a Texas action against Sun Mountain regarding the claimed debt, but she answered the Montana action pro se. On Sun 3 Mountain’s motion, the Bexar County Court entered an order abating Gore’s Texas action pending disposition of the Montana proceeding. ¶5 Upon being served with the Montana summons and complaint, Gore, on or about April 8, 2002, submitted via certified mail to the Missoula County Clerk of Court, an answer and special appearance which denied the allegations of indebtedness to Sun Mountain and asserted that the District Court lacked personal jurisdiction over her as defendant. Gore also served via certified mail a copy of the answer upon Sun Mountain’s counsel in Missoula. The clerk of court may have initially filed Gore’s answer but later returned it to Gore with a note stating that Gore failed to include the required filing fee. In an affidavit, Gore stated she received the returned answer on April 17, 2002. ¶6 On April 12, 2002, after Gore’s appearance deadline expired, Sun Mountain, without notice to Gore, applied for entry of default pursuant to Rule 55(a), M.R.Civ.P. On April 16, 2002, the District Court entered default against Gore. The following day, April 17, 2002, Sun Mountain requested a hearing and entry of default judgment against Gore. Also on that day, Gore received her returned answer and called the clerk of court to inquire why her documents had been returned. She then learned that the default had been entered against her the previous day. On April 25, 2002, the District Court held the hearing requested by Sun Mountain and entered default judgment against Gore in the amount of $21,628.28, which consisted of principal, accrued interest, attorney fees, costs, and expenses. ¶7 Upon learning of the default, Gore immediately hired Montana counsel who, on June 13, 2002, within the sixty-day period required by Rule 60(b), M.R.Civ.P., and pursuant to 4 Rules 55(c), 60(b), and 12(b), M.R.Civ.P., moved to set aside the default, vacate the default judgment, and dismiss the case for lack of personal jurisdiction. ¶8 The District Court failed to rule on the motion within sixty days, and it was deemed denied by operation of Rule 60(c), M.R.Civ.P. On August 22, 2002, the District Court held a hearing on Gore’s motions to set aside the default, vacate the default judgment, and dismiss the case. At the hearing, Gore’s counsel stated he believed the District Court had lost jurisdiction on the matter pursuant to Rule 60(c), and the court agreed. The District Court stated that, upon appeal, the question before this Court would be whether or not the default is valid. ¶9 On August 30, 2002, Gore filed a notice of appeal with this Court, appealing from the deemed denial of her motion to set aside the default and vacate the default judgment. STANDARD OF REVIEW ¶10 In reviewing a default judgment, we are guided by the principle that every litigated case should be decided on its merits; judgments by default are not favored. In re Marriage of Whiting (1993), 259 Mont. 180, 186, 854 P.2d 343, 347. When appeal is from a denial of a motion to set aside a default judgment, our standard of review is that only a slight abuse of discretion need be shown to warrant reversal. Lords v. Newman (1984), 212 Mont. 359, 364, 688 P.2d 290, 293; Blume v. Metropolitan Life Ins. Co. (1990), 242 Mont. 465, 467, 791 P.2d 784, 786. The party seeking to set aside a default judgment has the burden of proof. In re Marriage of Winckler, 2000 MT 116, ¶ 10, 299 Mont. 428, ¶ 10, 2 P.3d 229, ¶ 10. 5 6 DISCUSSION ¶11 Did the District Court abuse its discretion when it denied Gore’s motion to set aside the default and default judgment? ¶12 Pursuant to Rule 55(c), M.R.Civ.P., a default may be set aside for “good cause”: 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 Blume, this Court clarified the criteria which must be satisfied by a defaulting party to establish good cause, and we have restated the criteria as follows: (1) the defaulting party proceeded with diligence; (2) the defaulting party’s neglect was excusable; (3) the defaulting party has a meritorious defense to the claim; and (4) the judgment, if permitted to stand, will affect the defaulting party injuriously. Winckler, ¶ 15 (citing Blume); see also In re Marriage of McDonald (1993), 261 Mont. 466, 468, 863 P.2d 401, 402. ¶13 Rule 60(b), M.R.Civ.P., provides the following bases for setting aside a judgment: On motion and upon such terms as are just, the court may relieve a party or a party’s legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; . . . or (6) any other reason justifying relief from the operation of the judgment. ¶14 The moving party must first satisfy the Rule 55(c), M.R.Civ.P., criteria for good cause, and then satisfy the more stringent Rule 60(b), M.R.Civ.P., criteria: “. . . the ‘good cause standard under Rule 55(c), M.R.Civ.P., should be applied more flexibly and leniently than the excusable neglect standard under Rule 60(b), M.R.Civ.P.’” Winckler, ¶ 17 (citing Blume, 242 Mont. at 467, 791 P.2d at 786; quoting Cribb v. Matlock Communications, Inc. (1989) 236 Mont. 27, 30, 768 P.2d 337, 339). 7 ¶15 Gore contends she has met her burden for setting aside the default and default judgment pursuant to Rules 55(c) and 60(b), M.R.Civ.P. Gore argues (a) that she proceeded with diligence in hiring Montana counsel to file her Rule 60(b), M.R.Civ.P., motion within the sixty-day period as required by the rule; (b) that her neglect was excusable based upon her good faith compliance with the summons, which did not include instructions to remit a $65.00 filing fee; (c) that she has a meritorious defense to Sun Mountain’s claim, specifically, that she did not sign the Personal Guaranty for Golf Emporium Superstore, Inc., that the debts made the basis of Sun Mountain’s claim were incurred long after Ocean Club, Inc., stopped doing business, and that Sun Mountain has acknowledged in writing that the debts at issue are owed by Golf Emporium Superstore, Inc.; and (d) that the judgment, if permitted to stand, will affect her injuriously since, as she asserts, she does not owe the debt as alleged. ¶16 In response, Sun Mountain asserts Gore’s argument that the summons provided no notice of the filing fee is without merit. Sun Mountain states Gore had an obligation to educate herself and abide by the various rules of Montana courts. Further, Sun Mountain argues it is error for the court to exonerate Gore from failure to appear because of her pro se status. Sun Mountain analogizes that it had to hire Texas counsel to properly appear and defend in the case filed by Gore in that state, but that Gore initially chose not to hire Montana counsel which would have assured a proper appearance and answer in this action. Finally, Sun Mountain argues that Gore’s challenges to the validity of the Personal Guaranty are also without merit. Sun Mountain states that, according to the terms of the Personal 8 Guaranty, in order to terminate her contractual obligations, Gore would have had to have provided prior written notification to Sun Mountain, which Gore did not do. ¶17 Upon receipt of the complaint and summons in Texas, Gore first attempted to file a timely answer to the action. Then, upon learning of the entry of default against her, she immediately hired Montana counsel, who filed a timely motion to vacate the default and the default judgment pursuant to Rules 55(c) and 60(b), M.R.Civ.P., and to dismiss the case for lack of personal jurisdiction pursuant to Rule 12(b), M.R.Civ.P. The matter was fully briefed and set for hearing on August 22, 2002. However, shortly before the hearing, Gore discovered, and the District Court concurred, that the matter had been deemed denied by operation of Rule 60(c), M.R.Civ.P. We conclude that Gore acted with diligence herein. ¶18 The evidence produced by Gore further demonstrates that her failure to appear was not due to inexcusable neglect or disrespect for the court or judicial process. As an out-of- state pro se litigant, Gore followed the instructions on the summons and filed her answer and special appearance with the clerk of court and opposing counsel within twenty days. She mistakenly assumed that if she simply followed the instructions provided on the summons, her answer would be filed. She did not know, and the summons did not inform her, that Montana law requires defendants to pay a $65.00 filing fee in order to respond to a complaint. As a result, Gore did not remit the filing fee. By the time Gore found out that she was required to submit a filing fee with her answer, Sun Mountain had already applied for, and received, a default without notice to Gore. 9 ¶19 This Court has set aside default judgments on grounds of excusable neglect in cases where pro se defendants have either misunderstood communications from the opposing attorney, where opposing counsel took advantage of pro se defendants, or where pro se defendants made errors that would not typically have been made by counsel. In In re Marriage of Broere (1994), 263 Mont. 207, 867 P.2d 1092, this Court set aside a default judgment in a dissolution action on grounds of excusable neglect when a husband, acting pro se, did not understand from the summons that he was to return his answer to District Court. The summons directed him to file his answer and serve a copy upon his wife’s attorney, and he mistakenly believed a telefaxed response to his wife’s attorney was sufficient, especially when the wife’s attorney subsequently served him with a notice of issue. Broere, 263 Mont. at 210, 867 P.2d at 1094. See also Whiting, 259 Mont. at 186, 854 P.2d at 347, and Waggoner v. Glacier Colony of Hutterites (1953), 127 Mont. 140, 148, 258 P.2d 1162, 1166. ¶20 Sun Mountain cites Lomas & Nettleton Co. v. Wiseley (7th Cir. 1989), 884 F.2d 965; In re Marriage of Castor (1991), 249 Mont. 495, 817 P.2d 665; Schalk v. Bresnahan (1960), 138 Mont. 129, 354 P.2d 735; and Foster Apiaries, Inc. v. Hubbard Apiaries, Inc. (1981), 193 Mont. 156, 630 P.2d 1213, for the premise that Gore’s actions do not constitute excusable neglect. In Lomas, the Seventh Circuit Court of Appeals found no excusable neglect for an attorney’s failure to attend a foreclosure sale. Lomas, 884 F.2d at 968. In Castor, this Court found no excusable neglect for an attorney’s forgetfulness in noting the date of a rescheduled hearing. Castor, 249 Mont. at 499, 817 P.2d at 667. Likewise, in Schalk, we found no excusable neglect where the failure to enter an appearance was as a 10 result of an attorney’s forgetfulness because of other more important business. Schalk, 138 Mont. at 132, 354 P.2d at 736. And, in Foster Apiaries, we found no excusable neglect where a defendant company’s representative indicated he did not know what further action was required to make an appearance, yet the representative was the corporate president doing business on a multi-state basis. Moreover, the president had actual notice of the default and waited 147 days before moving to dismiss under Rule 60, M.R.Civ.P. We stated, “[a] failure to appear due to forgetfulness and the press of other, more important business is not sufficient to establish excusable neglect.” Foster Apiaries, 193 Mont. at 161, 630 P.2d at 1216 (quoting Morris v. Frank Transportation Co. (1979), 184 Mont. 74, 76, 601 P.2d 698, 699). ¶21 These cases, which illustrate the premise that “[a] liberal court cannot find excusable neglect where a defendant has willingly slumbered on his rights and ignored the judicial machinery established by law,” Morris, 184 Mont. at 76, 601 P.2d at 699, stand in stark contrast to Gore’s efforts, as pro se litigant, in answering Sun Mountain’s complaint and summons. Here, as in Broere, Whiting, and Waggoner, Gore’s evidence indicates her default was not willful. We further conclude that Gore’s actions constituted excusable neglect. ¶22 Gore has also established a meritorious defense. Initially, we note that Gore “does not have to demonstrate the truth of the allegation of the answer, and it is not appropriate to discuss the merits of the answer beyond finding a prima facie defense.” Blume, 242 Mont. at 470, 791 P.2d at 787. 11 ¶23 Gore asserts the Personal Guaranty in question was executed in 1996 for a Texas corporation, Ocean Club, Inc., which ceased doing business in 1997. Golf Emporium Superstore, Inc., a new entity which was incorporated in 1996, occupied the former location of Ocean Club, Inc., and began doing business with Sun Mountain in January 1997. Gore contends Ocean Club, Inc., ordered no merchandise from Sun Mountain since January 1997. According to Gore, the damages alleged in Sun Mountain’s complaint are for goods sold and delivered by Sun Mountain to Golf Emporium Superstore, Inc., between April 27, 2001, and October 29, 2001. ¶24 Further, Gore asserts that Sun Mountain has received payments paid by check from Golf Emporium Superstore, Inc., in response to invoices it sent over the past five years, that Sun Mountain was advised of the creation of Golf Emporium Superstore, Inc., and that Ocean Club, Inc., was defunct. Significantly, Gore also alleges that Sun Mountain has acknowledged in writing that the debts at issue are owed by Golf Emporium Superstore, Inc. ¶25 Regarding the final criterion, the evidence produced by Gore further indicates that, if the default judgment is permitted to stand, she will be injuriously affected because the default judgment orders her to pay $21,628.28 to Sun Mountain, even though she denies responsibility for the debt. ¶26 Concluding that Gore has satisfied all of the criteria of the “good cause shown” requirement of Rule 55(c), M.R.Civ.P., we turn our inquiry to the “mistake, inadvertence, surprise, or excusable neglect” requirement of Rule 60(b), M.R.Civ.P. Winckler, ¶ 22. In Broere, we defined a “mistake” under this Rule as “some unintentional act, omission, or 12 error arising from ignorance, surprise, imposition, or misplaced confidence.” Broere, 263 Mont. at 209, 867 P.2d at 1094 (quoting Black’s Law Dictionary 1152 (4th ed. rev. 1975)). In Broere, the default entered against the husband in a marital dissolution action was set aside because the husband, appearing pro se, was ignorant of the legal process and defaulted based upon his mistaken assumption that his faxed response to his wife’s attorney constituted filing. Broere, 264 Mont. at 209, 867 P.2d at 1094. Here, Gore, also a pro se litigant, unintentionally defaulted through lack of payment of the filing fee despite demonstrating her intent to appear and defend by serving her answer via certified mail upon the clerk of court and Sun Mountain’s counsel. Thus, Gore, like the defendant in Broere, meets the Rule 60(b), M.R.Civ.P., criteria for “mistake.” ¶27 Sun Mountain argues that this Court has specifically refused to overturn a default judgment based on “the identical ‘excusable neglect’ Gore alleges here,” citing Johnson v. Murray (1982), 201 Mont. 495, 656 P.2d 170. However, we are not persuaded by this comparison. It is correct that, in Johnson, a pro se litigant sought to have a default judgment set aside on grounds that his failure to pay a required filing fee was an inadvertent mistake, that he received no bill from the clerk of court for the fee, and that his pro se status afforded him more leeway in complying with procedural rules. However, this Court upheld the trial court’s refusal to set aside the default judgment because of the egregious conduct of the pro se litigant. The trial court denied the motion to set aside on grounds not present here: . . . [that the litigant had] fail[ed] to pay the filing fee until 2 ½ months later and after the request to enter his default had been submitted; that he had failed to present a prima facie meritorious defense in the answer and that the evidence indicated overwhelmingly that he had no defense to the actions for 13 libel and slander of title. Although [the litigant was acting pro se], the District Court found that his reckless disregard for the rights and feelings of the plaintiffs and his further attempt at that stage to prolong the litigation were adequate reasons to deny his motion to set aside the judgment. Johnson, 201 Mont. at 504-05, 656 P.2d at 175. ¶28 Sun Mountain cites Greenup v. Russell, 2000 MT 154, 300 Mont. 136, 3 P.3d 124, for the proposition that while arguably pro se litigants should be given more latitude in regard to procedural oversights, “that latitude cannot be so wide as to prejudice the other party, and it is reasonable to expect all litigants, including those acting pro se, to adhere to procedural rules.” Greenup, ¶ 15. Although we continue to endorse this principle, it is not dispositive here. In Greenup, we refused to set aside a default judgment entered against a pro se litigant who had waited a year and a half after entry to have the default judgment set aside. Greenup, ¶ 12. Gore has caused no prejudice to Sun Mountain by any such delay. ¶29 “[C]ases are to be tried on the merits and judgments by default are not favored.” Maulding v. Hardman (1993), 257 Mont. 18, 23, 847 P.2d 292, 296. If doubt exists concerning whether a default should be set aside, the doubt should be resolved in favor of the motion to set it aside. Twenty-Seventh Street, Inc. v. Johnson (1986), 220 Mont. 469, 471, 716 P.2d 210, 211. For nearly a century, this Court has noted the liberality with which default judgments should be set aside: The provisions of this [civil procedure] section are exceedingly liberal in their terms, remedial in their character, and were evidently designed to afford parties a simple, speedy, and efficient relief in a most worthy class of cases. The power thus conferred upon courts to relieve parties from judgments taken against them by reason of their mistake, inadvertence, surprise, or excusable neglect should be exercised by them in the same liberal spirit in which the section was designed, in furtherance of justice and in order that cases may be 14 tried and disposed of upon their merits. When therefore, a party makes a showing of such mistake, inadvertence, surprise, or excusable neglect, applies promptly for relief after he has notice of the judgment, shows by his affidavit of merits that prima facie he has a defense, and that he makes the application in good faith, a court could not hesitate to set aside the default, and allow him to serve an answer upon such terms as may be just under all the circumstances of the case. Greene v. Montana Brewing Co. (1905), 32 Mont. 102, 109, 79 P. 693, 695 (quoting Griswold Linseed Oil Co. v. Lee (1891), 1 S.D. 531, 47 N.W. 955, 957). ¶30 Because Gore has met her burden in satisfying the requirements of Rules 55(c) and 60(b), M.R.Civ.P., and because our policy is to favor resolution on the merits, we conclude that the District Court’s refusal, by operation of law, to set aside the default judgment entered against Gore constitutes, at a minimum, a slight abuse of discretion. Therefore, we reverse the entry of the default and default judgment, and remand for further proceedings consistent with this opinion. /S/ JIM RICE We concur: /S/ KARLA M. GRAY /S/ JIM REGNIER /S/ PATRICIA O. COTTER /S/ W. WILLIAM LEAPHART	March 9, 2004
3db63857-1ea9-465f-87a3-3d6953c9e05b	State v. Peterson	2013 MT 329	DA 12-0079	Montana	Montana Supreme Court	DA 12-0079 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 329 STATE OF MONTANA, Plaintiff and Appellee, v. BRYCE EVERETT PETERSON, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC-08-151 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Sarah Chase Rosario, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana William Fulbright, Ravalli County Attorney, Hamilton, Montana Submitted on Briefs: September 18, 2013 Decided: November 5, 2013 Filed: __________________________________________ Clerk November 5 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Bryce Everett Peterson appeals from the District Court’s Opinion & Order, filed December 14, 2011, denying his Motion to Withdraw Alford Pleas. We affirm in part, reverse in part, and remand for further proceedings. PROCEDURAL AND FACTUAL BACKGROUND ¶2 In November 2008, the State charged Peterson with the felony offenses of aggravated kidnapping, aggravated assault, assault with a weapon, intimidation, and aggravated burglary, and also the misdemeanor offense of partner or family member assault, second offense. The affidavit filed in support of the charges alleges that on October 17, 2008, Peterson arrived at the house of his sometime girlfriend H.P., and kicked in the door. Once inside Peterson began assaulting H.P., hitting her and forcing her to the floor where he continued the assault for an extended period of time. Peterson forced H.P. into his truck and began driving, calling a hospital to report that H.P. had overdosed on medication. When H.P. attempted to cry out for help Peterson punched her in the head and continued to slap her. Peterson prevented H.P. from getting out of the truck, slamming her head into the interior before pulling off onto a side road in a remote area and telling H.P he was taking her where no one would ever find her. ¶3 Peterson then took H.P. to his home where he continued to assault her. A Deputy arrived to check on H.P.’s safety but when he knocked on the door Peterson held a gun to her face and demanded that she be quiet. The Deputy, hearing nothing from inside the 3 house, left. Peterson then began making phone calls and H.P. eventually escaped the house and was able to report what had happened to her. ¶4 Law enforcement officers surrounded Peterson’s house. He refused to leave and made threats to kill specific officers who he could see outside. Peterson surrendered after about 18 hours and was taken to the hospital for an evaluation and then to jail. He retained an attorney to represent him. ¶5 In November 2008 the District Court ordered that Peterson be transferred to the Montana State Hospital for a mental evaluation to determine his fitness to proceed. Peterson was at MSH for two months after which treating professionals filed a report on his condition. They concluded that he did not suffer from a mental disease or defect, that he was fully capable of understanding the proceedings against him and of assisting in his own defense, and that he was fit to proceed to trial. The MSH report also concluded that Peterson had been fully capable of forming the “requisite state of mind” at the time of the offenses and of appreciating the criminality of his behavior. On February 4, 2009, the District Court found that Peterson was competent to stand trial. ¶6 Peterson’s attorney retained a psychiatrist to conduct an independent evaluation. The defense psychiatrist evaluated Peterson and issued a report in July 2009 concluding that Peterson suffered from bipolar disorder, but that he was competent to stand trial. The defense psychiatrist concluded that Peterson had the ability to act with knowledge or purpose at the time of the offenses, although his ability to appreciate the criminality of his conduct was diminished by a mood disorder. 4 ¶7 At a hearing in August 2009 the District Court granted the State’s motion for leave to introduce evidence of prior instances in which Peterson had assaulted other women and H.P. At that same hearing the defense filed a brief questioning Peterson’s competency to proceed. The District Court heard argument and testimony on the competency issue, including testimony from Peterson. The District Court noted that Peterson presented articulate, logical and coherent testimony about his personality disorders, the medications that addressed them, and the therapeutic significance of dosage levels. The District Court concluded that nothing was presented to alter the conclusions of the professionals that Peterson had been capable of forming the required criminal intent at the time of the offenses, and that he was competent to stand trial. ¶8 On September 10, 2009, a day before trial was scheduled to begin, Peterson and his attorney appeared before the District Court to enter Alford pleas to all the charged offenses. An Alford plea arises from the decision in North Carolina v. Alford, 400 U.S. 25, 91 S. Ct. 160 (1970) and is recognized by statute in Montana. Section 46-12-212, MCA. An Alford plea allows a defendant to plead guilty to an offense without acknowledging his guilt. State v. Locke, 2008 MT 423, ¶ 18, 347 Mont. 387, 198 P.3d 316. ¶9 Peterson and his attorney signed and filed a multi-page pleading captioned “Alford Plea and Waiver of Rights” in which Peterson affirmed his desire to voluntarily enter the pleas and that there was no plea agreement. Peterson acknowledged that he was giving up a variety of rights, including the chance of being convicted of lesser included offenses and the chance of appeal on all issues except the voluntariness of the plea. He affirmed 5 that he was satisfied with the services and competency of his attorney and that they had discussed the merits of the case and possible defenses. He affirmed that he was competent to enter the plea and did not suffer any emotional or mental disability that would make him unsure about what he was doing. He specifically explained in a handwritten passage that he wished to enter an Alford plea because he did not want to plead guilty but had determined that it was in his “best interests to avoid trial.” He affirmed that he believed that a jury would find him guilty beyond a reasonable doubt. ¶10 Thereafter the District Court read the allegations for the charges of aggravated kidnapping and aggravated assault. Peterson entered Alford pleas to both charges. When the District Court read the allegations related to the charge of assault with a weapon, Peterson injected: “I can’t do this. I can’t do this. No, I’m not guilty of that. I’m not guilty of this.” The District Court explained the nature of an Alford plea and Peterson responded that he understood that it was in his best interest to enter a plea because the “cards have been stacked against” him by the prosecution, apparently referring to prior rulings on evidentiary issues. The District Court then recessed the proceeding. ¶11 When the proceeding resumed some 20 minutes later, Peterson announced that he wanted two issues addressed: he requested an evaluation of his medication dosage and he requested that there be specific language in the plea documents stating that he maintained his innocence. Peterson agreed that the medication issue could be addressed after the plea proceeding, and he entered Alford pleas to the remaining charges. The District Court explained the possible penalties for the offenses as well as requirements for violent offender registration and restitution obligations. The District Court again informed 6 Peterson of the rights to trial that he was giving up and Peterson said that he understood. He affirmed that there were no assurances of leniency given in exchange for his pleas, nor was any force, threat or improper tactic used to obtain his pleas. Peterson’s attorney told the District Court that he believed that Peterson was competent to enter the pleas and that his medication complaints did not affect his ability to understand the proceeding. ¶12 Peterson affirmed that his communication with his attorney was “as good as could be” and that they had disagreed about some things. He stated that he still did not understand how he could maintain his innocence and still enter an Alford plea. The District Court explained that an Alford plea is like a guilty plea but without agreement that he committed every element of each offense. Peterson stated again that he believed that there was “no defense” for him because the prosecutor had lied to the court to obtain favorable evidentiary rulings. Even so, Peterson stated that it was “absolutely” in his best interests to plead to the charges rather than to go to trial. ¶13 Peterson’s attorney summarized the time he had spent on the case, noting a couple dozen personal meetings and close to 100 telephone calls. The attorney affirmed that they discussed the evidence, including discussions involving the defense investigator. ¶14 Peterson then affirmed that it was his choice to go ahead with the pleas instead of going to trial and provided a detailed and rational explanation of his medication issues. The District Court then found that there was a factual basis for the charges, based upon the facts set out in the affidavit filed in support of the motion for leave to file the information against Peterson. The District Court found that Peterson entered the pleas knowingly, voluntarily and intelligently. The District Court accepted the Alford pleas. 7 ¶15 The District Court conducted sentencing hearings on October 23 and November 13, 2009, and received testimony about the crimes and about Peterson’s mental state. Peterson admitted to a history of abusing women but claimed he was suffering from a mental disease or defect at the time of the prior events. Mental health professionals from the Montana State Hospital testified that while Peterson had a personality disorder and abused cannabis, he did not suffer from a mental disease or defect. The defense psychiatrist testified that he believed that Peterson had bipolar disorder that should be considered in sentencing. The District Court sentenced Peterson to a total of 70 years in prison with 20 years suspended. Peterson’s attorney obtained leave of court to withdraw as counsel. ¶16 In November 2010 Peterson appeared with new counsel and moved to withdraw his Alford pleas. Peterson contended that he should be allowed to withdraw his prior pleas because his mental state at the time of the pleas precluded him from knowingly and voluntarily making a plea decision; because he maintained his innocence to the charges against him; and because the District Court’s colloquy with him was insufficient to determine whether the pleas were knowingly and voluntarily made. ¶17 The District Court conducted a hearing on the motion and received briefs. On December 14, 2011, the District Court issued a 30-page Opinion & Order denying Peterson’s motion to withdraw the pleas. The District Court examined the medical evidence as to Peterson’s mental capacity and found that the more persuasive and credible evidence demonstrated that Peterson was competent to enter the pleas. The District Court examined the change-of-plea hearing and found that Peterson did not 8 demonstrate mental instability, but understood what was happening and had a detailed understanding of his medication. The District Court found that Peterson had appeared to be alert and that his “responses and statements were articulate, logical and oriented.” The District Court found that Peterson was thoroughly questioned before the pleas were accepted, and that his desire to maintain innocence was no ground to reject an Alford plea. ¶18 The District Court concluded that Peterson’s Alford pleas were knowingly and voluntarily entered and that his motion to withdraw the pleas was without merit and should be denied. Peterson appeals. ¶19 On appeal Peterson raises the following issues: ¶20 Issue One: Did the District Court properly deny Peterson’s motion to withdraw his Alford pleas? ¶21 Issue Two: Should this matter be remanded to the District Court to determine the amount of restitution due to the victim from Peterson for future counseling expenses? STANDARD OF REVIEW ¶22 A district court may allow a defendant to withdraw a guilty plea where good cause is shown. Section 46-16-105(2), MCA. If a guilty plea is involuntary, that constitutes good cause to allow it to be withdrawn. State v. Usrey, 2009 MT 227, ¶ 17, 351 Mont. 341, 212 P.3d 279. The standard of voluntariness of a guilty plea is whether the defendant was fully aware of the direct consequences of the plea, including the actual value of any commitments made to him by the court, prosecutor or his attorney. If so, the plea will stand unless it was induced by threats or improper promises. State v. Warclub, 9 2005 MT 149, ¶ 18, 327 Mont. 352, 114 P.3d 254, citing Brady v. U.S., 397 U.S. 742, 90 S. Ct. 1463 (1970). A properly supported claim of ineffective assistance of counsel during the change of plea process can constitute good cause for withdrawal of a plea. Burns v. State, 2012 MT 100, ¶ 7, 365 Mont. 51, 277 P.3d 1238. ¶23 When a district court denies a motion to withdraw a guilty plea, this Court will review findings of fact to determine whether they are clearly erroneous, and conclusions of law to determine if they are correct. The ultimate question of voluntariness is a mixed question of fact and law that this Court reviews de novo to determine whether the district court was correct. Warclub, ¶ 24. DISCUSSION ¶24 Issue One: Did the District Court properly deny Peterson’s motion to withdraw his Alford pleas? ¶25 Peterson raises a number of issues on appeal, all to support the underlying contention that his Alford pleas were not voluntary and that he should be allowed to withdraw them. First, Peterson argues that he should be allowed to withdraw his pleas because both of his prior attorneys—the attorney who represented him at the trial/plea proceedings and the attorney who represented him on the motion to withdraw the pleas— provided him with ineffective assistance of counsel. ¶26 Peterson’s motion in District Court to withdraw the pleas was based upon the arguments that he lacked the mental capacity to enter the pleas; that he maintained that he was innocent of the charges; and that the District Court’s colloquy with him at the time of the pleas was inadequate. Peterson did not raise any issue concerning the alleged 10 ineffectiveness of his trial/plea attorney when he moved to withdraw his pleas, and the District Court did not consider or rule upon that issue. When a defendant appeals denial of a motion to withdraw a prior plea, this Court will not entertain new issues that were not raised in the District Court. State v. Ostrerloth, 2000 MT 129, ¶ 20, 299 Mont. 517, 1 P.3d 946 (no new issues may be raised on appeal of a motion to withdraw a plea); State v. McFarlane, 2008 MT 18, ¶ 12, 341 Mont. 166, 176 P.3d 1057 (this Court will not consider a claim of ineffective assistance of counsel at a change of plea proceeding when the claim was not raised in district court). Because Peterson did not raise the issue that his trial/plea attorney provided ineffective assistance, we decline to address this argument on appeal.1 ¶27 Peterson next argues that he is entitled to withdraw the pleas because they were not knowingly and intelligently made. He argues that the District Court failed to inform him that that he could go to trial on the charge of aggravated kidnapping and pursue conviction of a lesser included offense of kidnapping. ¶28 Section 46-12-210, MCA, covers in detail the “advice” that a district court must give a defendant proposing to enter a guilty plea. A district court’s advice to a pleading 1 While we do not consider the ineffective assistance claim, we do note an argument made by Peterson’s attorney on appeal. One of the contentions made by Peterson’s attorney on appeal is that Peterson’s trial/plea attorney was “out of money,” causing his inability to adequately represent Peterson and causing him to act against Peterson’s best interests by coercing him to plead guilty. Despite the strident accusations made in the briefing on Peterson’s behalf on this point, there is no demonstrated factual support for it, much less any justification for characterizing it as an “insidious” factor in the case. The only cited support for this argument is that Peterson’s trial/plea attorney requested in a pre-trial motion that the District Court order the State to pay for the cost of serving trial subpoenas because Peterson, not the attorney, was indigent. These rather serious accusations against Peterson’s trial/plea attorney are completely unjustified and unfounded in the record. 11 defendant is constitutionally adequate if it covers the items in § 46-12-210, MCA. State v. Otto, 2012 MT 199, ¶ 18, 366 Mont. 209, 285 P.3d 583 (a district court is required to give the advice covered by § 46-12-210, MCA, and that advice is constitutionally sufficient for a voluntary plea). A district court is not required to advise the defendant about issues not covered by the statute such as the right to appeal, the right to speedy trial or the right to object to evidence. Otto, ¶ 19. There is no requirement that the district court provide advice about possible lesser included offenses. Usrey, ¶ 24; State v. Swensen, 2009 MT 42, ¶ 14, 349 Mont. 268, 203 P.3d 786. The District Court did not err to the extent that it failed to advise Peterson about the possibility of a lesser included offense to the charge of aggravated kidnapping. ¶29 Peterson next argues that his pleas were not knowingly and intelligently made, and therefore not voluntary, because the District Court did not advise him that he could go to trial and then appeal pre-trial orders, such as rulings on the admissibility of evidence and other issues. A District Court is not required to advise a pleading defendant about any rights to contest prior orders in a future appeal. Otto, ¶ 19. The District Court did not err to the extent that it failed to advise Peterson about the possibility of a future appeal of pre-trial orders. ¶30 Peterson next argues that he was entitled to withdraw his guilty pleas because the attorney who represented him on the motion to withdraw the pleas provided ineffective assistance of counsel. This Court evaluates claims of ineffective assistance of counsel under the test established in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052 (1984). Whitlow v. State, 2008 MT 140, ¶ 10, 343 Mont. 90, 183 P.3d 861; Bomar v. 12 State, 2012 MT 163, ¶¶ 7-8, 365 Mont. 474, 285 P.3d 396. First the defendant must show that his attorney’s performance was deficient by demonstrating that it fell below an objective standard of reasonableness. Whitlow, ¶ 14. There is a strong presumption that the attorney’s performance fell within the wide range of reasonable professional assistance, Whitlow, ¶ 15, because there are “countless ways to provide reasonable assistance in any given case.” Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. ¶31 Second, the defendant must show that his attorney’s deficient performance prejudiced the defense. Whitlow, ¶ 10. This requires a showing of a “reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different.” Strickland, 466 U.S. at 694, 104 S. Ct. at 2068. ¶32 This Court will consider the merits of a claim of ineffective assistance of counsel on appeal only if the record is sufficient to determine whether the attorney was ineffective. State v. Briscoe, 2012 MT 152, ¶ 10, 365 Mont. 383, 282 P.3d 657. Claims that are not based upon facts of record must be raised, if at all, in a proceeding for postconviction relief. State v. Main, 2011 MT 123, ¶ 48, 360 Mont. 470, 255 P.3d 1240. ¶33 Peterson claims that his plea withdrawal attorney was ineffective because he failed to argue that the District Court should not have accepted the plea to the charge of intimidation under § 45-5-203, MCA. Specifically, Peterson argues that there was no showing that he acted with the purposely or knowingly mental state required for that offense. The intimidation charge was based upon Peterson’s actions during the extended stand-off with law enforcement officers at his residence. During the stand-off Peterson threatened that he was going to shoot one or more specifically identified officers who 13 were at the scene. He identified an officer by name, described where he was at the scene, and threatened to shoot him in the head. ¶34 We find that there is sufficient record-based information to allow review of this claim. There is no factual dispute about the intimidation incident, and at sentencing Peterson admitted to making the threat and to understanding how it could be understood as a “threat and intimidation to law enforcement.” A defendant’s mental state may be inferred from his acts and from the circumstances of the offense. State v. Claussell, 2001 MT 62, ¶ 31, 305 Mont. 1, 22 P.3d 1111 (purpose or knowing mental state). A reasonable inference from the facts was that Peterson intended to hinder performance by law enforcement and to prevent them from arresting him. This is sufficient to support the charge of intimidation. State v. McCarthy, 2004 MT 312, ¶ 47, 324 Mont. 1, 101 P.3d 288. As a matter of law, Peterson has failed to demonstrate that his withdrawal attorney’s performance in this regard was deficient and that it fell below an objective standard of reasonableness. Peterson has not established that he received ineffective assistance of counsel regarding the plea to the charge of intimidation. ¶35 Peterson next claims that his withdrawal attorney was ineffective because he failed to present additional evidence at the hearing on the motion to withdraw about Peterson’s mental state at the time of the pleas. At the hearing on the motion to withdraw, defense counsel presented both Peterson’s testimony and the testimony of the defense psychiatrist who had previously examined Peterson and who had previously testified as to Peterson’s mental condition. Defense counsel also submitted into evidence a letter from the defense 14 psychiatrist setting out the opinions of five other mental health professionals that Peterson was bipolar. ¶36 Peterson’s contention on appeal is that his withdrawal attorney rendered ineffective assistance by only presenting one expert. The argument is that if withdrawal counsel had presented the live testimony of the other medical professionals described in the letter admitted into evidence, the District Court would have found Peterson to be bipolar. This entire argument turns on the assumption that if only the District Court had found that Peterson was bipolar then the original pleas would not have been accepted or, if accepted, Peterson would have been allowed to withdraw them. This is based upon nothing more than speculation presented as fact. The assumption underlying Peterson’s argument is that a person diagnosed as bipolar is not competent to enter a plea in a criminal case, and, if he does, is entitled to withdraw it later. The issue below was not whether Peterson was bipolar. The issue was whether he was competent to enter the pleas to the charges. The experts for the State and for the defense agreed that Peterson was competent to participate in the plea proceedings. ¶37 The record is clear in this case that the District Court was very familiar with Peterson’s mental state. Testimony and evidence on that issue were presented to the District Court prior to Peterson’s entering the pleas, and again at the withdrawal hearing. Peterson does not contend on appeal that there was any new or different evidence, only that the evidence should be presented in a different way. In addition, even the defense psychiatrist who opined that Peterson was bipolar also rendered the expert opinion that 15 Peterson was competent to stand trial and that he was capable of forming the mental state required to be convicted of the charged offenses. ¶38 On the face of the record it is clear that Peterson’s withdrawal attorney acted reasonably and consistently with an objective standard of reasonableness in presenting the motion to withdraw to the District Court. Peterson has wholly failed to demonstrate that his withdrawal attorney failed to provide effective assistance by presenting only one expert at the withdrawal hearing. ¶39 The record demonstrates that Peterson was fully aware of the direct consequences of the pleas and that they were knowingly and voluntarily given. He has failed to establish that there was good cause to allow him to withdraw his prior Alford pleas to the charges against him, and the District Court is affirmed. ¶40 Issue Two: Should this matter be remanded to the District Court to determine the amount of restitution due to the victim from Peterson for future counseling expenses? ¶41 The District Court ordered that Peterson be responsible for payment of the future counseling costs of the victim in an “unlimited amount.” Peterson does not argue that he may not be held responsible for the counseling costs, but only that the District Court was required to specify the total amount of restitution. Section 46-18-244, MCA. The State agrees with Peterson’s argument and agrees that this matter should be remanded to the District Court for a determination of the total amount of restitution for the victim’s future counseling costs. ¶42 The District Court’s order denying Peterson’s motion to withdraw his Alford pleas to the charges against him is affirmed. This matter is remanded to the District Court for 16 the sole purpose of determining the amount of restitution for the victim’s future counseling costs that Peterson is required to pay. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT	November 5, 2013
5efd77da-12a7-46b6-be69-8837faff7aa8	DOT v. American Bank	2013 MT 330N	DA 13-0072	Montana	Montana Supreme Court	DA 13-0072 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 330N MONTANA DEPARTMENT OF TRANSPORTATION, Plaintiff and Appellant, v. AMERICAN BANK OF MONTANA, a Montana Corporation, Defendant and Appellee. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 04-474B Honorable Katherine R. Curtis, Presiding Judge COUNSEL OF RECORD: For Appellant: Valerie D. Wilson, Carol Grell Morris, Special Assistant Attorney Generals, Montana Department of Transportation; Helena, Montana For Appellee: A. Clifford Edwards, Triel D. Culver, Jackie S. Shields, Edwards, Frickle & Culver; Billings, Montana Submitted on Briefs: October 16, 2013 Decided: November 6, 2013 Filed: __________________________________________ Clerk November 6 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Appellant Montana Department of Transportation (Department) appeals from the District Court’s order of October 25, 2012, that determined § 70-30-306(2), MCA, to be in violation of Article II, Section 29 of the Montana Constitution. We affirm the District Court’s award of attorney’s fees and vacate the District Court’s order of October 25, 2012. ¶3 We consider for a second time the appropriate amount of attorney’s fees in this condemnation proceeding. The Department initiated a condemnation proceeding of aportion of American Bank’s property in 2004. The District Court dismissed the Department’s complaint with prejudice in 2005. The District Court awarded American Bank reasonable and necessary attorney fees as a result of the dismissal. ¶4 American Bank failed to file a request for the award. American Bank’s attorneys instead filed affidavits that attested that each attorney had lowered their hourly rates to be consistent with the hourly billing rates of other Flathead County eminent domain attorneys. The Department objected to American Bank’s requested attorney’s fees as being in conflict with § 70-30-306(2), MCA. The Department alleged that American Bank’s requested rates exceeded the “customary hourly rates” for an attorney in Flathead County. 3 ¶5 The District Court entered a post-judgment order that awarded $116,739.53 in litigation expenses to American Bank. The District Court based its award on thehourly rates for the attorneys contained in American Bank’s affidavit. The Department appealed that award. We reversed and remanded to the District Court for further limited proceedings “to determine attorney fees pursuant to § 70-30-306(2), MCA.” State, ex rel. Montana Dep’t of Transp. v. Am. Bank of Montana, 2008 MT 362, ¶ 21, 346 Mont. 405, 195 P.3d 844 (Am. Bank of Montana I). ¶6 Nearly one year after remittitur from this Court, American Bank shifted its strategy. American Bank filed a motion to set a scheduling conference and notified the District Court and the Department for the first time that it would challenge the constitutionality of § 70-30- 306(2), MCA. American Bank argued that our prior holding “instructed [the District Court] to award attorney fees based upon an artificial number that is neither reasonable nor related to actual necessity.” American Bank further argued that “such an award would violate th[e District] Court’s duty to uphold the Constitution[al]” right to just compensation for American Bank, as Article II, Section 29 of the Montana Constitution requires in eminent domain proceedings. ¶7 The District Court agreed with American Bank and issued an order on October 25, 2012, that declared § 70-30-306(2), MCA, unconstitutional. The District Court concluded that the right to recover fees in an eminent domain proceeding represents a fundamental right. The District Court concluded that § 70-30-306(2), MCA, “lacks a compelling state 4 interest” that could withstand the strict scrutiny applied to constraints on fundamental rights. The Department appeals. ¶8 The parties and the District Court must adhere to this Court’s statement of a principle or rule of law necessary to a decision on appeal throughout any of the case’s subsequent proceedings. Haines Pipeline Const., Inc. v. Montana Power Co., 265 Mont. 282, 289-91, 876 P.2d 632, 637-38 (1994); Zavarelli v. Might, 239 Mont. 120, 124-26, 779 P.2d 489, 492- 93 (1989). The general rule that the District Court may consider any matters left open following this Court’s review does not apply when we reverse and remand a case with specific limiting instructions. Zavarelli, 239 Mont. at 124-26, 779 P.2d at 492-93. When this Court reverses and remands for a single purpose, the District Court retains jurisdiction to consider only the limited issues that this Court reversed and remanded. Haines Pipeline Const., 265 Mont. at 289-91, 876 P.2d at 637-38. ¶9 We previously remanded to the District Court for further limited proceedings “to determine attorney fees.” Am. Bank of Montana I, ¶ 21. The “[r]easonable and necessary attorney fees” that we required the District Court to determine became the law of the case. Section 70-30-306(2), MCA. The law of the case required that the statute remain the basis for fees as the District Court originally determined and this Court affirmed. The District Court lacked jurisdiction to consider for the first time the constitutionality of the statute allowing its award of attorney’s fees. Haines Pipeline Const., 265 Mont. at 289-91, 876 P.2d at 637-38; Zavarelli, 239 Mont. at 124-26, 779 P.2d at 492-93. 5 ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our 1996 Internal Operating Rules, as amended in 2006, that provide for memorandum opinions. We vacate the District Court’s October 25, 2012, order. We decline to express any opinion about the constitutionality of § 70-30-306(2), MCA. We nevertheless affirm the District Court’s award of attorney’s fees as contained in its order of November 30, 2012, as being consistent with the requirements of § 70-30-306, MCA, and valid under the law of the case. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE Justice Patricia Cotter concurring in part and dissenting in part. ¶11 I concur and dissent. ¶12 I dissent from the Court’s holding affirming the District Court’s award of fees. As indicated, we previously remanded to have the court determine fees pursuant to § 70-30-306(2), MCA. Am. Bank of Montana I, ¶ 21. However, because it declared this provision of the statute unconstitutional, the court on remand assessed fees under § 70-30-306(1), MCA. In that we have now vacated the court’s order declaring § 70-30-306(2), MCA, unconstitutional, the subject provision remains the law. Therefore, if we are to honor the law of the case, fees should be determined in accordance with 6 § 70-30-306(2), MCA, and not § 70-30-306(1), MCA, as was done by the District Court. I would remand for this to be accomplished. ¶13 I concur in the remainder of the Court’s Opinion. I add that I stand by my Dissent in Am. Bank of Montana I. I urge the Court to abandon its requirement that fees be assessed based upon the “hourly rates typical or common for a non-specific attorney’s services in the county in which the trial is held,” Am. Bank of Montana I, ¶ 14, (emphasis added), and allow consideration by district courts of the Forrester v. Boston & Mont. Consol. Copper & Silver Mining Co., 29 Mont. 397, 409, 74 P. 1088, 1093 (1904) factors when assessing the reasonableness and necessity of attorney fees in condemnation cases. /S/ PATRICIA COTTER	November 6, 2013
29180b0e-707e-4044-9381-8320f72dc578	State v. Garding	2013 MT 355	DA 11-0763	Montana	Montana Supreme Court	DA 11-0763 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 355 STATE OF MONTANA, Plaintiff and Appellee, v. KATIE IRENE GARDING, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC 10-160 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Eileen A. Larkin, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Tammy K Plubell, Assistant Attorney General; Helena, Montana Fred R. Van Valkenburg, Missoula County Attorney; Jennifer Clark, Deputy County Attorney; Missoula, Montana Submitted on Briefs: October 16, 2013 Decided: November 26, 2013 Filed: __________________________________________ Clerk November 26 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Katie Irene Garding (Garding) appeals from the Judgment entered by the Fourth Judicial District Court, Missoula County, regarding her conviction for the offenses of vehicular homicide while under the influence, failure to stop immediately at the scene of an accident involving an injured person, and driving without a valid driver’s license. We affirm and address the following issues on appeal: ¶2 1. Did the District Court err by limiting the Defendant’s cross-examination of the State’s informant? ¶3 2. Did the District Court err by preventing the Defendant’s expert forensic pathologist from testifying about matters not disclosed through discovery? ¶4 3. Did the District Court err by permitting an undisclosed expert witness to testify for the State? FACTUAL AND PROCEDURAL BACKGROUND ¶5 This case involves the tragic death of Bronson Parsons (Parsons) due to injuries sustained during a hit-and-run vehicle-pedestrian accident in the early morning hours of January 1, 2008. At approximately 1:40 a.m., Parsons and Daniel Barry (Barry) were walking along the right-hand shoulder of Highway 200 and toward the Reno Casino (the Reno) in East Missoula to participate in the Bar’s last call of the night. When they were about 300 yards from the Reno, a dark-colored SUV struck Parsons from behind and carried him a short distance before he slid off the side of the hood. The SUV veered off the road, corrected itself, and then accelerated westward toward Missoula. Parsons remained on his back in the roadway, having sustained fatal blunt force trauma to the back of his head. 3 ¶6 In the darkness, Barry was able to identify the fleeing vehicle only as a bigger, dark-colored SUV or truck. Barry also thought the vehicle had a deer guard or something else reinforcing its frontend. Deborah Baylor (Baylor), who was driving east along Highway 200 at the time of the collision, saw a dark-colored vehicle strike Parsons with its passenger side. Baylor explained that she heard a pop or a bang and then saw Parsons fly off the side of the vehicle and land in the roadway. Neither Baylor nor Barry heard any glass breaking during the accident. ¶7 Trooper Novak of the Montana Highway Patrol soon arrived at the scene and conducted an investigation. He looked for anything of evidentiary value, such as broken glass or damaged vehicle parts, but was only able to find a set of tire tracks on the shoulder of the road, which he later photographed. Trooper Novak was not able to precisely identify the point of impact. ¶8 Other law enforcement officers were alerted about the accident, and about ten hours later Trooper Hader of the Montana Highway Patrol stopped Garding to investigate her cracked windshield. Garding was driving a black 1994 Chevy Blazer with a unique, aftermarket steel bumper protruding from the frontend. Trooper Hader then believed that the accident had involved a full-frontal crash and that the subject vehicle would have extensive frontend damage. When Trooper Hader did not observe any such damage, he cited Garding for driving without a license and arrested her boyfriend, James Bordeaux (Bordeaux), who was also in the vehicle, on an out-of-state warrant. Law enforcement would take no further action against Garding for some time. 4 ¶9 Law enforcement initially suspected that Gabrielle Weiss (Weiss) had hit Parsons with her vehicle, a green 1995 S-10 Chevy Blazer, due to an unusual 911 call that she placed around the time of the accident.1 During that call Weiss mistakenly identified herself as being in East Missoula that night. Law enforcement later confirmed that she had actually been in the Blue Mountain area that night. During the investigation, law enforcement impounded Weiss’s vehicle and submitted its bumper to the FBI for laboratory examination. Although the bumper contained a fabric impression from a pair of jeans,2 no conclusive results were obtained. Weiss was not charged and the case went cold. ¶10 On December 22, 2008, almost one year after the accident, Tueray Cornell (Cornell), then an inmate at the Missoula County Detention Center, contacted Trooper Hader to report that he had information about the incident. Cornell explained that Garding had driven to his house on January 1, 2008, and told him that she had hit a deer. Cornell used duct tape to repair Garding’s broken light cover by taping it back in place. Following up on this lead, law enforcement discovered that Garding’s Blazer had been repossessed and resold. The new owner explained that the Blazer had broken down almost immediately upon purchase, but otherwise remained in the same condition. The right front fog lamp was affixed with duct tape. 1 Weiss admitted to being highly intoxicated at the time she called 911. Her boyfriend had recently been stabbed, and she was attempting to drive him to the hospital. 2 Weiss testified that her boyfriend, who was wearing jeans, jumped onto the hood of her vehicle during an argument on December 31, 2007. 5 ¶11 Meanwhile, Bordeaux, one of Garding’s passengers on the night of the accident and now her ex-boyfriend, was incarcerated in Missoula on a burglary charge. At the omnibus hearing in Bordeaux’s case, the State checked the omnibus hearing form to indicate that it intended to pursue a Persistent Felony Offender (PFO) designation under § 46-18-502(1), MCA, against Bordeaux, which would permit a district court to sentence him to up to 100 years in prison. However, the State did not discuss or pursue this possibility further. ¶12 As part of the investigation into Garding, Trooper Hader contacted Bordeaux, who related that on the day of the accident, Bordeaux and Garding started drinking around 11:00 a.m. After several hours of drinking at Red’s Bar in Missoula, they met Paul McFarling (McFarling) and drove to East Missoula in Garding’s Blazer, drinking Black Velvet and smoking marijuana on the way. The three continued to drink throughout the afternoon and evening, including at the Reno. Sometime after midnight, they drove to Red’s Bar in Missoula and remained there until 1:30 a.m. They then returned to East Missoula in Garding’s Blazer to try to purchase cocaine. McFarling, who was sitting in the backseat, pulled out a gun and attempted to show it to Garding and Bordeaux. Bordeaux, who was sitting in the front passenger’s seat, turned around and started arguing with McFarling, threatening to “slap him” and telling Garding to pull over so he could kick McFarling out of the car. Possibly distracted by these events, Garding struck Parsons from behind with the passenger’s side of her vehicle. Bordeaux stated that he spun around in his seat just in time to see a person flying through the air and hear 6 Garding say, “I hit somebody.” Garding did not stop the vehicle, but instead drove back to Missoula and stayed the night at McFarling’s house. ¶13 In exchange for providing this testimony, the State offered Bordeaux a plea deal whereby he would testify against Garding and plead guilty to the burglary, and in return, the State would recommend that he receive a five-year suspended sentence. The possible PFO designation was not discussed or mentioned in the parties’ written plea agreement. Obtaining Bordeaux’s cooperation, the State charged Garding with Parsons’ death. ¶14 At trial, Garding sought to impeach Bordeaux’s credibility. In her opening statement, Garding’s counsel stated, “the State wants you to believe that [Bordeaux] did not get any deal for his original sentence. As I mentioned, he was facing 20 years in prison [for burglary], plus an additional 5 to 100 years for being a persistent felony offender.” However, when Garding’s counsel began her cross-examination of Bordeaux, the District Court granted the State’s objection to any mention of the potential PFO designation, limiting the scope of Garding’s questioning in this regard to the burglary charge and the contents of the plea agreement. ¶15 The State called the medical examiner, Dr. Gary Dale (Dr. Dale), who testified that the location and size of Garding’s bumper was consistent with muscle tearing injuries in Parsons’ calves. Garding called Dr. Thomas Bennett (Dr. Bennett), a forensic pathologist, to challenge Dr. Dale’s testimony. Dr. Bennett testified that irregular bruising found on the exterior of Parsons’ calves would not have been caused by a bumper like Garding’s. When asked to explain the muscle tearing discussed by Dr. Dale, the District Court sustained the State’s objection that Dr. Bennett’s report obtained in 7 discovery had failed to mention muscle tearing and limited Dr. Bennett’s testimony to the bruising on Parsons’ calves. ¶16 The State also called Alice Ammen (Ammen) from the State Crime Lab to testify about her inspection of the victim’s clothing. During cross-examination, Ammen noted that the Crime Lab had the ability to analyze fabric impressions, such as the jeans impression left on Weiss’s bumper, although a different section of the lab handled that responsibility. To address this issue further, the State, still in its case in chief, called Debra Hewitt (Hewitt), a fabric-impression expert from the State Crime Lab, who had not previously been listed as a witness. Over Garding’s objection, the District Court permitted Hewitt to testify regarding why a fabric impression analysis would not have been probative in this case. According to Hewitt, absent some unique defect or stitching, the lab cannot distinguish between the impressions left by different pairs of jeans, and because the impression found on Weiss’s bumper was not unique, the lab did nothing further. ¶17 The jury convicted Garding of vehicular homicide while under the influence, failure to stop immediately at the scene of an accident involving an injured person, and driving without a valid driver’s license. She appeals. STANDARD OF REVIEW ¶18 We review a district court’s evidentiary rulings for abuse of discretion. State v. Bonamarte, 2009 MT 243, ¶ 13, 351 Mont. 419, 213 P.3d 457. A district court “abuses its discretion if it acts arbitrarily or unreasonably, and a substantial injustice results.” Bonamarte, ¶ 13. However, “[a] district court has broad discretion when determining the 8 relevance and admissibility of evidence.” State v. Daniels, 2011 MT 278, ¶ 11, 362 Mont. 426, 265 P.3d 623. In exercising its discretion, a district court remains bound by the Rules of Evidence or other applicable statutes. We review de novo a district court’s interpretation of an evidentiary rule or statute. We exercise plenary review for questions regarding constitutional law. Daniels, ¶ 11. DISCUSSION ¶19 1. Did the District Court err by limiting the Defendant’s cross-examination of the State’s informant? ¶20 Garding argues that the District Court improperly limited her inquiry into Bordeaux’s bias or motive to testify falsely by not allowing her to cross-examine Bordeaux about his possible PFO designation. She explains that the possibility of Bordeaux facing 100 years in prison is exactly the kind of bias or motive that should have been made known to the jury. The State counters that the only reference it made to a PFO designation was the check on the omnibus form, but that the matter was not further discussed and the State did not negotiate away a PFO designation in exchange for anything. The plea agreement contains no mention of a PFO sentencing enhancement, and thus the State argues that the District Court properly exercised its discretion to limit Garding’s inquiry. ¶21 The “accused’s right to demonstrate the bias or motive of prosecution witnesses is guaranteed by the [Confrontation Clause of the] Sixth Amendment,” State v. Gommenginger, 242 Mont. 265, 272, 790 P.2d 455, 460 (1990) (citations omitted), and the Montana Constitution, Mont. Const. art. II, § 24. The accused’s right to confront 9 adverse witnesses is fundamental. State v. Parker, 2006 MT 258, ¶ 20, 334 Mont. 129, 144 P.3d 831 (citing State v. Clark, 1998 MT 221, ¶ 20, 290 Mont. 479, 964 P.2d 766; Mont. Const. art. II, § 24). A defendant is to be given “broad latitude” in questioning the credibility and self-interest of witnesses. On Lee v. U.S., 343 U.S. 747, 757, 72 S. Ct. 967, 973-74 (1952). “The Confrontation Clause ‘guarantees an opportunity for effective cross-examination, not cross-examination that is effective in whatever way, and to whatever extent, the defense might wish.’” State v. Nelson, 2002 MT 122, ¶ 19, 310 Mont. 71, 48 P.3d 739 (citing State v. Jenkins, 2001 MT 79, ¶ 19, 305 Mont. 95, 23 P.3d 201 (additional citations omitted) (emphasis in original)). A district court maintains broad latitude to limit cross-examination to those issues that are relevant. Nelson, ¶ 15. We have explained that “discretion in exercising control and excluding evidence of a witness’s bias or motive to testify falsely becomes operative only after the constitutionally required threshold level of inquiry has been afforded the Defendant.” Bonamarte, ¶ 16. ¶22 In Nelson, an informant testified against Nelson after reaching a plea agreement with the Ravalli County prosecutor. Nelson, ¶ 11. During Nelson’s cross-examination of the informant, the State objected to the scope of Nelson’s questions. Nelson explained that he wanted to cross-examine the informant about other charges filed against him in order to establish that the informant had a pattern of reaching plea deals and then testifying against co-defendants. The district court refused to allow this line of questioning. Nelson, ¶ 12. On appeal, Nelson argued that the district court’s limitation on the scope of his inquiry violated his right to confront his accuser. Nelson, ¶ 16. We 10 disagreed, holding that Nelson had been afforded the constitutionally required level of inquiry. Nelson, ¶ 19. We found it persuasive that “nothing in the record indicate[d] that Ravalli County offered any plea arrangements to [the informant] based on” his other alleged criminal activity, Nelson, ¶ 17, and that Nelson received wide latitude when cross-examining the informant about the actual contents of the plea agreement with Ravalli County, Nelson, ¶ 18. ¶23 As in Nelson, Bordeaux’s plea agreement does not contain any reference to the PFO designation. As the State notes, other than the check on Bordeaux’s omnibus hearing form, he was never notified that the State considered him to be a PFO. Garding generalizes that the state “‘routinely’ uses a PFO designation to encourage a deal,” and cites Nelson for the proposition that a defendant’s right to confront is violated “when a court precludes questioning on the witness’s potential for bias or prejudice stemming from his interest in receiving leniency on other charges from the prosecuting office.” However, Garding failed to present any evidence that Bordeaux actually received “leniency on other charges” regarding the PFO, as the following exchange between counsel for Garding and the District Court illustrates: [Garding:] Your Honor, I’m arguing, though, I don’t—we don’t have to argue that he received benefit of them not filing for the persistent felony offender. What I’m asking is his state of mind when he was charged with the burglary, what he was facing, the penalties that he was facing, the consequences that he was facing for his motive to go and make a statement. [District Court:] Well, absent the testimony the only thing I have is the plea agreement. So that’s what I’m limited to, the actual motives and—and discussions and focus in this case. Now if there’s something else, some other evidence, I’m happy to consider it, but at this point I’m precluding getting into it [possible PFO designation]. 11 ¶24 After making this ruling, the District Court, as in Nelson, permitted Garding to cross-examine Bordeaux at length about his plea agreement with the State, including the following exchange: [Garding:] Okay. And so two days after you provide this statement [about Garding], after your burglary charge has been pending for over two months, you go and enter a guilty plea on the burglary, right? [Bordeaux:] Yes, ma’am. [Garding:] Just two days after you give this statement. [Bordeaux:] Yes, ma’am. [Garding:] And you get a sentence that does not call for you to go to prison here in Montana, right? [Bordeaux:] Yes. [Garding:] And you get a sentence that allows you to be on probation, and you get to walk out those doors, and you’ve gone back to Missouri, right? [Bordeaux:] Yes. Based on our review of the record, it is clear that the District Court afforded Garding sufficiently wide latitude in cross-examining Bordeaux about his bias and motivation to testify falsely to satisfy Garding’s right of confrontation. Garding inquired extensively into Bordeaux’s burglary charge, his plea agreement, and the timing of his statement against Garding. This inquiry, coupled with the lack of evidence that Bordeaux’s plea agreement was motivated in any way by a potential PFO designation, satisfies the constitutional requirement of an effective opportunity for cross-examination. See Nelson, 12 ¶¶ 15-19. Based on the foregoing, we hold that the District Court did not violate Garding’s constitutional rights, nor did it abuse its discretion in this instance.3 ¶25 2. Did the District Court err by preventing the Defendant’s expert forensic pathologist from testifying about matters not disclosed through discovery? ¶26 Garding argues that the District Court erred by not permitting Dr. Bennett to refute Dr. Dale’s testimony about the muscle tearing in Parson’s calves. During trial, Dr. Dale testified that Parsons sustained a “3-inch area of tearing or crushing of the muscle, the calf muscles, in both calves . . . above his heel.” However, when Garding attempted to question Dr. Bennett about this muscle tearing, the District Court sustained the State’s objection and limited Dr. Bennett’s testimony to the bruising found on Parsons’ calves: [District Court:] We’re looking at [Dr. Bennett’s] opinion number four. Specifically limit—it specifically states “bruises” when indicating the linkage to the vehicle. [Dr. Bennett:] Yes. [District Court:] And so that’s what you’re limited to and not to the tearing of the muscle because that’s what was disclosed. [Dr. Bennett:] Okay. [District Court:] And so you understand that rule. Okay. [Dr. Bennett:] Perfectly fine, judge. That’s the most important part anyway. . . . 3 In her reply brief, Garding shifts the focus of her argument away from her cross-examination of Bordeaux to a discussion about the District Court’s ruling on a generic motion in limine filed by the State. Having reviewed the applicable documents, we find that our analysis in this case appropriately centers on the District Court’s decision to limit Garding’s cross-examination of Bordeaux at trial, since the PFO issue was ultimately decided at that point. 13 [District Court:] When you disclose you’re generally limited to that area and that’s my ruling. ¶27 The State offers little justification, and, after review, we are unable to conclude there was an appropriate legal basis for the District Court’s exclusion of Dr. Bennett’s testimony. As Garding notes, “defense counsel may not be required to prepare or disclose summaries of witnesses’ testimony.” Section 46-15-323(8), MCA; State v. Huerta, 285 Mont. 245, 253, 947 P.2d 483, 488 (1997) (concluding that it was error to require the defendant to produce summaries of his witnesses’ testimony). Section 46-15- 323(6)(b), MCA, states that the names and addresses of defense experts, as well as their reports, shall be made available to the prosecutor. This was done here, and Dr. Bennett’s report mentions, contrary to the District Court’s ruling, Dr. Dale’s finding about the muscle tearing. Further, during trial, Garding’s counsel advised the District Court that Dr. Bennett would testify about “how people can obtain muscle tears” and “how blunt force trauma can create muscle tears” in accordance with M. R. Evid. 103(a)(2). Thus, we conclude that the District Court abused its discretion in limiting Dr. Bennett’s testimony to only Parsons’ bruising injuries. We now turn to the question of whether this error was harmless. ¶28 “The first step in conducting [a] harmless-error analysis is to determine whether the error is structural error or trial error.” State v. Stewart, 2012 MT 317, ¶ 45, 367 Mont. 503, 291 P.3d 1187 (citation omitted). Structural error affects the framework within which the trial proceeds. State v. Van Kirk, 2001 MT 184, ¶ 38, 306 Mont. 215, 32 P.3d 735. Structural error is of “constitutional dimensions, precedes the trial, and undermines 14 the fairness of the entire trial proceeding.” Stewart, ¶ 45. Examples include: errors in the jury selection process, deprivation of the right to counsel, and lack of an impartial trial judge. Structural error is not subject to harmless-error review and is automatically reversible. Van Kirk, ¶ 39 (citations omitted). Trial error, on the other hand, typically occurs during the presentation of a case to the jury. It can be reviewed qualitatively for prejudice relative to other evidence introduced during trial and, therefore, is not automatically reversible. Stewart, ¶ 45. ¶29 Precluding Dr. Bennett’s testimony was not, in and of itself, an error affecting the framework in which the trial proceeded—it “did not contaminate the trial mechanism along the lines that a biased judge, lack of counsel, or a jury-selection error would,” Stewart, ¶ 45. Thus, any error on the part of the District Court was trial error subject to Montana’s harmless error statute. That statute provides, “[a] cause may not be reversed by reason of any error committed by the trial court against the convicted person unless the record shows that the error was prejudicial,” and “[a]ny error, defect, irregularity, or variance that does not affect substantial rights must be disregarded.” Section 46-20- 701(1), (2), MCA. ¶30 Garding argues that the District Court’s decision prejudiced her by barring the jury from properly evaluating whether her bumper “could have or could not have caused Parsons’ muscle tearing,” thereby preventing her from presenting a complete defense. She further argues that the State capitalized on this exclusion during its closing argument by referencing the muscle tearing several times. Accordingly, Garding asserts that the District Court’s decision to limit Dr. Bennett’s testimony contributed to her conviction. 15 ¶31 In response to a claim that trial error may have contributed to a conviction, it “‘becomes incumbent on the State to demonstrate that the error at issue was not prejudicial.’” State v. Slavin, 2004 MT 76, ¶ 22, 320 Mont. 425, 87 P.3d 495 (citing Van Kirk, ¶ 42). To meet this burden in cases where a court ruling excludes testimony, the State must demonstrate that there was no reasonable possibility that the exclusion contributed to the conviction. Slavin, ¶ 22. ¶32 Dr. Bennett was permitted to testify at length about the nature of Parsons’ bruises and the features of Garding’s bumper: The bruises as described on the back and as seen in the photographs would not be caused by a bumper like that in the mechanism as described. That bumper with the square edges and so forth would not produce those irregular marks on the back of the calf. The bruises would be much more characteristic. You would see lines of petechiae and so forth . . . . Again the bruising is not petechiae. There are regular deep bruises we see on the back of the calves. The bluish discoloration and so forth, the blue, it’s a curved, smooth surface, not this bumper. . . . [Garding’s bumper is] a 3-inch bumper. The skin markings effectively . . . indicate this isn’t the bumper. Dr. Bennett repeatedly testified that Garding’s vehicle did not cause the injuries to Parsons’ calves. Each time, Dr. Bennett supported his opinion with extensive analysis of the bruising, which he characterized to the jury as “the best way to look for the nature of that instrument [Garding’s bumper],” and to the District Court as “the most important part [of his testimony].” ¶33 Although the State mentioned muscle tearing during its closing argument, Dr. Bennett was still allowed to present the most critical aspects of his testimony to the jury—including his ultimate conclusion that Garding’s vehicle did not cause the injuries 16 to Parsons’ calves. We believe this testimony sufficiently enabled the jury to weigh Dr. Bennett’s opinion against Dr. Dale’s. Therefore, we conclude that there was no reasonable possibility that Garding’s conviction resulted from the District Court’s exclusion of this portion of Dr. Bennett’s analysis, and the error was harmless. ¶34 3. Did the District Court err by permitting an undisclosed expert witness to testify for the State? ¶35 Lastly, Garding argues that the District Court abused its discretion by allowing the State to call Hewitt to testify about fabric impressions analysis when she had not been previously disclosed as a witness. The State acknowledges that it did not disclose Hewitt as a witness,4 but offers that she was called only to briefly explain why fabric impression evidence from Weiss’s bumper was not analyzed after Garding raised the issue on cross-examination of Ammen. Garding counters that the effect of calling a surprise witness is both “devastating and prejudicial.” ¶36 A prosecutor, upon request, must provide the defendant with “the names, addresses, and statements of all persons whom the prosecutor may call as witnesses in the case in chief,” together with “all written reports or statements of experts who have personally examined the defendant or any evidence in the particular case . . . .” Section 46-15-322(1)(a), (c), MCA. If the prosecutor fails to comply with these discovery provisions at any time, the court “may impose any sanction it finds just under the circumstances . . . .” Section 46-15-329, MCA. This statute provides a district court with 4 According to the State, Hewitt was not disclosed because she never produced a report or completed any testing. 17 the flexibility to impose sanctions, but does not mandate automatic exclusion for noncompliance. State v. Waters, 228 Mont. 490, 495, 743 P.2d 617, 621 (1987). ¶37 It is generally inappropriate for the State to call an undisclosed expert witness in its case in chief. Here, however, the District Court afforded Garding ample time to interview Hewitt and indicated a willingness to grant more time if necessary. Hewitt’s testimony was to a narrow issue and was brief. Garding thoroughly cross-examined Hewitt about the failure to compare the fabric impressions on Weiss’s bumper to the clothing of the victim or any other relevant party. ¶38 Further, the State could have called Hewitt as a rebuttal witness to elicit her testimony. “‘Rebuttal evidence offered by the State is admissible if it has a tendency to contradict or disprove evidence of the defense.’” State v. Gardner, 2003 MT 338, ¶ 36, 318 Mont. 436, 80 P.3d 1262 (citation omitted). “‘Rebuttal testimony is proper only if it tends to counteract a new matter offered by the adverse party.’” Gardner, ¶ 36 (citation omitted). During her cross-examination of Ammen, Garding asked whether the State Crime Lab had the capability of analyzing fabric impressions, which Ammen answered affirmatively. The State then called Hewitt to address this newly raised issue. ¶39 Garding cites § 46-15-322(6), MCA, for the proposition that “the State is required to disclose the names of rebuttal witnesses ‘no later than five days before trial or at a later time as the court may for good cause permit.’” However, this statute applies to witnesses called by the State to rebut affirmative defenses that a defendant has raised and notified the State of pursuant to § 46-15-323(3), (4), MCA. The State did not call Hewitt to rebut any of these defenses. As we have held, “[d]etermining the admissibility of rebuttal 18 testimony is within the sound discretion of the district court . . . .” State v. Jackson, 2009 MT 427, ¶ 68, 354 Mont. 63, 221 P.3d 1213. ¶40 The District Court’s decision to allow Hewitt to testify did not constitute reversible error. Hewitt’s statements were very brief and Garding fully cross-examined her. Even if we were to determine that the District Court abused its discretion, such error would be harmless. See Stewart, ¶ 45. The fact that the State called Hewitt during its case in chief, rather than as a rebuttal witness later, did not prejudice Garding in any way, nor did it contribute to her conviction. ¶41 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BRIAN MORRIS	November 26, 2013
330c8c65-7140-40cb-96b0-811ca7df70df	STATE v DAHLIN	2004 MT 19	03-352	Montana	Montana Supreme Court	No. 03-352 IN THE SUPREME COURT OF THE STATE OF MONTANA 2004 MT 19 STATE OF MONTANA, Plaintiff and Respondent, v. DEAN P. DAHLIN, Defendant and Appellant. APPEAL FROM: District Court of the Fourteenth Judicial District, In and For the County of Golden Valley, Cause No. DC 2002-06, Honorable Randal I. Spaulding, Presiding Judge COUNSEL OF RECORD: For Appellant: Robert W. Snively, Attorney at Law, Roundup, Montana For Respondent: Honorable Mike McGrath, Attorney General; Jim Wheelis, Assistant Attorney General, Helena, Montana Catherine Truman, County Attorney, Roundup, Montana Submitted on Briefs: December 23, 2003 Decided: January 28, 2004 Filed: __________________________________________ Clerk 2 Justice W. William Leaphart delivered the Opinion of the Court. ¶1 Dean Dahlin (Dahlin) appeals the denial of a motion for directed verdict in the Fourteenth Judicial District, Golden Valley County, where Dahlin was convicted of felony theft of a vehicle. We affirm and remand to the District Court for an amendment to the sentencing order consistent with this opinion. ¶2 We restate the issues on appeal as follows: ¶3 1. Whether the District Court abused its discretion in denying Dahlin’s motion for directed verdict. ¶4 2. Whether the District Court erred in ordering restitution for loss of use of the vehicle. FACTUAL AND PROCEDURAL BACKGROUND ¶5 Dahlin and Michael Anguiano (Anguiano) were roommates in Lavina, Montana, when Dahlin’s van broke down. Anguiano gave Dahlin permission to use Anguiano’s Ford F-150 truck for transportation to work in Billings. This arrangement continued for about three months. On March 14 or 15, Anguiano let Dahlin take the vehicle to Billings with the understanding that Dahlin would return it the following day. When Dahlin did not return the truck, Anguiano reported the vehicle stolen on March 26, 2002. ¶6 An information was filed on May 30, 2002, charging Dahlin with three counts of theft. Counts II and III were dismissed at the onset of the trial. Thereafter, the trial proceeded on Count I, felony theft of Anguiano’s vehicle. During the trial, Anguiano testified that Dahlin did have permission to take the vehicle to Billings and keep it there 3 overnight but that Dahlin was to return it the next day. Anguiano also testified that he did not see or hear from Dahlin after Dahlin took the truck in March. ¶7 After the State rested its case-in-chief, Dahlin moved for directed verdict on the grounds that the State’s evidence failed to show unauthorized control over the vehicle. The court denied the motion. Dahlin then presented his case, and he was convicted of felony theft. The court ordered Dahlin to make restitution to Anguiano in the amount of $1,336.12, including $500 for fair rental fee of the vehicle. Dahlin appeals the denial of the motion for directed verdict and the $500 reimbursement. STANDARD OF REVIEW ¶8 “We review a district court’s decision to deny a criminal defendant’s motion for a directed verdict for an abuse of discretion.” State v. Billedeaux, 2001 MT 9, ¶ 8, 304 Mont. 89, ¶ 8, 18 P.3d 990, ¶ 8 (citing State v. Brady, 2000 MT 282, ¶ 20, 302 Mont. 174, ¶ 20, 13 P.3d 941, ¶ 20). No abuse of discretion occurs if, “after viewing the evidence in [a] light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” State v. Cochran, 1998 MT 138, ¶ 28, 290 Mont. 1, ¶ 28, 964 P.2d 707, ¶ 28. ISSUE 1 ¶9 Whether the District Court abused its discretion in denying Dahlin’s motion for directed verdict. ¶10 Dahlin contends that the District Court abused its discretion when it denied the motion for directed verdict because the State did not prove that there was a theft or that the theft 4 occurred in Golden Valley County. The State argues there was sufficient evidence that a theft occurred and that it occurred in Golden Valley County. An “owner must be deprived of his property before a charge of theft will stand.” State v. White (1988), 230 Mont. 356, 359, 750 P.2d 440, 441. In White, the defendant was a long distance truck driver who did not return his employer’s truck to Montana once his employer withdrew authorization for the defendant to operate the truck. We concluded that the defendant’s failure to return the truck resulted in the employer being deprived of his property. ¶11 Here, when the State rested, Anguiano had testified that Dahlin had permission to drive the vehicle to Billings, keep it there overnight, and return the vehicle the next day. Dahlin failed to do this and, according to Anguiano, Dahlin did not contact Anguiano concerning the vehicle’s whereabouts. Dahlin’s failure to return the vehicle deprived Anguiano of his property. In addition, in White, jurisdiction was proper in Montana because the defendant was supposed to return the truck to Montana. White, 230 Mont. at 359, 750 P.2d at 441. Similarly, here, the State presented evidence that the theft occurred in Golden Valley County because Anguiano testified that Dahlin was to return the vehicle to Anguiano in Lavina, Montana, which is located in Golden Valley County. “The Supreme Court has held that ‘where the crime charged is a failure to do a legally required act, the place fixed for its performance fixes the situs of the crime.’” United States v. Overaker (9th Cir. 1985), 766 F.2d 1326, 1327 (quoting Johnson v. United States (1956), 351 U.S. 215, 220, 76 S.Ct. 739, 742, 100 L.Ed 1097, 1102). 5 ¶12 There was sufficient evidence in the record when the State rested that a reasonable person, “after viewing the evidence in the light most favorable to the prosecution,” could conclude that Dahlin committed felony theft in Golden Valley County. Cochran, ¶ 28. The District Court did not abuse its discretion in denying Dahlin’s motion for directed verdict. ISSUE 2 ¶13 Whether the District Court erred in ordering restitution for loss of use of the vehicle. ¶14 Dahlin contends that the restitution of $500 in rental fees was in error because there was no evidence to support the award. The State concedes the award for $1,336.12 should be reduced by $500. ¶15 We, therefore, affirm the District Court’s denial of the motion for directed verdict and remand to the District Court to amend the sentencing order and reduce restitution by $500. /S/ W. WILLIAM LEAPHART We concur: /S/ JOHN WARNER /S/ PATRICIA O. COTTER /S/ JIM REGNIER /S/ JIM RICE	January 28, 2004
52d1d7e6-1be7-478b-a4f9-98566b9a9291	Palmer v. Quinn et al.	2013 MT 378N	DA 13-0132	Montana	Montana Supreme Court	DA 13-0132 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 378N M. STACEY PALMER, M. STACEY PALMER TRUST, Plaintiff and Appellant, v. ROBERT QUINN, AMF CONTRACTING, SHAWN JOHNSTON, STEVE JOHNSTON, and GARY PERREN and CITY OF THREE FORKS, MAYOR GENE TOWNSEND, RAY NOBLE and C & H ENGINEERING & SURVEYING, INC. MARK CHANDLER, MATT COTTERMAN AND JOHN DOES 1 THROUGH 20, Defendants and Appellees. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV-09-1211B Honorable Wm. Nels Swandal, Presiding Judge COUNSEL OF RECORD: For Appellant: M. Stacey Palmer, self-represented; San Pedro, California For Appellees: Jason T. Cutts; Attorney at Law; Belgrade, Montana (for Gary Perren) Robert J. Quinn; Attorney at Law; Bozeman, Montana (for AFM Contracting, Shawn Johnston, and Steven Johnston) Alexander L. Roots, J. Robert Planalp; Landoe, Brown, Planalp & Reida, PC; Bozeman, Montana (for City of Three Forks, Mayor Gene Townsend, and Ray Noble) December 31 2013 2 Neil G. Westesen, Brad J. Brown; Crowley Fleck PLLP; Bozeman, Montana (for C&H Engineering & Surveying, Inc., Mark Chandler, and Matt Cotterman) Submitted on Briefs: November 20, 2013 Decided: December 31, 2013 Filed: __________________________________________ Clerk 3 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 This case arises from a project to develop and subdivide a piece of real property owned by M. Stacey Palmer (Palmer) near Three Forks, Montana. Palmer and her business partner, Gary Perren (Perren), hired C&H Engineering & Surveying, Inc. to be the project engineer and AFM Contracting for construction of underground infrastructure work. ¶3 The project failed in June 2001 after Palmer could not obtain sufficient financing. Having completed considerable work, AFM filed a construction lien and a foreclosure action. We upheld the validity of the construction lien in a 2007 appeal. Johnston v. Palmer, 2007 MT 99, 337 Mont. 101, 158 P.3d 998. ¶4 The City of Three Forks owned a parcel in Palmer’s subdivision that had been reserved for future use as a city street (Kentucky Street). Palmer submitted a petition for the City to vacate the parcel, and the City Council voted to approve the petition on June 12, 2001. The city took no further action concerning the Kentucky Street parcel 4 until 2009, when Palmer informed the City that her property was sold at a Sheriff’s sale in December 2008 and requested that the City record the 2001 decision to vacate the Kentucky Street parcel. The City filed a resolution with the Gallatin County Clerk and Recorder’s Office on February 27, 2009, recognizing the approved 2001 petition. ¶5 On December 18, 2009, Palmer filed a complaint in the District Court alleging negligence and contract claims against C&H Engineering and Surveying, Inc., and its owners Mark Chandler and Matt Cotterman (C&H Defendants); the City of Three Forks, Mayor Gene Townsend, and city clerk Ray Noble (Three Forks Defendants); AFM Contracting, its owners Shawn Johnston and Steven Johnston, and their lawyer Robert Quinn (AFM Defendants); and Perren. ¶6 The District Court granted the C&H Defendants’, Three Forks Defendants’, and AFM Defendants’ motions for summary judgment on April 8, 2011, December 19, 2011, and November 21, 2012, respectively. Each was granted for primarily the same reason— expiration of the time allowed by the statutes of limitation for commencement of an action. ¶7 The allegations against Perren proceeded to a bench trial on December 5, 2012. On December 26, 2012, the court issued findings of fact, conclusions of law, and a judgment in favor of Perren. The court dismissed the majority of Palmer’s claims against Perren because they were time-barred under the relevant statutes of limitation. The court determined that the only possible allegation that was not time-barred was the claim for a 5 breach of a written obligation based on a document signed by Perren. The court concluded, however, that the testimony established that the document was intended only to help Palmer secure financing and that, because there was no consideration given in exchange for Perren’s signature on the document, it was not an enforceable contract. ¶8 Palmer appeals the judgments entered by the District Court. We review a district court’s grant of summary judgment de novo, using the same criteria applied by the district court under M. R. Civ. P. 56. Draggin’ Y Cattle Co. v. Addink, 2013 MT 319, ¶ 16, 372 Mont. 334, 312 P.3d 451. Summary judgment is appropriate when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c). We review a district court’s findings of fact to determine if they are clearly erroneous and its conclusions of law to determine whether they are correct. Byrum v. Andren, 2007 MT 107, ¶ 14, 337 Mont. 167, 159 P.3d 1062. ¶9 A statute of limitations begins to run “when the claim or cause of action accrues.” Section 27-2-102(2), MCA. A claim accrues “when all elements of the claim or cause exist or have occurred, the right to maintain an action on the claim or cause is complete, and a court or other agency is authorized to accept jurisdiction of the action.” Section 27-2-102(1)(a), MCA. 6 ¶10 Palmer’s claims against all defendants were based generally upon negligence and breach of contract theories arising out of the failed real estate development project. A negligence action accrues “when the negligent act or omission occurs.” Bekkedahl v. McKittrick, 2002 MT 250, ¶ 20, 312 Mont. 156, 58 P.3d 175 (citing N. Mont. Hosp. v. Knight, 248 Mont. 310, 315, 811 P.2d 1276, 1279 (1991)). Negligence claims are governed by a three-year statute of limitations. Section 27-2-204(1), MCA. A breach of contract action accrues at the time of breach, no matter when a party suffers damages. Textana, Inc. v. Klabzuba Oil & Gas, 2009 MT 401, ¶ 35, 353 Mont. 442, 222 P.3d 580. Breach of contract claims based on a written instrument must be brought within eight years, while claims based upon an oral agreement are limited to five years. Section 27-2- 202, MCA. The applicable limitations period for “an action against a municipality arising from a decision of the municipality relating to a land use, construction, or development project” is six months. Section 27-2-209(5), MCA. ¶11 On appeal, Palmer argues that the ten-year statute of repose, § 27-2-208, MCA, should apply to her claims. Because Palmer raises this argument for the first time on appeal, we decline to address it. Brookins v. Mote, 2012 MT 283, ¶ 24, 367 Mont. 193, 292 P.3d 347. We note, however, that the statute of repose cannot revive a claim that otherwise is barred by the applicable statute of limitations. Section 27-2-208(5), MCA. ¶12 Neither C&H nor AFM performed work for Palmer after September 2001. No negligent act or omission and no breach of any contractual obligation related to the 7 project could have occurred after this time. Because no applicable statute of limitations is longer than eight years, we conclude that the claims in Palmer’s December 2009 complaint against the C&H and AFM Defendants are time-barred. ¶13 The claims against the Three Forks Defendants arose out of the City’s alleged failures to halt the project before 2001 and to properly abandon the Kentucky Street parcel. Palmer maintains that the City did not correctly vacate the parcel until 2009, when it recorded the approved petition. These claims both arise from “decision[s] of the municipality relating to a land use, construction, or development project.” Section 29-2- 209(5), MCA. As such, the claims against the Three Forks Defendants needed to be filed within six months. Even if Palmer had a cognizable claim arising from the City’s February 2009 recording of the petition, her December 2009 filing was more than six months from this date and her claims against the Three Forks Defendants are time-barred. ¶14 Palmer argues that her claims against the AFM, C&H, and Three Forks Defendants did not expire because they arose from “continuing torts.” The “continuing tort” theory applies only in cases where the tortious act can be reasonably abated. Burley v. Burlington N. & Santa Fe Ry. Co., 2012 MT 28, ¶ 89, 364 Mont. 77, 273 P.3d 825. This theory generally applies to cases involving trespass or nuisance, where the tort is a “temporary injury that gives rise to a new cause of action each time that it repeats.” Burley, ¶ 14. As discussed above, Palmer’s claims accrued when the respective parties committed a negligent act or breached an agreement. Palmer does not demonstrate how 8 any act was abatable, and we conclude that the continuing tort theory is inapplicable to this case. Having determined that the relevant limitation periods had passed, we affirm the District Court’s orders granting summary judgment to the AFM, C&H, and Three Forks Defendants. ¶15 The negligence, breach of fiduciary duty, and breach of oral contract claims against Perren also are barred by the applicable statutes of limitation. Palmer failed to present any evidence indicating that Perren was involved with the partnership or project after September 2001. The longest period of limitations available would be five years for the alleged breach of an oral contract claim; thus, Palmer’s 2009 complaint is time-barred. The District Court’s application of the law to these claims against Perren was correct. ¶16 The only claim that the District Court tried on the merits was Perren’s alleged breach of a written agreement. This claim arose from a document entitled “Contract” that was signed by Perren and Palmer. The document referenced a note payable to Palmer in the amount of $100,000 and set forth a payment schedule that included a balloon payment due by September 2004. Perren explained that the document was created only to assist Palmer in obtaining financing through a financial institution. The potential lender denied the financing request on August 3, 2001. Palmer did not produce the underlying note referenced in the document and there is no evidence of it in the record. The District Court found that there was no intent for Perren to pay Palmer $100,000, that 9 no payments had been made or demanded under the purported note, and that the agreement lacked the required contractual element of consideration. ¶17 After listening to the testimony and reviewing the contract, the District Court found that Perren signed the document only in order to help Palmer obtain financing. Following a review of the record, we conclude that Palmer has not shown clear error in the District Court’s findings regarding the parties’ intent. Absent evidence of an exchange of funds or any underlying indebtedness by Perren, the District Court correctly concluded that there was no enforceable contract for lack of consideration. We affirm the District Court’s judgment in favor of Perren. ¶18 As a final issue, the City of Three Forks requests that we order Palmer to pay for the City’s attorney’s fees and costs for defending an appeal “wholly without merit.” The City is the only Defendant to request such relief. We generally do not impose sanctions unless the appeal “is entirely unfounded and intended to cause delay or unless [a party’s] actions otherwise constitute an abuse of the judicial system.” Murphy Homes, Inc. v. Muller, 2007 MT 140, ¶ 90, 337 Mont. 411, 162 P.3d 106. We decline to impose fees and costs in this case. ¶19 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. Application of the applicable statutes of limitation is controlled by settled principles of law, which the trial court correctly applied. The District Court’s findings of fact are 10 supported by substantial evidence, and Palmer has not carried her burden of demonstrating on appeal that its conclusions are incorrect. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JIM RICE	December 31, 2013
27ec044a-0aa7-46f5-8e12-9140d1b8fe00	Sayer v. Boyle Deveny Meyer	2013 MT 322N	DA 13-0234	Montana	Montana Supreme Court	DA 13-0234 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 322N KYEANN SAYER, Plaintiff and Appellant, v. BOYLE, DEVENY & MEYER, P.C., Defendant and Appellee. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV-12-356 Honorable John Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Kyeann Sayer, self-represented; Missoula, Montana For Appellee: Liesel Shoquist, Milodragovich, Dale & Steinbrenner, P.C.; Missoula, Montana Submitted on Briefs: October 9, 2013 Decided: October 29, 2013 Filed: __________________________________________ Clerk October 29 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Appellant Kyeann Sayer (Sayer) appeals the order of the Fourth Judicial District, Missoula County, that determined that Sayer did not qualify as a real party in interest who could recover damages allegedly suffered by Tupi Plain, LLC, and that Liesel Shoquist (Shoquist) served as attorney of record for Appellee Boyle, Deveny & Meyer, P.C., (BDM). We affirm. ¶3 Sayer and her mother, Sharon Boyce (Boyce), filed a claim in Justice Court against BDM in which they alleged that BDM negligently had prepared taxes for Boyce and Tupi Plain, LLC. Boyce and Sayer had been principals in Tupi Plain, LLC. The Justice Court dismissed the claim. Boyce and Sayer appealed the Justice Court’s dismissal to the District Court. ¶4 The District Court granted BDM’s motion for partial summary judgment on the issue of Sayer’s failure to allege any claims on which she could recover damages. The District Court also granted BDM’s motion in limine to exclude any evidence of any damages allegedly suffered by Tupi Plain, LLC. ¶5 Boyce and Sayer then submitted what amounted to a request to have the District Court reconsider its earlier orders. Boyce and Sayer further alleged that Shoquist, counsel for 3 BDM, had not been an attorney of record for BDM. The District Court denied the motion by Boyce and Sayer to reconsider the orders. Boyce then accepted BDM’s offer of judgment and dropped out of the case. ¶6 Sayer, on her own behalf, now appeals the District Court’s order to dismiss her from the lawsuit and the District Court’s findings that Sayer cannot assert claims for Tupi Plain, LLC in her own name. Sayer further challenges the District Court’s denial of her request to reverse its earlier rulings and its conclusion that Shoquist had served as an attorney of record for BDM. Sayer also has requested that sanctions be imposed upon BDM for unnamed improprieties and alleged collusion between the District Court and Shoquist. ¶7 Sayer argues on appeal that Tupi Plain, LLC had been dissolved and that she simply was trying to wrap up some of its unfinished business in her capacity as a former principal. She contends that she may represent herself, as a real party in interest, when the alleged damages flow through Tupi Plain, LLC to her as a principal. She further contends that the District Court improperly accepted pleadings filed by Shoquist on behalf of BDM even though Shoquist never made an appearance as attorney of record, or filed a notice of substitution of counsel. Sayer further requests sanctions against Shoquist and BDM on the basis that Shoquist and the District Court engaged in deceit and colluded against her. ¶8 We review de novo a district court’s decision on summary judgment. Lampi v. Speed, 2011 MT 231, ¶ 10, 362 Mont. 122, 261 P.3d 1000. We review for abuse of discretion a district court’s decision whether to grant a motion in limine related to the exclusion of evidence. Stokes v. Ford Motor Co., 2013 MT 29, ¶ 11, 368 Mont. 365, 300 P.3d 648. We 4 have determined to decide this case pursuant to Section I, Paragraph 3(d), of our 1996 Internal Operating Rules, as amended in 2006, that provides for memorandum opinions. The District Court correctly interpreted § 35-8-909, MCA, as it applies to claims brought on behalf of Tupi Plain, LLC. It is manifest on the face of the briefs and record before us that the District Court correctly decided legal issues and properly exercised its discretion regarding evidentiary issues. ¶9 Affirmed. /S/ BRIAN MORRIS We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE	October 29, 2013
d70cf03e-8d8b-446f-8b5c-c8a0de033e12	State v. Dawn M. Jensen	2013 MT 353N	DA 12-0409	Montana	Montana Supreme Court	DA 12-0409 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 353N STATE OF MONTANA, Plaintiff and Appellee, v. DAWN MARIE JENSEN, Defendant and Appellant. APPEAL FROM: District Court of the Seventeenth Judicial District, In and For the County of Valley, Cause No. DC 2011-26 Honorable John C. McKeon, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender, Nicholas Domitrovich, Assistant Appellant Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General; Helena, Montana Nicholas Murnion, Valley County Attorney; Glasgow, Montana Submitted on Briefs: October 30, 2013 Decided: November 19, 2013 Filed: __________________________________________ Clerk November 19 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Dawn Marie Jensen (Jensen) appeals from her conviction at trial on one count of criminal distribution of dangerous drugs. We affirm. ¶3 The central issue on appeal is whether the prosecutor’s remarks during closing deprived Jensen of a fair trial by invading the province of the jury. During closing, the State argued that its burden of proof was “not an unreasonable burden. Every defendant that’s been convicted in the last 200 years has been convicted by proof beyond a reasonable doubt. It’s only necessary to prove the elements of the crime beyond a reasonable doubt, not every little point that comes up.” Later in the closing argument, the State also characterized the burden of proof as “using your common sense.” The prosecutor also argued that its informant, Carrie Gartner, had no incentive to lie on the stand because she faced criminal prosecution for doing so. Jensen did not object to any of these statements. Finally, the State said that Jensen “refused to accept her consequences today.” Jensen objected to that statement as an improper argument, and the District Court sustained that objection, admonishing the prosecution that the argument was not proper. ¶4 A district court’s decision to grant a new trial in the interests of justice is reviewed for abuse of discretion. Cooper v. Hanson, 2010 MT 113, ¶ 28, 356 Mont. 309, 234 P.3d 59; 3 State v. Goodwin, 249 Mont. 1, 17, 813 P.2d 953, 963 (1991). In examining whether a district court abused its discretion in refusing a new trial, we consider (1) the strength of the evidence against the defendant; (2) the prejudicial effect of the alleged improper comments by the prosecutor; and (3) to what extent the district court’s response cured any prejudice. State v. Ahto, 1998 MT 200, ¶ 32, 290 Mont. 338, 965 P.2d 240; State v. Arigwe, 2007 MT 204, ¶ 164, 338 Mont. 442, 167 P.3d 815. ¶5 The prosecutor’s comments that Jensen did not “accept her consequences” were improper. Except for in capital cases, the jury should not be influenced in any way by sentencing factors, such as the acceptance of guilt. State v. Stewart, 2000 MT 379, ¶ 42, 303 Mont. 507, 16 P.3d 391. Jensen’s acceptance of responsibility for the crime was irrelevant to the issues at trial and unsupported by any evidence or argument at trial. The District Court properly sustained Jensen’s objection and admonished the prosecution for making the improper argument. ¶6 Even when comments are improper, however, a defendant must demonstrate that the prosecutor’s comments prejudice his or her right to a fair and impartial trial. State v. Gladue, 1999 MT 1, ¶ 27, 293 Mont. 1, 972 P.2d 827; State v. Stuit, 268 Mont. 176, 185, 885 P.2d 1290, 1296 (1994). In Criswell, we found no prejudice resulting from a prosecutor’s improper comments because jurors likely “saw those remarks for what they were: unprofessional and unnecessary disparagements of the defendants having no bearing on the question of guilt.” State v. Criswell, 2013 MT 177, ¶ 50, 370 Mont. 511, 305 P.3d 760. 4 Finally, admonishment by the court may have a curative effect on any prejudice resulting from an improper comment. Gladue, ¶ 31; Criswell, ¶ 50. ¶7 The comment that Jensen “refused to accept her consequences,” was largely irrelevant under the circumstances and any resulting prejudice was insubstantial. Jensen argues that the prosecutor’s comment caused the jury to punish Jensen for exercising her right to trial. But the entire focus of the trial was whether Jensen had actually committed the crime, and Jensen unequivocally denied committing the offense. The State did not argue or present evidence concerning Jensen’s accountability for the crime, and the District Court properly instructed the jury to decide Jensen’s guilt based only on the evidence presented at trial. The District Court sustained Jensen’s objection and admonished the prosecution that the argument was improper. The curative effect of that admonishment and the jury instructions diminishes Jensen’s claims of prejudice. ¶8 Jensen’s remaining claims were not asserted at trial and are subject to plain error review. State v. Finley, 276 Mont. 126, 137, 915 P.2d 208, 215 (1996); State v. West, 2008 MT 338, ¶ 20, 346 Mont. 244, 194 P.3d 683. We employ plain error review sparingly on a case-by-case basis, and only when the claimed errors implicate a defendant’s fundamental constitutional rights and result in a manifest miscarriage of justice. State v. Parks, 2013 MT 280, ¶ 34, 372 Mont. 88, 310 P.3d 1088; State v. Daniels, 2003 MT 247, ¶ 20, 317 Mont. 331, 77 P.3d 224; West, ¶ 23. ¶9 In Lindberg, a prosecutor questioned the defendant’s credibility on the grounds that he failed to call any witnesses, and characterized one witness as a “liar.” State v. Lindberg, 5 2008 MT 389, ¶ 33, 347 Mont. 76, 196 P.3d 1252. Although these statements were improper, we found under the totality of the circumstances that the statements did not shift the burden of proof to the defendant and did not cause prejudice. Lindberg, ¶¶ 30-34. In Raugust, we found that the comments “[r]easonable doubt has been used in every criminal case in this country” and “prisons are full of people who have been convicted beyond a reasonable doubt” were not improper because they merely demonstrated that reasonable doubt was not an impossible standard. State v. Raugust, 2000 MT 146, ¶¶ 42-43, 300 Mont. 54, 3 P.3d 115. Finally, while the State is prohibited from offering its personal view regarding the credibility of a witness, it is not prohibited from commenting on witness credibility based on inferences drawn from the evidence. Daniels, ¶ 26; State v. MacDonald, 2013 MT 97, ¶ 14, 369 Mont. 483, 299 P.3d 799. ¶10 We decline to employ plain error review of Jensen’s remaining claims because none of the prosecutor’s comments implicated the defendant’s fundamental rights or cast unfairness into the trial. The prosecutor’s comment that “[e]very defendant” in the last 200 years had been convicted beyond a reasonable doubt was meant to demonstrate that minor doubts and uncertainties did not warrant acquittal, just as in Raugust. Nor did the prosecution’s comments improperly shift the burden of proof to Jensen. The prosecution told the jury that they should convict if they found that Jensen had committed the crime “based upon something you hear in this courtroom and using your common sense . . . .” This comment merely asked the jurors to evaluate the testimony and evidence based on common sense. The District Court properly instructed the jury regarding the actual definition of 6 reasonable doubt, dispelling any confusion created by the prosecution’s “common sense” comment. Finally, the State did not make an improper comment by stating that its informant, Carrie Gartner, was disincentivized from lying by the threat of criminal prosecution. That argument is not the prosecutor’s personal opinion on Gartner’s credibility, but a logical inference that Gartner has a reason to be trusted on the stand. As such, it is not an improper comment and causes no prejudice to Jensen’s trial. Since none of these statements jeopardized Jensen’s fundamental rights or cast unfairness into the trial, we decline to exercise plain error review of these issues. ¶11 For the foregoing reasons, Jensen’s conviction is affirmed. ¶12 We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our Internal Operating Rules, which provides for noncitable memorandum opinions. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ JIM RICE /S/ BETH BAKER /S/ LAURIE McKINNON	November 19, 2013
707904be-f6fb-40b8-bc75-ba72964aa42b	McVey v. USAA Cas. Ins. Co.	2013 MT 346	DA 13-0235	Montana	Montana Supreme Court	DA 13-0235 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 346 LINDA McVEY a/k/a LINDA PIERCE, Petitioner and Appellant, v. USAA CASUALTY INSURANCE COMPANY, Respondent and Appellee. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DV 10-164 Honorable Brenda Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellant: Walter “Lefty” Madden, Attorney at Law; Livingston, Montana Mark J. Hartwig, Attorney at Law; Livingston, Montana For Appellee: David McLean, Christy S. McCann, Browning, Kaleczyc, Berry & Hoven, P.C.; Missoula, Montana Submitted on Briefs: October 2, 2013 Decided: November 14, 2013 Filed: __________________________________________ Clerk November 13 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Appellant Linda McVey, a/k/a Linda Pierce (McVey), appeals the decision of the Sixth Judicial District Court, Park County, that entered summary judgment in favor of Appellee USAA Casualty Insurance Company (USAA). We reverse and remand. ¶2 We address the following issues on appeal: ¶3 Whether McVey was qualified to bring a claim pursuant to §§ 33-18-201(4) and-242, MCA. ¶4 Whether the District Court properly granted summary judgment in favor of USAA regarding McVey’s claim for damages arising from emotional distress. PROCEDURAL AND FACTUAL BACKGROUND ¶5 McVey was involved in a car accident with Kent Blough (Blough) on July 26, 2007. She was crossing a two-lane bridge over the Yellowstone River south of Livingston, Montana. Blough approached in the opposite direction while pulling a swather behind his pickup. The swather was wider than the lane of travel. McVey collided with the swather’s left side in her lane of travel. ¶6 Montana Highway Patrol Trooper Jason Hoppert (Hoppert)filed a crash investigator’s report. Hoppert determined that the vehicles had collided in McVey’s lane of travel. McVey suffered severe injuries as a result of the accident, including seven broken ribs, a fractured right wrist, and a fractured left heel. McVey endured surgeries to repair her wrist and heel and underwent extensive post-surgical rehabilitation. Blough reported the accident to McVey’s insurer, USAA, the day after the accident. 3 ¶7 USAA assigned claims adjuster Danny Theda (Theda) to handle the claim. Theda took a statement from Blough. Blough claimed that he had stopped before crossing the bridge due to his concerns regarding the width of the swather. Theda spoke with McVey on August 1, 2007, but she could not remember the details of the accident. Theda never interviewed Hoppert about his crash investigation. Theda interviewed no firefighters and ambulance service personnel who responded to the scene of the accident. ¶8 USAA received Hoppert’s crash investigation report on September 5, 2007. Despite this information, Theda still concluded that McVey was the majority at fault for the accident. USAA paid Blough’s property damages. At the time, McVey’s USAA policy had coverage that included: property damage, medical payments, and UM/UIM coverage. USAA made auto collision and medical payments to McVey under the policy. USAA refused to honor McVey’s $300,000 UM/UIM coverage once Theda determined that McVey was the majority at fault. ¶9 McVey filed suit against Blough in 2009. USAA unsuccessfully tried to intervene in the lawsuit, apparently to prevent McVey from prevailing. Blough’s insurer paid McVey the limit of Blough’s insurance policy. Despite repeated requests, USAA refused to pay McVey any sums available under her UM/UIM coverage of $300,000. ¶10 USAA’s own expert eventually reviewed accident reconstruction reports prepared by an expert for McVey and an expert for Blough. USAA’s expert determined that Blough, whom USAA had already paid under McVey’s policy, had been the majorityat fault. USAA immediately tendered to McVey its $300,000 UM/UIM policy limit. 4 ¶11 McVey filed a complaint against USAA stating six claims. She asserted that USAA had breached the insurance contract and had violated sections of the Montana Unfair Trade Practices Act (UTPA), specifically §§ 33-18-201 and -242, MCA. McVey also asserted fraud and common law bad faith claims and sought punitive damages. The District Court dismissed McVey’s breach of contract claim on McVey’s request. The District Court later dismissed McVey’s claims for fraud and common law bad faith. ¶12 McVey retained claims for violation of the UTPA and for punitive damages. McVey filed a motion for summary judgment on the basis that USAA’s investigation had not been reasonable as a matter of law, pursuant to § 33-18-201(4), MCA. The District Court denied McVey’s motion. ¶13 USAA filed two separate motions for partial summary judgment. The first motion contended that McVey had not been a “claimant” as required by the UTPA. The second motion sought dismissal of McVey’s claims for damages arising from her alleged emotional distress and increased insurance premiums. The District Court granted both motions filed by USAA. ¶14 The District Court’s grant of USAA’s motions for partial summary judgment resolved all remaining claims. The District Court entered judgment. McVey appeals. STANDARD OF REVIEW ¶15 We review de novo a district court’s ruling on a motion for summary judgment. Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. 5 DISCUSSION ¶16 Whether McVey was qualified to bring a claim pursuant to §§ 33-18-201(4) and -242, MCA. ¶17 Section 33-18-201(4), MCA, prohibits an insurer from “refus[ing] to pay claims without conducting a reasonable investigation based upon all available information.” Section 33-18-242, MCA, provides that “[a]n insured or a third-party claimant has an independent cause of action against an insurer for actual damages” that arise from an insurer’s violation of § 33-18-201(4), MCA. ¶18 McVey claims that USAA’s failure to investigate reasonably her UM/UIM claim violated § 33-18-201(4), MCA. USAA responds, and the District Court agreed, that § 33-18- 201(4), MCA, does not apply in this situation because McVey did not qualify as a “claimant” at the time that Blough had filed the claim in question. USAA argues in the alternative that even if McVey had been a “claimant,” USAA never refused to pay McVey’s claim as it eventually paid $300,000 for her UM/UIM coverage. ¶19 Both parties focus heavily on whether McVey had been a “claimant” for purposes of § 33-18-201(4). MCA. The District Court determined that only a “claimant” could invoke § 33-18-201(4), MCA, based on our decision in Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 86, 345 Mont. 12, 192 P.3d 186. We stated in Lorang that “the UTPA is designed to protect claimants against insurers who would deny a claim without first conducting a reasonable investigation.” Lorang, ¶ 86 (emphasis added). 6 ¶20 Nowhere in §§ 33-18-201(4) or -242, MCA, however, does the language limit to “claimants” those persons protected under the statutes. Section 33-18-201(4), MCA, addresses when an insurer refuses to pay a claim. Nothing in § 33-18-201(4), MCA, indicates who has to file the claim for the statute to apply. Section 33-18-242, MCA, refers to the “insured” or a “third-party claimant” as possessing an independent cause of action for an insurer’s violation of the UTPA. In fact, the “claimant” to whom the Court referred in Lorang, ¶ 86, was an “insured” who filed a claim against her health insurance provider. Lorang, ¶ 1. The reference in Lorang to a “claimant” did not intend to control the scope of the protections provided by §§ 33-18-201(4) and -242, MCA, or otherwise bar an “insured,” such as McVey, from pursuing a claim pursuant to §§ 33-18-201(4) or -242, MCA. ¶21 Blough filed a claim with USAA on July 27, 2007, the day after the accident. Aclaim for purposes of § 33-18-201(4), MCA, had been filed as of July 27, 2007. The provisions of § 33-18-201(4), MCA, applied to USAA’s actions in adjusting the claim from that day forward. The fact that Blough, rather than McVey, had filed the claim on July 27, 2007, does not preclude McVey, the insured, from invoking the protections of §§ 33-18-201(4) and -242, MCA. ¶22 USAA separately maintains that it did not refuse to pay, or unreasonably delay in paying, McVey’s UIM claim. USAA points to the fact that it eventually paid $300,000 to McVey under her policy’s UM/UIM coverage. McVey argues that USAA’s determination on September 12, 2007, that McVey had been the majority at fault for the accident 7 constituted a de facto denial of McVey’s UM/UIM coverage. McVey directs us to a report by David E. Bauer (Bauer), an expert witness for USAA. ¶23 Bauer noted that McVey “was not eligible to recover under the UIM coverage of her auto policy” due to USAA’s liability evaluation on September 12, 2007, “that Linda McVey was more than 50% at fault for the accident.” Bauer reiterated that McVey “was not ‘legally entitled to recover’” due to the terms of her policy. We agree with McVey that USAA’s determination that McVey had been the majority at fault excluded her from eligibility to recover under the UIM coverage portion of her policy. USAA’s determination on September 12, 2007, that she had been the majority at fault rose to the level of a denial of her UM/UIM coverage under the policy. ¶24 USAA eventually paid McVey the sums available under her UM/UIM coverage, but it waited more than three years after the accident—until September 2010—to pay its policy limits. A later payment fails to cure an insurer’s prior failure to conduct a reasonable investigation, as required by § 33-18-201(4), MCA. See Lorang, ¶ 149. The Court discussed in Lorang the unintended consequences that would flow from a decision to allow insurers to “cure” an unreasonable investigation by subsequently paying the claim after having denied it. Lorang, ¶ 149. The Court recognized that insurers simply could “ignore the UTPA and forego reasonable investigation, or any investigation, until the claimant [took] steps to enforce his or her contractual rights.” Lorang, ¶ 149. If the law allowed this “cure,” insurers would “remain immune from liability under § 33-18-201 (4), MCA.” Lorang, ¶ 149. To 8 allow insurers to “cure” effectively would render this section of the code meaningless. Lorang, ¶ 149. ¶25 USAA’s eventual payment to McVey of the policy limit under her UM/UIM coverage does not shield USAA from potential liability under § 33-18-201(4), MCA. USAA effectively denied McVey’s UM/UIM claim on September 12, 2007, when it determined McVey to be the majority at fault. USAA’s eventual payment of the claim proves insufficient to preclude application of § 33-18-201(4), MCA. Lorang, ¶ 149. ¶26 Whether USAA actually conducted a reasonable investigation as required by § 33-18- 201(4), MCA, remains an issue for the trier of fact. We reverse the District Court’s determination that McVey may not pursue a claim based upon USAA’s alleged failure to investigate reasonably her claim as required under § 33-18-201(4), MCA. ¶27 Whether the District Court properly granted summary judgment in favor of USAA regarding McVey’s claim for damages arising from emotional distress. ¶28 The District Court determined that McVey had failed to present any evidence that she suffers from emotional distress as a result of USAA’s alleged mishandling of her claim. A court may grant summary judgment if “discovery and disclosure materials on file” indicate that no genuine issue of material fact exists, and that the party moving for summary judgment is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3). McVey claims emotional distress as an element of damages that resulted from USAA’s alleged violation of the UTPA. A party who raises a parasitic emotional distress claim does not have to demonstrate the heightened standard of proof required for an independent, stand-alone claim 9 of negligent or intentional infliction of emotional distress. Lorang, ¶ 190; Jacobsen v. Allstate Ins. Co., 2009 MT 248, ¶ 66, 351 Mont. 464, 215 P.3d 649. ¶29 We clarified in Jacobsen that no heightened standard exists for parasitic emotional distress claims, “and that the severity of the distress affects the amount of damagesrecovered but not the underlying entitlement to recover.” White v. Longley, 2010 MT 254, ¶ 48, 358 Mont. 268, 244 P.3d 753 (citing Jacobsen, ¶ 66). Jacobsen also cited the damage instructions in the Montana Pattern Jury Instructions 2d 25.02, 15.01-03, for guidance in evaluating a parasitic claim for emotional distress damage. Jacobsen, ¶ 66. The instructions provide that there exists no “definite standard by which to calculate compensation for mental and emotional suffering and distress.” Mont. Pattern Jury Instr. Civ. 25.02 (2d ed. 2003); Jacobsen, ¶ 65. Therefore, a party who pursues a parasitic claim for emotional distress avoids the heightened evidentiary showing of a stand-alone emotional distress claim. Jacobsen, ¶ 66; Lorang, ¶ 190. ¶30 McVey’s parasitic emotional distress claim arises from her UTPA claims. McVey’s deposition testimony provides sufficient evidence of emotional distress to establish that genuine issues of material fact exist. McVey described USAA as a “bunch of crooks” who caused her to have suffered emotional distress damages as a result of how USAA treated her. McVey further testified that “I am suffering mental distress,” but declined to describe it. She only said that she “[did not] need counseling for something that [she] know[s] is not [her] fault.” 10 ¶31 We allowed a claim of emotional distress by the insureds in Lorang to proceed to trial premised on the fact that they were “shocked and sickened at the prospect of having to battle with [their insurer] again to recover replacement socket benefits.” Lorang, ¶ 193. We subsequently determined in White that the plaintiffs had presented sufficient evidence to support an award of emotional distress damages on their claims of negligence and constructive fraud when they testified to the “stress, anxiety and depression” that they had suffered from dealing with a “house-building fiasco.” White, ¶ 49. We noted that the plaintiffs had to live apart when the husband “had to abandon retirement and return to California to work again.” White, ¶ 49. This evidence substantiated the District Court’s determination that “the Whites suffered greatly as they watched their dream turn into a nightmare.” White, ¶ 49. McVey can pursue her emotional distress claim if she can present evidence at trial of a similar nature. ¶32 A jury ultimately decides facts in a case and the inferences to be drawn from such facts. Sections 26-1-501, -502, MCA. A court should not rely upon an inference for summary judgment purposes if it “requires a speculative leap[.]” Knucklehead Land Co. v. Accutitle, Inc., 2007 MT 301, ¶ 25, 340 Mont. 62, 172 P.3d 116. Additionally, unsupported allegations generally prove insufficient for a plaintiff to withstand summary judgment. Glacier Tennis Club at the Summit, LLC v. Treweek Constr. Co., 2004 MT 70, ¶ 37, 320 Mont. 351, 87 P.3d 431, overruled in part on other grounds, Johnson v. Costco Wholesale, 2007 MT 43, ¶ 21, 336 Mont. 105, 152 P.3d 727. 11 ¶33 McVey admittedly failed to support her statement in her deposition that she suffered mental distress by any additional explanation. We need not make a “speculative leap,” however, if we infer from all of the evidence in the summary judgment record that McVey would experience stress and anxiety during the three-year interval between the accident and USAA’s decision finally to pay her the benefits of her UM/UIM coverage. McVey suffered substantial physical injuries that required multiple surgeries. She nevertheless persisted in her efforts to secure coverage under her UM/UIM policy. Among other matters, she retained an accident reconstruction expert to overcome USAA’s attempt to intervene against her in her suit against Blough. A jury should be allowed to hear McVey’s emotional distress claim and observe her demeanor on the stand. A jury can decide if McVey suffered from emotional distress as a result of her treatment by USAA when it allegedly violated the UTPA. McVey has met the evidentiary standard required in Jacobsen to defeat USAA’s motion for summary judgment. See Jacobsen, ¶ 66. ¶34 Reversed and remanded for further proceedings in accordance with this opinion. /S/ BRIAN MORRIS We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER Justice Laurie McKinnon, dissenting. 12 ¶35 I respectfully dissent from the Court’s holding that an insured has standing to enforce the UTPA based solely on the filing of a claim by a third-party claimant. This holding is contrary to basic principles of standing and justiciability. I further dissent from the Court’s holding that USAA is not entitled to summary judgment on McVey’s UTPA cause of action. This holding is based on a mistaken understanding of the timing of McVey’s UIM claim. ¶36 Following is a timeline of the pertinent events in this case: July 26, 2007McVey and Blough are involved in an automobile accident. July 27, 2007Blough files a property claim with USAA. July to Sept. 2007 USAA claims adjuster Theda conducts an investigation, including an interview with Blough on August 1, two interviews with McVey on separate days in August, a review of the police report, and an inspection by an independent adjuster. Sept. 12, 2007 Theda concludes that McVey is “majority at fault.” USAA pays Blough’s property claim. Sept. 14, 2007 McVey’s attorney notifies USAA that she will sue Blough for damages. Feb. 18, 2008USAA receives the report of Blough’s reconstruction expert, which indicates that McVey was at fault. Jan. 20, 2009 McVey files suit against Blough. Feb. 10, 2009McVey’s attorney advises USAA that she will be submitting a UIM claim with USAA. May 26, 2010 McVey provides USAA with a second reconstruction expert’s report, which states that Blough was at fault. McVey informs USAA that she settled the litigation with Blough for the policy limits, and she demands payment of her UIM claim. USAA thereafter hires a third expert to evaluate the accident reports. 13 Sept. 23, 2010 USAA pays McVey the UIM policy limits. ¶37 The Court holds that Blough’s act of filing a third-party claim with USAA gave McVey (the insured) standing to enforce the UTPA. Opinion, ¶¶ 20-21. But at that time, McVey did not have a pending claim with USAA that required a liability determination or investigation. The only pending claim that triggered USAA’s investigation of the accident was Blough’s claim for property damage, and Blough thus was the only party who could claim any sort of injury if USAA conducted an inadequate investigation. The Court’s conclusion that McVey could file an action under the UTPA premised on USAA’s handling of Blough’s claim lacks any basis in law. To maintain an action, McVey must demonstrate her own injury under the UTPA. ¶38 Under §§ 33-18-201(4) and -242(1), MCA, an insured or a third-party claimant has an independent cause of action against an insurer for actual damages caused by the insurer’s refusal to pay claims without conducting a reasonable investigation. However, it is an elemental principle of justiciability that a plaintiff cannot maintain an action unless she clearly alleges a past, present, or threatened injury to a property or civil right which would be alleviated by successfully maintaining the action. Heffernan v. Missoula City Council, 2011 MT 91, ¶ 33, 360 Mont. 207, 255 P.3d 80. Furthermore, “as a prudential matter,” a plaintiff is generally restricted to asserting her own rights and not those of third parties. Williamson v. Mont. Pub. Serv. Commn., 2012 MT 32, ¶¶ 28, 42, 364 Mont. 128, 272 P.3d 71. ¶39 McVey’s UIM claim was premised on the assertion that Blough’s motor vehicle had been underinsured. She presented this claim to USAA, at the earliest, in February 2009. At 14 that time, her lawsuit against Blough was in its infancy. McVey did not demand payment from USAA under her UIM coverage until May 2010, after settlement of her lawsuit against Blough. I agree with the Court that if USAA had then denied coverage to McVey based solely on its initial, allegedly inadequate investigation of Blough’s claim three years earlier (in the summer of 2007), then McVey would have suffered the requisite “injury” to establish standing for a lawsuit under the UTPA. See Opinion, ¶¶ 22-23. But that would only be because McVey had, by that point, filed her own claim necessitating an investigation of the accident. The filing of a “claim” is a prerequisite to the pursuit of a UTPA action by that claimant premised on a violation of § 33-18-201(4), MCA. An insured cannot claim injury based solely on how the insurer investigates a claim made by a third party. I accordingly disagree with the Court’s conclusion at ¶ 21 that Blough’s filing of a property claim, by itself, gave McVey grounds to invoke the protections of §§ 33-18-201(4) and -242, MCA. ¶40 Turning now to the specifics of McVey’s UTPA action, the facts do not support the Court’s assertion that USAA denied McVey’s UIM claim based on Theda’s earlier determination in September 2007 that McVey had been majority at fault. Opinion, ¶ 23. McVey’s UIM coverage provided for the payment of damages that she was legally entitled to recover from the owner or operator of an underinsured motor vehicle. The purpose of UIM coverage “is to provide a source of indemnification when the tortfeasor does not provide adequate indemnification.” Hardy v. Progressive Specialty Ins. Co., 2003 MT 85, ¶ 21, 315 Mont. 107, 67 P.3d 892. Although McVey filed her UIM claim with USAA in February 2009, she was not eligible for such coverage until it was determined that Blough was at fault 15 and that his insurance coverage was insufficient to compensate McVey for her damages. That was the purpose of McVey’s lawsuit against Blough. From January 2009 to May 2010, she was involved in litigation against Blough to establish which party was at fault. In May 2010, McVey settled her case against Blough for his policy limits and notified USAA of the settlement. At that time, McVey provided USAA with the report of her accident reconstruction expert and asserted her eligibility for UIM coverage. Once USAA received the report of McVey’s expert, USAA investigated and concluded that Blough was at fault. USAA then paid the policy limits of McVey’s UIM coverage in September 2010. ¶41 McVey has not asserted that USAA neglected to effectuate a prompt, fair, and equitable settlement of her UIM claim. See § 33-18-201(6), MCA. Rather, she has asserted specifically that USAA refused to pay her claim without conducting a reasonable investigation based on all available information. See § 33-18-201(4), MCA. Yet, USAA never refused to pay her claim. Quite the contrary, once McVey settled her lawsuit against Blough and demanded payment under her UIM coverage, USAA conducted an investigation in light of the expert report that McVey had only recently provided, and USAA then paid McVey’s UIM claim. The Court’s suggestion that USAA “waited more than three years” to pay McVey’s claim, Opinion, ¶ 24, is simply an incorrect recitation of the facts. (Not only that, it is irrelevant given that McVey has not asserted a claim under § 33-18-201(6), MCA.) McVey did not even present her UIM claim until February 2009, and her eligibility for UIM coverage did not arise until she settled the Blough lawsuit in May 2010. 16 ¶42 Based on the undisputed facts, USAA is entitled to summary judgment on McVey’s UTPA claim. I would affirm the District Court. I dissent from this Court’s contrary decision. /S/ LAURIE McKINNON	November 13, 2013
c9bd96f8-27a0-4898-8a5f-52f7edce1ce0	Horace Mann Ins. Co. v. Hanke	2013 MT 320	DA 12-0246	Montana	Montana Supreme Court	DA 12-0246 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 320 HORACE MANN INSURANCE COMPANY, Plaintiff and Appellee, v. ROBERT HANKE AND REBECCA HANKE, Defendants and Appellants. APPEAL FROM: District Court of the First Judicial District, In and For the County of Broadwater, Cause No. DV-2009-50 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellant: Geoffrey C. Angel, Angel Law Firm; Bozeman, Montana For Appellee: G. Trenton Hooper, Eric N. Peterson, Crowley Fleck PLLP; Billings, Montana Submitted on Briefs: September 11, 2013 Decided: October 29, 2013 Filed: __________________________________________ Clerk October 29 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Robert Hanke (Robert) and Rebecca Hanke (collectively the Hankes) appeal the order of the First Judicial District, Broadwater County, that granted summary judgment to Horace Mann Insurance Company (Horace Mann) on the insurance coverage issue, and the separate order that reimbursed Horace Mann and awarded attorney’s fees to Horace Mann under the Uniform Declaratory Judgment Act. We affirm in part, reverse in part, and remand. ¶2 We address the following issues on appeal: 1. Whether the District Court properly granted summary judgment in favor of Horace Mann when it determined that the Hankes’ insurance policy failed to cover the Warner dispute? 2. Whether the District Court properly determined that Horace Mann’s decisions to provide a defense and to pay the settlement of Warner’s claims nevertheless allowed Horace Mann to pursue reimbursement for the Hankes’ share of the settlement? 3. Whether the District Court properly awarded attorney’s fees to Horace Mann under the Uniform Declaratory Judgment Act’s supplemental relief provision? PROCEDURAL AND FACTUAL BACKGROUND ¶3 The dispute leading to the immediate appeal began when the Hankes offered space to Thomas Warner (Warner) to store personal belongings following Warner’s eviction from his residence in Bozeman in 2004. Warner accepted the Hankes’ offer. Warner stored his property in a small shed on the Hankes’ property, near Three Forks in Gallatin County. Robert and Warner apparently made an oral agreement. Robert and Warner did not commit this agreement to writing. The Hankes maintained home insurance coverage from Teachers Insurance, a subsidiary of Horace Mann during this time. 3 ¶4 A fire completely destroyed the Hankes’ home on April 20, 2005. As a result, Robert moved into a separate, larger shed on the property with his two sons. Rebecca Hanke and her daughter moved to a house in Belgrade. Robert and his sons began using Warner’s personal property shortly thereafter. Robert sent Warner a letter in August 2005 in which he claimed that Warner had breached the agreement that the two previously had reached. Robert asserted ownership over Warner’s property as a result of Warner’s alleged breach. ¶5 Warner filed an action against the Hankes for theft, conversion, and negligence in withholding Warner’s property on April 9, 2007. Warner also sought punitive damages. The Hankes retained private counsel and responded to Warner’s allegations. The Hankes failed to file a claim with Horace Mann to request a defense at that time. ¶6 The Hankes finally filed a claim with Horace Mann to request a defense against Warner’s suit on December 1, 2008. Horace Mann investigated a defense for the Hankes, with a full reservation of Horace Mann’s rights. Horace Mann agreed to assume the defense after investigation, with a full reservation of rights. Horace Mann retained new counsel to defend the Hankes. ¶7 The new counsel that Horace Mann provided for the Hankes arranged for a settlement conference to attempt to resolve Warner’s claims. Warner agreed to settle his claims for $54,000.00 at the conference. The Hankes agreed to pay $34,000.00 and Horace Mann agreed to contribute $20,000.00. The Hankes failed to obtain a loan to cover their $34,000.00 share. Horace Mann and the Hankes later reached an agreement whereby Horace Mann would advance the Hankes’ $34,000.00 share. Horace Mann advanced the Hankes’ 4 contribution to the settlement subject to a full reservation of rights. The payment settled Warner’s dispute with the Hankes. ¶8 Horace Mann filed a declaratory judgment action against the Hankes before the settlement conference. Horace Mann requested that the District Court determine whether the Hankes’ insurance policy required Horace Mann to defend the Hankes. Horace Mann and the Hankes filed cross-motions for summary judgment in the declaratory judgment action. ¶9 The District Court determined that the Hankes’ insurance policy excluded coverage for damage to Warner’s personal property that had resulted from intentional acts. The District Court found that the Hankes intentionally had taken possession and intentionally had claimed ownership of Warner’s property. The District Court also determined that “[t]he incidental liability coverage contains a similar exclusion.” The District Court further determined that the “Hankes’ taking possession and claiming ownership of Warner’s property was just such an intentional act.” The District Court concluded, therefore, that Horace Mann did not owe coverage to the Hankes for the Warner dispute. ¶10 Horace Mann requested that the District Court grant the costs of the defense that it had provided to the Hankes in the Warner dispute. Horace Mann further requested reimbursement for the $34,000.00 that Horace Mann had paid on behalf of the Hankes to settle the Warner dispute. Horace Mann lastly sought its attorney’s fees and costs resulting from the declaratory judgment action. ¶11 The District Court denied Horace Mann any reimbursement of attorney fees and costs in the Warner dispute. The District Court awarded $34,000.00 to Horace Mann, however, to 5 reimburse Horace Mann for its contribution to the settlement in the Warner dispute. The District Court further awarded $48,131.50 in attorney’s fees to Horace Mann for the declaratory judgment action. The Hankes appeal. STANDARD OF REVIEW ¶12 We review de novo a district court’s ruling on a motion for summary judgment. Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. This Court reviews for correctness a district court’s decision as to whether legal authority exists to award attorney fees. Hughes v. Ahlgren, 2011 MT 189, ¶ 10, 361 Mont. 319, 258 P.3d 439. We review for an abuse of discretion a district court’s order to grant or deny attorney fees if legal authority exists for the fees. Hughes, ¶ 10. DISCUSSION ¶13 Whether the District Court properly granted summary judgment in favor of Horace Mann when it determined that the Hankes’ insurance policy failed to cover the Warner dispute? ¶14 The District Court analyzed both the property coverage and liability coverage provisions of the Hankes’ insurance policy to determine whether the Hankes’ insurance policy covered their claim. The District Court also examined the policy exclusions under each source of coverage. The District Court concluded that Robert’s intentional acts excluded the Hankes’ claim under either provision. The Hankes assert that the District Court should have relied exclusively upon the incidental liability language that includes coverage for damage to other’s property. We examine separately each potential source of coverage and the accompanying exclusions. 6 ¶15 The personal property provision of the Hankes’ insurance policy provides that “[Horace Mann] cover[s] personal property . . . in the care of an insured.” The damaged property at issue undisputedly remained in the care of the Hankes. The relevant exception to the personal property provision excludes, however, “loss which results from an act committed by . . . an insured. This includes any loss which is expected or intended by an insured.” The District Court determined that the Hankes intentionally appropriated and took control of Warner’s personal property. These intentional acts, according to the District Court, led directly to the damage at issue. ¶16 The Hankes argue that the District Court should have examined another coverage relevant to their claim: “[r]egardless of an insured’s legal liability, [Horace Mann] pay[s] for property of others damaged by an insured.” The Hankes argue that this provision applies “regardless of the Hankes’ legal liability.” This claim requires us to examine the exclusion relevant to liability coverage in the Hankes’ policy. The exclusion provides that “[Horace Mann] do[es] not pay for damage to property . . . caused intentionally by an insured who has attained the age of 13.” ¶17 The Hankes contend that Horace Mann should have covered any damage to Warner’s property under this standard. The Hankes suggest that the “underlying conduct” that caused the damage to Warner’s personal property had not been intentional, but instead had resulted from negligent acts. The Hankes claim that much of the underlying conduct that caused damage to Warner’s personal property had been the fault of the Hankes’ young children. 7 The exception for intentional acts applies only to “an insured who has attained the age of 13.” None of the Hankes’ children “ha[d] attained the age of 13.” ¶18 Similar to the District Court, we need not determine whether the Hankes’ young children acted negligently. Robert performed an intervening intentional act before his children allegedly damaged any of Warner’s personal property. Robert claimed ownership of Warner’s personal property in a letter to Warner on August 26, 2005, and further declared that the Hankes would use that property. The Hankes’ children had access to Warner’s personal property only due to the fact that Robert intentionally had claimed ownership and intentionally had used Warner’s property for his own purposes. ¶19 The Hankes next argue that they potentially retained Warner’s personal property with Warner’s permission. The record directly contradicts this claim. The substance of Robert’s August 26, 2005, letter to Warner makes clear that the Hankes’ had taken Warner’s property due to “[Warner’s] default on our original agreement.” Robert clearly informed Warner that “your property became mine.” Robert further declared that the Hankes “used Thomas Warner’s personal property” in an affidavit. These circumstances indicate no consent on Warner’s part to the Hankes’ use of his personal property. ¶20 Thus, Robert committed two intentional acts that exclude coverage. The first intentional act involves Robert’s decision to take possession of Warner’s property. Robert’s second intentional act occurred when he claimed ownership of Warner’s personal property. The damage to Warner’s personal property occurred due to Robert’s intervening acts of taking possession and claiming ownership. These intentional acts triggered the exception to 8 the Hankes’ insurance policy that excludes coverage for damage caused intentionally by an insured. Robert’s intentional acts also extinguished any potential coverage that could have been available to apply to any later allegedly negligent acts by the Hankes’ young children or others. ¶21 We further note that an additional exclusion to the Hankes’ incidental liability provision excludes coverage for “damage to property that is . . . used by . . . an insured.” This exclusion also appears to exclude from coverage any personal liability that Robert incurred when he damaged Warner’s property after Robert had taken possession and claimed ownership of Warner’s property. The District Court did not rely on this exclusion. The Hankes entirely ignored this exclusion. Horace Mann suggested only this exclusion “interestingly” applied. The Hankes used the personal property at issue as evidenced by Robert Hankes’ affidavit. Robert Hanke testified that “we used Thomas Warner’s personal property.” This separate exclusion supports the District Court’s determination that no coverage exists. We decline to uphold coverage under the terms of the policy. Safeco Ins. Co. of Am. v. Liss, 2000 MT 380, ¶ 32, 303 Mont. 519, 16 P.3d 399. The District Court properly granted summary judgment to Horace Mann. ¶22 Whether the District Court properly determined that Horace Mann’s decisions to provide a defense and to pay the settlement of Warner’s claims nevertheless allowed Horace Mann to pursue reimbursement for the Hankes’ share of the settlement? ¶23 The Hankes next claim that Horace Mann took control of the defense, deprived the Hankes of their preferred counsel, and settled the case without respecting the Hankes’ opportunity to have a jury determine the factual issues. The Hankes argue that these 9 decisions should bind Horace Mann. The Hankes posit that Horace Mann may not now seek reimbursement for the settlement advancement that Horace Mann chose to provide. ¶24 The Hankes ask this Court to disregard the insurer’s well-established duty to defend. An insurer’s duty to defend its insured arises when an insured sets forth facts that present a risk that possibly would be covered by the terms of an insurance policy. Farmers Union Mut. Ins. Co. v. Staples, 2004 MT 108, ¶ 20, 321 Mont. 99, 90 P.3d 381. An insurer owes a duty to defend unless the insurer unequivocally demonstrates that the claim against the insured falls outside the policy coverage. Staples, ¶ 22. ¶25 An insurer should provide the insured a defense under a reservation of rights if the insurer believes that a question exists about the boundaries of coverage. The insurer then may file a declaratory judgment action to resolve coverage issues. Staples, ¶ 28. The insurer may seek to recover the expenses that the insurer incurred in defending a claim outside of the insured’s policy coverage in the declaratory judgment action. Staples, ¶ 28. An insurer’s failure to follow this course leaves the insurer potentially liable for defense costs and judgments. Staples, ¶ 27; § 28-11-316, MCA. ¶26 Horace Mann assumed the duty to defend the Hankes. Horace Mann informed the Hankes in writing on December 24, 2008, on February 26, 2009, and on April 22, 2009, that Horace Mann reserved all rights in investigating the Hankes’ claim, and in providing a defense. The Hankes accepted the defense that Horace Mann had offered. Horace Mann’s new counsel arranged for a settlement conference on January 29, 2010. 10 ¶27 Robert, Rebecca Hanke, the new counsel that Horace Mann provided, Warner, and Warner’s counsel attended the settlement conference. Warner’s attorney negotiated the settlement amount to $54,000.00. Horace Mann offered to contribute $20,000.00 toward that amount. The Hankes “were expected to pay $34,000” of their own money to facilitate the $54,000.00 settlement. The Hankes unsuccessfully sought to obtain a loan for $34,000.00 to fund their obligation under the terms of the settlement. Horace Mann agreed to “fund the $34,000 owed by the Hankes” under the settlement agreement that the Hankes and Warner had reached. Horace Mann covered the Hankes’ $34,000.00 obligation under the settlement agreement without any assurance that it ever would be able to recover the advanced funds from the Hankes. ¶28 Horace Mann reserved in writing on April 20, 2010, its right to recover the cost of settlement upon advancing the Hankes’ their $34,000.00 contribution. Horace Mann specifically announced that its payment of “the Hankes’ obligation” would be subject to Horace Mann’s full reservation of rights. Horace Mann argues that it paid the Hankes’ $34,000.00 obligation in furtherance of its agreement with the Hankes. The Hankes fail to identify any evidence in the record that would suggest otherwise. The Hankes make only the general assertions that “[n]o amount of evidence now will prove what Warner may have proved against Hankes or they may have proved in defense” and that “no determination of fault or intent was made by a jury because Horace Mann decided it would pay the entire settlement.” The record suggests that Horace Mann advanced funds exclusively because of its agreement with the Hankes. 11 ¶29 The Hankes received the full benefit of Horace Mann’s strict adherence to the procedure that this Court has established. Horace Mann had reserved rights on multiple occasions in varying scope. Horace Mann reserved only “rights as allowed under the policy contract” in letters on December 24, 2008 and February 26, 2009. Horace Mann reserved substantially more broadly “the right to withdraw from the defense and indemnity” in a letter on April 22, 2009 (emphasis added). Horace Mann reserved specifically “the right to recover defense and settlement costs” in a letter on April 20, 2010, upon payment of the Hankes’ settlement claims. ¶30 The Dissent takes issue with Horace Mann’s failure to use the word “settlement” in an earlier letter, and its choice to use the word “costs” in conjunction with “settlement,” in Horace Mann’s April 20, 2010, letter. Dissent, ¶ 41. The “indemnity” language in the April 22, 2009, letter encompasses clearly, however, Horace Mann’s potential ability to recoup any amounts advanced. Travelers Cas. & Sur. Co. v. Ribi Immunochem Research, Inc., 2005 MT 50, ¶¶ 48-50, 326 Mont. 174, 108 P.3d 469. Horace Mann sent this letter to the Hankes nearly twelve months before the parties reached a settlement. Ribi Immunochem, ¶¶ 48-50. ¶31 The correspondence between Horace Mann and the Hankes and their counsel establishes that Horace Mann reserved its right to recover the additional $34,000.00 that it paid to the settlement with Warner. Horace Mann protected the Hankes’ $54,000.00 settlement in furtherance of Horace Mann’s agreement with the Hankes. Horace Mann adhered to the procedure that this Court has established to contest the boundaries of coverage and to recoup expenses. Ribi Immunochem, ¶¶ 48-50. We affirm the District Court’s award 12 of $34,000.00 to reimburse Horace Mann for its advancement of the Hankes’ share of the settlement. ¶32 Whether the District Court properly awarded attorney’s fees to Horace Mann under the Uniform Declaratory Judgment Act? ¶33 The District Court determined that the Uniform Declaratory Judgments Act’s supplemental relief provision supported an award of $48,131.50 in attorney’s fees to Horace Mann. A party in a civil action generally may not recover attorney’s fees absent a specific contractual or statutory provision that allows for those fees. Trustees of Indiana University v. Buxbaum, 2003 MT 97, ¶ 19, 315 Mont. 210, 69 P.3d 663. Section 27-8-313, MCA, authorizes a party to petition for supplemental relief based on a declaratory judgment “whenever necessary and proper.” ¶34 We determined in Buxbaum that an award of attorney’s fees falls within the scope of the supplemental relief authorized by § 27-8-313, MCA. Buxbaum, ¶ 46. We later clarified that a district court may award attorney fees in a declaratory relief action under § 27-8-313, MCA, only if equitable considerations support that award. United Nat. Ins. Co. v. St. Paul Fire & Marine Ins. Co., 2009 MT 269, ¶ 38, 352 Mont. 105, 214 P.3d 1260. Once the district court finds equitable considerations, the district court then must find that an award would be necessary and proper. United Nat. Ins. Co., ¶ 38. The court first must conclude that support for the award rests in equity, however, before the necessary and proper inquiry triggers. United Nat. Ins. Co., ¶ 38. 13 ¶35 We have limited the circumstances under which a court may award attorney’s fees in a declaratory judgment action. See United Nat. Ins. Co., ¶ 39; Hughes, ¶ 21; Baxter v. State, 2009 MT 449, ¶ 48, 354 Mont. 234, 224 P.3d 1211. In fact, only once have we upheld an award of attorney’s fees in a declaratory relief action under § 27-8-313, MCA. Renville v. Farmers Ins. Exch., 2004 MT 366, ¶ 28, 324 Mont. 509, 105 P.3d 280. We have never determined that equity supported an attorney’s fees award for an insurer who makes the “tactical decision” to file a declaratory judgment in the normal course of assuming its duty to defend. United Nat. Ins. Co., ¶ 37. ¶36 A jury awarded Renville damages for injuries that she had suffered as a passenger in a car accident. Renville, ¶ 7. Farmers Insurance Exchange (Farmers) withheld payment on a portion of Renville’s award even after this Court had affirmed the award. Renville, ¶¶ 8-18. Renville sought declaratory relief to recover unpaid damages from Farmers. Renville, ¶ 10. The district court granted declaratory relief and awarded Renville her attorney fees under § 27-8-313, MCA. Renville, ¶ 18. The district court reasoned that Renville had accrued substantial attorney’s fees in order to recover a small damages award. Renville, ¶¶ 18, 28. We agreed that the attorney’s fees award prevented the anomalous result of Renville having been better off had she never brought the claim. See United Nat. Ins. Co., ¶ 38. Renville represents an outlier where equity supported an award of attorney’s fees. United Nat. Ins. Co., ¶ 38, quoting Buxbaum, ¶ 46. Horace Mann’s circumstances here accordingly differ dramatically from Renville. 14 ¶37 An insurer in the normal course of coverage may elect to fulfill its duty to defend by providing coverage to an insured and later contesting the boundaries of that coverage in a declaratory judgment action. Staples, ¶ 28. Horace Mann, acting in the normal course of business, elected to fulfill its duty to provide a defense to the Hankes subject to a reservation of rights. An insurer may recover its defense costs for the underlying action when it ultimately has no duty to defend. Ribi Immunochem, ¶ 50. The District Court denied Horace Mann’s attempt to recoup its defense costs expended on the Hankes’ behalf in the action brought by Warner, however, due to Horace Mann’s failure to provide timely notice to the Hankes of its intent to recoup these costs in the event that no coverage existed. ¶38 Horace Mann, also acting in the normal course of business, made the “tactical decision” to file a declaratory judgment action to determine definitively its coverage obligations. Staples, ¶ 28. These actions by Horace Mann support the District Court’s decision to recompense Horace Mann for its contribution to the settlement with Warner. These acts fail to rise to the level, however, that would prompt an award of attorney’s fees to Horace Mann in the declaratory judgment action pursuant to the analysis in Renville. Horace Mann simply acted in the normal course of business that an insurer would take when it exercises its duty to defend under a reservation of rights. The record fails to support an award of attorney’s fees to Horace Mann under the extreme circumstances presented in Renville. See United Nat. Ins. Co., ¶ 39. We need not analyze whether the award was necessary and proper under the analysis in Buxbaum. See United Natl. Ins. Co., ¶ 38. 15 ¶39 We reverse the District Court’s award of attorney fees to Horace Mann and remand for further proceedings. /S/ BRIAN MORRIS We concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BETH BAKER Justice Patricia Cotter concurring in part and dissenting in part. ¶40 I concur in the Court’s resolution of Issues One and Three. I dissent from the Court’s resolution of Issue Two. I would conclude that because it did not provide specific notice to Hankes prior to mediation and settlement that it intended to seek reimbursement of its contribution to any settlement, Horace Mann may not now recover its contribution to the settlement. ¶41 As the District Court noted in its order addressing indemnification and fees, the first several letters written by Horace Mann to the Hankes undertaking their defense did not alert the Hankes of the possibility of nor the explicit reservation of the right to seek reimbursement. In fact, it was not until its letter of April 20, 2010, that Horace Mann first explicitly mentioned a right to reimbursement. This letter stated: “Horace Mann’s payment of the Hankes’ obligation [to fund the $34,000 owed by the Hankes under the settlement agreement reached at mediation] is made under a full reservation of rights, including the right to recover defense and settlement costs should the [c]ourt rule in the declaratory 16 judgment action that there is no coverage.” Notably, this letter was sent three months after the mediation at which the parties settled the Warner claims. ¶42 The District Court cited with approval the case of Travelers Cas. & Sur. Co. v. Ribi Immunochem Research, 2005 MT 50, ¶¶ 48-50, 326 Mont. 174, 108 P.3d 469, in which we held that insurers may recover the costs of defending and indemnifying their insured against uncovered claims, in certain circumstances. We said that these costs are recoverable, where the insurer: (1) timely and explicitly reserved the right to recoup the costs; and (2) provided specific and adequate notice to the insured of the possibility of reimbursement. Relying upon this test, the District Court properly concluded that because Horace Mann did not notify Hankes that it could later seek reimbursement for the defense costs until well after those costs had been expended, it had failed to meet its obligation to specifically and timely inform them that it would seek to recoup those amounts. I agree with this conclusion. The District Court and this Court go awry, however, in concluding that Horace Mann timely and explicitly advised Hankes that it would seek to recover the contribution it made to the settlement of the Warner claim. ¶43 As noted above, the April 20, 2010 letter in which Horace Mann agreed to provide the remaining $34,000 toward the settlement on behalf of the Hankes stated it was doing so under a full reservation of rights, “including the right to recover defense and settlement costs” should the court determine in the declaratory action that there was no coverage for the 17 Warner claims. (Emphasis added.) This letter does not timely or explicitly alert the Hankes that it intended to recoup the amounts advanced toward the settlement of the Warner claim. ¶44 The Legislature defines the costs generally allowable to a prevailing party. Section 25-10-201, MCA, states that the allowable costs are the parties’ “necessary disbursements,” to include legal fees of witnesses; the expenses of taking depositions; legal fees for publication; fees paid to stenographers for filing and recording papers; expenses of printing papers for hearing; and “other reasonable and necessary expenses that are taxable according to the course and practice of the court or by express provision of law.” Nowhere in Montana statute or case law are “costs” defined to include an insurer’s contribution to a settlement. ¶45 Given that Ribi addresses a claim for reimbursement of defense costs, and not claims for reimbursement of settlement amounts, it is arguably not even applicable here. However, there are no reported Montana cases in which this Court has approved a claim for reimbursement of a settlement contribution by an insurance company operating under a reservation of rights. I submit that a parallel version of the Ribi test should apply where an insurer later seeks to recover the amount it paid in settlement of a claim after there is a determination that it has no duty to indemnify. I would conclude that an insurer may later recover monies it paid in the settlement of a claim against the insured, provided the insurer (1) timely and explicitly reserved the right to recoup the settlement amount; and (2) provided specific and adequate notice to the insured of the possibility of reimbursement. ¶46 Here, in advising the insured that it reserved the right to recover defense and settlement costs, Horace Mann did not meet the foregoing test. First, it did not timely and 18 explicitly reserve the right to recoup the settlement amount, as it did not address reimbursement of any sums until months after the mediation. Second, it did not provide specific and adequate notice to the insured of the possibility that it would seek reimbursement of the settlement amount. I would conclude that Horace Mann was not entitled to secure reimbursement of its contribution to the settlement with Warner. I therefore dissent from the Court’s resolution of Issue Two. ¶47 I otherwise concur. /S/ PATRICIA COTTER	October 29, 2013
02a8f960-9883-4e7e-b920-6662e9bd204e	Heavirland v. State	2013 MT 313	DA 12-0759	Montana	Montana Supreme Court	DA 12-0759 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 313 LOREN HEAVIRLAND, SUE HEAVIRLAND and LYLE A. WEIST, Claimants and Appellees, v. STATE OF MONTANA, Objector and Appellant. APPEAL FROM: Montana Water Court, Upper Missouri Division, Teton River Basin (41O), Cause No. 41O-97 Honorable Russ McElyea, Presiding Judge COUNSEL OF RECORD: For Appellant: Timothy C. Fox, Montana Attorney General, Jeremiah D. Weiner, Assistant Attorney General; Helena, Montana For Appellee: Justin B. Lee, Attorney at Law; Choteau, Montana Submitted on Briefs: August 7, 2013 Decided: October 22, 2013 Filed: __________________________________________ Clerk October 22 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 The State of Montana appeals from the Montana Water Court’s Order that determined Loren Heavirland, Sue Heavirland and Lyle A. Weist (collectively, claimants) produced sufficient evidence to overcome the presumption of abandonment of their water right claim. We affirm. ISSUES ¶2 We address the following issues: 1. Did the Water Court correctly conclude that 79 Ranch governs the issue of abandonment? 2. Did the Water Court correctly conclude that the claimants produced sufficient evidence to show they had no intent to abandon their water right? FACTUAL AND PROCEDURAL BACKGROUND A. Factual Background. ¶3 In 1904, Frank Truchot filed and perfected the water right which is the subject of this controversy. The water right, for surface water from Muddy Creek, was for 24.43 CFS to be applied by flood irrigation on a maximum of 645 acres. In 1913, Christina Weist, wife of Henry Weist, purchased the water right. The Weists used the water right to flood irrigate their farm. Raymond (Ray), Henry Weist’s son, took over the farm in the mid-1940s. Ray stopped irrigating when he went into military service in 1941. He re-commenced irrigation in 1947-48. From that time until 1961, Ray used Muddy Creek for irrigation in years when water was available. 3 ¶4 Ray’s son, Lyle Weist (Lyle), explained the right was very difficult to use due to the slope of the ground and the heavy clay “gumbo” soil. Lyle stated in his supplemental affidavit that the Weists had to pump water from Muddy Creek uphill into a ditch along the north end of the property. To flood irrigate the property, Henry and Ray would dam the ditch to send water flowing in a southeasterly direction over the fields, back into Muddy Creek. Lyle explained: “[W]hen the property was flood irrigated in the spring and summer, the plants on the west side of the field drowned by the time the water reached the east side of the field.” Ray and Henry attempted to counter the problem by irrigating the field only in late fall to put moisture in the ground for the next season; and by planting hardier crops, like alfalfa. These efforts proved unsuccessful. Ray also attempted using hand lines to irrigate his property. He decided against using a wheel line after seeing a wheel line fail on a similar neighboring property. In particularly dry years, when there was no water in Muddy Creek, Ray could not irrigate his crops. In the driest years, he had to resort to crop rotation. Ray completely ceased irrigating his fields by 1962, “due to the inefficient nature of flood irrigation.” Lyle also stated in an affidavit that his father’s age and deteriorating physical condition contributed to his decision to stop irrigating. Ray had the Sun River Electric Cooperative run three-phase power out to the property sometime in the late 1960s or early 1970s. This, Lyle stated, was in contemplation of the possibility that Lyle would want to run pivot irrigation when he one day took over the farm. ¶5 Lyle returned to the farm in 1975 and subsequently purchased it. In 1978, Lyle looked up the history of water rights on the property at the Teton County Courthouse. In 4 1981 he and his wife, Linda, filed a statement of claim in the Montana general stream adjudication. Lyle installed a 14-tower Valley Center Pivot during the winter of 1981-82 and resumed irrigating. He continued irrigating with the center pivot until 1991, when he sold the property and water right to the Heavirlands. The pivot cost over $125,000 and that expenditure, in part, forced Lyle to sell the farm. After the Heavirlands purchased the property, they irrigated every year except for one, when water was not available. B. Procedural Background. ¶6 Lyle and Linda Weist’s claim appeared in the Temporary Preliminary Decree for Basin 41O with DNRC issue remarks. The issue remarks noted that the 1962 Teton County Water Resources Survey and 1978 USDA Aerial Photograph No. 178-177 appear “to indicate 0.00 acres irrigated.” These remarks raised an issue of abandonment. No party filed objections to the Claim or to the DNRC issue remarks. Meetings between the claimants and the DNRC failed to resolve the issue remarks. ¶7 On December 8, 2008, DNRC Water Resource Specialist Kraig Van Voast (Van Voast) filed a Memorandum with the results of his review of the water right claim. Van Voast was not able to confirm historical irrigation from Muddy Creek on the claimed place of use. He reviewed the 1962 Teton County Water Resource Survey and the 1957 air photos used to produce the Water Resource Survey. Based on his review, it appeared Bynum Irrigation District “E” Canal may have serviced the claimed place of use at some time prior to 1962, but it did not appear to be serviced by a ditch system connected to Muddy Creek. Van Voast also reviewed several documents Loren Heavirland provided, including a 1941 5 aerial photo. Van Voast determined that none of this information resolved a lack of proof of historical irrigation from Muddy Creek. He stated none of the historical data sources he reviewed showed any of the ditches or canals that would be required to transport the water from the claimed point of diversion to the claimed place of use. ¶8 Because of the potential abandonment issue remark, the Water Master issued an order joining the State of Montana in the adjudication, through the Attorney General, pursuant to § 85-2-248(7), MCA. The State moved for summary judgment, or, in the alternative, partial summary judgment, on the issue of abandonment. Based on the factual record, the Water Master issued an order granting partial summary judgment to the State. The ruling found that the nonuse of the water right from 1962 to 1982 was a sufficiently long period of continuous nonuse to raise a rebuttable presumption of an intent to abandon the water right and to shift the burden of proof to the claimants to overcome the presumption. ¶9 The Water Master held an evidentiary hearing on the matter. The Water Master filed a Report containing findings of fact and conclusions of law. In his Report, the Water Master concluded the water right had been abandoned, reasoning: Nonuse of claim 41O 47356-00 from 1962 to 1982 is sufficient to establish a long period of continuous nonuse and shift the burden to the claimants to rebut the presumption of an intent to abandon the water right. The evidence presented by the claimants has not overcome that burden. ¶10 Claimants filed an Objection to the Water Master’s Report with the Chief Water Court Judge. They set forth three main arguments: (1) Abandonment of existing water rights should be determined under the law as it existed prior to July 1, 1973; (2) the Water Master’s 6 application of 79 Ranch analysis to their existing right was therefore an impermissible retroactive application of the law; and (3) even if 79 Ranch applied, the claimants had successfully rebutted the presumption of intent to abandon the water right by producing sufficient evidence explaining and excusing the long period of nonuse. ¶11 The Water Court ruled that 79 Ranch applied to the claimants’ case. The Water Court further found that the Water Master had erred in finding that the claimants had failed to produce sufficient evidence to rebut the presumption of intent to abandon. ¶12 The State appeals. STANDARD OF REVIEW ¶13 At the State’s urging, we take this opportunity to clarify the standard of review.1 Because the case involves both a Water Master and the Water Court, two standards of review are relevant: the standard the water judge applies to the Water Master’s report and the standard we apply to the Water Court’s opinion. Abandonment of a water right is a “question of fact.” Section 89-902, RCM (1947).2 Montana’s Rule 53 is clear regarding the 1 In Weinheimer Ranch, Inc. v. Pospisil, 2013 MT 87, ¶ 19, 369 Mont. 419, 299 P.3d 327, we applied our customary standard of review of the trial court’s findings of fact for clear error and its conclusions of law for correctness. Weinheimer Ranch, ¶ 19. There, although the case involved the Water Court’s review of findings made by a water master, the parties did not invoke a different standard of review and we did not consider it. We do so here. 2 The 1973 Montana Constitution provides: “All existing rights to the use of any waters for any useful or beneficial purpose are hereby recognized and confirmed.” Mont. Const. art. IX, § 3(1). Pursuant to that provision, the Water Use Act preserves “existing rights.” See§§ 85-2-101(4), 85-2-102(12), MCA. We have previously applied § 89-902, RCM, defining abandonment as a question of fact, to abandonment issues arising from pre-1973 water rights. See 79 Ranch v. Pitsch, 204 Mont. 426, 431, 666 P.2d 215, 217 (1983) (“Abandonment of a water right is a question of fact. Section 89-802, Revised Codes of Montana, 1947 (applicable here, repealed in 1973).”). 7 standard of review that the Water Court applies to the findings of fact in a Water Master’s report. “[T]he court must accept the master’s findings of fact unless clearly erroneous.” M. R. Civ. P. 53(e)(2). ¶14 Rule 53 does not subject conclusions of law to clear error review. The Water Court properly recognized that, in reviewing the master’s conclusions of law, the “standard of review is plenary and [the court] . . . must determine whether the [master’s] . . . conclusions are correct as a matter of law.” Geil v. Missoula Irrigation Dist., 2002 MT 269, ¶ 22, 312 Mont. 320, 59 P.3d 398. Thus, the Water Court reviews the Water Master’s findings of fact for clear error and the Water Master’s conclusions of law for correctness. M. R. Civ. P. 53(e)(2); Geil, ¶ 22. ¶15 “This Court applies the same standards of review to the Water Court as it does to an appeal from a district court.” Mont. Trout Unlimited v. Beaverhead Water Co., 2011 MT 151, ¶ 16, 361 Mont. 77, 255 P.3d 179. Whether the standard of review was applied correctly is a question of law. See Milliken Research Corp. v. Dan River, Inc., 739 F.2d 587, 593 (Fed. Cir. 1984).3 We therefore review the Water Court’s September 19, 2012, Order Regarding Abandonment de novo, to determine whether it correctly applied the clear error standard of review to the Water Master’s findings of fact and whether its conclusions of law are correct. See Morris Plan Industrial Bank v. Henderson, 131 F.2d 975, 977 (2d Cir. N.Y. 3 Although Fed. R. Civ. P. 53(e) was amended in 2003 to require de novo review of a master’s findings instead of the clearly erroneous standard found in the Montana rule, cases decided under the pre-2003 federal rule are instructive. 8 1942) (Hand., L.) (in reviewing a district court’s decision on a referee’s report pursuant to Rule 53(e), “the question is the same in this court as it was in the district court.”). ¶16 Even where the Water Master’s findings find substantial support in the evidence, the Water Court still may determine that they were clearly erroneous. We have long recognized that “[s]ubstantial evidence and clearly erroneous are not synonymous[.]” Interstate Prod. Credit Ass’n v. Desaye, 250 Mont. 320, 323, 820 P.2d 1285, 1287 (1991). Thus, the court may determine that “[a] finding is ‘clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” U.S. v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542 (1948); Desaye, 250 Mont. at 323, 820 P.2d at 1287. DISCUSSION ¶17 1. Did the Water Court correctly conclude that 79 Ranch governs the issue of abandonment? ¶18 The issue of which standard for determining abandonment applies is a legal conclusion. See In re Musselshell River Drainage Area, 255 Mont. 43, 50, 840 P.2d 577, 581 (1992) (stating “the Water Court correctly applied the thrust of 79 Ranch to the facts before it.”); Haggin v. Saile, 23 Mont. 375, 381, 59 P. 154, 155 (1899) (reviewing district court’s determination of “the law as to what constituted abandonment” for correctness). We review the Water Court’s legal conclusions to determine whether they are correct. Weinheimer Ranch, ¶ 19. The Water Court reviewed the Water Master’s conclusion that 79 Ranch applies to abandonment of a pre-1983 water right claim for correctness and 9 determined the Water Master correctly concluded the standard from 79 Ranch applied. We agree. ¶19 79 Ranch provides that: [A] long period of nonuse is strong evidence of an intent to abandon the water rights. In effect, such a long period of continuous nonuse raises the rebuttable presumption of an intention to abandon, and shifts the burden of proof onto the nonuser to explain the reasons for nonuse . . . . To rebut the presumption of abandonment, there must be established some fact or condition excusing long periods of nonuse, not merely expressions of desire or hope. 79 Ranch, 204 Mont. at 432-33, 666 P.2d at 218 (emphasis added). In In re Clark Fork River Drainage Area (Clark Fork II), we explained: “To rebut the presumption of abandonment, the claimant must establish some fact or condition excusing the long period of nonuse, not mere expressions of hope or desire reflecting a gleam-in-the-eye philosophy regarding future use of the water.” In re Clark Fork River Drainage Area, 274 Mont. 340, 344, 840 P.2d 1353, 1355 (1995) (internal citations and quotations omitted). ¶20 Claimants contend that 79 Ranch analysis should not apply because it could threaten their pre-1973 water right. Claimants argue that it is improper to apply post-1973 case law to pre-1973 water rights claims because they are “existing rights” and must be protected under the law as it existed in 1973. Because 79 Ranch was not decided until June of 1983, and because it effected a change in the law, claimants assert, it should not apply. ¶21 The 1973 Montana Constitution provides: “All existing rights to the use of any waters for any useful or beneficial purpose are hereby recognized and confirmed.” Mont. Const. art. IX, § 3(1). Pursuant to that provision, the Water Use Act preserves “existing 10 rights.” See §§ 85-2-101(4), 85-2-102(12), MCA. However, the protection of “existing rights” does not preclude applying post-1973 precedent. In Musselshell Riverwe determined that 79 Ranch does not offend the Montana Constitution’s protection of existing rights. In re Musselshell River Drainage Area, 255 Mont. at 48-49, at 580-81. A strong presumption exists in favor of the retroactive application of new judicial rules of law. Stavenjord v. Montana State Fund, 2006 MT 257, ¶ 9, 334 Mont. 117, 146 P.3d 724. Thus, we agree with the Water Court that 79 Ranch should be applied retroactively. A. 79 Ranch and existing rights. ¶22 As the Water Court explained, we have already concluded the protection of pre-1973 existing water rights does not preclude applying our 79 Ranch decision retroactively. We reiterate our statement in Musselshell River, equally applicable here, that 79 Ranch “was not the stunning reversal appellants assert it to be.” Musselshell River, 255 Mont. at 47, 840 P.2d at 579. 79 Ranch did not overrule the past precedent relating to abandonment, it clarified how the law already essentially operated. ¶23 A finding of abandonment requires showing both nonuse and intent to abandon. Thomas v. Ball, 66 Mont. 161, 167, 213 P. 597, 599 (1923). A lengthy period of nonuse has long been considered “potent evidence” of an intent to abandon. Smith v. Hope Mining Co., 18 Mont. 432, 438, 45 P. 632, 634 (1896) (nine years’ nonuse of a water right, when that period exceeded the statute of limitations, was “very potent evidence, if it stood alone, of an intention to abandon.”). Courts have long relied on testimony and evidence submitted by both parties to evince the circumstances of nonuse and elucidate whether intent to abandon 11 existed. See Smith, 18 Mont. at 438, 45 P. at 634; Thomas, 66 Mont. at 168, 213 P. at 600. Although the party alleging abandonment has historically carried the burden of proving intent to abandon, Thomas, 66 Mont. at 168, 513 P. at 600, the opposing party has always had to produce enough evidence to at least cast doubt on the existence of that intent. The court would then construe the circumstances surrounding the alleged abandonment—as established by the evidence the parties set forth—to determine whether intent to abandon existed. See Featherman v. Hennessy, 42 Mont. 535, 540-41, 113 P. 751, 753 (1911). ¶24 The shift from a long period of nonuse being considered “potent evidence” of an intent to abandon to its raising a rebuttable presumption such intent existed is merely an incremental change from the earlier rule. Musselshell River, 255 Mont. at 49, 840 P.2d at 580. The shift changes the timing of when the party opposing the abandonment finding must produce evidence of intent. Before 1973, a party opposing abandonment would defend against the claim by producing evidence and testimony at trial to establish the party did not intend to abandon a water right. Now, 79 Ranch “is akin to a caveat to claimants that they should not rest their case without addressing the potent evidence of intent to abandon which arises from a long period of non-use.” Musselshell River, 255 Mont. at 49, 840 P.2d at 580. This does nothing to change the policy that “the courts will not lightly decree an abandonment of a property so valuable [as water] in a semi-arid region such as this.” Thomas, 66 Mont. at 167, 213 P. at 599. However, it also honors the age-old principle that: [A]s the settlement of the country has advanced, the great value of the use of water has become more and more apparent…As a result, the law, crystallized in statutory form, is that an appropriation of a right to the use of running water 12 flowing in the creeks must be for some useful or beneficial purpose, and when the appropriator, or his successor in interest, abandons and ceases to use the water for such purpose, the right ceases. Power v. Switzer, 21 Mont. 523, 529, 55 P. 32, 35 (1898). 79 Ranch operates primarily to clarify the law of abandonment as it has always existed. ¶25 Because we conclude that 79 Ranch primarily clarified operation of the existing law, we do not assume that rights which are not protected under 79 Ranch would be protected under the law as it existed prior to July 1, 1973. The Water Court correctly concluded that application of 79 Ranch is not precluded by Montana’s Constitution or statutes. B. 79 Ranch and Dempsey retroactivity analysis. ¶26 In our decision in Dempsey v. Allstate Ins. Co., we held that “all civil decisions of this court apply retroactively to cases pending on direct review or not yet final, unless all three of the [factors from Chevron Oil v. Huson, 404 U.S. 97, 92 S.Ct. 349 (1971)] . . . are satisfied . . . .” Dempsey v. Allstate Ins. Co., 2004 MT 391, ¶ 31, 325 Mont. 207, 104 P.3d 483. Importantly, Dempsey requires that the decision to be applied non-retroactively “must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied or by deciding an issue of first impression whose resolution was not clearly foreshadowed.” Dempsey, ¶ 21. ¶27 The claimants cannot satisfy the conjunctive, three-factor Dempsey test because we conclude the incremental shift in the law 79 Ranch caused did not establish a new principle of law or decide an issue of first impression. We can see no reason why 79 Ranch should not apply retroactively under these circumstances. 13 ¶28 We hold that the Water Master and the Water Court correctly concluded 79 Ranch governs the issue of abandonment in Montana. ¶29 2. Did the Water Court correctly conclude that the claimants produced sufficient evidence to show they had no intent to abandon their water right? ¶30 The State argues there is insufficient evidence to support the Water Court’s finding that the claimants justified the twenty-year period of non-use of their water right. The State also argues that the Water Court committed error by improperly treating two of the Water Master’s findings of fact as clearly erroneous without employing clear error analysis. Specifically, the State contests the Water Court’s treatment of the Water Master’s findings that (1) no specific evidence was introduced to demonstrate that age or infirmity contributed to Ray’s decision to cease irrigating his property; and (2) installation of three-phase power to the claimant’s predecessor’s property did not indicate a plan to install a pivot irrigation system. This alleged “violation” of M. R. Civ. P. 53(e)(2), the State asserts, is so serious as to require reversal. ¶31 “The question of abandonment of the use of any of the waters was one of fact, dependent upon the evidence of the conduct, acts, and intent of the parties claiming the usufruct of the water.” Power, 21 Mont. at 529, 55 P. at 34. As the Water Court observed, intent to abandon “need not be proved directly, but may be inferred from all the circumstances of the case.” Denver by Bd. Of Water Comm’rs v. Snake River Water Dist., 788 P.2d 772, 776 (Colo. 1990). “The circumstances must be such as to justify an inference 14 of intention to abandon; in other words, to leave the property to be taken by any other person who chooses to do so.” Featherman, 42 Mont. at 540-41, 113 P. at 753. ¶32 We agree with the Water Court that determining whether a water right has been abandoned requires weighing all of the relevant factual circumstances of the case. See Power, 21 Mont. at 529, 55 P. at 34; Denver by Bd. Of Water Comm’rs, 788 P.2d at 776; Featherman, 42 Mont. at 540-41, 113 P. at 753. To successfully rebut a presumption of abandonment, a claimant must produce “[s]pecific evidence explaining or excusing the long period of non-use of the particular water rights on the specific property . . . .” Musselshell River, 255 Mont. at 51, 840 P.2d at 582. Specific evidence must relate to the specific non- use on the property in question. Musselshell River, 255 Mont. at 50-51, 840 P.2d at 581 (evidence, not specific to the acreage in question, that certain spans of years were “pretty dry” and “most people” did not have sufficient funds to reopen ditches was not sufficient to rebut the presumption of abandonment). A statement asserting lack of sufficient funds to irrigate is not enough, standing alone, to rebut a presumption of abandonment. 79 Ranch, 204 Mont. at 218-19, 666 P.2d at 433. ¶33 The Water Court weighed the specific evidence regarding relevant factual circumstances the claimants had presented and concluded it was sufficient to overcome the presumption of abandonment. The Water Court held that the Water Master misapprehended the effect of the evidence the claimants presented, leaving the Water Court with the firm conviction the Water Master had committed clear error. 15 ¶34 Our review of the record supports the Water Court’s determination that the claimants submitted sufficient evidence to overcome the presumption of abandonment. Lyle testified extensively regarding the specific obstacles associated with irrigating the Weist’s property. For instance, he stated: “[W]hen the property was flood irrigated in the spring and summer, the plants on the west side of the field drowned by the time the water reached the east side of the field.” Although the record does not reveal Ray’s age in 1962, there is no reason to doubt Lyle’s testimony in his sworn affidavit that age and illness contributed to his father’s decision to cease irrigating. And the decision to install three-phase power to the property, in contemplation of one day running a pivot irrigation system, is at least “slight” evidence that the Weists did not intend to abandon their water right. The fact that Lyle actually did install a pivot irrigation system when he was able to supports his assertion that Ray obtained three- phase power to the property believing his son might want to run such a system. Lyle resumed irrigation as soon as he installed the center pivot. Lyle’s statement that he was forced to sell the farm in part due to the debt he incurred in purchasing the center pivot supports his testimony that financial hardship prevented irrigation for some time. Finally, Lyle actually filed and sold the water right. Unlike in Musselshell River, all of these facts and assertions provided specific context for nonuse of the specific water right at issue. ¶35 The State challenges the Water Court’s failure to apply clear error analysis to the Water Master’s fifth factual finding. The Water Master found: The testimony addressing Raymond Weist’s conduct from 1962 to 1975 is minimal. Lyle Weist testified only in general terms regarding this period of time. From this testimony, it appears that Raymond simply gave up trying to 16 irrigate a difficult field. It is implied that advancing age and health issues may have played a role, but nothing specific was provided to give any substance to these implications. In the late 1960s or early 1970s, Raymond Weist had three phase power installed on the property. Lyle testified that Raymond had asked him if he ever intended to irrigate the property in the future. Lyle indicated that he hoped to be able to do so. Based on this potential, Raymond proceeded to have the power company bring three phase power to the property. From Lyle’s testimony, it appears that the three phase power was installed for two reasons: (1) if they ever did get back to irrigating the property with a center pivot system, it would require three phase power, and (2) it was convenient. The power company was doing work in the area at the time. The motivation for three phase power was a possible center pivot system, but there was no actual plan to install such a system. ¶36 The State argues that the Water Court ignored the paucity of evidence in the record when it rejected the Water Master’s finding that the Weists did not justify the period of non- use. The finding of abandonment, however, depends upon the entire factual circumstances surrounding the case. See Power, 21 Mont. at 529, 55 P. at 34; Featherman, 42 Mont. at 540-41, 113 P. at 753. The Water Master examined all of those factual circumstances and found them insufficient to show the claimants did not intend to abandon their water right. Thus, the Water Master found the right had been abandoned. ¶37 The Chief Water Judge, looking at the same factual circumstances, concluded the Water Master’s finding misapprehended the effect of the evidence. In the Water Court’s view, the factual circumstances—including Lyle’s testimony and the evidence of the Weists’ acts—demonstrated the claimants did not intend to abandon their water right. In light of its review of the relevant circumstances, the Water Court concluded that the Water Master had “misapprehended the totality of the evidence, leaving the [Water] Court with a firm conviction a mistake was committed.” 17 ¶38 In light of the Water Court’s thorough consideration of the “entire evidence,” U.S. Gypsum, 333 U.S. at 395, 68 S. Ct. at 543, we conclude that the Water court correctly applied the clear error standard of review. CONCLUSION ¶39 The Water Court correctly applied 79 Ranch analysis. The Water Court correctly concluded that the claimants submitted sufficient evidence to rebut the presumption of abandonment. ¶40 Affirmed. /S/ MICHAEL E WHEAT We concur: /S/ JIM RICE /S/ PATRICIA COTTER /S/ BETH BAKER /S/ BRIAN MORRIS	October 22, 2013
6c652c26-985e-4281-9d46-013478b72343	Bresnan Commc'ns, LLC v. Mont. Dep't of Revenue	2013 MT 357	DA 12-0569	Montana	Montana Supreme Court	DA 12-0569 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 357 BRESNAN COMMUNICATIONS, LLC, Plaintiff and Appellee, v. STATE OF MONTANA, DEPARTMENT OF REVENUE, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV-10-1312 Honorable Susan P. Watters, Presiding Judge COUNSEL OF RECORD: For Appellant: David R. Stewart, Courtney Jenkins (argued), Teresa G. Whitney, Special Assistant Attorney Generals, Montana Department of Revenue, Legal Services Office; Helena, Montana For Appellee: Robert L. Sterup (argued), Kyle Anne Gray, Shane P. Coleman, Holland & Hart LLP; Billings, Montana Argued and Submitted: September 25, 2013 Decided: December 2, 2013 Filed: __________________________________________ Clerk December 2 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 The State of Montana Department of Revenue (Department) appeals the order of the Thirteenth Judicial District, Yellowstone County, that determined that the Department lacked authority to impose retroactive assessments on Bresnan Communications, LLC (Bresnan). The Department also appeals the separate findings of fact, conclusions of law, and order that determined that Bresnan owns exclusively class eight cable television system properties under § 15-6-138(l)(k), MCA. We reverse and remand. ¶2 We address the following issues on appeal: 1. Whether the District Court properly determined that Bresnan owned exclusively class eight property? 2. Whether the District Court properly concluded that the Department lacked authority to impose retroactive property tax assessments? PROCEDURAL AND FACTUAL BACKGROUND ¶3 Bresnan challenged the Department’s decision to tax Bresnan as a single entity rather than allowing Bresnan to apportion unilaterally its assets among tax classifications. Bresnan is a Delaware Limited Liability Company that operates in Montana. Bresnan purchased the cable television network infrastructure in Montana that is at the center of this dispute in 2003. ¶4 Bresnan’s 2003 network was typical of cable systems. The “headend” of that network received and broadcasted data that Bresnan chose. The headend broadcasted data over the “trunk cable,” the industry name for the networked cable system that connected Bresnan’s data feed to each customer’s neighborhood. Once the data reached a customer’s neighborhood, the “feeder cable” transmitted data throughout the neighborhood. Each 3 individual customer had a “drop cable” that connected the feeder cable to the customer’s home. The drop cable connected to the customer’s “terminal equipment.” The terminal equipment, commonly known as the set-top box, interpreted which data to play on a television. ¶5 Bresnan began to upgrade the network’s infrastructure to include new services shortly after the purchase. Bresnan sought to integrate services beyond basic television programming. Bresnan wanted to bundle expanded cable programming (cable), on-demand video services, high-speed internet data services (internet), and voice-over internet protocol telephony services (VoIP). Bresnan labels these services its “Triple Play” package. The upgrades necessary to include these services altered Bresnan’s network from its 2003 form. ¶6 Bresnan’s expert accounting and valuation report describes Bresnan’s “significant investment in system engineering, costly new equipment, upgraded distribution plant, and installation labor” in order to expand its cable programming. Bresnan improved its satellite receiver dishes, installed signal combiners, optical laser transmission equipment, and added optical fiber between the headend and feeder cable distribution nodes. Bresnan invested in video-on-demand servers and upgraded distribution node equipment. Bresnan also distributed new set-top boxes to customers. ¶7 Bresnan made additional investments to prepare its system for internet services following its cable upgrade. Bresnan made business arrangements to provide connection to the internet and upgraded its physical system to affect the addition of internet services. Physical upgrades included data switches in each headend to interface with the internet 4 connections in Seattle and Denver, local data servers in main headends, and a “Cable Modem Termination System” (CMTS). ¶8 The CMTS allowed Bresnan to combine the internet data with the cable data into a single electrical signal for transfer over Bresnan’s system. Bresnan also provided cable modems to subscribers who purchased internet service. To achieve the transfer of internet service to its customers, Bresnan used both the CMTS and the recently-installed signal combiners, optical fiber between headends and distribution nodes, and existing drop cables. ¶9 Bresnan upgraded its network further to provide VoIP residential telephone services. Bresnan contracted with Net2Phone, a joint venture partner, to effect this upgrade. Net2Phone provided most of the necessary capital and software to bring about residential VoIP capabilities. Bresnan provided use of the CMTS to combine the residential VoIP data with the cable and internet data into a single electrical signal for transfer over Bresnan’s network. Bresnan used both the CMTS and the recently-installed signal combiners, optical fiber between headends and distribution nodes, and existing drop cables to achieve the transfer of residential VoIP service to its customers. ¶10 Bresnan also engaged in the “[s]ystem [h]ardening” process for its network after upgrades to enable residential voice services. System hardening included further physical changes to Bresnan’s network. Specifically, Bresnan installed battery backups and other unspecified equipment to identify and reduce interference for residential VoIP service. System hardening reduced interference that specifically would have affected the data and VoIP traffic on its network. 5 ¶11 Bresnan made further upgrades to enable commercial VoIP. These upgrades included new switches in select headends and data servers for commercial subscriber voicemail services. Bresnan used the CMTS to combine the commercial VoIP data with residential VoIP, cable, and internet data into a single electrical signal for transfer over Bresnan’s network. Bresnan used both the CMTS and the recently-installed signal combiners, optical fiber between headends and distribution nodes, and existing drop cables to achieve the transfer of commercial VoIP service to its customers. ¶12 Bresnan lastly began to provide the same terminal equipment to customers in 2010, without consideration of which services the customer had purchased from Bresnan. This new terminal equipment provided an integrated experience to customers. Regardless of which services the customer had purchased from Bresnan, all data arrived into a single piece of terminal equipment. The single terminal equipment processed that data and delivered the appropriate service to the customer. ¶13 Although Bresnan functionally had bundled its Triple Play services for consumers, Bresnan segregated each service for taxation purposes. Montana imposes an excise tax upon voice services, such as Bresnan’s telephony operations. Section 15-53-128 et seq., MCA. Montana imposes no excise taxes upon cable television or high speed internet. Section 15- 53-128 et seq., MCA. Bresnan paid separate franchise fees to local governments for the right to install its cable television system in public rights of way. Bresnan needed to pay no franchise fees, however, for high speed internet or telephony. ¶14 The Montana legislature amended the Montana tax code in 1999 to include language central to this dispute. The amendment specifically incorporated “telecommunications 6 services” into the tax code when it created an assessment classification for “telecommunications services companies.” Section 15-6-156(1)(d), MCA (2001). The Department would for the first time assess centrally allocations of “telecommunications services companies” under the new amendment. Section 15-6-156(1)(d), MCA (2001). Comments at the hearings on the bill show that the bill’s sponsor intended to provide a tax decrease from the pre-1999 assessment and taxation rates for “the assets of telecommunications” in future telecommunications developments. Mont. Sen. Tax. Comm., Hearing on HB 174, 1999 Legis., Reg. Sess. 11-13 (Apr. 12, 1999). ¶15 Montana’s administrative rules require the Department to value centrally reported property through the unit method of valuation. Admin. R. M. 42.22.111 (2011). Unit valuation considers the market value of the company as a functional whole instead of the value of individual components. Whether a taxpayer uses local filing, as compared to central filing, dictates the method that the Department uses to value property. ¶16 Bresnan unilaterally apportioned company assets when Bresnan made its tax reports in order to segregate its property. Bresnan used centralized, statewide reporting for its voice operations. Bresnan included roughly 10% of company assets in its voice operation tax declaration. Bresnan reported voice operations as “Bresnan Digital Services, LLC” doing business as “Montana Telephony” from 2007 to 2009. Bresnan also centrally reported its microwave satellite operations as a portion of the same 10% of company assets. The Department had classified Bresnan’s voice operations as class thirteen property from 2007 to 2009 because the voice operations were “allocations of [a] centrally assessed 7 telecommunications and services compan[y].” The class thirteen classification resulted in a 6% centralized assessment on Bresnan’s voice property. ¶17 Bresnan included the remaining 90% of its assets in locally reported cable and internet properties assessments as “Bresnan Communications, LLC.” Local communities assessed Bresnan’s cable and internet properties from 2007 to 2009. Local assessments resulted in a 3% local assessment on cable and internet properties. The Department knew of Bresnan’s decision to report its cable and internet properties for local assessment as class eight properties from 2007 to 2009. ¶18 The Department audited Bresnan in December 2008 for tax years 2007 and 2008. The Department determined upon completion of the audit in August 2009 that Bresnan should report its property as a single entity rather than as three separate entities. The Department informed Bresnan that Montana law required the Department to assess Bresnan centrally as one unit, and to classify Bresnan’s property under class thirteen as allocations of a centrally assessed telecommunications services company. ¶19 The Department issued revised assessments for Bresnan for tax years 2007, 2008, and 2009 following the audit. The Department’s revised assessments centrally assessed all of Bresnan’s property under class thirteen. The Department submitted the revised assessments to Bresnan. Bresnan paid parts of the assessments under protest. ¶20 The Department similarly assessed Bresnan centrally on May 26, 2010, as one unit for the 2010 tax year. The 2010 assessment subjected all of Bresnan’s Montana properties to class thirteen central assessment at a 6% tax rate. Section 15-6-156(4), MCA. The reclassification increased Bresnan’s tax burden from $1,711,365 in tax year 2009 to 8 $7,337,692 in tax year 2010. Bresnan filed this declaratory judgment action in response on July 28, 2010. ¶21 Bresnan sought to prevent the Department from issuing revised assessments of Bresnan for tax years 2007, 2008, and 2009. Bresnan also sought to prevent the Department from issuing any other revised assessments. Bresnan additionally sought a declaration that the Department illegally had assessed all of Bresnan’s property as class thirteen property. Bresnan further asked the District Court to require the Department to refund taxes that Bresnan had paid under protest. Bresnan lastly challenged the legality of the Department’s method of assessment for the 2010 tax year. ¶22 The District Court granted Bresnan’s motion for summary judgment on the Department’s ability to issue retroactive assessments in a written order on September 26, 2011. The District Court conducted a bench trial on October 24, 2011. The District Court concluded that Bresnan owned class eight properties. The District Court directed the Department to refund with interest the payments that Bresnan had made under protest. The District Court also vacated the Department’s retroactive assessments of Bresnan. The Department appeals. STANDARD OF REVIEW ¶23 We review for clear error a district court’s findings of fact. Roland v. Davis, 2013 MT 148, ¶ 21, 370 Mont. 327, 302 P.3d 91. Clear error exists if substantial, credible evidence fails to support the findings of fact, if the district court misapprehended the evidence’s effect, or if we have a definite and firm conviction that the district court made a 9 mistake. Roland, ¶ 21. We review for correctness a district court’s conclusions of law. Roland, ¶ 21. We review de novo a district court’s ruling on a motion for summary judgment. Bailey v. State Farm Mut. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. DISCUSSION ¶24 Whether the District Court properly determined that Bresnan owned exclusively class eight property? ¶25 We first address whether Montana law allows the Department to classify Bresnan’s property in class eight or class thirteen. Montana law defines class eight properties to include “cable television systems.” Section 15-6-138(1)(k), MCA. Montana taxes class eight properties at 3%. Section 15-6-138(3), MCA. Class thirteen properties comprise “allocations of centrally assessed telecommunications services companies.” Section 15-6- 156(1)(d), MCA. Montana taxes class thirteen property at “6% of its market value.” Section 15-6-156(4), MCA. ¶26 These statutory definitions pose the question of whether Bresnan’s property should be classified as a “cable television system” or a “telecommunications services company.” The District Court concluded as a matter of law that Bresnan’s property qualified as a “cable television system.” The District Court evaluated Bresnan’s “[o]ne-way transmission of video programming,” “set of closed transmission paths,” and “system that receives and amplifies the signals broadcast by one or more television stations” to reach its conclusion. The District Court relied both on the legislature’s definition of a “cable television system,” and the language in Bresnan’s Montana Cable Television Franchise Agreements that 10 matched the language in the Federal Cable Act. Bresnan fit the definition of a cable television system under these factors. ¶27 The District Court further concluded as a matter of law that “Bresnan’s addition of voice and data services did not change the character of its cable television systems.” The District Court relied upon the Department’s apparent failure to “reconcile the necessity of Franchise Agreements for Bresnan to deliver its video programming” with the Department’s contention that “Bresnan, as a whole, is a telecommunications company.” The District Court applied a use test to measure Bresnan’s “PPE [property, plant, and equipment], bandwidth, subscribers, or revenue” to “conclude that Bresnan owns property subject to [c]lass [e]ight property taxation.” ¶28 The Department challenges the District Court’s focus on Bresnan’s physical attributes to the exclusion of the use and productivity of Bresnan’s property. The Department alleges that the District Court erroneously considered only “a portion of [Bresnan’s] use and productivity.” The Department argues that the District Court should have evaluated Bresnan’s classification based upon Bresnan’s use of all of its property and the productivity that results from that use. Chicago, M. & St. P. Ry. Co. v. Powell Cnty., 76 Mont. 596, 599, 247 P. 1096, 1097 (1926); Wheir v. Dye, 105 Mont. 347, 73 P.2d 209 (1937). The Department further takes issue with the District Court’s lack of “analysis on the physical attributes or use and productivity of Bresnan’s internet property.” ¶29 The District Court relied heavily upon our decision in Omimex Canada, Ltd. v. State Dep’t of Revenue, 2008 MT 403, 347 Mont. 176, 201 P.3d 3. In Omimex, we considered whether a natural gas company’s property fell within § 15-6-141(1)(b), MCA (2007). 11 Omimex, ¶ 17. Section 15-6-141(1)(b), MCA (2007), encompasses “allocations for centrally assessed natural gas companies having a major distribution system in this state.” Omimex’s lack of a major distribution system within Montana excluded it from § 15-6-141(1)(b), MCA (2007). Omimex, ¶ 26. ¶30 “[C]able television systems” comprise class class eight property. Section 15-6- 138(1)(k), MCA. “[A]llocations of centrally assessed telecommunications services companies” comprise class thirteen properties. Section 15-6-156(1)(d), MCA. Neither classification statute contains the requirement that a taxpayer have “a major distribution system in this state,” similar to the provision in § 15-6-141(1)(b), MCA (2007), at issue in Omimex. This physical attribute requirement in Omimex—in the form of a major distribution system—remains unique for purposes of property tax classification statutes. Not surprisingly, Omimex represents the sole case where we have determined that the physical attributes of a taxpayer’s property alone govern property tax classification. Omimex, ¶ 26. ¶31 The District Court’s analysis focused upon a physical attribute of Bresnan’s property—the transfer of electrical data signals. Physical attributes do not represent the standard that Montana courts use to classify property. The District Court’s focus upon the physical attributes of Bresnan’s network confines the Department’s ability to classify Bresnan’s entire property in proportion “to its use, its productivity, its utility, [and] its general setting in the economic organization of society.” Yellowstone Pipe Line Co. v. State Bd. of Equalization, 138 Mont. 603, 621, 358 P.2d 55, 64 (1960). The physical attributes of Bresnan’s property and the productivity that results from the use of that property represent the proper metric to classify Bresnan. Wheir, 105 Mont. at 354-55, 73 P.2d at 213. 12 ¶32 Bresnan argues that we should uphold the District Court’s conclusion regardless because Bresnan qualifies as a “cable television system” under the definition of a rural cooperative utility cable television system, “that receives and amplifies the signals broadcast by one or more television stations.” Section 35-18-102, MCA. Bresnan cites to its cable franchise agreements with Montana cities to bolster its position. Bresnan also correctly identifies that both parties’ experts agree that Bresnan operates a cable television system. The Department concedes “that Bresnan’s systems are capable, at least in part, of these utilities.” ¶33 This definition of a “cable television system” fails to capture all of the uses to which Bresnan puts its network. Nothing restricts the use and productivity of Bresnan’s network to the delivery of an electrical data signal only for cable television. Bresnan’s expert report from Dr. Walter Stanley Ciciora describes cable as the “predominant,” but not exclusive, “use of even the most technologically advanced cable television systems today.” Bresnan’s accounting and valuation report describes a “multi-million dollar commitment to enhance[] [cable] that required a significant investment in system engineering, costly new equipment, upgraded distribution plant, and installation labor.” That same report describes additional investments “needed to provide data services” and “needed to provide V[o]IP residential telephony services,” as well as the “incremental cost of enabling commercial V[o]IP services.” Dr. Ciciora concluded that “[m]ost of [Bresnan’s] cable television systems are technologically advanced, providing cable television programming, and high speed data and voice.” 13 ¶34 Bresnan altered its network from one with the limited ability to broadcast only cable in 2003, to the multi-service capable network at issue in this litigation. Bresnan’s argument that its network operates exclusively a “cable television system” denies the obvious fact of the actual use and productivity of Bresnan’s upgraded network. This upgraded network, combined with Bresnan’s attendant property, has expanded Bresnan’s operation beyond a “cable television system” as defined by any section of the Montana code, including § 15-6- 138(1)(k), MCA. ¶35 Various provisions within Title 15 and the administrative rules of Montana explain what constitutes a telecommunications services provider for property tax purposes. We must construe statutes that address the same subject matter and that are consistent with one another to ensure that all statutes have effect. Mountain W. Farm Bureau Mut. Ins. Co. v. Hall, 2001 MT 314, ¶ 23, 308 Mont. 29, 38 P.3d 825. ¶36 “[A]llocations of centrally assessed telecommunications services companies” comprise class thirteen properties. Section 15-6-156(1)(d), MCA. The definitions section of Title 15 defines the parameters of a telecommunications services company. A “telecommunications services provider” offers retail telecommunications services. Section 15-53-129 (14), MCA. “Retail telecommunications,” in turn, involve “the two-way transmission of voice, image, data, or other information over wire, cable, fiber optics, microwave, radio, satellite, or similar facilities that originates or terminates in this state and is charged to a customer with a Montana service address.” Section 15-53-129(10)(a), MCA. 14 ¶37 The administrative rules of Montana clarify that a “telecommunications service provider” includes “a telecommunication services company or a person providing retail telecommunication services as provided in 15-53-129, MCA.” Admin. R. M. 42.22.101(31) (2011). The administrative rules further define “telecommunications for property tax purposes” as “the transmission of information between or among points specified by the user. The transmission must be without change in the form or content as sent and received. The transmission includes all related services associated with providing the information by the telecommunication service provider.” Admin. R. M. 42.22.101(30) (2011) (emphasis added). We construe these statutes and regulations on the same subject matter so that all statutes have effect. Mountain W. Farm Bureau, ¶ 23. ¶38 Title 15 and administrative rules, taken together, confirm that “for property tax purposes,” Admin. R. M. 42.22.101(30) (2011), a class thirteen “telecommunication services compan[y],” § 15-6-156(1)(d), MCA, “provid[es] retail telecommunication services.” Admin. R. M. 42.22.101(31) (2011). A “telecommunications services provider,” § 15-53- 129(14), MCA, in turn, offers “[r]etail telecommunications.” Section 15-53-129(10)(a), MCA. Bresnan provides “voice,” “data,” and “other information” over “fiber optic” cable to its customers. Section 15-53-129(10)(a), MCA. Data and voice are “related services associated” with Bresnan’s original network that historically provided only cable. Admin. R. M. 42.22.101(30) (2011). ¶39 Bresnan’s transmissions terminate in the homes of “customer[s] with a Montana service address” in twenty counties. Section 15-53-129(10)(a), MCA. Bresnan uses its network to provide cable, to provide data, and to provide voice services. Section 15-53- 15 129(14), MCA. Bresnan’s activities constitute “retail telecommunications” and “telecommunications” under both Title 15 and the administrative rules. Section 15-53- 129(10)(a), MCA; Admin. R. M. 42.22.101(30) (2011). ¶40 The Montana legislature has seen fit to define a class thirteen telecommunication services company in a manner that encompasses distribution networks whose owners use the capacity of that network to provide voice, cable, and data electrical signals to subscribers over that single distribution system. Sections 15-53-129 (14), -129(10)(a), MCA. We decline to parse the number and type of electrical data signals that Bresnan transmits over its network or the allocations of the network’s physical elements when the use and productivity of the network as a whole fits the statutory definition of a telecommunications network. An analysis of the use and productivity of Bresnan’s entire network results in the inescapable conclusion that Bresnan uses a single transmission line to deliver three separate services. This analysis imparts the Department with the authority to classify Bresnan’s property accordingly under class thirteen as a telecommunication service. Powell Cnty., 76 Mont. at 599, 247 P. at 1097; Wheir, 105 Mont. at 347, 73 P.2d at 213. ¶41 The legislature’s exemption of certain properties from class thirteen further supports this outcome. The expression of one thing in a statute implies the exclusion of another. Omimex, ¶ 21. The legislature explicitly excluded from class thirteen any class five property owned by an organization that provides telecommunications services. Section 15-6- 156(2)(f), MCA. This express exclusion of class five property implies that the legislature intended to include all other property that a telecommunications services provider owns in class thirteen. Section 15-6-156(2)(f), MCA. If the legislature had intended to exclude class 16 eight “cable television systems” from class thirteen, the legislature could have added the additional language of “and under 15-6-138 [class eight]” to the class thirteen exemptions. Section 15-6-156 (2)(f), MCA. The legislature did not do so. ¶42 To limit Bresnan’s classification to a “cable television service” fails to achieve the purpose of Montana’s taxation classification statutes. Statutory definitions and administrative guidelines taken together, and in the absence of an applicable exclusion, make clear that Bresnan’s use and productivity fits the definition of a “telecommunication services provider.” Bresnan, as a result, remains subject to assessment under class thirteen. ¶43 The Dissent argues that the Department’s failure to value Bresnan’s property in different classes “disregards the basic premise of our property classification system.” Dissent, ¶ 65. Nothing in the classification statutes requires, however, that the Department apportion Bresnan’s property among Montana’s various property tax classifications. This Court previously has defined “allocation” for taxation purposes as “the process of attributing to the taxing state the value of a portion of an interstate system for tax purposes.” Yellowstone Pipe Line Co., 138 Mont. at 612, 358 P.2d at 60. The class thirteen definition of “allocations of centrally assessed telecommunications services companies” requires only that the Department consider all of Bresnan’s property located within Montana for taxation purposes. Section 15-6-156(1)(d), MCA; Yellowstone Pipe Line Co., 138 Mont. at 612, 358 P.2d at 60. This decision allows the Department to address properly “an administrative matter within its broad discretion.” State v. Hornstein, 2010 MT 75, ¶ 16, 356 Mont. 14, 229 P.3d 1206. 17 ¶44 The Dissent further argues that the overwhelming use of Bresnan’s property takes the form of “one-way transmission that receives and amplifies television broadcast signals.” Dissent, ¶ 67. The Department’s audit of Bresnan revealed, however, that very little of Bresnan’s use of its system involves exclusively cable television that relies on one-way transmissions that receive and amplify broadcast signals. In fact, most of Bresnan’s system, as currently used, has the capacity to support the two-way transmission of electrical data signals. The operation of a “telecommunications services compan[y],” involves the two-way transmission of electrical data signals. Section 15-6-156(1)(d), MCA. The Department’s audit of Bresnan confirms that “Bresnan upgraded their equipment and lines to two-way transmission capacity, fiber optic in most cases, to offer many of their advanced services that are available today.” ¶45 Our determination that the Department appropriately classified the use and productivity of Bresnan’s property under class thirteen instead of class eight requires us to analyze the assessment of class thirteen property. The District Court determined that central assessment did not apply to Bresnan. The District Court exempted Bresnan from central assessment based upon its determination that Bresnan qualified as a class eight “cable television system.” The District Court further reasoned that the central assessment statute, § 15-23-101, MCA, “omits any reference to cable television system[s].” A class thirteen classification, conversely, denotes by its terms “centrally assessed telecommunications services companies.” Section 15-6-156(1)(d), MCA. Bresnan’s qualification as a telecommunications service company requires us to determine whether class thirteen 18 classification of Bresnan would be appropriate under the “centrally assessed” element of §15-6-156(1)(d), MCA. ¶46 Montana law requires the Department to assess centrally “property owned by a corporation . . . operating a single and continuous property operated in more than one county.” Section 15-23-101(2), MCA. Properties that enjoy a unity of ownership and devotion to a single use qualify as single and continuous properties. W. Union Tel. Co. v. State Bd. of Equalization, 91 Mont. 310, 322-23, 7 P.2d 551, 552-53 (1932). “Single and continuous” properties are functionally integrated over a wide area and enjoy a unity of use and management. W. Union Tel. Co., 91 Mont. at 322-23, 7 P.2d at 552-53. ¶47 Bresnan operates a single and continuous network in the twenty Montana counties where Bresnan delivers three services. Bresnan operates in an integrated fashion. Bresnan’s customers pay one bill for the purchase of all three services. Bresnan manages its operations from the Network Operations Center in Billings. Customers use a single piece of terminal equipment. Bresnan owns class thirteen property in those locations where Bresnan operates a single transmission line to deliver three services to customers. Bresnan fits the statutory definition of a property that the Department must assess centrally. Section 15-6-156(1)(d), MCA. ¶48 Whether the District Court properly concluded that the Department lacked authority to impose retroactive property tax assessments? ¶49 We next address whether the Department possessed authority to issue revised assessments for Bresnan’s property for tax years 2007, 2008, and 2009. The District Court determined that § 15-8-601(b), MCA, controlled its analysis. The District Court interpreted 19 our revised assessment case law to allow reassessment only in circumstances where there had been a clerical error or a ministerial mistake. The District Court determined that our case law foreclosed reassessments “made to comport with a change in assessor judgment” to avoid impermissible prejudice to the taxpayer. ¶50 The District Court reasoned that the Department’s shift away from Bresnan’s prior income statement and balance sheet to a centralized assessment represented a shift in assessor judgment. The District Court concluded that the “change in appraisal judgment” placed the Department’s reassessment “outside the definition of an—‘erroneous assessment’” allowed under § 15-8-601, MCA. The Department argues that it “lacked the information necessary to make a determination on central assessment before its audit of Bresnan.” The Department contends that it “performed unit valuations on Bresnan for tax years 2007-2009” upon discovery of “the information necessary to make a determination on central assessment.” ¶51 The Department points out that none of our revised assessment cases “involve[d] centrally assessed property.” The authority to issue revised assessments is critical because appraisers must “annually test whether a property requires central assessment.” The Department contends that restraint on its ability to “exercise judgment to determine whether the property requires central assessment” would render the Department unable to perform its duty under Montana law. ¶52 We have defined the contours of revised assessments only twice. We determined first in Evans Products Co. v. Missoula Cnty., 201 Mont. 337, 342, 654 P.2d 523, 526 (1982), that “a clerical error falls under the plain language meaning of ‘erroneous assessment’ as it is 20 used in section 15-8-601, MCA.” Evans Products, 201 Mont. at 342, 654 P.2d at 526. We further noted that “[t]he bulk of authority and prior Montana case law suggest that appraisal, the setting of market value, is an integral part of the taxation process.” Evans Products, 201 Mont. at 343, 654 P.2d at 526. This Court analyzed revised assessments more recently in Kruse v. Cascade Cnty., 244 Mont. 126, 796 P.2d 568 (1990). We clarified in Kruse that “[p]roperty which has not been fully taxed according to appropriate tax procedures may be properly reassessed.” Kruse, 244 Mont. at 129, 796 P.2d at 570. ¶53 Neither Evans Products, nor Kruse, specifically examined revised assessments in the context of property that must be assessed centrally. Evans Products and Kruse make clear, however, that § 15-8-601, MCA, allows the Department to reassess property that has not been taxed fully according to appropriate tax procedures. Evans Products, 201 Mont. at 343, 654 P.2d at 526; Kruse, 244 Mont. at 129, 796 P.2d at 570. Unit valuation involves a specific type of appraisal. Appraisal represents an “integral part of the taxation process.” Evans Products, 201 Mont. at 343, 654 P.2d at 526. The Department logically possesses the authority under § 15-8-601, MCA, to reassess property subject to central assessment when the Department determines that such property has not been taxed fully according to appropriate tax procedures. ¶54 The Department must “discover” property that has escaped assessment before it has authority to issue a revised assessment. Section 15-8-601(b), MCA. Many taxpayers in Montana, including Bresnan, self-report their assets into different assessment classes. A more thorough look at the taxpayer’s property through an audit constitutes the only vehicle 21 for the Department to “discover” property that has escaped assessment when the taxpayer self-reports. The Department completed its audit of Bresnan in 2009. ¶55 The Department’s audit revealed that Bresnan should be classified properly as a class thirteen “telecommunication services provider.” This reclassification resulted in Bresnan being subject to central assessment. The audit further revealed past improper classification of property on the part of Bresnan. This improper classification apparently arose through Bresnan’s self-reporting of its assets. The historic improper classification of Bresnan’s property represents property that escaped full taxation according to appropriate tax procedures. Section 15-8-601(b), MCA. ¶56 The Department’s audit determined that Bresnan’s allocations of percentages of its property as cable, data, or voice failed to “appropriately represent the operations of the segments.” The property that Bresnan had classified as “telecommunications services” property contained only that property dedicated exclusively to voice service. Bresnan had classified the remaining lion’s share of its property as “cable television services.” This substantially larger portion included any property that involved cable or data in any way. The audit found that “[u]sing this methodology [Bresnan’s] [c]able operations are overstated and [t]elephony is understated.” ¶57 Kory Hofland (Hofland) worked as the unit manager of centrally assessed and industrial properties at the Department. Bresnan deposed Hofland. Hofland described property that had not been taxed fully. Hofland identified that Bresnan had limited its property that would be assessed centrally by “only reporting [to class thirteen] property of a receiver of [Bresnan’s] services that only had telephony.” Hofland explained that “[i]f that 22 recipient subscribed to telephony and [i]nternet, they weren’t [reported] in the telephony portion.” Hofland similarly explained that “[i]f they subscribed to telephony and cable, they weren’t in [Bresnan’s telephony reporting].” Hofland expressed further concerns about Bresnan’s lack of backup to “audited financial data” with regard to Bresnan’s historic reporting arrangement. ¶58 The Department’s audit of Bresnan and Hofland’s testimony indicate that the audit of Bresnan enabled the Department to discover property that had not been taxed fully according to appropriate tax procedures. The Department reclassified Bresnan as a class thirteen telecommunication services provider, subject to central assessment, in order to value the full property taxes due on Bresnan’s property. Section 15-8-601, MCA, grants the Department the authority to issue a revised assessment of Bresnan in order to capture the value of property that has not been taxed fully according to appropriate tax procedures. ¶59 Bresnan challenges the Department’s decision to issue a revised assessment as the result of a “change in assessor judgment.” Evidence in the record directly contradicts Bresnan’s argument. The Department’s discovery and subsequent reclassification arose from the audit’s revelation of inaccuracies in Bresnan’s self-classification. We decline to characterize the discovery of property that has not been taxed fully according to appropriate tax procedures due to a misclassification on the taxpayer’s part as a mere “change in assessor judgment.” We will not presume Bresnan’s bad faith in self-allocation. We similarly will not tie the Department’s hands simply because it discovered the improper classification through an audit when the taxpayer self-reports. 23 ¶60 We reverse the decision of the District Court. We remand and direct the District Court to enter a judgment consistent with this opinion. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ BETH BAKER Justice Jim Rice, dissenting. ¶61 The Court eschews any attempt to analyze the extensive record evidence and instead relies heavily on the presumption that because Bresnan provides some telecommunications services, nearly all of its property can be assessed by the Department under class thirteen. I believe that the Court has disregarded the plain wording and intent of Montana’s property classification statutes and failed to properly apply the “physical attributes” and “use and productivity” tests. ¶62 The proper application of these tests results in companies being taxed under multiple property classes, depending on the use of their property. The District Court extensively analyzed and entered findings about this system, including the property tax classifications applied to companies such as Montana Dakota Utilities, Northwestern Energy, Avista Corporation, Portland General Corporation, and Yellowstone Valley Electric Cooperative, all of which are taxed in multiple classes. More specifically, regarding the telecommunications 24 industry, the District Court found that “[t]elecommunications companies that report for central assessment under Class Thirteen also report and are assessed locally for certain of their Montana property under Class Eight, including Sprint Nextel, Qwest, and CenturyTel.” The court found that the Cable & Communications Corporation, a company that provides cellular telephone and cable television services, “reports its cellular telephone properties for central assessment under Class Thirteen while reporting its cable television properties for local assessment under Class Eight.” ¶63 Regarding Bresnan, the District Court found from the extensive evidence presented that “[o]ver 97% of Bresnan’s Montana bandwidth is used exclusively for the one-way transmission of video programming.” Further, “[s]tate-wide, 917 [of Bresnan’s] channels were devoted exclusively to the one-way transmission of video programming, while 26 channels were devoted to voice/data, and 28 channels were used for Video-on-demand (which also is one-way video transmission).”1 To summarize its lengthy findings, the court found that Bresnan’s properties “primarily were and are used to provide the one-way transmission to subscribers of video programming.” The District Court’s findings are supported by substantial evidence and have not been overturned. The Court’s approach is simply to assume that because Bresnan has telecommunications capabilities, the Department is authorized to tax nearly all of its property under class thirteen. ¶64 Turning to the statutes, we are to start with the principle that “[t]ax statutes must be construed in favor of the taxpayer.” Omimex, ¶ 25. The statutes make clear that holding 25 commercial property that facilitates the two-way transmission of voice, image, and data qualifies an entity as a telecommunications services company. See § 15-53-129(10)(a), MCA (“Retail telecommunications” means “the two-way transmission of voice, image, data, or other information over wire, cable, fiber optics, microwave, radio, satellite, or similar facilities that originates or terminates in this state”). Indeed, the Court correctly notes that by definition, “[a] ‘telecommunications services provider’ offers retail telecommunications services.” Opinion, ¶ 36 (citing § 15-53-129(14), MCA). Because Bresnan holds some two- way telephony and internet property, it operates, in part, as a telecommunications company. However, the Court gets sidetracked by then deducing that § 15-6-156(1)(d), MCA, allows the Department to classify nearly all of Bresnan’s property under class thirteen, Opinion, ¶ 40, when in reality, only some of that property—a very small fraction of it—actually facilitates the two-way transmission of voice, image, and data. ¶65 The statute does not require that all property of a telecommunications services company is to be taxed under class thirteen. By allowing the Department to tax Bresnan’s one-way property under class thirteen, the Court disregards the basic premise of our property classification system—different types of property are taxed in different classes. N. Pac. Ry. v. Sanders Co., 66 Mont. 608, 615-16, 214 P. 596, 599 (1923) (determining “[c]lassification must be based upon substantial distinctions which make one class really different from another.”); see § 15-6-101(2), MCA. The Legislature made a conscious decision to tax cable television systems at a 3% rate under class eight, § 15-6-138(1)(k), MCA, and 1 “Analog electronic communication long has been measured in “bandwidth” in units of MegaHertz (“MHz”). The Federal Communications Commission (“FCC”) historically defined a “channel” as 26 telecommunications services property at a 6% rate under class thirteen, § 15-6-156(1)(d), MCA. We should not permit the Department to ignore this distinction.2 Consistent with the classification system as a whole and the duty to construe the statutes in favor of the taxpayer, only property that actually meets the definition of telecommunications services property should be so classified. Thus, the statutes require an apportionment of taxes between Bresnan’s two-way transmission property—which demarcates a telecommunications services company in the first place—and its predominately one-way cable television property. ¶66 The Court’s determination that the “legislature intended to include all other property that a telecommunications services provider owns in class thirteen,” Opinion, ¶ 41, does great harm to not only Bresnan, but potentially to the property tax system as a whole. This holding runs directly counter to the property classification structure and to the manner in which telecommunications companies—and other companies—are actually taxed. For example, class nine property includes “allocations for centrally assessed natural gas distribution utilities . . . .” Section 15-6-141(1)(d), MCA. Under the Court’s analysis, this language would necessarily incorporate all properties of natural gas distribution utilities into this class and tax them at a 12% rate, see § 15-6-141(2). Clearly, this is not the case, as other utility property, such as “air and water pollution control equipment,” is classified under class five and taxed at a rate of 3%. See § 15-6-135(1)(b), (5). six (6) MHz.” 2 The Court argues that by classifying nearly all of Bresnan’s property under class thirteen, the Department is simply addressing “an administrative matter within its broad discretion.” Opinion, ¶ 43. However, we have also held that an agency’s implementation of a statute must be “consistent and not in conflict with the statute” and must “effectuate the purpose of the statute.” Mont. Trout Unlimited v. Mont. Dept. of Nat. Resources and Conserv., 2006 MT 72, ¶ 36, 331 Mont. 483, 133 P.3d 224 (citation omitted) (discussing an agency’s rulemaking authority). 27 ¶67 Moreover, the Court fails to apply our use and productivity test with any precision. During oral argument, Bresnan analogized its property to a superhighway consisting of 800 lanes. 796 of these lanes are filled bumper-to-bumper with trucks travelling one way, 24 hours per day, 365 days per year. The remaining 4 lanes contain cars travelling two ways. These cars do not move all the time, only sporadically. The trucks in this analogy represent Bresnan’s one-way cable television property. The cars represent Bresnan’s two-way telecommunications services property. Accordingly, after making extensive findings, the District Court determined that the overwhelming use of Bresnan’s property is one-way transmission that receives and amplifies television broadcast signals. The Court’s wholesale reliance on the Department’s audit does not render these findings clearly erroneous—M. R. Civ. P. 52(a)(6) requires that we “give due regard to the trial court’s opportunity to judge the witnesses’ credibility.” Both parties’ experts testified that Bresnan operates a cable television system. Class eight property includes “cable television systems,” § 15-6- 138(1)(k), MCA, which by definition “receive[] and amplif[y] the signals broadcast by one or more television stations.” Section 35-18-102, MCA. ¶68 The Court sidesteps the hard work of analyzing the record evidence, declining “to parse the number and type of electrical data signals that Bresnan transmits over its network or the allocations of the network’s physical elements . . . .” Opinion, ¶ 40. However, nothing could be more indicative of a network’s use than the number and type of data signals actually being transmitted over it. In sum, the Court claims to be classifying property on the basis of use, Opinion ¶¶ 31, 34, 40, but ultimately fails to do so by allowing the Department to place nearly all of Bresnan’s property into class thirteen. 28 ¶69 Bresnan has been changing the services it provides from cable television to telecommunications services. Consistent therewith, Bresnan has been reporting those changes, listing properties that are utilized for telecommunications services under class thirteen. However, the Department of Revenue got up one morning and decided to flip the entire company into class thirteen, thereby increasing Bresnan’s taxes by an incredible 329% overnight, from $1.7 million to $7.3 million, even though the overwhelmingly predominant use of Bresnan’s property is for class eight purposes. This disincentive for companies to expand their telecommunications services was not created or intended by the Legislature, but is the work of the Department. It should be called highway robbery—perhaps the first case of information superhighway robbery by the tax authorities. ¶70 I dissent. /S/ JIM RICE Justice Laurie McKinnon joins in the dissenting Opinion of Justice Rice. /S/ LAURIE McKINNON	December 2, 2013
e81941f1-efc8-469f-82e9-d23a53b21a65	State v. Lotter	2013 MT 336	DA 12-0139	Montana	Montana Supreme Court	DA 12-0139 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 336 STATE OF MONTANA, Plaintiff and Appellee, v. JILL MARIE LOTTER, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. CDC 2010-348 Honorable Kathy Seeley, Presiding Judge COUNSEL OF RECORD: For Appellant: Jennifer A. Hurley, Hurley Kujawa, PLLC; Butte, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General; Helena, Montana Leo J. Gallagher, Lewis and Clark County Attorney, Melissa Broch, Deputy County Attorney; Helena, Montana Submitted on Briefs: September 25, 2013 Decided: November 12, 2013 Filed: __________________________________________ Clerk November 12 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 A jury in the First Judicial District Court, Lewis and Clark County, found Jill Marie Lotter guilty of the attempted deliberate homicide of her husband, Mike, and the court entered judgment against her. Lotter appeals. We affirm. ¶2 We address the following issues on appeal: 1. Did the District Court err when it excluded Lotter’s proposed expert witness testimony about the behaviors of individuals in abusive relationships and their diagnoses of Lotter with post-traumatic stress disorder (PTSD)? 2. Did the District Court err when it admitted Mike’s alleged prior inconsistent statement to a volunteer firefighter responding to a medical emergency, when Mike could not remember making the statement? FACTUAL AND PROCEDURAL BACKGROUND ¶3 The State of Montana charged Lotter with the attempted deliberate homicide of her then-husband, Mike, at the family home on November 9, 2010. Lotter filed noticed of her intent to present evidence of her good character and to rely upon the affirmative defense of justifiable use of force. ¶4 Before trial, Lotter moved to exclude testimony of a volunteer firefighter that, when the firefighter responded to a 911 call from the Lotter home on November 9, Mike muttered, “This is the third time she has tried to kill me.” Lotter argued that Mike’s statement did not fit within any recognized hearsay exception and that, if Mike did not testify at trial, admission of the firefighter’s testimony would violate her right to confront witnesses against her, under the Confrontation Clause of the United States Constitution and Article II, Section 24 of the Montana Constitution. In response, the State argued that Mike was expected to 3 testify at trial and that, because he could not remember making the statement, it was admissible under the hearsay exclusion for prior inconsistent statements, M. R. Evid. 801(d)(1)(A). Following a pretrial hearing, the court denied the motion to exclude. It ruled that, if Mike testified, the statement would be admissible as a prior inconsistent statement under M. R. Evid. 801(d)(1)(A) and as an excited utterance pursuant to M. R. Evid. 803(2), and that if he did not testify, it would be admissible as a nontestimonial statement under Crawford v. Washington, 541 U.S. 36, 124 S. Ct. 1354 (2004). ¶5 Lotter also filed pretrial notice of her intent to call Dr. William Stratford and Dr. Mary Jo Jeffres as expert witnesses on the behaviors of individuals in abusive relationships. In response, the State moved to exclude any testimony as to Lotter’s state of mind at the time she committed the offense. Observing that Lotter had not interposed a defense of mental disease or defect, the District Court prohibited Lotter from presenting expert testimony on whether she had the capacity to act with purpose or knowledge, or that her capacity was diminished by some psychological issue. The court ruled, however, that, if Lotter established the necessary foundation at trial, the experts may testify about battered woman syndrome and characteristics unique to that syndrome. ¶6 At trial, the State presented evidence that, in the autumn of 2010, Mike and Jill Lotter were facing financial difficulties as they neared the 10th anniversary of their marriage. Mike had lost his job as a management consultant, their savings had been depleted, and they had accumulated substantial credit card debt, largely from Lotter’s self-admitted “addiction” to making penny auction purchases on the Internet. In addition, on two occasions during that 4 autumn, Mike had been hospitalized for serious injuries from unexplained falls in the family home. During those hospitalizations, Lotter had reported that Mike had been taking her antianxiety and sedative medications, and toxicology tests after his falls confirmed the presence of those medications in his system. Mike also was diagnosed with epilepsy and was prescribed medication to treat epilepsy. ¶7 At trial, Mike testified that he had never suffered from epilepsy before the autumn of 2010, and that he neither currently suffered from it nor continued to take any medication for it. He testified that his memory of how he suffered his injuries during that autumn was unclear. In particular, his memory of the events of November 9 was very limited. He testified that he remembered lying on his back with his hands pinned down and a huge, painful weight on his chest, and then seeing Lotter’s arm swing, after which everything went black. ¶8 Lotter testified that she found Mike at the bottom of a flight of stairs inside the house on the morning of November 9, after he apparently fell from the top of the stairway. She went to him and was preparing to help him change his underwear, which were wet, when he called her by his ex-wife’s name and accused her of trying to kill him. Lotter testified she was afraid of Mike and tried to pull away, but that he grabbed her and pulled her down, trying to choke her. She eventually crawled into the adjacent laundry room and picked up a hammer sitting on top of the water heater. Mike grabbed her again and would not let her go, so she hit him on the head with the hammer. She begged him to let her go, but he would not do so; at one point he took the hammer from her and hit her on the head. Lotter passed out; 5 when she came to, Mike told her to go take a shower, get in the car, and kill herself. Lotter testified that these events transpired over the course of about 3 hours. She took a shower, gathered some belongings, got into her car, and started down the driveway. When Lotter saw that her friend and neighbor was home, she went over to the neighbor’s house. ¶9 Lotter’s neighbor testified that, shortly after noon on November 9, 2010, Lotter knocked on her door and asked her to talk, because “Mike attacked me.” Lotter told the neighbor that she had hit Mike in the head with a hammer. The neighbor convinced Lotter to return with her to check on Mike. When they went to Lotter’s home, Mike was lying near the staircase inside the front door. His head was very bloody. The neighbor feared he might be dead, until she saw him move his arm. When the neighbor asked Lotter for a phone to call 911, Lotter replied that she did not have a phone with her. The neighbor ran home touse her phone to make the call. ¶10 Both Lotter and Mike were taken to the hospital. Mike was transferred by emergency flight to a hospital in Great Falls, where he was treated for a depressed skull fracture, multiple facial fractures, and over 20 lacerations. He had been hit in the head with the claw end of a hammer approximately 20 times. In contrast, none of Lotter’s injuries were serious, and they did not require followup. ¶11 Lotter testified that, during her marriage to Mike, he made demeaning comments to her, including telling her she was too sensitive, she was irresponsible, she didn’t handle her sons correctly, and she was the craziest and stupidest person he had ever known. He made trivial demands about how to load the dishwasher and how to fold his laundry. He 6 discouraged her friendships and preferred to be with her alone. Lotter testified that Mike would go into a “rage” every six months or so, but she did not identify any specific conduct by him during his “rages.” The District Court ruled that the evidence Lotter presented did not provide a sufficient foundation to support the admission of the testimony of her proposed expert witnesses on battered woman’s syndrome and PTSD. ¶12 The jury found Lotter guilty of attempted deliberate homicide. The District Court entered judgment requiring her to serve forty years at Montana Women’s Prison. Lotter appeals. STANDARD OF REVIEW ¶13 A district court has broad discretion when determining the relevance and admissibility of evidence, and we generally review evidentiary rulings for abuse of discretion. State v. Daniels, 2011 MT 278, ¶ 11, 362 Mont. 426, 265 P.3d 623. To the extent that the trial court’s ruling is based on an interpretation of a rule of evidence or a statute, however, our review is de novo. State v. Derbyshire, 2009 MT 27, ¶ 19, 349 Mont. 114, 201 P.3d 811. DISCUSSION ¶14 Did the District Court err when it excluded Dr. Stratford’s and Dr. Jeffres’ expert witness testimony about the behaviors of individuals in abusive relationships and their diagnoses of Lotter with PTSD? ¶15 Montana Rule of Evidence 702 provides that, “[i]f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine 7 a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise.” ¶16 This Court first addressed the admissibility of evidence concerning battered woman syndrome in State v. Stringer, 271 Mont. 367, 897 P.2d 1063 (1995). There, we recognized that the term is used to describe “common characteristics that appear in women who are abused physically and psychologically over an extended period of time by the dominant male figure in their lives.” Stringer, 271 Mont. at 375, 897 P.2d at 1068 (citation omitted). Before expert testimony on battered woman syndrome may be admitted, there first must be evidence of a battered victim. We declined to set “hard and fast foundational requirements” for establishing that a person is a battered woman, instead leaving those foundational decisions to the sound discretion of the trial court on a case-by-case basis: [T]he party seeking to introduce battered woman syndrome evidence must lay an appropriate foundation substantiating that the conduct and behavior of the witness is consistent with the generally recognized symptoms of the battered woman syndrome, and that the witness has behaved in such a manner that the jury would be aided by expert testimony which provides a possible explanation for the behavior. Stringer, 271 Mont. at 378, 897 P.2d at 1070. ¶17 Here, Lotter maintains she provided sufficient evidence that she was emotionally abused by Mike to justify admission of her proposed experts’ testimony on battered woman syndrome. At oral argument before this Court, Lotter’s counsel cited, as foundation for the admission of such expert testimony, Lotter’s testimony about Mike’s criticism of and trivial demands on her, and Mike’s testimony that sometimes when Lotter told him she would be 8 working late he drove by her office to see if she really was there—which counsel characterized as evidence that Mike stalked Lotter. ¶18 In State v. Hanks, 817 N.W.2d 663 (Minn. 2012), the Supreme Court of Minnesota upheld a trial court’s determination that evidence of a troubled relationship between a woman and her romantic partner was not sufficient to provide a foundation for the admission of expert testimony on battered woman syndrome. There, defendant Hanks, who was charged with both first- and second-degree murder of her romantic partner, offered evidence that her partner was not involved in the lives of his children, preferred that Hanks stay at home with the children rather than work outside the home, controlled the family finances and did not give Hanks money, got angry when Hanks went out socially, disabled Hanks’ vehicle so she could not drive it, and made threats to kill Hanks, his children, and himself. The Minnesota Supreme Court held that the trial court did not abuse its discretion in finding the evidence of a troubled relationship was insufficient to establish the type of relationship that would give rise to battered woman syndrome. Hanks, 817 N.W.2d at 669. ¶19 Having reviewed the record, we cannot say the District Court abused its discretion in ruling that Lotter had failed to produce an adequate evidentiary foundation in this case for the admission of expert witness testimony about the behaviors of individuals in abusive relationships. Lotter presented no evidence other than demeaning or degrading comments Mike may have made, from prior to November 9; nor did her vague testimony about rages establish the multiple cycles of violence necessary to provide a foundation for battered woman syndrome. See Stringer, 271 Mont. at 378, 897 P.2d at 1070. 9 ¶20 Lotter argues that, even if she did not adduce enough evidence to provide a foundation for the admission of expert testimony about battering and its effects, she was entitled to present Dr. Stratford’s testimony about his testing and his PTSD diagnosis of her, under § 46-14-213, MCA. Pretrial, the District Court correctly refused to admit such testimony for purposes of establishing that Lotter lacked the capacity to act with purpose or knowledge or that her capacity was diminished because of a psychological issue, on grounds that Lotter had not given notice of intent to rely on a mental disease or defect defense. After reviewing the record, we concur with the State’s position on appeal that the information provided to the District Court indicated the diagnoses of PTSD were based solely on the premise that Lotter suffered from battered woman syndrome. Therefore, if expert testimony on battered woman syndrome was not admissible, expert testimony on PTSD was not admissible, either. ¶21 Lotter claims the State put her “psychological diagnosis” at issue when it called Michelle Cuddy to testify. Cuddy, a licensed clinical professional counselor and crisis response team therapist, testified that she consulted with Lotter at the emergency room on November 9, 2010, after Lotter’s mother told a physician’s assistant who examined Lotter that Lotter was suicidal. Cuddy described her interaction with Lotter at the hospital and what Lotter told her had transpired earlier on that date, and her six pages of notes from her consultation were introduced into evidence. Cuddy testified that she perceived no indication that Lotter was intending to kill herself and, in response to a question on redirect examination, stated she “absolutely believed” that Lotter was “completely sane.” 10 ¶22 We conclude Cuddy’s testimony did not open the door for broader psychological diagnosis evidence. Lotter did not present the jury with a mental disease or defect defense, so was not challenging her “sanity.” Cuddy did not testify as an expert witness on Lotter’s overall psychological diagnosis, nor did Lotter propose to offer testimony by Dr. Stratford to refute Cuddy’s conclusion that Lotter was not suicidal. ¶23 Lastly, Lotter complains that the prosecution preyed on common misconceptions about victims of domestic violence during closing arguments at trial, “openly mocking [Lotter’s] allegations of abuse as mere ‘annoyances.’” However, no objections were made to the referenced remark during closing argument at trial, nor has the propriety of remarks made by the prosecution during closing argument been raised as an issue on appeal. ¶24 We hold that the District Court did not err in excluding Dr. Stratford’s and Dr. Jeffres’ expert testimony about the behaviors of individuals in abusive relationships and their diagnoses of Lotter with PTSD. ¶25 Did the District Court err when it admitted Mike’s alleged prior inconsistent statement to a volunteer firefighter responding to a medical emergency, when Mike could not remember making the statement? ¶26 As indicated above, Lotter’s pretrial motion to exclude evidence of Mike’s statement to the volunteer firefighter was based on (1) her Sixth Amendment right to confront witnesses; and (2) an argument that the statement did not fit within any exception to the general prohibition on admission of hearsay evidence. ¶27 The Confrontation Clause argument was based on the United States Supreme Court’s opinion in Crawford, which this Court first applied in State v. Mizenko, 2006 MT 11, 330 11 Mont. 299, 127 P.3d 458. The Confrontation Clause holdings of those cases relate to instances in which the declarant does not testify at trial. Because Mike testified at trial, there was no Confrontation Clause issue concerning the evidence of his November 9 statement, and the requirements set forth in Crawford and Mizenko do not apply. Accordingly, Lotter makes no Confrontation Clause argument on appeal. ¶28 We turn to the hearsay argument. Hearsay is a statement, other than one made by the declarant while testifying at the trial, that is offered to prove the truth of the matter asserted. M. R. Evid. 801(c). Hearsay generally is not admissible into evidence. M. R. Evid. 802. A statement is not hearsay, however, if the declarant testifies at the trial and is subject to cross- examination concerning the statement, and the statement is inconsistent with the declarant’s testimony. M. R. Evid. 801(d)(1)(A). ¶29 On appeal, Lotter does not contest that the firefighter’s testimony was admissible under M. R. Evid. 801(d)(1)(A). She acknowledges that, under State v. Lawrence, 285 Mont. 140, 159, 948 P.2d 186, 198 (1997), a declarant’s lapse of memory is an inconsistency within the meaning of that rule, and the witness may be impeached or rehabilitated with evidence of the earlier statement. ¶30 Lotter argues, however, that the admissibility of a prior inconsistent statement may be limited by factors other than hearsay, and maintains Mike’s November 9 statement was inadmissible as a matter of due process, because it was inherently unreliable. Citing State v. White Water, 194 Mont. 85, 634 P.2d 636 (1981), she references the circumstances under 12 which the statement was made, plus “[t]he defense had no ability to cross-examine [Mike] on his making of the statement.” ¶31 Lotter raises this due process argument for the first time on appeal. Generally, we will not consider new legal theories raised for the first time on appeal because “ ‘it is unfair to fault the trial court on an issue it was never given an opportunity to consider.’ ” State v. Montgomery, 2010 MT 193, ¶ 11, 357 Mont. 348, 239 P.3d 929, quoting State v. Courville, 2002 MT 330, ¶ 5, 313 Mont. 218, 61 P.3d 749. We will adhere to that general rule here. ¶32 We conclude Lotter has failed to establish that the District Court abused its discretion when it admitted the firefighter’s testimony about what Mike said to him. ¶33 Because we have concluded the District Court did not err in either of the above rulings, we need not address the third issue Lotter raised on appeal: whether we should reverse her conviction under the cumulative error doctrine. ¶34 We affirm the judgment entered by the District Court. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ BRIAN MORRIS /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE	November 12, 2013
ba376453-3ff8-4ac0-a410-43c8b3b9b02b	Diaz v. State	2013 MT 331	DA 12-0654	Montana	Montana Supreme Court	DA 12-0654 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 331 JEANETTE DIAZ and LEAH HOFFMANN-BERNHARDT, Individually and on Behalf of Others Similarly Situated, Plaintiffs and Appellees, v. STATE OF MONTANA, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV-2008-956 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Robert C. Lukes, Garlington, Lohn & Robinson, PLLP, Missoula, Montana For Appellees: Erik B. Thueson, Scott L. Peterson, Thueson Law Office, Helena, Montana James G. Hunt, Jonathan McDonald, Dix, Hunt & McDonald, Helena, Montana Submitted on Briefs: August 28, 2013 Decided: November 6, 2013 Filed: __________________________________________ Clerk November 6 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 The State of Montana appeals from the District Court’s Order filed June 19, 2012, denying the State’s motion for summary judgment. We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶2 Plaintiffs Diaz and Hoffman-Bernhardt were covered by the State of Montana’s employee healthcare benefit program established under Title 2, chapter 18, MCA (referred to as the Plan). The Plan is not subject to the insurance code, § 33-1-102(7), MCA, and is funded by the State as an employee benefit. It covers over 30,000 State employees, dependents, and retirees. See generally Diaz v. Blue Cross and Blue Shield, et al., 2011 MT 322, 363 Mont. 151, 267 P.3d 756 (Diaz I). This case is before this Court upon the District Court’s certification under M. R. Civ. P. 54(b), as to the portion of the June 19, 2012 order denying the State of Montana’s motion for summary judgment. ¶3 The District Court applied Diaz I and Blue Cross & Blue Shield v. State Auditor, 2009 MT 318, 352 Mont. 423, 218 P.3d 475 and concluded that the State, operating the Plan, is an insurer for purposes of Title 2, chapter 18, MCA, and that a “coordination of benefits” provision in the Plan contravened the “made whole” requirement of § 2-18-902, MCA. The issue on appeal is whether the District Court properly concluded that the State’s operation of the Plan is subject to the “made-whole” provisions in §§ 2-18-901 and -902, MCA. ¶4 For a period of years the Plan has contained the following provision: 3 The following services and expenses are not covered: . . . 5. Expenses that a member is entitled to have covered or that are paid under an automobile insurance policy, a premise liability policy, or other liability insurance policy. This includes but is not limited to a homeowner’s policy or business liability policy, or expenses that a member would be entitled to have covered under such policies if not covered by the State Plan. The State refers to this as a “coordination of benefits” provision, designed to determine which is the primary and which is the secondary payer as between insurers. The intent of the provision is to have only one insurer pay any given claim such as a medical expense, so as to “exclude double payment.” ¶5 Diaz was injured in an automobile accident in December 2006, and her medical expenses were covered by the Plan. The Plan paid her medical claims, one of which was a $195 claim paid to a naturopathic physician. The physician returned the payment to the Plan because the charge had been paid by the insurer of the other driver in the accident that injured Diaz. Hoffman-Bernhardt was injured in an automobile accident in September 2005 and her medical claims were covered by the Plan. In her case a medical care provider returned a claim payment to the Plan because the claim had been paid by another insurer. There is no dispute that all of the medical bills of both plaintiffs were paid by either the Plan or by third-party insurers. Diaz and Hoffman-Bernhardt assert that the Plan should not have retained the payments returned by the medical providers, but should have paid those amounts to them and was required to do so unless they had 4 been made whole or fully compensated for all losses they incurred as a result of the automobile accidents. ¶6 While the Plan did not assert express subrogation rights as against any other person or entity, the issue before the District Court was whether the Plan violated the provisions of §§ 2-18-901 and -902, MCA, by accepting the refunds from the medical providers. Plaintiffs contend that the application of the Plan’s coordination of benefits provision to allow the Plan to retain the refunds amounts to subrogation and that no insurer has a right to subrogation unless the insured is made whole for all losses. The District Court agreed and denied the State’s motion for summary judgment. STANDARD OF REVIEW ¶7 The parties agree that this Court reviews a summary judgment ruling de novo to determine whether it is correct. Citizens for Responsible Dev. v. Sanders County, 2009 MT 182, ¶ 7, 351 Mont. 40, 208 P.3d 876. DISCUSSION ¶8 The issue on appeal is whether the District Court properly denied the State’s motion for summary judgment. ¶9 Section 2-18-901, MCA, provides: Subrogation Rights. A disability insurance policy subject to this chapter may contain a provision providing that, to the extent necessary for reimbursement of benefits paid to or on behalf of the insured, the insurer is entitled to subrogation as provided for in 2-18-902, against a judgment or recovery received by the insured from a third party found liable for a wrongful act or omission that caused the injury necessitating benefit payments. Section 2-18-902, MCA, provides: 5 Notice—shared costs of third-party action—limitation. (1) If an insured intends to institute an action for damages against a third party, the insured shall give the insurer reasonable notice of the intention to institute the action. (2) The insured may request that the insurer pay a proportionate share of the reasonable costs of the third-party action, including attorney fees. (3) An insurer may elect not to participate in the cost of the action. If an election is made, the insurer waives 50% of any subrogation rights granted to it by 2-18-901. (4) The insurer’s right of subrogation granted in 2-18-901 may not be enforced until the injured insured has been fully compensated for the insured’s injuries. “Disability insurance” is defined in § 33-1-207(1), MCA, and there is no dispute that the Plan is “disability insurance” as defined and that the State, through the plan, is an insurer. Diaz I, ¶¶ 16-17. ¶10 The issue on appeal is whether the made-whole requirement of § 2-18-902(4), MCA, applies to the Plan insofar as it has withheld payments or has retained payments returned by a healthcare provider, because the medical expense has been paid by a third party. The District Court, in denying the State’s motion for summary judgment, held that the made-whole requirement applies. ¶11 Subrogation is a substitution of the legal right of one for another. Skague v. Mtn. States T & T Co., 172 Mont. 521, 526, 55 P.2d 628, 630-31 (1977). In the case of insurance relationships, an insurer who pays for a loss incurred by the insured might have a subrogation claim against a recovery that the insured makes from a third party. This is provided for in § 2-18-901, MCA. Alternatively, an insurer may pay the loss incurred by the insured and then pursue reimbursement for that payment from a third party that is responsible for the loss. This is provided for in § 2-18-902, MCA. An important 6 component of subrogation under Montana law is that the party in the insurer’s position may not seek subrogation based upon loss paid to an insured unless the insured has been “made whole” or fully compensated for all loss suffered. Section 2-18-902(4), MCA. [W]hen the insured has sustained a loss in excess of the reimbursement by the insurer, the insured is entitled to be made whole for his entire loss and any costs of recovery, including attorney’s fees, before the insurer can assert its right of legal subrogation against the insured or the tortfeasor. Skague, 172 Mont. at 528, 55 P.2d at 632. ¶12 In the present case the plaintiffs assert that the Plan was obligated to pay the amount of their medical expenses even if those expenses have already been paid by a third party. Plaintiffs contend that withholding payment for a medical expense because it has been paid by a third party amounts to de-facto subrogation, especially when the Plan did not undertake any analysis of whether the beneficiaries had been made whole for their loss. Diaz I, ¶¶ 4-6. The State asserts that utilization of a coordination of benefits provision does not constitute subrogation, and therefore does not require any made-whole analysis. Further, the State contends that the Plan should not be subject to the same rules as a traditional insurer. ¶13 In Blue Cross, this Court addressed a similar issue. In that case, coordination of benefits language in a Blue Cross and Blue Shield policy excluded coverage for any health care costs incurred by its insureds if they received or were entitled to receive payment of those costs from a third party’s automobile or premises liability policy. The issue in that case was whether the coordination of benefits provision violated the made- whole requirement found in § 33-30-1102, MCA. This Court held that the legal effect of 7 the coordination of benefits provision was to allow Blue Cross and Blue Shield to exercise subrogation before paying anything to its insured. Therefore this Court held that utilization of the coordination of benefits provision violated the made-whole requirement of § 33-30-1102, MCA. Blue Cross, ¶ 19. ¶14 The same analysis applies to the present case. The coordination of benefits provision allows the Plan to exercise de facto subrogation by allowing the Plan to avoid payment for covered medical expenses without making any determination as to whether the beneficiaries have been made whole for their loss. The critical factor is the effect of the coordination of benefits provision, and the fact that it is not expressly referred to as “subrogation” is not determinative. ¶15 The next issue is whether the provisions of §§ 2-18-901 and -902, MCA, apply in this case. Section 2-18-901, MCA, provides that a “disability insurance policy subject to this chapter” may contain language allowing an insurer to exercise subrogation against a recovery received by the insured from a third party that caused the injury. Section 2-18-902(4), MCA, provides that the insurer’s right of subrogation in § 2-18-901, MCA, “may not be enforced until the injured insured has been fully compensated for the insured’s injuries.” The State argues that the Plan is not subject to the Insurance Code found in Title 33, MCA, as discussed in Diaz I, ¶ 15, and is not an “insurer” as referred to in §§ 2-18-901 and -902, MCA. ¶16 Title 2, chapter 18, MCA, specifically provides for establishment of the Plan as an alternative to conventional insurance for State employees, § 2-18-812, MCA. In Diaz I, this Court concluded that for purposes of Title 2, MCA, the State operates as an “insurer” 8 when it provides benefits to its employees through the Plan. Diaz I, ¶ 17. We see no reason to deviate from this holding. ¶17 The issues in this case are governed by settled Montana law, which the District Court properly applied. The decision of the District Court is affirmed and this matter is remanded for further proceedings consistent with this Opinion. /S/ MIKE McGRATH We concur: /S/ PATRICIA COTTER /S/ BRIAN MORRIS /S/ JIM RICE Justice Patricia Cotter, concurring. ¶18 I concur in the Court’s Opinion. I write separately to state that my initial misgivings with Diaz’s arguments were quelled by the fact that the Legislature was lobbied in both 2011 and 2013 to repeal §§ 2-18-901 and -902, MCA, and to authorize the coordination of benefits provision at issue in this case. In both years, the Legislature considered the arguments that the State makes here and rejected them. By 2013, the Legislature was presumably aware of our decisions in Diaz I, and Blue Cross & Blue Shield of Mont. v. Mont. State Auditor, and yet it purposely declined to take the very action that the State now implores this Court to take. ¶19 We have stated: “As a general rule, the Montana public policy is prescribed by the legislature through its enactment of statutes.” Fisher v. State Farm Mut. Auto. Ins. Co., 9 2013 MT 208, ¶ 25, 371 Mont. 147, 305 P.3d 861 (citing Hardy v. Progressive Specialty Ins. Co., 2003 MT 85, ¶ 32, 315 Mont. 107, 67 P.3d 892). Particularly apropos here, we have also held that “when an amendment is offered to a pending bill and rejected, the intention of the legislature is manifest that the law shall not read as it would if the amendment had been accepted, and the courts cannot do ‘by construction what the legislature refused to do by enactment.’ ” Murray Hosp. v. Angrove, 92 Mont. 101,1 116, 10 P.2d 577, 583 (1932) (On Motion for Rehearing) (citations omitted). ¶20 I therefore concur. /S/ PATRICIA COTTER Justice Jim Rice, concurring. ¶21 I disagree that the coordination of benefits provision constitutes subrogation, see Opinion, ¶ 14, for the reasons set forth in my dissenting opinion in Blue Cross regarding the exclusion clause there at issue. See Blue Cross, ¶¶ 22-30 (Rice, J., dissenting). Specifically: [S]ubrogation arises only when there is a ‘substitution of one party for another whose debt the party pays, entitling the paying party to rights, remedies, or securities that would otherwise belong to the debtor.’ Thayer [v. Uninsured Employers’ Fund, 1999 MT 304, ¶ 17, 297 Mont. 179, 991 P.2d 447 (citation omitted)]. Here, subrogation never occurs because BCBS lacks any authority to substitute itself for the insured. BCBS has merely used the freedom of contract to exclude any coverage and thereby refuse to assume a risk. The provisions are clear and unambiguous: under the proposed policy, BCBS would be contracting with a customer for a single recovery, and basing the customer’s premium thereon. 1 Currently, this case is incorrectly reported by Lexis as 92 Mont. 10. The Court is attempting to have this corrected. 10 Blue Cross, ¶ 27. Again, another decision by this Court must be counted among the factors driving up the cost of health insurance, as the Court continues to ignore the design and structure of the insurance contract, and the premium upon which the contract was based, to redefine the subject provision as subrogation. This decision will have the effect of invalidating any number of additional setoffs and provisions by which the insurer avoids making double payments to providers of medical services. Premiums will have to be increased accordingly to account for the increased costs of payouts occasioned by this decision and by the additional setoffs that may be invalidated under this decision. ¶22 My dissenting opinion in Diaz I criticized the Court for issuing a “hidden holding,” noting that the Court’s discussion swept beyond the stated issue and leaped to a conclusion that the State was an “insurer,” without so much as addressing the parties’ arguments on that issue or even acknowledging that there were any arguments on the issue. Diaz I, ¶ 59 (Rice, J., dissenting). Now, the Court does it again by simply saying that this issue was already decided in Diaz I. See Opinion, ¶ 16. While I don’t disagree that the issue was there decided, it remains an improper holding that resolves the case arbitrarily, without appropriate analysis of the legal arguments. ¶23 I made these arguments in the cited prior cases and lost the arguments each time. Because those holdings are now the governing authority, and only for that reason, I concur in the outcome the Court has ordered herein, and have signed the opinion. /S/ JIM RICE 11 Justice Laurie McKinnon joins in the concurring Opinion of Justice Rice. /S/ LAURIE McKINNON	November 6, 2013
8f24f596-fc86-4728-adca-6717fa550cea	Bull Lake Fire Dist. v. Lincoln County	2013 MT 342	DA 13-0238	Montana	Montana Supreme Court	DA 13-0238 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 342 BULL LAKE FIRE DISTRICT, a Political Subdivision, Petitioner and Appellant, v. LINCOLN COUNTY, a Political Subdivision, ROBY BOWE, in his capacity as Lincoln County Sheriff and Director of the Libby PSAP, TROY AREA DISPATCH BOARD, LIBBY VOLUNTEER FIRE DEPARTMENT, a Municipal Fire Department of the City of Libby, LIBBY VOLUNTEER AMBULANCE SERVICE, INC., a Montana Public Benefit Corporation, and TROY VOLUNTEER AMBULANCE, a Montana Public Benefit Corporation, Respondents and Appellees. APPEAL FROM: District Court of the Nineteenth Judicial District, In and For the County of Lincoln, Cause No. DV-11-292 Honorable C.B. McNeil, Presiding Judge COUNSEL OF RECORD: For Appellant: Kim T. Christopherson, Christopherson Law Office, P.C., Kalispell, Montana For Appellees: Sean Goicoechea; Jinnifer J. Mariman, Moore, Cockrell, Goicoechea & Axelberg, P.C., Kalispell, Montana For Amicus Curiae Angel Island Community Association: Douglas C. Allen, Attorney at Law, Cut Bank, Montana November 12 2013 2 For Amicus Curiae Montana State Fire Chiefs Association, Montana Volunteer Fire Fighters Association, Gallatin County Fire Council, and Missoula Rural Fire District: Catherine Dinwiddie, Attorney at Law, Bozeman, Montana Courtney Jo Lawellin, Attorney at Law, Livingston, Montana Submitted on Briefs: October 16, 2013 Decided: November 12, 2013 Filed: __________________________________________ Clerk 3 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 The Bull Lake Fire District appeals from the District Court’s “Order Granting Respondents’ Motion for Summary Judgment Re: BLFD,” filed March 5, 2013. We reverse.1 ¶2 The controlling issue on appeal is whether the District Court properly granted summary judgment to Lincoln County and the other respondents, collectively referred to as the County Respondents. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In 1989 the Lincoln County Commissioners created the Bull Lake Rural Fire District as provided for in §§ 7-33-2001 and 7-33-2101 through -2144, MCA. Those statutes provide that upon petition of property owners and after notice and hearing, a county commission may create a fire district. Sections 7-33-2101 through -2103, MCA. The county commission may contract directly with another public entity to provide fire protection, or it may choose to appoint trustees to govern and manage the district. Section 7-33-2104, MCA. When the Lincoln County Commission established the Bull Lake Fire District it chose to appoint a board of trustees to govern and manage it. The District encompasses identified parcels of private property located along an eleven-mile stretch of State Highway 56 in Lincoln County. 1 The Cabinet View Fire Service Area was originally a petitioner in the action along with the District. However, during the pendency of this action the County dissolved the Fire Service Area. It did not participate in this appeal and this Court has removed its name from the caption. 4 ¶4 In 2011 the District’s Trustees amended the Bull Lake Fire District By-Laws to reflect the scope of services that a district can offer under Montana law. Section 7-33-2105, MCA, provides that a district’s trustees “have the authority to provide adequate and standard firefighting and emergency response apparatus, equipment, personnel, housing, and facilities, including real property and emergency medical services and equipment for the protection of the district.” Section 7-33-2105(1)(b), MCA. Bull Lake’s revised By-Laws provide that it intends to respond to “all non-medical emergencies within the district” including “fire prevention and suppression, motor vehicle accidents, extrication, hazardous material incidents, [and] water rescue/marine fire incidents.” ¶5 A dispute arose between the District and the County Respondents over whether the District could offer any services other than “adequate and standard” firefighting. The County contends that the scope of the District’s services was established when the District was created in 1989. The County contends that despite changes in Montana law regarding the scope of services that a district may provide, Bull Lake cannot extend its services beyond structure, wildland and vehicle firefighting without the County’s prior approval. ¶6 The District and the County Respondents also have a dispute concerning dispatching the District to respond to emergencies. The Lincoln County Commission oversees emergency services dispatching in the County. It contracts with the Troy Area Dispatch Board to dispatch emergency services in the Troy area, which includes the Bull Lake Fire District. Troy Dispatch dispatches the District to respond to structure and 5 wildland fires that arise in the District’s territory, but does not dispatch the District to other emergencies. The District contends that it has the right to be dispatched to all emergencies in its geographical area, and it self-dispatches to emergencies that it learns of by using a radio scanner. This has resulted in conflicts with other public entities in the area. ¶7 The District brought a declaratory judgment action seeking resolution of the dispute with the County Respondents as to the permissible scope of the District’s services, and as to the circumstances under which the District could be dispatched. After a hearing and briefing, the District Court granted summary judgment to the County Respondents. The District Court found no statute that determines who can expand the scope of services provided by a district, but also concluded that no statute grants that power to a district itself. The District Court concluded that the scope of the District’s services was delegated by the County at the time the District was created in 1989 and is limited by the language of § 7-33-2105, MCA, as it existed at that time. The District Court further determined that the Legislature’s 1991 amendment of the statute to include “emergency response” and “emergency medical services” was not retroactive. Therefore the statutory change did not expand the scope of the District’s services, which were limited those “delegated” by the County in 1989. ¶8 The District Court held that the District is only entitled to notification, as provided in § 10-4-104(2), MCA, of emergencies that occur within its geographical jurisdiction and within the authorized scope of its services. The District Court further concluded that Troy Dispatch has the discretion to dispatch the emergency services that it deems 6 necessary and appropriate for each situation, as provided in § 10-4-101(7) and (23), MCA, and is not required to dispatch the District to all calls. ¶9 In summary, the District Court determined that the District is wholly a creation of Lincoln County; that the County delegated to the District only the authority to provide limited firefighting services; and that only the County can authorize the District to expand the scope of its services. Last, the District Court concluded that the District is only entitled to receive notice of emergencies in its geographical area and that Troy Dispatch has the discretion whether to dispatch the District to respond to any particular emergency. STANDARD OF REVIEW ¶10 This Court reviews a district court’s ruling on summary judgment de novo, to determine whether it is correct, applying the same standards as the district court under M. R. Civ. P. 56. Lucas v. Stevenson, 2013 MT 15, ¶ 12, 368 Mont. 269, 294 P.3d 377. DISCUSSION ¶11 The creation and operation of fire districts are governed by §§ 7-33-2001 and 7-33-2101 through -2144, MCA. The first issue is whether those statutes limit the District to providing only standard structure, wildland and vehicle firefighting services. ¶12 Contrary to the District Court’s conclusions, the statutes are clear that when a district is governed by a board of trustees, as is the case with the Bull Lake Fire District, the trustees and the fire chief determine the scope of the district’s services under Montana law. The role of a court in construing a statute “is simply to ascertain and declare what is in terms or in substance contained therein.” Section 1-2-101, MCA; Friends of the Wild 7 Swan v. DNRC, 2005 MT 351, ¶ 13, 330 Mont. 186, 127 P.3d 394. When the intent of the Legislature can be determined from the plain meaning of the words used, courts need not go further to apply other means of construction. State v. Daniels, 2003 MT 30, ¶ 9, 314 Mont. 208, 64 P.3d 1045. ¶13 Section 7-33-2105(1)(b), MCA, as it has existed for over twenty years, provides that fire district trustees “have the authority to provide adequate and standard firefighting and emergency response apparatus, equipment, personnel, housing, and facilities, including real property and emergency medical services and equipment, for the protection of the district.” (Emphasis added.) Similarly, a district is overseen by a fire chief who is responsible for “providing and managing emergency services that are established by the agency.” Section 7-33-2001(1)(e), MCA (emphasis added). Those services “include but are not limited to” fire suppression, medical aid, hazardous materials response, ambulance service and extrication from vehicles. Section 7-33-2001(1)(e)(i)-(v), MCA. The fire chief is responsible for establishing and maintaining a training program for the district, which “must include training in all areas of emergency response in which the agency provides services.” Section 7-33-2001(11), MCA (emphasis added). ¶14 These powers and duties as to the scope of services are specifically granted to a fire district’s trustees and fire chief, and are governed by Montana law. City of Cut Bank v. Glacier County, 270 Mont. 355, 358, 891 P.2d 1174, 1176 (1995). As the District Court recognized, Montana law contains no requirement that a district seek prior approval of the county before it can provide any of the emergency services provided for in Montana law. 8 ¶15 Fire districts are governed by Montana law and the Legislature may amend that law from time to time, as it did in the case of § 7-33-2105, MCA. Therefore, when the Legislature amended the statute subsequent to the establishment of the District, the amended statute applied and authorized the District to provide the services described in §§ 7-33-2001 and -2105, MCA. ¶16 This is not an issue governed by the rules on retroactive application of statutes, § 1-2-109, MCA. The amendment of § 7-33-2105, MCA, to include “emergency services” and “emergency medical services” did not result in a retroactive application of law. The amendment simply allowed existing districts and those created in the future to provide expanded services if they chose to do so. Impermissible retroactive application of a statute occurs when it is applied to divest or impair vested rights acquired under prior law, or when it creates a new obligation, imposes a new duty or attaches a new disability in respect to transactions already passed. C. Loney Concrete v. Uninsured Employers’ Fund, 1998 MT 230, ¶ 18, 291 Mont. 41, 964 P.2d 777. There has been no showing that the amendment at issue here, empowering the trustees of a district to provide emergency services, divested or impaired any vested right or adversely impacted any transaction already passed. Section 7-33-2105, MCA, had always specified the “powers and duties of trustees,” and the amendment simply expanded the powers and duties of trustees of a district going forward. See § 1-2-203, MCA (amendments to statutes are considered to be enacted at the time of amendment). 9 ¶17 While fire districts have these and other independent powers,2 they are not wholly dissociated from the counties in which they exist. The county commission appoints the initial trustees and fills trustee vacancies when they arise. Section 7-33-2106, MCA. The district prepares an annual budget and may request the county commission to levy a tax upon property within the district to provide funds to operate the district. Sections 7-33-2105 and -2109, MCA. Any money received by the trustees must be deposited with the county treasurer, to the credit of the district. Section 7-33-2105, MCA. Under certain circumstances the county commission may dissolve a district. Section 7-33-2128, MCA. ¶18 For purposes of the present case, the divisions of responsibility as between the County and the District are well-defined, and the District has the power to provide the services set out in § 7-33-2105, MCA. ¶19 The District Court correctly framed the dispatch issue as one primarily relating to the District’s scope of services, noting that the County Respondents “do not dispute that BLFD is and will be dispatched to all fires and situations where there is an immediate threat of a fire occurring within BLFD’s jurisdiction.” The District Court concluded that the District “must only be notified of emergency calls within BLFD’s geographical jurisdiction and within its scope of authorized services.” Finally, the District Court held that Troy Dispatch “has the discretion to dispatch emergency services, including those provided by BLFD, as it deems appropriate.” 2 Fire district trustees may enter contracts with other entities for fire protection services (§ 7-33-2107, MCA); may enter mutual aid agreements with other entities (§ 7-33-2108, MCA); and may pledge income to secure financing for district operations and borrow money by issuing bonds (§ 7-33-2109, MCA). 10 ¶20 Emergency service calls to 9-1-1 are governed by statute in Montana, Title 10, chapter 4, MCA. A basic 9-1-1 system includes equipment necessary to receive calls on a twenty-four-hour basis at a public safety answering point (PSAP). Section 10-4-101(4) and (22), MCA. A PSAP, like Troy Dispatch, must have the capability to dispatch public and private services in the 9-1-1 jurisdiction. Section 10-4-103(2)(b), MCA. This can be done in three ways. The PSAP may “as appropriate” directly dispatch public or private safety services to the incident. Section 10-4-101(22), MCA. The PSAP may receive the pertinent information from the 9-1-1 call and “relay” that information “to the appropriate public safety agency . . . for dispatch of an emergency unit.” Section 10-4-101(23), MCA. The PSAP may directly “transfer” the 9-1-1 call “to an appropriate public safety agency or other provider of emergency services.” Section 10-4-101(25), MCA. ¶21 Section 10-4-104(2), MCA, provides that a “public safety agency with jurisdictional responsibilities must in all cases be notified by the public safety answering point of a request for service in the agency’s jurisdiction.” Clearly Montana law places a duty on the PSAP provider to notify (whether through direct dispatch, relay or transfer) all emergency service providers within the jurisdictional area of a particular call. Section 10-4-101(7), MCA, defines “direct dispatch” as the service that the PSAP “provides for a decision as to the proper action to be taken and for dispatch of appropriate emergency service units.” Section 10-4-101(22), MCA, provides that a PSAP may “as appropriate” directly dispatch, transfer or relay calls. Both provisions confer discretionary authority on the PASP, depending upon the response required by the circumstances of each situation. 11 ¶22 The responsibility of a court, when there are several statutory provisions, is to apply them if possible to give effect to all. Section 1-2-101, MCA; State v. Incashola, 1998 MT 184, ¶ 16, 289 Mont. 399, 961 P.2d 745. Therefore, while a public service agency “with jurisdictional responsibilities” must “in all cases” be notified by the PSAP of a request for service in the agency’s jurisdictional area, it is the responsibility of the PSAP to determine how to provide the notification, and which emergency service provider to actually dispatch in each instance. ¶23 The District Court’s award of summary judgment to the County Respondents is reversed. /S/ MIKE McGRATH We concur: /S/ BRIAN MORRIS /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE	November 12, 2013
42a0c9f1-8c93-47db-b61a-c8643a9911b9	State v. Tellegen	2013 MT 337	DA 12-0632	Montana	Montana Supreme Court	DA 12-0632 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 337A STATE OF MONTANA, Plaintiff and Appellee, v. KANDICE TELLEGEN, Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DC 12-063B Honorable Katherine R. Curtis, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender, Koan Mercer, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General; Helena, Montana Ed Corrigan, Flathead County Attorney, Alison Howard, Travis Ahner, Deputy County Attorneys; Kalispell, Montana Submitted on Briefs: September 26, 2013 Decided: November 12, 2013 Amended: January 29, 2014 Filed: __________________________________________ Clerk January 29 2014 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Judge Katherine Curtis of the Eleventh Judicial District Court, Flathead County, presided over the trial of Kandice Tellegen (Tellegen) for theft and accountability to burglary. The jury returned a verdict of guilty on both counts. Tellegen appeals from numerous alleged errors at trial. ¶2 We address the following issues on appeal: Issue One: Did the District Court err by instructing the jury on the theory of accountability when the State had not directly charged an accountability based offense? Issue Two: Did Tellegen’s counsel render ineffective assistance by offering a “conduct-based” definition of “purposely?” Issue Three: Did Tellegen’s counsel render ineffective assistance by failing to object to her theft conviction on the grounds that it violated Montana’s statutory restriction on multiple charges? FACTUAL AND PROCEDURAL BACKGROUND ¶3 On January 13, 2012, Tellegen and her friends Ashley Ekern (Ashley), Aaron Zelenik (Aaron), and Jeff Weldele (Jeff) spent the afternoon together. The group eventually decided that Jeff and Aaron would go and “scout a house” while Ashley and Tellegen waited at a fishing access near Kila, Montana. Ashley and Tellegen soon went looking for Jeff and Aaron, and spotted their car parked near an unknown house. Tellegen parked the car around back and approached the house. Jeff and Aaron then opened the garage door and told Tellegen to pull her car into the garage. Once inside, accounts differ as to whether Tellegen participated in loading the cars with items from the home. 3 ¶4 The State filed an information charging Tellegen with accountability for burglary. The State later withdrew that charge and amended the information to charge Tellegen with burglary, conspiracy to commit burglary, and theft. After the presentation of evidence, the District Court and attorneys settled instructions. The State sought an accountability instruction for the burglary charge, which the District Court granted over Tellegen’s objection. The District Court settled on an instruction defining the word “purposely” as a conduct-based mental state instead of a result-based mental state. Tellegen’s attorney did not object to this instruction. Finally, the court’s instructions defined theft as a predicate offense to burglary. The jury convicted Tellegen of both burglary and theft. STANDARDS OF REVIEW ¶5 We review jury instructions for abuse of discretion. State v. Lacey, 2012 MT 52, ¶ 15, 364 Mont. 291, 272 P.3d 1288. In considering whether a district court has correctly instructed the jury in a criminal case, we determine whether the instructions taken as a whole fully and fairly instructed the jury on the law applicable to the case. State v. Hocter, 2011 MT 251, ¶ 14, 362 Mont. 215, 262 P.3d 1089. Claims of ineffective assistance of counsel present mixed issues of law and fact which we review de novo. State v. Clary, 2012 MT 26, ¶ 12, 364 Mont. 53, 270 P.3d 88. DISCUSSION ¶6 Did the District Court err by instructing the jury on the theory of accountability when the State had not directly charged an accountability based offense? ¶7 The State’s first information filed against Tellegen charged her with accountability for 4 burglary. The State then amended the charges to burglary, conspiracy to commit burglary, and theft, but eliminated the accountability for burglary charge. When the District Court began discussing jury instructions at the close of evidence, the State sought an instruction on the theory of accountability for burglary. The District Court admitted this instruction, citing to Tower, 267 Mont. at 68, 881 P.2d at 1320. Tellegen now asks us to revisit our holding in Tower, arguing that she was deprived of due process because she was not informed of the nature of the State’s accusations against her. I. Tower’s Holding is Correct as a Matter of Law. ¶8 We decline to revisit Tower’s holding that accountability is not a separate charge requiring express notice from the prosecution. The Sixth Amendment requires that the State inform a criminal defendant of the nature and cause of the accusation against her. U.S. Const. amend. VI. To this end, Montana law requires that charging documents give “a plain, concise, and definite statement of the offense charged, including the name of the offense, whether the offense is a misdemeanor or felony, the name of the person charged, and the time and place of the offense as definitely as can be determined.” Section 46-11- 401(1), MCA. ¶9 We have consistently reaffirmed our holding in Tower that accountability is not a separate or different offense from the one charged, but rather, is “merely a conduit by which to find a person criminally liable for the acts of another.” State v. Maetche, 2008 MT 184, ¶ 16, 343 Mont. 464, 185 P.3d 980; State v. Abe, 1998 MT 206, ¶ 31, 290 Mont. 393, 965 P.2d 882; State v. Tower, 267 Mont. 63, 68, 881 P.2d 1317, 1320 (1994); In re B.D.C., 211 5 Mont. 216, 220-21, 687 P.2d 655, 657 (1984). In Tower, we held that this established legal principle allows defendants to predict that the State may pursue an accountability theory for a crime charged. Tower, 267 Mont. at 68, 881 P.2d at 1320. This desire for stability and predictability is the same interest fulfilled in adhering to stare decisis. State v. Kirkbride, 2008 MT 178, ¶ 13, 343 Mont. 409, 185 P.3d 340; State v. Gatts, 279 Mont. 42, 51, 928 P.2d 114, 119 (1996). In reaffirming Tower’s holding, we provide further stability and predictability to an already well-established principle of Montana law. II. Tower’s Holding Applies to This Case. ¶10 Tellegen’s case is indistinguishable from Tower. The amended information charged Tellegen with burglary and later the State pursued an accountability instruction for burglary. As the District Court noted, this is exactly the situation contemplated in Tower. (“I think the cases clearly apply to this case, and I think it’s the law in the state, and I think I need to give [the accountability instruction].”) Since accountability is not a separate offense from the charge of burglary, Tellegen was effectively put on notice of the accountability theory when she was first charged with burglary. ¶11 Tellegen’s case is also similar to Tower in that she had notice of the nature of the State’s allegations based on the State’s case against her before and during trial. State v. Murphy, 174 Mont. 307, 311-12, 570 P.2d 1103, 1105 (1977); Tower, 267 Mont. at 68, 881 P.2d at 1320. The State originally charged Tellegen with accountability for burglary, and only withdrew that charge to replace it with burglary and conspiracy to commit burglary. The first charge should have given Tellegen notice that the State suspected her involvement 6 in aiding or abetting the burglary. ¶12 Moreover, the facts of Tellegen’s case should have put her on notice that the State could pursue an accountability theory. In State v. Medrano, 285 Mont. 69, 74-75, 945 P.2d 937, 940 (1997), two defendants hit and kicked a victim, but co-defendants disputed which of the impacts resulted in serious bodily injury to the victim’s spleen. We held that Medrano had notice of the State’s accountability theory because the defendants had been accused of acting in concert and were charged individually and jointly for the victim’s injuries. Medrano, 285 Mont. at 74-75, 945 P.2d at 940. Tellegen was charged for her participation in a burglary committed by her and other defendants, and other defendants testified that she had participated in the crime by driving the car into the garage and assisting them in loading it with items. Nothing in the facts of the case or in the State’s charges can be interpreted to accuse Tellegen of acting alone, yet she now claims surprise at the State’s accusation that she assisted others in committing the crime. The circumstances surrounding the trial put Tellegen on notice that the State would pursue an accountability theory. ¶13 Finally, Tellegen mistakenly relies on State v. Spotted Eagle, 2010 MT 222, 358 Mont. 22, 243 P.3d 402. In that case, the State initially charged Spotted Eagle with causing bodily injury to his partner, but later sought to instruct the jury under a different subsection of the same statute, requiring a finding of “reasonable apprehension of bodily injury.” Spotted Eagle, ¶¶ 7-11. Spotted Eagle’s entire trial concerned his causing bodily injury, and he was only aware of the “apprehension” element once all evidence had been presented. Spotted Eagle, ¶ 14. This shift constituted a substantive change in the essential elements of 7 the charge against him and we subsequently held that the instruction was a separate and distinct charge. Spotted Eagle, ¶¶ 11-13. ¶14 Spotted Eagle is distinguishable from Montana case law on accountability. Accountability is not a separate or different offense from the one charged, it is merely a theory to establish criminal liability for the charged offense. Maetche, ¶ 16; Tower, 267 Mont. at 68, 881 P.2d at 1320. Because accountability is not different or separate from the offense charged, its addition does not constitute a substantive shift in the charge. Spotted Eagle is therefore inapposite to the present case. Ineffective Assistance of Counsel Claims ¶15 To determine whether an individual has received ineffective assistance of counsel, we use the two-part test set forth in Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064 (1984); State v. Miner, 2012 MT 20, ¶ 11, 364 Mont. 1, 271 P.3d 56. Under this test, the defendant must demonstrate (1) that counsel’s performance was deficient, and (2) that counsel’s deficient performance prejudiced the defendant. Miner, ¶ 11. If an insufficient showing is made regarding one prong of the test, there is no need to address the other prong. Dawson v. State, 2000 MT 219, ¶ 21, 301 Mont. 135, 10 P.3d 49. ¶16 Under Strickland’s first prong, we examine whether counsel’s conduct fell below an objective standard of reasonableness considering prevailing professional norms, and in the context of all circumstances. Whitlow v. State, 2008 MT 140, ¶ 14, 343 Mont. 90, 183 P.3d 861. Under Strickland’s second prong, we examine whether there is a reasonable probability that counsel’s lack of reasonable professional conduct renders the trial result unreliable or the 8 proceedings fundamentally unfair. Miner, ¶ 12. “If it is easier to dispose of an ineffectiveness claim on the ground of lack of sufficient prejudice . . . that course should be followed.” Strickland, 466 U.S. at 687, 104 S. Ct. at 2069. ¶17 Did Tellegen’s counsel render ineffective assistance by offering a “conduct-based” definition of “purposely?” ¶18 Tellegen’s attorney submitted an instruction defining “purposely” as a mental state wherein “it is the person’s conscious objective to engage in conduct of that nature.” The prosecution sought to convict Tellegen under Montana’s accountability statute, which requires that a person acts “with the purpose to promote or facilitate . . . commission of the offense.” Section 45-2-302, MCA. Tellegen argues that the instruction on “purposely” incorrectly defined it as a conduct-based mental state when the instruction for accountability calls for a result-based mental state. ¶19 In State v. Andress, 2013 MT 12, 368 Mont. 248, ___P.3d___, we considered an ineffective assistance of counsel claim where the defendant’s attorney submitted instructions defining “purposely” as a conduct-based rather than result-based mental state. We found that the jury could have easily found Andress guilty under either standard, and therefore, he did not suffer prejudice from the erroneous instruction. Andress, ¶¶ 25-29. ¶20 In the instant case, a jury could easily find Tellegen guilty with a result-based mental state. Therefore, like in Andress, the instruction resulted in no prejudice to her position at trial. Tellegen testified that she and a friend arranged to wait at a fishing access while Jeff and Aaron “were going to go scout a house.” After a long wait, Tellegen and her friend went 9 looking for Jeff and Aaron, eventually spotting their car in front of a house. Tellegen knew that “something was up,” so she pulled her car behind the house and waited for Jeff and Aaron. Eventually, Jeff and Aaron opened the garage door and told her to bring the car into the garage. At this point, Tellegen testified that she knew she was participating in a crime. (“A: And so we went back up, we grabbed the car, we pull it in. And I’m starting to get really paranoid at that point . . . . Q: Did you know what they were doing? A: I figured it out by then.”) Tellegen claims that once in the house, she never assisted in stealing items, “[b]ut then again I didn’t stop it, like I should have.” Tellegen’s co-defendants, however, testified that Tellegen participated in loading the cars with items from the home. ¶21 A jury could easily find Tellegen guilty under either mental state based on the testimony presented at trial. The instruction held that burglary is committed when a person unlawfully enters a structure and commits an offense therein. Section 45-6-204, MCA. Accountability exists when a person aids, abets, agrees, or attempts to aid with the purpose to promote or facilitate the commission of an offense either before or during its commission. Section 45-2-302, MCA. Applying a result-based mental state, the jury would need to find that Tellegen acted with the purpose to promote or facilitate the unlawful entry into an occupied structure and an offense was committed therein. That fact is clear from the record; Tellegen was aware that her friends were “scouting a house” when she waited at the fishing access, she knew “something was up” when she spotted her accomplices’ car and pulled behind the house, and when she drove her car into the home’s garage she “figured it out by then” that a burglary was underway. These facts provide ample evidence for a jury to 10 conclude that Tellegen knew her actions would assist an unlawful entry wherein a theft occurred. Because a jury could have easily convicted Tellegen under either mental state instruction, her attorney’s failure to object to the instruction caused no prejudice to her position at trial. ¶22 Did Tellegen’s counsel render ineffective assistance by failing to object to her theft conviction on the grounds that it violated Montana’s statutory restriction on multiple charges? ¶23 Montana law prohibits convicting a defendant on multiple offenses when one offense is included in the other. Section 46-11-410(2)(a), MCA. The prohibition on double jeopardy bars both multiple prosecutions and multiple punishments for the same offense. State v. Guillame, 1999 MT 29, ¶¶ 8, 19, 293 Mont. 224, 975 P.2d 312. In State v. Russell, 2008 MT 417, 347 Mont. 301, 198 P.3d 271, we considered a conviction for felony homicide and aggravated assault wherein aggravated assault was the predicate offense for the felony homicide charge. We held that the predicate offense was necessarily included in the greater offense of felony homicide. Russell, ¶¶ 23-24. The felony homicide statute allowed the State to charge Russell in a way that avoided the multiple charge problem, but the State’s charges and jury instructions clearly identified aggravated assault as the predicate offense to felony homicide. Russell, ¶¶ 23, 26-29. ¶24 Montana’s burglary statute provides that a person commits the offense when she knowingly enters or remains unlawfully in an occupied structure with the purpose to commit an offense therein. Section 45-6-204(1)(a), MCA. The Legislature amended the statute in 2009, adding that burglary is also committed when the person knowingly or purposely 11 commits any other offense within that structure. Section 45-6-204(1)(b). This alternative definition of burglary requires the State to prove that another offense took place once inside the dwelling, but relieves the State of proving the defendant’s purpose at the time she unlawfully entered the dwelling. ¶25 The State charged Tellegen with burglary and later instructed the jury using language from § 45-6-204(1)(b), MCA. The instruction incorporated the theft charge into its language; “[T]he State must prove the following elements: One, that the Defendant knowingly entered and remained unlawfully in an occupied structure, and . . . that the Defendant purposely or knowingly committed the offense of theft therein.” Tellegen was then convicted of both burglary and the predicate offense of theft. Theft was charged as a predicate offense to burglary, so Tellegen’s conviction for both crimes constitutes a direct violation of the statutory restriction on multiple charges in § 46-11-410(2)(a), MCA. The State could have easily charged Tellegen with theft and burglary under § 45-6-204(1)(a), MCA, as that form of burglary requires no proof of a predicate offense. Like in Russell, however, we are bound by “the State’s choice in framing the charges.” Russell, ¶ 27. Because theft was charged as a predicate offense to this type of burglary, Tellegen’s theft conviction should have been vacated on statutory grounds. ¶26 Counsel’s failure to make a valid objection based on the statutory prohibition on multiple charges constitutes deficient performance under the first prong of Strickland. State v. Becker, 2005 MT 75, ¶ 20, 326 Mont. 364, 110 P.3d 1. Failure to make a valid objection to vacate a conviction prejudices the Defendant by affecting the outcome of the case, even if 12 the conviction is set to run concurrently with valid convictions in the case. State v. Williams, 2010 MT 58, ¶¶ 27-30, 355 Mont. 354, 228 P.3d 1127; Ball v. United States, 470 U.S. 856, 864-65, 105 S. Ct. 1668, 1673 (1985) (“The second conviction, whose concomitant sentence is served concurrently, does not evaporate simply because of the concurrence of the sentence.”) Tellegen’s attorney failed to object to the theft conviction, for which Tellegen was sentenced to a concurrent prison term and charged additional fees, costs, and fines. The absence of objection and the subsequent sentence satisfy both prongs of Strickland. CONCLUSION ¶27 Tellegen’s conviction for theft is reversed and remanded to the District Court for recalculation of conviction-based fees, costs, and fines. Tellegen’s conviction and sentence for accountability to burglary are affirmed. /S/ MICHAEL E WHEAT We concur: /S/ JIM RICE /S/ PATRICIA COTTER /S/ LAURIE McKINNON	November 12, 2013
ef4182c6-8800-4a77-a6ad-2f4011b71f36	State v. Phillips	2013 MT 317	DA 12-0619	Montana	Montana Supreme Court	DA 12-0619 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 317 STATE OF MONTANA, Plaintiff and Appellee, v. LEE HUNTER PHILLIPS, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC 11-198 Honorable Robert L. Deschamps, III, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Deborah S. Smith, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Mardell Ployhar, Assistant Attorney General; Helena, Montana Fred R. Van Valkenburg, Missoula County Attorney; Andrew W. Paul, Deputy County Attorney; Missoula, Montana Submitted on Briefs: August 21, 2013 Decided: October 29, 2013 Filed: __________________________________________ Clerk October 29 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Lee Hunter Phillips appeals the judgment of the Fourth Judicial District Court, Missoula County, following his felony conviction of criminal production or manufacture of dangerous drugs in violation of § 45-9-110, MCA (2009). ¶2 Phillips raises two issues on appeal: ¶3 1. Whether the District Court erred in denying Phillips’s motion to suppress evidence. ¶4 2. Whether the District Court’s imposition of the cost of court-appointed counsel is illegal. ¶5 We affirm the conviction and reverse and remand for correction of the sentence. PROCEDURAL AND FACTUAL BACKGROUND ¶6 On the morning of October 15, 2010, Missoula County Sheriff’s Deputies Schmill and Stineford set out to serve an arrest warrant at 7890 West Riverside Drive (7890) in Missoula County. The officers later testified that in the process of trying to locate the home they became confused and drove up and down West Riverside Drive. After unsuccessfully trying to locate the address, Schmill decided to stop for a “knock and talk” at a house he believed to be in the vicinity of 7890 to attempt to determine the home’s location. Later, both officers testified that the house at which they stopped did not have any visible address markings, and they even believed that it might be 7890. ¶7 After walking onto the property through a large gate, Schmill went to the front door while Stineford stayed by the corner of the house. Schmill knocked on the door. 3 Through the open front door and closed storm-door window, he could see marijuana plants on hanging racks and dried marijuana in baggies and glass jars. ¶8 Phillips came to the door and, when asked, told Schmill that his address was 7820 West Riverside Drive (7820). Schmill asked Phillips where 7890 was located and Phillips pointed west. Schmill later testified that, because the house numbers should have proceeded opposite the direction in which Phillips pointed, he decided to asked Phillips for identification to verify his identity and address. Schmill testified that Phillips invited him in and produced a driver’s license and verification that he was a medical marijuana provider. After calling for back-up and confirming through the Department of Public Health and Human Services the number of patients for whom Phillips provided marijuana, the officers measured the marijuana and allowed Phillips to keep enough for six patients, including himself. They confiscated 868 grams and forty plants of marijuana. ¶9 On May 23, 2011, the State charged Phillips with a violation of § 45-9-110(4)(a), MCA (2009)—criminal production or manufacture of dangerous drugs, marijuana in excess of one pound, a felony. Phillips moved to suppress the results of the search of his residence. He argued that, because the officers had no reason to enter his property, they were not lawfully in a place where they could see the marijuana in plain view. Phillips claimed that the street numbers for both his residence and 7890 clearly were marked on each mailbox and home. The State responded that the officers did not see any markings and did not know who lived at Phillips’s residence. 4 ¶10 The District Court held a hearing on Phillips’s motion to suppress evidence on December 8, 2011. Schmill and Stineford both denied seeing any numbers on Phillips’s house or on the mailbox across the street when they drove by or walked up to the door. Stineford stated that based upon the block and side of the street on which the house stood, they believed Phillips’s house could have been 7890. Additionally, Schmill testified that he knew nothing about Phillips or his residence prior to speaking with him that day. ¶11 Investigator Mark Beck and Phillips testified for the defense. Beck stated that he went to Riverside Drive in November 2011 to see how the addresses were marked and discovered that the mailboxes of both 7820 and 7890 were marked and that the front of the 7890 trailer was marked. Although Beck opined that he believed 7890 to be easy to locate, he admitted that he had no personal knowledge of whether the numbers existed in October 2010 when the seizure occurred. Phillips testified that the address numbers were on his mailbox the entire time he lived at the residence. Phillips also testified that although he added numbers to one side of the gate and to his front porch after the seizure, the numbers on the other side of the gate were there on October 15, 2010. Phillips provided pictures of his mailbox, gate and home, testifying that they were taken “a couple of days” after the search. The District Court questioned his timeline, indicating that because the photographs showed tulips in the garden, green grass and leaves on trees, the court did not believe they were taken in October. Phillips denied trying to mislead the court but stated it was possible, given the number of photographs he took, that they 5 “could have been taken at different dates.” The court stated that they “obviously were” and that this “color[ed] [Phillips’s] testimony.” ¶12 The court denied the motion to suppress. It found that Phillips’s deceit about when the photos were taken and the fact that the numbers looked brand new led the court to believe the officers’ account. The court noted that, with the permission of the parties, it consulted with the Missoula County Surveyor, who advised the court that neither 7820 nor 7890 was numbered correctly considering the homes’ location. The court found no impropriety in the officers’ conduct of walking up to Phillips’s front door to knock and ask for directions. Following the order, Phillips moved to reopen the hearing on the motion based on an affidavit of Beck describing additional investigation done to verify whether the addresses were visible at the time of the search. The Court granted the motion and scheduled a second hearing. ¶13 At the second hearing, several witnesses testified that the mailboxes for both 7820 and 7890 were marked with numbers prior to October 2010. The neighborhood mail carrier, Barbara Weimer, testified that the boxes were marked before October 2010. The owner of the 7890 trailer, Nancy Beck, testified that the trailer was marked with an address number that could be seen from the road. The manager of Phillips’s residence, Maura Ganz, testified that both the mailbox and the gatepost of 7820 were marked in 2008. Phillips testified again at the second hearing. He acknowledged that the view of the numbers on the gatepost would be blocked if he parked in front of the gate, but stated that he remembered parking in his driveway on that day. Following testimony, the court 6 concluded that the new evidence did not change its previous decision to “take [the officers’] contention that they didn’t see [the numbers] and give them the benefit of the doubt.” ¶14 Reserving his right to appeal the court’s ruling, Phillips pled guilty on June 26, 2012. The court sentenced him to a two-year deferred sentence. Among other fees recommended by the presentence investigation report (PSI), the court imposed an $800 fee for court-appointed counsel. The court did not inquire into Phillips’s ability to pay, and Phillips did not object to the cost. Phillips now appeals both the denial of his motion to suppress and the imposition of the $800 fee. STANDARD OF REVIEW ¶15 We review a district court’s denial of a criminal defendant’s motion to suppress to determine whether the court’s findings of fact are clearly erroneous and whether those findings were applied correctly as a matter of law. State v. Shults, 2006 MT 100, ¶ 13, 332 Mont. 130, 136 P.3d 507. Findings are clearly erroneous if they are not supported by substantial evidence, if the court misapprehended the effect of the evidence, or if review of the record leaves this Court convinced that a mistake has been made. State v. Dunn, 2007 MT 296, ¶ 7, 340 Mont. 31, 172 P.3d 110. ¶16 We review criminal sentences for legality. State v. Mainwaring, 2007 MT 14, ¶ 7, 335 Mont. 322, 151 P.3d 53. A determination of legality is a question of law that is reviewed de novo. Mainwaring, ¶ 7. 7 DISCUSSION ¶17 1. Whether the District Court erred in denying Phillips’s motion to suppress evidence. ¶18 The parties agree, and it is well-established, that the plain view doctrine allows law enforcement to seize evidence in plain view under certain circumstances. State v. Loh, 275 Mont. 460, 473, 914 P.2d 592, 600 (1996) (citing Horton v. California, 496 U.S. 128, 136-37, 110 S. Ct. 2301, 2308 (1990)). The essential predicate to any valid warrantless seizure of incriminating evidence is that the officer must be lawfully at the place from which he could plainly view the evidence. In other words, his initial entry onto or intrusion into the place where he views the evidence must not have been in violation of the Fourth Amendment or in violation of Article II, section 11 of Montana’s Constitution. Loh, 275 Mont. at 473, 914 P.2d at 600. Where the parties disagree is whether the officers were lawfully at the place where they could view the evidence—Phillips’s front door. ¶19 Phillips argues that the officers came to his front door as a pretext for finding his marijuana grow operation. He points out that the officers never returned to the area to serve the arrest warrant that had prompted their journey. After hearing the officers’ testimony and considering all of the evidence, the District Court disagreed. “It is within the province of the trial court to determine the credibility of witnesses and the weight to be given their testimony during a hearing on a motion to suppress and we do not review those determinations.” State v. Campbell, 278 Mont. 236, 241, 924 P.2d 1304, 1397 (1996). “[E]ven greater deference” is given to the trial court’s findings when they are 8 “based on determinations regarding the credibility of witnesses.” Anderson v. Bessemer City, 470 U.S. 564, 575, 105 S. Ct. 1504, 1512 (1985). ¶20 The officers testified to their stated purpose of trying to locate 7890. The Court also heard testimony from Phillips and others that both addresses were visibly marked at the time. The court viewed photographs of the area and consulted with the Missoula County Surveyor. After weighing the evidence, the court determined that the officers did not act improperly in going onto Phillips’s property. Phillips has not convinced us that the District Court’s findings were clearly erroneous. The court exercised its jurisdiction to judge Phillips’s credibility and find that his potential deceit about when he took the photographs undermined his testimony. The court acted within its fact-finding province to believe the officers’ story about being lost on West Riverside Drive. No photograph submitted by the defendant or his investigator definitively showed how the addresses appeared to the officers on that day. Even if every defense witness told the truth about the existence of address numbers on the homes and mailboxes of the two residences in question, that testimony did not prove that the officers were lying about not noticing them—particularly given that the court viewed the officers’ confusion in light of the incorrect placement of the addresses on the road. Phillips fails to show how these determinations rise to clear error. A court’s decision to believe adverse witnesses over a party’s allegations does not meet this standard. ¶21 Phillips argues that because the court acknowledged that the officers could be lying, it was clearly erroneous to accept their testimony at face value. We disagree with 9 Phillips’s assertion that the court accepted any testimony at face value. The court made a credibility determination in light of all of the evidence—including the fact that the address the officers were seeking was not in the correct numerical location. Simply acknowledging that the officers could be lying does not mean that the court could not ultimately determine to believe the officers’ story. The officers’ testimony was not “so internally inconsistent or implausible on its face that a reasonable factfinder would not credit it.” State v. Beach, 2013 MT 130, ¶ 24, 370 Mont. 163, 302 P.3d 47 (quoting Anderson, 470 U.S. at 575, 105 S. Ct. at 1512). Given the evidence before it, the court’s finding that the officers acted appropriately was supported by substantial evidence and not clearly erroneous. Being lawfully on Phillips’s property, their observations of the marijuana in plain view were an appropriate basis for confiscating the excess plants and for the subsequent charges. The District Court correctly denied the motion to suppress. ¶22 2. Whether the District Court’s imposition of the cost of court-appointed counsel is illegal. ¶23 Phillips also appeals the portion of his sentence imposing an $800 cost for court-appointed counsel. He argues that the provision is illegal for two reasons: the fee exceeds the amount allowed by the applicable statute in effect at the time of the offense and the court did not inquire into Phillips’s ability to pay pursuant to § 46-8-113(3), MCA. The state concedes the first issue, but argues that Phillips waived his second argument by failing to object during his sentencing. ¶24 Although we generally refuse to review an issue raised for the first time on appeal, we have crafted an exception to review allegedly illegal criminal sentences. State v. 10 Lenihan, 184 Mont. 338, 341-43, 602 P.2d 997, 999-1000 (1979). “It appears to be the better rule to allow an appellate court to review any sentence imposed in a criminal case, if it is alleged that such sentence is illegal or exceeds statutory mandates, even if no objection is made at the time of sentencing.” Lenihan, 184 Mont. at 343, 602 P.2d at 1000. A merely objectionable sentence, however, does not rise to this level and would not invoke the Lenihan exception. State v. Kotwicki, 2007 MT 17, ¶ 13, 335 Mont. 344, 151 P.3d 892; see also State v. MacDonald, 2013 MT 105, ¶ 18, 370 Mont. 1, 299 P.3d 839. As long as the sentence is within the maximum authorized by law, a sentencing court’s failure to abide by a statutory requirement results only in an objectionable sentence, not an illegal one. Kotwicki, ¶ 13; MacDonald, ¶ 17. ¶25 In Kotwicki, we declined to apply the Lenihan exception to review a district court’s alleged failure to consider the defendant’s ability to pay a fine, pursuant to a statutory requirement in § 46-18-231(3), MCA, before imposing a $25,000 fine. Kotwicki, ¶ 16. We concluded that the district court’s failure to consider the defendant’s ability to pay was merely objectionable, not illegal, and, absent objection, could not be reviewed on appeal. We clarified in MacDonald that our holding was “explicitly based on the assumption ‘that the court failed to consider Kotwicki’s financial condition.’” MacDonald, ¶ 18. ¶26 As in Kotwicki and MacDonald, the District Court’s alleged neglect of the statutory requirement to inquire into Phillips’s ability to pay the costs of court-appointed counsel does not speak to the legality of the sentence and is only objectionable. Phillips 11 did not object to the District Court’s procedure or raise his inability to pay at sentencing. The transcript reveals that Phillips did object to a $500 fine listed in the PSI that he argued was not agreed to as part of the plea agreement, and the court did not impose that fine. Yet, even after the court stated that it was including the $800 public defender fee in Phillips’s sentence, asked Phillips if he had any questions, and asked if Phillips agreed with the sentence imposed, Phillips did not bring up an inability to pay. Our holding in Kotwicki controls; we again hold that a district court’s failure to abide by a statutory procedure when imposing a fine does not make a sentence illegal. Given Phillips’s failure to object, we will not review whether the District Court correctly followed the procedure prescribed by § 46-8-113(3), MCA. ¶27 The amount of the fee, however, presents a different issue. Phillips alleges that the fee exceeded the amount allowed by statute, rendering that portion of the sentence illegal. The State concedes and we agree that the public defender fee imposed was the wrong amount. “The law in effect at the time an offense is committed controls as to the possible sentence for the offense . . . .” State v. Tirey, 2010 MT 283, ¶ 26, 358 Mont. 510, 247 P.3d 701. Section 46-8-113(1) (2009), MCA, provided that a sentencing court shall order a defendant to pay $500 in every felony case for the cost of assigned counsel if the defendant would be able to pay it. The legislature raised the amount to $800 in 2011. Section 46-8-113(1), MCA (2011). Because Phillips pled guilty to a crime occurring in 2010, the 2009 provisions control his sentence. Accordingly, we remand the judgment to the District Court to correct the amount of the court-appointed counsel fee. 12 CONCLUSION ¶28 Having concluded that the District Court’s findings were not clearly erroneous, we affirm its denial of Phillips’s motion to suppress evidence. Additionally, absent objection below, we decline to review the court’s failure to consider Phillips’s ability to pay the cost of court-appointed counsel. We do review the amount of that cost and hold that it exceeded the statutorily allowed amount. We remand for the District Court to correct the judgment to reflect the cost of court-appointed counsel required by the statute in effect at the time of the offense. /S/ BETH BAKER We concur: /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ LAURIE McKINNON /S/ PATRICIA COTTER	October 29, 2013
54980a5a-20bf-4b70-ae54-0e31a0a77624	State v. Jackson	2013 MT 316	DA 13-0135	Montana	Montana Supreme Court	DA 13-0135 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 316 STATE OF MONTANA, Plaintiff and Appellee, v. MICHAEL RAY JACKSON, Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DC-11-389(A) Honorable Ted O. Lympus, Presiding Judge COUNSEL OF RECORD: For Appellant: Julie Brown, Montana Legal Justice, PLLC, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Jonathan M. Krauss, Assistant Attorney General; Carolyn Sime, Legal Intern, Helena, Montana Ed Corrigan, Flathead County Attorney, Kalispell, Montana Submitted on Briefs: October 9, 2013 Decided: October 29, 2013 Filed: __________________________________________ Clerk October 29 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Michael Ray Jackson appeals from an order of the Eleventh Judicial District Court, Flathead County, denying his Motion to Withdraw Plea of No Contest. We affirm. ¶2 The issue presented on appeal is whether the District Court erred by denying Jackson’s motion to withdraw his plea. PROCEDURAL AND FACTUAL BACKGROUND ¶3 On November 18, 2011, Jackson’s girlfriend, Maresa Brauer, ended their relationship. Later that day, officers responded to a report of a disturbance at Brauer’s residence. According to Brauer’s statement to police, Jackson sent her a text that said, “Game on.” He then drove to her house, where she was accompanied by a female friend. Brauer said that Jackson pulled her hair, punched out the passenger side mirror on her car, slashed her car’s tires, and used his truck to push her car toward the house. Brauer’s friend said that Jackson also used his truck to push her van. Jackson then produced a rifle and pointed it at the two women. Brauer ran into the house and her friend hid behind a tree. Both women called 911. ¶4 Jackson was charged with two counts of felony assault with a weapon and two counts of misdemeanor criminal mischief. He reached a plea agreement with the State, pursuant to which he agreed to plead no contest to one count of felony criminal endangerment in violation of § 45-5-207, MCA. The State agreed to recommend a ten-year suspended sentence. 3 ¶5 At the change of plea hearing, the District Court first established that Jackson was aware of the nature of the allegations, had been given sufficient time to discuss the matter with counsel, and was satisfied with the performance of counsel. Jackson was then sworn and the District Court elicited testimony in support of his plea. Jackson testified that he was entering his plea knowingly and voluntarily. He testified that no improper threats or promises had been made. Upon questioning from his attorney, Jackson testified that on November 18, 2011, there had been an incident between himself and Brauer. Jackson stated that the allegations regarding that incident were contained in the information, affidavit, police report, and witness statements, which had been provided to him for review. He confirmed his intent to plead no contest to criminal endangerment. ¶6 Jackson’s attorney then asked whether, after reviewing the evidence against him, he believed it was likely that he would be convicted. Jackson replied, “Due to my financial standing[,] I believe that to be true.” Jackson’s attorney asked if he wished to take the benefit of the bargain with the State rather than going through a trial, to which Jackson replied, “I just can’t afford to pay.” Jackson’s attorney explained that his services as a public defender were free and that he was prepared to go to trial at no cost. Jackson stated that he understood. He then confirmed that he wanted to “get back to work.” He also hoped to reconcile with Brauer. He testified that he understood his no contest plea would result in a conviction, but that he would not have to make specific admissions of guilt. ¶7 The State then questioned Jackson, who confirmed that he believed there would be a “good possibility” of serving prison time rather than receiving a suspended sentence if 4 the matter went to trial. The State asked Jackson, “So that’s what you mean when you say financially, because you want to be able to stay out in the community in order to keep your job?” Jackson replied that he “wouldn’t do much good” in prison. ¶8 The District Court took judicial notice of the affidavit filed in support of the information and found that there was a sufficient basis for the plea. The District Court accepted Jackson’s plea of no contest. Prior to sentencing, Jackson moved to withdraw his plea, which the District Court denied. He then received a ten-year suspended sentence in accordance with the State’s recommendation. STANDARD OF REVIEW ¶9 On appeal of the denial of a motion to withdraw plea, this Court reviews findings of underlying fact for clear error and conclusions of law for correctness. State v. Warclub, 2005 MT 149, ¶ 24, 327 Mont. 352, 114 P.3d 254. The voluntariness of a plea is a mixed question of law and fact, which this Court reviews de novo. Warclub, ¶ 24. DISCUSSION ¶10 Jackson claims that the District Court failed to establish a sufficient factual basis for his no contest plea. He also claims that the District Court did not determine that he believed the plea to be in his best interest. Therefore, he claims that he should be permitted to withdraw his plea, because there is doubt as to whether it was entered voluntarily. ¶11 A plea of nolo contendere, or no contest, may be withdrawn for good cause at any time before judgment or within one year of final judgment. Section 46-16-105(2), MCA. We will apply the same good cause standard to a motion to withdraw a plea of nolo 5 contendere as we do to a motion to withdraw a guilty plea. Good cause exists where a plea was entered involuntarily. Warclub, ¶ 16. An inadequate plea colloquy may be one indication that a plea was involuntary. State v. Frazier, 2007 MT 40, ¶ 10, 336 Mont. 81, 153 P.3d 18 (citing State v. Muhammad, 2005 MT 234, ¶ 14, 328 Mont. 397, 121 P.3d 521). ¶12 A court may not accept a plea of guilty without determining that there is a factual basis supporting the plea. Section 46-12-212(1), MCA. The court is therefore required to “solicit admissions from a defendant regarding what acts the defendant committed that constitute the offense charged.” Frazier, ¶ 21. If a defendant does not wish to make such admissions, however, he or she may instead enter a plea of no contest. Section 46-12-212(2), MCA. The court may accept a plea of no contest “if the defendant considers the plea to be in [his or her] best interest and the court determines that there is a factual basis for the plea.” Section 46-12-212(2), MCA. Because a no contest plea exists specifically to allow a defendant to avoid making admissions, the court must look to other sources in order to establish the required factual basis. State v. Locke, 2008 MT 423, ¶¶ 18-19, 347 Mont. 387, 198 P.3d 316. The information and affidavit may provide the factual basis for a no contest plea. Locke, ¶ 19. ¶13 The District Court established a sufficient factual basis for the offense of criminal endangerment. Jackson testified that an incident involving Brauer had taken place on November 18, 2011. He testified that the information, affidavit, police report, and witness statements had been provided to him. He testified that he understood the allegations against him. He testified that he believed it was likely he would be convicted 6 if the matter were to proceed to trial. The District Court also reviewed the affidavit offered by the State, which included the statements of Brauer and her friend describing the incident to officers. Brauer stated that Jackson had pulled her hair, broken the mirror on her car, slashed the tires on her car, pushed her car with his truck, and then pointed a rifle at her. Brauer’s friend confirmed the account, adding that Jackson had also pushed her van with his truck. The affidavit also noted that officers had taken photos of the damaged vehicles at the scene and had observed the women to be visibly shaken and distressed. This was sufficient to establish that a factual basis existed to support the charge of criminal endangerment. ¶14 The District Court also adequately determined that Jackson believed the no contest plea to be in his best interest. Jackson testified that he believed that he would likely be convicted if the matter went to trial. He wanted to avoid a trial and possible prison sentence so that he could return to his job and attempt to reconcile with Brauer. He wanted to receive the benefit of the State’s recommendation of a suspended sentence, which he believed he was not likely to receive if he were convicted after a trial. He also understood that he had the option of proceeding to trial with an attorney at no cost. Jackson’s testimony was sufficient to support the conclusion that he believed the plea was in his best interest. ¶15 Furthermore, the record supports the conclusion that Jackson’s plea was entered knowingly and voluntarily. He stated that he understood the nature of the allegations against him and had received the advice of counsel. He testified that his plea was voluntary. He understood his plea would result in a conviction. He understood the 7 State’s recommendation and was aware that it was not binding on the District Court. He received the benefit of reduced charges and a suspended sentence. ¶16 The District Court did not err by denying Jackson’s motion to withdraw plea. We will not overturn a district court’s denial of a motion to withdraw a guilty plea if the defendant was aware of the consequences of the plea, and the plea was made voluntarily. Burns v. State, 2012 MT 100, ¶ 6, 365 Mont. 51, 277 P.3d 1238. ¶17 Affirmed. /S/ MIKE McGRATH We concur: /S/ MICHAEL E WHEAT /S/ BRIAN MORRIS /S/ LAURIE McKINNON /S/ PATRICIA COTTER	October 29, 2013
0ed4b1c5-20de-4ee1-88b7-515e41db9422	GEQ v. Robinson	2013 MT 339N	DA 13-0095	Montana	Montana Supreme Court	DA 13-0095 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 339N GEQ CORPORATION, Plaintiff Intervenor and Appellant, v. MONTANA STATE DEPARTMENT OF TRANSPORTATION, Defendant and Appellee, and ANDY and LESLEY ROBINSON d/b/a A&L Robinson, INC., a Montana Corporation, Plaintiffs and Appellees. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DV 11-237 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellant: Susan Callaghan, Tyler Gernant; Callaghan & Gernant, PC; Butte, Montana For Appellees: Jolyn E. Eggart, David L. Ohler, Valerie D. Wilson; Special Assistant Attorneys General; Helena, Montana (for Montana Department of Transportation) Wade J. Dahood, Michelle Sievers; Knight, Dahood, Sievers & Dahood; Anaconda, Montana (for Robinsons) November 12 2013 2 Submitted on Briefs: September 11, 2013 Decided: November 12, 2013 Filed: __________________________________________ Clerk 3 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 GEQ Corporation (GEQ) appeals the order of the Twenty-First Judicial District Court, Ravalli County, denying its request to be awarded proceeds of a judgment obtained under a M. R. Civ. P. 68 offer of judgment. The sole issue on appeal is whether the District Court erred in denying GEQ’s claim to the Rule 68 judgment proceeds. We affirm. ¶3 The underlying suit arose over a small strip of land adjoining the west side of Highway 93 in Victor, Montana. GEQ developed and began operating a convenience store and gas station on the property in 1992. Two years later, Andy and Lesley Robinson (Robinsons) purchased the property from GEQ under a contract for deed. In 2011, a Montana Department of Transportation (MDT) project widening Highway 93 resulted in a customer parking area for the subject property becoming a portion of the highway. ¶4 Seeking damages for the loss of the property, the Robinsons filed an inverse condemnation complaint against MDT on April 6, 2011. On June 15, 2011, GEQ filed a motion to intervene as a party-plaintiff on the grounds that the Robinsons were in default 4 under the contract for deed and that GEQ, as legal owner of the property, was entitled to any proceeds that the Robinsons might receive as a result of their inverse condemnation claim. The District Court granted the motion to intervene. ¶5 MDT and the Robinsons proceeded to litigate the case without GEQ’s further involvement. MDT and the Robinsons conducted discovery and disclosed experts. Eventually, both parties filed motions for summary judgment with supporting briefs and materials. Facing what it considered “outrageous” litigation costs, MDT submitted an offer of judgment to the Robinsons pursuant to Rule 68 on June 21, 2012. MDT offered $151,500 “for settlement of all claims the Plaintiffs have asserted in this matter or could assert . . . .” The offer, which was served on both the Robinsons and GEQ, included “compensation for the alleged taking, plus depreciation, if any, to the remainder in this matter and interest,” together with costs and necessary litigation expenses, “including attorney fees, expert fees, litigation expenses and interest, if any.” The Robinsons accepted the offer, and GEQ then filed a notice of lien against the judgment. The District Court entered the judgment against MDT and set a hearing to determine the proper recipient of the funds. ¶6 The District Court denied GEQ’s request for the judgment proceeds in an amended order entered on October 30, 2012.1 The court’s determination turned on its conclusion that the offer of judgment and its acceptance constituted a settlement of the case and 1 Following its determination that the Robinsons were entitled to the proceeds, the District Court granted GEQ leave to file any complaint it may have against MDT within twenty days. The amended order struck this provision on the court’s conclusion that GEQ was not entitled to file a new complaint directly against MDT; GEQ does not appeal this determination. 5 could not be considered compensation for the taking of GEQ’s property. Because MDT did not admit liability for any alleged taking and the court did not determine that a taking existed, the court considered the proceeds to be nothing more than settlement proceeds to which GEQ, as a non-party to the settlement, was not entitled. ¶7 On appeal, GEQ argues that the District Court erred in its interpretation of a Rule 68 offer of judgment. Because the District Court’s ruling relied on a legal interpretation, we review its determination de novo. Peterson v. St. Paul Fire & Marine Ins. Co., 2010 MT 187, ¶ 45, 357 Mont. 293, 239 P.3d 904. ¶8 GEQ contends that a judgment entered pursuant to Rule 68 functions as an adjudication on the merits, distinguishing its proceeds from mere settlement proceeds. GEQ argues that, as the owner of the property in question, it is the only party entitled to compensation for the loss under Article II, Section 29, of the Montana Constitution. It asserts that whether MDT admitted liability for a taking is irrelevant to the legal effect of the judgment. MDT filed a short Appellee’s Brief, stating that it takes no position on the disposition of the funds. ¶9 It is true that a judgment entered under Rule 68 acts as adjudication on the merits for purposes of mooting any issue of liability in the same case. Weston v. Kuntz, 194 Mont. 52, 58, 635 P.2d 269, 273 (1981) (“[The] effect [of a Rule 68 offer], if the offer is accepted, is to render the issue of liability moot.”). It does not automatically follow, however, that GEQ is entitled to the Rule 68 judgment proceeds. We previously have recognized that an offer of judgment under Rule 68 “does not necessarily constitute an 6 admission of liability; instead, whether an offer amounts to such an admission is a function of the actual language itself.”2 Peterson, ¶ 49. ¶10 The language of the offer makes clear that it was made as a settlement between MDT and the Robinsons for the claims “the Plaintiffs have asserted in this matter or could assert . . . ,” including their “necessary and reasonable costs of litigation.” MDT adamantly denied liability and expressed that it made the settlement offer to avoid ongoing litigation costs. This is consistent with the “basic purpose” of Rule 68, which “is to encourage settlement and avoid protracted litigation.” Weston, 194 Mont. at 57, 635 P.2d at 272. Although the offer also included compensation for “any alleged taking,” there was no valuation of the property or any breakdown of what portion of the $151,500 constituted compensation for the alleged taking. Much of the settlement appears to be directed at litigation expenses, which were incurred only by the Robinsons. ¶11 GEQ did not participate in the litigation in any meaningful way and has failed to prove that any portion of the judgment proceeds at issue constitutes compensation for the property within the meaning of Article II, Section 29. Instead, the offer of judgment and the acceptance of that offer resulted in a settlement agreement between MDT and the Robinsons. Awarding GEQ the proceeds would be puzzling, considering that the agreement compensated the Robinsons for their litigation costs and attorney’s fees in exchange for dropping their claims against MDT. 2 Although Peterson dealt with F. R. Civ. P. 68, the Federal Rule mirrors Montana’s and was first adopted, in part, from Montana. See F. R. Civ. P. 68, advisory comm. nn. (1937); 4 Mont. Rev. Codes Ann. § 9770 (1935). 7 ¶12 GEQ asserts in its reply brief that if MDT paid the wrong party, it may be subject to paying the proceeds twice. We decline to address this argument because it was raised for the first time in GEQ’s reply brief. State v. Sattler, 1998 MT 57, ¶ 47, 288 Mont. 79, 956 P.2d 54; M. R. App. P. 23(c). ¶13 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. Absent an admission of liability or any indication that the judgment proceeds acted as compensation for a taking of its property, GEQ’s argument that it is entitled to the entirety of the settlement amount is unpersuasive. We are not convinced that the District Court erred in its application of Rule 68 to the judgment proceeds in this case. ¶14 Affirmed. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JIM RICE	November 12, 2013
28dbc4fc-d334-47f7-81b5-bd04cd917da9	Young v. State	2013 MT 340n	DA 13-0166	Montana	Montana Supreme Court	DA 13-0166 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 340N MATTHEW DEAN YOUNG, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV 11-1138 Honorable Karen Townsend, Presiding Judge COUNSEL OF RECORD: For Appellant: Julio K. Morales, Matthew S. Sonnichesen, Morales Law Office, PC; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General; Helena, Montana Fred Van Valkenburg, Missoula County Attorney, Suzy Boylan, Deputy County Attorney; Missoula, Montana Submitted on Briefs: October 23, 2013 Decided: November 12, 2013 Filed: __________________________________________ Clerk November 12 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Appellant Matthew Dean Young (Young) appeals from the memorandum and order of the Fourth Judicial District, Missoula County, that denied as time-barred Young’s amended second petition for post-conviction relief and further determined that Young had failed to present newly discovered evidence to overcome the time bar. We affirm. ¶3 The State of Montana (State) charged Young with four counts of felony sexual assault on March 12, 2001. Private counsel represented Young. Young asked the District Court to appoint a psychiatrist, at the State’s expense, to report on Young’s mental condition as it related to Young’s ability to form the necessary mental state or element required for each of the crimes charged. The District Court denied the expenditure due to the fact that the Public Defender’s Office did not represent Young. Young then entered a guilty plea pursuant to a plea agreement with the State. ¶4 The District Court sentenced Young on October 24, 2001. The District Court considered voluminous evidence at the sentencing hearing. Young’s counsel had presented the District Court with two omnibus hearing memoranda. Young’s counsel raised no issue with Young’s ability or fitness to proceed in the first memorandum. Young’s counsel 3 indicated in the second memorandum that Young intended to pursue the affirmative defense of mental disease or defect. ¶5 Young also had filed a plea of guilty and a waiver of rights that stated “I am not suffering from any emotional or mental disability which makes me unsure about what I am doing by pleading guilty.” The District Court also considered a 2001 psychological evaluation of Young and follow-up recommendations. The District Court further evaluated the pre-sentence investigation report and its attendant psychological evaluation. The District Court lastly heard from Young about his responsibility for the crime, his remorse, and his desire to seek further treatment. ¶6 The District Court determined that Young had made the conscious choice to abuse his victims. The District Court sentenced Young to four 75-year sentences to run concurrently. Young did not appeal his conviction or sentence. ¶7 Young filed a petition for post-conviction relief on December 23, 2002, in which he alleged ineffective assistance of counsel in light of the plea agreement. Young claimed that his counsel had led him to believe that the District Court would not impose the lengthy sentence that the plea agreement suggested. Young further claimed that his counsel had performed ineffectively by failing to object to the probation officer’s testimony concerning Young’s prior psychological treatment. The District Court denied Young’s petition. Young did not appeal that denial. ¶8 Young remained incarcerated at the Montana State Prison. Young’s counsel in 2005 requested that clinical psychologist Dr. George Athey perform a psychological evaluation of 4 Young. Dr. Athey evaluated Young in early December 2005. Dr. Athey discussed the results of the 2005 evaluation with Young’s counsel. Young’s counsel did not request a full report as a result of that discussion. Young took no further action on the 2005 evaluation at that time. ¶9 Young filed a second petition for post-conviction relief on September 1, 2011. Young claimed that he had been incompetent when he entered his guilty plea in 2001, and that the District Court had violated his right to due process by not ordering a competency evaluation on its own. Young based his claims on a January 11, 2011, report from Dr. Athey. Dr. Athey’s 2011 report summarized and aggregated prior clinicians’ evaluations of Young. The report summarized the 2001 psychosexual evaluation that had been before the District Court at sentencing. The report further summarized Dr. Athey’s 2005 mental health evaluation, and a separate 1991 mental health evaluation. Young amended his second petition for post- conviction relief on January 27, 2012, to include further documentation. ¶10 The District Court concluded that Young’s petition had been filed out of time under § 46-21-101, MCA. The District Court further decided that it had to consider the merits of Young’s claim because it raised the “quasi-jurisdictional matter” of Young’s competency. The District Court concluded that Young’s petition failed to unearth any “newly-discovered evidence” to show more than a “conclusory allegation” that Young might have been incompetent or unfit to stand trial. The District Court further concluded that Dr. Athey’s report could not be considered newly discovered evidence when Dr. Athey had based the 5 2011 mental health evaluation primarily on the 2005 mental health evaluation. The District Court denied Young’s petition. Young appeals. ¶11 We review for clear error a district court’s findings of fact in disposition of a petition for post-conviction relief. State v. Beach (Beach II), 2013 MT 130, ¶ 8, 370 Mont. 163, 302 P.3d 47. We review for correctness a district court’s conclusions of law in disposition of a petition for post-conviction relief. Beach II, ¶ 8. We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our 1996 Internal Operating Rules, as amended in 2006, that provide for memorandum opinions. ¶12 We agree with the District Court that Young’s decision to wait until 2011—six years after publication—to act upon the 2005 mental health evaluation means that it cannot constitute newly discovered evidence. The 2005 mental health evaluation alerted Young that a further evaluation might be needed. Young additionally fails to address how further evaluation of his mental health in 2011, could have reflected on his entry of guilty pleas in 2001. We agree with the District Court that, in light of what was known to the trial court at the time, its failure sua sponte to make further inquiry into Young’s competency did not violate his constitutional rights. It is manifest on the face of the briefs and the record before us that substantial evidence in the record supports the District Court’s findings and that the District Court correctly applied the law to these findings. ¶13 Affirmed. /S/ BRIAN MORRIS We Concur: 6 /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ PATRICIA COTTER /S/ JIM RICE	November 12, 2013
fccbfed9-2093-41c5-9c5c-2f003536990d	Carestia v. Robey	2013 MT 335	DA 12-0724	Montana	Montana Supreme Court	DA 12-0724 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 335 DOMINIC (DEE) CARESTIA, and TERESA CARESTIA, Plaintiffs and Appellants, v. JEFFREY E. ROBEY, Defendant and Appellee. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. DDV 08-268 Honorable Dirk M. Sandefur, Presiding Judge COUNSEL OF RECORD: For Appellants: Calvin J. Stacey; Stacey & Funyak; Billings, Montana For Appellee: Paul N. Tranel; Bohyer, Erickson, Beaudette & Tranel; Missoula, Montana Submitted on Briefs: October 2, 2013 Decided: November 12, 2013 Filed: __________________________________________ Clerk November 12 2013 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Teresa Carestia (Teresa) appeals from the orders of the Eighth Judicial District Court, Cascade County, denying her motion for a new trial on the issue of damages and awarding costs on a bill of costs that was not properly verified. We reverse in part and affirm in part. ISSUES ¶2 We restate the issues as follows: 1. Did the District Court err in denying Teresa’s motion for a new trial? 2. Did the District Court abuse its discretion in awarding costs on a bill of costs that was not properly verified? BACKGROUND ¶3 In November 2007, Teresa and her husband, Dominic Dee Carestia (Dee), were involved in a motor vehicle accident in Fergus County, Montana. The Carestias brought suit against Jeffrey Robey (Jeffrey), the driver of the other vehicle, claiming personal injury and property damages resulting from the accident. On November 1, 2011, the case proceeded to jury trial. On November 4, 2011, the jury returned a special verdict finding that Jeffrey’s negligence was a cause of the accident. The jury also determined Dee was contributorily negligent, and it apportioned fault between Dee and Jeffrey, with Dee 15% at fault and Jeffrey 85% at fault. Teresa sought to recover medical expenses in the sum of $4,312.32, which was comprised primarily of massage therapy and chiropractic expenses. The jury awarded her only $872 in medical expenses, and awarded nothing for 3 her past and future pain and suffering or loss of capacity to pursue her established course of life. ¶4 Five days after the filing of the jury verdict, on November 9, 2011, Jeffrey filed a bill of costs pursuant to M. R. Civ. P. 68(d). On November 10, 2011, the Carestias filed their own bill of costs. The “competing bills of costs then gave rise to [an] extraordinary flurry of briefing,” a summary of which is unnecessary for our analysis. On September 18, 2012, the District Court entered an order allowing the Carestias to recover costs from Jeffrey and allowing Jeffrey to recover costs from the Carestias. ¶5 The Carestias filed a motion for a new trial. The District Court failed to rule on the motion, so it was deemed denied. M. R. Civ. P. 59(f). The Carestias filed this appeal in December 2012.1 On appeal, Teresa requests that the decisions of the District Court be reversed pursuant to Rule 19 of the Montana Rules of Appellate Procedure, that the case be remanded for a new trial, and that she be awarded her costs on appeal. Teresa argues the evidence of her injuries, expenses, and ongoing discomfort was undisputed and the District Court should have granted her motion for a new trial. She further argues that the District Court abused its discretion by extending the time within which Jeffrey could submit a verified bill of costs when Jeffrey made no showing of excusable neglect as required under M. R. Civ. P. 6(b)(1)(B). She therefore requests that we strike the award of costs to Jeffrey. 1 In March 2013, the parties participated in appellate mediation. Dee’s claims were settled, but Teresa’s were not. 4 ¶6 Jeffrey counters that the jury’s award of $872 in medical expenses was proper because that sum was the total for her expenses. He argues Teresa failed to establish that her massage and chiropractic treatments were reasonable or necessary and did not offer records of those treatments into evidence. Jeffrey further argues his award of costs should be affirmed because the District Court properly exercised its discretion in considering his bill of costs. STANDARD OF REVIEW ¶7 When the basis of a motion for a new trial is insufficiency of the evidence, we review the denial of the motion de novo and determine whether there was substantial evidence to support the verdict. Styren Farms Inc. v. Roos, 2011 MT 299, ¶ 11, 363 Mont. 41, 265 P.3d 1230 (internal citation omitted). Substantial evidence is evidence that a reasonable mind might accept as adequate to support a conclusion; it may be less than a preponderance of the evidence, but must be more than a “mere scintilla.” Styren Farms, ¶ 11 (internal citation omitted). We review a district court’s award of costs to determine if the district court abused its discretion. Mularoni v. Bing, 2001 MT 215, ¶ 22, 306 Mont. 405, 34 P.3d 497 (internal citation omitted). DISCUSSION ¶8 1. Did the District Court err in denying Teresa’s motion for a new trial? ¶9 After the jury returned its verdict denying Teresa past and future pain and suffering damages, she sought a new trial pursuant to Rules 50 and 59(e) of the Montana Rules of Civil Procedure. The basis for the motion was that there was insufficient evidence to support the jury’s verdict, and the verdict was contrary to the law. The 5 District Court did not rule on the motion, and it was deemed denied pursuant to M. R. Civ. P. 59(f). M. R. Civ. P. 59(a)(1)(A) provides a new trial may be granted “after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in Montana state court.” ¶10 Teresa contends Montana case law “requires the granting of a new trial so [she] can present her damage claims to a new jury in Great Falls.” Teresa cites Thompson v. City of Bozeman, 284 Mont. 440, 945 P.2d 48 (1997), Renville v. Taylor, 2000 MT 217, 301 Mont. 99, 7 P.3d 400, and Hoffman v. Austin, 2006 MT 289, 334 Mont. 357, 147 P.3d 177 (overruled in part on other grounds), as examples of cases in which “the jury found that the defendant’s negligence caused the plaintiff’s injury and a new trial was granted due to the jury’s failure to award uncontested damages . . . such as pain and suffering, mental and emotional distress and loss of established course of life activities among others.” Teresa argues a new trial is similarly appropriate in this case because no witness at trial disputed that she had been injured, and Jeffrey conceded that she had been injured, telling the jury “it’s up to you to what degree that injury should be compensated.” She also argues that the award of medical expenses was inadequate. ¶11 Jeffrey counters that the record supports the jury’s award for medical expenses because no records of her massage and chiropractic expenses were offered into evidence. Further, the two medical providers called by Teresa who had actually examined her had seen her only once and did not recommend massage therapy or chiropractic treatment for her injuries. Addressing her complaint that the jury was required to compensate Teresa for her pain and suffering, Jeffrey argues her failure to offer a proper jury instruction 6 consistent with her theory of the case and evidence precludes her from assigning error on this issue. According to Jeffrey, if Teresa “is correct that it was mandatory for the jury to award the requested damages, then she was required to offer jury instructions consistent with her position” instead of agreeing with the instruction that the award “should include reasonable compensation for any pain and suffering experienced” (emphasis in original). Jeffrey concedes that if we determine Teresa did not waive the issue of pain and suffering damages by failing to offer proper jury instructions, she is entitled to a new trial on the issue of her past pain and suffering damages. ¶12 As an initial matter, we conclude Teresa did not waive her argument with respect to past pain and suffering by failing to offer proper jury instructions. In similar cases, we have not required the plaintiff to offer jury instructions stating that awarding such damages is mandatory as a prerequisite to granting a motion for a new trial. See e.g. Hoffman; Renville (both cases were remanded on the issue of damages, even though the jury instructions stated “. . . your award should include reasonable compensation for . . . .”). Moreover, we note Teresa is not arguing that it was mandatory for the jury to award her damages. Rather, she is arguing that insufficient evidence supported the jury’s zero damage award, and that it should have awarded her pain and suffering damages based on the evidence before it. ¶13 Teresa presented substantial evidence to support an award of damages for past pain and suffering. Summarized briefly, that evidence included Teresa’s testimony that her right shoulder and neck started to hurt on the evening of the accident. Teresa testified that her pain got worse throughout the evening and that, on the following morning, her 7 neck was stiff, her shoulder hurt, and she had a new pain around her ribs. She went to the urgent care facility in Billings, and the physician’s assistant who saw her testified that Teresa had slight tenderness in her neck, lower back, shoulder, and right arm. The radiologist who had interpreted Teresa’s x-rays testified that he found a minimally displaced fracture of her right sixth rib. On June 25, 2008, Teresa saw another physician’s assistant who testified Teresa voiced discomfort, he found an area that was tender to palpation, and he had no reason to question Teresa’s veracity. Teresa visited the chiropractor 38 times in 2008. She testified at trial that she was still having problems with her rib, four years after the accident, and that the pain limited her participation in certain activities. ¶14 There was no evidence that Teresa had any pre-existing injuries. Teresa and Dee testified that she had no prior injury, and Jeffrey did not impeach this evidence. In Murray v. Whitcraft, 2012 MT 298, ¶ 13, 367 Mont. 364, 291 P.3d 587, the defendant presented evidence and cross-examined the plaintiff’s witnesses to suggest that the collision had caused little, if any, impact to the plaintiff’s shoulder, and that he had re-injured the shoulder on a later occasion while bow hunting. In this case, Jeffrey suggested that Teresa may have re-injured herself while engaged in physical activities unrelated to the accident, but he did not provide any evidence to support this assertion. While Jeffrey may have questioned the extent of Teresa’s pain and suffering, he did not controvert the evidence that she had pain and suffering as a result of the accident. ¶15 We distinguished Murray from the line of cases Teresa has cited (Hoffman, Thompson, and Renville) because Murray offered only a general verdict form. Therefore, 8 we could not “determine the degree to which the jury found [the defendant’s] negligence caused Murray’s injuries and the precise nature of the damages the jury awarded to Murray.” Murray, ¶ 22. Here, unlike in Murray, we are able to ascertain that the jury awarded zero damages for pain and suffering because the verdict form itemized the categories of damages. ¶16 “We have previously held that, although it is within the jury’s province to weigh the evidence and determine credibility, a jury is not free to disregard uncontradicted, credible, nonopinion evidence.” Renville, ¶ 26 (citing Thompson, 284 Mont. at 443, 945 P.2d at 50). We conclude that Teresa was entitled to some award of damages for her past pain and suffering proven in this case. ¶17 We reject Teresa’s request that we remand for a new trial on her past and future medical expenses, her future pain and suffering, and her loss of established course of life. As indicated, Teresa did not offer her medical bills into evidence nor did she offer any testimony that the massage and chiropractic treatments she underwent were medically necessary. Further, there was no evidence that Teresa was likely to incur future medical expenses. In fact, in light of the Carestias’ failure to supplement discovery responses, counsel for the Carestias advised the court that they would seek damages only for the year 2008. There is therefore no basis for a remand on these issues. ¶18 Accordingly, we conclude that a portion of the jury’s damage award was not supported by substantial credible evidence. For that reason, we set aside the portion of the jury’s verdict that awarded no damages for past pain and suffering and remand to the District Court for a new trial limited to the sole issue of Teresa’s past pain and suffering. 9 We note that Jeffrey has not appealed the jury’s finding that Teresa was injured as a result of the parties’ collision. Therefore, upon retrial that fact need not be re-established. The remainder of the verdict is affirmed. ¶19 2. Did the District Court abuse its discretion in awarding costs on a bill of costs that was not properly verified? ¶20 On September 18, 2012, the District Court entered its ordering awarding both parties their costs. The Carestias argue that Jeffrey’s bill of costs did not meet the requirements of § 25-10-501, MCA, because it was not verified, and that the District Court abused its discretion in allowing Jeffrey to cure this defect by affidavit. The District Court relied on M. R. Civ. P. 6(b)(1)(B) for the authority to extend the time for good cause. The District Court determined good cause existed because Jeffrey filed a curative affidavit in a reasonably prompt manner upon notice of the defect. Moreover, briefing on the parties’ costs was still at an early stage, and an extension would not prejudice the Carestias. We conclude the District Court did not abuse its discretion when it denied the Carestias’ objection to Jeffrey’s bill of costs. ¶21 Finally, we decline Teresa’s request that we award her costs on appeal as the prevailing party, pursuant to M. R. App. P. 19(3)(a). While Teresa prevailed on one claim, she did not prevail on others. The foregoing rule provides that in the event of a dispute over which party has prevailed, that dispute, as well as the matter of costs, shall be resolved by the district court. 10 CONCLUSION ¶22 For the foregoing reasons, we reverse in part and affirm in part. We remand this case for a trial on the sole issue of damages for past pain and suffering. /S/ PATRICIA COTTER We concur: /S/ BRIAN MORRIS /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE	November 12, 2013
023e0d70-dd4a-4936-8dd2-214504306bb8	In re L.A.	2013 MT 327	DA 12-0689	Montana	Montana Supreme Court	DA 12-0689 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 327 IN THE MATTER OF: L.A., Respondent and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DI 11-05 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Eileen A. Larkin, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Micheal S. Wellenstein, Assistant Attorney General; Helena, Montana William E. Fulbright, Ravalli County Attorney; Hamilton, Montana Submitted on Briefs: October 16, 2013 Decided: November 5, 2013 Filed: __________________________________________ Clerk November 5 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 L.A. appeals the order of the Twenty-First Judicial Court, Ravalli County, ordering her involuntary commitment and involuntary medication. After a two-day trial, the jury concluded by special verdict that L.A. was suffering from a mental disorder, was unable to provide for her basic needs, was an imminent threat of injury to herself or others, and, if left untreated, her condition would deteriorate. At the dispositional hearing immediately following the verdict, the District Court adopted an Order of Commitment and Transport Order submitted by the State. In 2011, we reversed a previous order of commitment for L.A. due to the entry of an order by the District Court that employed conclusory statements of statutory criteria rather than a detailed statement of facts. In re L.L.A., 2011 MT 285, ¶¶ 11, 23, 362 Mont. 464, 267 P.3d 1. L.A. challenges the present commitment order on the same grounds. We affirm and review the following issues on appeal: ¶2 1. Did the District Court err by failing to make a detailed statement of facts in its post-trial disposition order as required by § 53-21-127(8)(a), MCA? ¶3 2. Did the District Court err by failing to meet the statutory prerequisites of § 53- 21-127(8)(h), MCA, to authorize involuntary medication? FACTUAL AND PROCEDURAL BACKGROUND ¶4 L.A. has previously been diagnosed as suffering from Schizophrenia. Following her release from her previous commitment in April 2011, L.A. was on medication and her condition was stable. She returned to live with her parents and was seen at a health clinic 3 to assist her with a treatment program. L.A. moved into her own apartment, but later moved back in with her parents. L.A. stopped taking her medication in early 2012, and her unusual behavior started to return. L.A.’s parents were concerned for L.A.’s safety and well-being, and began documenting L.A.’s behavior. Based on a report by Fred Huskey, a licensed clinical professional counselor and certified mental health professional, the State filed a petition for involuntary commitment of L.A. L.A. requested a jury trial pursuant to § 53-21-125, MCA. ¶5 At trial, L.A.’s father testified that L.A. stopped taking her medications because she believed “medications are poison and that they will kill her.” He also testified regarding his concern for her health due to her refusal to seek medical treatment for health problems and her increasingly poor hygiene. L.A. would get agitated and become physically aggressive with her parents if they asked her to take her medication or otherwise suggested she had a mental disorder. He also testified that L.A. was engaging in increasingly odd behavior such as staring at the wall and laughing while alone, placing toxic substances near her private area to prevent evil from getting her, plugging the toilet with items to stop evil rays, and placing coins around her bed to protect her from evil or “bioterror.” The jury viewed a videotape recorded by L.A.’s parents depicting strange behaviors by L.A. during a week long period shortly before trial. L.A.’s father also testified that L.A. was afraid to live alone due to her worsening paranoia, and was unable to pay her bills or manage her own finances. 4 ¶6 Darby Deputy Marshall Jon Moles testified that, a few days before the trial, L.A. approached him and asked him if he could hear screaming. She then told him that someone was being murdered at Como Lake, and that people in black clothing were in town to artificially inseminate people. Irene Walters, a nurse practitioner at Riverfront Mental Health Center, testified that L.A.’s condition began to deteriorate when she quit taking her medications in early 2012. Walters testified she was afraid that L.A.’s fears were so strong that she could ultimately hurt herself or her family. Huskey testified that Schizophrenia is treatable, but if left untreated each psychotic episode results in greater damage. Huskey believed that L.A. was not able to provide for her own basic needs or safety, and could be at risk of harming herself or others. Huskey did not recommend a less restrictive plan for L.A. because of her refusal to take medication and follow up with her treatment plan. ¶7 L.A. testified on her own behalf and adamantly denied having a mental disorder. She claimed that attempts to confine and forcibly medicate her were a threat to national security, and likely the result of sexual harassment. She also claimed that if she was forced to take medication she would likely die. ¶8 The jury completed a special verdict form, concluding that by a reasonable medical certainty L.A. suffered from a mental disorder. The jury also found by clear and convincing evidence that because of her mental disorder L.A. was “substantially unable to provide for her basic needs of food, clothing, shelter, health, or safety;” that “there exists an imminent threat of injury to [L.A.] or to others because of [her] acts or 5 omissions;” and that L.A.’s mental disorder, “as demonstrated by [L.A.’s] recent acts or omissions, will, if untreated, predictably result in deterioration” to the point she “will become a danger to self or to others, or will be unable to provide for [her] own basic needs.” Finally, the jury found that the physical facts and evidence necessary to support their answers were proven beyond a reasonable doubt. ¶9 Immediately after dismissing the jury, the District Court held a dispositional hearing. The court asked the State for a proposed order, which the State already had prepared. The Order of Commitment recited the findings stated on the special verdict form, which essentially tracks the language of § 53-21-126(1), MCA. The order contained five additional findings of fact, including that L.A. suffers from Schizophrenia, undifferentiated type, as diagnosed by Huskey; that, based upon the testimony, L.A. required commitment to Montana State Hospital; and that this commitment was the least-restrictive environment possible “based upon [L.A.’s] behavior and non-compliance with medications.” The order committed L.A. to the Montana State Hospital for up to 90 days, and approved involuntary medication if it was deemed necessary to facilitate her treatment. The court orally stated that the commitment and involuntary medication authorization were based on findings of the jury and the report by Huskey. STANDARD OF REVIEW ¶10 We exercise de novo review to determine whether a district court correctly interpreted and applied the relevant statutes. In re Mental Health of E.P.B., 2007 MT 224, ¶ 5, 339 Mont. 107, 168 P.3d 662. Whether a district court’s findings of fact satisfy 6 the statutory requirements is a question of law which we review for correctness. In re L.L.A., ¶ 7. ¶11 It is the jury’s function to weigh and resolve conflicts in the evidence, judge the credibility of witnesses, and “make the factual determinations necessary to render a verdict.” Seltzer v. Morton, 2007 MT 62, ¶ 94, 336 Mont. 225, 154 P.3d 561. The court must defer “to the jury’s constitutionally sanctioned decisional role,” Mont. Const. art. II, § 26, and it is not the court’s role to repeat the jury’s tasks and retry a case or reweigh evidence. Seltzer, ¶ 94. We review a jury verdict to determine whether, viewing the evidence in the light most favorable to the prevailing party, it is supported by substantial credible evidence. Seltzer, ¶ 94. DISCUSSION ¶12 1. Did the District Court err by failing to make a detailed statement of facts in its post-trial disposition order as required by § 53-21-127(8)(a), MCA? ¶13 The key difference between this case and L.A.’s 2011 appeal is that the findings here were made by a jury instead of a judge. In In re L.L.A., the trial judge was the trier of fact. Here, L.A. received a trial by jury and the jury found that the evidence proved beyond a reasonable doubt that L.A. suffered from a mental disorder, was unable to care for herself, posed a threat of harm to herself or others, and, if left untreated, would continue to deteriorate. ¶14 Only once in a published opinion have we addressed a case where a jury, rather than a judge, made the involuntary commitment determination. See In re D.M.S., 2009 MT 41, 349 Mont. 257, 203 P.3d 776. In re D.M.S. involved a challenge to the 7 sufficiency of the evidence. In re D.M.S., ¶¶ 3, 20. Here, L.A. does not challenge the sufficiency of the evidence to support the jury’s verdict, but argues only that the District Court erred “by ordering her involuntary commitment . . . without providing a detailed statement of facts” as required by § 53-21-127(8), MCA. ¶15 Juries generally do not enter detailed findings of fact from the evidence they hear. Though the involuntary commitment statutes must be strictly followed, including the entry of “detailed findings of fact,” § 53-21-127(8)(a), MCA, it is not possible for a judge, who is not privy to a jury’s deliberations, to know in detail what evidence the jury accepted or rejected in reaching its verdict. To ask the judge to enter detailed findings after a jury has reached a commitment verdict would require speculation and usurp the jury process, allowing the judge’s determination of the evidence to supersede the jury’s. “Statutory construction should not lead to absurd results if a reasonable interpretation can avoid it.” Bitterroot River Protective Ass’n. v. Bitterroot Conserv. Dist., 2008 MT 377, ¶ 72, 346 Mont. 507, 198 P.3d 219 (citation omitted). ¶16 Here, the jury utilized a special verdict form upon which they indicated that the evidence proved that L.A. suffered from a mental disorder, was unable to care for herself, posed a threat of harm to herself or others, and, if left untreated, would continue to deteriorate predictably to the point of danger to herself or others. The special verdict form, along with the additional findings entered by the District Court in its order, were sufficient to satisfy the statutory requirements in a case tried to a jury. 8 ¶17 2. Did the District Court err by failing to meet the statutory prerequisites of § 53- 21-127(8)(h), MCA, to authorize involuntary medication? ¶18 L.A. argues the District Court erred by “authorizing her involuntary medication without providing a detailed statement of facts,” citing § 53-21-127(8)(h), MCA. However, this provision does not require entry of a detailed statement of facts for purposes of authorizing the administration of medication involuntarily. That requirement is applicable only to the determination that a respondent is suffering from a mental disorder and requires commitment. See § 53-21-127(8)(a), MCA. The court’s reasoning regarding why “involuntary medication was chosen from among other alternatives” must only be supported by the usual “findings of fact.” Section 53-21-127(8)(h), MCA. ¶19 The jury determined that the evidence presented at trial proved beyond a reasonable doubt that L.A. suffered from a mental disorder and that her condition satisfied the requirements for commitment. The District Court orally noted that the order was adopted based upon the findings of the jury and the recommendations of Huskey, the designated Professional Person. Its written findings stated that the commitment and involuntary medication authorization were ordered based upon Huskey’s recommendation and L.A.’s “behavior and non-compliance with medications,” and that less restrictive alternatives were not appropriate for the same reason. Though these findings do not detail the particular evidence upon which the court’s findings and conclusions were based, the record was replete with evidence of L.A.’s behavior and 9 non-compliance with medications, and the statute only required findings supporting the reasoning for the authorization. Therefore, we conclude the order was sufficient.1 ¶20 Affirmed. /S/ JIM RICE We concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON 1 We are mindful that in In re R.W.K, 2013 MT 54, ¶ 32, 369 Mont. 193, 297 P.3d 318, decided after the case sub judice was tried, we “urge[d] the district courts to plainly and clearly state in orders of commitment whether the circumstances justify authorizing the chief medical officer or designated physician to administer medication involuntarily, and if so, the reason involuntary medication was chosen from among other alternatives.” Although this task belonged to the District Court, the court’s ability to identify determining circumstances was likewise inhibited by not being privy to the jury’s acceptance or rejection of evidence during deliberations.	November 5, 2013
7efb681c-d3ff-4b44-9fe2-14bb0319fcb2	State v. Hantz	2013 MT 311	DA 13-0037	Montana	Montana Supreme Court	DA 13-0037 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 311 STATE OF MONTANA, Plaintiff and Appellee, v. ROGER ALAN HANTZ, Defendant and Appellant. APPEAL FROM: District Court of the Tenth Judicial District, In and For the County of Fergus, Cause No. DC-2011-07 Honorable Randal I. Spaulding, Presiding Judge COUNSEL OF RECORD: For Appellant: Chuck Watson, Watson Law Office, P.C.; Bozeman, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General; Helena, Montana Thomas P. Meissner, Fergus County Attorney, Jean Adams, Deputy County Attorney; Lewistown, Montana Submitted on Briefs: September 18, 2013 Decided: October 22, 2013 Filed: __________________________________________ Clerk October 22 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Roger Alan Hantz (Hantz) appeals his conviction from the Tenth Judicial District, Fergus County. We affirm. ¶2 We address the following issues on appeal: 1. Whether Montana’s sexual abuse of children statute, § 45-5-625(1)(c), MCA, sweeps too broadly in violation of the First Amendment and the Commerce Clause? 2. Whether the District Court properly authenticated and admitted extensive internet chat logs into evidence? PROCEDURAL AND FACTUAL BACKGROUND ¶3 Fergus County Deputy Sheriff Troy D. Eades (Eades) conducted an online investigation of child enticement as part of the Internet Crimes Against Children Task Force (ICACTF). Eades represented himself as “Lissa,” a 14-year-old female from Montana. The 50-year-old Hantz lived in Fremont, California. Hantz first contacted Lissa on November 10, 2010. ¶4 Hantz found Lissa through the teenage-oriented social networking website TeenSpot.com. Hantz initially contacted Lissa through TeenSpot.com’s instant messaging system. Hantz asked Lissa her age, gender, and location. Lissa responded that she was a 14- year-old female from Montana. Hantz moved his conversation with Lissa from the TeenSpot.com instant messenger service onto the Yahoo instant messaging service. ¶5 The tone of Hantz’s conversation with Lissa changed quickly on the Yahoo instant messaging service. Hantz asked Lissa if she had seen a man naked, or if she had been naked with a man. Hantz told Lissa that he wanted to get naked with her. Hantz wanted to 3 masturbate while Lissa watched on a webcam. Hantz asked Lissa for permission to masturbate while she watched. Lissa briefly and affirmatively responded to each of Hantz’s statements and questions. Hantz shared his webcam feed with Lissa, and proceeded to masturbate on the live webcam feed. ¶6 Hantz asked Lissa to confirm that she was “really 14.” Lissa answered yes, and then asked Hantz if he liked younger girls. Hantz replied with “oh yea.” Hantz continued to ask Lissa about her sexual experiences. Hantz also made sexual references to Lissa. Shortly thereafter Hantz invited Lissa to join him in mutual masturbation. Hantz expressed his wish that Lissa had a webcam so that he could watch her. ¶7 Hantz chatted online with Lissa ten times over the next four months. Each conversation proceeded similarly to the November 10, 2010, conversation. Each conversation included references to Hantz masturbating. Hantz broadcasted his masturbation over his webcam several times. Hantz made references to sexual activities with younger females during this time. Hantz claimed to have had sexual intercourse with a 17-year old female named “lori.” ¶8 Hantz engaged in five chats with Lissa during February 2011. Hantz requested that Lissa remove her clothing several times over the course of these chats. Hantz also directed to Lissa to masturbate in each of these chats. Hantz lastly made several references to his potential plans to travel to Montana to meet Lissa in person. Hantz apparently intended to engage in various sexual activities with Lissa. 4 ¶9 Eades obtained an arrest warrant for Hantz based on Hantz’s potential travel plans. A Fremont, California detective, who also served as a member of the ICACTF, arrested Hantz on February 25, 2011. The Fremont police informed Hantz that they had an arrest warrant for him from Montana. Hantz claimed that there had been a misunderstanding, and that he “didn’t do anything.” ¶10 The Fremont police confiscated Hantz’s computer. The Fremont police found evidence of a search for airline tickets on the internet travel site Priceline.com for a flight from San Jose, California to Great Falls. The Fremont police also found copies of each of the online chats between Hantz and Lissa. ¶11 The Fremont police further found records of online chats between Hantz and other online personas who had represented themselves as female minors. These collateral chats had occurred during the same time period as Hantz’s chats with Lissa. Each of the collateral chats generally followed the same pattern as Hantz’s online chats with Lissa. ¶12 The State of Montana (State) charged Hantz on February 24, 2011, with two counts of felony sexual abuse of children, in violation of § 45-5-625(1)(c), MCA. The State specifically charged Hantz with two counts of knowingly having counseled Lissa, a person online whom Hantz had believed to be a 14-year-old female, to remove her clothing and engage in “masturbatory conduct.” ¶13 Hantz sought to dismiss both charges on the basis that § 45-5-625(1)(c), MCA, unconstitutionally limited his freedom of speech as protected by both federal and state constitutions due to the statute’s overbreadth, both on its face and as applied to his conduct. 5 Hantz further claimed that § 45-5-625(1)(c), MCA, violated the federal Commerce Clause. The District Court denied Hantz’s motion in a written order. ¶14 Hantz filed a motion in limine to exclude the collateral chats. Hantz apparently never filed a brief in support of his motion in limine. The District Court denied Hantz’s motion before trial. Hantz proceeded to trial. ¶15 The State requested permission to introduce the collateral chats between Hantz and the other online personas on the third day of trial. The District Court reviewed the 2,500 pages of online chat conversations outside the jury’s presence. The District Court characterized the 2,500 pages of online chat conversations as “non-testimonial in nature” and therefore determined the chats “c[ould] be admitted without running afoul of the confrontation clause.” The District Court then determined that the 2,500 pages could be offered “to establish motive, intent or absence of mistake.” ¶16 Hantz objected to the admission of any collateral chats that involved persons other than Lissa on the basis that admission of the chats would be cumulative evidence. The District Court determined that a cautionary instruction would remedy any potential prejudice. The District Court delivered the cautionary instruction over Hantz’s objection. ¶17 Hantz claimed at trial that he thought that he had been “role playing” with an adult woman in the online chat. Hantz claimed that he thought the adult woman with whom he had been chatting merely pretended to be a 14-year-old. The jury found Hantz guilty of both counts. Hantz appeals. STANDARD OF REVIEW 6 ¶18 This Court exercises plenary review of constitutional issues. DeVoe v. City of Missoula, 2012 MT 72, ¶ 12, 364 Mont. 375, 274 P.3d 752. We review for correctness a district court’s decisions on constitutional issues. DeVoe, ¶ 12. Statutes enjoy a presumption of constitutionality. DeVoe, ¶ 12. The party who challenges the constitutionality of a statute bears the burden of proof. DeVoe, ¶ 12. ¶19 We review for abuse of discretion a district court’s evidentiary rulings. State v. Bishop, 2012 MT 259, ¶ 31, 367 Mont. 10, 291 P.3d 538. A district court abuses its discretion if it acts arbitrarily without conscientious judgment or exceeds the bounds of reason, resulting in a substantial injustice. Bishop, ¶ 31. DISCUSSION ¶20 Whether Montana’s sexual abuse of children statute, § 45-5-625(1)(c), MCA, sweeps too broadly in violation of the First Amendment and the Commerce Clause? ¶21 Hantz asserts that Montana’s sexual abuse of children statute, § 45-5-625(1)(c), MCA, sweeps too broadly when it criminalizes any means of communication that serve to induce a child under 16 to engage in sexual conduct. Section 45-5-625(1)(c), MCA, provides that a person commits the offense of sexual abuse of children if the person knowingly “persuades, entices, counsels, or procures a child under 16 years of age or a person the offender believes to be a child under 16 years of age to engage in sexual conduct, actual or simulated.” Section 45-5-625(1)(c), MCA. Section 45-5-625(5)(b)(i)(D), MCA, specifically defines sexual conduct to include actual or simulated masturbation. 7 ¶22 A challenged statute’s overbreadth must be both real and substantial when judged in relation to a statute’s plainly legitimate sweep. State v. Nye, 283 Mont. 505, 515, 943 P.2d 96, 103 (1997); State v. Ross, 269 Mont. 347, 353, 889 P.2d 161, 164 (1995). Hantz must show that the alleged overbreadth presents both “real” and “substantial” threats to speech that adults have a constitutional right to receive and to address, both as applied to himself and to others. Hantz concedes that Montana’s sexual abuse of children statute serves a plainly legitimate purpose: to protect children from sexual predators and sexual exploitation. Hantz must demonstrate, therefore, that § 45-5-625(1)(c), MCA, would have a real and substantial effect on any speech beyond the statute’s legitimate purpose. Nye, 283 Mont. at 515, 943 P.2d at 103; Ross, 269 Mont. at 353, 889 P.2d at 164. ¶23 Hantz asserts that the term “counsels” in § 45-5-625(1)(c), MCA, serves to “criminaliz[e] constitutionally protected speech because the law as written, even with the ‘knowingly’ element” fails to distinguish between lawful and unlawful conduct. Hantz points to various online publications that § 45-5-625(1)(c), MCA, allegedly would cover. Hantz includes the masturbation section of Columbia University’s Go Ask Alice Health Services online question and answer database, the Planned Parenthood Info for Teens website and its guidance regarding masturbation, and others in his list. Hantz suggests that the detailed information provided by these websites about “sexuality, sex education, and ‘how to’ discussions” for masturbation would fall within the purview of § 45-5-625(1)(c), MCA. 8 ¶24 Hantz’s argument that websites that broadly provide sexual information fall within the purview of § 45-5-625(1)(c), MCA, fails to account for the “knowingly” element of § 45- 5-625(1)(c), MCA. By its own terms Montana’s sexual abuse of children statute applies only to those who “knowingly” persuade, entice, counsel, or procure a child to engage in sexual activity. The statute applies only when a sender transmits a message with the intent that a minor will view that communication. Reno v. Am. Civil Liberties Union, 521 U.S. 844, 876, 117 S. Ct. 2329, 2347 (1997). As the Supreme Court recognized in Reno, “the sender must be charged with knowing that one or more minors will likely view [the message]” in light of the size of the potential audience for most messages and the absence of a viable age verification process. Reno, 521 U.S. at 876, 117 S. Ct. at 2347. ¶25 The criminal act occurs, therefore, when an offender sends a message with the knowing intent to cause a minor to engage in sexual activity. Montana’s sexual abuse of children statute does not reach those who draft, publish, or distribute publications that discuss human sexuality for a wide audience. Section 45-5-625(1)(c), MCA, likewise does not apply to those who post information regarding human sexuality for all internet users, either adults or children, to seek out and read at their discretion. The statute restricts no particular content. The statute prohibits no particular viewpoints. Section 45-5-625(1)(c), MCA, prohibits only a knowing communication with a minor that encourages the minor to engage in sexual activity. ¶26 This knowing communication element of Montana’s sexual abuse of children statute prohibits application of the statute to broad communications to a general audience that may 9 include minors. Hantz attempts to blur the line between a person who directly and clearly counsels a minor to engage in sexual conduct, and broad-based communicating about, regarding, or concerning human sexuality. The knowing communication requirement of § 45-5-625(1)(c), MCA, narrowly tailors the statute’s reach to apply only to conduct that would contravene the State’s interest in protecting children from online sexual predators. ¶27 Hantz next argues that § 45-5-625(1)(c), MCA, sweeps overbroadly as applied to his conduct. Hantz argues that application of Montana’s sexual abuse of children statute to situations when an actor “was not present, had no physical contact with the underage individual, and any self masturbation [sic] was not used in any film or media” fails to serve the statute’s legislative purpose. Hantz argues that applying the statutory language to his alleged “virtual fantasy with no intention . . . of making it anything else” extends Montana’s sexual abuse of children statute beyond constitutional validity. ¶28 An “as applied” challenge to the constitutional validity of a statute focuses upon whether the statute is too vague to apply in a particular situation. Nye, 283 Mont. at 516, 943 P.2d at 103. We will not strike the statute for vagueness if the challenged statute appears reasonably clear in its application. Nye, 283 Mont. at 516, 943 P.2d at 103. We confine our “as applied” overbreadth evaluation to a determination of whether the statute reaches constitutionally protected conduct. State v. Dugan, 2013 MT 38, ¶ 52, 369 Mont. 39, 303 P.3d 755 ¶29 Hantz’s effort to entice Lissa, a person whom Hantz believed to be a 14-year-old girl, to engage in simultaneous masturbation over the internet clearly falls within the prohibition 10 of § 45-5-625(1)(c), MCA. The State charged Hantz with knowingly counseling Lissa to engage in sexual conduct. The jury found Hantz guilty of violating the statute’s prohibition on knowingly counseling a person under the age of 16 to engage in sexual conduct. Hantz fails to identify any unclear application of the statute to his conduct. Neither the U.S. Constitution nor the Montana Constitution provides protection for Hantz’s actions. ¶30 Hantz further argues that § 45-5-625(1)(c), MCA, violates the dormant Commerce Clause. The Commerce Clause grants Congress the power “[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” U.S. Const. art. I, § 8, cl. 3. Dormant Commerce Clause jurisprudence interprets the federal Commerce Clause to prohibit implicitly certain state actions “that interfere with interstate commerce.” Quill Corp. v. N.D. ex rel. Heitkamp, 504 U.S. 298, 309, 112 S. Ct. 1904, 1911 (1992). ¶31 Hantz relies primarily on American Libraries Association v. Pataki, 969 F.Supp. 160 (S.D.N.Y.1997), to support his dormant Commerce Clause argument. The federal court in Pataki invalidated a New York statute that prohibited the intentional use of the internet to communicate pornography to children. Pataki, 969 F.Supp. at 169. The federal court determined that the internet’s lack of “geographic distinctions” included the internet in the realm of interstate commerce. Pataki, 969 F.Supp. at 170. The federal court feared that inconsistent legislation, “taken to its most extreme, could paralyze development of the [i]nternet altogether,” despite the fact that New York had acted in its traditional role to protect minors and to enforce state laws. Pataki, 969 F.Supp. at 169. 11 ¶32 The federal court enjoined enforcement of the New York statute in Patakibecause the federal court believed that internet content providers outside of New York might violate the statute unintentionally. Pataki, 969 F.Supp. at 174-76. This hypothetical result could burden interstate commerce because the New York statute might chill internet content providers’ activities, even though the content providers were operating legally in their own states. Pataki, 969 F.Supp. at 174-76. The federal court determined that the states’ varying approaches to pornographic communications could subject a single actor “to haphazard, uncoordinated, and even outright inconsistent regulation by states that the actor never intended to reach and possibly was unaware were being accessed.” Pataki, 969 F.Supp. at 168-69. ¶33 The reasoning in Pataki fails to protect Hantz’s conduct from the reach of Montana’s statute. Section 45-5-625(1)(c), MCA, requires a person to act “knowingly” when he seeks to persuade, entice, counsel, or procure a minor to engage in an illegal sex act. The knowing requirement of the statute greatly narrows the scope of the law and its effect on interstate commerce. We conceive of no legitimate commerce, interstate or otherwise, that involves a person who acts “knowingly” when he seeks to persuade, entice, counsel, or procure a minor to engage in an illegal sex act. ¶34 Section 45-5-625(1)(c), MCA, likewise regulates no behavior that occurs wholly outside of Montana. Montana may prosecute only those criminal acts that occur within Montana. Section 45-1-104(2), MCA. The narrow focus of § 45-5-625(1)(c), MCA, further reduces concerns regarding inconsistent regulation. The federal court in Pataki concluded 12 that “an Internet user cannot foreclose access to her work from certain states or send differing versions of her communications to different jurisdictions.” Pataki, 969 F.Supp. at 183. Section 45-5-625(1)(c), MCA, proscribes knowing communication with a minor for purposes of illegal sexual activity, and nothing else. ¶35 The underlying assumption of Pataki that a ban on “communications” may interfere with an adult’s legitimate free speech rights does not apply to a ban on a person acting “knowingly” when he seeks to persuade, entice, counsel, or procure a minor to engage in an illegal sex act. The State’s effort to prevent a knowing communication by an adult with a person under 16 that focuses upon illegal sexual conduct constitutes a permissible regulation of commerce that fails to infringe unlawfully upon “[c]ommerce . . . among the several states.” U.S. Const. art. I, § 8, cl. 3. ¶36 Whether the District Court properly authenticated and admitted extensive internet chat logs into evidence? ¶37 Hantz argues that the District Court committed reversible error when it admitted the collateral chats. Hantz specifically alleges that the prejudice of the collateral chat logs outweighs their probative value due to the 2,500 page length of the collateral chats. Hantz further alleges that the State failed to lay a proper foundation to admit the evidence due to the State’s failure to prove that Hantz actually had chatted with underage girls, or merely had chatted with adults who held themselves out to be underage girls. ¶38 “[E]vidence sufficient to support a finding that the matter in question is what its proponent claims” properly authenticates an evidentiary offer. M. R. Evid. 901(a). The State offered the collateral chats as evidence of sexually explicit online chats between Hantz 13 and other personas who held themselves out to be young girls. The State did not need to prove the actual identity of the other personas. The State provided evidence sufficient for the District Court to determine that the collateral chats involved Hantz and personas who held themselves out as young girls. The nature of the chats showed that Hantz had engaged in sexually explicit chats with other personas who had held themselves out to be young girls. The State properly authenticated the evidentiary offer of the collateral chats. ¶39 Montana Rule of Evidence 404(b) governs the admissibility of other crimes, wrongs, or acts. A district court possesses discretion when it determines whether other crimes evidence should be admissible under M. R. Evid. 404(b). State v. Berosik, 2009 MT 260, ¶ 28, 352 Mont. 16, 214 P.3d 776. Generally, evidence of a defendant’s prior acts or crimes “is not admissible to prove the character of a person in order to show action in conformity therewith.” M. R. Evid. 404(b). Evidence of a defendant’s prior acts or crimes may be admissible for other purposes, such as “proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.” M. R. Evid. 404(b). ¶40 Hantz earlier had filed a series of motions in limine to exclude various items of potential evidence pursuant to M. R. Evid. 404(b). One of Hantz’s motions requested that the District Court exclude any “written statement in the possession of any agency involved in the investigation of this case.” The motion denoted evidence “in the form of chats.” Hantz’s motion did not identify any specific chats for the District Court to evaluate. Hantz’s motion further failed to advance any legal theory to exclude any particular chats. Hantz apparently 14 also failed to file a brief in support of his motion in limine, despite claiming that he would do so during a July 26, 2012, pretrial conference. ¶41 The District Court denied Hantz’s motion in limine based upon Hantz’s failure to “specifically identif[y] what statements [he] finds objectionable or how such statements constitute evidence of other crimes, wrongs, or acts.” The District Court determined that Hantz had failed to cite any legal authority to support the exclusion of any written statements “in the form of chats.” The District Court further noted Hantz’s failure to “demonstrate[] with argument or authority why the statements should be excluded.” We decline to require more precise findings of fact and conclusions of law when a defendant fails to raise an argument sufficiently specific to allow a district court to conduct a meaningful review of the evidence in question. State v. Dist. Court of Eighteenth Judicial Dist. of Montana, 2010 MT 263, ¶ 49, 358 Mont. 325, 246 P.3d 415. ¶42 Hantz objected again at trial when the State sought to introduce the collateral chats. Hantz took exception to the potential cumulative nature of the chats. The District Court noted that Hantz had failed again to “cite any authority,” or to “identify any of the specific information at issue” when he raised his objection during trial. The District Court identified the difficult circumstances that Hantz’s objection created during a hearing in chambers: “the Court finds itself in the middle of the trial now, on the third day, trying to make an assessment of the 404(b) factors.” ¶43 Hantz proffered the suggestion that the Court allow “whoever wants to testify about [the collateral chats], to testify that there were chats with other [sic],” to obviate Hantz’s 15 “cumulativeness” concerns. The District Court declined Hantz’s invitation. The District Court determined that computer “gobbly gook” constituted most of the 2,500 pages of collateral chats. The District Court further determined that the State had “parsed out the parts involving the chats.” The District Court concluded that Hantz’s “404(b) type motion [wa]s not in time, [and] that [Hantz] didn’t properly brief it.” ¶44 The District Court articulated its rationale to admit the collateral chats: “the facts contained in these documents[] undermined the defense’s claim that Mr. Hantz’s chats were harmless fantasy.” The District Court set the prosecution “at liberty to offer this into evidence.” Upon admission of the evidence the District Court admonished the jury that the State’s collateral chat “evidence is not admitted to prove the character of the Defendant or to show that he acted in conformity therewith. The only purpose of admitting this evidence is to show identity knowledge and/or intent.” The District Court further told that jury that “[y]ou may not use this evidence for any other purpose. The Defendant is not being tried for the other crimes, wrongs or acts.” A limiting instruction generally cures any unfair prejudice. Dist. Court of Eighteenth Judicial Dist., ¶ 49. ¶45 Hantz suggests that District Court’s ruling prejudiced him because “there is a distinct likelihood that the jury convicted Hantz based on his being merely suspicious and indifferent about [Lissa]’s age, rather than on a factual determination.” We disagree. Hantz filed a broad motion in limine that did not identify specific documents to be excluded, the legal basis for excluding any of the collateral chats, or the reasons why the prejudice caused to Hantz from the admission of specific documents outweighed the probative value of those 16 documents. Moreover, Hantz testified at trial that he believed that Lissa was an adult and that the two of them simply had been “role playing” that she was a minor and that he wanted to engage in sexual activities with her. As the District Court recognized, Hantz’s defense strategy entitled the State to use the collateral chats to demonstrate motive, intent, and absence of mistake on Hantz’s part as to the age of the person to whom he had been chatting. State v. Guill, 2010 MT 69, ¶ 39, 355 Mont. 490, 228 P.3d 1152. ¶46 Affirmed. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON	October 22, 2013
aef51487-8676-4ec9-8783-19e21c983951	Brown & Brown of Mont., Inc. v. Raty	2013 MT 338	DA 13-0346	Montana	Montana Supreme Court	DA 13-0346 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 338 BROWN AND BROWN OF MT, INC., A Corporation, Plaintiff and Appellant, v. KEITH RATY AND COLLEEN RATY, Defendant and Appellee. APPEAL FROM: District Court of the Twelfth Judicial District, In and For the County of Hill, Cause No. DV 08-190 Honorable Daniel A. Boucher, Presiding Judge COUNSEL OF RECORD: For Appellant: J. Devlan Geddes, Goetz, Gallik & Baldwin, P.C.; Bozeman, Montana For Appellee: Gregory J. Hatley, Davis, Hatley, Haffeman & Tighe, P.C.; Great Falls, Montana Submitted on Briefs: October 23, 2013 Decided: November 12, 2013 Filed: __________________________________________ Clerk November 12 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Brown & Brown of Montana, Inc. (Brown) appeals from the Order of the Montana Twelfth Judicial District Court, Hill County, modifying its final judgment to conform with our opinion in Brown & Brown of MT, Inc. v. Raty, 2012 MT 264, 367 Mont. 67, 289 P.3d 156 (Brown I). ¶2 We reverse and remand for further proceedings. ¶3 The issue on appeal is: ¶4 Did the District Court err by failing to delineate the scope of the Ratys’ residential and recreational prescriptive easements across Brown’s real property? FACTUAL AND PROCEDURAL BACKGROUND ¶5 The Court previously considered this case in Brown I, where we reviewed the District Court’s decision granting summary judgment to the Ratys. The District Court’s decision, as modified, provided generally that: (1) the Ratys had a prescriptive easement to cross Brown’s land; (2) the prescriptive easement included residential and recreational uses; and (3) the width of the easement was confined to twenty feet. The record before the District Court included sworn affidavits, deposition testimony, and photographs attesting to historic and present-day use of the easement. The uses included trailing herds of livestock, horseback riding, walking, driving agricultural and construction equipment, hauling materials to repair or build fences, spraying weeds, maintaining and developing water sources, hauling firewood, riding snowmobiles, accessing residences, hunting, and fishing. We held that the District Court properly found that the Ratys had a prescriptive easement 3 that included these uses, but improperly limited the width of the easement to twenty feet for the purposes of trailing cattle. We remanded the case to the District Court to clarify the scope of recreational and residential uses authorized by the easement; and to modify its order regarding the easement’s width. ¶6 The District Court’s pertinent language as to the scope of use included in the easement originally read: The permitted uses of the Raty’s prescriptive easement are as follows: a. Trailing cattle and engaging in other travel necessary for the maintenance of the cattle and the property on which the cattle are placed; b. Residential uses associated with the cabin/residence maintained on the Upper Setty Ranch; and c. Recreational uses associated with the cabin/residence located on the Upper Setty Ranch. ¶7 The District Court amended this language to read: The permitted uses of the Raty’s prescriptive easement are as follows: a. Trailing cattle and engaging in other travel necessary for the maintenance of the cattle and the property on which the cattle are placed; b. Residential uses associated with the cabin/residence maintained on the Upper Setty Ranch, limited to those historical uses established during the prescriptive period; and c. Recreational uses associated with the cabin/residence located on the Upper Setty Ranch, limited to those historical uses established during the prescriptive period. STANDARD OF REVIEW 4 ¶8 Whether the District Court has complied with the remand instructions is a question of law, which we review for correctness. Watson v. West, 2011 MT 57, ¶ 13, 360 Mont. 9, 250 P.3d 845; see In re Marriage of Pfeifer, 1998 MT 228, ¶ 9, 291 Mont. 23, 965 P.2d 895. DISCUSSION ¶9 Did the District Court err by failing to delineate the scope of the Ratys’ residential and recreational prescriptive easements across Brown’s real property? ¶10 On remand, a district court must proceed in conformity with the views expressed by the appellate court. See Haines Pipeline Constr. v. Mont. Power Co., 265 Mont. 282, 290, 876 P.2d 632, 637 (1994). Trial court proceedings on remand should comport with the mandate and the result contemplated by the appellate court’s opinion. 5 Am. Jur. 2d Appellate Review § 734 (2013). ¶11 When we remanded this case to the District Court in Brown I, we did so, in part, to “alleviate Brown’s concern that the District Court has granted the Ratys unlimited use of the road for residential and recreational uses[.]” Brown I, ¶ 35. Brown argues that “[t]he Modified Judgment leaves Brown, and future owners of the subject properties, uncertain as to what uses the Ratys may make of their residential and recreational prescriptive easements across Brown’s property because the character and frequency of the ‘historical uses’ were not defined by the District Court.” For instance, Brown pontificates: Imagine twenty years from now the Ratys’ successors in interest tear down the existing homestead cabin on the Upper Setty Ranch and construct a multi- bedroom private residence with outbuildings. May the Ratys’ successors access their new home using the prescriptive easement under the Modified Judgment? Further imagine the Ratys’ successors in interest invite ten of their 5 friends for a week of hunting on the Upper Setty Ranch. May the friends use the prescriptive easement to access the Upper Setty Ranch? What if it is twenty friends? What if they are going to spend the week riding dirt bikes and ATVs? . . . May the Ratys’ successors [grade, gravel or pave the two-track road within the easement]? We agree that the District Court’s revision to its judgment did little to address Brown’s concerns. While the added language “limited to those historical uses established during the prescriptive period,” is an accurate statement of what the law requires, it does not adequately define the scope of use encompassed in the Ratys’ prescriptive easement. ¶12 In Brown I, we set forth the principles of law governing prescriptive easements. “The extent of a servitude is determined by the terms of the grant or the nature of the enjoyment by which it was acquired.” Section 70-17-106, MCA. We explained that “[t]he right to use an easement acquired by prescription cannot exceed the use which was made during the prescriptive period.” Brown I, ¶ 31 (citing Kelly v. Wallace, 1998 MT 307, ¶ 37, 292 Mont. 129, 972 P.2d 1117; Ruana v. Grigonis, 275 Mont. 441, 454, 913 P.2d 1247, 1255 (1996)); see also Jon W. Bruce & James W. Ely, Jr., The Law of Easements and Licenses in Land § 7:12, 7-29 (Thomson Reuters 2013). Where an easement is not specifically defined, its scope extends only to uses “reasonably necessary and convenient” for the purpose for which it was created. Brown I, ¶ 31 (citing Clark v. Heirs & Devisees of Dwyer, 2007 MT 237, ¶ 27, 339 Mont. 197, 170 P.3d 927; Leffingwell Ranch, Inc. v. Cieri, 276 Mont. 421, 430, 916 P.2d 751, 757 (1996); Strahan v. Bush, 237 Mont. 265, 268, 773 P.2d 718, 720 (1989)). For instance, in Ferguson v. Standley, 89 Mont. 489, 502, 300 P. 245, 250 (1931) (overruled on other grounds by In re Estate of Dolezilek, 156 Mont. 224, 478 P.2d 278 (1970)), this Court 6 held that where the plaintiff had obtained a prescriptive right to use a road, the right—while confined to historic uses—“of course” included “the right to make necessary repairs on the road [he historically used] and, for that purpose, to use so much of defendant’s land as is necessary.” ¶13 We have rejected an “evolutionary” approach to defining private prescriptive easements that would allow greater use of the easement over time. Kelly, ¶ 37 (citing Warnack v. Coneen Fam. Trust, 278 Mont. 80, 86, 923 P.2d 1087, 1091 (1996)). Rather, “[t]he right of the owner of the dominant estate is governed by the character and extent of the use during the period requisite to acquire it.” Ferguson, 89 Mont. at 502, 300 P. at 250 (citing Chessman v. Hale, 31 Mont. 577, 79 P. 254 (1905)). In Kelly we held that “the frequency of use by which owners of an easement by prescription acquired their easement during the prescriptive period may limit the frequency of future use[.]” Kelly, ¶ 34. The character of future use is also limited to the type of use during the prescriptive period. See Wareing v. Schreckendgust, 280 Mont. 196, 213, 930 P.2d 37, 48 (1997) (where the Wareings had maintained a ditch by shovel and hand cleaning throughout the prescriptive period, future maintenance was limited to shovel and hand cleaning); Warnack, 278 Mont. at 86, 923 P.2d at 1091 (affirming the district court’s decision limiting the scope of a prescriptive easement’s use to the use by which it had been acquired). The specific language the district court in Warnack used to limit the scope of a prescriptive easement is instructive: The right of the Plaintiffs [Warnack], heirs, successors, assigns and agents to use the primary road easement should be on foot, horseback, and all ordinary modern means of transportation for purpose of access to their lands, 7 construction of a residence and outbuildings as necessary, all for agricultural purposes. Additionally, Plaintiffs have a right to access their property for hunting, fishing, camping and recreation. It is the conclusion of the Court that the easement is governed by the character and extent of its use during the period requisite to acquire it and that the easement can not [sic] exceed the use which Plaintiffs and their predecessors made of it during the prescriptive period. This grants Plaintiffs an absolute right to access their property over the primary easement for all agricultural purposes, as well as hunting and fishing recreational purposes. It does not grant an easement for purposes of logging, mineral extraction or exploration, or subdividing of the real property. Such uses of the prescriptive easement would increase the burden on the servient landowners. None of the parties are hereby prohibited from placing gates or cattle guards on their respective properties but if locks are placed on gates, keys or combinations, as necessary, shall be provided to Plaintiffs and their agents. Warnack, 278 Mont. at 85-86, 923 P.2d at 1090-91. ¶14 We conclude that the District Court did not comply with the mandate and the result contemplated by this Court in Brown I. The District Court’s judgment need not catalogue a litany of specific activities each party may undertake, as Brown appears to request, but it should at least provide the level of guidance this Court endorsed in Warnack. CONCLUSION ¶15 We again remand this matter to the District Court to modify its order to better define the character and frequency of historic recreational and residential use. It appears to this Court that the factual record before the District Court should be sufficient for the District Court to render an opinion defining the scope of permissible recreational and residential use. In the court’s discretion, however, it may conduct such additional fact-finding as it deems necessary to better describe the character and frequency of recreational and residential use associated with the easement. 8 ¶16 Reversed and remanded for further proceedings consistent with this Opinion. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ BRIAN MORRIS /S/ PATRICIA COTTER /S/ JIM RICE	November 12, 2013
5cf68a23-e99a-4eed-9da9-97dc38fe18e2	Harrell v. Farmers Educ. Coop. Union of Am., Mont. Div.	2013 MT 367	DA 13-0034	Montana	Montana Supreme Court	DA 13-0034 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 367 THURSTON “SONNY” HARRELL, Plaintiff and Appellee, v. THE FARMERS EDUCATIONAL COOPERATIVE UNION OF AMERICA, MONTANA DIVISION and ALAN MERRILL, Defendants and Appellants. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADV 11-0212 Honorable Thomas M. McKittrick, Presiding Judge COUNSEL OF RECORD: For Appellants: Antonia P. Marra; Sara R. Sexe; Marra, Sexe, Evenson & Bell, P.C.; Great Falls, Montana For Appellee: Elizabeth A. Best; Best Law Offices, P.C.; Great Falls, Montana Lawrence A. Anderson; Attorney at Law, P.C.; Great Falls, Montana Submitted on Briefs: August 28, 2013 Decided: December 10, 2013 Filed: __________________________________________ Clerk December 10 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 The Farmers Educational Cooperative Union of America, Montana Division, commonly known as the Montana Farmers Union (MFU), and Alan Merrill, MFU’s president, appeal a jury verdict from the Eighth Judicial District Court, Cascade County, against MFU for wage claims and constructive discharge, and against Merrill individually for interference with Thurston “Sonny” Harrell’s employment relationship. The jury awarded Harrell compensatory and punitive damages. ¶2 We restate the issues as follows: ¶3 1. Whether the District Court erred in denying summary judgment on Harrell’s wage claims. ¶4 2. Whether the District Court erred in denying judgment as a matter of law on Harrell’s claim against Merrill individually. ¶5 3. Whether MFU is entitled to a new trial on Harrell’s constructive discharge claim. ¶6 4. Whether punitive damages properly were awarded against MFU. ¶7 We reverse in part, affirm in part, and remand for application of the statutory limit to the punitive damages award. FACTUAL AND PROCEDURAL BACKGROUND ¶8 Harrell spent many years working for MFU, a farm organization that manages educational programs, youth camps, and lobbying efforts directed toward benefitting the rural farming community. MFU originally hired Harrell as the membership director. He 3 left this position after five years and temporarily moved to Alabama. MFU rehired him as the education director when he returned to Montana in October 2006. Merrill became MFU’s president shortly after Harrell rejoined MFU. ¶9 MFU initially classified Harrell’s education director position as “exempt,” meaning he was unable to claim overtime pay but earned compensatory time instead. Beginning in April 2010, when an independent accounting firm began handling its payroll, MFU paid Harrell overtime at one and one-half times his hourly pay in any week that he worked over 40 hours. Harrell did not discover the alleged error in his original classification until December 2010, at which time he began requesting that MFU retroactively pay him for all the overtime hours he had worked over the past few years. MFU steadfastly refused and later provided Harrell with a new job description, which was unchanged except that it reflected that the position was now non-exempt. ¶10 Meanwhile, another dispute arose between MFU and Harrell regarding vacation hours. MFU’s employee handbook limits the maximum number of vacation hours that an employee can accumulate by permitting employees to accrue only up to “the amount of leave they would earn in 18 months at their current rate of accrual.” Instead of using his vacation hours to take time off from work, Harrell had allowed his vacation time to accumulate, anticipating that he would receive payment for the hours upon his retirement. He eventually accrued more hours than permitted by the handbook. On April 30, 2010, MFU notified Harrell that it would not pay him for all the hours of his accrued vacation 4 time since 2007 and subtracted the excess hours from his timesheets. When Harrell asked for reinstatement of and payment for the excess vacation, MFU explained that he was not allowed to earn more vacation hours than the capped amount stated in the MFU handbook. ¶11 Harrell also claimed he was owed wages for performing “extra duties.” In 2007, after MFU’s executive director Tracy Houck resigned, MFU’s management assigned Harrell some of the tasks she previously performed. Harrell estimated that these tasks required one hour of work per day. Harrell testified that Merrill took over some of Houck’s tasks as well, such as serving as the liaison between the staff and the board of directors and reviewing budget allocations. As president, Merrill remained in charge of the office, or “at the top of the pyramid,” and all staff reported to him. Merrill assumed the role of managing MFU’s day-to-day business and its employees. Harrell repeatedly requested that MFU pay him for doing tasks outside his job description, but MFU did not fill the executive director position or pay Harrell more for assuming the excess workload. ¶12 Merrill wrote a letter to Harrell in February 2011, explaining that MFU’s board had determined that Harrell had not performed certain obligations of his position. Shortly after, MFU cut Harrell from full-time to part-time and issued him a new job description that contained substantially the same duties that he already had been performing. MFU explained that its decision to make the education director position part-time was based on 5 the board’s understanding that the job duties Harrell actually performed no longer required a full-time position. ¶13 Harrell filed a complaint in the District Court on March 4, 2011. Harrell alleged that he had been classified incorrectly as exempt and that he was thus entitled to 422 hours of overtime pay and penalties. The complaint also alleged that MFU owed him over $4000 for 232.47 vacation hours earned and not paid. Harrell claimed that MFU failed to compensate him for the additional duties he took on after the executive director left. Harrell claimed that Merrill personally interfered with Harrell’s contractual or business relations with MFU by making false statements about him to the Board of Directors. Harrell also raised several other claims against Merrill individually based on these same allegations, but dismissed them during trial. ¶14 MFU responded that its decision to make the education director position part-time was not retaliatory, but that Harrell’s failure to accomplish tasks assigned to him left him with less to do. MFU based its decision on Harrell’s own reports, his letters refusing to do what he was asked by the board, and his opposition to assigned tasks or his failure to complete them in a timely manner. MFU contended that Harrell’s position as education director was intended to be an exempt position because it required substantial discretion, such as designing education programs, determining which grants to request, and seasonally supervising other staff to complete the education and camp work. MFU claimed that the education director position was made a non-exempt position when it was 6 determined that Harrell’s performance of the position had fewer supervisory responsibilities, in part because of a diminution in educational programs. MFU argued that Harrell was not owed any wages, as he worked no overtime for which he had not already been paid as a nonexempt employee, and that he was not entitled to overtime for the period that he was designated as exempt. With regard to the interference with contract claim, MFU argued that the board had the right to ask Merrill about Harrell’s work performance and Merrill had the right and duty to inform the board of his opinion. MFU further claimed that Harrell was not entitled to additional vacation pay because he could not accrue more vacation time than the handbook allowed, and no provision in the handbook provided for payment of vacation in lieu of taking the vacation time except upon resignation or termination. Finally, MFU argued that all of Harrell’s claims made pursuant to Montana’s wage statutes were barred by the applicable statute of limitations. ¶15 On April 29, 2011, Harrell resigned his employment and amended his complaint to allege constructive discharge under the Wrongful Discharge from Employment Act (WDEA). Harrell alleged that he was forced to quit because MFU increased hostility toward him in the workplace and ostracized him after he asserted his right to be paid for vacation, extra duties, and overtime. MFU also denied this additional claim, maintaining that it paid all of Harrell’s remaining wages after his voluntary resignation. ¶16 MFU filed a motion for summary judgment on all claims on July 16, 2012. The District Court denied MFU’s motion in a one-sentence order. Before trial, MFU filed a 7 motion in limine seeking to prevent Harrell from introducing evidence concerning a previous case brought by a former employee against MFU. That employee, Katie Kassmier, had alleged constructive discharge based on alleged sexual harassment; she settled her claim in 2007 while represented by the same attorney now representing Harrell. ¶17 During the Kassmier case, Harrell wrote a memo—introduced by MFU during Harrell’s trial—to the MFU executive committee outlining his concerns regarding what he perceived to be sexually discriminatory policies that could bear adversely upon MFU in the Kassmier case. While Harrell’s direct involvement in that case was limited, MFU did ask Harrell to draft an affidavit supporting its defense. Harrell’s initial affidavit, while helpful to MFU, omitted what he believed to be some essential information. On August 13, 2010, Harrell signed a second affidavit that rendered the first affidavit useless to MFU. MFU later entered a confidential settlement following mediation with Kassmier. Harrell claimed that MFU’s response to this second affidavit further contributed to an intolerable work environment. ¶18 The court had reserved ruling on the motion in limine when the trial started. Over MFU’s objections, the District Court allowed Harrell’s counsel to discuss the Kassmier case during her opening statement and to introduce evidence regarding the prior case throughout the trial. Despite expressly avowing to the judge that “I don’t want to try to get that in,” Harrell’s counsel brought the confidential settlement to the attention of the 8 jury several times, asking one MFU employee, “[Y]ou wouldn’t have agreed to pay north of six figures if you didn’t think there was risk . . . ?” and asking another, “You wouldn’t have paid money if it wasn’t meritorious, right?” These references prompted MFU to move for a mistrial, which the District Court denied. ¶19 MFU’s counsel also referenced the Kassmier case repeatedly, explaining that they believed they had no choice but to defend against the evidence once it was introduced. MFU denied the sexual harassment allegations involving Kassmier, told the jury in its opening statement that the Human Rights Bureau found no cause to think there was any sexual discrimination against Kassmier, and introduced evidence pertaining to the Kassmier case during the trial. ¶20 The jury returned a special verdict form in all respects favorable to Harrell. The jury found that MFU failed to pay Harrell for overtime, for vacation, and for his work handling the duties formerly assigned to the executive director. The jury found that Merrill interfered with Harrell’s employment relationship with MFU and awarded tort damages against Merrill in the amount of $85,000 for resulting pain and suffering, harm to the ability to enjoy life, and the loss of established course of life. The jury also found that MFU constructively discharged Harrell because he refused to violate the law regarding payment of wages and overtime. It awarded $90,000 in damages for wrongful termination. The total compensatory award was $232,439.40. The jury determined that 9 punitive damages were appropriate and the court scheduled a separate hearing on the issue. ¶21 The Kassmier issue reached its apex when Harrell’s counsel mentioned the amount of the settlement during her final summation on punitive damages, stating, “Well, when it was Katie Kassmier’s turn, [MFU] had $200,000. You heard Mr. Schlepp tell you that, two hundred thousand bucks that they had to pay her.” Mr. Schlepp had denied remembering the Kassmier settlement amount on the witness stand, and the court had overruled MFU’s objection to questions about the settlement. Harrell’s counsel also stated, “We know that for them $200,000 is a drop in the bucket.” ¶22 The jury returned a punitive damages verdict of $300,000. The District Court denied MFU’s request to apply the three percent limit to the punitive damages award imposed by § 27-1-220(3), MCA, ruling that the Defendants waived the right to present evidence of net worth by not offering that evidence during the punitive damages phase of the trial. Pursuant to the provision for attorney’s fees in the wage claim statutes, § 39-3- 214, MCA, the District Court also assessed attorney’s fees against MFU after the trial. Defendants appealed, alleging many issues of substantial error. STANDARD OF REVIEW ¶23 We review a district court’s decision on a motion for summary judgment de novo. Jensen v. State, 2009 MT 246, ¶ 6, 351 Mont. 443, 214 P.3d 1227. A motion for summary judgment shall be granted if “the pleadings, the discovery and disclosure 10 materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c). ¶24 This Court reviews a district court’s evidentiary rulings “to determine whether the court abused its discretion.” Faulconbridge v. State, 2006 MT 198, ¶ 22, 333 Mont. 186, 142 P.3d 777. “A district court abuses its discretion only if it acts arbitrarily without employment of conscientious judgment or exceeds the bounds of reason.” Faulconbridge, ¶ 22. We also review for abuse of discretion a district court’s decision to deny a motion for a mistrial. Heidt v. Argani, 2009 MT 267, ¶ 10, 352 Mont. 86, 214 P.3d 1255. The decision depends on “whether the party has been denied a fair and impartial trial.” Heidt, ¶ 10. ¶25 “We review a district court’s conclusions on questions of law to determine if those conclusions are correct.” Ammondson v. Northwestern Corp., 2009 MT 331, ¶ 29, 353 Mont. 28, 220 P.3d 1. DISCUSSION ¶26 1. Whether the District Court erred in denying summary judgment on Harrell’s wage claims. ¶27 Harrell set forth three wage claims under the Wage Protection Act, § 39-3-201 et seq., MCA. The wage claims involved his overtime pay, vacation hours, and the “extra duties” he assumed in the absence of an executive director. We conclude that the District Court should have granted summary judgment for MFU on all three claims. 11 a. Limitations Period ¶28 Section 39-3-207(1), MCA, requires an employee to file a complaint for wages and penalties within 180 days of default or delay in the payment in wages. “[A] wage claim under § 39-3-207, MCA, accrues when the employer’s duty to pay the employee matures and the employer fails to pay the employee.” Jensen, ¶ 11. “[W]here an employer continually fails to comport with Montana’s wage laws on a monthly basis, the employee’s wage claims accrue on a monthly basis.” Craver v. Waste Mgt. Partners of Bozeman, 265 Mont. 37, 45, 874 P.2d 1, 5 (1994), overruled in part on other grounds, In re Estate of Lande, 1999 MT 179, ¶ 15, 295 Mont. 277, 983 P.2d 316. Failing to pay wages due in past months when the employer has begun paying wages again for each current month, however, does not prevent the clock on the statute of limitations from starting. ¶29 The claim accrues—and the clock begins to run—on the last date on which the employer fails to pay. Jensen, ¶ 11. In Jensen, we applied the rule from Craver where an employee’s affidavit stated that the last date on which the employer failed to pay overtime was June 20, 2007, when the employee was reclassified as non-exempt and thus entitled to overtime. Jensen, ¶ 11. The employer paid overtime from that date until the complaint was filed on February 19, 2008. Jensen, ¶ 4. Because the employee did not file his wage complaint within 180 days after the last date on which the employer failed 12 to pay as required by § 39-3-207, MCA, summary judgment was appropriate. Jensen, ¶ 14. ¶30 Contrary to our holding in Jensen, Harrell argues that Montana has two different applicable statutes of limitations, one for wages and one for penalties, and that the longer of the two should apply. Harrell relied on numerous cases1 to argue that the five-year limitation period found in § 27-2-202(2), MCA, would apply to wage claims because § 39-3-207, MCA, only applies to penalties. ¶31 Section 39-3-207, MCA, was amended in 1999—after every case cited by Harrell—to address this concern and the plain language of the amended statute refutes Harrell’s claim to a longer period of time in which to file. Prior to 1999, the statute provided, “Any employee may recover all such penalties as are provided for the violation of 39-3-206 which have accrued to him at any time within 18 months succeeding such default or delay in the payment of such wages.” The amended statute is titled, “Period within which employee may recover wages and penalties.” Section 39-3-207, MCA (amended language in italics). It provides the applicable statute of limitations for wage claims, stating, “An employee may recover all wages and penalties provided for the violation of 39-3-206 by filing a complaint within 180 days of default or delay in the payment of wages.” Section 39-3-207(1), MCA (emphasis added). It is clear that the 1 Craver, 265 Mont. 37, 874 P.2d 1; State v. Wilson, 189 Mont. 52, 614 P.2d 1066 (1980); Delaware v. Kay-Decorators, Inc., 1999 MT 13, 293 Mont. 97, 973 P.2d 818; Pope v. Keefer, 180 Mont. 454, 591 P.2d 206. 13 statute is no longer limited to penalties. There is not a substantial question as to the statute of limitations that applies to wage claims: we apply the 180-day limitation to both wages and penalties. Jensen, ¶ 14. b. Overtime ¶32 Harrell’s claim to additional overtime pay missed the 180-day statute of limitations. The evidence submitted in the summary judgment proceedings did not support Harrell’s claim that he was classified improperly as an exempt employee until the end of December 2010. Harrell was paid time-and-a-half overtime beginning in April 2010, around the time when MFU hired an independent firm to handle payroll. Harrell’s own time records and the affidavit of the accounting firm’s employee in charge of payroll, Melissa Smith, reflect that Harrell was paid overtime at one and one-half times the hourly rate whenever he worked more than forty hours per week from April 2010 forward, including his extra time conducting the camps during the summer of 2010. Harrell did not file his complaint until March 2011. Applying the 180-day statute of limitations to Harrell’s claim for overtime wages, we conclude that this claim is clearly barred. c. Vacation ¶33 Harrell’s claim for vacation pay also fails to meet the statute of limitations. Harrell admits in his First Amended Complaint that MFU notified Harrell of his loss of earned vacation hours on April 30, 2010, when the independent accounting firm took 14 over payroll. At that time, MFU clearly refused to pay Harrell for more vacation time than was permitted by the handbook. Exhibits show that accumulated vacation time built up to over 232 hours, then a handwritten note from the accountant crossed out that number and inserted 120 hours on the April 2010 time record. This deduction was carried forward on all of Harrell’s subsequent time records. Although Harrell continued to fill out his timesheets with the higher balance, there is a handwritten correction on every one reflecting the April 2010 deduction. Melissa Smith testified that Harrell received a pay stub each month reflecting this deduction from his vacation balance. ¶34 “[V]acation pay is earned by virtue of an employee’s labor and once it has accrued, it has by definition been earned.” Langager v. Crazy Creek Prods., 1998 MT 44, ¶ 30, 287 Mont. 445, 954 P.2d 1169. Conversely, once it has been erased from the books, vacation time has been eliminated. Harrell’s wage claim for vacation pay, therefore, accrued when MFU reduced the vacation time Harrell claimed to have been owed. MFU’s removal of vacation hours from the balance for which Harrell could receive payment, of which he had express notice, started the clock on the statute of limitations. The complaint in this case was not filed until nearly a year after the claim arose. Harrell failed to file his claim within 180 days of April 30, 2010, as required by § 39-3-207, MCA, thus barring his wage claim for his vacation time. 15 d. Estoppel ¶35 Harrell argues that MFU should be estopped from asserting a statute of limitations defense to his wage claims, relying on Dagel v. Great Falls, 250 Mont. 224, 819 P.2d 186 (1991). “Estoppel is not favored and will only be sustained on clear and convincing evidence.” Dagel, 250 Mont. at 235, 819 P.2d at 193. Harrell asserts that MFU intentionally concealed from him whether he was incorrectly classified as exempt, which he did not learn until December 2010. Generally, “[l]ack of knowledge of the claim or cause of action, or of its accrual, by the party to whom it has accrued does not postpone the beginning of the period of limitation.” Section 27-2-102(2), MCA. More specifically, the date on which an employee becomes aware that his position has been reclassified from exempt to non-exempt “is not a material fact and has no legal effect on when [the] wage claim accrued.” Jensen, ¶ 13. ¶36 The question of “concealment” of facts in a statute of limitations inquiry is governed by § 27-2-102(3), MCA, which prevents the period of limitations from beginning if “facts constituting the claim are by their nature concealed or self-concealing” or “before, during, or after the act causing the injury, the defendant has taken action which prevents the injured party from discovering the injury or its cause.” Equitable estoppel also may prevent the period of limitations from beginning where facts unknown to the party claiming the benefit of the estoppel are knowingly concealed. Dagel, 250 Mont. at 234-35, 819 P.2d at 192-93 (applying doctrine of equitable estoppel 16 to prevent the defendant from asserting that the plaintiff’s WDEA claim was barred by “a written collective bargaining agreement at the time of her discharge” where the employer had denied the existence of such an agreement). We have not applied these theories to a statutory claim for wages and need not decide in this case whether they could apply to such a claim. ¶37 The problem with Harrell’s estoppel argument is that the evidence clearly shows that he knew that he was being paid as a non-exempt employee and that his claim for vacation pay was denied long before December 2010. See Arthur v. Pierre Ltd., 2004 MT 303, ¶ 34, 323 Mont. 453, 100 P.3d 987 (plaintiff failed to meet the third element of equitable estoppel due to personal knowledge of facts giving rise to her claim at the time she allegedly acted in reliance thereon). No parts of the alleged injuries or facts relating to the alleged injuries were concealed from Harrell. Harrell knew in April 2010 that his excess vacation hours were eliminated. With regard to the overtime claim, even if MFU determined that Harrell was classified erroneously and withheld its determination from him—which it denies—Harrell knew no later than mid-summer of 2010 that MFU began paying him overtime. The relevant fact is that MFU informed Harrell that his requests for payment were denied, precluding application of equitable estoppel because Harrell had personal knowledge of the facts giving rise to his claims at all times pertinent to the limitations inquiry. The statute of limitations for overtime and vacation expired and MFU is entitled to judgment as a matter of law on those claims. 17 e. Extra Duties ¶38 Harrell’s third claim under the wage statutes regarding “extra duties” does not meet the definition of a wage claim under the statute. Harrell claims that MFU should have increased his salary to account for the duties he assumed in the absence of an executive director. The statutes obligate the employer to pay only those wages actually earned by the employee. Section 39-3-201(6)(a), MCA, defines “wages” to include “any money due an employee from the employer or employers, whether to be paid by the hour, day, week, semimonthly, monthly, or yearly . . . .” Section 39-3-204(1), MCA, provides: “Except as provided in subsections (2) and (3), every employer of labor in the state of Montana shall pay to each employee the wages earned by the employee . . . .” Wage statutes do not apply to claims for wages that could have been earned but for breach of employment contract or wrongful termination because such wages were not “earned” as required by the wage statutes. Myers v. Dept. of Agric., 232 Mont. 286, 291, 756 P.2d 1144, 1147 (1988). The Montana Wage Protection Act does not govern disputes over the rate of pay; it only governs the payment of actual wages due an employee. ¶39 The rate of compensation for work performed is normally defined by the employment contract. McConkey v. Flathead Elec. Coop., 2005 MT 334, ¶ 23, 330 Mont. 48, 125 P.3d 1121. This Court has followed other courts in recognizing that an “employer is free to set the terms and conditions of employment and compensation and the employee is free to accept or reject those conditions.” Langager, ¶ 25. 18 ¶40 The obligation to pay wages only exists to the extent agreed upon between the employee and the employer. For example, in McConkey, an employee sought compensation under the wage statutes for “personal time,” akin to vacation time, of which the employer had paid only 95%. The employee argued “that the District Court erred in holding that his personal time did not qualify as ‘wages’ pursuant to § 39-3- 201(6)(a), MCA, and holding that he was thus not entitled to be paid for all such time he accrued at 100%.” McConkey, ¶ 21. We concluded that “the payment of 95% of [the employee’s] personal time was proper[,]” and that “the other 5% did not constitute wages that were part of [the employee’s] agreed compensation.” McConkey, ¶ 24. Thus, it is the law in Montana that one party cannot unilaterally decide that more wages are owed than the amount upon which the employer and employee have agreed. ¶41 Accordingly, the pivotal question is whether Harrell actually earned payment at a higher rate than he was paid. The evidence shows clearly that he did not. Although Harrell assumed a number of the previous executive director’s tasks, MFU did not appoint him as an interim executive director or agree to pay him any additional compensation. Harrell estimated that he spent one hour per day on executive director duties and admitted that other employees also assumed some of the unfilled executive director position’s duties. Harrell argued at trial that MFU deceived him into working “extra duties” by convincing him that he would receive additional pay, but he has not introduced any evidence showing that MFU ever actually offered him additional pay. It 19 appears that instead Harrell made an assumption that he would be paid more, and believed that he deserved to be paid more, despite receiving no assurance from MFU that he would receive additional compensation. ¶42 The MFU employee handbook explains, “Job descriptions are not fixed . . . they are guidelines only and can be expected to change over time.” MFU paid Harrell for all the work he performed as MFU’s education director. Even if he deserved a higher rate of pay, wages for the extra duties are not “due and payable” to Harrell. As MFU’s counsel pointed out, nothing in the wage claim statutes permits an employee to claim a raise that was not given. The fact that Harrell was asked to complete tasks that did not fit within the express provisions of his job description, while perhaps adding to his constructive discharge theory, does not give rise to a wage claim, and Harrell’s claim for wages for extra duties should have been dismissed on summary judgment. f. Conclusion ¶43 The District Court erroneously allowed the jury to award unpaid wages to Harrell because the court incorrectly determined that the 180-day limitation period applied only to penalty requests and it should have dismissed the claim for extra duties. We reverse the District Court’s denial of the Defendants’ motion for summary judgment on all three of Harrell’s wage claims. Because the wage claims are denied, a penalty cannot be assessed against MFU. Finally, because Harrell cannot recover on his wage claims, the attorney’s fee award also must be vacated. The wage claims were the sole basis for the 20 fee award, see § 39-3-214, MCA, and MFU’s claims regarding the amount of fees are moot. ¶44 2. Whether the District Court erred in denying judgment as a matter of law on Harrell’s claim against Merrill individually. ¶45 Prior to and during trial, Merrill moved to dismiss the claims against him, arguing that as an employee and officer of MFU he could not be held individually liable for his actions under the facts of this case. The general rule is that only a stranger can interfere with contractual or business relationships. Bolz v. Myers, 200 Mont. 286, 292-94, 651 P.2d 606, 609-10 (1982). An agent of an employer is not a stranger to the employer’s business contracts or relationships. See Bellanger v. Am. Music Co., 2004 MT 392, ¶ 22, 325 Mont. 221, 104 P.3d 1075 (“Absent an agency relationship between him and AMC, Kelman’s claimed privilege from suit for tortious interference based on agency does not apply.”). ¶46 No one disputes that Merrill is an agent of MFU. “An agency is actual when the agent is really employed by the principal.” Bellanger, ¶ 19. Merrill was acting as the actual agent of MFU in all of his dealings with Harrell: Merill was paid a salary by MFU and there was no argument whatsoever that Merrill acted other than in the scope of his employment. ¶47 Harrell asserts, however, that Merrill can be individually liable, even though he is an agent of MFU. “Corporate officers or directors are privileged to interfere with or induce breach of the corporation’s contracts or business relations with others as long as 21 their actions are in good faith and for the best interests of the corporation.” Phillips v. Mont. Educ. Ass’n, 187 Mont. 419, 425, 610 P.2d 154, 158 (1980). “An agent’s acts, if motivated and taken in furtherance of the purposes and interests of its principal, will not give rise to a cause of action for tortious interference of a contract between its principal and a third party.” Lachenmaier v. First Bank Sys, 246 Mont. 26, 34-35, 803 P.2d 614, 619 (1990). However, “[w]here an officer or director acts against the best interests of the corporation, acts for his own pecuniary benefit, or with the intent to harm the plaintiff, he is personally liable.” Phillips, 187 Mont. at 425, 610 P.2d at 158. ¶48 “The personal nature of the agent’s actions forms the narrow exception to the general policy that officers and agents of a corporation must be shielded from personal liability for acts taken on behalf of the corporation.” Ammondson, ¶ 92 (quoting Crystal Springs Trout Co. v. First State Bank of Froid, 225 Mont. 122, 129, 732 P.2d 819, 823 (1987)). In Ammondson, we affirmed the district court’s decision to submit individual tort claims against the corporate defendant’s officers and directors to the jury. Our ruling was based on evidence that arguably could support a claim that the individual defendants participated in the decision to withhold notice until after the company filed for bankruptcy that the plaintiffs’ pension contracts had been terminated; were involved in maliciously prosecuting claims against the plaintiffs in subsequent bankruptcy court litigation; and made decisions about the plaintiffs’ retirement payments that were not based on a cost-benefit analysis for the company but with their own bonuses in mind. 22 Ammondson, ¶ 93. We ultimately held that the district court’s denial of judgment as a matter of law for the individual agents was appropriate in light of evidence suggesting that the agents personally participated in tortious conduct. Ammondson, ¶ 94. ¶49 Ammondson is not applicable here. First, the plaintiffs’ claims in that case did not arise from their alleged wrongful termination from employment, for which the WDEA provides an exclusive remedy. Section 39-2-902, MCA. Second, though Harrell portrayed Merrill as incompetent and demeaning to women, he did not introduce evidence at trial that, with respect to Harrell, Merrill acted against the best interests of the corporation, for his own pecuniary benefit, or with intent to harm Harrell personally. The substance of the allegations against Merrill was that, while acting as president of MFU, he told the board falsely that Harrell was underperforming. Harrell fails to show that by communicating his opinions to the board while acting in his professional capacity, Merrill acted against MFU’s corporate purposes and interests. Negative opinions of Harrell’s performance by his boss, on their own, do not rise to the level of tortious interference without some indication that Merrill had a private pecuniary motive or a personal desire to ruin Harrell. ¶50 Third, the jury was not instructed on the proper standard of law. “[T]he law regarding personal liability of a corporate officer or director [was] set forth by this Court in Phillips . . . .” King v. Zimmerman, 266 Mont. 54, 62, 878 P.2d 895, 900 (1994). In King, we approved the following jury instruction based on our decision in Phillips: 23 Corporate officers or directors are privileged to interfere with or induce breach of the corporation’s contracts or business relations with others as long as their actions are in good faith and for the best interests of the corporation. Where an officer or director acts against the best interests of the corporation, acts for his own pecuniary benefit, or with intent to harm the plaintiff, he is personally liable. King, 266 Mont. at 62, 878 P.2d at 900. Here, the jury was not instructed on this rule from Phillips. Rather, Harrell submitted and the District Court gave—over MFU’s objection—an instruction based on Bolz, which set forth the standards that apply to a third party’s interference with a contract. Bolz, 200 Mont. at 295, 651 P.2d at 611. Merrill is not personally liable under the legal standards that govern this case. ¶51 Finally, while the jury found that MFU acted fraudulently and with malice, no such finding was made with regard to Merrill individually. The privilege of limited liability applies here, and Merrill is shielded from personal liability. ¶52 3. Whether MFU is entitled to a new trial on Harrell’s constructive discharge claim. ¶53 MFU argues that the District Court erred in denying its motions for a mistrial and for a directed verdict on the issue of constructive discharge under the WDEA, and requests that this Court reverse the jury’s verdict on that claim. MFU points to Harrell’s use of deposition excerpts, the court’s curative instruction regarding a proffered piece of evidence, and evidence from the Kassmier case to support this argument on appeal. “A district court possesses broad discretion to determine the admissibility of evidence.” Malcolm v. Evenflo Co., 2009 MT 285, ¶ 29, 352 Mont. 325, 217 P.3d 514. The majority 24 of these alleged errors fall within the broad discretion afforded the district court in making evidentiary rulings, and—though we do find some error—we conclude that cumulatively the alleged errors do not entitle MFU to a new trial on this issue. a. Deposition Use ¶54 MFU argues that Harrell’s use of Merrill’s deposition at trial was improper. MFU proposes that under M. R. Civ. P. 32(a)(6), the court should have required Harrell to play the entire deposition, instead of allowing Harrell to play potentially misleading excerpts. M. R. Civ. P. 32(a)(6) allows an adverse party to require the offeror of part of a deposition to “introduce other parts that in fairness should be considered with the part introduced, and any party may itself introduce any other parts.” Deposition testimony is admissible “to contradict or impeach the testimony given by the deponent as a witness, or for any other purpose allowed by the Montana Rules of Evidence.” M. R. Civ. P. 32(a)(2). “The trial court has discretion to exclude parts of the deposition that are unnecessarily repetitious in relation to the testimony of the party on the stand . . . .” Hart-Albin Co. v. McLees Inc., 264 Mont. 1, 8, 870 P.2d 51, 55 (1994). ¶55 The District Court ruled that fairness required only that MFU be allowed to introduce Merrill’s entire deposition in its own case in chief, which MFU declined to do. The court did not abuse its discretion. 25 b. Curative Instruction ¶56 MFU argues that a curative instruction offered to the jury was misleading and prejudicial. The curative instruction stated that MFU attempted to elicit testimony regarding a document that was “generated [by MFU] in an effort to mislead the jury,” “would have misled the jury,” was of “suspect” origin, and was “not credible.” The court read the document into the record outside the presence of the jury, but the document was not allowed into evidence. ¶57 The document in question was an unsigned and unsent letter purportedly written to Harrell by MFU board member Leonard Stone, MFU Vice President Rollie Schlepp, and Merrill. Stone testified that the letter was drafted by Schlepp. MFU failed to produce the letter during discovery, even though it was within the scope of Harrell’s discovery requests. MFU claimed that it did not discover the letter until after the trial began. MFU produced the letter during the first week of trial. ¶58 When MFU called Stone to the witness stand, MFU’s counsel asked about Harrell’s repeated grievances and what MFU did to respond. When Stone mentioned that the Vice President had “formulated a letter,” Harrell objected and requested a discussion without the jury present. Once the jury was excused, Harrell objected to the late disclosure of the letter and suggested the possibility that the letter had been drafted during the trial. The District Court shared Harrell’s skepticism regarding the letter’s origin, remarking that the letter, which appeared to have been drafted by a lawyer, was being 26 offered during the trial to confuse the jury into believing that MFU had written a response to Harrell’s complaints. Throughout the trial, Harrell had presented letters he had written to MFU expressing his grievances. Until Stone mentioned this letter, MFU had maintained that it had responded to Harrell only verbally. The court commented that by presenting the letter, MFU could bolster its argument that it actively responded to Harrell’s concerns. MFU maintained that it never intended to introduce the document, despite that it was marked with an exhibit sticker. The record does not confirm whether or not MFU did in fact fabricate this document during the trial. ¶59 Harrell’s counsel requested that the court sanction MFU for referring to the document and possibly attempting to introduce it into evidence. The court initially considered imposing the harshest possible sanction for discovery abuses—judgment on liability as a matter of law—noting this Court’s holding in Bulen v. Navajo Ref. Co., 2000 MT 222, 301 Mont. 195, 9 P.3d 607 (holding that the district court did not abuse its discretion when it imposed judgment on liability as a matter of law against the defendants for repeatedly failing to comply with the rules of discovery). See also Richardson v. State, 2006 MT 43, 331 Mont. 231, 130 P.3d 634. The court eventually decided against this sanction. ¶60 Harrell’s counsel also requested a curative instruction to correct any prejudice that could result from forcing her to object in a manner that likely caused the jury to believe that Harrell was concealing an important document. The court drafted a curative 27 instruction that it believed was of sufficient force to cure the problems created by MFU’s attempts to elicit testimony about a document that it failed to timely disclose. ¶61 “Generally, it is up to the trial court to decide the proper sanction for discovery abuse.” Richardson, ¶ 65. “We defer to the trial court because it is in the best position to know whether the party in question has disregarded the other’s rights, and is in the best position to determine which sanction is most appropriate.” Bulen, ¶ 18. We cannot substitute our own discretion for that of the District Court on this evidentiary issue. The court reasonably believed that MFU’s mid-trial disclosure of a document helpful to its case affected Harrell’s right to fair and timely discovery resulting in prejudice. We conclude that the court was within its discretion to give the curative instruction. c. The Kassmier Evidence ¶62 References to the Kassmier case by both parties began in opening statements and escalated throughout the trial. MFU argues on appeal that the court abused its discretion by admitting the evidence.2 ¶63 Following the conclusion of the Plaintiff’s opening statement, the District Court recessed out of the jury’s presence to consider the parties’ arguments regarding the Kassmier evidence. MFU argued that the evidence was inadmissible propensity or character evidence barred by M. R. Evid. 404(b). Harrell argued that it was “pattern and 2 MFU also claims that Fandrich v. Capital Ford Lincoln Mercury, 272 Mont. 425, 901 P.2d 112 (1995), precludes Harrell from claiming that MFU retaliated against him on the basis of the Kassmier affidavit. Because Harrell’s constructive discharge claim was not founded on Kassmier’s sexual harassment complaint, the Human Rights Act was not Harrell’s exclusive remedy and Fandrich does not apply. 28 practice evidence, Rule 404(b),” and admissible to show that MFU had on other occasions treated its employees with hostility, created adverse job conditions, and retaliated against the objecting employee. The District Court determined that the Kassmier evidence was admissible pursuant to M. R. Evid. 406 and that Harrell was on “solid ground” if the evidence was being offered to “establish[] common practices within the company.” The District Court also considered admissibility of the evidence pursuant to Rule 404(b) and cautioned Harrell’s counsel not to “go too far.” The court recognized that the evidence was inflammatory and prejudicial to MFU, but refused to allow MFU to “sanitize” the case by isolating Harrell’s allegations. The District Court assured MFU’s counsel that they would be allowed to defend against the Kassmier evidence, but refused to rule on any specific item of evidence until it was offered. ¶64 As the District Court ruled the evidence admissible under M. R. Evid. 406, we first consider that theory of admissibility. Rule 406 states that “[e]vidence of habit or of routine practice, whether corroborated or not, and regardless of the presence of eyewitnesses, is relevant to prove that conduct on a particular occasion was in conformity with the habit or routine practice.” “Habit” is defined as “a person’s regular response to a repeated specific situation” and “routine practice” as “a regular course of conduct of a group of persons or an organization.” M. R. Evid. 406. ¶65 The District Court erred in ruling that the Kassmier evidence, which was the only other employment claim against MFU identified by the parties, was allowable under 29 M. R. Evid. 406. More than one dispute is required to show “habit” under M. R. Evid. 406. See Mydlarz v. Palmer/Duncan Constr. Co., 209 Mont. 325, 342-43, 682 P.2d 695, 704 (1984) (“In our view one instance of alleged carelessness does not indicate habitual carelessness.”). Under the corresponding federal evidentiary rule, courts have held that “to prove an act was habitual [requires] the proponent to offer evidence of numerous, consistent occurrences of the act.” U.S. v. Oldbear, 568 F.3d 814, 822 (10th Cir. 2009) (“only three instances of the supposed habit [were] certainly not sufficient to demonstrate a habitual pattern”); Camfield v. City of Oklahoma City, 248 F.3d 1214, 1232-33 (10th Cir. 2001) (noting that five acts ordinarily are insufficient to establish a habit under F. R. Evid. 406). In the same vein, one prior claim of sexual harassment cannot establish a “routine practice,” particularly in a case that was not about sexual harassment. ¶66 Though the evidence was inadmissible under M. R. Evid. 406, the District Court also considered its admissibility under M. R. Evid. 404(b). Rule 404(b) places a limitation on otherwise relevant evidence when that evidence is of “other crimes, wrongs, or acts” offered to prove that a person acted in conformity with his or her character. Implicit within the rule is the assumption that evidence of propensity is of slight probative value and often prejudicial. Character evidence nevertheless may be admissible for an alternative purpose, such as to prove “motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.” M. R. Evid. 404(b). If the evidence meets one of the alternative purposes, the trial court must 30 consider its probative value in light of the purpose for which it is offered and balance the probative value of the evidence against its potential for prejudice. M. R. Evid. 403. ¶67 As a general rule, this Court does not allow remote or dissimilar events into evidence. See Faulconbridge, ¶ 30. In the context of employment actions, we have held that “[e]vidence of other [employees’] disciplinary actions is not relevant to whether the actions of [the plaintiff employee] justify the termination of his employment.” Wolny v. City of Bozeman, 2001 MT 166, ¶ 38, 306 Mont. 137, 30 P.3d 1085. We relied in Wolny on our prior “review of the pertinent precedent[, which] shows that past conduct or action is never admissible as relevant in a case regarding a specific charge.” Wolny, ¶ 38 (quoting In re Raynes, 215 Mont. 484, 492, 698 P.2d 856, 861 (1985) (affirming the grant of a protective order on the basis that “information concerning various disciplinary cases that occurred to officers of the Great Falls Police Department over a ten year period” was irrelevant)). ¶68 In this case, however, Harrell maintained that his affidavit in the Kassmier case and his memo to the executive board regarding discriminatory policies supported his claim that MFU had reasons to retaliate against him and were relevant to proving his constructive discharge claim. Given the theory of his case, it was within the District Court’s discretion to allow the presentation of evidence from the Kassmier case in order to demonstrate MFU’s motive or intent in its dealings with Harrell. See Brundridge v. Flour Fed. Servs., Inc., 191 P.3d 879, 888 (Wash. 2008) (holding that in the context of 31 wrongful discharge in violation of public policy, evidence of employer retaliation against other employees is relevant to show motive or intent). ¶69 We conclude that the District Court did not abuse its discretion in permitting some evidence of the context for Harrell’s claim to show motive or intent for his harassment or discharge. The Kassmier evidence tended to show that MFU had a motive to ostracize and constructively discharge Harrell. The deterioration of Harrell’s working conditions arguably was related, at least in part, to his perceived support for Katie Kassmier. Although some of the evidence pushed the limits of Rules 402, 403, and 404, both parties had a hand in its introduction and we cannot say that the court abused its discretion in holding that the probative value of the evidence was outweighed by the danger of unfair prejudice. “We may affirm a district court decision that is correct regardless of the district court’s reasoning in reaching its decision.” PacifiCorp v. State, 2011 MT 93, ¶ 54, 360 Mont. 259, 253 P.3d 847. Harrell properly was allowed to introduce some evidence of MFU’s prior acts to show the context of his allegation that MFU had a motive to retaliate against him. ¶70 But while some of the Kassmier evidence was relevant and otherwise admissible to show motive or intent, we conclude that the District Court erred when it allowed Harrell to discuss the settlement from the Kassmier case. To be admissible, evidence must be relevant, meaning the evidence has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less 32 probable than it would be without the evidence.” M. R. Evid. 401. The rules of evidence prohibit the admission of settlement evidence to prove liability. M. R. Evid. 408; Charles Alan Wright & Kenneth W. Graham, Jr., Federal Practice and Procedure vol. 23, § 5301 at 159 (2005) (“While the rule is ordinarily phrased in terms of offers of compromise, it is apparent that a similar attitude must be taken with respect to completed compromises when offered against a party thereto.”). ¶71 This Court previously reversed a jury verdict where the trial court allowed a party to introduce a settlement amount into evidence. Beil v. Mayer, 242 Mont. 204, 789 P.2d 1229 (1990). In Beil, we held that evidence relating to the plaintiff’s settlement from a previous accident “served to interject immaterial, prejudicial information into the trial” when it was offered by the defendant on the issue of damages. Beil, 242 Mont. at 207, 789 P.2d at 1232. We explained that a settlement amount “rarely has any relevance to the determination of damages at issue in the present trial.” Beil, 242 Mont. at 207-08, 789 P.2d at 1232. We also observed that the settlement amount “does not give the jury a true picture of the reason for the settlement amount” because a party often “will accept a settlement for reasons which are extraneous to the true issue at hand.” Beil, 242 Mont. at 208, 789 P.2d at 1232. As we stated in Azure v. Billings, 182 Mont. 234, 245, 596 P.2d 460, 466 (1979), “[t]he amount of the settlement could adversely affect the defendant because there is a virtual admission of negligence by the settling party . . . .” There is the strong policy concern that allowing evidence from previous settlements, unless absolutely 33 necessary, will discourage parties from reaching a compromise. DeTienne Assocs. Ltd. Partner. v. Mont. Rail Link, 264 Mont. 16, 22, 869 P.2d 258, 262 (1994). ¶72 We echoed this concern in our recent ruling that Montana law prohibits introducing evidence from confidential mediations. Kluver v. PPL Mont., LLC, 2012 MT 321, ¶ 58, 368 Mont. 101, 293 P.3d 817. We emphasized in Kluver that the law “expressly prohibits the disclosure of ‘all mediation-related communications, verbal or written’ made during mediation absent consent or an express statutory exception.” Kluver, ¶ 52 (quoting § 26-1-813(3), MCA). In Kluver, although we did not find the error reversible because of other evidence sufficient to support the trial court’s ruling in that case, we stressed the zero-tolerance policy in the law prohibiting evidence of what occurred during mediation. Kluver, ¶¶ 59-60. ¶73 Notwithstanding the factual differences between these cases and the settlement at issue here, the rule that the amount of a previous settlement is not generally admissible nonetheless applies. Harrell’s counsel referenced the confidential settlement several times during trial; counsel questioned more than one witness about it and suggested that MFU would not have agreed to a settlement “north of six figures” if it had done nothing wrong. She then stated a specific dollar amount in the punitive phase of the trial. Harrell’s argument that MFU “opened the door” to this evidence falls short because Harrell’s counsel started discussing Kassmier in her opening statement. 34 ¶74 Finally, the settlement amount does not fall within Rule 408’s limited exception as showing MFU’s bias or prejudice against Harrell in this case. Cf. Tripp v. Jeld-Wen, 2005 MT 121, 327 Mont. 146, 112 P.3d 1018. In Tripp, we upheld the admission of a settlement between the plaintiff homeowners and their contractor over the installation of a faulty floor. The evidence was introduced by the floor’s manufacturer, the defendant in the case, who had named the contractor as a third-party defendant. We agreed that the settlement was relevant to show the contractor’s bias and therefore permissible under Rule 408. Tripp, ¶ 20. The contractor, who testified as a witness for the plaintiff, obviously had an interest in minimizing his own liability as a third-party defendant in the action. ¶75 In contrast, the Kassmier settlement was introduced for the express purpose of demonstrating a “pattern and practice” of mistreatment of MFU employees—to prove liability for Harrell’s alleged constructive discharge. This is not a proper purpose under Rule 408. The settlement of that case has no bearing on any fact of consequence and is not relevant to whether Harrell was constructively discharged. Particularly in light of numerous references in front of the jury to MFU’s alleged “pattern and practice,” which we also have determined was not correct, the settlement amount was improperly admitted and served no purpose other than to prejudice the jury against MFU. 35 d. Conclusion ¶76 “Courts will exercise the greatest self-restraint in interfering with the constitutionally-mandated process of jury decision.” Cameron v. Mercer, 1998 MT 134, ¶ 8, 289 Mont. 172, 960 P.2d 302. We will not reverse a jury’s verdict for improperly admitted evidence unless “substantial prejudice to the complaining party [is] shown.” Green v. Green, 181 Mont. 285, 293, 593 P.2d 446, 451 (1979); M. R. Civ. P. 61 (requiring this Court to “disregard all errors and defects that do not affect any party’s substantial rights”). Put another way, “a reversal cannot be predicated upon an error in admission of evidence, where the evidence in question was not of such character to have affected the result.” In re A.N., 2000 MT 35, ¶ 55, 298 Mont. 237, 995 P.2d 427; Mason v. Ditzel, 255 Mont. 364, 371, 842 P.2d 707, 712 (1992); Lauman v. Lee, 192 Mont. 84, 90, 626 P.2d 830, 834 (1981). Having determined that some of the circumstances of the prior sexual harassment lawsuit and Harrell’s role in it properly were allowed, we must consider whether the mention of the settlement amount was so significant as to warrant reversal of the finding that MFU constructively discharged Harrell. ¶77 A constructive discharge under the WDEA occurs when the employer creates a situation in which “an objective, reasonable person would find [the work environment] so intolerable that voluntary termination is the only reasonable alternative.” Section 39-2- 903(1), MCA. “[W]hether a constructive discharge has occurred is usually a question of fact determined by the totality of the circumstances.” Bellanger, ¶ 14. The jury was 36 presented with ample evidence over a nearly two-week trial to support its verdict finding constructive discharge. The District Court summarized this evidence: This is what I’ve heard throughout this case[.] Mr. Harrell was put on the stand. Did you file a grievance? Letter, after letter, after letter was presented. [MFU] complained about his letters. They thought he was being vexatious and troublesome, and a thorn in their side. And what he was doing, from the Court’s vantage point, was sticking up for his rights. He felt that he wasn’t paid properly salary-wise. He thought that he wasn’t being given credit for time and working overtime at the rate of one and a half times his salary. He felt that other individuals in the organization were given preferential treatment. He didn’t think the organization was running properly. And he wanted to contribute to help that organization be the best that it could be. And he was rebuffed. Evidence showed that MFU ostracized and penalized Harrell for standing up to MFU’s management. ¶78 Further, due to the restrictive statutory method for calculating damages under the WDEA, the inadmissible evidence was not reasonably of such character as to have affected the award of actual damages. The strict damages formula in the WDEA limits recovery to “lost wages and fringe benefits for a period not to exceed 4 years from the date of discharge together with interest on the lost wages and fringe benefits. Interim earnings, including amounts the employee could have earned with reasonable diligence, must be deducted from the amount awarded for lost wages.” Section 39-2-905(1), MCA. The jury was presented with specific evidence of Harrell’s wage loss and his interim earnings, and it correctly applied the deductions in arriving at its damage calculations. 37 ¶79 “When the trial court makes an error, but sufficient facts are otherwise established by independent evidence and substantial justice has been done such that the error is harmless, the Montana Supreme Court will not disturb the ruling of the lower court.” Renner v. Nemitz, 2001 MT 202, ¶ 28, 306 Mont. 292, 33 P.3d 255 (citing M. R. Civ. P. 61; M. R. App. P. 14). In light of the other substantial evidence presented by Harrell and the strict limitations on WDEA damages, we conclude that introduction of the settlement amount did not substantially prejudice Harrell or significantly affect the result with regard to Harrell’s claim. We uphold the jury’s verdict finding constructive discharge, despite our finding of error in the admission of evidence. ¶80 4. Whether punitive damages properly were awarded against MFU. ¶81 MFU requests that this Court reverse the punitive damage award because “[t]here was no evidence that MFU requested Harrell to violate any public policy,” several jury instructions and the verdict form were unclear because they did not sufficiently identify the liable defendant, and the District Court admitted improper evidence. In the alternative, MFU claims that the District Court improperly refused to limit the punitive damages award to three percent of MFU’s net worth as required by § 27-1-220(3), MCA. a. Punitive Damage Award ¶82 To prevail on a claim for punitive damages in an action for constructive discharge under the WDEA, an employee must “establish[] by clear and convincing evidence that the employer engaged in actual fraud or actual malice in the discharge of the employee in 38 violation of § 39-2-904(1)(a).” Section 39-1-905(2), MCA. Violation of § 39-2- 904(1)(a), MCA, requires that the wrongful discharge was “in retaliation for the employee’s refusal to violate public policy or for reporting a violation of public policy.” ¶83 “A defendant is guilty of actual malice if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the plaintiff and: (a) deliberately proceeds to act in conscious or intentional disregard of the high probability of injury to the plaintiff; or (b) deliberately proceeds to act with indifference to the high probability of injury to the plaintiff.” Section 27-1-221(2), MCA. “A defendant is guilty of actual fraud if the defendant: (a) makes a representation with knowledge of its falsity; or (b) conceals a material fact with the purpose of depriving the plaintiff of property or legal rights or otherwise causing injury.” Section 27-1-221(3), MCA. ¶84 Harrell’s claim to punitive damages for violation of the WDEA is predicated on his alleged refusal to violate the law requiring payment of wages and overtime. We have held that “overtime premiums are for the protection and benefit of the general public” and that an attempt to waive the right to overtime is contrary to public policy. Lewis v. B & B Pawnbrokers, Inc., 1998 MT 302, ¶ 23, 292 Mont. 82, 968 P.2d 1145. While the wage claims are barred by the statute of limitations, the jury still properly could find that Harrell’s refusal to violate public policy by asserting his statutory right to wages prompted his constructive discharge. 39 ¶85 Next, the verdict form clearly shows the jury found that MFU, not Merrill, acted with actual fraud and actual malice. Likewise, because the jury instructions were organized by issue and the court made clear that punitive damages were only available against MFU for the constructive discharge claim, the court did not err in instructing the jury. ¶86 Finally, there was sufficient evidence to submit the punitive damages claim to the jury. Introduction of the Kassmier settlement makes this issue a close call. But the evidence was sufficient to establish that MFU retaliated against Harrell for a multitude of reasons that all implicate public policy: for refusing to waive his right to overtime and vacation, for insisting on fair pay for the work that he was performing, and for challenging MFU’s practices that he believed were unfair to its female employees. We hold that the punitive damages claim properly went to the jury. b. Statutory Limit ¶87 MFU claims in the alternative that the District Court improperly refused to limit the punitive damages award to three percent of MFU’s net worth as required by § 27-1- 220(3), MCA. That section states, “An award for punitive damages may not exceed $10 million or 3% of a defendant’s net worth, whichever is less.” ¶88 Following a finding that a defendant is liable for punitive damages, a jury must consider evidence of a defendant’s net worth in a separate proceeding to determine the amount of the award. Section 27-1-221(7)(a). A defendant who offers no evidence of 40 net worth waives any claim that the statutory limit should be applied. Blue Ridge Homes, Inc. v. Thein, 2008 MT 264, ¶¶ 60-64, 345 Mont. 125, 191 P.3d 374. In Blue Ridge, the district court found that the defendants refused to submit any accurate financial statement and that the self-prepared document on which they attempted to rely was not reliable evidence. In addition, the defendants “refused to respond to requests for production and interrogatories on this issue.” Blue Ridge, ¶ 65. The defendants never submitted reliable financial information at any point in the proceedings. This Court affirmed the district court’s refusal to apply the limitation prescribed by § 27-1-220(3), MCA, holding that the defendants failed to meet their burden of demonstrating an accurate calculation of their net worth. Blue Ridge, ¶ 70. In so ruling, we explained that a defendant is not permitted to “gain an advantage from failing to produce evidence of his net worth.” Blue Ridge, ¶ 69. ¶89 During the liability phase of the trial, Harrell introduced an audited 2008-2009 financial statement that specified MFU’s net worth during the last years of Harrell’s employment. Both parties referenced this financial statement during the trial’s punitive damages phase. MFU used the exhibit to rebut Harrell’s claim that an award should be based on the $10-$12 million value of the larger Farmers Union Enterprises and to argue that MFU’s total assets were $2.7 million in 2009. Harrell did not object to MFU’s use of the exhibit during the punitive damages phase of the trial. Harrell argued to the jury that the financial information was not sufficiently current or credible, but did not offer 41 any countering evidence of MFU’s current net worth. The jury took the statement into the jury room during its deliberation on punitive damages. Properly, the jury was told nothing about the statutory limit. ¶90 Immediately following the jury’s punitive damages verdict, MFU filed a motion requesting that the court apply the statutory limit to reduce the $300,000 damage award. Harrell opposed this motion on the grounds that MFU “offered no evidence of [its] net worth.” MFU then filed a renewed motion to cap the punitive damages award, this time with an affidavit from MFU’s auditor that attested to the accuracy of the previously submitted 2008-2009 financial statement. The auditor also attached MFU’s statement for 2010-2011, which she stated was the most recent statement available as of September 21, 2012. ¶91 In its order affirming the jury’s punitive damages award, the District Court expressed concerns that the 2008-2009 financial statement was “stale” and did not accurately reflect MFU’s current net worth or follow Generally Accepted Accounting Principles (GAAP). The court refused MFU’s request to consider the current financial statement because MFU asked the court to consider the statement “weeks after the close of trial” and because the statements “should have been presented to the jury before it deliberated on the amount of punitive damages.” The District Court thus concluded that MFU had failed to present evidence of its net worth and denied MFU’s request to limit the award. 42 ¶92 The District Court was within its discretion to find that the statement on which the parties had relied was not the best evidence of MFU’s net worth at the time of trial. But it is the court, not the jury, that applies the statutory limit to a punitive damages verdict under § 27-1-220(3), MCA. See Blue Ridge, ¶ 68. Thus, the question here is not whether the evidence came too late for consideration by the jury. Instead, the question is whether allowing MFU to submit more current evidence of its net worth after the jury’s punitive damages verdict allows MFU to “gain an advantage” by its failing to produce the evidence before the jury. Blue Ridge, ¶ 69. ¶93 On the record before us, we conclude that MFU does not gain any advantage by consideration of the updated financial information and that the District Court erred by failing to follow the requirements of the statute. Harrell is not prejudiced by consideration of the late-filed updated financial statements because the jury did consider net worth evidence and its punitive damages verdict exceeds three percent of MFU’s net worth regardless of which statement is used. ¶94 Therefore, after the jury returned its punitive damages verdict and after Harrell voiced objection to the 2008-2009 financial statement, the court should have accepted MFU’s submission of its current audited financial information and applied the statute’s three percent limit to the jury’s award. Harrell benefits from applying the statutory limit to the updated financial information instead of to the 2009 net worth, and the 2011 net worth should be used to calculate the proper amount of damages. We therefore vacate 43 the punitive damages award and remand for application of § 27-1-220(3), MCA, to MFU’s 2011 net worth. CONCLUSION ¶95 We hold that MFU was entitled to summary judgment on Harrell’s wage claims and that liability cannot be imposed on Merrill individually. We vacate the jury’s damage awards for wages and penalties under the wage claim statutes, and its award of damages against Merrill. We also vacate the District Court’s award of attorney’s fees. We affirm the jury’s verdict on Harrell’s claim for constructive discharge and its decision to award punitive damages. We vacate the punitive damages award and remand the case to the District Court for application of the statutory limit. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ JIM RICE	December 10, 2013
caa4fdfd-1012-4f4d-9204-54995a16fb18	Sellner v. Brand	2013 MT 307N	DA 12-0471	Montana	Montana Supreme Court	DA 12-0471 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 307N IN RE THE MARRIAGE OF: VICKI L. SELLNER, Petitioner and Appellant, v. HAMPTON JAY BRAND, Respondent and Appellee. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DR-11-592 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Joan E. Cook, Law Office of Joan E. Cook; Missoula, Montana For Appellee: P. Mars Scott, Ryan A. Phelan, P. Mars Scott Law Offices, Missoula, Montana Submitted on Briefs: September 26, 2013 Decided: October 17, 2013 Filed: __________________________________________ Clerk October 17 2013 2 Chief Justice McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Vicki Sellner appeals from the District Court’s Findings of Fact, Conclusions of Law and Decree of Dissolution, filed July 3, 2012. Vicki argues that the District Court abused its discretion by adopting an “ambiguous” visitation schedule and by adopting the parenting plan proposed by Jay. We affirm. ¶3 The parties have two children, one a teenager and the other a toddler. The District Court’s decree gave the teenager the right to participate in deciding which parent to live with. The decree provided the parents with alternative arrangements for the younger child, encouraging them to actually communicate with each other and reach an agreement in parenting the children. It is not an error to provide alternatives in a parenting plan, and if either or both of the parents refuse to communicate and agree within the parameters set by the District Court’s decree, then more strict guidance can be provided in further proceedings. Meyer v. Meyer, 204 Mont. 177, 182-83, 663 P.2d 328, 331 (1983). We find no error or abuse of discretion in the District Court’s parenting plan. ¶4 Vicki also argues that the District Court erred in adopting the parenting plan proposed by Jay. The District Court entered extensive findings of fact regarding the circumstances of the parties and the needs of their children. The District Court specifically found that Vicki’s 3 proposed plan was deficient, that it would not adequately safeguard both parents’ rights, and that it would sever Jay’s relationship with the children “to the point of no recovery.” The District Court found that Vicki’s proposed restriction of Jay’s relationship with the children was not in their best interest, and that Jay “is the more available, experienced and competent parent.” While there was some confusion as to the provisions of the parenting plan ultimately submitted by Jay, it is clear that the District Court fully considered the best interests of the children in this case, as required by § 40-4-212, MCA, in adopting the parenting plan. The parenting plan adopted by the District Court controls the case and there was no error or abuse of discretion. ¶5 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for memorandum opinions. The issues in this case are ones of judicial discretion and clearly there was not an abuse of discretion. ¶6 Affirmed. /S/ MIKE McGRATH We concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ BRIAN MORRIS	October 17, 2013
aae10494-d4cb-48f6-9bcc-55a235e6b113	Benjamin v. Benjamin	2013 MT 293N	DA 13-0199	Montana	Montana Supreme Court	DA 13-0199 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 293N DELMAR BENJAMIN, Plaintiff and Appellant, v. JOYCE BENJAMIN and CECIL BENJAMIN, Defendants and Appellees. APPEAL FROM: District Court of the Ninth Judicial District, In and For the County of Toole, Cause No. DV-11-086 Honorable Laurie McKinnon and Honorable Robert G. Olson, Presiding Judges COUNSEL OF RECORD: For Appellant: Delmar Benjamin (Self-Represented); Shelby, Montana For Appellees: Jason T. Holden, Dana A. Ball; Faure Holden Attorneys at Law, P.C.; Great Falls, Montana Submitted on Briefs: September 11, 2013 Decided: October 8, 2013 Filed: __________________________________________ Clerk October 8 2013 2 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Delmar Benjamin (Delmar) appeals the orders of the Ninth Judicial District Court, Toole County, dismissing his complaint and denying his motion for relief from the order granting dismissal. We affirm. ¶3 Delmar filed an amended complaint in December 2011 in the District Court. He raised three claims in his amended complaint: (1) that his brother and mother, Cecil Benjamin (Cecil) and Joyce Benjamin (Joyce), had breached a farmland lease; (2) that Joyce had breached a gas well agreement; and (3) that Cecil had inappropriately distributed their father’s probate assets. Cecil and Joyce filed a motion to dismiss, alleging Delmar failed to state a claim upon which relief may be granted under M. R. Civ. P. 12(b)(6). The District Court granted the motion to dismiss on May 22, 2012. ¶4 A restatement of the dispositive issue on appeal is whether the District Court erred when it determined that Delmar failed to state a claim upon which relief may be granted. A district court’s determination that a complaint failed to state a claim presents a conclusion of law, which we review for correctness. Jones v. Mont. Univ. Sys., 2007 MT 82, ¶ 15, 337 Mont. 1, 155 P.3d 1247 (internal citations omitted). 3 ¶5 Regarding the farm lease, Delmar asserts the District Court did not take the allegations set forth in the complaint as true and failed to even consider them. He argues that the lease was not oral but was a “periodic tenancy with the expectation of renewal” based on a written contract. Cecil and Joyce counter that “[t]he written farm lease agreement upon which Delmar relies terminated by its own terms on March 1, 1995,” and that there was no renewal provision in the lease or other lease agreement. Because the lease was not in writing, they argue this claim was barred by the statute of frauds pursuant to § 28-2-903(1)(d), MCA. Moreover, they argue “the facts alleged by Delmar did not disclose the elements necessary to make a claim for breach of contract.” ¶6 The District Court correctly dismissed Delmar’s claim regarding the farm lease. The written lease agreement between Delmar and his father was for a term of one year (from 1994 to 1995) and did not include a renewal provision. Pursuant to § 70-26-204, MCA, an implied renewal period based on Delmar’s continued possession may be presumed for a year after the termination of the lease agreement, but not in excess of that one year. As the lease agreement is not evidenced by a writing, the District Court correctly concluded that Delmar’s claim was barred by the statute of frauds pursuant to § 28-2-903, MCA. ¶7 To support his second claim regarding the gas well agreement, Delmar again argues that the District Court ignored the contentions set forth in the complaint. He maintains he set forth a set of facts that, if proven, could result in a claim of tortious interference with a contract. Joyce and Cecil counter that Joyce owns the gas well and that Delmar fails to allege that plugging the gas well constituted a breach of any 4 purported gas well agreement. Given Delmar’s failure to establish a breach, we determine the District Court correctly concluded that Delmar failed to state a claim for relief. ¶8 Delmar’s final claim is that Cecil breached his fiduciary duty as personal representative of their father’s estate. Though the District Court dismissed this claim for lack of subject matter jurisdiction, Delmar argues that the District Court had jurisdiction pursuant to the doctrine of equity. He further argues the District Court failed to honor his father’s intent by not granting him possession of his portion of his father’s tangible personal property. ¶9 Because the estate was probated in the Ninth Judicial District Court in a case with a separate cause number, the probate court, rather than the District Court, had subject matter jurisdiction over the estate pursuant to § 72-1-202(1)(a), (2), MCA. Delmar failed to attend any hearings regarding the settlement and distribution of the estate in the probate court. Delmar did not challenge the will when it was probated, and he cannot do so now in this action in the District Court. The District Court correctly concluded that it did not have subject matter jurisdiction over this claim. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶11 For the foregoing reasons, we affirm the District Court’s decision. 5 /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ BRIAN MORRIS	October 8, 2013
d8034f43-f1c1-4bf9-8db7-a10257ed57c5	State v. Hyslop	2013 MT 302N	DA 12-0513	Montana	Montana Supreme Court	DA 12-0513 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 302N STATE OF MONTANA, Plaintiff and Appellee, v. DAVID WAYNE HYSLOP, Defendant and Appellant. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. BDC 11-236 Honorable Julie Macek, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender, Koan Mercer, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Pamela P. Collins, Assistant Attorney General; Helena, Montana John Parker, Cascade County Attorney, Susan Weber, Deputy County Attorney; Great Falls, Montana Submitted on Briefs: September 26, 2013 Decided: October 15, 2013 Filed: __________________________________________ Clerk October 15 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 David Wayne Hyslop appeals from his conviction of the crime of deliberate homicide in the Eighth Judicial District Court, Cascade County. We affirm. ¶3 The issue on appeal is whether the District Court erred in allowing a felony murder charge predicated upon the underlying felony of assault on a minor. ¶4 Hyslop was convicted of deliberate homicide under the felony murder provision of § 45-5-102(1)(b), MCA, for causing the death of two-year-old O.P. in the course of committing assault on a minor. Hyslop was caring for O.P. on June 23, 2011, while her mother, Kristy Perez, was attending classes. Hyslop wanted O.P. to take a nap in her bed, which was in a portion of the basement with a concrete floor. Hyslop’s brother testified that he heard Hyslop shouting at O.P. to go to bed, followed by a series of dull “thud” sounds. Hyslop told police that he either threw or dropped O.P., causing her head to hit the concrete floor. He was immediately concerned because O.P. did not cry and her body began to spasm. He believed she was unconscious. Hyslop then put O.P. in her bed, went upstairs, and left her alone without medical attention for at least three hours. He told his brother that O.P. was sleeping and that the sounds had been Hyslop hitting his head in the laundry room. 3 ¶5 When Perez returned home, she heard O.P. whimpering and moaning from the basement. Hyslop told her that O.P. was just having a bad dream. Perez went to the basement to check on O.P., and called 911 when she could not wake her. O.P. was transported to the emergency room at Benefis Hospital in Great Falls, and later to Primary Children’s Hospital in Salt Lake City, Utah, where she died on June 25, 2011. The cause of death was severe head trauma. An autopsy revealed extensive swelling and bleeding throughout her brain. It also showed that she had suffered an unusual and catastrophic spinal injury, consistent with her body having been bent forcefully over a solid object. There was evidence of a number of previously healed injuries that were not consistent with normal household accidents. ¶6 At trial, Hyslop made three motions arguing that assault on a minor, a bodily injury offense, could not serve as a predicate offense for the charge of felony murder. Hyslop allowed that the State had presented evidence sufficient to prove that O.P. had suffered severe injuries which led to her death. He argued, however, that “bodily injury,” defined at § 45-2-101(5), MCA, as “physical pain, illness, or an impairment of physical condition,” was distinct from “serious bodily injury,” defined at § 45-2-101(66), MCA, as injury that “creates a substantial risk of death” or “causes serious permanent disfigurement.” In his first motion, Hyslop argued that by presenting evidence proving a serious bodily injury rather than a bodily injury, the State had failed to prove the underlying offense of assault on a minor. In his second motion, he claimed that the State had not proven causation between assault on a minor and O.P.’s death, because, by definition, only a serious bodily injury offense could 4 result in death. Finally, Hyslop argued that allowing a bodily injury offense to serve as a predicate for felony murder constituted an arbitrary interpretation of the felony murder statute, because the legislature intended “bodily injury” and “serious bodily injury” to have distinct meanings. The motions were denied. The jury found Hyslop guilty of deliberate homicide, and he was sentenced to 100 years in prison with no eligibility for parole. ¶7 On appeal, Hyslop raises a substantive due process argument. He claims that the felony murder statute is not rationally related to a legitimate state purpose, because it allows “any other forcible felony” to serve as a predicate for felony murder, including those that do not require conduct likely to result in death. Section 45-5-102, MCA. Hyslop argues that the purpose of the felony murder statute is to punish conduct likely to result in death, and the “any other forcible felony” provision is not rationally related to this purpose. ¶8 This Court conducts plenary review of questions of constitutional law. State v. Egdorf, 2003 MT 264, ¶ 12, 317 Mont. 436, 77 P.3d 517. A statute is presumed constitutional, and any doubts must be resolved in favor of the statute. Egdorf, ¶ 12. The party challenging the statute has the burden of proving that it is unconstitutional beyond a reasonable doubt. Egdorf, ¶ 12. A party may not raise new arguments or change its legal theory on appeal. State v. Heath, 2004 MT 58, ¶ 39, 320 Mont. 211, 89 P.3d 947. An issue not addressed below may, however, be reviewed for plain error where fundamental constitutional rights are implicated and this Court is “firmly convinced” that failure to review the issue “would result in a manifest miscarriage of justice, call into question the fairness of the trial or proceeding, or compromise the integrity of the judicial process.” State v. Taylor, 5 2010 MT 94, ¶¶ 12-17, 356 Mont. 167, 231 P.3d 79. This Court invokes plain error review sparingly, on a case by case basis, after considering the totality of the circumstances. State v. Wilson, 2011 MT 277, ¶ 16, 362 Mont. 416, 264 P.3d 1146. ¶9 The State argues that Hyslop did not raise his present substantive due process argument before the District Court, and thus has waived the issue on appeal. We agree. In the District Court, Hyslop claimed that the felony murder statute had been applied to him in a way that violated his rights of procedural due process. His first two arguments were premised on the alleged insufficiency of the State’s trial evidence to prove the offenses charged. His third argument was based on legislative intent. By contrast, on appeal, Hyslop “maintains that the State’s trial evidence is not relevant,” and “does not dispute that the Legislature intended to apply felony murder to an assault on a minor.” Instead, he argues that the felony murder statute is facially invalid under substantive due process. This is a new argument, and therefore, we decline to address it. ¶10 Alternatively, Hyslop argues that this Court should hear his substantive due process argument pursuant to plain error review. We decline. In light of the circumstances of this case, we are not “firmly convinced” that failure to address Hyslop’s argument will “result in a manifest miscarriage of justice, call into question the fairness of the trial or proceeding, or compromise the integrity of the judicial process.” Taylor, ¶ 17. ¶11 Though we decline to address Hyslop’s argument on appeal, we note that the issues raised in the District Court were determined by our recent decision in Hicks, in which we held that assault on a minor can support a charge of felony murder. State v. Hicks, 2013 MT 6 50, ¶¶ 20-22, 369 Mont. 165, 296 P.3d 1149. There, we held that any forcible felony, defined as one that “‘involves the use or threat of physical force or violence against any individual,’” may serve as a predicate offense. Hicks, ¶ 20 (quoting § 45-2-101(24), MCA). Assault on a minor is a forcible felony. Hicks, ¶ 22. Here, the State was required to prove beyond a reasonable doubt that Hyslop committed an assault on a minor, O.P., and in so doing, caused her death. The jury found that the State had met its burden. ¶12 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for memorandum opinions. ¶13 Affirmed. /S/ MIKE McGRATH We concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE	October 15, 2013
7479d6cc-bd4f-49f7-b37f-99c21b35e474	State v. Peterson	2013 MT 329	DA 12-0079	Montana	Montana Supreme Court	DA 12-0079 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 329 STATE OF MONTANA, Plaintiff and Appellee, v. BRYCE EVERETT PETERSON, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC-08-151 Honorable Jeffrey H. Langton, Presiding Judge COUNSEL OF RECORD: For Appellant: Sarah Chase Rosario, Attorney at Law, Great Falls, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana William Fulbright, Ravalli County Attorney, Hamilton, Montana Submitted on Briefs: September 18, 2013 Decided: November 5, 2013 Filed: __________________________________________ Clerk November 5 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Bryce Everett Peterson appeals from the District Court’s Opinion & Order, filed December 14, 2011, denying his Motion to Withdraw Alford Pleas. We affirm in part, reverse in part, and remand for further proceedings. PROCEDURAL AND FACTUAL BACKGROUND ¶2 In November 2008, the State charged Peterson with the felony offenses of aggravated kidnapping, aggravated assault, assault with a weapon, intimidation, and aggravated burglary, and also the misdemeanor offense of partner or family member assault, second offense. The affidavit filed in support of the charges alleges that on October 17, 2008, Peterson arrived at the house of his sometime girlfriend H.P., and kicked in the door. Once inside Peterson began assaulting H.P., hitting her and forcing her to the floor where he continued the assault for an extended period of time. Peterson forced H.P. into his truck and began driving, calling a hospital to report that H.P. had overdosed on medication. When H.P. attempted to cry out for help Peterson punched her in the head and continued to slap her. Peterson prevented H.P. from getting out of the truck, slamming her head into the interior before pulling off onto a side road in a remote area and telling H.P he was taking her where no one would ever find her. ¶3 Peterson then took H.P. to his home where he continued to assault her. A Deputy arrived to check on H.P.’s safety but when he knocked on the door Peterson held a gun to her face and demanded that she be quiet. The Deputy, hearing nothing from inside the 3 house, left. Peterson then began making phone calls and H.P. eventually escaped the house and was able to report what had happened to her. ¶4 Law enforcement officers surrounded Peterson’s house. He refused to leave and made threats to kill specific officers who he could see outside. Peterson surrendered after about 18 hours and was taken to the hospital for an evaluation and then to jail. He retained an attorney to represent him. ¶5 In November 2008 the District Court ordered that Peterson be transferred to the Montana State Hospital for a mental evaluation to determine his fitness to proceed. Peterson was at MSH for two months after which treating professionals filed a report on his condition. They concluded that he did not suffer from a mental disease or defect, that he was fully capable of understanding the proceedings against him and of assisting in his own defense, and that he was fit to proceed to trial. The MSH report also concluded that Peterson had been fully capable of forming the “requisite state of mind” at the time of the offenses and of appreciating the criminality of his behavior. On February 4, 2009, the District Court found that Peterson was competent to stand trial. ¶6 Peterson’s attorney retained a psychiatrist to conduct an independent evaluation. The defense psychiatrist evaluated Peterson and issued a report in July 2009 concluding that Peterson suffered from bipolar disorder, but that he was competent to stand trial. The defense psychiatrist concluded that Peterson had the ability to act with knowledge or purpose at the time of the offenses, although his ability to appreciate the criminality of his conduct was diminished by a mood disorder. 4 ¶7 At a hearing in August 2009 the District Court granted the State’s motion for leave to introduce evidence of prior instances in which Peterson had assaulted other women and H.P. At that same hearing the defense filed a brief questioning Peterson’s competency to proceed. The District Court heard argument and testimony on the competency issue, including testimony from Peterson. The District Court noted that Peterson presented articulate, logical and coherent testimony about his personality disorders, the medications that addressed them, and the therapeutic significance of dosage levels. The District Court concluded that nothing was presented to alter the conclusions of the professionals that Peterson had been capable of forming the required criminal intent at the time of the offenses, and that he was competent to stand trial. ¶8 On September 10, 2009, a day before trial was scheduled to begin, Peterson and his attorney appeared before the District Court to enter Alford pleas to all the charged offenses. An Alford plea arises from the decision in North Carolina v. Alford, 400 U.S. 25, 91 S. Ct. 160 (1970) and is recognized by statute in Montana. Section 46-12-212, MCA. An Alford plea allows a defendant to plead guilty to an offense without acknowledging his guilt. State v. Locke, 2008 MT 423, ¶ 18, 347 Mont. 387, 198 P.3d 316. ¶9 Peterson and his attorney signed and filed a multi-page pleading captioned “Alford Plea and Waiver of Rights” in which Peterson affirmed his desire to voluntarily enter the pleas and that there was no plea agreement. Peterson acknowledged that he was giving up a variety of rights, including the chance of being convicted of lesser included offenses and the chance of appeal on all issues except the voluntariness of the plea. He affirmed 5 that he was satisfied with the services and competency of his attorney and that they had discussed the merits of the case and possible defenses. He affirmed that he was competent to enter the plea and did not suffer any emotional or mental disability that would make him unsure about what he was doing. He specifically explained in a handwritten passage that he wished to enter an Alford plea because he did not want to plead guilty but had determined that it was in his “best interests to avoid trial.” He affirmed that he believed that a jury would find him guilty beyond a reasonable doubt. ¶10 Thereafter the District Court read the allegations for the charges of aggravated kidnapping and aggravated assault. Peterson entered Alford pleas to both charges. When the District Court read the allegations related to the charge of assault with a weapon, Peterson injected: “I can’t do this. I can’t do this. No, I’m not guilty of that. I’m not guilty of this.” The District Court explained the nature of an Alford plea and Peterson responded that he understood that it was in his best interest to enter a plea because the “cards have been stacked against” him by the prosecution, apparently referring to prior rulings on evidentiary issues. The District Court then recessed the proceeding. ¶11 When the proceeding resumed some 20 minutes later, Peterson announced that he wanted two issues addressed: he requested an evaluation of his medication dosage and he requested that there be specific language in the plea documents stating that he maintained his innocence. Peterson agreed that the medication issue could be addressed after the plea proceeding, and he entered Alford pleas to the remaining charges. The District Court explained the possible penalties for the offenses as well as requirements for violent offender registration and restitution obligations. The District Court again informed 6 Peterson of the rights to trial that he was giving up and Peterson said that he understood. He affirmed that there were no assurances of leniency given in exchange for his pleas, nor was any force, threat or improper tactic used to obtain his pleas. Peterson’s attorney told the District Court that he believed that Peterson was competent to enter the pleas and that his medication complaints did not affect his ability to understand the proceeding. ¶12 Peterson affirmed that his communication with his attorney was “as good as could be” and that they had disagreed about some things. He stated that he still did not understand how he could maintain his innocence and still enter an Alford plea. The District Court explained that an Alford plea is like a guilty plea but without agreement that he committed every element of each offense. Peterson stated again that he believed that there was “no defense” for him because the prosecutor had lied to the court to obtain favorable evidentiary rulings. Even so, Peterson stated that it was “absolutely” in his best interests to plead to the charges rather than to go to trial. ¶13 Peterson’s attorney summarized the time he had spent on the case, noting a couple dozen personal meetings and close to 100 telephone calls. The attorney affirmed that they discussed the evidence, including discussions involving the defense investigator. ¶14 Peterson then affirmed that it was his choice to go ahead with the pleas instead of going to trial and provided a detailed and rational explanation of his medication issues. The District Court then found that there was a factual basis for the charges, based upon the facts set out in the affidavit filed in support of the motion for leave to file the information against Peterson. The District Court found that Peterson entered the pleas knowingly, voluntarily and intelligently. The District Court accepted the Alford pleas. 7 ¶15 The District Court conducted sentencing hearings on October 23 and November 13, 2009, and received testimony about the crimes and about Peterson’s mental state. Peterson admitted to a history of abusing women but claimed he was suffering from a mental disease or defect at the time of the prior events. Mental health professionals from the Montana State Hospital testified that while Peterson had a personality disorder and abused cannabis, he did not suffer from a mental disease or defect. The defense psychiatrist testified that he believed that Peterson had bipolar disorder that should be considered in sentencing. The District Court sentenced Peterson to a total of 70 years in prison with 20 years suspended. Peterson’s attorney obtained leave of court to withdraw as counsel. ¶16 In November 2010 Peterson appeared with new counsel and moved to withdraw his Alford pleas. Peterson contended that he should be allowed to withdraw his prior pleas because his mental state at the time of the pleas precluded him from knowingly and voluntarily making a plea decision; because he maintained his innocence to the charges against him; and because the District Court’s colloquy with him was insufficient to determine whether the pleas were knowingly and voluntarily made. ¶17 The District Court conducted a hearing on the motion and received briefs. On December 14, 2011, the District Court issued a 30-page Opinion & Order denying Peterson’s motion to withdraw the pleas. The District Court examined the medical evidence as to Peterson’s mental capacity and found that the more persuasive and credible evidence demonstrated that Peterson was competent to enter the pleas. The District Court examined the change-of-plea hearing and found that Peterson did not 8 demonstrate mental instability, but understood what was happening and had a detailed understanding of his medication. The District Court found that Peterson had appeared to be alert and that his “responses and statements were articulate, logical and oriented.” The District Court found that Peterson was thoroughly questioned before the pleas were accepted, and that his desire to maintain innocence was no ground to reject an Alford plea. ¶18 The District Court concluded that Peterson’s Alford pleas were knowingly and voluntarily entered and that his motion to withdraw the pleas was without merit and should be denied. Peterson appeals. ¶19 On appeal Peterson raises the following issues: ¶20 Issue One: Did the District Court properly deny Peterson’s motion to withdraw his Alford pleas? ¶21 Issue Two: Should this matter be remanded to the District Court to determine the amount of restitution due to the victim from Peterson for future counseling expenses? STANDARD OF REVIEW ¶22 A district court may allow a defendant to withdraw a guilty plea where good cause is shown. Section 46-16-105(2), MCA. If a guilty plea is involuntary, that constitutes good cause to allow it to be withdrawn. State v. Usrey, 2009 MT 227, ¶ 17, 351 Mont. 341, 212 P.3d 279. The standard of voluntariness of a guilty plea is whether the defendant was fully aware of the direct consequences of the plea, including the actual value of any commitments made to him by the court, prosecutor or his attorney. If so, the plea will stand unless it was induced by threats or improper promises. State v. Warclub, 9 2005 MT 149, ¶ 18, 327 Mont. 352, 114 P.3d 254, citing Brady v. U.S., 397 U.S. 742, 90 S. Ct. 1463 (1970). A properly supported claim of ineffective assistance of counsel during the change of plea process can constitute good cause for withdrawal of a plea. Burns v. State, 2012 MT 100, ¶ 7, 365 Mont. 51, 277 P.3d 1238. ¶23 When a district court denies a motion to withdraw a guilty plea, this Court will review findings of fact to determine whether they are clearly erroneous, and conclusions of law to determine if they are correct. The ultimate question of voluntariness is a mixed question of fact and law that this Court reviews de novo to determine whether the district court was correct. Warclub, ¶ 24. DISCUSSION ¶24 Issue One: Did the District Court properly deny Peterson’s motion to withdraw his Alford pleas? ¶25 Peterson raises a number of issues on appeal, all to support the underlying contention that his Alford pleas were not voluntary and that he should be allowed to withdraw them. First, Peterson argues that he should be allowed to withdraw his pleas because both of his prior attorneys—the attorney who represented him at the trial/plea proceedings and the attorney who represented him on the motion to withdraw the pleas— provided him with ineffective assistance of counsel. ¶26 Peterson’s motion in District Court to withdraw the pleas was based upon the arguments that he lacked the mental capacity to enter the pleas; that he maintained that he was innocent of the charges; and that the District Court’s colloquy with him at the time of the pleas was inadequate. Peterson did not raise any issue concerning the alleged 10 ineffectiveness of his trial/plea attorney when he moved to withdraw his pleas, and the District Court did not consider or rule upon that issue. When a defendant appeals denial of a motion to withdraw a prior plea, this Court will not entertain new issues that were not raised in the District Court. State v. Ostrerloth, 2000 MT 129, ¶ 20, 299 Mont. 517, 1 P.3d 946 (no new issues may be raised on appeal of a motion to withdraw a plea); State v. McFarlane, 2008 MT 18, ¶ 12, 341 Mont. 166, 176 P.3d 1057 (this Court will not consider a claim of ineffective assistance of counsel at a change of plea proceeding when the claim was not raised in district court). Because Peterson did not raise the issue that his trial/plea attorney provided ineffective assistance, we decline to address this argument on appeal.1 ¶27 Peterson next argues that he is entitled to withdraw the pleas because they were not knowingly and intelligently made. He argues that the District Court failed to inform him that that he could go to trial on the charge of aggravated kidnapping and pursue conviction of a lesser included offense of kidnapping. ¶28 Section 46-12-210, MCA, covers in detail the “advice” that a district court must give a defendant proposing to enter a guilty plea. A district court’s advice to a pleading 1 While we do not consider the ineffective assistance claim, we do note an argument made by Peterson’s attorney on appeal. One of the contentions made by Peterson’s attorney on appeal is that Peterson’s trial/plea attorney was “out of money,” causing his inability to adequately represent Peterson and causing him to act against Peterson’s best interests by coercing him to plead guilty. Despite the strident accusations made in the briefing on Peterson’s behalf on this point, there is no demonstrated factual support for it, much less any justification for characterizing it as an “insidious” factor in the case. The only cited support for this argument is that Peterson’s trial/plea attorney requested in a pre-trial motion that the District Court order the State to pay for the cost of serving trial subpoenas because Peterson, not the attorney, was indigent. These rather serious accusations against Peterson’s trial/plea attorney are completely unjustified and unfounded in the record. 11 defendant is constitutionally adequate if it covers the items in § 46-12-210, MCA. State v. Otto, 2012 MT 199, ¶ 18, 366 Mont. 209, 285 P.3d 583 (a district court is required to give the advice covered by § 46-12-210, MCA, and that advice is constitutionally sufficient for a voluntary plea). A district court is not required to advise the defendant about issues not covered by the statute such as the right to appeal, the right to speedy trial or the right to object to evidence. Otto, ¶ 19. There is no requirement that the district court provide advice about possible lesser included offenses. Usrey, ¶ 24; State v. Swensen, 2009 MT 42, ¶ 14, 349 Mont. 268, 203 P.3d 786. The District Court did not err to the extent that it failed to advise Peterson about the possibility of a lesser included offense to the charge of aggravated kidnapping. ¶29 Peterson next argues that his pleas were not knowingly and intelligently made, and therefore not voluntary, because the District Court did not advise him that he could go to trial and then appeal pre-trial orders, such as rulings on the admissibility of evidence and other issues. A District Court is not required to advise a pleading defendant about any rights to contest prior orders in a future appeal. Otto, ¶ 19. The District Court did not err to the extent that it failed to advise Peterson about the possibility of a future appeal of pre-trial orders. ¶30 Peterson next argues that he was entitled to withdraw his guilty pleas because the attorney who represented him on the motion to withdraw the pleas provided ineffective assistance of counsel. This Court evaluates claims of ineffective assistance of counsel under the test established in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052 (1984). Whitlow v. State, 2008 MT 140, ¶ 10, 343 Mont. 90, 183 P.3d 861; Bomar v. 12 State, 2012 MT 163, ¶¶ 7-8, 365 Mont. 474, 285 P.3d 396. First the defendant must show that his attorney’s performance was deficient by demonstrating that it fell below an objective standard of reasonableness. Whitlow, ¶ 14. There is a strong presumption that the attorney’s performance fell within the wide range of reasonable professional assistance, Whitlow, ¶ 15, because there are “countless ways to provide reasonable assistance in any given case.” Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. ¶31 Second, the defendant must show that his attorney’s deficient performance prejudiced the defense. Whitlow, ¶ 10. This requires a showing of a “reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different.” Strickland, 466 U.S. at 694, 104 S. Ct. at 2068. ¶32 This Court will consider the merits of a claim of ineffective assistance of counsel on appeal only if the record is sufficient to determine whether the attorney was ineffective. State v. Briscoe, 2012 MT 152, ¶ 10, 365 Mont. 383, 282 P.3d 657. Claims that are not based upon facts of record must be raised, if at all, in a proceeding for postconviction relief. State v. Main, 2011 MT 123, ¶ 48, 360 Mont. 470, 255 P.3d 1240. ¶33 Peterson claims that his plea withdrawal attorney was ineffective because he failed to argue that the District Court should not have accepted the plea to the charge of intimidation under § 45-5-203, MCA. Specifically, Peterson argues that there was no showing that he acted with the purposely or knowingly mental state required for that offense. The intimidation charge was based upon Peterson’s actions during the extended stand-off with law enforcement officers at his residence. During the stand-off Peterson threatened that he was going to shoot one or more specifically identified officers who 13 were at the scene. He identified an officer by name, described where he was at the scene, and threatened to shoot him in the head. ¶34 We find that there is sufficient record-based information to allow review of this claim. There is no factual dispute about the intimidation incident, and at sentencing Peterson admitted to making the threat and to understanding how it could be understood as a “threat and intimidation to law enforcement.” A defendant’s mental state may be inferred from his acts and from the circumstances of the offense. State v. Claussell, 2001 MT 62, ¶ 31, 305 Mont. 1, 22 P.3d 1111 (purpose or knowing mental state). A reasonable inference from the facts was that Peterson intended to hinder performance by law enforcement and to prevent them from arresting him. This is sufficient to support the charge of intimidation. State v. McCarthy, 2004 MT 312, ¶ 47, 324 Mont. 1, 101 P.3d 288. As a matter of law, Peterson has failed to demonstrate that his withdrawal attorney’s performance in this regard was deficient and that it fell below an objective standard of reasonableness. Peterson has not established that he received ineffective assistance of counsel regarding the plea to the charge of intimidation. ¶35 Peterson next claims that his withdrawal attorney was ineffective because he failed to present additional evidence at the hearing on the motion to withdraw about Peterson’s mental state at the time of the pleas. At the hearing on the motion to withdraw, defense counsel presented both Peterson’s testimony and the testimony of the defense psychiatrist who had previously examined Peterson and who had previously testified as to Peterson’s mental condition. Defense counsel also submitted into evidence a letter from the defense 14 psychiatrist setting out the opinions of five other mental health professionals that Peterson was bipolar. ¶36 Peterson’s contention on appeal is that his withdrawal attorney rendered ineffective assistance by only presenting one expert. The argument is that if withdrawal counsel had presented the live testimony of the other medical professionals described in the letter admitted into evidence, the District Court would have found Peterson to be bipolar. This entire argument turns on the assumption that if only the District Court had found that Peterson was bipolar then the original pleas would not have been accepted or, if accepted, Peterson would have been allowed to withdraw them. This is based upon nothing more than speculation presented as fact. The assumption underlying Peterson’s argument is that a person diagnosed as bipolar is not competent to enter a plea in a criminal case, and, if he does, is entitled to withdraw it later. The issue below was not whether Peterson was bipolar. The issue was whether he was competent to enter the pleas to the charges. The experts for the State and for the defense agreed that Peterson was competent to participate in the plea proceedings. ¶37 The record is clear in this case that the District Court was very familiar with Peterson’s mental state. Testimony and evidence on that issue were presented to the District Court prior to Peterson’s entering the pleas, and again at the withdrawal hearing. Peterson does not contend on appeal that there was any new or different evidence, only that the evidence should be presented in a different way. In addition, even the defense psychiatrist who opined that Peterson was bipolar also rendered the expert opinion that 15 Peterson was competent to stand trial and that he was capable of forming the mental state required to be convicted of the charged offenses. ¶38 On the face of the record it is clear that Peterson’s withdrawal attorney acted reasonably and consistently with an objective standard of reasonableness in presenting the motion to withdraw to the District Court. Peterson has wholly failed to demonstrate that his withdrawal attorney failed to provide effective assistance by presenting only one expert at the withdrawal hearing. ¶39 The record demonstrates that Peterson was fully aware of the direct consequences of the pleas and that they were knowingly and voluntarily given. He has failed to establish that there was good cause to allow him to withdraw his prior Alford pleas to the charges against him, and the District Court is affirmed. ¶40 Issue Two: Should this matter be remanded to the District Court to determine the amount of restitution due to the victim from Peterson for future counseling expenses? ¶41 The District Court ordered that Peterson be responsible for payment of the future counseling costs of the victim in an “unlimited amount.” Peterson does not argue that he may not be held responsible for the counseling costs, but only that the District Court was required to specify the total amount of restitution. Section 46-18-244, MCA. The State agrees with Peterson’s argument and agrees that this matter should be remanded to the District Court for a determination of the total amount of restitution for the victim’s future counseling costs. ¶42 The District Court’s order denying Peterson’s motion to withdraw his Alford pleas to the charges against him is affirmed. This matter is remanded to the District Court for 16 the sole purpose of determining the amount of restitution for the victim’s future counseling costs that Peterson is required to pay. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT	November 5, 2013
625e7db9-a00f-4cf7-a2ee-0fa1df33819d	Matter of K.G. K.G. and K.G.	2013 MT 361N	DA 13-0206	Montana	Montana Supreme Court	DA 13-0206 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 361N IN THE MATTER OF: K.G., K.G., and K.G., Youths in Need of Care. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADN 12-59 Honorable Julie Macek, Presiding Judge COUNSEL OF RECORD: For Appellant: Kathryn McEnery, McEnery Law Office, PLLCA; Kalispell, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General; Helena, Montana John Parker, Cascade County Attorney, Jennifer L. Quick, Deputy Cascade County Attorney; Great Falls, Montana Submitted on Briefs: November 13, 2013 Decided: December 3, 2013 Filed: __________________________________________ Clerk December 3 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 D.G., the Birth Father, appeals from the Order of Montana Eighth Judicial District Court, Cascade County, terminating his parental rights to his children, K.G.1, K.G.2, and K.G.3 (collectively, the Children). We affirm. ¶3 On July 26, 2011, the Birth Mother called Benefis Hospital in Great Falls with concerns about K.G.2. At the time, K.G.2 was two months old. K.G.2 has Down Syndrome, as well as medical conditions that require her to have a colostomy bag and a feeding tube. When the Birth Mother brought K.G.2 in to be examined, the examining physician found that she had bruising on her chin consistent with someone grabbing the chin with the thumb and point finger and holding hard. She had “significant” circular-shaped burns on her abdomen and right upper shoulder extremity that had scabbed over. X-rays revealed that she had four broken ribs on her left side and a broken left femur. Her injuries caused severe respiratory failure and she had to be transferred from the Benefis Hospital to Salt Lake City. In the expert opinion of the Great Falls examining physician, Dr. Gerrity, it was lucky to get K.G.2 to Salt Lake City alive. ¶4 D.G. eventually confessed to having caused most of the injuries and pled guilty to assault on a minor. He was sentenced to the Department of Corrections for ten years, with five suspended. 3 ¶5 K.G.1 and K.G.2 were removed from their parents’ care and adjudicated Youths in Need of Care (YINC) on November 10, 2011. At that time, D.G. testified, he believed that if he did a “boot camp” his parental rights would not be terminated; and that the Departmentof Public Health and Human Services (the Department) planned to set in place a treatment plan for him. D.G. completed boot camp, anger management classes, parenting classes and a substance abuse course in connection with his sentence. ¶6 The court granted Temporary Legal Custody (TLC) of K.G.1 and K.G.2 to the Department on December 8, 2011. K.G.3 was born in 2012. K.G.3 was adjudicated a YINC almost immediately and the court granted the Department TLC in July, 2012. The State petitioned for termination of parental rights of both parents and for permanent legal custody, as to all three Children. ¶7 The District Court held a hearing on the matter on December 7, 2012. At that hearing, the State requested that D.G.’s rights be terminated pursuant to §§ 41-3-609(1)(d) and 41-3- 423(2)(c), MCA. Section 41-3-609(1), MCA, provides, in pertinent part: (1) The court may order a termination of the parent-child legal relationship upon a finding established by clear and convincing evidence . . . that any of the following circumstances exist: . . . (d) the parent has subjected a child to any of the circumstances listed in 41-3-423(2)(a) through (2)(e). Section 41-3-609(1)(d), MCA (emphasis added). Section 41-3-423(2), MCA, provides, in pertinent part: [T]he department may, at any time during an abuse and neglect proceeding, make a request for a determination that preservation or reunification services need not be provided . . . A court may make a finding that the department need not make reasonable efforts to provide preservation or reunification services if the court finds that the parent has: . . . 4 (c) committed aggravated assault against a child[.] Section 41-3-423(2), MCA (emphasis added). D.G.’s attorney moved to prevent the State from proceeding on this theory. D.G.’s attorney also made motions with regards to ineffective assistance of counsel (IAC); and with regards to the State’s burden of proof. The court denied D.G.’s motions. The District Court ordered termination of D.G.’s parental rights and extension of TLC, pending a second hearing on the State’s petition to terminate the parental rights of the Birth Mother. ¶8 This Court reviews a district court’s decision to terminate parental rights for an abuse of discretion. In re T.S., 2013 MT 274, ¶ 21, 372 Mont. 79, 310 P.3d 538. We will not disturb a district court’s decision on appeal unless “there is a mistake of law or a finding of fact not supported by substantial evidence[.]” In re T.S., ¶ 21. We review discretionary trial court rulings, including trial administration issues and evidentiary rulings, for abuse of discretion. In re G.M., 2009 MT 59, ¶ 11, 349 Mont. 320, 203 P.3d 818. We review a district court’s findings of fact to determine whether they are clearly erroneous and its conclusions of law to determine whether they are correct. In re T.S., ¶ 21 (citing In re E.Z.C., 2013 MT 123, ¶ 19, 370 Mont. 116, 300 P.3d 1174). ¶9 Although a parent’s right to the care and custody of a child is a fundamental liberty interest, and must be protected by fundamentally fair procedures, the best interests of the children take precedence over the parental rights. See In re T.S.B., 2008 MT 23, ¶¶ 18-19, 341 Mont. 204, 177 P.3d 429. ¶10 On appeal, D.G. argues that the District Court’s decision rested on the finding that continuing the legal parent-child relationship would result in “an ongoing risk of abuse 5 and/or neglect” and that this finding incorporated an (erroneous) finding that the conduct or condition rendering D.G. unfit was unlikely to change within a reasonable time. D.G. further argues that the District Court abused its discretion in terminating his parental rights because the State did not adhere to the proper statutory procedures: The State’s petition never asked the District Court for a determination that no treatment plan was required for D.G., or for a determination that no reasonable efforts at reunification were required. Finally, D.G. argues that the District Court erred by denying his motions at the termination hearing. ¶11 The District Court expressly stated twice in its Order that it was terminating D.G.’s parental rights pursuant to §§ 41-3-609(1)(d) and 41-3-423(2)(c), MCA. These sections do not require a court to weigh the potential that a parent’s fitness might change. In the statutory context for the District Court’s decision, the court’s finding regarding the risk of abuse and neglect to D.G.’s children serves primarily to illustrate that extending D.G.’s parental rights was not in the best interest of his children. The District Court did not err in making this finding; substantial evidence supported the court’s determination, in light of the severity of the abuse D.G. perpetrated against K.G.2. ¶12 D.G.’s second argument boils down to a question about when and how the determinations that reasonable efforts at reunification and a treatment plan are not required should occur. “[T]he rules of statutory construction require the language of a statute to be construed according to its plain meaning.” Haux v. Mont. Rail Link, Inc., 2004 MT 233, ¶ 12, 322 Mont. 456, 97 P.3d 540. “Where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all.” Section 1-2-101, MCA. The Department’s request that the District Court terminate D.G.’s parental rights pursuant to 6 §§ 41-3-609(1)(d) and 41-3-423(2)(c), MCA, was sufficient to comply with the procedural requirements governing termination without efforts at reunification. Section 41-3-423(2), MCA, provides that the Department may seek a determination that reunification is not required “at any time.” Section 41-3-423(2), MCA. The Department stated twice in its petition that it was proceeding under the aggravated circumstances provisions of the termination statute. It was clear to the District Court at the termination hearing that the State was requesting a determination that it did not need to make efforts at reunification. As a result, in its Order, the District Court concluded pursuant to § 41-3-423(2)(c), MCA, that the Department was not required to make efforts at reunification. The Department’s statement in its petition that it intended to proceed under the aggravated circumstances statutes effectively sought a determination from the court that efforts at reunification were not required. The District Court’s conclusion that efforts at reunification were not required was legally correct and complied with the statute. ¶13 D.G.’s argument with regards to the treatment plan fails because, under these circumstances, no treatment plan was required. Section 41-3-609(4)(a), MCA, provides that no treatment plan is required if the court finds, following a hearing, that the parent meets certain conditions, including having committed aggravated assault on a child. D.G. argues that termination without a treatment plan should only occur when a workable treatment plan is “impossible” and directs our attention to In re C.L.R., 211 Mont. 381, 386, 685 P.2d 926, 929 (1984). In In re C.L.R., this Court held that, where the parent challenging termination of his parental rights had been convicted of deliberate homicide for fatally abusing his child’s sibling, the facts proved the impossibility of a workable treatment plan. In re C.L.R., 211 7 Mont. at 386, 685 P.2d at 929. But for the heroic efforts to save K.G.2’s life by transporting her to a treatment facility in Salt Lake City, the facts of this case would bear a striking similarity to those in In re C.L.R. The District Court would not have abused its discretion under an impossibility standard. As we explained in In re Inquiry of Baby Boy Scott, 235 Mont. 253, 255, 767 P.2d 298, 299 (1988), however, the Legislature changed the statutory framework on which we relied in C.L.R. to create some exceptions to the requirement that a treatment plan be imposed prior to termination. One of these is the exception at issue here, where the parent has committed aggravated assault on a child. Section 41-3-609(4)(a), MCA. The argument that the State was required to ask the court for a determination that a treatment plan was not required must fail, because this case falls within the circumstances set forth in § 41-3-609(4)(a), MCA.1 The District Court’s finding that D.G. committed aggravated assault against a child after the termination hearing, was sufficient to invoke § 41-3-609(4)(a), MCA’s, exception to the treatment plan requirement. Because the District 1 In re Inquiry of Baby Boy Scott concerned termination proceedings under the statutory provisions allowing termination without a treatment plan in cases where a parent’s mental illness renders the parent unable to assume the role of a parent within a reasonable time. In re Inquiry of Baby Boy Scott, 235 Mont. at 255, 767 P.2d at 299. In that context, our decision required that the testimony establishing the parent’s inability to assume the role of a parent also establish that the parent’s condition was unlikely to change within a reasonable time. In re C.R.O., 2002 MT 50, ¶ 7, 309 Mont. 48, 43 P.3d 913. In recognition of that requirement, the 2003 Legislature revised § 41-3-609(4)(b), MCA, to provide: “A treatment plan is not required under this part upon a finding by the court following hearing if: . . . (b) two medical doctors or clinical psychologists submit testimony that the parent cannot assume the role of parent within a reasonable time.” (Emphasis added). The “reasonable time” condition does not apply where a treatment plan is not required pursuant to § 41-3-609(4)(a), MCA. To read the statute to require finding a parent’s conduct or condition unlikely to change within a reasonable time, where the criteria set forth in §§ 41-3- 609(1)(a)-(e), MCA, are met, would lead to an absurd result. 8 Court concluded, following the termination hearing, that D.G. had committed aggravated assault on a child, the statute did not require a treatment plan to be set in place. ¶14 Nor did the District Court abuse its discretion in denying D.G.’s motions at the termination hearing. The record supports the District Court’s conclusion that D.G. had been put on notice consistently from the inception of the case that the State intended to file for termination on the grounds that he assaulted his child.2 Although D.G.’s counsel showed an admirable willingness to “throw himself under the bus” for his client, his motion at the hearing did not show that D.G. had suffered from ineffective assistance of counsel. The District Court did not abuse its discretion in denying that motion. Finally, the District Court did not abuse its discretion in denying D.G.’s motion regarding the State’s burden of proof because the grounds for the motion incorporated standards from a section of the statute upon which the District Court’s decision did not rely. D.G. provides no authority supporting his arguments that the District Court improperly denied these motions; and we are not persuaded that the District Court abused its discretion in doing so. ¶15 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The issues in this case are controlled by the statutes and precedent. The District Court did not abuse its discretion in terminating D.G.’s parental rights under the aggravated assault provisions of the 2 For instance, the order dated April 16, 2012 provided that the State planned to terminate the father’s parental rights based on his conviction for assaulting K.G.2. In the State’s petition to extend TLC, dated June 15, 2012, the State also announced that it planned to terminate D.G.’s rights under the theory of aggravated circumstances. In a hearing held on October 25, 2012, the State again stated it planned to terminate D.G.’s parental rights. 9 termination statute. Although we recognize D.G.’s efforts at rehabilitation, we agree with the District Court that it is not in the Children’s best interest to continue this parent-child relationship. ¶16 Affirmed. /S/ MICHAEL E WHEAT We concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JIM RICE	December 3, 2013
60d949fd-c46c-44bb-bb30-80da5af2a35c	State v. Sonny Carsten	2013 MT 304N	DA 13-0117	Montana	Montana Supreme Court	DA 13-0117 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 304N STATE OF MONTANA, Plaintiff and Appellee, v. SONNY L. CARSTEN, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-Second Judicial District, In and For the County of Stillwater, Cause No. DC 02-20 Honorable Blair Jones, Presiding Judge COUNSEL OF RECORD: For Appellant: Fred Snodgrass, Snodgrass, Copenhaver & Yasenak, PLLC; Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General; Helena, Montana John Petak III, Stillwater County Attorney, Nancy Rohde, Deputy County Attorney; Columbus, Montana Submitted on Briefs: October 2, 2013 Decided: October 15, 2013 Filed: __________________________________________ Clerk October 15 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Appellant Sonny L. Carsten (Carsten) appeals the order of the Twenty-Second Judicial District Court, Stillwater County, that denied his motion to dismiss his criminal case. We affirm. ¶3 The State of Montana (State) charged Carsten on April 15, 2002, in Justice Court in Stillwater County with three sex-related charges. Carsten was 20 years old at the time that he was charged. The State filed a motion on July 30, 2002, for leave to file an information in District Court that charged Carsten with three counts of felony rape. The District Court granted leave to file the information on August 8, 2002. Carsten was 21 years old at the time. Carsten entered a not guilty plea at his initial appearance in District Court on August 12, 2002. ¶4 The State and Carsten entered into a non-binding written plea agreement on September 4, 2002, whereby Carsten admitted that he “had sexual intercourse w/L.L. on or about Oct. 18, 1997. She was under the age of 16; and I was 3 or more years older then [sic] her.” The State agreed to dismiss two of the counts in exchange for Carsten’s guilty plea. The State further agreed to recommend a three-year deferred imposition of sentence. Carsten acknowledged that he was waiving his rights to a jury trial, to confront the witnesses against 3 him, to subpoena witnesses on his behalf, his right to an appeal, and his privilege against self-incrimination. ¶5 Carsten appeared before the District Court for a change of plea hearing on September 10, 2002. Carsten admitted that he knowingly had engaged in sexual intercourse with L.L. during the summer of 1999 when she was 14 years old and he was more than 3 years older than she. The District Court rejected the State’s recommendation for sentence and instead committed Carsten to ten years to the Department of Corrections, with five years suspended. ¶6 Carsten did not appeal his conviction or sentence. He did not file a petition for postconviction relief or a motion to withdraw his guilty plea. The Department of Corrections in 2006 granted Carsten credit for pre-trial time served of 51 days. Carsten was discharged from the Department of Corrections custody on November 16, 2007. Carsten discharged his probationary period on November 16, 2012. ¶7 Carsten filed a motion to dismiss his case about nine days before the expiration of his sentence. Carsten contended that the District Court had violated his constitutional right to due process when it had “denied his statutory right to a transfer hearing under the Youth Court Act and the sentence imposed exceeded his twenty-fifth birthday.” Carsten requested that the District Court set aside or expunge his “illegal conviction,” dismiss his case with prejudice, seal the criminal file, and relieve him of the requirement to register as a sexual offender. The District Court denied Carsten’s motion on the basis that Carsten never had been entitled to a transfer hearing due to the fact that he had been over the age of 21 when 4 the State had filed information in District Court and the only charge to which he had been convicted involved an adult offense that could not support a transfer to youth court. Carsten appeals. ¶8 We review de novo a district court’s denial of a motion to dismiss in a criminal proceeding. State v. Burns, 2011 MT 167, ¶ 17, 361 Mont. 191, 256 P.3d 944. The State argues, however, that Carsten has filed what amounts to a petition for postconviction relief that we review, pursuant to Crosby v. State, 2006 MT 155, ¶ 9, 332 Mont. 460, 139 P.3d 832, under a clearly erroneous standard for the District Court’s findings of fact and for correctness for the Court’s conclusions of law. Neither party seems to dispute the factual background of the case, thus we review de novo the District Court’s legal conclusions. Crosby, ¶ 9. ¶9 Carsten argues on appeal that he was under 21 years of age at the time the State first charged him and that at least one of the counts in the information involved conduct that he allegedly had committed while under the age of 18. Carsten claims that this fact entitled him to a transfer hearing under the Youth Court Act. He further contends the District Court lacked jurisdiction to impose this sentence on him as an adult without first conducting a transfer hearing. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our 1996 Internal Operating Rules, as amended in 2006, that provides for memorandum opinions. It is manifest on the face of briefs and the record before us that the District Court correctly applied the law to the largely undisputed facts in this case. ¶11 Affirmed. 5 /S/ BRIAN MORRIS We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JIM RICE /S/ LAURIE MCKINNON	October 15, 2013
84ed2c8b-631f-4fcc-9d42-b2b871294a4b	STATE v MINGUS	2004 MT 24	03-461	Montana	Montana Supreme Court	No. 03-461 IN THE SUPREME COURT OF THE STATE OF MONTANA 2004 MT 24 STATE OF MONTANA, Plaintiff and Respondent, v. ROBERT MINGUS, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DC 2002-0785, Honorable Gregory R. Todd, Presiding Judge COUNSEL OF RECORD: For Appellant: Gary E. Wilcox, Attorney at Law, Billings, Montana For Respondent: Honorable Mike McGrath, Attorney General; Tammy K. Plubell, Assistant Attorney General, Helena, Montana Dennis Paxinos, County Attorney; Ed Zink, Deputy County Attorney, Billings, Montana Submitted on Briefs: December 4, 2003 Decided: February 5, 2004 Filed: __________________________________________ Clerk 2 Justice W. William Leaphart delivered the Opinion of the Court. ¶1 Robert Mingus (Mingus) appeals the sentence imposed by the District Court. We reverse in part, affirm in part, and remand. ¶2 The issue presented on appeal is whether the District Court erred in sentencing by (a) ordering a $1,000 fine; (b) not giving Mingus credit toward the fine for his pretrial detention; and (c) ordering payment for aftercare treatment. Factual and Procedural Background ¶3 On October 24, 2002, Mingus was charged by Information with the offense of Driving Under the Influence of Alcohol or Drugs (DUI), a felony, in violation of § 61-8-401, MCA, and with Driving While License Suspended or Revoked, a misdemeanor, in violation of § 61- 5-212, MCA. On December 20, 2002, Mingus pled guilty to the DUI charge and the State agreed to dismiss the Driving While License Suspended or Revoked charge at sentencing. The court ordered a presentence investigation (PSI). The PSI listed Mingus’s debts and assets as zero. It also stated that prior to his arrest, Mingus was employed as a maintenance worker at an auto business, making approximately $1,280 per month. The PSI indicated Mingus would be able to return to that job once he was on probation. ¶4 In May of 2003, the District Court sentenced Mingus to a period of thirteen months to a facility approved by the Department of Corrections, subject to probation if he completed a residential alcohol treatment program. Additionally, he was sentenced for five years to the Montana State Prison, all suspended and to run consecutively to the thirteen-month term already imposed. The court also imposed a $1,000 fine. The record reflects that the court 3 considered the PSI which recommended certain conditions as part of Mingus’s probation. These conditions relevant to this appeal included: 5. The Defendant shall obtain a chemical dependency evaluation by a state approved treatment provider/facility, at his own expense, and follow all recommendations of said evaluation. 12. The Defendant shall pay a fine of not less than $1,000 or more than $10,000. 13. The Defendant, if financially able, as a condition of probation, shall pay $50 per day for the cost of imprisonment and/or alcohol treatment for the length of time the offender is imprisoned or in in-patient alcohol treatment. 16. The Defendant will enter and remain in an aftercare treatment program for the entirety of the probationary period. The Defendant will pay for the cost of out-patient alcohol treatment during the term of probation. ¶5 In District Court, Mingus objected to Conditions 12, 13, and 16. The record does not reflect that he properly objected to Condition 5. After voicing his objections, Mingus asked the court to follow the remainder of the plea agreement. The court engaged in the following colloquy with Mingus: THE COURT: Anything that you want to say, Mr. Mingus? MINGUS: No, sir. THE COURT: Well, you’ve obviously had a long history and involvement with the legal system, and it appears there’s some agreement here on maybe some underlying causes. Until you get a handle on your alcohol, you may just keep continually racking up some of these charges. I will order you sentenced to thirteen months to the Department of Corrections, followed by five years of probation, and I’m going to order you to pay a thousand dollar fine. I’m not going to give you credit for time served. It will be over and above any credit applying to the fine. I will give you credit for the time you’ve spent in jail and in prison on this sentence. 4 ¶6 At sentencing, the court discussed the changes it would make to the conditions recommended in the PSI. Condition 12 was modified to specify a fine of $1,000 to be credited to the general fund. The court stated Condition 16 would be modified “to say that you will enter and remain in [the aftercare] program for the entirety of the probationary period or so long as it’s recommended by the chemical dependency evaluation and your probation officer. And financially, you’re going to be ordered to pay that, because I think No. 5 also says that.” Conditions 5 and 13 were unchanged. The court noted that Condition 13 required Mingus to pay costs of imprisonment and in-patient alcohol treatment only if he was financially able; the court observed that it appeared in all probability Mingus would not be able to pay these costs. ¶7 The District Court subsequently entered a written judgment. The only variation between the oral sentence and the written sentence was in Condition 16. In the written judgment, Condition 16 required Mingus to remain in the “aftercare program for the entirety of the probationary period or so long as recommended by chemical dependency evaluation, Probation and Parole Officer, and is financially able.” The italicized portion was not in the oral sentence. ¶8 At the time Mingus was arrested for the current charges, he was on parole for previous offenses. As a result of the current charges, his parole was revoked and he is now incarcerated in the Montana State Prison serving out the prior sentence. The sentence in the present case will begin to run after the prior sentence is completed. Mingus filed this timely appeal. 5 Discussion ¶9 Issue: Whether the District Court erred in sentencing by (a) ordering a $1,000 fine; (b) not giving Mingus credit toward his fine for his pretrial detention; and (c) ordering payment for aftercare treatment? ¶10 We review a criminal sentence for legality only, ascertaining whether the sentence falls within the statutory parameters. State v. Micklon, 2003 MT 45, ¶ 5, 314 Mont. 291, ¶ 5, 65 P.3d 559, ¶ 5. A sentence is not illegal when it falls within the statutory parameters. State v. McLeod, 2002 MT 348, ¶ 12, 313 Mont. 358, ¶ 12, 61 P.3d 126, ¶ 12. We will address Conditions 12, 13, and 16. Mingus did not properly object to Condition 5 in the District Court. We have repeatedly held that “we will not review issues where the defendant failed to make a contemporaneous objection to the alleged error in the trial court” unless a sentence is illegal or exceeds the statutory parameters. Micklon, ¶ 8. “We will not put a district court in error for an action in which the appealing party acquiesced or actively participated.” Micklon, ¶ 10 (citation omitted). Because Mingus did not object to Condition 5 and then asked the court to follow the plea agreement, we will not address this condition on appeal. Micklon, ¶ 8. $1,000 Fine ¶11 A person who violates § 61-8-401, MCA, shall be sentenced in accordance with § 61- 8-731, MCA. Section 61-8-731, MCA, requires a fine of not less than $1,000 or more than $10,000. A sentencing judge is not required “to specify a period of time for payment of the fine or to specify whether the payment is to be made in installments[.]” McLeod, ¶ 35. 6 ¶12 Mingus’s argument is two-fold. First, he claims that the court erred because it did not set a payment schedule for Mingus to pay his fine. Second, Mingus claims that the court failed to comply with its statutory duty under § 46-18-231, MCA, to inquire into Mingus’s ability to pay the fine and the burden that payment of the fine would impose. ¶13 The court imposed the minimum allowable statutorily-required fine of $1,000. Since the fine was mandated by statute, Condition 12 was clearly within the statutory parameters. Section 61-8-731, MCA. Mingus contends that because the court did not establish a payment plan, technically the payment becomes due immediately. Section 46-18-234, MCA, provides: “Whenever a defendant is sentenced to pay a fine or costs under 46-18-231 or 46- 18-232, the court may grant permission for payment to be made within a specified period of time or in specified installments. If no such permission is included in the sentence, the payment is due immediately.” Accordingly, Mingus claims he would already be in default. However, Mingus was not fined pursuant to § 46-18-231, MCA, or § 46-18-232, MCA. Therefore the court was not required to specify the payment schedule. Additionally, we have stated that a sentencing judge is not required “to specify a period of time for payment of the fine or to specify whether the payment is to be made in installments[.]” McLeod, ¶ 35. The court was not in error when it did not specify when Mingus was to pay his fine. ¶14 Mingus claims that the court erred when it did not, prior to ordering the fine, inquire into his ability to pay the fine. We have previously required courts, before imposing a fine, to inquire whether a defendant would be able to pay a fine, considering the defendant’s financial resources and the extent of the resulting financial burden. However, these cases 7 have dealt with discretionary, not mandatory, fines. McLeod; State v. Farrel (1984), 207 Mont. 483, 676 P.2d 168; State v. Lenihan (1979), 184 Mont. 338, 602 P.2d 997. ¶15 In cases involving discretionary fines, when a defendant “has been found guilty of an offense for which a felony penalty of imprisonment could be imposed, the sentencing judge may, in lieu of or in addition to a sentence of imprisonment, impose a fine only in accordance with subsection (3).” Section 46-18-231(1)(a), MCA (emphasis added). Section 46-18-231(3), MCA, states that a “sentencing judge may not sentence an offender to pay a fine unless the offender is or will be able to pay the fine. In determining the amount and method of payment, the sentencing judge shall take into account the nature of the crime committed, the financial resources of the offender, and the nature of the burden that payment of the fine will impose.” This statutory provision does not apply to mandatory fines. When a fine is statutorily mandated, the court has no discretion as to whether to impose the fine, irrespective of the defendant’s ability to pay. The District Court did not err when it imposed the mandatory $1,000 fine without specifying a payment schedule or inquiring into Mingus’s ability to pay the fine. Credit for Pretrial Detention ¶16 A sentencing court must give “credit for each day of incarceration against both the sentence and any fine imposed.” State v. Fisher, 2003 MT 33, ¶ 13, 314 Mont. 222, ¶ 13, 65 P.3d 223, ¶ 13. Section 46-18-403(2), MCA, provides that [a]ny person incarcerated on a bailable offense who does not supply bail and against whom a fine is levied on conviction of the offense must be allowed a 8 credit for each day of incarceration prior to conviction, except that the amount allowed or credited may not exceed the amount of the fine. We have previously stated that the language in § 46-18-203(2) is mandatory. Fisher, ¶ 13. ¶17 Mingus was incarcerated for 193 days before his conviction. Mingus claims the court erred when it did not credit his pretrial incarceration toward his $1,000 fine. The record reflects the judge correctly gave him credit for his pretrial incarceration toward the time to be served in prison. However, the record clearly reflects the court did not give Mingus pretrial-detention credit toward the fine as required by § 46-18-403(2), MCA. The court stated that “I’m going to order you to pay a thousand dollar fine. I’m not going to give you credit for time served. . . . I will give you credit for the time you’ve spent in jail and in prison on this sentence.” ¶18 The State concedes that Mingus’s pretrial incarceration should have been credited toward the $1,000 fine. We agree. The District Court was in error when it did not give Mingus credit toward both the sentence and the fine. Aftercare Treatment ¶19 Section 61-8-731(3)(f), MCA, requires as a probationary condition that the person enter into and remain in an aftercare program for the entire probationary period. Applicable to that requirement is § 61-8-731(3)(b), MCA, which provides, as a condition of probation, the court shall order “a person who is financially able to pay the costs of imprisonment, probation, and alcohol treatment[.]” 9 ¶20 When the court orally sentenced Mingus for Condition 16, the court did not mention consideration of Mingus’s ability to pay for the aftercare program. Instead, the court simply stated that Mingus was required to pay for the aftercare program. The subsequent written sentencing order, however, did require consideration of Mingus’s financial ability to pay. Because the oral sentence and the written sentence for Condition 16 differ, the oral sentence will control. State v. Lane, 1998 MT 76, ¶ 40, 288 Mont. 286, ¶ 40, 957 P.2d 9, ¶ 40. ¶21 The record reflects that the court considered the PSI. The PSI reflected Mingus’s debts and assets as zero. The PSI also stated that, prior to incarceration, Mingus was earning approximately $1,280 per month and that he could return to this job once he was no longer in prison. The record does not reflect that the court made a separate inquiry into whether Mingus would be able to pay any costs imposed or whether such payment might cause hardship. ¶22 Mingus contends that because the court sentenced him to pay for the aftercare costs without a full inquiry into his ability to pay these costs, he is set up for immediate probation violations. Mingus is statutorily required to complete the aftercare treatment program pursuant to § 61-8-731(3)(f), MCA. He is only required to pay for this treatment if he is financially able to do so. Section 61-8-731(3)(b), MCA. Therefore, the court must make specific findings to determine whether Mingus is financially able to pay these costs. ¶23 The oral sentence does not take into account Mingus’s ability to pay for aftercare treatment, as required by § 61-8-731(3)(b), MCA. Although the written sentence does 10 reference financial ability, the District Court still did not make the requisite findings regarding Mingus’s ability to pay for the aftercare program. ¶24 We remand this case to the District Court for resentencing consistent with this opinion. /S/ W. WILLIAM LEAPHART We concur: /S/ KARLA M. GRAY /S/ JOHN WARNER /S/ PATRICIA O. COTTER /S/ JIM REGNIER /S/ JAMES C. NELSON /S/ JIM RICE	February 5, 2004
d954ce28-0808-4bc6-8896-66eb6dc03639	State v. Mederos	2013 MT 318	DA 12-0577	Montana	Montana Supreme Court	DA 12-0577 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 318 STATE OF MONTANA, Plaintiff and Appellee, v. LLOYD EUGENE MEDEROS, Defendant and Appellant. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Silver Bow, Cause No. DC 11-83 Honorable Brad Newman, Presiding Judge COUNSEL OF RECORD: For Appellant: Joseph P. Howard, P.C., Attorney at Law; Great Falls, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General; Helena, Montana Eileen Joyce, Silver Bow County Attorney, Samm Cox, Deputy County Attorney; Butte, Montana Submitted on Briefs: August 14, 2013 Decided: October 29, 2013 Filed: __________________________________________ Clerk October 29 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Lloyd Eugene Mederos (Mederos) appeals his conviction from the Second Judicial District Court, Silver Bow County. We affirm. ¶2 We address the following issue on appeal: ¶3 Whether Mederos’s trial counsel rendered ineffective assistance of counsel. PROCEDURAL AND FACTUAL BACKGROUND ¶4 A.R. and A.S. were both seven years old at the time that they alleged Mederos sexually assaulted them. A.S. lived with her mother Laura. A.R. lived with her mother, Laura’s sister, Kelley. Mederos was married to Kelley, so he also lived with A.R. A.S. and A.R. were close friends and spent lots of time together. ¶5 In 2011, A.S. told Laura that she did not want to go to her Aunt Kelley’s apartment because Mederos had been “sexing” her. A.S. also told Laura that Mederos had engaged in sexual contact with A.R. Laura contacted Kelley and the girls’ grandfather, Larry. Laura, Kelley, and Larry confronted Mederos. Mederos denied the claims. Laura reported Mederos to the police. ¶6 Forensic investigators interviewed the girls. The girls provided vague and unclear accounts during the forensic interviews. Medical examinations showed some signs of trauma, but ultimately proved inconclusive. ¶7 Mederos denied the charges at trial. The two girls testified at trial. Both girls offered disjointed and, at times, contradictory testimony about what happened. A.R. and A.S. often 3 responded that they did not remember what happened when counsel for the State or Mederos’s counsel asked them for more details. ¶8 Laura, Kelley, and Larry all testified at trial about the events of the night that A.S. told Laura that Mederos had been “sexing” her. The State also presented the testimony of other witnesses. These other witnesses included clinical social worker Dawn English (English), pediatrician Dr. Kenneth Graham (Graham), and forensic interviewers Shawna Guay (Guay) and Sue Casey (Casey). English testified about her therapy sessions with A.R. and A.S. She commented that A.S. had made consistent statements during therapy. Graham discussed his medical examination of the girls and what he had reported in his forensic medical reports. Both Guay and Casey testified about their forensic interviews with the girls. ¶9 A jury convicted Mederos of both counts of sexual assault. The District Court sentenced Mederos to concurrent 100 year sentences at Montana State Prison, with 50 years of each sentence suspended. Mederos appeals. STANDARD OF REVIEW ¶10 Claims of ineffective assistance of counsel present mixed issues of law and fact that we review de novo. State v. Clary, 2012 MT 26, ¶ 12, 364 Mont. 53, 270 P.3d 88. DISCUSSION ¶11 Mederos argues that his trial counsel rendered ineffective assistance of counsel in two areas. Mederos first contends that his counsel failed to object to numerous incidences of hearsay testimony by various witnesses. He also argues that his counsel improperly stipulated to the admission of multiple items of evidence that contained otherwise 4 inadmissible hearsay statements. Mederos contends that this evidence bolstered A.R.’s and A.S.’s testimony and raises a reasonable probability that the outcome of the proceedings would have been different if this additional, cumulative evidence had not been admitted. ¶12 We evaluate claims of ineffective assistance of counsel under the two-prong test set forth in Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064 (1984). State v. Howard, 2011 MT 246, ¶ 20, 362 Mont. 196, 265 P.3d 606. A defendant must establish that: (1) counsel’s performance was deficient and (2) the deficient performance prejudiced the defendant. Rosling v. State, 2012 MT 179, ¶ 23, 366 Mont. 50, 285 P.3d 486. A defendant must establish both prongs of the test. Whitlow v. State, 2008 MT 140, ¶ 11, 343 Mont. 90, 183 P.3d 861. We will not address both prongs if a defendant fails to establish either prong. Whitlow, ¶ 11. ¶13 A deficient performance falls “below an objective standard of reasonableness measured under prevailing professional norms and in light of the surrounding circumstances.” Whitlow, ¶ 20. We have recognized “ ‘a strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance.’ ” Whitlow, ¶ 15, quoting Strickland, 466 U.S. at 689, 104 S. Ct. at 2065. A petitioner who argues that his counsel’s “failure to object rendered counsel ineffective must show that counsel’s trial objection would have been proper and that the court likely would have sustained the objection.” Rogers v. State, 2011 MT 105, ¶ 16, 360 Mont. 334, 253 P.3d 889. ¶14 Mederos argues first that his counsel failed to object to multiple and repeated instances of hearsay testimony. Mederos posits that Laura, Kelley, and Larry offered 5 impermissible hearsay testimony regarding earlier statements made by A.R. and A.S. Mederos also argues that Graham, English, Guay, and Casey improperlytestified to the girls’ out-of-court statements and identifications of Mederos as the perpetrator. The State argues that Mederos’s trial counsel used testimony from these witnesses to cast doubt on the girls’ credibility. ¶15 Not all out-of-court statements constitute hearsay. Montana Rule of Evidence 801(d)(1) specifically excludes from the hearsay rule a prior statement by a witness where “the declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement” under two separate circumstances relevant here. The first circumstance involves a statement that is “inconsistent with the declarant’s testimony.” M. R. Evid. 801(d)(1)(A). The second circumstance involves a statement that is “consistent with the declarant’s testimony and is offered to rebut an express or implied charge against the declarant of subsequent fabrication, improper influence or motive.” M. R. Evid. 801(d)(1)(B). ¶16 Mederos must show that hearsay objections would have been proper and that the trial court would have sustained the objection to support his claims of ineffective assistance. Rogers, ¶ 16. A.R. and A.S. both testified at trial and Mederos’s counsel cross-examined each regarding their earlier statements. Many of A.R.’s and A.S.’s prior statements likely would qualify as prior inconsistent statements. ¶17 A claimed lapse of memory represents an inconsistency under M. R. Evid. 801(d)(1)(A). Howard, ¶ 31, citing State v. Lawrence, 285 Mont. 140, 159, 948 P.2d 186, 6 198 (1997). A.R. and A.S. frequently responded that they did not know or could not remember answers to questions during direct and cross-examination. The girls’ testimony charitably can be described as vague at times and somewhat unclear. The repeated lapses in memory in the girls’ testimony allowed the State to introduce other witnesses to testify about the girls’ prior inconsistent statements. See Howard, ¶ 31, citing Lawrence, 285 Mont. at 159, 948 P.2d at 198. ¶18 Laura’s, Kelley’s, and Larry’s testimony introduced the girls’ prior inconsistent statements. A court may admit consistent statements in conjunction with inconsistent statements where the nature of a witness’s testimony makes it difficult for the court to separate the consistent from the inconsistent portions of the prior statement. Howard, ¶ 31, citing Lawrence, 285 Mont. at 160, 948 P.2d at 198. The witnesses admittedly mixed consistent statements with inconsistent ones. The record indicates that toparse the consistent statements from the inconsistent statements likely would have made the witnesses’ testimony disjointed and confusing. See Howard, ¶ 31, citing Lawrence, 285 Mont. at 160, 948 P.2d at 198. ¶19 For example, A.S. testified that she had talked to her mother about Mederos on February 28, 2011. Mederos’s counsel asked A.S. on cross-examination when she first had told her mother that Mederos had been molesting her. A.S. responded that she did not remember. A.S.’s disjointed testimony failed to provide a clear picture of what actually happened on February 28, 2011. Laura testified about events that happened the night that A.S. told Laura that Mederos had been “sexing” her. Laura’s testimony clarified what she 7 and A.S. had discussed on February 28, 2011, and what A.S. had told her about Mederos. For the District Court to have admitted only parts of Laura’s testimony would have led to a piecemeal picture of what had happened that likely would have further confused the jury. Laura’s testimony provided a time frame and context for A.S.’s testimony about what happened when she told her mother about Mederos. ¶20 Mederos’s counsel may have had strategic reasons for not objecting even if all of Laura’s, Kelley’s, and Larry’s testimony did not fall under M. R. Evid. 801(d)(1)(A). We have held that counsel’s use of objections “lies within his or her discretion.” Riggs v. State, 2011 MT 239, ¶ 53, 362 Mont. 140, 264 P.3d 693. Riggs also involved a sexual assault case against minors. Riggs raised an ineffective assistance of counsel claim based on his counsel’s failure to object when several witnesses—the victims’ mothers, social workers, and law enforcement officers—offered prior consistent statements made by the victims. Riggs, ¶ 50. ¶21 Riggs’s counsel testified at an evidentiary hearing on Riggs’s petition for post- conviction relief that he had not objected to these witnesses’ statements because he wanted to point out the numerous inconsistencies in the victims’ statements. Riggs, ¶ 53. We recognized that different counsel have different trial strategies and that Riggs’s counsel’s strategy was objectively reasonable. Riggs, ¶ 54. As in Riggs, Mederos’s counsel may have opted not to object to Laura’s, Kelley’s, and Larry’s testimony in order to highlight inconsistencies in the girls’ stories. Mederos’s counsel had discretion not to object. Riggs, ¶ 53. 8 ¶22 Mederos next asserts that Graham, the examining pediatrician, improperly testified to A.R.’s out-of-court statements recorded by the forensic interview team. Mederos classifies this testimony by Graham as hearsay within hearsay. Mederos ignores the fact that the parties previously had stipulated to the admission of A.R.’s forensic interview. Graham simply testified to matters previously admitted into evidence through the forensic interviews and forensic medical reports that he had prepared. ¶23 Mederos also argues that Graham offered impermissible hearsay that A.S. “had disclosed digital/vaginal penetration.” The parties previously had stipulated to the admission of A.S’s forensic medical report created by Graham. Graham’s testimony repeated statements that he had made in A.S.’s forensic medical report, including the notion that A.S. “had disclosed digital/vaginal penetration.” ¶24 Presentation to a jury of admissible evidence that proves the same facts as tainted evidence usually amounts to harmless error when the tainted evidence qualifies as cumulative of the admissible evidence. State v. Van Kirk, 2001 MT 184, ¶ 47, 306 Mont. 215, 32 P.3d 735. We have characterized as cumulative a witness’s testimony regarding out- of-court statements, and, thus, harmless error, as the statements mirrored those made on a 911 tape that the trial court earlier had admitted without objection. State v. Mizenko, 2006 MT 11, ¶ 26, 330 Mont. 299, 127 P.3d 458. ¶25 Graham’s testimony repeated statements made in A.R.’s forensic interview and A.S.’s forensic medical report. Both documents earlier had been admitted without objection. Graham’s testimony would qualify as cumulative of the previously admitted documents. 9 Van Kirk, ¶ 47. The District Court’s admission of Graham’s statements, regardless whether Mederos’s counsel objected, would be subject to harmless error analysis. Van Kirk, ¶ 47. “An ineffective assistance of counsel claim cannot succeed when predicated on counsel’s failure to take an action which, under the circumstances, would likely not have changed the outcome of the proceeding.” State v. Haldane, 2013 MT 32, ¶ 37, 368 Mont. 396, 300 P.3d 657. ¶26 Mederos contends that social worker English repeated hearsay statements in her testimony when the State asked English whether A.S. had been consistent about her allegations and the identity of her abuser. English testified that A.S. had been “completely consistent.” English’s testimony regarding A.S.’s prior consistent statement likely would not qualify as hearsay under M. R. Evid. 801(c). English did not restate A.S.’s prior statements in court to prove the “truth of the matter asserted” in the statements. M. R. Evid. 801(c). Rather, English testified in response to Mederos’s attacks on A.S.’s veracity as a witness. See State v. Robins, 2013 MT 71, ¶ 11, 369 Mont. 291, 297 P.3d 1213 (discussing situations in which it would be appropriate for an expert witness to testify about a child sexual abuse victim’s credibility). English contended that A.S. consistently had alleged that Mederos had engaged in sexual conduct with her. Mederos’s counsel legitimately could have believed that he did not have grounds to object to the statement as hearsay. See State v. Aker, 2013 MT 253, ¶ 36, 371 Mont. 491, ___P.3d ___. ¶27 Mederos also argues that forensic interviewers Guay and Casey presented hearsay statements. Guay and Casey testified regarding statements made by A.R. and A.S. during 10 forensic interviews. The parties previously had stipulated to the admission of the forensic interviews. The statements would qualify as cumulative of the previously admitted forensic interviews. Mizenko, ¶ 26; Van Kirk, ¶ 47. Cumulative evidence will be deemed harmless “ ‘unless the record shows that the error was prejudicial.’ ” State v. Hansen, 1999 MT 253, ¶ 86, 296 Mont. 282, 989 P.2d 338, quoting State v. Carter, 285 Mont. 449, 459, 948 P.2d 1173, 1178-79 (1997); § 46-20-701(1), MCA. Unfairly prejudicial evidence “arouses the jury’s hostility or sympathy for one side without regard to its probative value.” State v. Ugalde, 2013 MT 308, ¶ 47, 372 Mont. 234, ___ P.3d ___. ¶28 Mederos’s counsel could exercise discretion regarding when to object. Riggs, ¶ 53. He may have chosen not to object for a variety of reasons, even when a witness proffered hearsay testimony. Testimony from Laura, Larry, Kelley, Graham, Guay, and Casey contradicted the girls’ vague and erratic testimony throughout trial. Mederos’s counsel successfully brought out these contradictions through cross-examination. Mederos’s counsel may have anticipated that these witnesses’ testimony would create a tangled story that ultimately would undermine the girls’ credibility. ¶29 Mederos next challenges the District Court’s admission of various items of evidence in the record that he argues should have been excluded as hearsay. A statement can be oral or written for purposes of hearsay. M. R. Evid. 801(a). Mederos’s counsel stipulated to the admission of all the State’s exhibits before trial. This stipulation included four main items: (1) video recordings of the girls’ forensic interviews, (2) drawings and pictures created 11 during the girls’ forensic interviews, (3) reports from the girls’ forensic medical exams, and (4) A.S.’s emergency room medical report. ¶30 The girls frequently mentioned that they could not remember certain events throughout their testimony. As discussed previously, lapsed memories constitute inconsistent statements under M. R. Evid. 801(d)(1)(A). Howard, ¶ 31, citing Lawrence, 285 Mont. at 159, 948 P.2d at 198. The girls also made statements at trial directly inconsistent with statements they had offered during the forensic interviews. For example, A.S. told Casey during her forensic interview that Mederos had twice put his finger in her “pee-pee.” A.S. testified in trial, though, that Mederos put his finger in her “pee-pee” three times and that she “remember[ed] telling everyone that…he put his finger in [her] pee-pee three times.” ¶31 Mederos’s counsel cross-examined A.R. and A.S. and the other witnesses presented by the State regarding these inconsistent statements. Mederos’s counsel highlighted the fact that A.S. testified differently at trial than she had testified during the forensic interviews. These inconsistencies may have prompted Mederos’s counsel to stipulate to the admission of the forensic reports for strategic reasons to help undermine the girls’ testimony through cross-examination. Counsel’s actions, taken in this light, do not appear to fall “below an objective standard of reasonableness measured under prevailing professional norms.” Whitlow, ¶ 20. ¶32 The State introduced pictures and drawings from the girls’ forensic interviews. A.R. labeled body parts on a picture of the human body during her forensic interview. The State 12 used the picture to establish how A.R. identified different body parts. The State did not use the picture with A.R’s annotations to establish that the picture presented a true and accurate representation of the human body. The State instead introduced the picture to demonstrate to, and clarify for, the jury the names that A.R. used for different body parts. ¶33 A.S. drew a picture during her forensic interview. A.S.’s drawing depicted events that A.S. claimed had happened in the bedroom with Mederos. A.S. denied at trial having made the drawing. The admission of the drawing, coupled with A.S.’s denial of having made the drawing, undermined A.S.’s credibility as a witness. The decision by Mederos’s counsel to stipulate to admission of the drawing had the potential to help Mederos’s case as evidenced by A.S.’s denial that she had made the drawing. ¶34 Graham created separate forensic medical reports for A.S. and A.R. Both medical reports contain fertile ground for cross-examination. A.S.’s medical report illuminates inconsistencies in her claims. A.S. states in the report that Mederos had touched her in January. A.S.’s mother testified at trial, however, that A.S. had not been to Mederos’s house in January. A.R.’s medical report indicates that she previously had been to the Child Evaluation Center based on allegations of possible sexual abuse by a different family member. Both reports provide inconclusive physical evidence of sexual abuse. ¶35 The State also introduced a medical report from A.S.’s emergency room visit after Laura had reported the case to the police. A.S. reported the presence of “white stuff” in her vaginal area after Mederos had molested her. One might deduce that the “white stuff” had been semen. The emergency room medical report offers another possible explanation, 13 however, for “white stuff” found in A.S.’s vaginal area. The report speculates that A.S. might have had a yeast infection. Mederos’s counsel reasonably could have anticipated that the admission of these medical reports would benefit his client. This interpretation would position Mederos’s counsel’s actions within the standard of reasonable professional assistance. See Whitlow, ¶ 14, citing Strickland, 466 U.S. at 687-88, 104 S. Ct. at 2065. ¶36 We ask “why” Mederos’s counsel did or did not perform as alleged in evaluating Mederos’s counsel’s performance throughout trial. Aker, ¶ 34, citing Howard, ¶ 21. We look to the record to answer this question. Aker, ¶ 34, citing Howard, ¶ 21. We cannot address a claim of ineffective assistance of counsel on direct appeal if the defendant bases his claim on matters outside of the record. Aker, ¶ 34, citing State v. Kougl, 2004 MT 243, ¶ 14, 323 Mont. 6, 97 P.3d 1095. A petition for post-conviction relief would allow Mederos to develop a record to explain “why” his counsel acted as he did at trial. Aker, ¶ 34. A reviewing court then could determine “ ‘whether counsel’s performance was ineffective or merely a tactical decision.’ ” Aker, ¶ 34, quoting Kougl, ¶ 14. ¶37 The evidence as a whole illuminates inconsistencies in the girls’ story and undermines their veracity as witnesses. Mederos’s counsel addressed these inconsistencies in his closing statements. Mederos’s counsel also may have perceived that all of the statements and evidence contested by Mederos did not actually violate hearsay rules. The trial record does not include an explanation for Mederos’s counsel’s trial strategy. We decline to speculate on the claimed error on direct appeal as Mederos’s allegations of ineffective counsel implicate questions of trial strategy that exceed the scope of the record. See Aker, ¶ 37, citing State v. 14 Dyfort, 2000 MT 338, ¶ 11, 303 Mont. 153, 15 P.3d 464. A petition for post-conviction relief represents the appropriate route for Mederos to develop a record to support his claim of ineffective assistance of counsel. Aker, ¶ 34. ¶38 Affirmed. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JIM RICE	October 29, 2013
380d1097-569f-4097-bb88-24326737cdfa	Vernon Miller v. State	2013 MT 323N	DA 13-0362	Montana	Montana Supreme Court	DA 13-0362 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 323N VERNON L. MILLER, Plaintiff and Appellant, v. STATE OF MONTANA, Defendant and Appellee. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADV-2013-114 Honorable Mike Menahan, Presiding Judge COUNSEL OF RECORD: For Appellant: Vernon Lee Miller, self-represented; East Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General; Helena, Montana Leo J. Gallagher, Lewis and Clark County Attorney, Jeff Sealey, Deputy County Attorney; Helena, Montana Submitted on Briefs: October 9, 2013 Decided: October 29, 2013 Filed: __________________________________________ Clerk October 29 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Vernon Miller (Miller) appeals from the Order of the Montana First Judicial District Court, Lewis and Clark County, denying his petition for postconviction relief. We affirm. ¶3 Miller was charged with operating a commercial tow truck without an annual safety inspection in violation of §§ 61-8-904 and -907, MCA. He was also charged with theft, pursuant to § 45-6-301(1)(a), MCA, for failing to return the towed vehicle to the rightful owner upon request. At Miller’s initial appearance for this case, the Justice Court set an omnibus hearing for February 9, 2011 and appointed the Office of the State Public Defender (OPD) to represent him pending determination of his eligibility for a public defender. The OPD assigned Thad Adkins (Adkins), who was representing Miller in a previous 2009 case, to represent Miller. On February 8, 2011, Miller and Adkins appeared in Justice Court for sentencing for Miller’s 2009 offense. At that hearing, Adkins talked to Miller about continuing the February 9, 2011 omnibus hearing in his 2010 case. Adkins moved to continue the February 9 omnibus hearing and the hearing was continued to March 16, 2011. On February 25, 2011, the OPD sought an order rescinding Adkins’s appointment because Miller did not meet the financial qualifications for the OPD’s representation. The Justice Court granted that motion on February 28, 2011. 3 ¶4 Miller did not appear at the March 16, 2011 omnibus hearing, and the case was set for bench trial. Miller was convicted of both offenses following the May 9, 2011 bench trial, in Justice Court. Miller appealed the Justice Court’s decision to the First Judicial District Court, Lewis and Clark County. Ultimately, the District Court considered Miller’s appeal, affirmed the Justice Court’s decision, and dismissed Miller’s appeal. Miller filed a motion for reconsideration, which the District Court also denied. Miller appealed to this Court. We affirmed, in a memorandum opinion. State v. Miller, 2012 MT 273N. ¶5 Miller filed a petition for postconviction relief (PCR) on February 12, 2013. In his petition for PCR, Miller alleged that Adkins failed to apprise him of the March 16, 2011, omnibus hearing and that the failure constituted ineffective assistance of counsel (IAC). He also alleged that OPD provided him with IAC because it erred in rescinding the public defender appointment and failed to preserve his right to appeal in the 2009 case. The District Court denied that petition on April 26, 2013. ¶6 A petition for PCR must be filed within one-year of the date the conviction becomes final. Section 46-21-102, MCA. This Court reviews a district court’s denial of a petition for PCR by determining whether the findings of fact are clearly erroneous and whether the conclusions of law are correct. Garrett v. State, 2005 MT 197, ¶ 10, 328 Mont. 165, 119 P.3d 55. IAC claims present mixed questions of law and fact, which we review de novo. Garrett, ¶ 9 (citing State v. Lucero, 2004 MT 248, ¶ 12, 323 Mont. 42, 97 P.3d 1106). We analyze IAC claims under the conjunctive, two-prong test from Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064 (1984), to determine whether (1) counsel’s 4 performance fell below an objective standard of reasonableness; and (2) the criminal defendant was prejudiced by counsel’s deficient performance. ¶7 Miller’s claims for PCR related to his 2009 case are time-barred. The District Court declined to consider them and so do we. ¶8 Further, Miller cannot show Adkins’s representation fell below an objective standard of reasonableness. Adkins indicated he told Miller that the omnibus hearing would be continued until March 16, 2011, at the February 8 hearing. Miller does not dispute this fact; rather, he asserts either that he did not hear Adkins or did not understand what Adkins was saying. In addition, Adkins stated in a sworn affidavit that he had spoken on the phone with one of Miller’s daughters on February 11, 2011, and advised her of the March 16, 2011 omnibus hearing. Adkins also attested that, when he became aware that Miller did not qualify for the OPD’s services, he instructed his support staff to draft a letter explaining to Miller that he did not qualify for representation by the OPD and advising him of his next court date—the March 16, 2011 omnibus hearing. Adkins attempted to inform Miller of the omnibus hearing verbally in person, through his family, and in an official letter from the OPD. This does not fall below a standard of reasonable representation and Miller cannot prevail on his claim against Adkins under Strickland’s standard. ¶9 Nor did the OPD’s termination of its representation constitute IAC. In February, 2011, Miller had sufficient assets to hire private counsel. As the District Court explained, the OPD is prohibited from representing a defendant whose assets and income, like Miller’s, are sufficient for the defendant to obtain private counsel. See § 47-1-111, MCA. Pursuant to 5 § 47-1-111, MCA, the OPD notified the Justice Court, and Miller, that Miller was not eligible for the OPD’s representation in February 2011. The District Court correctly pointed out that the fact Miller chose to represent himself in subsequent proceedings is not evidence that Adkins and the OPD were ineffective. The OPD was not required to represent Miller; its withdrawal from representation was not only reasonable, but was required by the governing law. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The issues in this case are controlled by the statutes and precedent, which the District Court correctly interpreted and applied. ¶11 Affirmed. /S/ MICHAEL E WHEAT We concur: /S/ MIKE McGRATH /S/ JIM RICE /S/ PATRICIA COTTER /S/ BETH BAKER	October 29, 2013
526db523-94f9-4e48-be29-b1a98044cda0	Matter of K.J. YINC	2013 MT 314N	DA 13-0193	Montana	Montana Supreme Court	DA 13-0193 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 314N IN THE MATTER OF: K.J., A Youth in Need of Care. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADN 11-024 Honorable Greg Pinski, Presiding Judge COUNSEL OF RECORD: For Appellants: Lisa B. Kauffman, Attorney at Law; Missoula, Montana (for Mother) Jeanne M. Walker; Hagen & Walker, PLLC; Billings, Montana (for Father) For Appellee: Timothy C. Fox, Montana Attorney General; Jonathan M. Krauss, Assistant Attorney General; Helena, Montana John Parker, Cascade County Attorney; Great Falls, Montana Submitted on Briefs: September 18, 2013 Decided: October 22, 2013 Filed: __________________________________________ Clerk October 22 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 S.T. (Mother) and R.J. (Father), the biological parents of K.J., both appeal an order of the Eighth Judicial District Court, Cascade County, terminating their parental rights to K.J. and granting permanent legal custody to the Montana Department of Health and Human Services (DPHHS or the Department). We affirm. ¶3 Early in 2011, DPHHS received a report that Mother recently injected and smoked methamphetamine in her home in front of K.J, who was then one year old. The report also indicated that Mother was selling her prescription medications and that assaults by Mother had caused Father to temporarily leave the home. Mother took several voluntary urinalysis tests and repeatedly tested positive for methamphetamine and benzodiazepine. On February 28, 2011, K.J. was removed from his parents’ home at the request of the Department. A child protection specialist arranged for a hair sample from K.J., which tested positive for methamphetamine. ¶4 On March 11, 2011, DPHHS filed an amended petition for emergency protective services, adjudication as youth in need of care, and temporary legal custody for K.J. On May 18, 2011, the District Court held a hearing on the petition. Both parents were 3 represented by counsel. No objections were made when the Department advised the court that the parents would be stipulating to adjudication of K.J. as a youth in need of care, and the District Court later concluded in its May 27, 2011 order that the parents had stipulated to adjudication. The court granted temporary legal custody to the Department for six months and ordered treatment plans for both parents. Afterward, both parents filed motions seeking the return of the child. The District Court later denied those motions. ¶5 The Department filed petitions on May 17, 2012, for permanent legal custody and termination of the birth parents’ rights. On December 5, 2012, the District Court granted the Department’s request for termination of both Mother’s and Father’s parental rights. In its order, the District Court found by clear and convincing evidence that both parents failed to complete treatment plans—observing, among other things, that Father admitted to using methamphetamines as recently as November 2012 and that Mother’s completed urinalysis tests remained “positive for methamphetamine throughout the pendency of this case.” The court made a conclusion of law that it previously had adjudicated K.J. as a youth in need of care on May 18, 2011. Finally, the court concluded that neither parent was likely to change within a reasonable period of time and that the best interests of the child were served by terminating both parents’ legal rights and granting permanent custody to the Department. ¶6 We review a district court’s order terminating parental rights for an abuse of discretion. In re J.C., 2008 MT 127, ¶ 33, 343 Mont. 30, 183 P.3d 22. A district court 4 abuses its discretion when it “acts arbitrarily without conscientious judgment or exceeds the bounds of reason.” J.C., ¶ 33. We review the trial court’s findings of fact for clear error and its conclusions of law for correctness. In re D.B., 2008 MT 272, ¶ 13, 345 Mont. 225, 190 P.3d 1072. ¶7 Both parents argue on appeal that the District Court failed to follow statutory requirements for adjudicating K.J. a youth in need of care. To terminate parental rights under § 41-3-609(1)(f), MCA, the court first must adjudicate the child as a youth in need of care. ¶8 Parents may stipulate that “the child meets the definition of a youth in need of care by the preponderance of the evidence.” Section 41-3-434(1), MCA. The parents argue that the record contains no written stipulation or affirmative statements in open court that they agreed that K.J. is a youth in need of care. Instead, counsel for the Department stated in the May 18, 2011 hearing, “It’s my understanding the birth mother and father are going to be stipulating to an adjudication of the youth as a youth in need of care.” No objection to this statement was made. The court made a subsequent finding of fact “[t]hat the parents have stipulated to the adjudication of the Youth as a Youth in Need of Care . . . .” ¶9 “To properly preserve an issue for appeal, a party must notify the court at the time the objectionable conduct is at issue.” In re A.T., 2006 MT 35, ¶ 15, 331 Mont. 155, 130 P.3d 1249. “Failure to make a timely objection constitutes a waiver of the party’s right to appeal.” A.T., ¶ 15. Neither parent nor counsel for either parent objected to the 5 Department’s assertion at the May 18, 2011 hearing, to the court’s finding of fact that the parents stipulated to adjudication, or at any other time during the District Court proceedings. Neither parent raised the issue until the briefs on appeal. ¶10 This Court continually has stated that “we will not fault a district court for failing to address statutory deficiencies that are not brought to its attention during the proceedings because doing so would encourage litigants to withhold objections rather than raise the issues appropriately in the district court.” In re A.S., 2006 MT 281, ¶ 35, 334 Mont. 280, 146 P.3d 778 (quoting In re A.N.W., 2006 MT 42, ¶ 41, 331 Mont. 208, 130 P.3d 619). In A.S., we pointed out that a parent acquiesced to a child’s adjudication as a youth in need of care when there was no objection to the adjudication and the adjudication was repeatedly referenced in court documents leading up to the termination hearing. A.S., ¶ 35. Similarly, we hold here that the parents waived the right to appeal the adjudication issue because they did not timely object or raise the issue before the District Court. ¶11 Mother raises two additional issues: whether her treatment plan failed to accommodate her disabilities and whether the Department made sufficient efforts to reunify her with K.J. All parties recognize that Mother has been diagnosed with agoraphobia, major depressive disorder, and anxiety and panic disorders. The record shows, however, that DPHHS and the District Court made reasonable modifications to her treatment plan to accommodate her disabilities. The District Court made specific 6 findings on this point and Mother has not demonstrated that its findings were clearly erroneous. ¶12 The record also establishes that Mother failed to complete the goals of her treatment plan. Even substantial compliance is insufficient to complete a treatment plan; complete compliance is required. In re D.A., 2008 MT 247, ¶ 22, 344 Mont. 513, 189 P.3d 631. Based on our review of the record, we hold that the District Court did not clearly err in its findings related to this issue and correctly concluded that the Department made good-faith, reasonable efforts to assist Mother in complying with her treatment plan within a reasonable time in order to reunify her with her child. ¶13 Father also raises two additional issues: whether the District Court properly determined that he did not complete his treatment plan and whether the condition or conduct rendering him unfit was unlikely to change in a reasonable time. Father argues that he could not complete his treatment plan during the time that he was incarcerated for failure to pay fines and that his work often prevented him from meeting other objectives. Father also argues against his treatment plan on the ground that his continued dependence on alcohol and drug use is neither reasonably related to his ability to parent nor identified as a factor prohibiting his ability to parent. ¶14 In concluding that “the continuation of the parent-child relationship between [Father] and the child will likely result in continued abuse or neglect to the child[,]” the District Court clearly stated that its conclusion was based “upon consideration of [Father’s] excessive use of methamphetamine, marijuana, and other substances that affect 7 his ability to care for and provide for his son.” Further, the court found that a significant factor making Father unable to care for K.J.—in addition to his substance abuse issues— is “his lack of recognition of the danger [Mother] poses to the child.” Father failed to acknowledge and accept his role in protecting K.J. from harm. The court reasonably believed that Father’s uncontrolled substance abuse, coupled with his inability to show that he can protect K.J. from Mother, warranted his treatment plan. ¶15 Despite his commendable efforts, Father also did not complete his treatment plan. The record demonstrates that Father admittedly continued to use alcohol, marijuana, and methamphetamine as recently as one month prior to the termination hearing. The District Court did not clearly err in its findings related to this issue and correctly concluded that Father failed to complete his treatment plan. ¶16 Finally, the court properly determined that the conduct or condition rendering Father unfit was unlikely to change in a reasonable time. A “parent’s past conduct is relevant in determining whether that parent’s conduct is unlikely to change.” In re G.S. & S.S., 2002 MT 245, ¶ 43, 312 Mont. 108, 59 P.3d 1063. Father failed to address his substance abuse issues that affected his ability to care and provide for K.J., and the evidence showed he had failed or been unable to protect K.J. when Mother subjected him to unacceptable risks. ¶17 “In determining whether to terminate parental rights, . . . the best interests of the child are of paramount concern and take precedence over the parental rights.” A.S., ¶ 25. We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our 8 Internal Operating Rules, which provides for noncitable memorandum opinions. Having reviewed the briefs and the record on appeal, we conclude that the appellants have not met their burdens of persuasion. They have not shown error in either the District Court’s factual findings or its conclusions of law. The District Court did not abuse its discretion in terminating the parents’ rights. The judgment is affirmed. /S/ BETH BAKER We concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BRIAN MORRIS	October 22, 2013
3ed20dc1-7004-4afd-9add-f92f095bd67a	State v. Thomas Petersen	2013 MT 292N	DA 12-0353	Montana	Montana Supreme Court	DA 12-0353 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 292N STATE OF MONTANA, Plaintiff and Appellee, v. THOMAS JEFFERSON PETERSEN, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. CDC 2011-157 Honorable Kathy Seeley, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Kristen L. Larson, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Micheal S. Wellenstein, Assistant Attorney General; Helena, Montana Leo J. Gallagher, Lewis and Clark County Attorney; Helena, Montana Submitted on Briefs: September 26, 2013 Decided: October 8, 2013 Filed: __________________________________________ Clerk October 8 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 The State charged Thomas Jefferson Petersen in the First Judicial District Court, Lewis and Clark County, with driving a motor vehicle while under the influence of alcohol or drugs, a felony, in violation of § 61-8-401, MCA, and unlawful possession of an open alcoholic beverage container in a motor vehicle, a misdemeanor, in violation of § 61-8-460, MCA. These offenses were committed on or about October 18, 2010. ¶3 Petersen was assigned a public defender and entered pleas of not guilty. Trial was held December 13, 2011, and the jury found Petersen guilty of both charges. On the DUI offense, the District Court sentenced him to the Montana Department of Corrections for 13 months, followed by a 5-year suspended sentence. On the open-container charge, the court imposed a $100 fine and surcharges of $75. Petersen now appeals. Issue 1 ¶4 The first issue Petersen raises is that the District Court did not conduct an adequate initial inquiry into his pretrial request for new counsel. Petersen sent a letter to the court, dated December 9, 2011, expressing “a great deal of concern about my counsel.” He alleged that counsel was not ready for trial and did not seem to want to defend him. Petersen asserted that he had asked counsel to do “several things” for him, but that counsel had refused to do them and had threatened Petersen. Petersen opined that if 3 counsel was working on his case at all, “it is not for my side.” He stated that he had lost all trust in his counsel and asked to be provided with new counsel. ¶5 On the morning of trial, outside the presence of the prospective jurors and the prosecutor, the District Court acknowledged receipt of Petersen’s letter but noted that Petersen had failed to provide “anything specific” in the letter. Petersen replied that his “specific” concern related to the bottle of whiskey found in the van he had been driving when he was stopped. He claimed the bottle had not been fingerprinted, and he opined that one or more police officers had lied or tampered with evidence. The court observed that Petersen could make this argument to the jury, but that it was not a sufficient basis for replacing his counsel. The court asked Petersen’s counsel (Morgan) directly whether he was prepared for trial, and Morgan stated that he was. ¶6 The District Court then advised Petersen that he had a right to counsel, but not a right to pick his counsel. The court found that, “at least from what has been presented here, [Morgan] is providing you with a defense.” The court told Petersen that he could either proceed with Morgan or represent himself. The court apprised Petersen of the “dangers and disadvantages” of representing himself. The court noted that it had reviewed the file and “it looks like a tough case for the defense.” Morgan also interjected during this colloquy that “it’s very dangerous to proceed pro se” and “my advice, on the record, is that that’s not an appropriate move.” ¶7 Petersen indicated that he did not want to represent himself. He maintained, however, that he had the right to put on a defense and call witnesses. In addition to the fingerprinting issue mentioned above, he complained that “I see no witnesses here on my 4 behalf. They never even asked me about witnesses, so I assumed they were doing some sort of investigation.” The District Court asked Petersen whether he had some witnesses he wanted to call, and the following colloquy ensued: THE DEFENDANT: Well, I certainly think that the little gal that works at the AAA Towing should be called, because when they towed the van, they thought it was for a wreck, and it was impounded. And the officer said it wasn’t impounded. And stuff was missing. And she was fired within the next week, anyway. There’s a lot of strange things -- THE COURT: How is that relevant to whether you were driving under the influence? THE DEFENDANT: I -- I was not driving under the influence, Your Honor. THE COURT: How is that relevant to whether or not you were driving under the influence? THE DEFENDANT: It was a frame-up, in my opinion, Your Honor. I had nothing to drink since about 2:00, and I had two beers and that’s it. Nothing. THE COURT: And you had a breath test and a blood test that came back over .20. THE DEFENDANT: And I think that’s a question, too. THE COURT: Well, I think we’re going to proceed with the trial at this point, Mr. Morgan. MR. MORGAN: That’s fine, Your Honor. THE COURT: Mr. Morgan will be representing you. If you determine that you want to take over your defense, we can talk about that later. But at least for voir dire, Mr. Morgan is going to be representing you. You have not stated sufficient reason in my presence to not have him represent you. ¶8 A criminal defendant has a constitutional right to effective assistance of counsel, and indigent defendants are entitled to representation by appointed counsel at the public’s expense. State v. Dethman, 2010 MT 268, ¶ 15, 358 Mont. 384, 245 P.3d 30. The right to effective assistance of counsel does not grant defendants a right to counsel of their choice, however. State v. Holm, 2013 MT 58, ¶ 18, 369 Mont. 227, 304 P.3d 365. So 5 long as appointed counsel is rendering effective assistance, a defendant may not demand dismissal or substitution of counsel simply because he or she lacks confidence in, or does not approve of, his or her appointed counsel. Dethman, ¶ 15. ¶9 When a defendant complains about ineffective assistance of appointed counsel and requests new counsel, a district court must make “adequate initial inquiry” as to whether the defendant’s allegations are “seemingly substantial.” Dethman, ¶ 16. A district court conducts an “adequate initial inquiry” when it considers the defendant’s factual complaints together with counsel’s specific explanations and makes some sort of critical analysis of the complaint. Dethman, ¶ 16. The defendant has the burden of establishing a “seemingly substantial” complaint. See Dethman, ¶ 16. ¶10 Here, Petersen notably waited until four days before trial to register what appear to be longstanding complaints about his counsel. The gist of Petersen’s complaints was that the charges against him were the product of a “frame-up” and that his counsel was either unprepared for trial or working for the prosecution. Petersen proffered no material facts to substantiate these allegations, however. Nor did he provide any basis for disbelieving Morgan when Morgan stated to the judge that he was prepared for trial. Petersen failed to identify any witnesses whom Morgan could have called to provide relevant testimony, and Petersen failed to provide any credible reason for concluding that Morgan may have been ineffective in not having the whiskey bottle fingerprinted. Petersen also did not allege a total breakdown of communication with counsel. See Dethman, ¶ 16. Petersen’s complaints, in short, lacked any specific factual support. 6 ¶11 Petersen contends that under Dethman, ¶ 16, the District Court was required to obtain defense counsel’s specific explanations regarding Petersen’s complaints. That is not what Dethman says, however. The court was required to conduct a “critical analysis” of Petersen’s complaints. Dethman, ¶ 16. Petersen’s complaints about “frame-ups” and conspiracies by the police, the prosecution, and his own counsel were utterly groundless. There was no need for the court to obtain explanations from Morgan. We conclude that the District Court did not abuse its discretion in denying Petersen’s request to substitute counsel. Dethman, ¶ 11. Issue 2 ¶12 As a second issue on appeal, Petersen challenges the District Court’s imposition of a condition (on his suspended sentence) that he pay the costs of assigned counsel in the amount of $800. See § 46-8-113, MCA. Petersen contends that the court’s “implicit” finding that he had the ability to pay this amount is clearly erroneous. Petersen did not raise this objection in the District Court, however, and we generally refuse to review on appeal an issue to which the party failed to object in the trial court. State v. Kotwicki, 2007 MT 17, ¶ 8, 335 Mont. 344, 151 P.3d 892. Just as a sentencing court’s outright failure to consider the defendant’s ability to pay must be brought to the court’s attention in order to preserve the issue for appeal, Kotwicki, ¶¶ 21-22, so must a sentencing court’s reliance on allegedly erroneous factual findings about the defendant’s ability to pay. Issue 3 ¶13 As a final matter, Petersen contends that the District Court’s written judgment does not conform to the oral pronouncement of sentence in that the written judgment does 7 not credit Petersen’s misdemeanor fine with time served as the court orally ordered. The State concedes this claim. Petersen also contends that the District Court lacked statutory authority to order Petersen to pay $75 in surcharges for his misdemeanor open-container conviction. The State likewise concedes this claim. We accordingly reverse the $75 surcharge and remand with instructions to strike this illegal component of Petersen’s sentence. State v. Heafner, 2010 MT 87, ¶ 11, 356 Mont. 128, 231 P.3d 1087. We also remand with instructions to modify the written judgment to reflect that Petersen’s $100 misdemeanor fine is credited with time served. State v. Hoots, 2005 MT 346, ¶ 35, 330 Mont. 144, 127 P.3d 369. ¶14 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. As to Issue 1, Petersen has not shown an abuse of discretion in the District Court’s denial of his request to substitute counsel. As to Issue 2, Petersen failed to preserve the issue for appellate review. As to Issue 3, we reverse in part and remand for corrections to Petersen’s sentence as specified above in ¶ 13. ¶15 Affirmed in part, reversed in part, and remanded with instructions. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BRIAN MORRIS	October 8, 2013
e1184555-1b77-416f-b749-223e36968c33	State v. Charlo	2013 MT 324N	DA 13-0222	Montana	Montana Supreme Court	DA 13-0222 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 324N STATE OF MONTANA, Plaintiff and Appellee, v. JOHNNY SHAWN CHARLO, Defendant and Appellant. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DC 11-118 Honorable Deborah Kim Christopher, Presiding Judge COUNSEL OF RECORD: For Appellant: Matthew M. Stevenson, David M. Maldonado, Stevenson Law Office; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General; Helena, Montana Mitch Young, Lake County Attorney, Jessica Cole-Hodgkinson, Deputy County Attorney; Polson, Montana Submitted on Briefs: October 16, 2013 Decided: November 5, 2013 Filed: __________________________________________ Clerk November 5 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Johnny Shawn Charlo (Charlo) pled guilty to sexual assault pursuant to § 45-5-502, MCA. The District Court sentenced Charlo to a term of 40 years of incarceration, with 25 years suspended. In its oral pronouncement of sentence, the court ordered that Charlo would not be eligible for parole until he had served five years of his sentence. The court “considered putting a parole restriction with regard to obtaining sex offender treatment while you’re in prison, but the parties have not asked for that. But the Court highly recommends that you are involved in that . . . .” The court then orally incorporated by reference the probation officer’s recommended conditions for the suspended sentence. Among those was Condition 29, requiring outpatient sex offender treatment. All conditions contained in the Pre-Sentence Investigation (PSI) report had been provided to Charlo prior to sentencing. ¶3 The District Court handed down its written judgment seven months later. That judgment ordered that Charlo “shall not be eligible for parole for five (5) years and must complete sex offender treatment.” Charlo filed a Motion to Correct Written Judgment, citing differences between the oral and written judgment. The District Court denied Charlo’s motion to correct the judgment. 3 ¶4 On appeal, Charlo argues that the District Court improperly adopted PSI recommendations by reference, that the District Court gave inadequate reasons for imposing the five-year parole eligibility restriction, and disputes the written judgment’s requirement that he complete the Sexual Offender Program (SOP) before becoming parole eligible. ¶5 When a district court’s oral pronouncement of sentence conflicts with the written judgment, the oral pronouncement controls. State v. Lane, 1998 MT 76, ¶¶ 36-40, 288 Mont. 286, 957 P.2d 9; Fletcher v. State, 2013 MT 266, ¶ 16, 372 Mont. 22, 309 P.3d 998. If a portion of a sentence is illegal, or a written and oral judgment are in conflict, we remand to the district court to correct the judgment by striking illegal conditions, phrasing the conditions as recommendations, or by conforming the written judgment with the oral judgment. State v. Johnson, 2000 MT 290, ¶¶ 38-40, 302 Mont. 265, 14 P.3d 480; State v. Heafner, 2010 MT 87, ¶¶ 11-13, 356 Mont. 128, 231 P.3d 1087. ¶6 In the instant case, the court’s oral judgment recommended that Charlo participate in sex offender treatment before becoming eligible for parole. The written judgment does not phrase this condition as a recommendation, but as a requirement for parole eligibility. By changing the recommendation to a requirement, the District Court’s written judgment added a restriction to Charlo’s parole eligibility that was not included in the oral pronouncement of sentence. Charlo acknowledges that, as a level one sexual offender, he is required to successfully complete the educational phase of treatment before being eligible for parole. Section 46-18-207, MCA. To the extent the District Court’s written judgment requires more, 4 however, it is not consistent with the oral pronouncement of sentence and must be remanded for correction. ¶7 The District Court properly exercised its authority to require Charlo’s participation in outpatient sexual offender programs during the suspended portion of his sentence. Section 46-18-202(1)(g), MCA, authorizes a sentencing judge to impose conditions of sentence that are reasonably related to the objectives of rehabilitation, protecting society, and protecting the victim. Further, if a Defendant is put on notice of sentencing conditions and given sufficient opportunity to respond to those conditions, the Defendant should not be heard to complain. State v. Waters, 1999 MT 229, ¶ 32, 296 Mont. 101, 987 P.2d 1142. In Waters, we found that the defendant received proper notice of a condition contained in the PSI report when he acknowledged that he had read and discussed the PSI report. Waters, ¶ 32. ¶8 Condition 29 of the PSI report requires that Charlo participate in outpatient sexual offender treatment, which is reasonably related to preventing Charlo’s recidivism and directly implicates concerns of rehabilitation and protecting society. Charlo was afforded proper notice of this condition when he acknowledged that he understood the PSI conditions and did not object to them. Therefore, we affirm the District Court’s imposition of Condition 29, requiring Charlo to participate in outpatient sexual offender treatment. ¶9 Finally, the District Court gave adequate justification for the five-year restriction on Charlo’s parole eligibility. Section 46-18-202(2), MCA, authorizes courts to impose restrictions on parole eligibility as necessary. District courts have great discretion in determining whether it is necessary to restrict parole eligibility, and are limited only by 5 reasonableness. State v. Kirkbride, 2008 MT 178, ¶ 18, 343 Mont. 409, 185 P.3d 340. Here, the District Court limited Charlo’s parole eligibility in order to provide at least five years of security to the victim, allowing her to complete counseling without the fear that her attacker could be set free. The court’s reasoning for this restriction is sound, and we will not disturb it on appeal. ¶10 The proper remedy here is remand to the District Court to correct the written judgment by conforming it to the oral sentence. The condition requiring Charlo to complete sex offender treatment before becoming parole eligible should be stricken, or rephrased as a recommendation. The conditions imposed by the District Court on Charlo’s suspended sentence were reasonable and the sentence imposed was otherwise lawful. Charlo’s sentence is reversed and remanded to the District Court to conform the oral and written judgments. ¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our Internal Operating Rules, which provides for noncitable memorandum opinions. /S/ MICHAEL E WHEAT We concur: /S/ BETH BAKER /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ MIKE McGRATH	November 5, 2013
b3fe8ba9-468d-473b-96ab-dfa484fcfc11	Horning v. City of Polson et al.	2013 MT 305N	DA 13-0236	Montana	Montana Supreme Court	DA 13-0236 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 305N RORY HORNING, Plaintiff and Appellant, v. CITY OF POLSON, a Montana Municipal Corporation; JAMES RAYMOND, an individual; and TODD CROSSETT, an individual, Defendants and Appellees. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DV 12-85 Honorable Wm. Nels Swandal, Presiding Judge COUNSEL OF RECORD: For Appellant: William A. Schreiber; Attorney at Law; Polson, Montana For Appellees: John Francis Haffey; Phillips Haffey PC; Missoula, Montana Submitted on Briefs: September 18, 2013 Decided: October 16, 2013 Filed: __________________________________________ Clerk October 16 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Rory Horning (Horning) appeals from the District Court’s order granting summary judgment to Defendants City of Polson (City), James Raymond (Raymond), and Todd Crossett (Crossett), on all of Horning’s claims arising out of his participation, or asserted right to participate, in meetings of the Polson City Council, and from the District Court’s discovery rulings. ¶3 Horning actively participates in City government activities, including attending City Council meetings. Following a public information meeting on May 18, 2011, facilitated by Crossett, the City Manager, Crossett sought and obtained a temporary order of protection from the Lake County Justice Court restraining Horning from coming within 500 feet of Crossett, Crossett’s family members, their home, Polson Middle School, Crossett’s wife’s workplace, and any public meeting where Crossett was required to be present. According to Crossett’s affidavit, during the meeting, Crossett had instructed Horning and another attendee to cease arguing, and also stopped Horning from restarting the argument. Crossett asserted that, after the meeting, Horning had approached him and threatened him (“if you ever do that again . . . you are going to get 3 some of me.”). Crossett’s prior experiences with Horning led him to believe that Horning was a threat to his family and himself. The Justice Court issued the order on May 20, 2011, and set a hearing on the protection order for June 8, 2011. ¶4 The order of protection precluded Horning from attending the June 6, 2011 meeting of the City Council. The order was discontinued by the Justice Court after the hearing that was conducted on June 8. Horning attended the June 20 City Council meeting, during which Horning engaged another citizen, Kevin Avison, in an argument. After Horning repeatedly interrupted Avison and was reminded several times by Mayor Pat DeVries that Avison had the floor, Horning was asked to leave the meeting. Horning threatened litigation as he left. ¶5 Horning filed this action against the City, Crossett, and City Attorney James Raymond in April 2012, asserting claims that he was deprived of his constitutional right to participate in government proceedings and peaceably protest, deprived of his right of free speech, and was subjected to public humiliation, embarrassment and slander. After the City answered on behalf of the Defendants,1 the parties engaged in discovery. On October 11, 2012, the City moved for summary judgment. On November 29, 2012, Horning filed motions to address the City’s objections to certain discovery requests and for sanctions, including striking of the City’s affirmative defenses. However, on 1 Defendants Crossett and Raymond were not listed in the caption of the complaint and their names did not appear in the captions of the pleadings thereafter until summary judgment was entered in favor of the City. However, the complaint stated allegations against them and they have been treated as defendants throughout the litigation. All of the Defendants have been represented by the same law office. 4 December 3, 2012, the District Court granted summary judgment to the City, holding that Horning’s rights to participate and protest were not violated because he had a reasonable opportunity to participate, including means to provide input at the June 6, 2011 meeting he was precluded from attending, and that, in any event, his claims were untimely filed. Regarding the June 20, 2011 meeting, the District Court ruled it was not unreasonable for Mayor DeVries to ask Horning to leave for his disruptive behavior. The District Court dismissed Horning’s defamation-related claims on the ground they were based upon privileged communications. Defendants Crossett and Raymond then moved for summary judgment and, in an order largely paralleling its summary judgment order in favor of the City, the District Court likewise granted summary judgment in their favor. It then denied Horning’s pending motions as moot. ¶6 On appeal, Horning argues that the District Court erred by denying his discovery- related motions as moot, and thereby deprived him of the full opportunity to engage in discovery and provide the court with additional evidence. He also argues that the District Court failed to consider all of the evidence in the case, particularly in regard to the other restrictions upon his movement and freedom imposed by the order of protection beyond precluding him from attending the June 6, 2011 Council meeting, and other slanderous statements made by the Defendants, and that the District Court improperly viewed the evidence in favor of the City, instead of viewing the evidence in his favor as the party opposing summary judgment. The Defendants argue that the District Court properly dismissed Horning’s right to participate claims, that the Defendants’ statements to and 5 about Horning were not slanderous, and that Horning’s further claims were not properly preserved for appeal. They also argue that Horning did not request that discovery be compelled, did not avail himself of affidavits to oppose summary judgment, and that discovery was not improperly foreclosed by the District Court’s determination that the claims failed as a matter of law. ¶7 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. Having reviewed the briefs and record on appeal, we conclude that Horning has not demonstrated reversible error by the District Court and that the legal issues raised are controlled by settled law that the District Court correctly applied. Further, the District Court did not abuse its discretion in resolving the discretionary discovery issues. ¶8 Affirmed. /S/ JIM RICE We concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ BRIAN MORRIS /S/ LAURIE McKINNON	October 16, 2013
6a9afff1-7720-486d-804a-cefe184fbbb5	Jacky v. Avitus Group	2013 MT 296	DA 13-0114	Montana	Montana Supreme Court	DA 13-0114 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 296 SUSAN JACKY, Plaintiff and Appellant, v. AVITUS GROUP, BIG SKY BUSLINES, and the MONTANA DEPARTMENT OF LABOR, Defendants and Appellees. APPEAL FROM: District Court of the Twenty-Second Judicial District, In and For the County of Carbon, Cause No. DV 12-96 Honorable Blair Jones, Presiding Judge COUNSEL OF RECORD: For Appellant: Katelyn B. Atwood; Montana Legal Services Association; Billings, Montana For Appellees: Patricia Bik; Special Assistant Attorney General; Department of Labor & Industry; Helena, Montana Submitted on Briefs: August 28, 2013 Decided: October 10, 2013 October 10 2013 2 Filed: __________________________________________ Clerk 3 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 Susan R. Jacky (Jacky) appeals the orders denying her petition for review and her motion to set aside the judgment of the Twenty-second Judicial District Court, Carbon County. We reverse and remand for a review of the administrative record. ISSUE ¶2 A restatement of the dispositive issue on appeal is: ¶3 Did the District Court err when it denied a petition for judicial review because no supporting brief was filed? FACTUAL AND PROCEDURAL BACKGROUND ¶4 Jacky worked as a bus driver for Big Sky Bus Lines in Great Falls, Montana. After leaving her job, she applied for unemployment benefits with the Montana Department of Labor and Industry (the Department). On July 5, 2012, the Department issued a determination that Jacky was not qualified to receive unemployment benefits. The Department affirmed its initial determination on August 3, 2013. Jacky timely requested an administrative hearing, after which the hearing officer affirmed the redetermination. Jacky then filed an appeal to the Board of Labor Appeals (the Board). The Board adopted and affirmed the decision of the hearing officer on November 20, 2012. ¶5 After exhausting her administrative remedies, Jacky, appearing as a self-represented litigant, filed a petition for review in the District Court. Jacky attached copies of various documents to her petition, including a copy of the Board’s decision. Jacky did not serve the Department with her petition. On January 18, 2013, the District 4 Court denied Jacky’s petition for failure to comply with Rule 2 of the Montana Uniform District Court Rules (Rule 2) because Jacky had not filed a supporting brief or stated issues of law for review. ¶6 Upon receiving a copy of the court’s January 18 order, the Department first learned of the action in District Court. In turn, it filed a motion to set aside the judgment. The Department argued that Montana law requires a district court to review the administrative record to determine whether the Board correctly applied the law and whether the factual findings of the Board are supported by substantial evidence. According to the Department, “[t]he unique statutory standard of review of an unemployment insurance matter, pursuant to § 39-51-2410(5), MCA, preclude[d] the entry of a default judgment by the [c]ourt.” ¶7 On January 30, 2013, the District Court denied the Department’s motion. The District Court stated that it “underst[ood] the applicable procedure explicitly,” but that such procedure was not at issue because Jacky failed to “[raise] any identifiable question of law for the Court’s review” and to “state the grounds upon which a review is sought.” The District Court affirmed its initial denial. ¶8 Jacky filed an appeal with this Court on February 11, 2013. Jacky argues that Rule 2 is inapplicable because it governs motions, not petitions for review. Jacky further argues that the statutory procedure for judicial review in unemployment cases does not require parties to submit supporting briefs with their petitions for review. Jacky contends the District Court should not have dismissed her petition without first giving her leave to amend, especially as no other party would have suffered prejudice. 5 ¶9 In its answer brief, the Department also requests we reverse the District Court’s order and remand this case, arguing the District Court erred by failing to conduct a review of the administrative record. The Department argues the petition for judicial review is governed by Montana’s unemployment insurance law, which directs a district court to expedite judicial review of Board decisions and to conduct a review of the administrative record. STANDARD OF REVIEW ¶10 Denial of a petition for judicial review due to a petitioner’s failure to comply with a procedural rule is a conclusion of law. We review a court’s conclusions of law for correctness. Galassi v. Lincoln Co. Bd. of Commrs., 2003 MT 319, ¶ 7, 318 Mont. 288, 80 P.3d 84. DISCUSSION ¶11 Did the District Court err when it denied a petition for judicial review because no supporting brief was filed? ¶12 On appeal, both parties contend the District Court improperly denied Jacky’s petition for judicial review. We conclude that the District Court erred when it denied Jacky’s petition for failure to file a supplemental brief. We decline to address the other issues raised by the parties as this issue is dispositive. ¶13 Section 39-51-2410, MCA, sets out the process to be followed in seeking judicial review of a Board decision on a claim for unemployment benefits. Pursuant to § 39-51-2410(2), MCA, “any party aggrieved thereby may secure judicial review thereof by commencing an action in the district court,” filing a petition “stat[ing] the grounds 6 upon which a review is sought,” and “serv[ing] [it] upon the commissioner of labor and industry and all interested parties.” ¶14 Rule 2 provides: “The moving party shall file a supporting brief upon filing a motion.” The District Court concluded that Jacky violated this rule by failing to attach a brief to her petition. ¶15 A motion is “[a] written or oral application requesting a court to make a specified ruling or order.” Black’s Law Dictionary 1106 (Bryan A. Garner ed., 9th ed., West 2009). A petition, on the other hand, is merely “[a] formal written request presented to a court or other official body.” Black’s Law Dictionary at 1261. While it is obvious that one seeking judicial review of a Board decision hopes to have the decision overturned, the petitioner is not obligated under the governing statute to file a supporting brief. Rather, she is simply invoking her statutory remedy and asking the District Court to review the decision of the Board. ¶16 Further, we note that the procedures set forth in § 39-51-2410, MCA, are specifically tailored to meet the purposes of the unemployment insurance chapter. “When a general and particular provision are inconsistent, the latter is paramount to the former, so a particular intent will control a general one that is inconsistent with it.” Section 1-2-102, MCA; see also State v. Garner, 1999 MT 295, ¶ 26, 297 Mont. 89, 990 P.2d 175 (“[T]he Rules of Civil Procedure apply in a post-conviction relief proceeding only when they are applicable and not inconsistent with post-conviction statutes.”) (italics in original); Rierson v. State, 191 Mont. 66, 70, 622 P.2d 195, 198 (1981) (“Only in the broadest sense could these limitations [for written contracts or other obligations] be 7 considered to be controlling, and since there is a more specific statute involving injury to personal property rights, of which retirement benefits are one, we are constrained to follow the more specific statute.”); Weston v. Cole, 233 Mont. 61, 63, 758 P.2d 289, 291 (1988) (holding the two-year period for filing a particular tort action such as assault and battery controls over the more general three-year statute of limitations for tort actions). ¶17 Because the specific statutory procedures set forth in § 39-51-2410, MCA, govern these proceedings, and because a petition is not a motion, the provisions of Rule 2 do not apply to a petition for judicial review. It is our obligation to apply the statute as written, without inserting what has been omitted or omitting what has been inserted. Section 1-2-101, MCA; Garner, ¶ 22. A district court may require a petitioner to file a brief in support of the petition, see e.g. Schneeman v. State, 257 Mont. 254, 260, 848 P.2d 504, 508 (1993), but such briefing is not mandated by § 39-51-2410, MCA. ¶18 The District Court asserted that Jacky failed to raise any identifiable question of law for the court’s review or to state the grounds upon which she sought relief. Jacky wrote that the Department “failed to document, process and facilitate [her] unemployment claim accurately, honestly, fairly or ethically resulting in a gross miscarriage of justice.” This statement is adequate for the purposes of “stat[ing] the grounds upon which a review is sought” under § 39-51-2410(2), MCA. Jacky was not required to provide any discussion or legal authority to support her request. ¶19 Jacky failed to serve the Department with her petition as required by the statute. However, “[a]s a general rule, we encourage a liberal interpretation of procedural rules governing judicial review of administrative decisions, rather than taking an overly 8 technical approach, so as to best serve justice and allow the parties to have their day in court.” In re McGurran, 1999 MT 192, ¶ 11, 295 Mont. 357, 983 P.2d 968 (overruled on other grounds by Davis v. State, 2008 MT 226, ¶ 23, 344 Mont. 300, 187 P.3d 654) (citing Hilands Golf Club v. Ashmore, 277 Mont. 324, 330, 922 P.2d 469, 473 (1996)). The Department was put on notice of the petition when the District Court denied Jacky’s motion, and it appropriately intervened in the case. The Department did not argue that Jacky’s petition should be dismissed for failing to comply with the service requirement, and it suffered no prejudice because of Jacky’s failure to serve. Thus, Jacky’s failure to properly serve the Department does not preclude a District Court review of the administrative record. ¶20 The Dissent complains that the petition “provides no discernible objection to any finding of fact, conclusion of law or reasoning of the agency.” Dissent, ¶ 24. However, § 39-51-2410(6), MCA, provides that “[i]t shall not be necessary in any judicial proceeding under this section to enter exceptions to the rulings of the board . . . .” We will not place Jacky in error for failing to do what the statute excuses her from doing. If the District Court determines on remand that it requires briefing on any issue or question, it will be free to so instruct the parties. ¶21 The District Court erred when it denied Jacky’s petition for failure to include a supplemental brief. Because this is the dispositive issue, it is unnecessary for us to address the remaining issues of whether a district court should dismiss a petition for review without first granting leave to amend and whether a district court may deny a petition for review without first reviewing the administrative record. We reverse and 9 remand to the District Court for a full review of the administrative record in accordance with the provisions of § 39-51-2410, MCA. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ BRIAN MORRIS Justice Jim Rice, dissenting. ¶22 The Court reverses and remands to the District Court “for a full review of the administrative record.” Opinion, ¶ 21. This begs the question, “review for what?”—no cognizable legal issues have been identified, either in the petition for judicial review or in the Court’s analysis. ¶23 The Court concludes that the requirement of § 39-51-2410(2), MCA, for a petitioner to “state the grounds upon which review is sought” has been satisfied by the petition’s statement that “[t]he individuals representing the [listed Defendants] failed to document, process and facilitate the plaintiff’s unemployment claim accurately, honestly, fairly or ethically resulting in a gross miscarriage of justice.” It bears noting that this 10 statement is the entirety of the petition’s identification of the grounds upon which relief was sought.1 ¶24 I disagree with the Court’s determination that this statement satisfies the statutory requirement. See Opinion, ¶ 18. Just how was the claim not processed “accurately, honestly, fairly or ethically?” In what way did the defendants fail to “document, process and facilitate” the claim properly? The petition provides no discernible objection to any finding of fact, conclusion of law or reasoning of the agency. The District Court didn’t have a clue as to any legal issue raised, and won’t on remand. As we explained in Arlington v. Miller’s Trucking, Inc., 2012 MT 89, 364 Mont. 534, 277 P.3d 1198, courts reviewing wage claim determinations by the Department of Labor: may reverse or modify the decision if substantial rights of the appellant have been prejudiced because: (a) the administrative findings, inferences, conclusions, or decisions are: (i) in violation of constitutional or statutory provisions; (ii) in excess of the statutory authority of the agency; (iii) made upon unlawful procedure; (iv) affected by other error of law; (v) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; (vi) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. Arlington, ¶ 19 (citing 2-4-704(2)(a), MCA). The petition failed to state any of these bases for review, and thus failed to comply with the requirement that the petition “shall state the grounds upon which review is sought.”2 1 The Court interprets the petition as alleging something against “the Department,” Opinion, ¶ 18, but even that is not necessarily correct. The petition’s allegation is made against “individuals representing” the parties named in the petition, including two private entities. 11 ¶25 The Court is imposing upon the District Court an obligation to expend judicial resources to scour the entire administrative record (“a full review,” Opinion, ¶ 21) in search of possible winning legal issues for the petitioner. This violates any number of legal principles, not the least of which is judicial impartiality. As the District Court correctly stated, “[t]he Court cannot serve as counsel for the petitioner.” Further, as we have often stated, the courts do not owe a duty to a party “to conduct legal research on his behalf, to guess as to his precise position, or to develop legal analysis that may lend support to that position.” Johansen v. Dept. of Natural Resources & Conservation, 1998 MT 51, ¶ 24, 288 Mont. 39, 955 P.2d 653; see also State v. Whalen, 2013 MT 26, ¶ 32, 368 Mont. 354, 295 P.3d 1055. ¶26 If the petitioner had been represented by counsel and filed this petition, we would affirm the dismissal for the utter failure to identify a legal issue—in a heartbeat. By reversing to give Jacky another chance, we are improperly granting a pro se litigant latitude “so wide as to prejudice the other party.” Neil Consultants, Inc. v. Lindeman, 2006 MT 80, ¶ 8, 331 Mont. 514, 134 P.3d 43. “[I]t is reasonable to expect pro se litigants to adhere to procedural rules.” Neil Consultants, Inc., ¶ 8. 2 In response to this dissent, the Court says the language in § 39-51-2410(6), MCA, which eliminates the need to “enter exceptions” to the Board’s rulings, somehow also excuses the requirement for the petition to state a ground for review. Opinion, ¶ 20. However, this archaic term, which has been used in this statute since its original enactment in 1937, see Laws of Montana, 1937, ch. 137, § 6(i), references the necessity of making a “formal objection to [the Board’s] ruling by a party who wants to preserve the objection for appeal . . . . In federal courts and most state courts, the term ‘exception’ has been superseded . . . .” Black’s Law Dictionary, 583 (Bryan A. Garner ed., 7th ed., West 1999) (emphasis added). That meaning is likewise confirmed by the context of the term’s use in this statute, which provides that “[i]t shall not be necessary in any judicial proceeding under this section to enter exceptions to the rulings of the [B]oard and no bond shall be required for entering such appeal.” 12 ¶27 The Court reasons, at times, that the District Court erred by dismissing the case for Jacky’s failure to file a supporting brief. See Opinion, ¶¶ 3, 11, 12.3 However, while mentioning the failure to file a brief, the District Court also dismissed the petition for failing to state a claim, and clearly not on the sole basis of failing to file a brief. This point was expressly clarified in the District Court’s order denying the motion to set aside the judgment, which said nothing about a failure to file of a brief: [T]he threshold issue is whether Jacky has raised any identifiable question of law for the Court’s review. Jacky provided only a conclusory statement . . . . This statement raises no identifiable question of law for the Court’s review under § 39-51-2410(5), MCA. Nor did Jacky’s annotations in the margins of the attached documents—which may or may not have been part of the record—raise any identifiable question of law for the Court’s review. As such, Jacky did not “state the grounds upon which a review is sought” as required under § 39-51-2410(2), MCA. [Emphasis added.] ¶28 There was no issue for the District Court to decide, and nothing further to do. As it noted, even if it assumed that Jacky was questioning the sufficiency of the evidence, it “would be just that—an assumption. . . . [I]t is neither the province nor duty of the Court to guess what a party intends to argue and then to make a determination based on that guess. Questioning the sufficiency of the evidence is one of many possible legal issues . . . .” ¶29 The District Court made no error. It could not decide something that was not presented. On remand, it will apparently be required to manufacture something to decide. 3 The Opinion vacillates between the grounds for reversing. See Opinion, ¶¶ 12, 21 (the failure to permit Jacky to file a supplemental brief “is the dispositive issue”); but see Opinion, ¶ 18 (the petition was “adequate . . . . Jacky was not required to provide any discussion or legal authority to support her request.”). The net result of the Opinion is that it was reversible error to not permit Jacky to file a supplemental brief, but it was nonetheless legally unnecessary for her to file one. 13 ¶30 I would affirm. /S/ JIM RICE Justice Laurie McKinnon joins in the dissenting Opinion of Justice Rice. /S/ LAURIE McKINNON	October 10, 2013
19809008-b4f5-44a1-9f2f-1265644b1c63	Willis v. Fertterer et al	2013 MT 282	DA 13-0071	Montana	Montana Supreme Court	DA 13-0071 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 282 TERRY J. WILLIS, Plaintiff and Appellant, v. DAVID J. FERTTERER, DEBRA DIETZ, and RICHARD FERTTERER, Defendants and Appellees, APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. CDV-97-1689 Honorable Kenneth R. Neill, Presiding Judge COUNSEL OF RECORD: For Appellant: E. Lee LeVeque, Lee LeVeque Law Offices, PLLC; Great Falls, Montana For Appellees: Paul R. Haffeman, James A. Donahue, Davis, Hatley, Haffeman & Tighe, P.C.; Great Falls, Montana Submitted on Briefs: August 28, 2013 Decided: October 1, 2013 Filed: __________________________________________ Clerk October 1 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Terry Willis (Willis) appeals the findings of fact, conclusions of law, and order of the Eighth Judicial District, Cascade County that deemed valid a warranty deed that conveyed property from Willis to David Fertterer (Fertterer), and further determined that Fertterer had not converted any funds that belonged to Willis. We affirm. ¶2 We address the following issues on appeal: ¶3 Whether substantial evidence supports the District Court’s findings of fact? ¶4 Whether the District Court properly determined that Willis failed to prove that Fertterer had converted funds from Willis’s bank account? PROCEDURAL AND FACTUAL BACKGROUND ¶5 Willis lived in Florida at the time of the events that gave rise to this action. Willis visited Montana in 1988. Willis first met Fertterer, Fertterer’s wife Debra Fertterernée Dietz (Debra), Fertterer’s brother Richard (Dick), and Fertterer’s late father Richard Fertterer Sr. (Richard Sr.) on this trip. The Fertterers live near Belt in Cascade County. Willis developed a friendship with Fertterer, Debra, and Richard Sr. ¶6 Willis travelled to Montana several times in 1988 and 1989 to socialize and to recreate. Willis also alleges that he delivered cocaine for Richard Sr. During one trip Willis requested that Fertterer tell Willis if Fertterer learned of Montana recreational property available for sale. ¶7 Fertterrer learned in 1989, that the Weggeland Place (Weggeland), a property near the Fertterers’ residence, was up for sale. Fertterer called Willis to alert him. Willis made 3 arrangements to travel to Montana to view the property. Willis viewed Weggeland with Fertterer, Richard Sr., and Lillian Schmasow (Schmasow), a local realtor. ¶8 Willis signed a buy/sell agreement to purchase Weggeland on May 17, 1989. Willis appointed Schmasow to be his attorney in fact for the transaction. Schmasow signed a contract for deed and escrow agreement on Willis’s behalf. The contract for deed lists a final purchase price of $240,700.32 plus interest. The contract states that this amount would be paid in a $50,000.00 down payment and four installments of $50,388.75 due on August 30, 1989, November 30, 1989, February 28, 1990, and May 30, 1990. Willis made the $50,000.00 down payment. A portion of those funds apparently represented proceeds from illegal drug sales. The escrow agreement appointed First American Title Company (First American) of Great Falls as escrow agent. The escrow agreement further required Willis to pay each remaining installment through First American. ¶9 Willis opened a post office box at the Belt Post Office and a checking account at Belt Valley Bank before he returned to Florida. Willis also had received mail from a separate post office box in Great Falls. Willis denied having opened the Great Falls post office box. Willis had received copies of the escrow agreement and payment coupon for Weggeland, however, at the post office box in Great Falls. ¶10 Willis thereafter made occasional trips to Montana. Willis chose not to tell his wife (Avelia) about his purchase of Weggeland or his account at Belt Valley Bank. Willis apparently failed to disclose these facts in an effort to protect her from involvement in Willis’s drug dealing. 4 ¶11 Willis claims that he had been unaware that the contract for deed required a $50,388.75 payment toward Weggeland on August 30, 1989. Willis failed to make this payment on time. Schmasow delivered a late payment in September 1989, to cover the August 30, 1989, payment. Fertterer, in conjunction with Dick, contributed $22,408.75 to the August 30, 1989, late payment, and Willis apparently paid $27,980.00. ¶12 Fertterer and Dick characterize the $22,408.75 as a loan to Willis. Fertterer and Dick possess no promissory note or other documentation, however, to verify their claim. Willis disputes that the contribution from Fertterer and Dick represented a loan. Willis instead claims that Fertterer and Dick had laundered Willis’s drug sale profits through their accounts and thus Willis had provided the sole source of the funds for the August, 30, 1989, late payment. ¶13 Federal authorities arrested Willis in Florida in November 1989. The United States charged Willis with conspiring to possess at least five kilograms of cocaine and possessing at least five kilograms of cocaine with intent to distribute. Willis potentially faced life sentences for each charge due to his previous drug offenses. Federal authorities seized, and Willis ultimately forfeited, over $150,000.00 in Willis’s possession at the time of his arrest. The federal district court sentenced Willis to two terms of life imprisonment in 1990 following his conviction. ¶14 Willis’s impending life sentences left him unable to pay for Weggeland as the contract for deed contemplated. Willis and Fertterer made an arrangement to save Weggeland. The parties disagree about the specifics of that arrangement. 5 ¶15 Willis claims that Fertterer agreed to make payments for Willis. Willis claims that Weggeland still would belong to Willis upon his release. Fertterer conversely claims that Willis relinquished Weggeland to Fertterer on condition that Fertterer agree to take over the remaining payments. Both parties agree that Fertterer would be responsible for completing the payments to purchase Weggeland. The parties disagree about the effect that this plan would have on the ownership of Weggeland. ¶16 Willis further requested that Fertterer and Debra remove funds from his Belt Valley Bank checking account in an apparent effort to prevent federal authorities from seizing those funds. Fertterer and Debra complied. They used previously-signed checks that Willis had left with them to withdraw the entire remaining balance of $23,475.00 from Willis’s Belt Valley Bank checking account. Fertterer and Debra stored these funds in the pocket of one of Willis’s jackets. Fertterer claims that he delivered the jacket that contained all of these funds to Avelia. Avelia denies that she had received the funds. ¶17 Fertterer contacted his loan officer at Farm Credit Services to resolve the Weggeland matter. Fertterer earlier had received an agreement from Willis to sell Weggeland to Fertterer (Willis-Fertterer Deed) for $240,000.00. This notarized document suggests that Willis had agreed to sell Weggeland to Fertterer. Willis contests the validity of the deed. ¶18 First American Title prepared the Willis-Fertterer Deed. The Willis-Fertterer Deed bears a December 28, 1989, notarized signature that appears to read “Terry Willis.” Rita Crowell (Crowell), Florida Notary Public, and former employee at the Fort Pierce, Florida, 6 Federal Public Defender’s Office, notarized the signature. Willis denies that he signed the Willis-Fertterer Deed. ¶19 Willis’s expert witness testified that Willis’s signature had been forged on the Willis- Fertterer Deed. Willis was in pre-trial detention on December 28, 1989, the date that the parties apparently executed the Willis-Fertterer Deed. At the time the federal district court had assigned Willis a public defender to represent him in the federal criminal proceeding. Willis ultimately retained private counsel. Willis’s private counsel testified that he remembered having worked earlier with Crowell at the Fort Pierce Federal Public Defender’s Office, but it appears that nobody could locate Crowell to testify. It remains unclear how the Willis-Fertterer Deed travelled from Montana to Florida, received Willis’s signature on December 28, 1989, and returned to Montana to be recorded the next day on December 29, 1989. ¶20 Armed with the notarized Willis-Fertterer Deed, Fertterer applied for a loan with Richard Sr. to purchase Weggeland. Farm Credit Services approved the loan for $152,935.00, secured by a mortgage. Fertterer paid the proceeds from this loan, in the amount of $149,492.95, to First American Title Company. This amount paid in full the balance on Willis’s contract for deed. Fertterer therefore paid, including his contributions to the late August 30, 1989, payment, $171,901.70 of the $240,700.32 purchase price for Weggeland. Willis paid the remaining total and interest. ¶21 First American Title Company closed the transaction after having received payment in full. The Cascade County Clerk and Recorder recorded the warranty deed from the original 7 Weggeland owners to Willis on December 29, 1989, followed immediately by the warranty deed from Willis to Fertterer. ¶22 Fertterer and Richard paid off the loan from Farm Credit Services that had secured Weggeland in 2001. Fertterer has maintained and improved Weggeland since paying off the loan. Fertterer also has paid all required property taxes. ¶23 Willis cooperated with the federal government in exchange for a reduced sentence. The federal district court granted a motion by the United States to modify Willis’s sentence in 1998. This modification reduced Willis’s federal sentence to fourteen years. Willis served part of this sentence on federal supervised release. Willis violated conditions of his federal supervised release. The federal district court revoked Willis’s supervised release on November 9, 2004, and returned Willis to federal prison. ¶24 The Federal Bureau of Prisons released Willis from all conditions on December 5, 2008. Willis soon thereafter filed an action in Cascade County that challenged Fertterer’s ownership of Weggeland. Willis further alleged that Fertterer and Debra had converted funds from Willis’s Belt Valley Bank account. The District Court conducted a bench trial in November 2012. The District Court affirmed the validity of the Willis-Fertterer Deed. The District Court also concluded that Fertterer had not converted any funds that belonged to Willis. Willis appeals. STANDARD OF REVIEW ¶25 We determine whether a district court’s findings of fact are clearly erroneous and whether its conclusions of law are correct. In re B.M., 2010 MT 114, ¶ 14, 356 Mont. 327, 8 233 P.3d 338. A factual finding is clearly erroneous if it is not supported by substantial evidence, if the trier of fact misapprehended the effect of the evidence, or if the record leaves the reviewing court with the definite and firm conviction that a mistake has been made. Varano v. Hicks, 2012 MT 195, ¶ 7, 366 Mont. 171, 285 P.3d 592. We view evidence in the light most favorable to the prevailing party, and we leave the credibility of witnesses and the weight assigned to their testimony for the determination of the trial court. Mowrer v. Eddie, 1999 MT 73, ¶ 36, 294 Mont. 35, 979 P.2d 156. DISCUSSION ¶26 Whether substantial evidence supports the District Court’s findings of fact? ¶27 Willis first challenges the District Court’s factual finding that the notarized signature on the Willis-Fertterer deed was valid. Willis relies upon the Mississippi Supreme Court’s decision in Thompson v. Shell W. E & P Inc., 607 So. 2d 37 (Miss. 1992), for the unremarkable proposition that the presumption of validity of authenticity “can only be overthrown by a strong evidentiary showing.” Thompson, 607 So.2d at 41. The District Court identified, however, the “sharp conflict” between the parties’ testimony on the circumstances surrounding Willis’s notarized signature on the Willis-Fertterer Deed. ¶28 Willis attacks the District Court’s determination that Willis personally had appeared before Crowell, and that Crowell had notarized the deed in Florida on December 28, 1989. Willis further challenges the feasibility of the Cascade County Clerk having recorded the Willis-Fertterer deed in Montana on the next day, December 29, 1989. Willis lastly argues 9 that the District Court ignored the testimony of his handwriting expert that the signature on the Willis-Fertterer deed had been forged. ¶29 Willis contends that these facts rise to the level of a strong evidentiary showing sufficient to overcome the presumptive validity of the Willis-Fertterer Deed that Crowell had notarized. He cites two other cases from Mississippi, Woodson v. Jones, 33 So.2d 316 (Miss. 1948) and Continental Oil Co. v. Walker, 117 So.2d 333 (Miss. 1960) to bolster his position. The Mississippi Supreme Court invalidated a notarized document in each case. ¶30 The notary’s certification in Walker appears on the back of the deed. Walker, 117 So. 2d at 335. This suspicious factor, along with the fact that the grantor had been out of the county on military duty on the date that he allegedly had appeared before the notary, led the Court to uphold the trial court’s determination that the deed was invalid. Walker, 117 So.2d at 335-36. Similarly, in Woodson, the spelling of the purported notarized signature failed to match the spelling of the grantor’s name. Woodson, 33 So.2d at 316. This discrepancy, along with the grantor’s son’s testimony that he had signed the deed rather than the grantor, operated as compelling evidence to overcome the presumed validity of a notarized signature. Woodson, 33 So.2d at 316. ¶31 The District Court sits in the best position to resolve conflicting factual testimony and to evaluate expert witness testimony. Mowrer, ¶ 36. We will not disturb the District Court’s determination without finding either that substantial evidence fails to support the factual finding, that the District Court misapprehended the effect of the evidence, or that we are left with the firm conviction that the District Court made a mistake. Varano, ¶ 7. 10 ¶32 The District Court analyzed the conflicting evidence presented at trial and considered the credibility of the witnesses’s testimony. The District Court identified “unanswered questions” about how the Willis-Fertterer Deed moved to Florida and back to Great Falls, but found that it was “apparently by overnight mail or personal delivery.” The District Court focused on the totality of the circumstances to determine that “Willis [w]as the one most likely to have involved [Crowell].” The District Court further highlighted that “[n]o one has challenged Ms. Crowell’s signature” on the Willis-Fertterer deed. ¶33 Willis fails to identify any strong evidence of forgery on appeal. Willis dismisses as “somehow magic[],” the deed’s travel from Florida to Montana. Willis further accuses Fertterer of having conspired to forge the deed without any evidence to support the argument. These factors fall short of the evidence of forgery in Woodson and Walker. ¶34 The District Court found Willis’s testimony less credible than Fertterer’s. In particular, the District Court pointed to Willis’s multiple criminal convictions and his own testimony that he illegally had hidden assets to avoid forfeiture to the federal government as evidence of Willis’s lack of veracity. Willis further conceded on cross-examination that he had made a similar arrangement in July 1989 upon his arrest in which Fertterer had taken over payments for a tractor that Willis had been purchasing. This earlier arrangement granted ownership of the tractor to Fertterer when Fertterer paid the balance in full. The District Court concluded based on “all of the matters listed in the Findings of Fact” that Willis had failed to present clear and convincing evidence of forgery needed to overcome the 11 presumption of authenticity of a notarized document. Substantial evidence supports the District Court’s finding of validity of the Willis-Fertterer Deed. Varano, ¶ 7. ¶35 Willis next argues that the District Court should have quieted title in his name due to the alleged forgery of his signature on the Willis-Fertterer Deed. Willis argues that the invalid deed could not transfer title as Willis had not ratified the invalidity. Willis failed to establish, however, that his signature had been forged on the deed that transferred Weggeland. A factfinder remains free to disregard an expert’s testimony. Stave v. Estate of Rutledge, 2005 MT 332, ¶ 21, 330 Mont. 28, 127 P.3d 365. The District Court’s finding of validity of the Willis-Fertterer deed conveyed Weggeland without requiring Willis to have ratified any alleged forgery. Willis’s contention that he did not ratify the Willis-Fertterer Deed fails based on the fact that substantial evidence supports the District Court’s factual finding of the validity of the deed. Varano, ¶ 7. ¶36 Whether the District Court properly determined that Willis failed to prove that Fertterer had converted funds from Willis’s bank account? ¶37 Willis lastly argues that the District Court improperly found that Willis had failed to prove conversion of his funds. Conversion involves a distinct act of dominion wrongfully exerted over property in denial of, or inconsistent with, the owner’s right. Feller v. First Interstate Bancsystem, Inc., 2013 MT 90, ¶ 26, 369 Mont. 444, 299 P.3d 338. Willis needed to present facts at trial sufficient to show that Fertterer wrongfully had exercised dominion over Willis’s property inconsistent with Willis’s right. Feller, ¶ 26. 12 ¶38 Willis identifies some evidence in the record that does not support the District Court’s findings of fact. Willis testified that Fertterer had used Willis’s checks to withdraw all of the funds from Willis’s Belt Valley Bank account. The parties presented conflicting testimony about whether Willis had authorized that withdrawal. The District Court determined that “Willis le[ft] signed checks with [Fertterer] and [Debra] to fill out.” ¶39 The parties also presented conflicting testimony regarding what had happened to the funds after the withdrawal. The District Court further determined that Fertterer “delivered the money from the four checks he and [Debra] had used to take funds from Willis’[s] Belt Valley Bank account to Willis’[s] wife Avelia.” The District Court resolved these conflicting accounts when it found Fertterer more credible. Mowrer, ¶ 36. Willis’s criminal convictions and testimony about having hidden assets during his criminal prosecution likely hampered his credibility. Willis fails to identify any factual determination that lacks support by substantial evidence. Varano, ¶ 7. ¶40 Affirmed. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JIM RICE	October 1, 2013
2975a057-0697-4cce-90df-12be862ef588	Estate of Beals	2013 MT 290N	DA 13-0088	Montana	Montana Supreme Court	DA 13-0088 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 290N IN THE MATTER OF THE ESTATE OF: CLEO M. BEALS, Deceased. APPEAL FROM: District Court of the Sixteenth Judicial District, In and For the County of Rosebud, Cause No. DP 08-18 Honorable Joe L. Hegel, Presiding Judge COUNSEL OF RECORD: For Appellant: David M. McLean; McLean & McLean, PLLP; Anaconda, Montana For Appellee: Thomas E. Towe, Tucker P. Gannett; Towe, Ball, Mackey, Sommerfeld & Turner, PLLP; Billings, Montana Submitted on Briefs: July 31, 2013 Decided: October 8, 2013 Filed: __________________________________________ Clerk October 8 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Bob Beals, Byron (Bus) Beals, and Bonny Rieckmann are the three children of W.E. (Dude) and Cleo Beals. Dude owned a successful mortuary and furniture business in Forsyth, Montana. His oldest son, Bob, also worked in the family business. When Dude died in 1994, his estate was probated in accordance with his 1963 will. The will provided that all of Dude’s property “of whatsoever nature, kind or description” should go to Cleo, with anything remaining upon her death to his three children to “share and share alike.” The bulk of the property, however, passed outside the will to Cleo and the children through life insurance beneficiary designations and accounts in joint tenancy with rights of survivorship. ¶3 In 1995, after the court appointed Bus as Cleo’s guardian and estate conservator, Bob and his son prepared an “Accounting of the Holdings of W.E. ‘Dude’ Beals as of June 1, 1994 to the Current Assets of Cleo M. Beals as of October 31, 1995.” This accounting reflected two insurance policies in the name of Dude alone that listed Bob as the sole beneficiary, but Bob noted in the accounting that the proceeds from these were placed in a tax free account to be held for Cleo’s future health care. There were also two 3 bank accounts held in joint tenancy between Dude and Bob. Again, Bob noted that the two accounts were being held separately from Cleo’s other assets to be used for her heath care if needed. ¶4 Cleo died on August 17, 2007. Pursuant to her will, the court appointed Bob as her personal representative. Cleo’s will, drafted at the same time as Dude’s, provided that her entire estate would go to Dude or, if he did not survive her, to her children equally. During the probate proceeding, Bus and Bonny brought a petition to compel Bob, as personal representative, to include certain assets in Cleo’s estate, including the four accounts held in Bob’s name alone. Bus and Bonny claimed Bob was not following their parents’ intent that the estate be divided equally among the children. In their petition to the court, Bus and Bonny raised seven categories of items that they were requesting the court order Bob to include in the estate. The items at issue on appeal are the four accounts in Bob’s name, as well as two life insurance policies (Hartford and MONY). Bob agreed that the proceeds of the latter two policies were property of the estate, but he claimed that he already had deposited those funds into the estate. ¶5 The District Court held a § two-day bench trial in May 2012 to settle the issues raised in the petition. On January 2, 2013, the court filed findings of fact, conclusions of law and an order. The court found that Dude’s overriding intent in setting up his estate was that his money would be used to support Cleo during her lifetime and then pass equally to his children. Because of this intent, the court concluded that Bob was unjustly enriched by retaining the assets in the four accounts and ordered the creation of a 4 constructive trust for those assets to become part of Cleo’s estate. Along with the four accounts, the court also ordered Bob to return the proceeds of the Hartford and MONY life insurance policies to the estate. ¶6 Bob appeals the District Court’s findings and conclusions. Bob argues that the District Court erred in finding that Dude, with Bob’s help, arranged a maze of accounts intending to avoid probate. Bob also alleges that the court erred in finding that the Hartford and MONY insurance proceeds, payable to Cleo, were not already paid into the estate. Finally, Bob objects to the imposition of a constructive trust, arguing that he was not unjustly enriched and that the District Court improperly created the trust. ¶7 The standard of review governing proceedings in equity is codified at § 3-2- 204(5), MCA, which directs the appellate court to review and determine questions of fact as well as questions of law. In re Estate of McDermott, 2002 MT 164, ¶ 22, 310 Mont. 435, 51 P.3d 486. We review a district court’s findings of fact to determine if they are clearly erroneous and its conclusions of law to determine whether they are correct. McDermott, ¶ 22. ¶8 First, we conclude that the District Court’s finding that Bob assisted Dude in creating various accounts in order to avoid probate was not material to the court’s decision. We accordingly reject Bob’s argument that it is ground for reversal. The District Court did not rely on the fact that Bob helped Dude avoid probate. In fact, the court observed that Montana law does not require any breach of a fiduciary obligation or wrongdoing before the imposition of a constructive trust. Instead, the court relied on 5 Bob’s understanding that Dude’s overriding intent in naming Bob as a joint account holder and beneficiary was that the assets be held for Cleo’s benefit, then equally divided among the children. The record supports this finding. In Bob’s accounting of Cleo’s holdings, he listed the assets at issue as being held for Cleo’s health care. Bob admitted in his testimony that his retention of the accounts was on “an honor system,” and that the accounts were Cleo’s money, often held in his name only as a matter of convenience. He also acknowledged a discussion in which his father said that “once [Cleo] was taken care of, once she died, then the three [siblings] were supposed to divide up the property equally.” There was no objection to the court’s consideration of this evidence and we decline to overturn the District Court’s finding on this point. ¶9 Bob also argues that the court incorrectly ordered the return of the Hartford and MONY proceeds to the estate. Bob points out that these insurance proceeds were not the subject of any of the Findings of Fact or Conclusions of Law, and they were first mentioned in the District Court’s Order directing Bob to pay the proceeds to the estate. This Court has adopted the doctrine of implied findings for the purpose of reviewing findings of fact. The doctrine provides that where findings of fact “are general in terms, any findings not specifically made, but necessary to the [determination], are deemed to have been implied, if supported by the evidence.” Kluver v. PPL Mont., LLC, 2012 MT 321, ¶ 41, 368 Mont. 101, 293 P.3d 817 (quoting In re Transfer of Location for Mont. All-Alcoholic Bevs. Resort, 2008 MT 165, ¶ 29, 343 Mont. 331, 184 P.3d 324). 6 ¶10 Here, because the court ordered the assets paid back into the estate, it impliedly found that Bob had not yet done so. This implied finding is supported by the evidence. While Bob claimed that he accounted for these policies and purchased a certificate of deposit after depositing them into Cleo’s checking account, the record does not support his claim. Even in his own testimony, Bob could not provide a direct response or remember exactly where the money came from and where it went. After examining the bank statements and his testimony, we conclude that Bob fails to meet his burden of proving clear error in the District Court’s findings. ¶11 Finally, Bob challenges the imposition of a constructive trust. The District Court relied on § 72-33-219, MCA, in conjunction with our ruling in McDermott, ¶¶ 25-26, for the proposition that imposing such a trust no longer requires a showing of fraud or other wrongful acts on the part of the defendant. Section 72-33-219, MCA, allows a constructive trust to arise “when a person holding title to property is subject to an equitable duty to convey it to another on the ground that the person holding title would be unjustly enriched if the holder were permitted to retain it.” See also N. Cheyenne Tribe v. Roman Catholic Church, 2013 MT 24, ¶ 30, 368 Mont. 330, 296 P.3d 450. Principles of equity allow courts broad discretion in creating constructive trusts. N. Cheyenne Tribe, ¶ 32 (citing Eckart v. Hubbard, 184 Mont. 320, 325, 602 P.2d 988, 991 (1979)). ¶12 McDermott is controlling here. There, we upheld a district court’s imposition of a constructive trust after a son attempted to retain property deeded to him by his father when there was evidence that the property was meant to be used for the benefit of his 7 disabled brother. McDermott, ¶ 28. Similar to the beneficiary and account designations in the present case, the deed met the requirements of a grant solely to the son. McDermott, ¶ 7. Bob does not distinguish McDermott or argue that it has no application to the instruments and accounts at issue here. He argues only that he was the clearly named joint tenant or beneficiary on the accounts and was not unjustly enriched. Given the District Court’s finding regarding Bob’s understanding of Dude’s overriding intent and our broad policy for allowing a court to impose a constructive trust in the interest of equity, we conclude that Bob has not demonstrated legal error in the District Court’s determination that Bob was unjustly enriched or its imposition of a constructive trust. ¶13 We have determined to decide this case pursuant to Section 1, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶14 Affirmed. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ BRIAN MORRIS /S/ JIM RICE /S/ LAURIE McKINNON	October 8, 2013
35510a7a-d39d-4bb4-bce2-fc1c04d7c21f	State v. MacGregor	2013 MT 297	DA 11-0498	Montana	Montana Supreme Court	DA 11-0498 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 297 STATE OF MONTANA, Plaintiff and Appellee, v. JEREMY STEVEN MacGREGOR, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDC 2010-142 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender, Koan Mercer, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General; Helena, Montana Leo J. Gallagher, Lewis and Clark County Attorney, Tara Harris, Deputy County Attorney; Helena, Montana Submitted on Briefs: September 18, 2013 Decided: October 15, 2013 Filed: __________________________________________ Clerk October 15 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Judge Jeffrey M. Sherlock (Judge Sherlock) of the First Judicial District Court, Lewis and Clark County, presided over the trial of Jeremy MacGregor (MacGregor) for two counts of attempted deliberate homicide. The jury returned a verdict of guilty on both counts. Judge Sherlock denied MacGregor’s motions to dismiss for lack of speedy trial and for juror misconduct. MacGregor appeals from these dismissals as well as from numerous alleged errors at trial. We affirm. STATEMENT OF ISSUES ¶2 Issue One: Did the District Court correctly deny MacGregor’s motion fora new trial based on juror misconduct? ¶3 Issue Two: Did the District Court err by failing to inquire into MacGregor’s ineffective assistance of counsel claim and the voluntariness of his decision to represent himself? ¶4 Issue Three: Did the District Court correctly deny MacGregor’s speedy trial claim? ¶5 Issue Four: Did the District Court err by admitting evidence of MacGregor’s prior assault of his wife? ¶6 Issue Five: Should we exercise plain error review of MacGregor’s claim that the District Court gave an erroneous instruction on mitigated deliberate homicide? ¶7 Issue Six: Did the District Court improperly impose parole conditions? FACTUAL AND PROCEDURAL BACKGROUND ¶8 On April 15, 2010, MacGregor shot and nearly killed his unarmed wife, Jennifer MacGregor (Jennifer) and their live-in nanny, Betsy Mart (Betsy). He was arrested and charged with two counts of attempted deliberate homicide. After brief representation by a 3 public defender, MacGregor demanded that he represent himself pro se and the court allowed him to do so with standby counsel. ¶9 Before trial, MacGregor filed numerous motions with the court, including a motion to dismiss for lack of speedy trial. The District Court denied the motion to dismiss for lack of speedy trial. Trial commenced on February 22, 2011. ¶10 At trial, MacGregor made vague claims about his general non-violent nature and argued that he had not been in a fight for a number of years. The State introduced evidence that MacGregor had assaulted Jennifer in the past, seeking to rebut his statements of non- violence. The District Court admitted this prior assault to rebut MacGregor’s claim of non- violent character and his statement that he had not been in fights for many years. ¶11 The court submitted instructions to the jury for attempted deliberate homicide and attempted mitigated deliberate homicide. MacGregor failed to object to the instructions. The jury found MacGregor guilty of both counts of attempted deliberate homicide. ¶12 MacGregor’s standby counsel filed a motion for new trial based on juror misconduct. The District Court conducted a hearing concerning juror Justin Wearley’s (Wearley) communication with his family about the trial, his reading of a newspaper during trial, and his failure to reveal at voir dire that he had been a victim of domestic violence. The District Court heard testimony from Wearley, his wife, and their two children, and denied the motion upon a finding that MacGregor could not show prejudice. STANDARDS OF REVIEW ¶13 Appropriate standards of review will be discussed as they arise in this opinion. 4 DISCUSSION ¶14 Did the District Court correctly deny MacGregor’s motion for a new trial based on juror misconduct? ¶15 This Court reviews motions for new trial based on juror misconduct for abuse of discretion, and a district court will not be overturned unless a defendant demonstrates he was deprived of a fair and impartial trial. State v. Rennaker, 2007 MT 10, ¶ 29, 335 Mont. 274, 150 P.3d 960. I. Failure to Disclose at voir dire. ¶16 Section 46-16-115, MCA, lists a number of appropriate challenges for cause in evaluating prospective jurors. Unless a juror falls within one of those statutory categories, the juror will not be removed for cause without a showing of partiality. State v. Hendricks, 171 Mont. 7, 11, 555 P.2d 743, 746 (1976). In Rennaker, we reviewed a misconduct claim in a trial for sexual assault wherein two jurors failed to disclose their prior experience of sexual abuse. Rennaker, ¶ 35. We held that the nondisclosure of their experiences only constituted misconduct if it amounted to intentional concealment, or other further evidence of bias was proven. Rennaker, ¶ 35. ¶17 The District Court properly concluded that Juror Wearley’s failure to disclose was not intentional and no other evidence of bias was presented. Although the defense inquired during voir dire about experiences with domestic violence, a juror could have believed that the defense was inquiring about whether those experiences “would influence how you judge this case . . . .” Indeed, that was the very question asked of another juror, who was not 5 challenged for cause or bias. We further note that past experiences with a similar crime are not listed as legitimate challenges for cause in § 46-16-115, MCA. The defense, therefore, can only show misconduct by proving some evidence of bias. Section 46-16-115(2)(j), MCA; State v. Dunfee, 2005 MT 147, ¶ 16, 327 Mont. 335, 114 P.3d 217. ¶18 MacGregor urges that we recognize Wearley’s implied bias based on the similarities between his experiences and the facts of the case, relying on Gonzales v. Thomas, 99 F.3d 978, 987 (10th Cir. 1996). But our holding in Rennaker requires more than similarities between the juror’s experiences and the crime alleged. MacGregor can point to no evidence of bias other than the fact that Wearley had been a victim of domestic violence. In fact, testimony of Wearley’s family revealed that he sympathized with MacGregor. Therefore, the District Court did not abuse its discretion in determining that Wearley was an impartial juror who unintentionally concealed his experience with domestic violence. II. The Newspaper. ¶19 MacGregor argues that Wearley was exposed to prejudicial extraneous information when he had his family read a newspaper article about the trial to him. Juror misconduct based on extraneous communications must be reviewed on a case-by-case basis, and in the context of the entire record. United States v. Maree, 934 F.2d 196, 202 (9th Cir. 1996) (rev’d in part on other grounds, United States v. Adams, 432 F.3d 1092, 1095 (9th Cir. 2006). The trial court is uniquely qualified to appraise whether extraneous information resulted in prejudice, and we accord substantial weight to that determination. Stebner v. 6 Associated Materials, Inc., 2010 MT 138, ¶ 23, 356 Mont. 520, 234 P.3d 94; Maree, 934 F.2d at 202. ¶20 Where a juror is exposed to extraneous information, a rebuttable presumption of prejudice exists. Stebner, ¶ 17. This presumption is not absolute, and arises only when the information shows a natural tendency to prejudice. Allers v. Riley, 273 Mont. 1, 8, 901 P.2d 600, 605 (1995). In cases concerning prejudice from pretrial newspaper publicity, we held that a “juror’s knowledge of the case and publicity, without more, is insufficient to warrant a change of venue since it cannot be equated with prejudice.” State v. Devlin, 2009 MT 18, ¶ 32, 349 Mont. 67, 210 P.3d 791 (emphasis added) (quoting State v. Fuhrman, 278 Mont. 396, 409, 925 P.2d 1162, 1170 (1996)). Juror misconduct and the resulting prejudice may be evaluated by considering juror testimony and affidavits concerning the misconduct. Stebner, ¶¶ 17, 22; Harry v. Elderkin, 196 Mont. 1, 7-8, 637 P.2d 809, 813 (1981). ¶21 Here, the District Court did not abuse its discretion when it determined that Wearley’s communications with his family did not have a tendency to prejudice. The fact that Wearley was exposed to publicity alone does not constitute a showing of prejudice. The District Court considered testimony from Wearley and his family indicating that he sympathized with MacGregor and did not feel that the article influenced his view of the trial. The court concluded that the headline “Shooter Blames Demonic Forces,” presented no new information that had not been divulged in MacGregor’s trial because his opening argument stated that “demonic forces somehow got these things to happen where apparently I have done these horrible, horrible things to my family.” MacGregor points to no falsehood or bias 7 produced by the article and has not shown any facts demonstrating that the article has a natural tendency to prejudice. The District Court did not abuse its discretion in determining that the information did not prejudice the outcome of the trial. III. Wife’s Comments. ¶22 MacGregor also argues that Wearley was exposed to prejudicial extraneous information when his wife said that MacGregor was “making excuses” for his conduct. We have held that a district court is within its discretion to deny a retrial when an assertion of prejudice has no grounds in the record. State v. White, 2008 MT 129, ¶ 13, 343 Mont. 66, 184 P.3d 1008 (“Although White asserts that Lindbergh’s impermissible comment prejudiced the jury . . . his claim of prejudice fades when the record is considered.”). Testimony at the District Court’s inquiry indicated that Wearley’s statements occurred in the midst of a civics lesson with his children about the trial, and Wearley himself did not express his opinion or seek the opinion of his wife. No evidence was presented that Wearley was persuaded or influenced by his wife’s opinion of the trial. The District Court properly concluded that Wearley was not exposed to any statement that would prejudice his view of MacGregor’s position at trial. ¶23 Did the District Court err by failing to inquire into MacGregor’s ineffective assistance of counsel claim and the voluntariness of his decision to represent himself? I. Ineffective Assistance of Counsel Inquiry. ¶24 MacGregor complains that his attorney failed to form a strategy or contact him while he was at the Montana State Hospital. But these complaints concerned his attorney’s activity after he had been designated “standby counsel.” Standby counsel does not constitute counsel 8 for Sixth Amendment purposes. Halley v. State, 2008 MT 193, ¶ 22, 344 Mont. 37, 186 P.3d 859 (quoting United States v. Taylor, 933 F.2d 307, 313 (5th Cir. 1991). Because standby counsel does not fulfill the Sixth Amendment right to effective counsel, MacGregor cannot claim that standby counsel’s action or inaction violated his right to effective assistance. ¶25 MacGregor also alleged before and during trial that his attorneys had colluded with the prosecution to his detriment. The record is unclear whether he was referring to conduct occurring before or after his appointed counsel was designated as standby counsel. When a defendant alleges ineffective assistance of counsel during trial, we review whether the district court made an inquiry into those complaints to determine whether they are substantial. State v. Gallagher, 1998 MT 70, ¶ 15, 288 Mont. 180, 955 P.2d 1371; State v. Hammer, 2013 MT 203, ¶ 14, 371 Mont. 121, 305 P.3d 843. In reviewing a district court’s inquiry, we do not examine whether counsel was ineffective, but instead, whether the district court’s inquiry into the claim was adequate. Hammer, ¶ 14; State v. Dethman, 2010 MT 268, ¶ 16, 358 Mont. 384, 245 P.3d 30; State v. Weaver, 276 Mont. 505, 511, 917 P.2d 437, 441 (1996). ¶26 A district court’s inquiry is adequate when it considers the defendant’s factual complaints together with counsel’s explanations addressing the complaints. Gallagher, ¶ 15; Dethman, ¶ 16. If the district court’s adequate inquiry finds that the defendant’s complaints are insubstantial, it is not required to hold a hearing on the issue. Hammer, ¶ 14. A complaint is substantial when it makes some showing of fact indicating that counsel’s performance was deficient, and that the deficient performance prejudiced the defendant. 9 Bomar v. State, 2012 MT 163, ¶ 7, 365 Mont. 474, 285 P.3d 396; State v. Miner, 2012 MT 20, ¶ 11, 364 Mont. 1, 271 P.3d 56. Those facts must make a showing of deficiency to overcome the presumption that a defendant was provided with effective assistance of counsel. State v. Morsette, 2013 MT 270, ¶¶ 19-21, 372 Mont. 38, ___P.3d___. ¶27 Here, MacGregor’s primary claim was that his counsel colluded with the prosecution by sharing details about the defense and otherwise talking with each other. The District Court noted that the defense discusses details of the case with prosecutors “in every single criminal case, and there is nothing shown that would create a breach of confidentiality.” The court held that discussions between the defense and prosecutors were not sufficient to overcome the presumption that counsel was effective, and did not reveal any indication of prejudice towards the case. MacGregor points to no other facts indicating that his lawyer’s conduct was unprofessional or incorrect. Accordingly, the District Court made an adequate inquiry to establish that MacGregor’s claims had no merit. II. Voluntariness of Waiver. ¶28 This Court has recognized the Sixth Amendment right to self-representation, but we are also mindful of the disadvantages confronting pro se parties. Halley, ¶ 20. A District Court may only allow a defendant to waive the right to counsel when the record establishes that the defendant is fully aware of the dangers and disadvantages of self-representation, and made the waiver knowingly with “eyes wide open.” State v. Colt, 255 Mont. 399, 406, 843 P.2d 747, 751 (1992); Faretta v. California, 422 U.S. 806, 835, 95 S. Ct. 2525, 2541 (1975). So long as substantial credible evidence exists to support the district court’s decision that the 10 defendant made a voluntary, knowing and intelligent waiver, it will not be disturbed on appeal. State v. Plouffe, 198 Mont. 379, 385, 646 P.2d 533, 536 (1982). ¶29 The District Court here ensured that MacGregor knew the disadvantages of self- representation, warning him that it could decrease the effectiveness of representation and that he would need to follow court deadlines. The District Court also ordered a competency evaluation and refused to allow MacGregor to proceed pro se until the evaluation was completed. After evaluators at the Montana State Hospital (MSH) determined that MacGregor was competent to stand trial, the court again explained the dangers of self- representation. MacGregor still insisted on waiving counsel. The record clearly reflects that the District Court took adequate precautions to ensure that MacGregor waived counsel voluntarily and knowingly. ¶30 Did the District Court correctly deny MacGregor’s speedy trial claim? ¶31 We apply two standards when reviewing a district court’s ruling on a speedy trial motion. First, we review factual findings to determine whether those findings are clearly erroneous. State v. Couture, 2010 MT 201, ¶ 47, 357 Mont. 398, 240 P.3d 987. Second, we examine de novo whether the district court correctly interpreted and applied constitutional law to the facts at issue. Couture, ¶ 47. ¶32 This Court evaluates speedy trial claims by considering the relevant facts in four key areas, and then assessing whether those facts demonstrate a denial of the right to speedy trial. Morsette, ¶ 12 (citing State v. Ariegwe, 2007 MT 204, ¶ 34, 338 Mont. 442, 167 P.3d 815). The relevant factors include the length of delay, the reasons for delay, the accused’s 11 responses to the delay, and prejudice to the accused. Ariegwe, ¶¶ 106-11. No single factor in this balancing test is indispensable or dispositive, and we recognize that district courts must engage in a difficult, sensitive, often subjective balancing process. State v. Johnson, 2000 MT 180, ¶ 14, 300 Mont. 367, 4 P.3d 654; State v. Highpine, 2000 MT 368, ¶ 14, 303 Mont. 422, 15 P.3d 938. I. Length and Responsibility for Delay. ¶33 A trial delay of longer than 200 days triggers the four factor balancing test in Ariegwe. Ariegwe, ¶ 62. However, the length of delay alone does not amount to a speedy trial violation. We must also consider the reasons for the delay and attribute portions of the delay to certain parties. Ariegwe, ¶ 64. Delay requested by a particular party may be attributable to the other party. State v. Diaz, 2006 MT 303, ¶¶ 32-33, 334 Mont. 479, 148 P.3d 628; Ariegwe, ¶ 66. When the State causes a delay in the trial, we must evaluate whether a valid reason justified the delay. Ariegwe, ¶ 67 (quoting Barker v. Wingo, 407 U.S. 514, 531, 92 S. Ct. 2182, 2192 (1972)). Those delays resulting from the State’s lack of diligence are weighed significantly against the State. Couture, ¶ 72. “Institutional delays” that are inherent in the criminal justice system are valid reasons for delay and we do not weigh those delays heavily against the State. Morsette, ¶ 13. Delay may be attributed to the defendant when the defendant attempts to change counsel, request a continuance, or request mental health evaluations. Morsette, ¶ 14. ¶34 MacGregor was arrested on April 15, 2010. On July 27, 2010, MacGregor gave notice of his defense of mental incapacitation and not having a particular state of mind. That 12 notice referenced § 45-2-203, MCA, providing that intoxication is not a defense to mental state unless the defendant did not knowingly consume an intoxicating substance. MacGregor filed a motion requesting evaluation of his mental state on July 30, and the State moved for the same evaluation at the Montana State Hospital. MacGregor withdrew his motion for evaluation on August 3, and then again filed the motion for psychological evaluation on August 6, noting “I understand this motion may delay trial.” MacGregor returned from evaluation at MSH on November 3, 2010, and on November 15, 2010, a status hearing set a trial date for February 7, 2011. ¶35 The District Court calculated that 314 days had passed between arrest and trial. Of those days, the court found that MacGregor was responsible for a seven-day continuance and the 90-day mental health evaluation at MSH. MacGregor now disputes the assignment of responsibility for the mental health evaluation, as it was requested by the State. We agree with the District Court’s conclusion that the request was a direct response to MacGregor’s intoxication defense and his request for private evaluation. The court also held that the rescheduling of trial dates resulting from the mental health evaluation could also be attributed to MacGregor, amounting to 175 days. This was not in error, as the State had been prepared for trial on the original date and the court was forced to reschedule only as a result of MacGregor’s actions. Finally, the court correctly attributed 131 days to the State as institutional delay resulting from continuances and preparation for trial, as no evidence demonstrated a lack of diligence on the State’s behalf. II. Assertion of the Right. 13 ¶36 When a defendant raises a speedy trial issue, we must evaluate whether the defendant truly wants a speedy trial, or whether he is attempting to have his case dismissed on speedy trial grounds. State v. Steigelman, 2013 MT 153, ¶ 15, 370 Mont. 352, 302 P.3d 396; State v. Billman, 2008 MT 326, ¶ 31, 346 Mont. 118, 194 P.3d 58. MacGregor was arrested on April 15, 2010, and at a hearing on November 15, 2010, the trial was scheduled for February 7, 2011. MacGregor was incarcerated for 214 days, at which time he was told that he would be incarcerated for 84 more days before trial would begin. MacGregor then filed a motion on November 22, 2010, indicating that he wanted a speedy trial, but that the court should not do any speedy trial balancing yet. MacGregor then filed a motion on January 11, 2011, requesting that the court perform the speedy trial balancing test and dismiss his case. ¶37 The District Court concluded that MacGregor asserted his right to speedy trial only to avoid trial. MacGregor could have easily brought the motion to dismiss when he first complained of the delay on July 15, or at the rescheduling hearing at November 15, or even in his motion filed on November 22. Instead, the timing of MacGregor’s motion comes just before his trial, but long after the rescheduling hearing or his first complaint of delay. We agree with the District Court’s conclusion that this tactic was disingenuous, and that MacGregor likely did not raise it earlier because he wanted to give more weight to his motion to dismiss. III. Prejudice to the Defendant. ¶38 As a final matter, we must consider prejudice to the accused resulting from the delay of trial. The impairment of the accused’s defense from a speedy trial violation constitutes 14 the most important factor in our prejudice analysis. Steigelman, ¶ 29; City of Billings v. Bruce, 1998 MT 186, ¶ 19, 290 Mont. 148, 965 P.2d 866. We must also consider a defendant’s interest in minimizing impairment of liberty and shortening the disruption of daily life. Ariegwe, ¶ 87; United States v. MacDonald, 456 U.S. 1, 8, 102 S. Ct. 1497, 1502 (1982). In Morsette, we considered a defendant who was housed in solitary confinement during a 662-day trial delay, but no evidence showed any impairment to the defendant’s case. Morsette, ¶ 13. We upheld the District Court’s finding that the State had overcome the presumption of prejudice to the defendant because his defense had not been impaired. Morsette, ¶ 15. The conditions of incarceration are also relevant in assessing the oppressiveness and prejudice to the defendant. Ariegwe, ¶ 97. ¶39 Here, MacGregor points to no evidence that the delay of trial impaired his defense. At the speedy trial hearing, MacGregor alleged that video surveillance of the bowling alley had been unattainable due to the delay, and that some witnesses lacked memory of the events at the bowling alley. But MacGregor made no showing that the loss of evidence prejudiced his case. Namely, he never demonstrated that the video evidence ever existed, that the video evidence could ever have been obtained, that the video was destroyed as a result of the delay, or that the video would have helped his case at trial. The same problems exist with his friends’ recollections of the bowling alley events. MacGregor never alleged that his friends remembered incorrectly or that a clearer memory would have benefitted his case. Like the court in Morsette, the District Court considered all of MacGregor’s allegations of prejudice and found no evidence that his defense had been impaired. Since impairment of the defense 15 is the most important factor in determining prejudice from delay, we see no reason to disturb the court’s finding that MacGregor did not suffer prejudice. ¶40 As a final matter, MacGregor contends that he was subjected to oppressive conditions while he was incarcerated, including prison overcrowding and malfunctioning of the heat system. We do not condone the conditions that MacGregor endured during his incarceration. Those conditions alone, however, do not warrant a finding of oppressive pretrial incarceration sufficient to establish the prejudice factor of speedy trial analysis. Morsette, ¶ 16. IV. Balancing. ¶41 In Ariegwe, trial was delayed for more than 400 days and nearly all of the delay was attributable to the government, but we found that no speedy trial violation existed when considered in the context of other circumstances. Ariegwe, ¶ 134. In Morsette, we affirmed a District Court’s finding that there was no substantial prejudice to the defendant, even though a 321-day delay was attributable to the State. Morsette, ¶¶ 15-16; See also, Steigelman, ¶ 14 (426-day delay not violation of speedy trial on balance). Federal courts have also declined to dismiss on speedy trial grounds when violations extended far beyond 200 days because other factors controlled. Barker, 407 U.S. at 534, 92 S. Ct. at 2192 (delay of four years did not trigger speedy trial dismissal when defendant was free on bond for that time); United States v. King, 483 F.3d 969, 976 (9th Cir. 2007) (two-year delay “not excessive”). 16 ¶42 In considering the totality of the circumstances, we find that the District Court properly determined that all four factors weighed against MacGregor’s speedy trial claim. The majority of the delay in trial was attributable to MacGregor’s trial tactics, and he failed to vigorously and genuinely assert his right to speedy trial. Only 131 days were attributable to the State, and all of that delay was for valid institutional purposes. MacGregor cannot show prejudice to his position at trial resulting from the delay. The District Court correctly employed the balancing test to conclude that MacGregor was not deprived of his right to speedy trial. ¶43 Did the District Court err by admitting evidence of MacGregor’s prior assault of his wife? ¶44 This Court reviews evidentiary rulings for abuse of discretion. State v. McOmber, 2007 MT 340, ¶ 10, 340 Mont. 262, 173 P.3d 690. The State sought to use evidence of MacGregor’s assault on his wife, Jennifer, occurring two years prior to this incident. The District Court ruled that such evidence could only be used to rebut character evidence presented by MacGregor, pursuant to M. R. Evid. 404(a)(1). MacGregor contends that he never made any statements about nonviolence towards his wife, so the State improperly introduced the assault. ¶45 A defendant puts his character at issue when making unnecessary or self-serving statements about his character which he knows to be untrue. State v. Gowan, 2000 MT 277, ¶ 24, 302 Mont. 127, 13 P.3d 376. The State may rebut character evidence by cross- examining the defendant’s character or by calling witnesses of its own. Gowan, ¶ 23. In 17 State v. Clark, 209 Mont. 473, 492-93, 682 P.2d 1339, 1349-50 (1984) a defendant charged with sexual intercourse without consent stated that he was generally a nonviolent and truthful person. We held that this opened the door to rebuttal evidence concerning the defendant’s violent and untruthful past. Clark, 209 Mont. at 489, 682 P.2d at 1348. ¶46 During MacGregor’s trial, he argued that he was unusually violent on the night in question. He noted that he picked fights with friends on that night even though he was “not a violent man” and had not been in a fight in many years. MacGregor blamed his sudden outburst of violence on the combination of stress, a “spiritual assault,” and his intense intoxication. MacGregor hoped to persuade the jury that this amounted to “extreme mental or emotional stress for which there is reasonable explanation or excuse” and justified a verdict for attempted mitigated deliberate homicide. Section 45-5-103(1), MCA. The general theme of MacGregor’s argument was, “I wasn’t acting like myself.” ¶47 The prosecution cross-examined MacGregor to show that he regularly became belligerent when intoxicated. MacGregor denied becoming violent when intoxicated, other than the night in question; “I don’t recall any other incidents.” In response to this, the State asked whether MacGregor had drunkenly assaulted his wife two years earlier. This evidence directly rebuts MacGregor’s assertion that he was not himself, not violent, and not aware that he was especially belligerent when intoxicated. MacGregor plainly opened the door to character evidence when he made general claims about his nonviolent nature and his unusual behavior when intoxicated that night. The District Court properly admitted the prior conviction to rebut MacGregor’s character evidence. 18 ¶48 Should we exercise plain error review of MacGregor’s claim that the District Court gave an erroneous instruction on mitigated deliberate homicide? ¶49 MacGregor argues that the District Court gave an incorrect instruction on attempted mitigated deliberate homicide. That instruction correctly stated that mitigated deliberate homicide contained the elements of deliberate homicide, and that mitigation should be found if “the Defendant was acting under the influence of extreme mental or emotional stress for which there is reasonable explanation or excuse.” Section 45-5-103(1), MCA. The instruction also stated that “you should first consider the verdict on the greater offense of attempted deliberate homicide. If you find the Defendant guilty of attempted deliberate homicide, you need go no further as you will have reached a verdict in this case.” Both parties admit that this part of the instruction was incorrect as a matter of law, because mitigated deliberate homicide requires a preliminary finding of deliberate homicide. Demontiney v. Mont. Twelfth Judicial Dist. Crt., 2002 MT 161, ¶ 16, 310 Mont. 406, 51 P.3d 476; State v. Scarborough, 2000 MT 301, ¶¶ 48-50, 302 Mont. 350, 14 P.3d 1202. MacGregor, who drafted and submitted this instruction to the court, did not object to it. We generally do not review jury instructions unless they are specifically objected to at trial. State v. Earl, 2003 MT 158, ¶ 23, 316 Mont. 263, 71 P.3d 1201. We may exercise plain error review if the claimed error implicates a defendant’s fundamental constitutional rights and results in a manifest miscarriage of justice. Earl, ¶ 25. ¶50 MacGregor contends that the incorrect instruction prevented the jury from considering mitigated deliberate homicide as a charge, and this constitutes a miscarriage of justice. 19 MacGregor alleges mitigation because he was intoxicated on marijuana and alcohol; he was upset about an incident where his dog knocked over his child; his child had been diagnosed with a minor ailment; he had fired someone recently; he had quit cigarettes, marijuana, and alcohol (although not that day); he had worked 60-hour work weeks; he had cut his hand; and his wife forgot their anniversary. But mitigating factors arise from some sort of direct provocation, not simply the buildup of stress and anger. Hans v. State, 283 Mont. 379, 399, 942 P.2d 674, 686 (1997). We have previously ruled that extreme intoxication does not constitute a mitigating factor, nor do the stresses that accompany living in hard times. State v. Goulet, 283 Mont. 38, 42, 938 P.2d 1330, 1333 (1997) (showing of intoxication or anger insufficient to support mitigation); State v. Martin, 2001 MT 83, ¶¶ 33-34, 305 Mont. 123, 23 P.3d 216 (unemployment, homelessness, pregnant girlfriend do not support mitigation). MacGregor presented no evidence demonstrating provocation of his anger other than the challenges that naturally accompany sobriety, fatherhood, and marriage. ¶51 MacGregor claims that he only fired shots when his wife threatened to leave him, and that this constitutes a mitigating factor. Testimony at trial revealed that Jennifer refused to live with MacGregor without their live-in nanny, saying that if Betsy were fired, “I can’t live like this” and “[i]f she goes, I go.” MacGregor then began to threaten Jennifer by putting the gun to her forehead and under her chin. When Jennifer pushed him away and began to run out the door, MacGregor shouted “[w]ait baby, please don’t do this.” When Jennifer stopped and turned to face MacGregor, he shot her in the chest, and went on to shoot Betsy. 20 ¶52 Jennifer’s insistence on a live-in nanny is distinguishable from the passions and jealousies ignited when a romantic partner ends a relationship. See State v. Gratzer, 209 Mont. 308, 682 P.2d 141 (1984); State v. Azure, 2002 MT 22, 308 Mont. 201, 41 P.3d 899. The fact that one’s spouse wants a nanny is not a reasonable excuse for extreme mental or emotional distress that results in deadly violence. Because MacGregor did not prove any mitigating factors as a matter of law, the instruction did not rise to a level of plain error. ¶53 Did the District Court improperly impose parole conditions? ¶54 Finally, we review sentences for legality to determine whether they are within statutory parameters. State v. Hicks, 2006 MT 71, ¶ 41, 331 Mont. 471, 133 P.3d 206. At sentencing, the District Court imposed a period of incarceration, restitution to Betsy and Jennifer, and prohibited MacGregor from seeing Betsy or Jennifer. While the parole board has sole authority to impose conditions of release upon parole, the original judgment may impose conditions for the entirety of an individual’s sentence, even when they are later paroled. State v. Burch, 2008 MT 118, ¶¶ 22-29, 342 Mont. 499, 183 P.3d 66; § 46-23-216, MCA, (“The period served on parole must be considered service of the term of imprisonment . . . .”). Where a district court lacks statutory authority to impose a sentence, its conditions may be considered recommendations to the parole board if parole is granted. State v. Heafner, 2010 MT 87, ¶ 6, 356 Mont. 128, 231 P.3d 1087 (“[T]he District Court did not have the power to impose conditions upon a future parole that might be granted to Heafner. If Heafner is paroled then the Board of Pardons and Parole may impose conditions of parole 21 and may consider those listed by the District Court as recommendations.”); State v. Holt, 2011 MT 42, ¶ 18, 359 Mont. 308, 249 P.3d 470. ¶55 MacGregor contends that the District Court unlawfully imposed conditions upon parole by stating that his sentence conditions would apply even if released on parole. MacGregor points to no specific condition, but only contests that the conditions of his sentence should not apply to him if he is later paroled. While the District Court may not impose conditions of parole, it is statutorily authorized to impose some of the conditions in the order, such as the requirement that he pay restitution to his victims. Section 46-18- 201(5), MCA. It would be illogical for the District Court to require MacGregor to pay restitution only when he was incarcerated and not when paroled, and the court properly exercised its authority in imposing that condition. To the extent the conditions imposed govern his behavior on parole, the conditions may be viewed as the District Court’s recommendations to the parole board. Only the parole board, however, may impose conditions on MacGregor for the purposes of parole. The District Court properly exercised its authority in adopting the PSR’s recommended conditions. CONCLUSION ¶56 For the reasons stated above, the MacGregor’s convictions and sentence are affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ JIM RICE 22 /S/ BETH BAKER /S/ BRIAN MORRIS	October 15, 2013
eff0b211-b565-4856-9950-3e0506ea0140	State v. Ugalde	2013 MT 308	DA 11-0366	Montana	Montana Supreme Court	DA 11-0366 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 308 STATE OF MONTANA, Plaintiff and Appellee, v. NEVADA R. UGALDE, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DC 09-344 Honorable Susan P. Watters, Presiding Judge COUNSEL OF RECORD: For Appellant: Gregory D. Birdsong; Birdsong Law Office, PC; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Pamela P. Collins, Assistant Attorney General; Helena, Montana Scott Twito, Yellowstone County Attorney; Juli M. Pierce, Deputy Yellowstone County Attorney; Billings, Montana Submitted on Briefs: July 10, 2013 Decided: October 17, 2013 Filed: __________________________________________ Clerk October 17 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Nevada Ugalde appeals her conviction by a jury in the Thirteenth Judicial District Court of aggravated assault, a felony. We consider the following issues on appeal: ¶2 1. Whether the District Court should have dismissed the charges against Ugalde when, after Ugalde disclosed information and defense strategies to the State Medical Examiner, communication occurred between the Medical Examiner and the Yellowstone County Attorney. ¶3 2. Whether Ugalde is entitled to a new trial on the ground that the State’s witnesses were unnecessarily cumulative or unfairly prejudicial to Ugalde. ¶4 3. Whether Ugalde is entitled to a new trial on the ground that the prosecution presented prejudicial victim impact testimony. ¶5 4. Whether Ugalde is entitled to a new trial on the ground of prosecutorial misconduct during closing argument. ¶6 5. Whether Ugalde is entitled to a new trial because her counsel provided ineffective assistance. ¶7 We affirm. FACTUAL AND PROCEDURAL BACKGROUND ¶8 On the morning of June 11, 2008, Nevada Ugalde placed several urgent phone calls to Susan Napier, the mother of the child she was babysitting. Through tears, Ugalde told Napier that the child, I.N., had fallen from the crib and expressed concern about the way he was acting and breathing. ¶9 Napier did not have a vehicle with her, so she began walking toward Ugalde’s home. Meanwhile, Ugalde called her husband and told him about I.N.’s condition. Ugalde’s husband asked or told her to “Call 911,” hung up the phone, left his workplace, 3 and began driving home. On the way, he spotted Napier walking on the side of the road and stopped to pick her up. They arrived at the Ugalde home together, approximately thirty minutes after the initial phone call between Ugalde and Napier. Ugalde never called 911. ¶10 Ugalde handed I.N. to Susan at the front door. I.N.’s eyes were nearly closed and he was barely breathing. Ugalde’s husband took Susan and I.N. to the emergency room at the Billings Clinic. ¶11 In the emergency room, Dr. Curtis Lee discovered multiple injuries to I.N.’s head and internal bleeding. Dr. Linda Johnson, a general practice pediatrician, and Dr. Eugen Dolan, a neurosurgeon, were called in to assist with I.N.’s care. Dr. Johnson helped identify and reduce immediate problems with intracranial pressure. Dr. Lee and Dr. Dolan decided to fly I.N. to a children’s hospital in Denver for additional treatment. ¶12 Since the incident, I.N. has undergone extensive physical, speech, and occupational therapy. I.N. suffered hearing loss and visual impairments requiring several surgeries. The State’s professional witnesses believed the injuries were inconsistent with simply falling from a crib to a carpeted floor. ¶13 Several people involved with I.N.’s treatment reported the incident to law enforcement pursuant to mandatory reporting obligations. On June 29, 2009, the State filed an Information charging Ugalde with aggravated assault in violation of § 45-5-202, MCA (2007). The Information alleged that Ugalde purposely or knowingly “shook or slammed” I.N. on June 11, 2008, causing serious bodily injury. Ugalde entered a plea of 4 not guilty and received a public defender. Due to a conflict, Ugalde was appointed new counsel on July 2, 2009. ¶14 Ugalde’s counsel decided she would need to retain a pathologist as an expert. To that end, she consulted with Eric Olsen, coordinator for resource allocations to contract counsel for the Office of the Public Defender [OPD], to comply with the OPD’s internal policy that requires approval for any expenses over $200. ¶15 After voicing concerns about funding, Olsen explained that he was “not inclined to approve the request” and instead put Ugalde in contact with Dr. Gary Dale, the State Medical Examiner at the State Crime Lab. Ugalde could consult Dr. Dale without charge due to an agreement between the OPD and the State Crime Lab. ¶16 Under the impression that her communications would be kept confidential, Ugalde’s counsel spoke with Dr. Dale. Dr. Dale remarked that the State’s identification of Dr. Thomas Bennett as an expert in the case surprised him, in part because he knew the State already was aware of potential problems with using Dr. Bennett in child abuse cases. Dr. Dale recommended Dr. Mary Case as an independent expert for the defense. Dr. Dale never signed a written agreement with the public defender’s office or with Ugalde’s counsel. Nor apparently did he discuss with defense counsel any agreement to maintain confidentiality. ¶17 After concluding that his involvement with Ugalde was “terminated,” Dr. Dale telephoned Dennis Paxinos, the Yellowstone County Attorney, and discussed what he perceived as problems with the use of Dr. Bennett as an expert in this case. Dr. Dale warned against using Dr. Bennett as a witness, though he indicated that he agreed with 5 Dr. Bennett’s conclusion that the injuries were inconsistent with an accidental cause. Paxinos later related the information obtained from Dr. Dale to the prosecutor handling the case. ¶18 On November 25, 2009, Ugalde filed a motion to dismiss the charge for alleged violations of confidentiality and due process. Ugalde argued that by revealing defense information and strategy to Paxinos, Dr. Dale violated a duty to keep his consultation with Ugalde’s counsel confidential. In addition, Ugalde’s motion alleged interference with the attorney-client relationship in violation of the Sixth Amendment and a violation of the right to effective assistance of counsel. ¶19 The District Court denied the motion to dismiss on March 16, 2010, concluding that Dr. Dale owed the defense no duty of confidentiality and that the proper remedy in any event would be disqualification of the witness—not dismissal of the Information. The court rejected Ugalde’s due process violation and Sixth Amendment arguments. Finally, the court concluded that these facts did not demonstrate ineffective assistance of counsel. ¶20 Trial commenced on April 19, 2010, and lasted five days. The State listed twenty-two anticipated witnesses in its trial brief and called eighteen witnesses at trial. One witness for the State, Dr. Smith, was added fourteen days before the trial began. ¶21 On the first day of trial, Ugalde objected to the State’s plan to call more than ten witnesses, especially the wide range of experts called to establish the element of serious bodily injury. Ugalde’s counsel argued that the parade of witnesses was unnecessary, 6 cumulative, and could serve only to generate hostility toward Ugalde and sympathy for the victim. ¶22 In response, the court asked if Ugalde would stipulate to the element of serious bodily injury and thereby remove the State’s obligation to prove that required element of the offense. Ugalde’s counsel indicated that she was not comfortable stipulating to serious bodily injury. The court stated, “Then I think the State has to prove it.” The court overruled each of Ugalde’s many subsequent objections to cumulative testimony throughout the trial. In total, the State called approximately eleven witnesses over the next three-and-a-half days to testify to various aspects of the injuries to I.N. ¶23 The theory of the defense was that I.N. fell from the crib at Ugalde’s home. Ugalde called two expert witnesses: Dr. Kenneth Monson, a biomechanical engineer, who testified that the injuries could have been caused by a short accidental fall, and Dr. John Plunkett, a pathologist, who explained that a short fall could cause this constellation of injuries. Dr. Plunkett also testified about a growing skepticism to shaken baby syndrome in certain sections of the medical community—particularly biomechanical engineers and, increasingly, pathologists. Lisa Justis, a social worker, testified about I.N.’s ability to pull himself up to a position where falling from the crib was possible, and Ugalde also testified on her own behalf. In its closing argument, defense counsel emphasized that, despite the surfeit of expert witnesses, the State could not eliminate the possibility of an accidental cause of the injuries beyond a reasonable doubt. 7 ¶24 On April 23, 2010, a unanimous jury found Ugalde guilty of aggravated assault. The District Court sentenced her to twenty years, with five suspended, and ordered her to pay $1,331,636.65 in restitution. ¶25 Following the trial, Ugalde filed a motion for a new trial or dismissal based on Dr. Dale’s disclosure of confidential information to Paxinos, cumulative evidence, the presentation of evidence previously ruled improper, and improper closing argument. The District Court denied the motion. Ugalde appeals her conviction and the court’s denial of her motion for a new trial. STANDARD OF REVIEW ¶26 We review for abuse of discretion a district court’s denial of a motion for a new trial. State v. Thorp, 2010 MT 92, ¶ 39, 356 Mont. 150, 231 P.3d 1096 (2010) (citing State v. Makarchuk, 2009 MT 82, ¶ 14, 349 Mont. 507, 204 P.3d 1213). ¶27 This Court generally will “not address issues of prosecutorial misconduct pertaining to a prosecutor’s statements not objected to at trial.” State v. Aker, 2013 MT 253, ¶ 21, 371 Mont. 491, __ P.3d __ (citing State v. Longfellow, 2008 MT 343, ¶ 24, 346 Mont. 286, 194 P.3d 694). “We may review such an issue, however, under the plain error doctrine.” Aker, ¶ 21 (citing State v. Lacey, 2012 MT 52, ¶ 14, 364 Mont. 291, 272 P.3d 1288). The decision to invoke plain error review is discretionary. Aker, ¶ 21. ¶28 “Only record-based ineffective assistance of counsel claims are considered on direct appeal.” Aker, ¶ 22 (citing State v. Howard, 2011 MT 246, ¶ 18, 362 Mont. 196, 265 P.3d 606). “To the extent such claims are reviewable, ‘they present mixed questions of law and fact that we review de novo.’” Aker, ¶ 22 (quoting Howard, ¶ 18.) 8 DISCUSSION ¶29 1. Whether the District Court should have dismissed the charges against Ugalde when, after Ugalde disclosed information and defense strategies to the State Medical Examiner, communication occurred between the Medical Examiner and the Yellowstone County Attorney. ¶30 On appeal, Ugalde argues her client confidentiality, work product privileges, and due process rights were violated when Dr. Dale, the State Medical Examiner, disclosed information obtained from a confidential consultation with defense counsel to Dennis Paxinos, the Yellowstone County Attorney. She also argues that Paxinos engaged in prosecutorial misconduct by communicating with Dr. Dale and relaying the information to the State’s prosecuting attorney. A. Client Confidentiality ¶31 The District Court did not abuse its discretion in holding that the conduct of Dr. Dale and Paxinos did not entitle Ugalde to dismissal of the information or a new trial. “Because it is a drastic step, dismissing an indictment is a disfavored remedy.” U.S. v. Rogers, 751 F.2d 1074, 1076 (9th Cir. 1985). ¶32 A defendant’s “access to expert assistance is a crucial element in assuring a defendant’s right to effective legal assistance, and ultimately, a fair trial.” Hutchinson v. People, 742 P.2d 875, 881 (Colo. 1987). The confidentiality of experts “is a crucial element in the effective legal representation of a defendant.” Hutchinson, 742 P.2d at 882. The District Court correctly recognized, however, that when this duty of confidentiality is breached, the proper remedy is to disqualify the expert. In re Mitchell, 981 P.2d 172, 175 (Colo. 1999) (citing Wang Laboratories, Inc. v. Toshiba Corp., 762 9 F. Supp. 1246 (E.D. Va. 1991), rev’d in part on other grounds); see Rogers, 751 F.2d at 1079 (“If, in fact, Miller revealed a confidential communication in violation of his ethical obligations as an attorney, suppression of that evidence at trial is the appropriate remedy.”). ¶33 In Hutchinson, the Colorado Supreme Court reversed a conviction on the ground that the prosecution should not have been permitted to call a defense-retained handwriting expert in its case-in-chief. Hutchinson, 742 P.2d at 876. Unlike in Hutchinson, the expert at issue here, Dr. Dale, was never called to the stand and offered no testimony. ¶34 In Ugalde’s brief in support of her motion to dismiss, she argued that if the test for a breach of confidentiality by a non-attorney expert is met, “disqualification of the expert is compelled.” Her brief further noted that “[t]he policy of excluding an expert who has received this type of information is due to the fact that it is difficult to determine conclusively what impact such information may have on the expert’s analysis or subsequent testimony.” ¶35 Ugalde argues on appeal that the alleged breach of confidentiality here warrants a new trial or dismissal of the action. Her brief points out that, “[b]ecause Dr. Dale is not a retained expert for the prosecution in this matter, exclusion is not a remedy for his actions.” But, as the District Court recognized, this does not mean that dismissal is appropriate. See U.S. v. Morrison, 449 U.S. 361, 364-65, 101 S. Ct. 665, 668 (1981) (“[A]bsent demonstrable prejudice, or substantial threat thereof, dismissal of the indictment is plainly inappropriate, even though the violation may have been 10 deliberate.”).1 To the contrary, the fact that Dr. Dale was not called as a witness means that the type of harm against which exclusion is meant to protect never occurred here in the first place. ¶36 “The trial court has discretion to grant a criminal defendant a new trial but may do so only if required in the interests of justice.” State v. Billedeaux, 2001 MT 9, ¶ 23, 304 Mont. 89, 18 P.3d 990; § 46-16-702(1), MCA. The court’s decision to deny a new trial must be justified by the law and the weight of the evidence. Billedeaux, ¶ 23; § 46-16- 702(3), MCA. Ugalde relied on an unspoken—and ultimately misguided—assumption that her communications with Dr. Dale were confidential. The record shows that the prosecution already knew of the problems surrounding Dr. Bennett. Dr. Dale sent a letter on December 9, 2005—a considerable time before this case was filed—informing the Montana County Coroners and County Attorneys of Dr. Bennett’s problematic history. Ugalde was not affected by Dr. Dale’s disclosure of his ultimate opinion that Ugalde intentionally harmed I.N. because this opinion never reached the jury. Thus, we agree with the District Court that the evidence presented here does not warrant dismissal of the information or a new trial. B. Work-Product Privilege ¶37 Ugalde argues that “[Dr.] Dale’s disclosures violated work-product privilege, resulting in unfair and irremediable prejudice to her case.” The work-product doctrine protects against the disclosure of “the mental processes of an attorney, providing a 1 There is nothing in the record here to suggest that there was a deliberate violation of any confidentiality agreement. 11 privileged area within which [the attorney] can analyze and prepare [a] client’s case.” State v. Miller, 231 Mont. 497, 513, 757 P.2d 1275, 1285 (1988) (citing U.S. v. Nobles, 422 U.S. 225, 238, 95 S. Ct. 2160, 2170 (1975)). “The reality of our legal system demands that the embraces of the protection also extend to agents of the attorney.” Miller, 231 Mont. at 513, 757 P.2d 1285. ¶38 Here, it is uncertain to what extent, if any, work product was disclosed. The disclosure of Dr. Dale’s ultimate opinion regarding causation is irrelevant because he never testified. Even if he had, his opinion necessarily would have been disclosed to the State prior to his taking the stand. State v. Anderson, 211 Mont. 272, 280, 686 P.2d 193, 98 (1984) (citing State v. Hardy, 235 S.E.2d 828, 841 (N.C. 1977) (“The privilege is certainly waived when the defendant or the State seeks at trial to make a testimonial use of the work product.”)). Ugalde’s intention to impeach Dr. Bennett qualifies as work product but it is unclear whether this intention was disclosed to Paxinos. It appears as though Dr. Dale only discussed the problems with calling Dr. Bennett as a witness generally, consistent with his previous letter. In essence, Ugalde argues that she was prejudiced by the disclosure of facts already known to all parties, and the fact that she was denied the chance to impeach an expert who never testified. “The burden to demonstrate an abuse of discretion is on the party seeking reversal of an unfavorable ruling.” State v. Criswell, 2013 MT 177, ¶ 42, 370 Mont. 511, 305 P.3d 760. Ugalde has not carried her burden of demonstrating that these facts warrant dismissal of the information or a new trial. 12 C. Due Process ¶39 Ugalde alleges general due process violations resulting from Dr. Dale’s disclosure of information to Paxinos pertaining to Dr. Bennett. “A district court may dismiss an indictment where the government’s investigatory or prosecutorial conduct violates a defendant’s due process rights.” U.S. v. King, 200 F.3d 1207, 1213 (9th Cir. 1999) (citing U.S. v. Barrera-Moreno, 951 F.2d 1089, 1091 (9th Cir. 1991)). “To violate due process, government conduct must be ‘so grossly shocking and so outrageous as to violate the universal sense of justice.’” King, 200 F.3d at 1213 (quoting U.S. v. Restrepo, 930 F.2d 705, 712 (9th Cir. 1991)). When the government’s investigatory or prosecutorial conduct has violated a defendant’s right to due process, it is within the district court’s discretion to dismiss an indictment. King, 200 F.3d. at 1213. ¶40 While the communications between Dr. Dale and Paxinos constitute government action, Ugalde does not explain how a due process violation exists when a defendant cannot impeach an expert witness who offers no evidence. Dr. Bennett was contacted regarding this case at a relatively early stage. The State used his professional opinion in the affidavit and motion for leave to file the Information. It may be, given the State’s awareness of potential issues with Dr. Bennett testifying, that he was included simply to consult regarding other experts. Ugalde’s protestation that this is a “close case” is unconvincing. Even if Ugalde had impeached Dr. Bennett regarding his expert opinion that the injuries were not accidental, the harm to the State’s case was minimal because Dr. Bennett’s opinion was shared by four other medical doctors who testified at trial. 13 ¶41 The District Court determined that the government conduct was not so outrageous or shocking as to infringe Ugalde’s due process rights and we agree. D. Prosecutorial Misconduct ¶42 Ugalde argues that the District Court failed to consider “the prosecutorial misconduct implicit in Dennis Paxinos[’s] actions.”2 Specifically, Ugalde argues that Paxinos had “an absolute obligation to end the conversation and advise Dale of the doctor’s obligation to keep the consultation with defense counsel confidential.” ¶43 A new trial may be granted “where the prosecutor’s actions have deprived [a] defendant of a fair and impartial trial.” State v. Gray, 207 Mont. 261, 266-67, 673 P.2d 1262, 1265-66 (1983) (citations omitted). This Court “measures prosecutorial misconduct by reference to established norms of professional conduct.” State v. Passmore, 2010 MT 34, ¶ 48, 355 Mont. 187, 225 P.3d 1229 (2010) (citation omitted). ¶44 In Passmore, the Court noted that the defendant “cited no cases or professional standards” that supported his argument, and did not establish prejudice since the defendant was not tried under a problematic Information. Passmore, ¶ 48. Ugalde likewise cites no comparable cases or standards and fails to establish prejudice. Paxinos knew very little about the case when called by Dr. Dale. Paxinos merely facilitated the transfer of information that was either irrelevant or already possessed by the State. The record does not show that Paxinos sought an unfair advantage or that he obtained one. While we do not endorse the communications that occurred in this case, we conclude that 2 We limit our analysis to Yellowstone County Attorney Paxinos’s conduct, since Ugalde conceded in a brief that “the specific prosecutor in this matter obviously has clean hands . . . .” 14 they did not deprive Ugalde of due process. The District Court did not err in denying Ugalde’s motions for dismissal or a new trial on this issue. ¶45 2. Whether Ugalde is entitled to a new trial on the ground that the State’s witnesses were not unnecessarily cumulative or unfairly prejudicial to Ugalde. ¶46 Ugalde argues that the sheer quantity of the State’s witnesses was unnecessary and unfairly prejudiced the jury against her. Specifically, she claims the State called an excessive number of expert witnesses to prove the element of serious bodily injury, contending that “[a]ny of these witnesses would have been sufficient to establish that I.N. suffered serious bodily injury.” The District Court disagreed, determining that the State’s medical witnesses provided relevant information to the jury without needlessly presenting cumulative evidence. The court observed that each witness testified within his or her own medical specialty and held that although there may have been some overlapping testimony, the evidence was “not nearly as ‘cumulative’ as the defendant claims.” ¶47 “Relevant evidence is generally admissible.” State v. Vandersloot, 2003 MT 179, ¶ 16, 316 Mont. 405, 73 P.3d 174 (citing M. R. Evid. 402). Cumulative evidence is “additional evidence of the same character to the same point.” Section 26-1-102(4), MCA. It is true that the “testimony of one witness is sufficient to prove a fact.” State v. Merrick, 2000 MT 124, ¶ 13, 299 Mont. 472, 2 P.3d 242. However, cumulative evidence will be deemed harmless “unless the record shows that the error was prejudicial.” State v. Hansen, 1999 MT 253, ¶ 86, 296 Mont. 282, 989 P.2d 338 (1999) (quoting State v. Carter, 285 Mont. 449, 459, 948 P.2d 1173, 1178-79 (1997)); § 46-20-701(1), MCA. “Evidence is unfairly prejudicial when it ‘arouses the jury’s hostility or sympathy for one 15 side without regard to its probative value.’” State v. Meredith, 2010 MT 27, ¶ 45, 355 Mont. 148, 226 P.3d 571 (citing State v. Schauf, 2009 MT 281, ¶ 41, 352 Mont. 186, 216 P.3d 740 (quoting State v. Bieber, 2007 MT 262, ¶ 59, 339 Mont. 309, 170 P.3d 444)). ¶48 Ugalde elected to require the prosecution to prove each element of the alleged crime. The prosecution was not merely required to prove that serious bodily injury occurred, but also that Ugalde caused the injuries. The court instructed the jury that the State was required to prove serious bodily injury and causation as elements of the crime. Ugalde argues that the State called only two witnesses to testify regarding causation. Yet even the experts who only testified on the nature and extent of the injuries played a role in proving whether I.N.’s injuries were caused by an accidental fall from a crib or intentionally by some other means. Because Ugalde was the only other person present when I.N. was injured and she presented expert testimony to support her claim that he had fallen from his crib, the prosecution was required to present evidence of the nature and seriousness of the injuries to show that they could not have been sustained from a fall. Thorough review of the record reveals that it is often impossible to separate which evidence went to the causation element and which went to the serious bodily injury element; the extent of the injuries was a factor for the jury to consider in determining both seriousness and causation. ¶49 The District Court reviewed the evidence and properly determined that the State did not parade ten doctors before the jury to testify to the exact same point or offer irrelevant evidence. Ugalde made several objections at trial—some of which were sustained—that the State’s experts were being asked to testify beyond their expertise. 16 Ugalde would have the State walk a tightrope between presenting prejudicially cumulative evidence and failing to call the correct experts to sufficiently explain these complicated medical issues. While the State must stay within the bounds of the Rules of Evidence, the path is nowhere near as narrow as the defense suggests here. ¶50 The District Court determined that this complicated case required the testimony of the different experts and treatment providers to fully explain the cause and extent of the injuries to the jury. We hold that the court’s determination was within its discretion. ¶51 3. Whether Ugalde is entitled to a new trial on the ground that the prosecution presented prejudicial victim impact testimony. ¶52 Ugalde argues that much of the evidence presented against her was “victim impact evidence,” citing to Armstrong v. State, 826 P.2d 1106, 1116 (Wyo. 1992), and U.S. v. Copple, 24 F.3d 535, 545 (3d Cir. 1994). Victim impact evidence describes “the effect of the crime on the victim and [the victim’s] family.” Payne v. Tennessee, 501 U.S. 808, 821, 111 S. Ct. 2597, 2606 (1991). If victim impact evidence is introduced that is “so unduly prejudicial that it renders the trial fundamentally unfair, the Due Process Clause of the Fourteenth Amendment provides a mechanism for relief.” Payne, 501 U.S. at 825, 111 S. Ct. at 2608. ¶53 In Armstrong, the Supreme Court of Wyoming held that a prosecutor’s suggestion during closing argument that he fought to keep out evidence of cocaine use “to prevent another ordeal for the victim’s family” constituted harmless error. Armstrong, 826 P.2d at 1116. In Copple, the U.S. Court of Appeals for the Third Circuit held that some victim impact evidence was relevant to the issue of intent and therefore admissible, while other 17 evidence regarding the amount of the victim’s losses was irrelevant and unfairly prejudicial since the impact of the losses was not at issue in the case. Copple, 24 F.3d at 544-45. ¶54 On appeal, Ugalde offers no specific testimony as an example of improper victim impact evidence. We find nothing here akin to the statement in Armstrong. Also, as the District Court observed, the evidence presented here bears “little resemblance” to the evidence in Copple. Here, the testimony of the State’s witnesses was relevant to proving mental state, causation, and serious bodily injury. We hold that the District Court did not abuse its discretion when it determined that the State’s evidence was not so prejudicial as to render the trial fundamentally unfair. ¶55 4. Whether Ugalde is entitled to a new trial on the ground of prosecutorial misconduct during closing argument. ¶56 The prosecutor began her closing argument with a first-person narrative from the perspective of the infant, relating the State’s view of what happened as though I.N. was testifying on his own behalf. During rebuttal, the prosecutor then told jurors that the infant was “speaking to you” and asked the jurors to “tell [I.N.] that you heard him and that you find the Defendant guilty.” Ugalde did not object to the State’s closing argument. ¶57 Ugalde argues on appeal that the State’s closing and rebuttal arguments were improper because certain statements constituted a “golden rule” argument. Ugalde explains that a “golden rule” argument is one in which jurors “are asked to put themselves in a party’s place,” citing to State v. Long, 975 A.2d 660 (Conn. 2009). 18 Ugalde argues that such arguments are improper because they “appeal to base, visceral emotion, without regard for evidence or proof of guilt.” See Clausell v. State, 2005 MT 33, ¶ 41, 326 Mont. 63, 106 P.3d 1175 (Nelson, J., dissenting) (“These types of ‘Golden Rule’ arguments are improper, as they interfere with the jury’s objectivity.”). ¶58 The District Court concluded that the State’s closing and rebuttal arguments were proper, analogizing to Clausell. In Clausell, this Court concluded that the defendant did not establish that the prosecutor engaged in misconduct where the prosecutor “asked the jury to follow the evidence trail left by [the victim’s] body and determine ‘what speaks for [the victim]? The evidence, Defendant’s actions, Defendant’s admissions.’” Clausell, ¶ 17. Similarly, the District Court determined the prosecutor’s argument in this case urged the jury to follow the trail of evidence and find Ugalde guilty. The court also noted that Ugalde did not timely object to the State’s purported violation of the golden rule at trial. ¶59 “A prosecutor’s misconduct may be grounds for reversing a conviction and granting a new trial if the conduct deprives the defendant of a fair and impartial trial.” Clausell, ¶ 11 (citing State v. Gray, 207 Mont. 261, 266-67, 673 P.2d 1262, 1265-66 (1983)). If a timely objection is not made at trial, however, the issue is waived; post-trial objections do not properly preserve an issue for appeal. Section 46-20-104(2), MCA, State v. McWilliams, 2008 MT 59, ¶¶ 43-47, 341 Mont. 517, 178 P.3d 121; State v. Misner, 2007 MT 235, ¶¶ 24-26, 339 Mont. 176, 168 P.3d 679; State v. Grace, 2001 MT 22, ¶ 35, 304 Mont. 144, 18 P.3d 1008. A timely objection must be made “as soon as the grounds for the objection become apparent.” Grace, ¶ 35. 19 ¶60 We will apply plain error review only “in situations that implicate a defendant’s fundamental constitutional rights when failing to review the alleged error may result in a manifest miscarriage of justice, leave unsettled the question of the fundamental fairness of the proceedings, or compromise the integrity of the judicial process.” Aker, ¶ 21 (citing State v. McDonald, 2013 MT 97, ¶ 8, 369 Mont. 483, 299 P.3d 799). We often have “refused to conduct plain error review of a prosecutor’s comments” in other similar contexts, such as closing arguments regarding witness credibility, “even in cases where we have concluded that the comments were improper.” Aker, ¶ 29; e.g. State v. Lindberg, 2008 MT 389, ¶ 33, 347 Mont. 76, 196 P.3d 1252. ¶61 This Court held in a previous case that defense counsel was not deficient for remaining silent when a prosecutor purported to speak as the deceased victim, where “all material statements contained in the prosecutor’s narration from the standpoint of the victim were supported by testimonial or other evidence admitted at trial.” Kills On Top v. State, 273 Mont. 32, 50-51, 901 P.2d 1368, 1380 (1995). In U.S. v. Rodriguez, 581 F.3d 775, 803 (8th Cir. 2009), the Eighth Circuit Court of Appeals held that “a prosecutor’s brief claim to ‘speak for’ a victim is improper if, in the context of surrounding statements, the comment appeals excessively to jurors’ emotions.” Where “the surrounding statements focused jurors’ attention on the government’s evidence,” however, the comment was held not to be improper. Rodriguez, 581 F.3d at 803. Although the Rodriguez court noted a split of authority on the issue, it observed that speaking for a victim does not necessarily result in error. Rodriguez, 581 F.3d at 803 (citing Sanchez v. State, 41 P.3d 531, 535 (Wyo. 2002); State v. Braxton, 531 S.E.2d 428, 20 455 (N.C. 2000); Henderson v. State, 583 So.2d 276, 286 (Ala. App. 1990)). Even those cases cited as contrary authority did not conclude that “speaking for” the victim alone required reversal of a conviction. E.g. U.S. v. Lowder, 5 F.3d 467, 473-74 (10th Cir. 1993); People v. Brown, 624 N.E.2d 1378, 1388, 1391-92 (Ill. App. Ct. 1993); State v. Roberts, 838 S.W.2d 126, 131 (Mo. App. 1992). The Ninth Circuit’s decision in Drayden v. White, 232 F.3d 704 (9th Cir. 2000), is similar. In that case, the court held that the defendant’s trial was not rendered “fundamentally unfair” by the prosecutor’s improper delivery during his closing argument—from the witness chair—of a lengthy soliloquy purporting to tell the story of the homicide victim. Among other things, the court noted that “the prosecutor’s statements were supported by the evidence and reasonable inferences that could be drawn from the evidence. In other words, had the prosecutor delivered exactly the same speech in the third person, it would have been proper.” Drayden, 232 F.3d at 713. ¶62 Although the prosecutor in this case purported to speak for the victim, she then asked the jury to consider the witnesses’ testimony carefully because “[I.N.] can’t tell you what happened on June 11th of 2008.” The State did not expressly invite the jury to put itself in the shoes of the victim. Considering the State’s closing argument in its entirety, we observe that the argument following the challenged comments directed the jury to the evidence and its relationship to the elements of the offense. Makarchuk, ¶ 24 (“We consider alleged improper statements during closing argument in the context of the entire argument.”). While we do not decide whether the prosecution’s argument was objectionable, we conclude after a review of the record and the District Court’s careful 21 consideration of the issue that—in the context of the surrounding statements—it did not rise to the level of plain error. The Dissent’s strong statement that prosecutors are suffering no “actual consequences” of “violat[ing] ethical rules” by committing misconduct during argument (Dissent, ¶ 118) overlooks its earlier recognition that this Court has not yet decided whether a first-person narrative constitutes misconduct (Dissent, ¶ 105). We decline to overturn the jury’s verdict on the basis of an argument that was not made at trial and that has not been held to be grounds for a new trial by this Court or by other courts to have considered the issue under similar circumstances. Ugalde waived her right to raise this claim on appeal by failing to object to the State’s closing arguments during trial. The District Court did not abuse its discretion in denying her motion for a new trial on this issue. ¶63 5. Whether Ugalde is entitled to a new trial because her counsel provided ineffective assistance. ¶64 Ugalde argues that her counsel provided ineffective assistance due to an “inherent conflict” in the management of conflict cases by the OPD, which made it impossible for counsel to exercise independent judgment. She further argues that defense counsel’s failure to ensure the confidentiality of an expert witness, to object to late disclosure of a new expert by the prosecution, to stipulate to serious bodily injury, to object to victim impact testimony, and to timely object to the prosecution’s closing arguments constitutes ineffective assistance and denied her a fair trial. ¶65 A defendant’s right to effective assistance of counsel is guaranteed by the Sixth and Fourteenth Amendments to the United States Constitution, and by Article II, § 24 of 22 the Montana Constitution. “Before reaching the merits of an ineffective assistance of counsel claim in a direct appeal, we ‘must first determine whether the allegations are properly before the Court on appeal or whether the claim should be raised in a petition for post-conviction relief’ pursuant to § 46-21-101, MCA.” Aker, ¶ 34 (quoting State v. Upshaw, 2006 MT 341, ¶ 33, 335 Mont. 162, 153 P.3d 579). “If the claim is based on matters outside of the record, ‘we will refuse to address the issue on appeal.’” Aker, ¶ 34 (quoting State v. Kougl, 2004 MT 243, ¶ 14, 323 Mont. 6, 97 P.3d 1095). If a claim is reviewable on appeal, however, the claim “present[s] mixed questions of law and fact that we review de novo.” Aker, ¶ 22 (quoting Howard, ¶ 18). ¶66 If we determine that an ineffective assistance of counsel claim is based on the record, we analyze the claim under the two-part test set forth by the U.S. Supreme Court in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052 (1984). Under Strickland, a defendant bears the burden of proving: “(1) that counsel’s performance was deficient; and (2) that counsel’s deficient performance prejudiced the defense.” Whitlow v. State, 2008 MT 140, ¶ 10, 343 Mont. 90, 183 P.3d 861 (citing Strickland, 466 U.S. at 687, 104 S. Ct. at 2064). “To prevail on an ineffective assistance claim, a defendant must satisfy both prongs of this test. Where the defendant makes an insufficient showing as to one prong of the test, it is unnecessary to address the other prong.” Hammer v. State, 2008 MT 342, ¶ 10, 346 Mont. 279, 194 P.3d 699 (2008) (citing Whitlow, ¶ 11). ¶67 As Ugalde raises a number of unrelated claims, we discuss each in turn. 23 A. Inherent Conflict of Interest ¶68 Ugalde argues that defense counsel was “unable to effectively represent [her] due to the inherent conflict arising from the centralized nature of the Office of the Public Defender . . . .” She points specifically to the contract coordinator’s ties to the OPD and the requirement that the OPD approve expenditures over $200 by contract defense attorneys. To support her position, she offers a 2009 study conducted by the American University Criminal Courts Technical Assistance Project, suggesting that structural issues with the OPD’s contract coordinator position allow undue influence over contract counsel by the OPD. These allegations properly are before the Court on appeal and this issue may be addressed directly. ¶69 A lawyer is obligated to maintain professional independence. “A lawyer shall not permit a person who recommends, employs or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.” M. R. Prof. Conduct 5.4(c). ¶70 Sufficient prejudice under Strickland’s second prong requires that the defendant “demonstrate that a reasonable possibility exists that, but for counsel’s unprofessional error, the result of the proceeding would have been different.” Hammer, ¶ 11. A cursory look at this issue is enough to determine that Ugalde was insufficiently prejudiced to warrant reversal. Ugalde’s counsel was required to obtain approval for expenditures and the contract coordinator shelved a preliminary request for a specific pathologist pending consultation with Dr. Dale. After consulting with Dr. Dale, however, defense counsel never renewed the request for the pathologist and instead requested another doctor. This 24 second request was approved. In addition, two out-of-state expert witnesses testified for the defense, and Ugalde was represented by two attorneys at trial. Ugalde has not shown that any of her requests for resources was not provided; she has shown only that one request was not renewed because her counsel chose another expert. No one has argued that responsibility for this choice rested on anyone other than defense counsel; indeed, we will not assume that, when a lawyer is required to request approval or consult with an expert, that she automatically abandons her own professional judgment. ¶71 Ugalde’s claim that her “choice of an expert witness was frustrated” is thus without merit and therefore the larger issues that she argues are implicated by the 2009 study will not be addressed at this time. Because the OPD approved Uglade’s ultimate choices for expert witnesses, she has not shown prejudice from a conflict of financial interest between the OPD and contract counsel. B. Failure to Ensure Confidentiality of a Witness ¶72 Ugalde claims that she received ineffective assistance of counsel when defense counsel failed to “explicitly and independently ensure confidentiality before disclosing critical case strategy . . . .” Ugalde adds to this claim that defense counsel’s failure to raise the Yellowstone County Attorney’s prosecutorial misconduct before the District Court also was ineffective assistance. ¶73 Having determined above that the disclosures by Dr. Dale to Paxinos were insufficient to affect the outcome of the case, we now hold based on the same reasoning that Ugalde cannot demonstrate a reasonable possibility that, but for counsel’s error, the result of the proceeding would have been different. 25 C. Failure to Object to the Late Disclosure of Dr. Smith ¶74 Ugalde argues that “competent counsel would have objected” to the State’s disclosure of a new expert witness “a mere fourteen days before trial.” This issue was not raised until Ugalde’s post-trial motion, but the record is sufficient to address the issue directly. ¶75 Under the first prong of Strickland, deficient performance is performance that “[falls] below an objective standard of reasonableness measured under prevailing professional norms and in light of the surrounding circumstances.” Whitlow, ¶ 20. The burden of proving deficient performance is on the defendant. Howard, ¶ 22. When “scrutinizing counsel’s actions, we are highly deferential, indulging a ‘strong presumption that counsel’s performance falls within the wide range of reasonable professional assistance.’” Howard, ¶ 22 (quoting Kills On Top, 273 Mont. at 49, 901 P.2d at 1380). In Howard, this Court determined that the defendant did not meet his burden to show deficient performance for failure to ascertain whether two child witnesses were competent to testify after noting that the defense’s cross-examination was thorough and that an investigator was employed during discovery to take the witness’s statements. Howard, ¶ 28. ¶76 Ugalde fails to identify how additional time to prepare would have aided the defense. The fact that defense counsel did not object to the timing of Dr. Smith’s disclosure suggests that the defense did not perceive the disclosure to be harmful at the time. Similar to Howard, defense counsel took advantage of the opportunity to interview Dr. Smith before trial. Likewise, the defense was able to thoroughly cross-examine him 26 regarding complicated medical issues and even called an expert who directly addressed and rebutted many of Dr. Smith’s opinions. The record does not support Ugalde’s claim of deficient performance by counsel here. D. Failure to Stipulate to Serious Bodily Injury ¶77 Ugalde claims that defense counsel’s discomfort to stipulating was “unpardonable” and describes the failure to stipulate to the element of serious bodily injury as the “most serious oversight” by defense counsel. Yet, to come to this conclusion, Ugalde assumes that the District Court radically would have restricted the State’s expert testimony if defense counsel had stipulated. ¶78 This assumption is insufficient to demonstrate ineffective assistance of counsel. While the trial court may have limited some testimony where it could determine that the testimony only went to the element of serious bodily injury, as discussed above, proving causation in this case required analysis of I.N.’s injuries. Therefore the State still may have needed to call many of the same witnesses to testify about the nature of the injuries. Ugalde’s argument to the contrary is speculative. Ugalde “bears the burden to show that [her] counsel’s performance fell below an objective standard of reasonableness.” State v. St. Germain, 2007 MT 28, ¶ 33, 336 Mont. 17, 153 P.3d 591. Strickland’s first prong “carries a strong presumption in favor of the State, as counsel is allowed wide latitude in deciding what tactics [counsel] should, and should not, employ in defending [a] client.” Kougl, ¶ 11. The record shows only that defense counsel was “not comfortable” stipulating to an element of the crime; putting the State to its burden of proof was not deficient performance. 27 E. Failure to Object to Victim Impact Testimony ¶79 Ugalde argues that defense counsel’s failure to object to victim impact testimony, when “taken in conjunction with the other errors by defense counsel,” constitutes a failure to provide effective representation. She concedes, however, that “it is not certain such objections would have been sustained, and it is less certain they would have changed the outcome . . . .” We already have pointed out above that Ugalde offers no specific statements as examples of victim impact evidence. We also have determined that the District Court did not abuse its discretion in determining that the State’s evidence was not sufficiently prejudicial to render the trial fundamentally unfair. We therefore conclude that Ugalde has failed to prove prejudice sufficient to meet the requirements of Strickland’s second prong. F. Failure to Object to Improper Closing Argument ¶80 Ugalde claims that defense counsel’s failure to object to the State’s closing argument, during which the State spoke from the perspective of the injured child, constitutes ineffective assistance of counsel. The State’s closing argument began with several brief, but undeniably emotional statements. The prosecutor—while pretending to be I.N.—said, “Now, I can’t hang out with kids my own age because I can’t say what I want or do what I need. I can’t tell my mom I love her. I can’t say what I want or do what I need because at age two-and-a-half I can only say three words.” Next, the State communicated that, while I.N. personally was unable to testify, the jury had “heard from numerous witnesses about what happened to [I.N.] on that day.” The State then proceeded to carefully and properly discuss the evidence introduced by each witness. 28 ¶81 During its own closing, the defense deftly focused on the State’s difficulty in eliminating the possibility of an accidental cause. The defense observed that the State’s experts could not completely rule out non-accidental trauma, and also that the State did not rebut evidence that I.N. was capable of pulling himself up and over the low-placed bars of the crib. The defense conceded that the injuries were “horrible and tragic” and entreated the jury to conclude that “[w]hat happened in this case was a horrible accident, not a crime.” ¶82 “In scrutinizing counsel’s actions, we are highly deferential, indulging a strong presumption that counsel’s performance falls within the wide range of reasonable professional assistance.” Howard, ¶ 22 (citation omitted). “Because many lawyers refrain from objecting during . . . closing argument, absent egregious misstatements, the failure to object during closing argument . . . is within the ‘wide range’ of permissible professional legal conduct.” Kills On Top, 273 Mont. at 50-51, 901 P.2d at 1380 (quoting U.S. v. Necoechea, 986 F.2d 1273, 1281 (9th Cir. 1993) (citation omitted). “This Court has determined . . . that failure to object does not qualify as unreasonable conduct by trial counsel.” State v. Lacey, 2012 MT 52, ¶ 28, 364 Mont. 291, 272 P.3d 1288 (citing Clausell, ¶ 20). ¶83 In Kills On Top, this Court held that the appellant’s trial counsel was “not deficient in failing to object to the prosecutor’s closing argument” when the prosecutor portrayed himself as the victim. Kills On Top, 273 Mont. at 50, 901 P.2d at 1380. Similarly—in light of the evidence presented in this case and considering the State’s closing argument as a whole—we conclude that defense counsel’s conduct falls within 29 the wide range of reasonable professional conduct. Ugalde has not met her burden of demonstrating deficient performance as required by Strickland’s first prong. G. Conclusion ¶84 In summary, we determine that all of Ugalde’s ineffective assistance of counsel claims are reviewable on direct appeal. Having reviewed those claims de novo, we conclude that Ugalde has not met the Strickland standard. CONCLUSION ¶85 Finding no error in the District Court’s trial or post-trial rulings, the conviction is affirmed. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ JIM RICE Justice Laurie McKinnon, dissenting. ¶86 After consideration of the record in its entirety, I conclude there was plain error when the prosecutor “channeled” the eight-month-old victim during closing arguments. Accordingly, I respectfully dissent from the Court’s holding under Issue 4 that the District Court did not abuse its discretion in denying Ugalde’s motion for a new trial. ¶87 While under the care and supervision of his babysitter (Ugalde), eight-month-old I.N. suffered a serious head injury causing acute bilateral subdural hematomas, brain swelling, and severe bilateral retinal hemorrhaging. As a result, I.N. likely will have 30 permanent deficiencies in his motor skills and cognitive development. It is doubtful that a prosecutor could have a more sympathetic victim than an eight-month-old infant who, allegedly, was abused by his caretaker. ¶88 In the Information, the State alleged that Ugalde had “purposely or knowingly caused serious bodily injury to another, to-wit: the Defendant shook or slammed I.N. (born in October 2007) causing him serious bodily injury,” in violation of § 45-5-202(1), MCA (“A person commits the offense of aggravated assault if the person purposely or knowingly causes serious bodily injury to another . . . .”). As is an accused’s right, Ugalde was not comfortable with stipulating to “serious bodily injury” and, thus, required the prosecution to meet its burden of proving every element of the offense charged. Nevertheless, in her opening statement, defense counsel acknowledged to the jury that I.N. had suffered serious bodily injury: “[Nevada] had her own young child, and she was baby-sitting [I.N.] in her own home when he suffered a terrible accident and he was seriously injured.” During her closing argument, defense counsel again acknowledged that “I told you out of the gate we weren’t going to contest that the injuries were serious in this case. That was never an issue. The issue in this case is causation.” ¶89 Ugalde’s approach is understandable, given that her defense related to causation. Testimony regarding the nature of I.N.’s injuries overlapped with testimony regarding the seriousness of those injuries, and defense counsel could not risk that a pretrial stipulation to “serious bodily injury” would foreclose her from examining experts at trial regarding the nature of the injuries as relevant to causation. We implicitly acknowledge counsel’s dilemma in our observation that a “[t]horough review of the record reveals that it is often 31 impossible to separate which evidence went to the causation element and which went to the serious bodily injury element; the extent of the injuries was a factor for the jury to consider in determining both seriousness and causation.” Opinion, ¶ 48. ¶90 Consequently, the prosecution produced ten witnesses who testified to various aspects of I.N.’s injuries and treatment—much of it overlapping and cumulative. While it would be unreasonable to prevent the State from developing its case regarding serious bodily injury, a defendant does not waive objections to prejudicial or cumulative evidence by insisting that the State meet its burden of proof. Ugalde still had the right to have relevant evidence excluded from consideration by the jury if its probative value was substantially outweighed by the danger of unfair prejudice or by considerations of needless presentation of cumulative evidence. M. R. Evid. 403. ¶91 The District Court refused to hold the State at fault “for preparing a thorough presentation of its case” and ultimately determined, in balancing the cumulative and prejudicial nature of the evidence against its probative value, that the complicated nature of I.N.’s injuries warranted testimony from each of the ten witnesses. In my view, this was a close call. However, we review such rulings for abuse of discretion, and the question under this standard is not whether we would have reached the same decision, but whether the trial judge acted arbitrarily without conscientious judgment or exceeded the bounds of reason. Newman v. Lichfield, 2012 MT 47, ¶ 22, 364 Mont. 243, 272 P.3d 625. I agree with the Court’s implicit holding that the District Court did not act arbitrarily without conscientious judgment or exceed the bounds of reason in allowing the prosecution to present the testimony of all ten witnesses. Opinion, ¶¶ 49-50. Given that 32 I.N. suffered a serious head injury, it is not surprising that the impact of this primary injury would be observed through many, if not all, aspects of I.N.’s physical and mental well-being. ¶92 Nevertheless, the impact on the jury of hearing ten experts testify to each aspect of I.N.’s injuries and treatment is relevant to, and provides context for, the prosecutor’s improper closing argument. The State’s first witness was Dr. Brian Starr, I.N.’s pediatrician. Dr. Starr testified that before the June 11, 2008 injury, I.N. was a developmentally normal child, but that since the injury, I.N.’s skull was not growing normally. Dr. Starr stated that this was indicative of a severe brain injury and that I.N. is permanently impaired as a result of this injury. Dr. Starr also stated that he has treated children who suffered short-distance accidental falls and that he had never seen, in such cases, the same “constellation of injuries” that I.N. had suffered. ¶93 Next, Holly Taylor, a physical therapist, described I.N.’s motor skills and how I.N.’s developmental delays in his motor skills are a result of his brain injury. Tanya Sciuchetti, a pediatric occupational therapist, also testified that I.N. was delayed in his motor skills due to his brain injury. Carol Morse, a speech and language pathologist, testified that I.N.’s speech development has been delayed as a result of his brain injury. ¶94 Dr. Eugen Dolan, a neurological surgeon, testified that I.N. suffered a severe head injury with bleeding inside the skull. When cross-examined on causation, Dr. Dolan was somewhat equivocal but did agree that I.N.’s injuries could have been caused by the trauma of falling from a crib. He admitted that he could not rule out accidental trauma as a potential cause. Dr. Linda Johnson, a pediatrician, also described I.N.’s injuries and her 33 treatment of those injuries. She stated that I.N.’s injuries were severe, and she was 95 to 97 percent sure that the injuries were the result of nonaccidental trauma. ¶95 Dr. Curtis Lee, an emergency room physician, testified that it was apparent I.N. had suffered “a severe head trauma.” He described I.N.’s injuries and testified about his treatment of I.N. Dr. Lee acknowledged that he had not ruled out accidental trauma as a potential cause of the injuries; however, he opined that the history he had been given regarding the mechanism of injury—i.e., that I.N. had fallen out of a crib—did not account for the severity of the injuries he had observed in I.N. ¶96 Dr. Andrew Sirotnak, of Denver Children’s Hospital in Colorado, is a pediatrician who specializes in child abuse cases. Dr. Sirotnak described I.N.’s injuries and testified that these injuries were not consistent with a linear fall of less than three feet onto a carpeted floor. Rather, in his opinion, this was a case of physical abuse or nonaccidental trauma. While he could not specify the mechanism of injury, Dr. Sirotnak opined that I.N.’s injuries were consistent with rapid acceleration-declaration, such as whiplash. ¶97 Dr. Daniel Weaver, a pediatric ophthalmologist, described the injuries to I.N.’s eyes and stated that surgical treatment of the eyes had been necessary due to I.N.’s head injury. Dr. Weaver testified that, in his experience, he had never seen I.N.’s constellation of injuries—bilateral retinal hemorrhages, bilateral vitreous hemorrhages, and an afferent pupil defect—in a child who had fallen from a height of less than four feet. He conceded, however, that such injuries could result from such a fall. ¶98 Lastly, Dr. Wilbur Smith, a pediatric radiologist, testified that I.N. had suffered severe abusive head trauma. In Dr. Smith’s opinion, I.N.’s injuries were not the result of 34 a short-distance fall but, rather, were the result of being shaken or slammed. He conceded on cross-examination, however, that the nature of the injuries by themselves did not establish abusive treatment by a caregiver—for example, they theoretically could have been the result of a motor vehicle accident—and thus it was necessary to consider the reported history about the injuries. Nevertheless, Dr. Smith maintained the opinion that I.N.’s injuries were not due to a fall from his crib. ¶99 In addition to the foregoing experts, the State called Susan Napier, I.N.’s mother. Through Susan, the State introduced State’s Exhibits 3 through 6 into evidence. Exhibits 3 and 4 are pictures taken of eight-month-old I.N. at his sister’s birthday party on June 1, 2008. Exhibit 5 is a picture of I.N. at the hospital in June 2008 following his injury. He is shown in a medically induced coma with IVs, a catheter, and a head wrap. Exhibit 6 is a picture of I.N. in January 2009 after his second eye surgery. He is shown with a patch over his left eye. ¶100 The prosecution’s initial closing argument, presented by Deputy County Attorney Juli Pierce, began as follows: May it please the Court, counsel, ladies and gentlemen of the jury. What a difference a day makes. Before June 11th of 2008, I was a normal, healthy, happy kid. My parents and I had hopes and dreams for me. This is me on June 1st of 2008 at my sister Anastasia’s birthday party. [Jury is presumably shown State’s Exhibits 3 and 4, depicting I.N. at the birthday party.] After June 11th of 2008, I would never ever, ever be the same again. My life and the lives of my family would be drastically changed forever because of what my baby-sitter, the Defendant, did to me. That morning, on June 11th of 2008, I was a normal kid. My mom and my grandma dropped me off at the Defendant’s house who had been baby-sitting me for a couple of months. Sometime in the early afternoon, my trusted caretaker, that woman, shook me and slammed me to the point of having severe closed head injury causing me to look like this. [Jury is 35 presumably shown State’s Exhibit 5, depicting I.N. in a medically induced coma.] And after June 11th of 2008, I had more and more surgeries, and more issues, and the Defendant caused me to look like this. [Jury is presumably shown State’s Exhibit 6, depicting I.N. following his second eye surgery.] Now, I can’t walk normally without braces on, or else I walk on my tiptoes. Now, I can’t hang out with kids my own age because I can’t say what I want to do or what I need. I can’t tell my mom I love her. I can’t say what I want or what I need because at age two-and-a-half I can only say three words. [Jury is shown a video, apparently State’s Exhibit 19, which shows I.N. at his home interacting with his mother in April 2010.] My life will never be the same, and my family’s lives will never be the same because of what the Defendant did to me on June 11th of 2008. At the conclusion of her argument, Pierce asked the jurors to “tell the Defendant that you know what happened that day, and you find her guilty.” ¶101 At the outset of her rebuttal closing argument, Pierce remarked: “We talked . . . at length in voir dire about child abuse. We talked about child abuse usually occurring behind closed doors, two people, perpetrator/victim.” Pierce asserted that “[I.N.] was the only witness, besides the Defendant, to tell you what happened to him on June 11th of 2008.” (I.N. did not actually testify.) Pierce concluded with the following: “[I.N.] can’t speak. He can’t sit in that chair and tell you what happened to him. But you heard all those witnesses, and it’s like [I.N.] was speaking to you. And you tell [I.N.] that you heard him, and you find the Defendant guilty.” ¶102 “Channeling the victim” is a technique by which a lawyer speaks to the jury in the first person as though she is the injured or deceased person. It is calculated to produce a dramatic and emotional impact on the jury by bringing to life in the courtroom a dead victim or a victim who—as here—cannot testify. In my view, a prosecutor who channels an eight-month-old infant, states that “I can’t tell my mom I love her,” and asks the jury 36 to “tell [the infant] that you heard him” has engaged in misconduct calling into doubt the fundamental fairness of the trial itself. ¶103 Channeling gained national attention in conjunction with John Edwards’s 2004 presidential campaign. Nineteen years earlier, Edwards (a North Carolina lawyer at the time) litigated an action against an obstetrician for negligently failing to perform a cesarean section that allegedly would have prevented the child’s cerebral palsy. Edwards stood before the jury and channeled the words of the unborn baby girl. Referring to an hour-by-hour record of a fetal heartbeat monitor, he told the jury: “She said at 3, ‘I’m fine.’ She said at 4, ‘I’m having a little trouble, but I’m doing O.K.’ Five, she said, ‘I’m having problems.’ At 5:30, she said ‘I need out.’ ” Edwards continued: “She speaks to you through me. And I have to tell you right now – I didn’t plan to talk about this – right now I feel her. I feel her presence. She’s inside of me, and she’s talking to you.” The jury awarded Edwards’s client $6.5 million, but the trial court subsequently ruled the award “excessive,” observing that it had been given “under the influence of passion and prejudice.” The parties ultimately settled for $4.25 million. See Adam Liptak & Michael Moss, In Trial Work, Edwards Left A Trademark, N.Y. Times (Jan. 31, 2004). ¶104 Most likely attributable to CLE presentations and trial-advocacy publications, the “art” of channeling has spread beyond the civil trial. Prosecutors apparently will risk manipulating and misstating the evidence in order to present an emotional appeal, even when they have ample and convincing evidence to convict. Drayden v. White, 232 F.3d 704, 711-13 (9th Cir. 2000); U.S. v. Rodriguez, 581 F.3d 775, 803 (8th Cir. 2009); Kills 37 on Top v. State, 273 Mont. 32, 51, 901 P.2d 1368, 1380 (1995); cf. Clausell v. State, 2005 MT 33, ¶ 17, 326 Mont. 63, 106 P.3d 1175; Clausell, ¶¶ 40-41 (Nelson, J., dissenting). ¶105 With respect to various types of conduct, this Court has been clear. It is improper for a prosecutor to offer personal opinions regarding witness credibility. State v. Daniels, 2003 MT 247, ¶ 26, 317 Mont. 331, 77 P.3d 224; State v. Gladue, 1999 MT 1, ¶ 15, 293 Mont. 1, 972 P.2d 827; State v. Rodgers, 257 Mont. 413, 417, 849 P.2d 1028, 1031 (1993). Statements by a prosecutor expressing a personal opinion about the guilt of the accused are likewise improper. Gladue, ¶ 21; State v. Stringer, 271 Mont. 367, 381, 897 P.2d 1063, 1071-72 (1995). It also is improper for the prosecutor to comment on evidence not of record during closing argument. Gladue, ¶ 14. However, this Court has not addressed directly whether channeling the victim in closing argument constitutes reversible misconduct. ¶106 The issue arose in Kills on Top, where we considered whether defense counsel’s failure to object to the prosecutor’s summation of the evidence, in which the prosecutor portrayed himself as the victim and narrated in the first person, constituted ineffective assistance. We held that counsel was not deficient because “it appears that all material statements contained in the prosecutor’s narration from the standpoint of the victim were supported by testimonial or other evidence admitted at trial.” Kills on Top, 273 Mont. at 51, 901 P.2d at 1380. But we declined to consider whether channeling the victim actually constituted prosecutorial misconduct. Kills on Top, 273 Mont. at 62, 901 P.2d at 1387. ¶107 In the civil context, the issue of channeling arose recently in a medical malpractice action where the plaintiff’s attorney assumed the persona of the plaintiff’s deceased 38 husband and delivered a first-person narrative recounting the events leading to his death. Heidt v. Argani, 2009 MT 267, ¶ 5, 352 Mont. 86, 214 P.3d 1255. Counsel used phrases such as “oh my God, I’m dying,” and then described being autopsied, including a description of being cut open and of the decedent’s sorrow at not getting to see his children grow up. Heidt, ¶ 5. At this point, one of the jurors announced that she was “not okay” and that she thought she was going to pass out. The defendant-physician (Argani) proceeded to render assistance. Heidt, ¶ 6. On appeal, we considered whether the plaintiff’s motion for a mistrial should have been granted. Heidt, ¶ 12. We concluded, in light of the unique circumstances of the case—i.e., a medical malpractice trial in which the jury gets to see the defendant doctor reacting to a real-life situation and apparently successfully delivering life-saving care—that a mistrial should have been granted. Heidt, ¶¶ 16-17. We did not address the propriety of counsel’s channeling. ¶108 Outside Montana, the Eighth Circuit observed in Rodriguez that a prosecutor may not express an opinion implying knowledge of facts unavailable to the jury and that it is improper to ask jurors to put themselves in the place of the victim. 581 F.3d at 803. However, the Court of Appeals noted disagreement among courts about whether a defendant is unfairly prejudiced by a prosecutor’s statement that she “speaks for” a victim. Rodriguez, 581 F.3d at 803.1 While the cases cited in Rodriguez are 1 The Rodriguez court cited the following cases: Compare Sanchez v. State, 41 P.3d 531, 535 (Wyo. 2002) (prosecutor did not err by telling jury: “You and I get to speak for” the victim); State v. Braxton, 531 S.E.2d 428, 455 (N.C. 2000) (holding that prosecutor does not err by arguing that he speaks for victim); Henderson v. State, 583 So. 2d 276, 286 (Ala. Crim. App. 1990) (“we find no reversible error in a brief statement suggesting that the prosecuting attorney speaks for the victim’s family”); with U.S. v. Lowder, 5 F.3d 467, 473-74 (10th Cir. 1993) 39 distinguishable from the present case in that they did not involve a prosecutor narrating in the voice of the victim, the cases nevertheless demonstrate how courts will view the range of prosecutorial conduct. ¶109 Our criminal justice system is premised on certain fundamental principles. One of those principles was aptly described by Justice Sutherland of the United States Supreme Court almost 80 years ago: The [prosecutor] is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done. As such, he is in a peculiar and very definite sense the servant of the law, the twofold aim of which is that guilt shall not escape or innocence suffer. He may prosecute with earnestness and vigor—indeed, he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one. It is fair to say that the average jury, in a greater or less degree, has confidence that these obligations, which so plainly rest upon the prosecuting attorney, will be faithfully observed. Consequently, improper suggestions, insinuations, and, especially, assertions of personal knowledge are apt to carry much weight against the accused when they should properly carry none. Berger v. U.S., 295 U.S. 78, 88, 55 S. Ct. 629, 633 (1935). (although the comment did not deprive the defendant of a fair trial, prosecutor made an improper comment to the jury by stating: “Who gets left out? The victims get left out. They don’t get anybody to talk for them.”); People v. Brown, 624 N.E.2d 1378, 1388, 1391-92 (Ill. App. 1st Dist. 1993) (prosecutor’s statement that “we speak for the victims in this case” was irrelevant to defendant’s guilt, and while no single trial error required reversal, cumulative error did); State v. Roberts, 838 S.W.2d 126, 131 (Mo. App. E. Dist. 1992) (although the comment did not require reversal, prosecutor made an improper statement by arguing: “The victim, Mr. Booker, isn’t here to speak for himself and able or not, it is my job to speak for Mr. Booker and Mr. Booker was a man with a family.”). 40 ¶110 In a similar vein, Chief Justice McGrath recently observed that “[a] prosecutor is an officer of the court” who “must strive to promote justice and the rule of law.” State v. Criswell, 2013 MT 177, ¶ 57, 370 Mont. 511, 305 P.3d 760 (McGrath, C.J., concurring). Unfortunately, however, “ ‘some prosecutors have permitted an excess of zeal for conviction or a fancy for exaggerated rhetoric to carry them beyond the permissible limits of argument.’ ” Criswell, ¶ 55 (McGrath, C.J., concurring) (quoting ABA Stands. for Crim. Just.: Prosecution Function and Def. Function, Stand. 3-5.8, Commentary, 107 (3d ed., Am. B. Assn. 1993)). “Prosecutorial conduct in argument is a matter of special concern because of the possibility that the jury will give special weight to the prosecutor’s arguments, not only because of the prestige associated with the prosecutor’s office, but also because of the fact-finding facilities presumably available to the office.” ABA Stands. for Crim. Just.: Prosecution Function and Def. Function, Stand. 3-5.8, Commentary, 107. Accordingly, a prosecutor “should not make arguments calculated to appeal to the prejudices of the jury” and “should refrain from argument which would divert the jury from its duty to decide the case on the evidence.” ABA Stands. for Crim. Just.: Prosecution Function and Def. Function, Stand. 3-5.8(c), (d), 106. ¶111 In Drayden, the Ninth Circuit concluded that the prosecutor had engaged in misconduct when he delivered a soliloquy in the voice of the victim. 232 F.3d at 712. The Court of Appeals observed: By doing so, the Prosecutor inappropriately obscured the fact that his role is to vindicate the public’s interest in punishing crime, not to exact revenge on behalf of an individual victim. Furthermore, the prosecutor seriously risked manipulating and misstating the evidence by creating a fictitious character based on the dead victim and by “testifying” in the voice of the character as 41 if he had been a percipient witness. Finally, by testifying as [the victim], the prosecutor also risked improperly inflaming the passions of the jury through his first-person appeal to its sympathies for the victim who, in the words of the prosecutor, was a gentle man who did nothing to deserve his dismal fate. Drayden, 232 F.3d at 712-13. I would add to this that channeling also risks infringing the defendant’s constitutional right to cross-examine her accusers face to face. U.S. Const. amend VI; Mont. Cost. art. II, § 24. ¶112 In Criswell, which involved charges of aggravated animal cruelty, the prosecutor disparaged the defendants during his closing argument, calling them “squatters” and “freeloaders.” He also asserted that they had been “run out of Idaho” and implied that one of the defendants had purchased marijuana in lieu of providing food for his cats. See Criswell, ¶ 43. While the prosecutor maintained that his remarks had not been intended to inflame the jury or to comment on the defendants’ characters, Criswell, ¶ 45, Chief Justice McGrath questioned this explanation: “Personally, I find that hard to believe. If not intended to inflame the jury or comment on the Criswells’ characters, then what were they intended to do?” Criswell, ¶ 57 (McGrath, C.J., concurring). In my view, we should be asking the same question here. ¶113 In her closing argument, prosecutor Pierce stood before the jury, assumed I.N.’s persona, and gave a first-person narrative of “what my baby-sitter, the Defendant, did to me.” If not intended to inflame the passions of the jury through an appeal to their sympathies for this already sympathetic infant-victim, then what was this tactic intended to do? This was a case in which the prosecution had presented ample—and, at times, repetitious—testimony about the serious bodily injuries suffered by the victim. The 42 prosecution also had presented multiple expert opinions that these injuries were not the result of an accidental fall from a crib. As Pierce observed in her closing argument, “witness after witness after witness” testified on these matters. Certainly, the prosecutor properly could have argued the State’s view of what these actual witnesses’ testimony showed. The prosecutor also could have urged the jury “to follow the trail of evidence and find Ugalde guilty.” Opinion, ¶ 58 (discussing the District Court’s reasoning based on Clausell). But that is not what happened. ¶114 The prosecutor here purported to give actual testimony from an absent witness. This testimony reflected Pierce’s personal opinions about what I.N. might have said on the witness stand had he been able to appear as a witness. Opinions of this sort, however, are “a form of unsworn, unchecked testimony and tend to exploit the influence of the prosecutor’s office and undermine the objective detachment that should separate a lawyer from the cause being argued.” ABA Stands. for Crim. Just.: Prosecution Function and Def. Function, Stand. 3-5.8, Commentary, 108. Such tactics inappropriately obscure the fact that the prosecutor’s role is to vindicate the public’s interest in punishing crime, not to exact revenge on behalf of an individual victim. Drayden, 232 F.3d at 712-13. They seriously risk manipulating and misstating the evidence by creating a fictitious character based on the injured victim and by “testifying” in the voice of the character. Drayden, 232 F.3d at 713. And they risk improperly inflaming the passions of the jury through the first-person appeal to its sympathies for the victim. Drayden, 232 F.3d at 713. They also deny the defendant the right to cross-examine the fictitious witness. 43 ¶115 The Court refuses to grant relief because Ugalde did not contemporaneously object to the prosecutor’s channeling.2 Opinion, ¶ 62. Somewhat ironically, however, the Court then denies relief on Ugalde’s claim of ineffective assistance of counsel (premised on defense counsel’s failure to object to the improper closing argument) because “many lawyers refrain from objecting during . . . closing argument” and “failure to object does not qualify as unreasonable conduct by trial counsel.” Opinion, ¶ 82 (ellipsis in original, internal quotation marks omitted). It seems to me that if failure to object does not qualify as unreasonable conduct by trial counsel, then we ought to review Ugalde’s prosecutorial misconduct claim on its merits. Conversely, if an objection was required in order to preserve this claim for appeal, then defense counsel was ineffective for not making one and we should review the claim. At the very least, the claim should be considered under plain error review. ¶116 We have stated repeatedly that misconduct by a prosecutor may form the basis for granting a new trial where the prosecutor’s actions have deprived the defendant of a fair and impartial trial. State v. Gray, 207 Mont. 261, 266-67, 673 P.2d 1262, 1265-66 (1983); State v. Arlington, 265 Mont. 127, 158, 875 P.2d 307, 325 (1994); State v. Hayden, 2008 MT 274, ¶ 27, 345 Mont. 252, 190 P.3d 1091. We have also explained 2 The Court cites Drayden as support for the Court’s decision to deny review of Ugalde’s claim. Opinion, ¶ 61. Drayden, however, was a federal habeas corpus proceeding. After finding that the prosecutor engaged in misconduct by delivering a soliloquy in the voice of the victim, the Court of Appeals then considered the separate question whether this misconduct warranted the grant of federal habeas relief. In so doing, the court applied a standard of review that is specifically deferential to state-court proceedings. Drayden, 232 F.3d at 713. The present case, in contrast, is a direct appeal from a criminal conviction, not a habeas corpus proceeding. And there are no similar federal-state comity concerns in our review of Ugalde’s claim. For these reasons, the Court’s reliance on the portion of the Drayden opinion discussed at ¶ 61 of the Opinion is misplaced. 44 that the applicability of plain error review must be decided on a “case-by-case” basis. State v. Sullivant, 2013 MT 200, ¶ 17, 371 Mont. 91, 305 P.3d 838; Daniels, ¶ 20. Under this doctrine, we may review a claimed error that implicates a defendant’s fundamental constitutional rights—including claims of prosecutorial misconduct—where failing to review the error may result in a manifest miscarriage of justice, may leave unsettled the question of the fundamental fairness of the trial or proceedings, or may compromise the integrity of the judicial process. Hayden, ¶¶ 17, 29-30; State v. Finley, 276 Mont. 126, 137-38, 915 P.2d 208, 215 (1996), overruled on other grounds, State v. Gallagher, 2001 MT 39, ¶ 21, 304 Mont. 215, 19 P.3d 817. ¶117 Here, I believe the prosecutor’s channeling the infant-victim in closing arguments denied Ugalde her constitutional right to a fair trial. The channeling was neither brief nor harmless. It was calculated to play on the emotions and sympathy of the jury. I.N. spoke to the jurors through Pierce, describing the assault, the surgeries, how his life is no longer the same, that he no longer can tell his mother he loved her, and that he can only speak three words. Pierce asserted that “[I.N.] was the only witness, besides the Defendant, to tell you what happened to him on June 11th of 2008.” Pierce asked the jurors to tell I.N. that they heard him and to tell Ugalde that they know what happened that day. The evidence presented at trial concerning the impact upon the eight-month-old victim and the cause of his injuries was overwhelming. But that does not justify our overlooking a prosecutor’s improper closing argument that was calculated to appeal to the jury’s emotions, passion, and sympathy. This tactic undermined the fundamental fairness of the trial. I therefore would reverse for plain error and remand for a new trial. 45 ¶118 In closing, I note there may be many reasons why defense counsel does not object to improper argument by the prosecutor. Counsel may believe that an objection would draw attention to a particular fact or strengthen the argument being made. Counsel may fear a particular response from the judge or the prosecutor that would harm his or her client. It is not inconceivable that defense counsel may allow the prosecutor to continue an improper line of argument and thereby potentially build reversible error into the case. But whatever the reason for defense counsel’s silence, this Court’s ongoing refusal to address improper arguments such as here perpetuates tolerance of trial tactics that undermine fairness in our tribunals. As I have observed previously, “[t]he message that this increasingly prevalent practice is sending, unfortunately, is that prosecutors in this State can be assured of having their convictions upheld despite comments made during trial which violate ethical rules and ‘run the risk of undermining the fundamental fairness of the judicial process.’ ” State v. Aker, 2013 MT 253, ¶ 44, 371 Mont. 491, ___ P.3d ___ (McKinnon & Cotter, JJ., dissenting) (quoting State v. Lindberg, 2008 MT 389, ¶ 34, 347 Mont. 76, 196 P.3d 1252). Until there are actual consequences, such as reversal of the conviction, the problem is going to persist. ¶119 In response to this, the Court observes that we have “not yet decided whether a first-person narrative constitutes misconduct.” Opinion, ¶ 62. However, the fact that this Court has not yet reversed a case due to improper channeling is beside the point. The rules prohibiting this tactic are already well settled. In this regard, the Court does not dispute the following: that a prosecutor “should not make arguments calculated to appeal to the prejudices of the jury,” ABA Stands. for Crim. Just.: Prosecution Function and 46 Def. Function, Stand. 3-5.8(c), 106; that a prosecutor “should refrain from argument which would divert the jury from its duty to decide the case on the evidence,” ABA Stands. for Crim. Just.: Prosecution Function and Def. Function, Stand. 3-5.8(d), 106; and that a prosecutor risks “manipulating and misstating the evidence” and “improperly inflaming the passions of the jury” by “testifying” in the voice of the victim, Drayden, 232 F.3d at 713. These standards were violated here when the prosecutor, in her closing argument, embarked on a first-person narrative in the voice of the victim. This tactic arguably ran afoul, as well, of our longstanding prohibitions against expressing a personal opinion about the guilt of the accused and commenting on evidence not of record. Gladue, ¶¶ 14, 21; Stringer, 271 Mont. at 381, 897 P.2d at 1071-72. ¶120 In the end, we fail today in our obligation to provide guidance to the bench and bar on a serious issue in the conduct of criminal proceedings—an issue that the appellant has squarely raised in this appeal. We have rules which establish, at least in my view, that it is improper for the prosecutor during closing argument to employ tactics calculated to play on the emotions and sympathy of the jury. Channeling the victim is clearly designed to do just that. I believe we should say so explicitly, rather than avoid the question on a procedural ground. ¶121 I dissent. /S/ LAURIE McKINNON	October 17, 2013
88d61cae-5389-4b2f-9764-1b3321742f7f	In re A.R.B.	2013 MT 310	DA 13-0318	Montana	Montana Supreme Court	DA 13-0318 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 310 IN THE MATTER OF: A.R.B., A Youth in Need of Care. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte/Silver Bow, Cause No. DN 12-15-BN Honorable Brad Newman, Presiding Judge COUNSEL OF RECORD: For Appellant: Kathryn McEnery; Attorney at Law; Kalispell, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Micheal S. Wellenstein, Assistant Attorney General; Helena, Montana Eileen Joyce, Silver Bow County Attorney; Butte, Montana Submitted on Briefs: September 26, 2013 Decided: October 22, 2013 Filed: __________________________________________ Clerk October 22 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 The biological mother of A.R.B. appeals the order of the Montana Second Judicial District Court, Silver Bow County, terminating her parental rights. ¶2 We address the following issues on appeal: ¶3 1. Whether the District Court erred by not staying proceedings on the ground that Montana no longer held exclusive and continuing jurisdiction over the child custody determination under § 40-7-202, MCA. ¶4 2. Whether the District Court erred by not staying proceedings on the ground that Montana was an inconvenient forum under § 40-7-108, MCA. ¶5 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶6 M.B. (Mother) gave birth to A.R.B. in June 2012, at St. James Hospital in Butte, Montana. During and after the birth, the hospital staff noticed Mother exhibiting numerous erratic behaviors. Mother would become paranoid and unaware of her surroundings, she swatted the nurses and threatened to spit on them, and she attempted to jump off the bed to get to A.R.B. as the nurses were cleaning up A.R.B. The hospital contacted the Montana Department of Public Health and Human Services (Department) concerned about Mother’s apparent mental health issues and inability to care for the child. ¶7 The Utah Department of Family Services (Utah DFS) also contacted the Department. Utah DFS previously had removed Mother’s other child from her care due to neglect. Mother’s parental rights to the other child were terminated by a Utah court in 3 December 2011. Utah DFS expressed concerned that Mother was coming to Butte to have her baby in order to avoid that agency’s jurisdiction. ¶8 The Department sent Child Protection Specialist Arletha Swan to the hospital to interview Mother. Swan assessed her as distracted and unable to focus. Mother refused to give any information regarding herself or her history. The Department removed A.R.B. from Mother at the hospital. ¶9 The Department filed a Petition for emergency protective services, adjudication as youth in need of care, and temporary legal custody of A.R.B. on June 21, 2012, supported by an affidavit from Swan detailing the behaviors Mother exhibited and Swan’s assessment of her. The District Court granted temporary emergency protective services and scheduled a show cause hearing on the Department’s petition for temporary legal custody for July 11, 2012. Mother failed to appear for the show cause hearing but was represented by counsel. After listening to Swan’s testimony, the District Court adjudicated A.R.B. a youth in need of care and granted the Department temporary legal custody of A.R.B. ¶10 The Department placed A.R.B. in a temporary foster home in Butte for approximately three months. In September 2012, pursuant to the Interstate Compact on the Placement of Children (ICPC), the Department placed A.R.B. in foster care with the Utah family who had adopted Mother’s other child. ¶11 Following the placement, Mother filed a “Motion to Relinquish Jurisdiction from Montana to Utah.” In the brief in support of her motion, she argued that jurisdiction over 4 A.R.B.’s case was governed by the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA) and that once Mother went to Utah and the Department placed A.R.B. with a foster family in Utah, Montana no longer had exclusive, continuing jurisdiction. She alternatively argued that the District Court should decline to exercise jurisdiction because Utah constituted a more convenient forum. The Department opposed the motion and filed a petition for permanent legal custody and the termination of Mother’s parental rights on the basis of abandonment, noting that Mother had no contact with the Department since July 2012 and no contact with Utah DFS. ¶12 The District Court conducted a hearing on the motion to relinquish jurisdiction. The Department’s lawyer advised the court that Utah DFS contacted him and indicated it would not accept jurisdiction or a transfer of the case. He argued that under Article V of the ICPC, Montana retained jurisdiction over A.R.B. even after placing A.R.B. in a foster care placement in Utah. The District Court issued an order on February 19, 2013, denying Mother’s motion to relinquish jurisdiction. The court relied on the fact that no Utah court with competing jurisdiction would assume A.R.B.’s case and recognized the jurisdiction vested in it through the ICPC. ¶13 On March 20, 2013, the District Court conducted a hearing on the Department’s petition for permanent legal custody and the termination of Mother’s parental rights. Mother was not present for the hearing, and her attorneys stated that they were unable to establish contact with her. Swan testified to Mother’s failure to appear at a family group conference to assist in the placement of A.R.B. or to contact the Department regarding 5 the development of a treatment plan. Swan also testified that Mother had not seen A.R.B. since A.R.B.’s birth and that her lack of cooperation prevented any visitation from occurring. Finding that Mother had abandoned A.R.B., the District Court terminated her parental rights and granted the Department permanent custody of A.R.B. with the right to consent to adoption or guardianship. STANDARD OF REVIEW ¶14 We review a district court’s decision on a motion to decline jurisdiction for an abuse of discretion. In re Lloyd, 2011 MT 133, ¶ 17, 361 Mont. 22, 255 P.3d 166. A court abuses its discretion when it acts “arbitrarily, without employment of conscientious judgment or in excess of the bounds of reason, resulting in substantial injustice.” In re K.H., 2012 MT 175, ¶ 19, 366 Mont. 18, 285 P.3d 474. DISCUSSION ¶15 1. Whether the District Court erred by not staying proceedings on the ground that Montana no longer held exclusive and continuing jurisdiction over the child custody determination under § 40-7-202, MCA. ¶16 Mother acknowledged that the District Court had jurisdiction to make an initial custody determination pursuant to § 41-1-103, MCA, because A.R.B. was within the State of Montana and allegedly subject to abuse and neglect in this state. Mother argues, however, that once she left Montana for Utah and the Department placed A.R.B. with a Utah foster family, the District Court was required to relinquish jurisdiction to a Utah court under the “exclusive, continuing jurisdiction” provision in § 40-7-202, MCA. 6 ¶17 Section 40-7-202, MCA, part of the codified UCCJEA, states that when a Montana court has made a child custody determination consistent with §§ 40-7-201 or 40-7-203, that court has exclusive, continuing jurisdiction over the determination until: (a) a court of this state determines that neither the child, the child and one parent, nor the child and a person acting as a parent have a significant connection with this state and that substantial evidence is no longer available in this state concerning the child’s care, protection, training, and personal relationships; or (b) a court of this state or a court of another state determines that neither the child, a parent, nor any person acting as a parent presently resides in this state. Mother cites In re B.P., 2008 MT 166, ¶ 19, 343 Mont. 345, 184 P.3d 334, for the proposition that a district court is obliged to apply this statute and relinquish jurisdiction upon a finding under (a) or (b). ¶18 The State argues on behalf of the Department that Montana retained jurisdiction over the case because the Department placed A.R.B. in a Utah foster home under the ICPC. Article V of the ICPC, codified at § 41-4-101, MCA reads: The sending agency shall retain jurisdiction over the child sufficient to determine all matters in relation to the custody, supervision, care, treatment, and disposition of the child which it would have had if the child had remained in the sending agency’s state until the child is adopted, reaches majority, becomes self-supporting, or is discharged with the concurrence of the appropriate authority in the receiving state. Such jurisdiction shall also include the power to effect or cause the return of the child or the child’s transfer to another location and custody pursuant to law. ¶19 The District Court declined to make a determination under (a) or (b) of § 40-7- 202, MCA, because there was not a court in Utah to which it could relinquish jurisdiction. The District Court acknowledged that B.P. imposed an obligation upon 7 district courts to apply § 40-7-202, MCA, but it distinguished the present case from B.P. because, in that case, the father had registered a Montana custody order with California courts and the mother requested that the Montana court relinquish jurisdiction after seeking to pursue an action for visitation in California. Here, there were no ongoing proceedings in a Utah court. In fact, Utah DFS indicated that it would refuse jurisdiction over A.R.B.’s case. We agree with the District Court’s conclusion that any obligation to relinquish jurisdiction to another court under the “exclusive, continuing jurisdiction” provision of the UCCJEA requires a pending proceeding in the other state. The Montana court is not obligated to seek out a sister state’s court and demand initiation of a proceeding. ¶20 Because the Department acted in accordance with the ICPC, and absent any pending proceeding in Utah, Article V of the ICPC controls. As the District Court pointed out, the plain language of Article V vests the District Court with jurisdiction in this case regardless of the foster placement in Utah. It dictates that Montana retained jurisdiction after the Department placed A.R.B. in Utah in order to adjudicate the pending proceeding. We therefore conclude that the District Court did not abuse its discretion in declining to relinquish jurisdiction in this case. ¶21 2. Whether the District Court erred by not staying proceedings on the grounds that Montana was an inconvenient forum under § 40-7-108, MCA. ¶22 Alternatively, Mother argues that the District Court abused its discretion by not staying the proceedings on the basis that Montana was an inconvenient forum. Section 40-7-108, MCA, is a discretionary provision that allows a court to decline jurisdiction 8 upon motion by a party if it determines that it is an inconvenient forum under the applicable circumstances. The statute directs a court making such a determination to consider “all relevant factors” and lists factors the court may consider. The fact that another proceeding is not pending in another forum is not dispositive under this provision as subsection (3) states that a court that has determined it is an inconvenient forum “shall stay the proceedings upon condition that a child custody proceeding be promptly commenced in another designated state . . . .” ¶23 Mother argues that the relevant factors in this case were that A.R.B. only lived in Montana for a few months before being placed in Utah, that Mother resides in Utah, and that Utah DFS had an interest in A.R.B.’s welfare. Additionally, Mother alleges that the court needed to consider that the court in Utah was familiar with the facts and issues, having previously terminated her parental rights, and that the evidence required for the pending litigation was located in Utah. ¶24 Mother fails to demonstrate that the District Court acted “arbitrarily, without employment of conscientious judgment or in excess of the bounds of reason, resulting in substantial injustice.” K.H., ¶ 19. The court pointed out that there were no pending proceedings in a Utah court and that Utah DFS declined to open any investigation regarding A.R.B. We are not persuaded by Mother’s argument that a Utah court would be more familiar with the facts and issues involved. The fact that a Utah court previously had terminated her rights to her other child does not automatically demonstrate that a court in that state would be better situated to handle the abandonment at issue in A.R.B.’s 9 case. The Department presented evidence from witnesses who had observed and assessed Mother’s behavior in Montana. ¶25 Although the District Court did not specifically address some of Mother’s other reasons articulating why Montana was an inconvenient forum, we conclude that they were immaterial to the District Court’s conclusion. The evidence required for the pending litigation was not located in Utah; the Department’s case regarding abandonment did not require any evidence from Utah DFS or the Utah foster family. Instead, the evidence necessary for the District Court’s determination of abandonment came from the Department, specifically Swan’s testimony that Mother had not seen A.R.B. since June 2012 and did not attempt to contact or work with the Department to regain custody of A.R.B. Further, although Mother argues that she would have had difficulty traveling to Montana, she showed no interest or intent to appear and did not attempt to do so remotely through telephone or videoconferencing. ¶26 After viewing the facts in light of the relevant factors under § 40-7-108, MCA, we hold that the District Court was within its discretion to decline Mother’s request to declare Montana an inconvenient forum. Its judgment terminating Mother’s parental rights to A.R.B. is affirmed. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JIM RICE /S/ BRIAN MORRIS	October 22, 2013
7b5574f5-6faf-476d-9ad7-c3447dd668ba	Marriage of Jones	2013 MT 303N	DA 13-0260	Montana	Montana Supreme Court	DA 13-0260 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 303N IN RE THE MARRIAGE OF DEREK M. JONES, Petitioner and Appellee, v. TAWNY FISHER-JONES, Respondent and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DR 12-1064 Honorable Gregory R. Todd, Presiding Judge COUNSEL OF RECORD: For Appellant: Tawny Fisher-Jones (Self-Represented); Billings, Montana For Appellee: Derek M. Jones (Self-Represented); Billings, Montana Submitted on Briefs: September 26, 2013 Decided: October 15, 2013 Filed: __________________________________________ Clerk October 15 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Tawny Fisher-Jones appeals from an order of the Thirteenth Judicial District Court, Yellowstone County, denying her motion to set aside decree. We affirm. ¶3 The issue presented on appeal is whether the District Court abused its discretion in denying Fisher-Jones’s motion to set aside the decree. ¶4 Fisher-Jones and Derek Jones were married in 2004 and have four children. Fisher-Jones is currently incarcerated at the Montana Women’s Prison. On September 18, 2012, Derek Jones petitioned for dissolution of the marriage. A sheriff’s return of service indicates that on September 19, 2012, Civil Officer Curtis Gibbs personally delivered to Fisher-Jones at the Montana Women’s Prison a “summons and temporary economic restraining order, petition for dissolution of marriage, petitioner’s declaration of assets, debts, income and expenses and petitioner’s proposed parenting plan.” Fisher-Jones alleges that she was never personally served with any of these documents, and instead became aware of the dissolution proceeding only in “mid-October.” ¶5 A default was entered October 12, 2012, and the final decree of dissolution was entered October 17, 2012. Fisher-Jones moved to set aside the decree. The District 3 Court denied her motion on December 4, 2012, finding that her claim of lack of service was refuted by the sheriff’s return. On January 4, 2013, Fisher-Jones moved again to set aside the decree, specifically citing M. R. Civ. P. 60(b). Her second motion restated her claim of lack of service, but added no new support. That motion was also denied. ¶6 This Court will reverse the denial of a motion to set aside a default judgment for only a slight abuse of discretion. Wittich Law Firm, P.C. v. O’Connell, 2013 MT 122, ¶ 14, 370 Mont. 103, 304 P.3d 375. The party seeking to set aside the default judgment bears the burden of persuasion. Wittich, ¶ 14. ¶7 A default judgment may be set aside due to surprise, if the judgment is void, or for any other reason that justifies relief. M. R. Civ. P. 55(c); M. R. Civ. P. 60(b). A judgment is void if the respondent is not properly served. Nikolaisen v. Adv. Transformer Co., 2007 MT 352, ¶ 16, 340 Mont. 332, 174 P.3d 940. A sheriff’s return of service “is prima facie evidence of the proof of the process or notices having been served as stated.” Section 25-3-302, MCA. The statements in the sheriff’s return of service may be overcome by proof that is “clear, unequivocal and convincing.” Sewell v. Beatrice Foods Co., 145 Mont. 337, 342, 400 P.2d 892, 894 (1965). Without more, the assertion of an individual that he or she was not served, no matter how confident, is not enough to meet this burden. Sewell, 145 Mont. at 342, 400 P.2d at 894. ¶8 Fisher-Jones alleges that she was not served with notice of the petition for dissolution. The sheriff’s return clearly states that Fisher-Jones was personally served on September 19, 2012, by Officer Gibbs. Fisher-Jones has not presented anything other 4 than her own assertions to rebut the statements contained in the sheriff’s return. This is not enough to establish the “clear, unequivocal and convincing” proof needed to overcome the sheriff’s return. Sewell, 145 Mont. at 342, 400 P.2d at 894. The District Court concluded that Fisher-Jones had not demonstrated any grounds for relief under M. R. Civ. P. 60(b). We hold that the District Court’s decision to deny her motion was not an abuse of discretion. ¶9 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for memorandum opinions. The issues in this case are ones of judicial discretion, and there clearly was not an abuse of discretion. ¶10 Affirmed. /S/ MIKE McGRATH We concur: /S/ PATRICIA COTTER /S/ JIM RICE /S/ LAURIE McKINNON Justice Beth Baker, dissenting. ¶11 We have long recognized a strong preference for deciding cases on the merits rather than by default. Steyh v. Steyh, 2013 MT 175, ¶ 8, 370 Mont. 494, 305 P.3d 50. When a motion to set aside a default “is made and is supported by a showing which leaves the court in doubt or upon which reasonable minds might reach different conclusions, the doubt should be resolved in favor of the motion.” Sewell, 145 Mont. at 5 340, 400 P.2d at 894. In Sewell, we reversed an order refusing to set aside the default based on the defendant’s positive recollection that he had not been served and his company records that “bear him out.” Sewell, 145 Mont. at 344, 400 P.2d at 896. ¶12 Here, Fisher-Jones is an inmate, without ready access to evidence “other than her own assertions” to rebut the prima facie showing of service. In her affidavit, her motion to set aside the decree, and her motion for relief under M. R. Civ. P. 60(b), Fisher-Jones vigorously disputed the return of personal service and claimed she had never been served. On appeal, she has suggested that there is evidence that would “bear [her] out,” namely, “logs, records and [surveillance]” from the Montana Womens’ Prison that would show whether or not the sheriff’s deputy effected personal service. Given Fisher-Jones’ assertions, the apparent availability of records from the Womens’ Prison, and the fact that the result of the decree was to provide Fisher-Jones very little contact with her children and allocate to her an unclear but potentially significant amount of the parties’ marital debt1, I would hold that the District Court slightly abused its discretion by not at least giving Fisher-Jones an opportunity to demonstrate proof, if any she had, to rebut the return of service. I would remand the case with instructions for the District Court to hold a hearing on her motion to set aside the decree for lack of personal service. /S/ BETH BAKER 1 The parenting plan adopted by the District Court states “the respondent shall take all debt [accumulated] during the marriage.” In the court’s Final Decree of Dissolution, however, a $58,153.73 debt is allocated between the parties; the decree confusingly lists “Wife” but then “Petitioner” as responsible for $4,407.35, and “Husband” but then “Respondent” as responsible for $53,746.38. In this case, Fisher-Jones is the Respondent, so the actual allocation is unclear.	October 15, 2013
81ac039c-6c98-4f78-bb4c-252513e2a970	H.E. Simpson Lumber Co. v. Three Rivers Bank of Mont.	2013 MT 312	DA 12-0771	Montana	Montana Supreme Court	DA 12-0771 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 312 H.E. SIMPSON LUMBER CO., Counter-Claimant, Appellant and Cross-Appellee, v. THREE RIVERS BANK OF MONTANA, Counter-Defendant, Appellee and Cross-Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 06-341B Honorable Katherine R. Curtis, Presiding Judge COUNSEL OF RECORD: For Appellant: Quentin M. Rhoades, Alison Garab; Sullivan, Tabaracci & Rhoades, P.C.; Missoula, Montana For Appellee: Charles E. Hansberry, Isaac M. Kantor; Garlington, Lohn & Robinson, PLLP; Missoula, Montana Submitted on Briefs: September 18, 2013 Decided: October 22, 2013 Filed: __________________________________________ Clerk October 22 2013 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Three Rivers Bank (Bank) and H.E. Simpson Lumber (Simpson) both had business and financial relationships with North End Timber Production, L.L.C. (NET or the mill), a now-defunct sawmill in Olney, Montana, formerly owned and operated by John and Lee Alt. Approximately five years into its operation, NET experienced serious financial difficulties and defaulted on approximately $1,400,000 in loan obligations to the Bank and at the same time owed Simpson approximately $893,500. Subsequently, proceedings were initiated in both Bankruptcy Court and the Eleventh Judicial District Court. While these cases were pending, a fire destroyed the mill. The Bank recovered approximately $980,000 from the mill’s insurance proceeds. Following a jury trial conducted in District Court, the jury, hearing the case between the Bank and Simpson, concluded that neither the Bank nor Simpson was entitled to recover damages from the other. Simpson appeals. We affirm. ISSUES ¶2 The dispositive issue on appeal is whether the District Court abused its discretion in refusing to admit into evidence a particular letter written by Bank president John King. FACTUAL AND PROCEDURAL BACKGROUND ¶3 Father and son Lee and John Alt started North End Timber in Olney, Montana, in June 2001. NET established its company bank account with Three Rivers Bank and obtained its first loan from the Bank during its first month of operation. In accordance with standard practices, the Bank secured repayment for this loan (and the 14 subsequent loans it would extend during the life of the company) through liens on collateral. The 3 Bank also required NET to obtain an insurance policy naming the Bank as a “loss payee,” required the Alts to sign personal guarantees for the loan amounts, and had other NET customers, including Simpson, execute assignment agreements under which these customers when making funds payable to NET, would make them payable to both NET and the Bank. The Bank continued to extend loans to NET until April 2006 when NET defaulted, owing the Bank approximately $1,400,000. ¶4 During 2002, NET and Simpson entered into an arrangement under which Simpson would provide NET with operating cash and in return would receive wood to sell in Simpson’s lumber facilities. This arrangement remained in place from December 2002 until January 26, 2006, when the relationship between NET and Simpson terminated. During that time more than $6,000,000 in lumber and cash was exchanged between NET and Simpson. As noted above, Simpson executed assignment agreements with the Bank in March 2003 and again in April 2004, in which it agreed to make any advanced funds available to NET payable to both NET and the Bank. For a short period of time, Simpson did not strictly adhere to the terms of the 2003 agreement and advanced funds to NET without the Bank’s knowledge. However, Simpson later complied with the assignment agreements. At the time NET terminated its relationship with Simpson, NET owed Simpson approximately $893,500. ¶5 In April 2006, the Bank served notices of default on NET and the Alts and declared all of NET’s notes immediately due and payable. The Bank initiated a foreclosure action against NET and filed its initial complaint in District Court on April 26, 2006. It filed an amended complaint on June 13, 2006. Also on June 13, 2006, NET 4 filed for Chapter 11 reorganization in Bankruptcy Court. As a secured creditor, the Bank immediately filed two claims in Bankruptcy Court in the amounts of $1,324,840 and $46,759.73. The foreclosure action in District Court was put on hold by a bankruptcy stay. ¶6 In August 2006, a fire completely destroyed the mill, and as a result, NET’s Chapter 11 proceeding was converted to a Chapter 7 liquidation proceeding. As a senior secured creditor, the Bank received $980,000 from insurance proceeds and from minor sales of scrap collateral. ¶7 The Bank’s foreclosure action in District Court was revived in February 2008, after which Simpson filed an answer to the Bank’s complaint. In March 2008, Simpson filed a counterclaim against the Bank asserting that the Bank interfered with its contractual and business relations with NET, committed constructive fraud, and was equitably estopped from asserting its claims against Simpson. Simpson sought to recover from the Bank up to $850,000 it had loaned to NET but was unable to recover due to the bankruptcy and subsequent fire. In response to Simpson’s counterclaim, the Bank filed a second amended complaint alleging, among other things, that Simpson breached two assignment agreements it had executed at the Bank’s behest. ¶8 Simpson also filed a cross-claim against the Alts, as guarantors. When the Alts failed to answer or otherwise respond to Simpson’s cross-claim, Simpson requested a default judgment. The District Court entered the requested judgments on June 11, 2009, and declared John and Lee Alt each individually and jointly liable to Simpson for $893,525.06. Simpson attempted to execute on these judgments without success. 5 ¶9 By 2010, many issues were resolved through motions for summary judgment and several parties were dismissed from the litigation. This left the Bank, the Alts and Simpson as parties, and only three issues for the jury to decide: Simpson’s claim for equitable estoppel, the Bank’s claims against Simpson pertaining to the assignment agreements, and whether the Bank had mitigated its damages under the assignment agreements. ¶10 Simpson’s estoppel claim was based upon Simpson’s allegation that King had repeatedly assured Simpson’s CEO, Dick Hammett, that the Bank would continue lending the mill funds for its long-term operation if Simpson would continue to advance funds for its short-term operation. There are no records of these assurances and King strongly denied making them. In an effort to establish that King was not a credible witness and his denial should not be believed, Simpson sought to introduce into evidence a March 2004 letter that King sent to the Board of Directors of Northwestern Business Center (or Center or the business center) encouraging the Center to provide capital in the form of loans to NET. It appears that Simpson discovered the existence of this letter sometime during the course of the litigation. In the letter, King advised the Board that NET was a viable business operation at the time and that despite its debt, including $98,000 owed to Simpson, the Center should not reject the investment. Simpson claimed that the letter contained misinformation about the financial well-being of NET, understated NET’s debts, and overstated management’s ability to continue operating the mill as a viable entity. In other words, Simpson claimed King lied to the Center in an effort to get the business center to advance requested funds. 6 ¶11 On September 27, 2010, the Bank filed motions in limine seeking, among other things, to exclude the March 2004 King letter from evidence. The parties agreed to allow a Special Master to resolve the motions in limine, and on December 1, 2010, the Special Master concluded that King’s letter to the Center should be excluded unless Simpson could show it was aware of the letter at the time it was written and relied upon it. Otherwise, the Special Master concluded, the letter was irrelevant and related to a collateral matter; therefore, it should be excluded from evidence. ¶12 The court conducted a jury trial from September 26 - 30, 2011. The jury rendered a verdict in which the Bank prevailed on its claim against Simpson under the 2003 assignment. The jury, however, determined the Bank failed to mitigate its damages and therefore awarded it no damages for this claim. The jury also found against the Bank on its claim under the 2004 assignment and it found against Simpson on its estoppel claim. It awarded no damages to either party. ¶13 Simpson appeals. STANDARD OF REVIEW ¶14 We review a district court’s decision on the admissibility of evidence for an abuse of discretion. A district court has broad discretion in determining whether evidence is relevant and admissible. It abuses its discretion when it acts arbitrarily without employment of conscientious judgment or so exceeds the bounds of reason as to work a substantial injustice. Wheaton v. Bradford, 2013 MT 121, ¶ 13, 370 Mont. 93, 300 P.3d 1162 (internal citations omitted). 7 DISCUSSION ¶15 Did the District Court abuse its discretion when it refused to admit into evidence a particular letter written by Bank president John King? ¶16 Simpson claims that at various times beginning in 2003, Bank President King made promises to Simpson that if Simpson would continue to provide short-term funding to the mill, the Bank would continue providing long-term funding and would use Simpson’s short-term funding to keep the mill operating. Simpson claims the Bank broke this promise and consequently the Bank should be held liable for the losses Simpson experienced when the mill closed. No one else was present when King purportedly made these promises to Simpson’s president, Dick Hammett. Hammett testified that Simpson relied upon King’s promises to its detriment. King denies he ever made such promises to Hammett and contends he was without the authority to do so. ¶17 Without any proof of King’s promises to Hammett, Simpson attempted to discredit King’s veracity by seeking to have the letter King wrote to the business center in 2004 admitted into evidence. Simpson claims this letter shows that King made untruthful statements to the Center about the financial health of the mill; therefore, the jury could have concluded that King also made untruthful assurances to Simpson. Simpson claims the letter is relevant because it undermines the presumption “that a witness speaks the truth” by establishing that the witness made prior inconsistent statements. It asserts that the letter bears directly on King’s credibility. Lastly, Simpson maintains the Bank failed to establish that it was unfairly prejudiced by the letter’s admission into evidence. For these reasons, Simpson argues the District Court abused its discretion when it refused to 8 admit King’s letter into evidence. It maintains that had the letter been admitted into evidence, the outcome of its counter-claim for equitable estoppel would have been different. ¶18 As noted above, on September 29, 2010, the parties stipulated to the appointment of a Special Master to resolve various issues including motions in limine filed by the parties. On December 1, 2010, the Special Master issued his ruling and concluded among other things that the Bank president’s letter to Northwest Business Center (1) did not establish a “pattern of conduct” that would support Simpson’s estoppel claim, (2) was irrelevant, and (3) was related to a collateral matter. During the trial, Simpson nonetheless attempted to question the Bank president about his written representations to Northwest Business Center pertaining to the financial health of NET. However, the District Court precluded this line of questioning. ¶19 Simpson relies on § 26-1-302, MCA, which states that “[a] witness is presumed to speak the truth.” The statute provides that this presumption may be controverted in a number of ways, including evidence of “inconsistent statements” by the witness. Simpson claims King’s letter to the Center is an “inconsistent statement.” It also opines that under M. R. Evid. 401 and 403 (Rules 401 and 403), “evidence bearing upon the credibility of a witness” is relevant and “can only be excluded if its probative value is ‘substantially outweighed’ by the danger of unfair prejudice . . . under [Rule 403].” Simpson maintains that the content of King’s letter establishes his lack of credibility and allows Simpson to satisfy the six elements for its equitable estoppel claim as set forth below. 9 ¶20 As we have frequently explained: Estoppel is a principle of equity. Equity will grant relief sought when in view of all the circumstances to deny it would permit one of the parties to suffer a gross wrong at the hands of the other party who brought about the condition. Estoppel is not favored and will only be sustained upon clear and convincing evidence. Dagel v. Great Falls, 250 Mont. 224, 235, 819 P.2d 186, 193 (1991) (citing Kenneth D. Collins Agency v. Hagerott, 211 Mont. 303, 310, 684 P.2d 487, 490 (1984) (internal ellipses omitted)). Simpson claims that it is inequitable that it should suffer financial losses based upon its relationship with NET when the Bank knew about NET’s difficulties and failed to tell Simpson about them, misleading it with false assurances. Simpson argues that the evidence of a lie to the business center constitutes support for its contention that King lied to Simpson too. ¶21 We first address Simpson’s argument that the letter would support its equitable estoppel claim. In Dagel, we set forth the six elements that define an equitable estoppel claim: 1. the existence of conduct, acts, language, or silence amounting to a representation or a concealment of a material fact; 2. these facts must be known to the party estopped at the time of his conduct, or at least the circumstances must be such that knowledge of them is necessarily imputed to him; 3. the truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel at the time it was acted upon by him; 4. the conduct must be done with the intention, or at least the expectation, that it will be acted upon by the other party, or under circumstances both natural and probable that it will be so acted upon; 10 5. the conduct must be relied upon by the other party and, thus relying, he must be led to act upon it; and 6. he must in fact act upon it in such a manner as to change his position for the worse. Dagel, 250 Mont. at 234-35, 819 P.2d at 192-93. See also Elk Park Ranch v. Park Co., 282 Mont. 154, 165, 935 P.2d 1131, 1137-38 (1997). We expressly noted in Elk Park that if any one of these elements was not present, the theory of equitable estoppel cannot be invoked. Elk Park, 282 Mont. at 166, 935 P.2d at 1138. ¶22 We conclude that the King letter could not assist Simpson in its efforts to satisfy the elements of an equitable estoppel claim. As the foregoing test requires, the party to be estopped must make a claim or representation to the other party with the intention at the time of his conduct that the representation will be acted upon by that other party. Dagel, 250 Mont. at 234-35, 819 P.2d at 192-93. Further, the other party must rely upon the representation to his detriment. Here, it is undisputed that the King letter and representations were made to Northwest Business Center in 2004, and not to Simpson. It is also undisputed that Simpson did not know of the letter in 2004, nor did it ever rebut the Special Master’s determination that the letter should be excluded unless Simpson could show it was aware of the letter at the time it was written and relied upon it. Simpson is therefore unable to demonstrate that it relied upon the representations set forth in King’s letter to its detriment. This being so, the letter in question could not lay the groundwork for a judgment in Simpson’s favor on its equitable estoppel claim. ¶23 In light of the foregoing, the only remaining basis for the admission of the letter was the contention that its contents could establish that King could be untruthful, and 11 therefore provide grounds for impeaching him. The Special Master determined that the letter could not be used for purposes of impeachment because it related to a “collateral matter.” Given that the letter was written in 2004 to a company that was not even a party to this litigation, we conclude that the District Court did not err in adopting the Special Master’s conclusions in this regard. We reiterate that it is within the discretion of the District Court to exclude otherwise potentially relevant evidence if its probative value is substantially outweighed by the danger of confusion of the issues or a waste of time. Rule 403. The letter did relate to a collateral matter, and the District Court therefore did not abuse its discretion in excluding it from evidence. ¶24 Finally, we note that the Bank filed a cross-appeal, arguing that the District Court erred in submitting Simpson’s equitable estoppel claim to the jury. Because we resolve this matter in favor of the Bank on direct appeal, we do not reach the cross-appeal. CONCLUSION ¶25 For the foregoing reasons, we affirm the District Court’s ruling excluding King’s letter to Northwest Business Center from the evidence presented to the jury. /S/ PATRICIA COTTER We concur: /S/ MICHAEL E WHEAT /S/ BRIAN MORRIS /S/ BETH BAKER /S/ JIM RICE	October 22, 2013
265d1eb5-f33d-4c03-912a-5c7217a8c831	State Farm Mut. Auto. Ins. Co. v. Freyer	2013 MT 301	DA 12-0543	Montana	Montana Supreme Court	DA 12-0543 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 301 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff, Appellee and Cross-Appellant, v. FRANK FREYER, as Personal Representative of the Estate of Heath Evans Freyer, and as Conservator of the Estate of Alicia Freyer, a Minor Child, and VAIL FREYER, Defendants, Appellants and Cross-Appellees. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 07-754A Honorable Holly Brown, Presiding Judge COUNSEL OF RECORD: For Appellants: Allan H. Baris; Moore, O’Connell and Refling, P.C.; Bozeman, Montana (for Frank Freyer) Daniel P. Buckley; Buckley Law Office, P.C.; Bozeman, Montana (for Vail Freyer) For Appellee: Dale R. Cockrell; Jinnifer Jeresek Mariman; Moore, Cockrell, Goicoechea & Axelberg P.C.; Kalispell, Montana (for State Farm) Robert F. James; Ugrin, Alexander, Zadick, & Higgins, P.C.; Great Falls, Montana (for State Farm) October 15 2013 2 For Amici: Lawrence A. Anderson; Attorney at Law, P.C.; Great Falls, Montana (for Amicus MTLA) Submitted on Briefs: July 24, 2013 Decided: October 15, 2013 Filed: __________________________________________ Clerk 3 Justice Jim Rice delivered the Opinion of the Court. ¶1 This is the second appeal in this case. See State Farm Mut. Aut. Ins. Co. v. Freyer (Freyer I), 2010 MT 191, 357 Mont. 329, 239 P.3d 143. Generally, Heath Freyer (Heath) and Vail Freyer (Vail), who were married and the parents of Alicia Freyer (Alicia), were all riding in their vehicle, which was insured by State Farm Mutual Automobile Insurance Company (State Farm). Vail was driving when the vehicle was involved in a rollover accident that resulted in Heath’s death. In Freyer I, we held, based upon the language of the subject policy’s “Limits of Liability” clause, that there was coverage for Alicia’s claim for derivative damages stemming from the death of her father, Heath, under her own “Each Person” policy limit of $50,000, contrary to State Farm’s position that all damages arising from Heath’s death were covered only by the “Each Person” policy limit of $50,000 applicable to him. Freyer I, ¶¶ 13-16. After remand, State Farm paid the contested coverage amounts. Appellants then brought claims against State Farm under several theories for the wrongful denial of coverage for Alicia’s derivative claims. The District Court granted summary judgment to State Farm on all of those theories, which Appellants challenge on appeal. We reverse in part, affirm in part, and remand for further proceedings. We address the following issues: ¶2 1. Did the District Court err in concluding that State Farm had not breached the insurance contract when it failed to indemnify Vail for Alicia’s derivative claims because it had a “reasonable basis in law” to challenge coverage of those claims? 4 ¶3 2. Did the District Court err in granting summary judgment to State Farm on the common-law bad faith and breach of the covenant of good faith and fair dealing claims? ¶4 3. Did the District Court err in granting summary judgment to State Farm on the Unfair Trade Practices Act claims? ¶5 4. Did the District Court err in concluding State Farm waived its statute of limitations affirmative defenses? FACTUAL AND PROCEDURAL BACKGROUND ¶6 In October 2003, Vail was driving a family vehicle in the Bozeman area, and Heath and three-month-old Alicia (collectively the Freyers), were passengers. Vail maneuvered the vehicle to pass a string of cars ahead of them, but when they were nearly even with the lead vehicle, driven by Michelle Manning (Manning), Manning executed a left-hand turn. The vehicles collided, sending the Freyers’ vehicle off the road, where it overturned. Heath was ejected and suffered fatal injuries. Alicia, who was confined by her car seat, suffered minor injuries. ¶7 State Farm insured the Freyers’ three vehicles against liability arising from Vail’s driving. On the subject vehicle, State Farm’s automobile liability policy provided coverage limits of $50,000 per person and $100,000 per accident, as well as underinsured motorist coverage of $50,000. Within days of the accident, State Farm offered to pay Heath’s Estate the $50,000 per person coverage limit for Heath’s injuries, but Vail’s attorney asked State Farm to wait on payment until a probate proceeding had been 5 initiated. Heath’s father, Frank Freyer (Frank), was appointed as personal representative of Heath’s Estate and as conservator of Alicia’s Estate. ¶8 On August 4, 2004, Frank requested by letter that State Farm pay the $50,000 it had previously offered to Heath’s Estate. Frank also advised State Farm that he would be demanding $50,000 for settlement of Alicia’s claims. The next day, State Farm sent Frank a check for $49,723.22, the balance of the $50,000 per person coverage limit for Heath’s Estate’s claim after deduction for payments made for Heath’s funeral and medical care. ¶9 In September 2004, State Farm filed a declaratory judgment action in federal court in an unrelated case that sought a declaration that the “Limits of Liability” clause in its auto liability policy limited coverage to $50,000 for all claims arising from the bodily injury to one person. See State Farm Mut. Aut. Ins. Co. v. Bowen (Bowen I), No. 04-63- BU-RFC (D. Mont. Aug. 3, 2005). The Limits of Liability clause at issue in Bowen I was identical to the one in the policy insuring Vail. That clause provides, in pertinent part: The amount of bodily injury liability coverage is shown on the declarations page under “Limits of Liability–Coverage A-Bodily Injury [-W-], Each Person, Each Accident.” Under “Each Person” is the amount of coverage for all damages due to bodily injury to one person. “Bodily injury to one person” includes all injury and damages to other persons, including emotional distress, sustained by such other persons who do not sustain bodily injury. (Emphasis added.) ¶10 On November 18, 2004, Frank demanded by letter that State Farm also pay $50,000 to satisfy Alicia’s claims against Vail. Frank asserted that because Alicia 6 suffered “bodily injury,” she was entitled to payment for all her damages, including her derivative claims arising from her father’s death, out of her own $50,000 “Each Person” limit. Frank also asserted that Alicia had personally sustained over $50,000 in damages because she had suffered a “closed head injury.” ¶11 Four days later, State Farm contacted its in-house counsel, Jo Ridgeway (Ridgeway), concerning Frank’s interpretation of the Limits of Liability clause. Two days later, Ridgeway advised State Farm that the majority rule from courts that had interpreted the clause was that all “derivative claims”—damages arising from another person’s injury or wrongful death—were subject to the $50,000 Each Person coverage limit. In other words, any derivative claim Alicia had pertaining to Heath’s death was subject to the $50,000 Each Person coverage limit for his claims, which had already been paid to Heath’s Estate. Based on this advice, State Farm informed Frank that it had already paid the available coverage limits for damages stemming from Heath’s death. Further, State Farm advised that, based upon Alicia’s medical records indicating that her head CT scan was normal, and her doctor’s conclusion that she suffered only “minor bruising,” it would settle her personal bodily injury claim against Vail for $5,000. ¶12 On January 27, 2005, Frank rejected the $5,000 offer and renewed his demand for $50,000. Frank advised that, if State Farm tendered that amount, he would provide a full release for all claims against Vail. State Farm rejected that offer, responding that it had changed neither its position regarding the interpretation of the policy nor its $5,000 valuation of damages for Alicia’s own physical injuries. 7 ¶13 On August 3, 2005, the U.S. District Court for Montana ruled in Bowen I that a derivative claim was subject to the same Each Person coverage limit as other claims for that person. See Bowen I at 9. That decision was ultimately affirmed by the Ninth Circuit. State Farm Mut. Aut. Ins. Co. v. Bowen (Bowen II), 247 Fed. Appx. 901, 902-03 (9th Cir. 2007). ¶14 On September 19, 2006, Frank, in his capacity as personal representative of Heath’s Estate and conservator of Alicia’s Estate, sued his daughter-in-law Vail for the damages sustained in the accident due to Vail’s negligent driving. State Farm accepted defense of the lawsuit and retained counsel to defend Vail. ¶15 On October 30, 2007, State Farm filed an action seeking a declaration that it had complied with the payment obligations under the Limits of Liability clause. In their answers, Frank, on behalf of Heath’s Estate and Alicia, and Vail asked the court to declare that the policy provided the additionally claimed coverage, and counterclaimed that State Farm had breached the insurance contract and the implied covenant of good faith and fair dealing, and violated Montana’s Unfair Trade Practices Act (UTPA) by its mishandling of Alicia’s and Heath’s Estates’ claims. ¶16 Two days later, Frank sent to State Farm a settlement letter demanding $2.6 million to settle all of the claims against Vail. According to Frank, $1.7 million of that settlement represented the “low range” of the economic loss to Heath’s Estate because of his death, while approximately $1 million represented the loss of support, loss of companionship, loss of established course of life, and emotional distress damages 8 stemming from Alicia’s loss of her father. Frank subtracted from the $2.7 million the $100,000 he had already been paid ($50,000 from State Farm and $50,000 from Manning’s insurer). Although State Farm did not change its position regarding interpretation of the policy, it paid an additional $150,000 to Heath’s Estate for three stacked $50,000 underinsured motorist coverages for the Freyers’ three vehicles insured by State Farm on June 4, 2008. ¶17 On July 21, 2008, Frank and Vail executed a $2.6 million stipulated judgment that is the center of controversy in this case. The settlement agreement stated that $2.6 million was “a fair and reasonable” amount for settlement of Heath’s Estate’s claims and Alicia’s claims. In return for Vail’s confession of negligence and the assignment of all claims she may have against State Farm, Frank signed a covenant not to execute against Vail’s personal assets. ¶18 On May 4, 2009, in the declaratory proceeding, the District Court ruled that State Farm had correctly interpreted the Limits of Liability clause of its policy. However, the Freyers appealed, and on August 27, 2010, this Court reversed, ruling that coverage for Alicia’s derivative claims was not limited to Heath’s Each Person limit. See Freyer I, ¶¶ 13-16. State Farm then paid another $50,000 to Alicia under the Each Person coverage limit applicable to her, and paid $20,000 in attorney fees to compensate Vail’s attorney for his work in the declaratory judgment action. Further, because Freyer I had found there was coverage for Alicia’s derivative claims, State Farm also paid her $150,000 in stacked underinsured motorist coverage, as it had for Heath’s Estate. Thus, 9 State Farm paid Freyers a total of $400,000—$200,000 to Heath’s Estate and $200,000 to Alicia. ¶19 In January 2011, Vail and Frank filed amended counterclaims in the proceeding. Vail alleged an additional violation of Montana’s UTPA, and asked for a declaration that the $2.6 million stipulated judgment was valid and enforceable against State Farm. Frank also sought enforcement of the stipulated judgment against State Farm. State Farm denied and countered that the claims were barred by the statute of limitations. ¶20 All parties moved for summary judgment. The District Court granted State Farm’s motion for summary judgment and denied Frank’s and Vail’s motions. The court concluded that it was reasonable for State Farm to interpret its policy as it did because “‘every other court faced with the issue before this Court has concluded that the “Each Person” limitation applies to a wrongful death claim.’” (Quoting Bowen I at 9.) While the District Court acknowledged that additional coverage was found in Freyer I, it concluded that State Farm had not been unreasonable in the determination about coverage it had made. Because State Farm had a “reasonable basis in law” to contest coverage, the District Court dismissed all of Frank’s and Vail’s claims. As to State Farm’s statute of limitations defense, the court concluded that Vail’s and Frank’s 2011 amended complaints were filed merely to reflect the shift in the parties’ respective positions pursuant to the assignment of rights, and therefore did not “state any new theory or claim for relief” from their 2008 counterclaims. Thus, State Farm had waived its statute of 10 limitations defense by failing to assert the defense in its answer to the counterclaims filed in 2008. ¶21 All parties appeal the District Court’s order. Vail and Frank appeal from the District Court’s order disposing of all of their claims. State Farm cross-appeals the District Court’s order dismissing its statute of limitations defense. STANDARD OF REVIEW ¶22 A district court’s grant or denial of summary judgment is reviewed de novo, utilizing the same analysis as the district court pursuant to Rule 56 of the Montana Rules of Civil Procedure. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186. “The interpretation of an insurance contract [is] a question of law.” Modroo v. Nationwide Mut. Fire Ins. Co., 2008 MT 275, ¶ 23, 345 Mont. 262, 191 P.3d 389. A district court’s legal conclusions are reviewed for correctness. Crane Creek Ranch, Inc. v. Cresap, 2004 MT 351, ¶ 8, 324 Mont. 366, 103 P.3d 535. DISCUSSION ¶23 Frank and Vail assert that the District Court erred by dismissing their (1) breach of contract claims and (2) § 33-18-201(1) UTPA claims. In addition, Frank asserts that the District Court erred by dismissing his third-party bad-faith claim against State Farm and his first-party claim for breach of the covenant of good faith and fair dealing that was assigned to the Estate by Vail. The District Court held that State Farm was entitled to summary judgment on all of these claims because it had a “reasonable basis in law” to dispute coverage. We address these claims in turn, and hold that the District Court erred 11 by applying a “reasonable basis in law” defense to Frank and Vail’s breach of contract claim, but did not err by applying that defense to the remaining claims. ¶24 1. Did the District Court err by concluding that State Farm had not breached the insurance contract when it failed to indemnify Vail for Alicia’s derivative claims because it had a “reasonable basis in law” to challenge coverage of those claims? ¶25 Frank and Vail argue that, under contract law, a breach is a breach—it does not matter if the breaching party was “reasonable” in its breach. They assert the District Court erred by concluding that State Farm did not breach its duty to pay Alicia’s claims when it wrongfully denied coverage for her derivative claims because State Farm had a “reasonable basis in law” to contest coverage for those claims. State Farm responds that its payment of policy limits, prejudgment interest and Freyers’ attorneys’ fees in pursuing the coverage determination leading to Freyer I has mooted Frank’s and Vail’s breach of contract claims and, in any event, the District Court properly applied the reasonable basis in law defense. We reject the mootness argument. An issue is moot when “‘the court is unable due to an intervening event or change in circumstances to grant effective relief or to restore the parties to their original position . . . .’” Gateway Opencut Mining v. Bd. of Co. Commrs., 2011 MT 198, ¶ 16, 361 Mont. 398, 260 P.3d 133 (quoting Greater Missoula Area Fedn. of Early Childhood Educators v. Child Start, Inc., 2009 MT 362, ¶ 23, 353 Mont. 201, 219 P.3d 881). Freyers are seeking damages for breach of the insurance contract beyond the payments made by State Farm. As further developed herein, it is possible that further relief could be granted. 12 ¶26 The duty to defend and the duty to indemnify are different, and those differences compel the results ultimately reached herein. The duty to indemnify is independent of and narrower than the duty to defend. Unlike an insurer’s duty to defend, which arises “when ‘a complaint against an insured alleges facts, which if proven, would result in coverage[,]’” an insurer’s duty to indemnify arises only if coverage under the policy is actually established. State Farm Fire & Cas. Co. v. Schwan, 2013 MT 216, ¶ 15, 371 Mont. 192, ___ P.3d ___ (emphasis added) (quoting Farmers Union Mut. Ins. Co. v. Staples, 2004 MT 108, ¶ 21, 321 Mont. 99, 90 P.3d 381, in turn citing St. Paul Fire & Marine Ins. Co. v. Thompson, 150 Mont. 182, 188, 433 P.2d 795, 799 (1967) and Grindheim v. Safeco Ins. Co., 908 F. Supp. 794, 800 (D. Mont. 1995)). Put another way, while an insurer’s duty to defend is triggered by allegations, “[a]n insurer’s duty to indemnify hinges not on the facts the claimant alleges and hopes to prove but instead on the facts, proven, stipulated or otherwise established that actually create the insured’s liability.” 43 Am. Jur. 2d Insurance § 676 (West 2013). ¶27 “Insurance agreements are contracts that are subject to the general rules of contract law.” Fisher ex rel. McCartney v. State Farm Mut. Aut. Ins. Co., 2013 MT 208, ¶ 25, 371 Mont. 147, 305 P.3d 861 (citing Travelers Cas. & Sur. Co. v. Ribi Immunochem Research, Inc., 2005 MT 50, ¶ 17, 326 Mont. 174, 108 P.3d 469). This general principle includes the determination of whether an insurer has breached a provision of the insurance contract. Under contract law, “a breach of contract is a failure, without legal excuse, to perform any promise that forms the whole or part of a contract.” Richard A. 13 Lord, Williston on Contracts vol. 23, § 63:1 at 434 (4th ed., West Group 2002). Hence, the contractual duty to indemnify is breached when an “insurer has wrongfully refused to provide coverage to an insured.” Yovish v. United Servs. Aut. Assn., 243 Mont. 284, 291, 794 P.2d 682, 686 (1990) overruled on other grounds in Mt. West Farm Bureau Mut. Ins. Co. v. Brewer, 2003 MT 98, ¶ 20, 315 Mont. 231, 69 P.3d 652; accord Davis v. Criterion Ins. Co., 754 P.2d 1331, 1332 (Alaska 1988). An insurer thus breaches the duty to indemnify by failing to provide coverage when (1) the established facts trigger coverage under the terms of the policy, and (2) the extent of the claimant’s damages are undisputed or clearly exceed policy limits. Cf. Yovish, 243 Mont. at 286-88, 794 P.2d at 684-85 (USAA breached duty to indemnify because it denied coverage based on non-renewal even though clear terms of policy, and Montana law, required insurer to provide adequate notice of cancelation or non-renewal of coverage, and the property damage to insured’s car and other car was undisputed); Brewer, ¶ 36 (insurer breached duty to indemnify when it incorrectly interpreted policy to exclude newly acquired car from coverage) (factual history in Christensen v. Mt. West Farm Bureau Mut. Ins. Co., 2000 MT 378, 303 Mont. 493, 22 P.3d 624). “Established facts” in this context are facts that are either undisputed or are initially disputed but subsequently determined by the fact finder. When facts necessary to determine the existence of coverage are contested in an underlying action, the insurer cannot be said to have yet breached the duty to indemnify. See Skinner v. Allstate Ins. Co., 2005 MT 323, ¶¶ 18-19, 329 Mont. 511, 127 P.3d 359 (court could not issue order determining duty to indemnify because issues of personal liability of the 14 insured were yet to be determined in an underlying case); Northfield Ins. Co. v. Mont. Assn. of Cos., 2000 MT 256, ¶ 17, 301 Mont. 472, 10 P.3d 813 (court could not determine secondary insurer’s duty to indemnify because underlying litigation had not determined insured’s liability and primary insurer’s coverage cannot be said to have been exceeded). ¶28 Here, Freyers asserted derivative claims for damages sustained by Alicia arising from her father’s death caused by Vail’s negligent driving, and argued for coverage under State Farm’s policy. State Farm did not challenge Frank’s assertion that the value of Alicia’s derivative claims exceeded the $50,000 Each Person limits of the policy. This Court held that State Farm incorrectly interpreted its policy by applying a single Each Person coverage limit and refusing further payment for Alicia’s claims. Freyer I, ¶¶ 13-16. Consequently, State Farm breached its duty to indemnify Vail to the proper limits of its policy against Alicia’s derivative claims, and it breached the insurance contract by so doing. ¶29 A breach of contract cannot be ameliorated by the reasonableness of the breaching party’s actions. The District Court thus erred by permitting State Farm to raise a “reasonable basis in law” defense to Frank’s and Vail’s breach of contract claims. See Kerry B. Harvey & Thomas A. Wiseman III, First Party Bad Faith: Common Law Remedies and a Proposed Legislative Solution, 72 Ky. L.J. 141, 163 (1983-84) (“Contract law, being amoral, does not inquire into the defendant’s state of mind at the time of the breach.”). We thus turn to the measure of damages for State Farm’s breach. 15 ¶30 Frank and Vail entered a stipulated judgment against Vail for $2.7 million.1 Vail argues that this is the measure of damages and offer that this Court and Montana’s Federal District Court have “repeatedly held that an insurer who breaches the contract is liable for all damages flowing from that breach, including judgments against the insured,” citing Indep. Milk & Cream Co. v. Aetna Life Ins. Co., 68 Mont. 152, 156-57, 216 P. 1109, 1110 (1923); Staples, ¶¶ 20, 24, 27, 31; Lee v. USAA Cas. Ins. Co., 2004 MT 54, ¶¶ 19-21, 320 Mont. 174, 86 P.3d 562; Grindheim, 908 F. Supp. at 797, 808; Nielsen v. TIG Ins. Co., 442 F. Supp. 2d 972, 975-76 (D. Mont. 2006). However, as State Farm correctly notes, all of these cases cited by Vail involve breaches of the duty to defend, not the duty to indemnify, and “this Court has never approved a confessed judgment as the proper measure of damages where the insurer defended its insured.” ¶31 We start with the principle that an insurer’s wrongful refusal to indemnify entitles its insured to recover consequential damages. See Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, 2008 MT 2, ¶ 64, 341 Mont. 33, 174 P.3d 948; Safeco Ins. Co. v. Munroe, 165 Mont. 185, 192, 527 P.2d 64, 68 (1974) (holding that insured was entitled to consequential damages). “Consequential damages are those damages ‘within the contemplation of the parties when they entered into the contract, and such as might 1 In entering the stipulated judgment, Vail was represented by her counsel who was provided by State Farm, pursuant to the automobile liability policy. 16 naturally be expected to result from its violation.’” Crumleys, ¶ 64 (quoting Martel Const., Inc. v. State, 249 Mont. 507, 511, 817 P.2d 677, 679 (1991)).2 ¶32 The Colorado Supreme Court addressed a strikingly similar case in Old Republic Ins. Co. v. Ross, 180 P.3d 427 (Colo. 2008) (en banc). Surviving spouses and children (the Rosses) of two passengers who died in a plane crash sued the airline company for their wrongful deaths. Old Republic, 180 P.3d at 428. The airline company was insured by Old Republic under an aviation policy and a commercial general liability policy. Old Republic, 180 P.3d at 429. At the outset of litigation, Old Republic tendered $200,000 to the Rosses, which it believed was the maximum coverage available under the aviation policy. Old Republic, 180 P.3d at 429. Old Republic disputed coverage under the commercial general liability policy, which had a policy limit of $1 million, and therefore, rejected the Rosses’ settlement demand of $800,000. Old Republic, 180 P.3d at 429. Old Republic filed an action in federal court seeking a declaration that its policy interpretation was correct and that its contractual obligation to the Rosses had been fulfilled by the $200,000 payment. Old Republic, 180 P.3d at 429. While the declaratory action was pending, the Rosses entered a settlement with the airline company wherein the airline company confessed judgment in the amount of $4 million, plus prejudgment interest of $1.3 million, for a total stipulated settlement of $5.3 million. Rosses agreed not to execute upon the airline company. Old Republic, 180 P.3d at 429. 2 This definition of consequential damages is taken directly from § 27-1-311, MCA, which permits the recovery of both proximate and consequential damages for breach of contract. See Crumleys, ¶ 64. 17 ¶33 In the declaratory action, Old Republic contended that coverage under the aviation policy was limited to $100,000 for each passenger, or $200,000 total for the two passengers, and did not provide additional coverage for the derivative claims of mental anguish brought by deceased passengers’ family members. Old Republic Ins. Co. v. Durango Air Service, Inc., 283 F.3d 1222, 1226-27 (10th Cir. 2002) (hereinafter Old Republic Declaratory Action). The Tenth Circuit for the United States Court of Appeals ultimately concluded that the aviation policy provided $700,000 in coverage for the plane crash, and construed an ambiguity in the commercial general liability policy in favor of additional coverage for the airline company. Old Republic Declaratory Action, 283 F.3d at 1227-28, 1230. Thus, the Tenth Circuit concluded that the two policies provided $1.7 million in coverage. Old Republic Declaratory Action, 283 F.3d at 1231.3 ¶34 Consequently, there were now two judgments: the state court stipulated judgment against the airline company for $5.3 million, and the federal judgment declaring coverage limits of $1.7 million under the policies. Old Republic, 180 P.3d at 429. Old Republic paid $1.7 million to satisfy the declaratory judgment of policy limits, but refused to pay any further amount toward the stipulated judgment. Old Republic, 180 P.3d at 429. 3 The insurer was incorrect about its interpretation of the policy because the policy specifically distinguished between claims brought by passengers and claims brought by others. Old Republic Declaratory Action, 283 F.3d at 1227. Hence, the court held that the 10 family members of the passengers could bring individual claims for “mental anguish.” Old Republic Declaratory Action, 283 F.3d at 1227. However, a Colorado statute limited recovery of noneconomic damages in a wrongful death action to $250,000. Old Republic Declaratory Action, 283 F.3d at 1228. The policy therefore provided $200,000 ($100,000 x 2) for the bodily injury of the deceased passengers and $500,000 ($250,000 x 2) for the “mental anguish” suffered by the passengers’ family members. Old Republic Declaratory Action, 283 F.3d at 1228. 18 Similar to the case before us, the Rosses asked the Colorado Supreme Court to enforce the stipulated judgment with the airline company as the proper measure of damages for Old Republic’s incorrect interpretation of both its policies. Old Republic, 180 P.3d at 428. In rejecting the Rosses’ request, the court surveyed the jurisdictions that had addressed the enforcement of pretrial stipulated judgments: We find no jurisdiction that would enforce a pretrial stipulated judgment against an insurer who was not a party to the underlying settlement agreement unless the insurer acted in bad faith, denied coverage, or refused to defend the claim on behalf of the insured. We therefore decline to extend [Colorado law] to encompass a settlement agreement entered under these circumstances. The majority rule in states that have considered this issue is that a pretrial stipulated judgment may be enforceable against the defendant’s liability insurer if the insurer breaches its contractual obligation to defend the insured. Under the majority view, when an insurer improperly abandons its insured, the insured is justified in taking steps to limit his or her personal liability. . . . A number of states have adopted a modification of the majority rule, demonstrating a willingness to enforce pretrial stipulated judgments under various enumerated circumstances. . . . In sum, many states broaden the circumstances under which a stipulated judgment may be enforceable, but none of these states has enforced a pretrial stipulated judgment against an insurer where the insurer has conceded coverage and defended its insured, and where there has been no finding of bad faith against the insurer. . . . We conclude that under the facts of this case, where the insurer has conceded coverage and defended its insured, and where there has been no finding of bad faith against the insurer, a stipulated judgment entered before trial, to which the insurer is not a party, cannot be enforced against the insurer. Old Republic, 180 P.3d 432-34 (emphasis added; internal citations omitted). 19 ¶35 The California Supreme Court has likewise disapproved of stipulated judgments as a measure of an insured’s damages when the insurer has provided a defense for the insured. In Hamilton v. Maryland Cas. Co., 41 P.3d 128, 131 (Cal. 2002), the insurer defended its insureds but refused the claimants’ demand for the $1 million policy limits, instead countering with a $150,000 offer to settle. The insureds and claimants subsequently entered into a stipulated judgment of $3 million; the insureds assigned any breach of contract claims they might have against the insurer, and, in return, the claimants agreed not to execute the $3 million judgment against the insureds. Hamilton, 41 P.3d at 131. The claimants then sued the insurer for breach of contract arising from its failure to accept the claimants’ settlement offers, asserting that the $3 million stipulated judgment was the appropriate measure of damages for the breach. Hamilton, 41 P.3d at 131-32. The California Supreme Court disagreed, holding: Where, as here, the insured, without the insurer’s agreement, stipulates to a judgment against it in excess of both the policy limits and the previously rejected settlement offer, and the stipulated judgment is coupled with a covenant not to execute, the agreed judgment cannot fairly be attributed to the insurer’s conduct, even if the insurer’s refusal to settle within the policy limits was unreasonable. Hamilton, 41 P.3d at 137. Importantly, the Hamilton Court distinguished cases where the insurer had failed to defend from cases where the insurer did defend, and reasoned that a stipulated judgment was presumptively enforceable as the measure of damages only in the former instance, because the non-defending insurer has left its insured on its own to challenge liability, and the insurer should not be able to “reach back” and interject itself into a controversy it has sidestepped to “void a deal the insured has entered to eliminate 20 personal liability.” Hamilton, 41 P.3d at 135 (citation and quotation marks omitted). Conversely, however, when “the insurer has accepted defense of the claim, and might have prevailed at trial had the insured and the claimants not settled without the insurer’s participation, no presumption of the insured’s liability generally arises from the fact or amount of settlement.” Hamilton, 41 P.3d at 135 (emphasis in original). ¶36 These cases are representative of what occurred in the case before us, and we find their reasoning persuasive. When an insurer defends the insured against a claim, and challenges coverage in a separate declaratory action, a stipulated settlement that relieves the insured of any financial stake in the outcome of the case does not represent the damages “within the contemplation of the parties when they entered into the [insurance] contract, and such as might naturally be expected to result from its violation.” Crumleys, ¶ 64 (internal quotation omitted). The insured has little incentive to minimize the settlement amount in negotiating a stipulated judgment. Nor is there any assurance that a stipulated judgment represents a proper calculation of the actual damages incurred by way of the breach. These concerns are clearly evident in the case before us. First, under the settlement, Vail has escaped all risk by simply assigning her insurance dispute with State Farm to Frank. The size of the judgment was essentially irrelevant to her. Then, the stipulated judgment does not, by its own terms, represent the correct measure of damages for the denial of Alicia’s claims—the only denial forming State Farm’s breach. As explained above, the settlement agreement provides that $1.7 million of the $2.7 million total represents the economic loss to Heath’s Estate. Yet, State Farm did not err 21 in any way in adjusting and settling the claims made by Heath’s Estate. State Farm tendered the full $50,000 Each Person coverage limit to Heath’s Estate and did not breach its duty to indemnify Vail for Heath’s claims. Thus, the bulk of the face amount of the stipulated judgment does not represent any measure of damages resulting from State Farm’s breach of its duty to indemnify Vail for Alicia’s claims. Alicia would not be entitled to the $1.7 million in damages Heath’s Estate suffered even had the case proceeded to trial. The economic loss the decedent’s estate suffers, as measured by the “present value of [the decedent’s] reasonable earnings during his life expectancy,” is “personal to the decedent” and does not “include any damages suffered by the decedent’s widow, children, or other heirs.” Swanson v. Champion Intl. Corp., 197 Mont. 509, 515, 646 P.2d 1166, 1169 (1982) (emphasis added; citations omitted). Alicia’s claims, on the other hand, were to compensate her personal loss of her father—loss of support, loss of companionship, loss of established course of life, etc. These wrongful-death claims are measured, not by the economic loss to the decedent’s estate, but, rather, the emotional, physical, and monetary support the decedent would have provided the heir. Swanson, 197 Mont. at 517-18, 646 P.2d at 1170-71. ¶37 The rule articulated by these jurisdictions is even more appropriate for Montana, given that State Farm pursued the action we have repeatedly admonished insurers to take if there is a coverage question—defend the insured and file a declaratory judgment action to discern coverage. See e.g. Palmer by Diacon v. Farmers Ins. Exch., 261 Mont. 91, 102-03, 861 P.2d 895, 902 (1993); see also St. Paul Fire & Marine Ins. Co. v. Cumiskey, 22 204 Mont. 350, 358, 665 P.2d 223, 227 (1983) (“an insurer may use this procedural device in order to obtain a determination of the validity, continuance, or coverage of an insurance policy; a determination of the extent of liability; or a determination of the insurer’s duties under the policy.”) (emphasis added); Staples, ¶ 28 (“If FUMIC wished to dispute coverage, it could have defended Staples under a reservation of rights and later sought judicial determination through a declaratory judgment action to determine whether coverage existed.”); Brewer, ¶ 30; see also Nielsen, 442 F. Supp. 2d at 977. This practice is also urged by leading commentators. See Appleman, Insurance Law & Practice vol. 20, § 11354 at 332-33 (West Publg. 1980) (“The insurer thus has a right to test [through a declaratory judgment action] its liability to pay judgments which may be recovered against the insured, or to test its liability for penalties and interest.”) (collecting cases); Allan D. Windt, Insurance Claims & Disputes: Representation of Insurance Companies & Insureds vol. 2, § 8.3 at 8-5 to 8-6 (6th ed., Thomson Reuters 2013) (noting it is appropriate for insurer to institute declaratory action after insured suffers loss so insurer can “determine whether the company is obligated to pay all or any part of the judgment or loss.”); Couch on Insurance vol. 16, § 232:47 (Lee R. Russ & Thomas F. Segalla, eds., 3d ed., Thomson/West 2005) (“In essence, where language in the insurance contract is thought to need clarification in order to determine the legal positions of the parties, declaratory action is appropriate.”). Lord, Williston on Contracts vol. 11, § 30:2 at 36-37 (West 2012) (“A frequently employed means of demonstrating in an authoritative manner the intent of the parties to a contract, either for the purpose of establishing rights or the 23 nonexistence of liabilities, is the petition for declaratory judgment. Insurance companies have often used this procedure in seeking a declaration from the courts that because of some exclusionary provision or false representation by the insured, they are not liable on a given policy which they have issued.”).4 The rule also recognizes the distinctions between the duty to defend and the duty to indemnify. The broader duty to defend requires an insurer to act immediately to defend the insured from a claim. The insurer must do so on the basis of mere allegations that could implicate coverage, if proven. Schwan, ¶ 15. On the other hand, the narrower duty to indemnify typically involves complicated interpretational questions that often require legal opinions and separate declaratory actions to determine. ¶38 A rule to the contrary would allow insureds to unilaterally inflate policy limits anytime an insurer tests coverage through a declaratory action. As State Farm notes, “[b]asically, Frank’s and Vail’s position is that all an insured has to do is file suit, enter a confession of judgment, obtain a covenant not to execute, and the insurer becomes liable for the confessed judgment, regardless of whether the insurer pays limits as asked or has a reasonable basis in fact or law for disputing the amount of the claim and defending the underlying action.” Indeed, while Frank was willing to settle all claims against Vail for $100,000 if State Farm would foot the bill, the demand ballooned to $2.6 million when Vail’s financial responsibility was removed from the equation. 4 Alicia’s and Heath’s claims did not implicate State Farm’s duty to pay, in advance of final settlement, actual medical payments and lost wages of a tort victim when “liability is reasonably clear.” Ridley v. Guar. Natl. Ins. Co., 286 Mont. 325, 327, 951 P.2d 987, 988 (1997) (med pay); DuBray v. Farmers Ins. Exch., 2001 MT 251, ¶ 15, 307 Mont. 134, 36 P.3d 897 (lost wages). 24 ¶39 Vail points to several cases which, when closely analyzed, do not address the issue here. In Ariz. Prop. & Cas. Ins. Guar. Fund v. Helme, 735 P.2d 451, 460 (Ariz. 1987), the Arizona Supreme Court held that doctors sued for malpractice did not breach their duty to cooperate with their insurer’s defense of them by entering a settlement with the claimants after the insurer breached its duty to indemnify. The insurer erroneously interpreted the coverage available as limited to a per occurrence limit of $99,900. Helme, 735 P.2d at 454, 457. In a declaratory action, a court determined that there had been two occurrences. Helme, 735 P.2d at 455. Meanwhile, the doctors settled with the claimants for $350,000 in exchange for the claimants’ covenant not to execute against the doctors. Helme, 735 P.2d at 455. The insurer sought a declaration that it was not obligated to pay the survivors on the second claim—not the total settlement amount of $350,000— because the doctors had settled without the insurer’s permission. Helme, 735 P.2d at 458. The Court disagreed, holding that the insurer’s breach of its duty to indemnify under the policy permitted the insured to take “reasonable steps” to save himself from the financial disaster of an excess judgment, including settling with the claimants. Helme, 735 P.2d at 460. However, the Court specifically noted that it was not determining whether that settlement would be binding on the insurer: “The parties have not argued, and this opinion does not reach, any issue regarding the extent to which the stipulations which form part of the settlement agreement are binding upon the insurer.” Helme, 735 P.2d at 460. Put another way, the Arizona Court did not hold that the insurer was bound to pay the stipulated judgment, but rather concluded the insurer was required to pay the 25 appropriate policy limits for two occurrences, even though the insureds had settled without its permission. ¶40 Vail also cites Miller v. Shugart, 316 N.W.2d 729 (Minn. 1982). There, while the insurer was litigating whether it had coverage, the insured stipulated to a $100,000 judgment—twice the $50,000 limit of the policy—with the claimant in exchange for a covenant not to execute against him. Miller, 316 N.W.2d at 731-32. After the Court had determined that coverage existed, the claimant sought to enforce only $50,000 of the stipulated judgment, which represented the policy limits. The insurer countered that it owed nothing because the insured had breached the cooperation clause of the policy. Miller, 316 N.W.2d at 732. The Minnesota Supreme Court, like the Arizona Supreme Court in Helme, concluded that because the insurer had failed to indemnify its insured, the insured did not breach his duty to cooperate by entering a settlement to protect his personal finances: If, as here, the insureds are offered a settlement that effectively relieves them of any personal liability, at a time when their insurance coverage is in doubt, surely it cannot be said that it is not in their best interest to accept the offer. Nor, do we think, can the insurer who is disputing coverage compel the insureds to forego a settlement which is in their best interests. Miller, 316 N.W.2d at 733-34. While the Court ultimately concluded that the stipulated judgment was enforceable upon the insurer, it was only enforceable up to the policy limits: “Nor is there anything wrong with the insureds’ confessing judgment in an amount double the policy limits, since plaintiff, in her motion for summary judgment, has recognized [the insurer’s] coverage is only $50,000 and seeks to recover no more than 26 that sum from [the insurer].” Miller, 316 N.W.2d at 734. In sum, the Minnesota Supreme Court never approved binding the insurer to a stipulated judgment in excess of policy limits.5 ¶41 The other cases Vail cites are also unavailing because they are either cases involving a breach of the duty to defend and the court refused to enforce the stipulated judgment on the insurer, Great Divide Ins. Co. v. Carpenter ex rel. Reed, 79 P.3d 599 (Alaska 2003) or, like the cases above, hold that the insured did not breach its duty to cooperate, and therefore is entitled to be indemnified for the settlement up to policy limits. See Presrite Corp. v. Commercial Union Ins. Co., 680 N.E.2d 216, 217, 220-21 (Ohio App. 8th Dist. 1996) (insurer required to pay settlement the “policy afforded” because insured did not breach duty to cooperate when it settled lawsuit after insurer denied coverage thereby exposing insured to entire amount of potential damage award).6 In sum, none of the cases urged by Vail support the holding she asks for today: a 5 Moreover, three years later the Minnesota Supreme Court limited Miller’s holding to situations where the insurer had denied all coverage under the policy. Buysse v. Baumann-Furrie & Co., 448 N.W.2d 865, 873-74 (Minn. 1989). There, because the insurer was only arguing over the extent of coverage to a claim—whether the insured accounting firm was entitled to only the $500,000 “each error” limit or whether it was entitled to the $1,000,000 “per year” limit—the insured’s stipulated judgment with the claimants was not binding on the insurer. Buysse, 448 N.W.2d at 875. The Court’s decision was founded on the practical point that, without such a rule, insureds could unilaterally bind insurers to settlements in every case where coverage was contested. Buysse, 448 N.W.2d at 872. 6 Amicus MTLA and Vail argue that Peris v. Safeco Ins. Co., 276 Mont. 486, 493-94, 916 P.2d 780, 785 (1996) controls here. However, like the other cases cited, Peris does not stand for the proposition that an insurer who defends the insured while contesting coverage is bound to a stipulated judgment if it is later determined the insurer was wrong on the coverage issue. Instead, like Helme and Miller, Peris merely holds that the insured is permitted, without voiding the insurance contract via its duty to cooperate with the insurer, to enter settlement. 27 stipulated judgment in excess of policy limits coupled with a covenant not to execute against the insured is the proper measure of damages when an insurer is defending its insured but contesting coverage. ¶42 As noted above, an insurer’s wrongful refusal to indemnify entitles its insured to recover consequential damages. Crumleys, ¶ 64. In Crumleys, we awarded the insured’s assignee the “administrative costs” incurred when the insurer denied coverage to extract an underground storage tank and remediate the area for leaking gasoline. Crumleys, ¶¶ 70-71. We reasoned that the property liability policy contemplated management and oversight costs of pollutant cleanup and that the administrative costs incurred in coordinating and managing the extraction and remediation were the natural consequence of the insurer’s failure to step in and begin that cleanup. Crumleys, ¶¶ 70-71. An insurer is also “liable for attorney fees when the insurer breaches its duty to indemnify.” Brewer, ¶ 36. Other courts have permitted insureds to recover lost profits as consequential damages from the wrongful denial or delay of coverage. See Lawrence v. Will Darrah & Assocs., Inc., 516 N.W.2d 43 (Mich. 1994) (permitting insured to recover payment under an insurance policy for a stolen truck and for lost profits arising from insurer’s breach of duty to indemnify); Bettius & Sanderson, P.C. v. Natl. Union Fire Ins. Co., 839 F.2d 1009 (4th Cir. 1988) (professional corporation entitled to lost profits based on insurer’s unjustifiable delay in settling third-party claim); Salamey v. Aetna Cas. & Sur. Co., 741 F.2d 874 (6th Cir. 1984) (convenience-store owner permitted to recover lost profits resulting from insurer’s wrongful refusal to pay benefits for fire loss); accord Windt, 28 Insurance Claims & Disputes at § 6:39 (collecting cases which have held that the proper measure of damages arising from insurer’s “breach of a contract to pay money” includes consequential damages but not listing stipulated judgments as a measure of those consequential damages). We offer these cases merely as examples of cases employing the principle that consequential damages are “those damages ‘within the contemplation of the parties when they entered into the contract, and such as might naturally be expected to result from its violation.’” Crumleys, ¶ 64 (quoting Martel Constr., 249 Mont. at 511, 817 P.2d at 679). ¶43 The District Court correctly refused to require State Farm to pay the stipulated judgment. However, we remand to the District Court to determine, in the first instance, the amount of damages, if any, Vail incurred because of State Farm’s breach of its duty to indemnify. ¶44 2. Did the District Court err in granting summary judgment to State Farm on the common-law bad faith and breach of the covenant of good faith and fair dealing claims? ¶45 In his capacity as assignee of Vail’s claims, Frank asserts that State Farm breached its duty of “good faith and fair dealing” to Vail by refusing to accept the reasonable offer from Frank to settle Alicia’s claims for $50,000 (first party claim). On behalf of Heath’s Estate and Alicia, he asserts that State Farm committed bad faith when it failed to settle for this amount (third party claims). The District Court dismissed these claims on the ground that State Farm had a reasonable basis in law to contest coverage, which it reasoned was a complete defense to these causes of action. 29 ¶46 In Jessen v. O’Daniel, 210 F. Supp. 317 (D. Mont. 1962), Judge Jameson provided an early explanation of the origins of an insurer’s duty to settle. Although insurance policies do not contain explicit contractual provisions requiring an insurer to accept reasonable settlement offers within the policy limits, a duty of “good faith” consideration of settlement offers arises by implication from the policy’s delegation to the insurer the authority to settle third-party claims. Jessen, 210 F. Supp. at 325-26. Judge Jameson pointed out that an insurer’s “[e]rror in judgment in not settling a case within the policy limits is not in itself sufficient to impose liability upon the insurer for any recovery in excess of the limits; nor is the mere fact that the insurer was unsuccessful in the trial of the case sufficient to show that the defense was not made in good faith.” Jessen, 210 F. Supp. at 325. Rather, whether an insurer acted in “good faith” had to be made on a case-by-case basis. Jessen, 210 F. Supp. at 326. ¶47 In Fowler v. State Farm Mut. Aut. Ins. Co., this Court adopted the Jessen formulation of the duty to settle, and rejected the plaintiff’s request to adopt a strict-liability remedy for an insurer’s failure to settle a third-party claim that had led to an excess judgment. 153 Mont. 74, 78-80, 454 P.2d 76, 78-79 (1969) (“To the extent that [ ] Crisci [v. Security Ins. Co. of New Haven, 426 P.2d 173 (Cal. 1967)] is viewed as abandoning any requirement of proof of bad faith, we would reject it”); accord Thompson v. State Farm Mut. Aut. Ins. Co., 161 Mont. 207, 215, 505 P.2d 423, 427 (1973) overruled on other grounds by Watters v. Guar. Natl. Ins. Co., 2000 MT 150, ¶ 63, 300 Mont. 91, 3 P.3d 626. In Gibson v. Western Fire Ins. Co., 210 Mont. 267, 274, 682 P.2d 30 725, 730 (1984), we held “[i]t is now fairly established in American jurisprudence that an insurer which in bad faith fails to settle a bona fide third party liability claim against its insured, within policy coverage limits, takes the risk of a judgment by the trier of fact in excess of the coverage limits.” (Emphasis added.) We subsequently addressed the bad faith issue and held that an insurer does not act in bad faith in rejecting a settlement if it had a reasonable basis in law or fact to contest the claim or the amount of the claim. Safeco Ins. Co. v. Ellinghouse, 223 Mont. 239, 248, 725 P.2d 217, 223 (1986) (“It is generally held that an insurer is entitled to challenge a claim on the basis of debatable law or facts and will not be liable for the bad faith or punitive damages for denying coverage if its position is not wholly unreasonable.”); Palmer by Diacon, 261 Mont. at 102, 861 P.2d at 901 (“Under Montana common law, an insurer cannot be held liable for bad faith in denying a claim if the insurer had a reasonable basis for contesting the claim or the amount of the claim.”); White v. State ex rel. Mont. St. Fund, 2013 MT 187, ¶ 24, 371 Mont. 1, 305 P.3d 795 (same) (quoting Palmer by Diacon). We have never held an insurer liable in bad faith for failing to settle within policy limits when it had a reasonable basis in law or fact for contesting coverage. Although Freyers request that we deviate from our well-settled precedent on this issue, we decline. ¶48 “To determine whether an insurer had ‘a reasonable basis in law . . . for contesting the claim or the amount of the claim,’ it is necessary first to survey the legal landscape as it existed during the relevant time period.” Redies v. Attys. Liab. Protec. Socy., 2007 MT 9, ¶ 29, 335 Mont. 233, 150 P.3d 930 (quoting § 33-18-242(5), MCA). In Redies, ¶¶ 30- 31 35, we reconciled our previous cases analyzing whether reasonableness is a question of fact for the jury or a question of law for the court. We concluded that although the determination of whether a party acted reasonably was typically a question of fact for the jury, whether an insurer was reasonable in its interpretation of legal precedent in its coverage determination was a question of law for the court: [W]e now clarify that while the assessment of reasonableness generally is within the province of the jury (or the court acting as fact-finder), reasonableness is a question of law for the court to determine when it depends entirely on interpreting relevant legal precedents and evaluating the insurer’s proffered defense under those precedents. This distinction not only reflects the principle that the jury does not decide or determine the law, but also honors the relevant language of the [UTPA’s reasonable basis in law defense]. Redies, ¶ 35 (emphasis added; citations omitted). Then, the court must assess the insurer’s proffered defense in lieu of that legal landscape. The reviewing court is not to ask whether it “agree[s] with the plaintiff’s theories of liability in the underlying suit but, rather, whether the insurer’s grounds for contesting those theories were reasonable under the existing law.” Redies, ¶ 38. In the absence of caselaw on point, “the determinative question” is whether the law in effect at the time, caselaw or statutory, provided sufficient guidance to signal to a reasonable insurer that its grounds for denying the claim were not meritorious. See Redies, ¶ 43 (“Accordingly, the determinative question is whether this progression in our case law toward holding an attorney liable to certain nonclients had, by the time [the plaintiff] stated her claims against [her lawyer], reached the point at which [the insurer’s] assertion that [it] owed her no duty no longer constituted ‘a reasonable basis in law’ for contesting her claim.”). 32 ¶49 State Farm contested coverage for Alicia’s derivative claims because it believed the “Each Person” limit in the policy unambiguously limited coverage to $50,000 for all claims related to Heath’s death. Freyer I, ¶¶ 4, 7. State Farm asked its in-house counsel, Ridgeway, for an opinion about whether the policy covered Alicia’s derivative claims. Ridgeway advised that courts interpreting the clause had concluded that derivative claims were subject to the same each person limit as the survivorship claim. See McKinney v. Allstate Ins. Co., 722 N.E.2d 1125 (Ill. 1999) (“per person” limit of liability clause “clearly limited” all claims arising out of the decedent’s death to a single per person limit); Geico Gen. Ins. Co. v. Arnold, 730 So. 2d 782 (Fla. Dist. App. 3d Dist. 1999) (“each person” limit of liability clause not ambiguous and limited wrongful death and survival claims); Cradoct v. Employers Cas. Co., 733 S.W.2d 301 (Tex. App. El Paso 1987) (“per person” limitation applied to person injured in accident, not other persons suffering loss because of that injury). Thus, State Farm took the position that, once it paid the $50,000 Each Person limit to Heath’s Estate, it had fulfilled its contractual obligation under the policy for claims related to his death. Freyer I, ¶ 11. ¶50 The state of Montana precedent, discussed below, and this “legal landscape” across numerous jurisdictions certainly gave credence to State Farm’s decision to contest coverage for Alicia’s derivative claims. However, that did not end the inquiry, as State Farm was also required to analyze the claim in light of the specific language of the Limit of Liability clause in Vail’s policy, which read: 33 The amount of bodily injury liability coverage is shown on the declarations page under “Limits of Liability–Coverage A-Bodily Injury [-W-], Each Person, Each Accident.” Under “Each Person” is the amount of coverage for all damages due to bodily injury to one person. “Bodily injury to one person” includes all injury and damages to other persons, including emotional distress, sustained by such other persons who do not sustain bodily injury. (Emphasis added.) State Farm’s position was that the first emphasized sentence limited the amount of coverage for any and all claims arising from the bodily injury to one person to the $50,000 “Each Person” limit. Therefore, because Alicia’s derivative claims stemmed from her father’s death, and not her own bodily injury, those claims were subject to the same $50,000 limit as Heath’s Estate’s claims. As to the second sentence, State Farm read it as clarifying that emotional distress claims were likewise subject to the same $50,000 “Each Person” limit. ¶51 Montana precedent that came closest to addressing this issue was Bain v. Gleason, 223 Mont. 442, 726 P.2d 1153 (1986) and Treichel v. State Farm Mut. Auto. Ins. Co., 280 Mont. 443, 930 P.2d 661 (1997). In Bain, the plaintiff’s wife was injured by a negligent driver who was insured under a $25,000 per person and $50,000 per accident policy. Bain, 223 Mont. at 444, 726 P.2d at 1154. The insurer paid the $25,000 per person limit, arguing that it constituted the “full extent of and the limit” of coverage under its policy. Bain, 223 Mont. at 445, 726 P.2d at 1154. The policy limited the insurer’s liability applicable to “each person” to $25,000 “for all damages arising out of bodily injury sustained by one person in any one occurrence.” Bain, 223 Mont. at 447, 726 P.2d at 1156. Plaintiff-husband brought a loss of consortium cause of action seeking to recover 34 the additional $25,000 under the per accident limit. We rejected the plaintiff’s claim because it was “plain under our statutes, and under the policy provisions here that the ‘each person’ limitation refers to all damages imposed by law by whomever suffered resulting from one bodily injury and one accident; the ‘each accident’ limitation applies when two or more persons suffer bodily injury in the same accident.” Bain, 223 Mont. at 451, 726 P.2d at 1158. Bain did not specifically answer the question in Freyer I because there was only one person injured in the accident. However, its holding, especially when coupled with our analysis of the statutory minimum mandatory limits, suggested that the “Each Person” policy language restricting coverage to $25,000 “for all damages arising out of bodily injury sustained by one person in any one occurrence” meant that no matter how many others were injured in the accident, they could not use their own bodily injury to obtain additional “Each Person” coverage for derivative damages stemming from another’s bodily injury. ¶52 In Treichel, we analyzed another automobile liability policy that limited coverage to $25,000 per person and $50,000 per accident. Treichel, 280 Mont. at 445, 930 P.2d at 663. The operative provision read: “Under ‘Each person’ is the amount of coverage for all damages due to bodily injury to one person.” Treichel, 280 Mont. at 445, 930 P.2d at 663. The plaintiff was riding her bicycle some distance behind her husband when she witnessed a motorist, insured with the above-described policy, strike her husband and throw him into the air; she also saw the “severe head wound [the husband] received when his head hit the vehicle’s windshield before he fell to the pavement.” Treichel, 280 Mont. 35 at 444-45, 930 P.2d at 662. The insurer, State Farm, paid the husband’s estate the $25,000 per person coverage, but denied paying the plaintiff the remaining $25,000 because her claim was similar to the claim for loss of consortium presented in Bain. Treichel, 280 Mont. at 448, 930 P.2d at 664. We disagreed with State Farm, distinguishing Bain because the loss of consortium claims pursued by the husband there were materially different from the “on the scene, direct physical and emotional impact” the wife suffered in personally watching her husband’s grisly death in Treichel: As the District Court pointed out in the case before us “it is this personal, on the scene, direct physical and emotional impact which distinguishes emotional distress claims under Sacco from loss of consortium claims.” [The plaintiff] was a separate person who received an independent and direct injury at the accident scene. Treichel, 280 Mont. at 449, 930 P.2d at 665. Treichel’s holding suggested that, unlike derivative claims that were not considered “bodily injury” under Bain, emotional distress claims would be considered stand-alone bodily injury claims because they stemmed from the personal trauma experienced by an on-the-scene witnessing of bodily injury to another. State Farm then decided that the “Each Person” policy provisions of the kind at issue in Bain and Treichel needed to be revised. State Farm thereafter modified the language of its “Each Person” limit by adding the sentence at issue in Freyer I: “Bodily injury to one person includes all injury and damages to other persons, including emotional distress, sustained by such other persons who do not sustain bodily injury.”7 7 The record contains communications between State Farm and the State Auditor’s Office. State Farm advised the Auditor’s Office that it was amending its policy “in response to the court case of Treichel vs. State Farm.” 36 Consequently, the “legal landscape” for State Farm’s interpretation of the policy language as applied to derivative claims was even more favorable than the landscape that was sufficient to shield the insurer in Redies. There, despite noting a “progression in our case law” away from the insurer’s coverage position, Redies, ¶ 43, we nonetheless agreed with the insurer that at the time of the coverage decision, the law was not reasonably clear. Redies, ¶ 57. Here, although Bain did not involve a situation where two people suffered bodily injury, it appeared to hold that derivative claims were subject to the “Each Person” limit of the deceased person. Treichel appeared to nuance Bain by holding that emotional distress claims arising from on-the-scene traumatic experiences would also constitute a bodily injury of the observing person. Then, State Farm took action in response to Treichel by supplementing the language of the Limit of Liability clause—which, according to Bain, already provided that derivative claims were subject to the deceased person’s “Each Person” limit—with an additional sentence that specified that emotional distress claims were likewise subject to the “Each Person” limits of the deceased person. While this drafting fix failed to accomplish its intended purpose in Freyer I, ¶¶ 12-14 (interpreting by negative inference the clause’s specific mention of “people who do not sustain bodily injury” to mean that derivative claims of those who 37 did suffer bodily injury were not subject to “Each Person” limits of the deceased person), its interpretation, while ultimately wrong, was clearly not unreasonable.8 ¶53 Because under “Montana common law, an insurer cannot be held liable for bad faith in denying a claim if the insurer had a reasonable basis for contesting the claim,” State Farm did not breach the covenant of good faith and fair dealing with Vail, nor commit bad faith by failing to settle with Frank. Ellinghouse, 223 Mont. at 248, 725 P.2d at 223; Palmer by Diacon, 261 Mont. at 102, 861 P.2d at 901-02; White, ¶ 24. The District Court properly granted State Farm summary judgment on these claims.9 8 The reasonableness of State Farm’s position is further evidenced by the fact that Montana’s federal district court had agreed with it. Prior to Freyer I, Hon. Richard Cebull held that even in a case involving bodily injury to two passengers, the “Limits of Liability” clause prohibited an injured person from recovering derivative claims under their own “Each Person” policy limits. See Bowen I. There, like here, two people suffered bodily injury in an accident. A wife suffered “abrasions to her face, a broken right arm, glass imbedded in her forehead, chest contusions, and post-traumatic stress disorder.” The husband died from his injuries. Bowen I at 1. The vehicle was insured for policy limits of $100,000 for “Each Person” and $300,000 for “Each Accident.” After State Farm paid policy limits to the husband’s estate, the wife sought derivative damages for her husband’s death. Bowen I at 1-2. State Farm filed a declaratory judgment action, “seeking a judicial determination of whether the ‘Each Person’ limit contained in the Bowens’ policies applies when there are survival and wrongful death claims arising out of the injury and death of a single insured.” Bowen I at 2. Judge Cebull analyzed Bain and Treichel and concluded that the key question was “whether wrongful death and survival claims are more like the loss of consortium claims encountered in Bain or the emotional distress claims in Treichel.” Bowen I at 5. Judge Cebull concluded that they were more akin to Bain because of the fundamental difference between emotional distress claims and wrongful death/survival claims. Bowen I at 8, aff’d, 247 Fed. Appx. 901 (9th Cir. 2007). 9 Vail briefly argues that pursuant to our decision in Freyer I, the law-of-the-case doctrine and collateral estoppel prevent State Farm from arguing it had a reasonable basis in law to challenge coverage. To the extent Vail is arguing that because Freyer I turned on the Court’s interpretation of policy language, instead of case law, her argument is unavailing because the “interpretation of an insurance contract presents a question of law.” Modroo, ¶ 23. Collateral estoppel is likewise inapplicable because Freyer I did not decide that State Farm’s interpretation was unreasonable. Thus, State Farm is not reopening an issue already decided by this Court. See Baltrusch v. Baltrusch, 2006 MT 51, ¶ 15, 331 Mont. 281, 130 P.3d 1267. 38 ¶54 The Dissent would reverse and remand for trial on the basis of Shilhanek v. D-2 Trucking, Inc., 2003 MT 122, 315 Mont. 519, 70 P.3d 721, citing an insurer’s obligation to attempt to settle within policy limits when “liability is reasonably clear,” and the possibility that a “reasonable jury could conclude . . . State Farm breached its obligation to attempt settlement within policy limits, thus placing the insured in jeopardy.” Dissent, ¶ 68. However, this case is not a Shilhanek situation, because Shilhanek did not involve a coverage issue. Without coverage, a duty to settle does not arise, even if the facts of the accident indicate that the insured’s liability, i.e., her negligence, is reasonably clear. See Mowry v. Badger St. Mut. Cas. Co., 385 N.W.2d 171, 178 (Wis. 1986) (the insurer’s “duty to settle is dependent upon whether the policy extends coverage for the circumstances underlying the harm sustained.”). Here, State Farm contested, not whether Vail’s liability for the accident was reasonably clear, but whether there was coverage at all for the claim. The Dissent notes there was no question about Vail’s liability for the accident. Had there had been no coverage issues, and State Farm had still refused to budge from its $5,000 offer, Shilhanek would have been implicated and this would be a different case. ¶55 The Dissent cites Dean v. Austin Mut. Ins. Co., 263 Mont. 386, 869 P.2d 256 (1994), for the proposition that reasonableness is a jury question. See Dissent, ¶ 71. Oddly, the Dissent does not discuss Redies, in which we expressly concluded that the general rule stated in Dean did not apply when the insurer raises a “reasonable basis in law” defense because questions of law are resolved by the courts, reflecting “the principle 39 that the jury does not decide or determine the law.” Redies, ¶ 35; see also White, ¶ 24. While the issue did go to the jury in Palmer by Diacon, coverage there was denied because of factual disputes about the underlying accident that required resolution by the trier of fact. Palmer by Diacon, 261 Mont. at 102, 861 P.2d at 902 (“In this case, Farmers contested liability, contending that Palmer’s accident was not caused by another motorist, and therefore, Palmer’s uninsured motorist policy did not cover the accident.”). Ellinghouse is likewise consistent with our analysis. There, we held it was error for Ellinghouse to introduce evidence and argue to the jury on the question of whether the insurer had a reasonable basis in law defense, but concluded the error was harmless in light of other circumstances. Ellinghouse, 223 Mont. at 251, 725 P.2d at 224-25. None of our cases declare this issue of law to be a jury question, and Redies clearly resolved any doubt on the issue. Factual disputes affecting coverage are certainly decided by the trier of fact, and this opinion does not change that. Here, there were no such disputes of material fact.10 10 Of note, the Dissent relies heavily on the fact that State Farm revised its policy language after this claim was made to urge reversal. See Dissent, ¶¶ 67, 69. However, there is no indication in the record that State Farm’s subsequent language revision, which was applicable prospectively to future claims, was done as a result of this claim. Courts must be cautious about permitting evidence of post-claim actions to assess the reasonableness of claim decisions when no relation to the claim has been demonstrated. To do otherwise would prompt speculation and raise questions of relevance and prejudice. The question turns on an analysis of “the legal landscape as it existed during the relevant time period.” Redies, ¶ 29. In any event, State Farm’s post-claim actions here did not change the clear authority that existed in favor of State Farm’s interpretation of its policy at the time of the claim, and do not raise a material fact prohibiting summary judgment on this issue. 40 ¶56 3. Did the District Court err in granting summary judgment to State Farm on the Unfair Trade Practices Act claims? ¶57 Frank argues that the District Court erred by dismissing the UTPA claims because the “reasonable basis in law” defense does not apply to the particular provision of the UTPA he is claiming State Farm violated—§ 33-18-201(1), MCA. State Farm responds that the defense does apply to that provision of the UTPA, and the District Court correctly dismissed the claims. ¶58 Montana’s Unfair Trade Practices Act prohibits insurers from practicing certain claims-settlement practices. Subsection (1) of § 33-18-201, MCA, makes it illegal for an insurer to “misrepresent . . . insurance policy provisions relating to coverages at issue[.]” “An insured or a third-party claimant has an independent cause of action against an insurer for actual damages” if the insurer violates subsection (1) and “misrepresents” the insurance policy. See § 33-18-242(1), MCA. However, an “insurer may not be held liable under this section if the insurer had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.” Section 33-18- 242(5), MCA; Lorang, ¶ 116 (“Before analyzing these claims, we note that our statutory law provides the insurer with an affirmative defense whereby it may avoid liability in a UTPA action if it ‘had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.’”) (citing Redies, ¶ 28, and quoting § 33-18- 242(5), MCA). 41 ¶59 Based on the plain language of § 33-18-242(5), MCA, State Farm cannot be held liable for violating the UTPA if it had a “reasonable basis in law” for contesting the claim. As noted above, we conclude that State Farm indeed had a reasonable basis in law to interpret its Limit of Liability clause in the manner it did. Therefore, the District Court did not err in granting summary judgment to State Farm on Frank’s and Vail’s UTPA claims. ¶60 4. Did the District Court err by concluding State Farm waived its statute of limitations affirmative defenses? ¶61 On cross appeal, State Farm challenges the District Court’s ruling that it waived the limitation defense. Citing M. R. Civ. P. 8(c), the District Court rejected State Farm’s statute of limitations defense because State Farm failed to raise that affirmative defense in its answer to Frank’s and Vail’s 2008 counterclaims to State Farm’s coverage action. State Farm asserts error, arguing that Frank’s and Vail’s 2011 amended counterclaims “superseded any previously filed counterclaims” which permitted State Farm to raise the statute of limitations defense anew. ¶62 We decline to reach this issue. In the District Court and on appeal, State Farm asserted the statute of limitations defenses for common-law bad faith, covenant of good faith and fair dealing, and the UTPA claims, but did not assert the defense for the breach of contract claim. Because we have held in State Farm’s favor on the claims for which State Farm asserted the defense, we need not address the issue. See Caldwell v. Sabo, 42 2013 MT 240, ¶ 5, 371 Mont. 328, 308 P.3d 81 (declining to address second issue because first issue was dispositive). ¶63 Affirmed in part, reversed in part, and remanded for further proceedings consistent therewith. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ BRIAN MORRIS Justice Patricia O. Cotter concurs and dissents. ¶64 I concur with the Court’s disposition of Issue One. I would reverse and remand Issues Two and Three for trial. ¶65 Issue Two presents the question of whether the District Court erred in granting summary judgment to State Farm on the common-law bad faith and breach of the covenant of good faith and fair dealing claims presented by Frank. Frank asserts two claims. In his first-party claim, in which he stands in the shoes of Vail pursuant to assignment, Frank argues that State Farm breached its duty of good faith and fair dealing to Vail, by refusing to accept Frank’s reasonable demand to settle Alicia’s claims against Vail for the additional $50,000 available under the policy. He presents a similar third-party claim on behalf of Heath’s estate and Alicia. The Court 43 agrees with the District Court’s conclusion that summary judgment was appropriate because State Farm had a reasonable basis in law to contest coverage. ¶66 Frank points out that by refusing to accept his demand, and by offering only $5,000 and refusing to further negotiate, State Farm put Vail in jeopardy of having an excess judgment entered against her. Vail asked State Farm to defend her in the underlying liability suit and indemnify her without limits, both of which State Farm refused to do. In fact, in a letter written to Vail in 2008, State Farm not only refused to indemnify her, but also indicated it would not pay for the defense of the declaratory judgment action that it had filed against her. Frank further points out that it was almost three years after he made a demand for the limits of liability upon State Farm that the company even began considering the filing of a declaratory judgment action. ¶67 In addition to the foregoing, it bears noting that in 2006, a year before it filed its declaratory action defending its limits of liability clause in the Freyer I litigation, State Farm amended its automobile policies in Montana to remove the key phrase in the limits of liability clause that reads “sustained by such other persons who do not sustain bodily injury.” This fact was not disclosed to Frank or Vail at all until December 2011 and only then because State Farm was asked in discovery to produce the text of the “Limits of Liability” clauses it had used both before and after the issuance of Freyer’s policy. ¶68 The Court errs in its analysis of Issue Two in two major respects. First, it focuses solely on the question of whether State Farm had a reasonable basis in law to contest coverage. It apparently concludes that the question of whether State Farm refused to settle within policy limits where liability is reasonably clear is wholly subsumed within the “reasonable basis in law” analysis. The questions are related but nonetheless distinct. There is no question of Vail’s liability for the accident. Where liability is reasonably clear, an insurer has an obligation to 44 attempt to settle within policy limits so as to protect its insured from the prospect of a judgment in excess of policy limits. Shilhanek v. D-2 Trucking, Inc., 2003 MT 122, ¶ 25, 315 Mont. 519, 70 P.3d 721. A reasonable jury could conclude that by refusing over a period of three years to budge from a $5,000 offer under the foregoing circumstances, State Farm breached its obligation to attempt settlement within policy limits, thus placing its insured in jeopardy. The Court cites Jessen with approval in ¶ 46, but then disregards the very point of the discussion: the question of whether an insurer acted in “good faith” is to be made on a case-by-case basis. As noted below, the question is one of fact, not law. ¶69 Second, the Court errs in construing all facts in favor of State Farm in reaching its conclusion that State Farm had a reasonable basis in law to contest coverage. It presumes throughout its analysis that State Farm acted in complete good faith, weaving into the Opinion an analysis of our case law so as to justify the amended language that State Farm added to its “each person” limit—language which this Court later interpreted against it. Noticeably, however, the Court does not even address the fact that State Farm again amended its automobile policies in Montana a year before filing this declaratory action, so as to remove the key phrase from its limits of liability clause. Given the timing of this policy revision, and the fact that it occurred while State Farm was steadfastly refusing to negotiate with Frank, a reasonable jury could certainly conclude that State Farm made the conscious decision to change its policy midstream because it concluded it may not have a reasonable basis in law for contesting such claims after all. ¶70 On summary judgment, a court should not be weighing the evidence or choosing one disputed fact over another. Cole v. Valley Ice Garden, L.L.C., 2005 MT 115, ¶ 4, 327 Mont. 99, 113 P.3d 275. This covert policy change in the midst of a settlement standoff plays an important 45 role in Freyers’ argument that State Farm engaged in bad faith. The Court errs in choosing to wholly disregard this significant factor and the potential bearing it could have on a jury’s analysis of State Farm’s reasonableness. ¶71 Unfortunately, making reasonableness determinations at the summary judgment stage is becoming a trend. In White (Cotter, J., concurring and dissenting), we upheld summary judgment in favor of State Fund, concluding that White’s bad faith claims must fail because State Fund had a reasonable basis in law for terminating his benefits. In so doing, we ignored a time- honored premise. White, ¶ 28. In Dean v. Austin Mut. Ins. Co., 263 Mont. 386, 389, 869 P.2d 256, 258 (1994), we said that “reasonableness is generally a question of fact; therefore, it is for the trier of fact to weigh the evidence and judge the credibility of the witnesses in determining whether the insurer had a ‘reasonable basis’ for denying a claim.” As in White, we again ignore Dean’s caution by concluding here that reasonableness is susceptible to determination on summary judgment, and by selecting the facts that support our conclusion. ¶72 The Court cites three cases for the proposition that an insurer cannot be held liable for bad faith if the insurer had a reasonable basis for contesting the claim. Opinion, ¶ 55. White is one of those cases. In the other two cases we cite—Ellinghouse and Palmer by Diacon—the question of whether the insurer engaged in bad faith was resolved by a jury. Though the verdict in favor of Palmer was reversed on other grounds, we stated in Palmer that the district court did not err “by concluding that reasonable people could draw different conclusions about whether Farmers’ had a reasonable basis for contesting Palmer’s claim.” Palmer, 261 Mont. at 104, 861 P.2d at 903. As in White, I again maintain here that while reasonable people could ultimately determine that State Farm had a reasonable basis for denying a claim, they could also conclude to the contrary. The point is that the reasonableness of State Farm’s conduct is for the trier of 46 fact to determine. I would therefore reverse and remand for a jury’s determination Freyers’ common-law bad faith claims and their claims that State Farm breached the covenant of good faith and fair dealing. ¶73 Finally, as to Issue Three, I conclude consistent with the above analysis that the Court also errs in upholding summary judgment on the UTPA claims. I would reverse and remand the UTPA claims for trial. ¶74 I therefore concur and dissent. /S/ PATRICIA COTTER Justice Michael E Wheat joins the Concurrence and Dissent of Justice Patricia O. Cotter. /S/ MICHAEL E WHEAT	October 15, 2013
0b821e13-448d-4b77-a3e3-1b696fbcad5f	Estate of Beals	2013 MT 290N	DA 13-0088	Montana	Montana Supreme Court	DA 13-0088 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 290N IN THE MATTER OF THE ESTATE OF: CLEO M. BEALS, Deceased. APPEAL FROM: District Court of the Sixteenth Judicial District, In and For the County of Rosebud, Cause No. DP 08-18 Honorable Joe L. Hegel, Presiding Judge COUNSEL OF RECORD: For Appellant: David M. McLean; McLean & McLean, PLLP; Anaconda, Montana For Appellee: Thomas E. Towe, Tucker P. Gannett; Towe, Ball, Mackey, Sommerfeld & Turner, PLLP; Billings, Montana Submitted on Briefs: July 31, 2013 Decided: October 8, 2013 Filed: __________________________________________ Clerk October 8 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Bob Beals, Byron (Bus) Beals, and Bonny Rieckmann are the three children of W.E. (Dude) and Cleo Beals. Dude owned a successful mortuary and furniture business in Forsyth, Montana. His oldest son, Bob, also worked in the family business. When Dude died in 1994, his estate was probated in accordance with his 1963 will. The will provided that all of Dude’s property “of whatsoever nature, kind or description” should go to Cleo, with anything remaining upon her death to his three children to “share and share alike.” The bulk of the property, however, passed outside the will to Cleo and the children through life insurance beneficiary designations and accounts in joint tenancy with rights of survivorship. ¶3 In 1995, after the court appointed Bus as Cleo’s guardian and estate conservator, Bob and his son prepared an “Accounting of the Holdings of W.E. ‘Dude’ Beals as of June 1, 1994 to the Current Assets of Cleo M. Beals as of October 31, 1995.” This accounting reflected two insurance policies in the name of Dude alone that listed Bob as the sole beneficiary, but Bob noted in the accounting that the proceeds from these were placed in a tax free account to be held for Cleo’s future health care. There were also two 3 bank accounts held in joint tenancy between Dude and Bob. Again, Bob noted that the two accounts were being held separately from Cleo’s other assets to be used for her heath care if needed. ¶4 Cleo died on August 17, 2007. Pursuant to her will, the court appointed Bob as her personal representative. Cleo’s will, drafted at the same time as Dude’s, provided that her entire estate would go to Dude or, if he did not survive her, to her children equally. During the probate proceeding, Bus and Bonny brought a petition to compel Bob, as personal representative, to include certain assets in Cleo’s estate, including the four accounts held in Bob’s name alone. Bus and Bonny claimed Bob was not following their parents’ intent that the estate be divided equally among the children. In their petition to the court, Bus and Bonny raised seven categories of items that they were requesting the court order Bob to include in the estate. The items at issue on appeal are the four accounts in Bob’s name, as well as two life insurance policies (Hartford and MONY). Bob agreed that the proceeds of the latter two policies were property of the estate, but he claimed that he already had deposited those funds into the estate. ¶5 The District Court held a two-day bench trial in May 2012 to settle the issues raised in the petition. On January 2, 2013, the court filed findings of fact, conclusions of law and an order. The court found that Dude’s overriding intent in setting up his estate was that his money would be used to support Cleo during her lifetime and then pass equally to his children. Because of this intent, the court concluded that Bob was unjustly enriched by retaining the assets in the four accounts and ordered the creation of a 4 constructive trust for those assets to become part of Cleo’s estate. Along with the four accounts, the court also ordered Bob to return the proceeds of the Hartford and MONY life insurance policies to the estate. ¶6 Bob appeals the District Court’s findings and conclusions. Bob argues that the District Court erred in finding that Dude, with Bob’s help, arranged a maze of accounts intending to avoid probate. Bob also alleges that the court erred in finding that the Hartford and MONY insurance proceeds, payable to Cleo, were not already paid into the estate. Finally, Bob objects to the imposition of a constructive trust, arguing that he was not unjustly enriched and that the District Court improperly created the trust. ¶7 The standard of review governing proceedings in equity is codified at § 3-2- 204(5), MCA, which directs the appellate court to review and determine questions of fact as well as questions of law. In re Estate of McDermott, 2002 MT 164, ¶ 22, 310 Mont. 435, 51 P.3d 486. We review a district court’s findings of fact to determine if they are clearly erroneous and its conclusions of law to determine whether they are correct. McDermott, ¶ 22. ¶8 First, we conclude that the District Court’s finding that Bob assisted Dude in creating various accounts in order to avoid probate was not material to the court’s decision. We accordingly reject Bob’s argument that it is ground for reversal. The District Court did not rely on the fact that Bob helped Dude avoid probate. In fact, the court observed that Montana law does not require any breach of a fiduciary obligation or wrongdoing before the imposition of a constructive trust. Instead, the court relied on 5 Bob’s understanding that Dude’s overriding intent in naming Bob as a joint account holder and beneficiary was that the assets be held for Cleo’s benefit, then equally divided among the children. The record supports this finding. In Bob’s accounting of Cleo’s holdings, he listed the assets at issue as being held for Cleo’s health care. Bob admitted in his testimony that his retention of the accounts was on “an honor system,” and that the accounts were Cleo’s money, often held in his name only as a matter of convenience. He also acknowledged a discussion in which his father said that “once [Cleo] was taken care of, once she died, then the three [siblings] were supposed to divide up the property equally.” There was no objection to the court’s consideration of this evidence and we decline to overturn the District Court’s finding on this point. ¶9 Bob also argues that the court incorrectly ordered the return of the Hartford and MONY proceeds to the estate. Bob points out that these insurance proceeds were not the subject of any of the Findings of Fact or Conclusions of Law, and they were first mentioned in the District Court’s Order directing Bob to pay the proceeds to the estate. This Court has adopted the doctrine of implied findings for the purpose of reviewing findings of fact. The doctrine provides that where findings of fact “are general in terms, any findings not specifically made, but necessary to the [determination], are deemed to have been implied, if supported by the evidence.” Kluver v. PPL Mont., LLC, 2012 MT 321, ¶ 41, 368 Mont. 101, 293 P.3d 817 (quoting In re Transfer of Location for Mont. All-Alcoholic Bevs. Resort, 2008 MT 165, ¶ 29, 343 Mont. 331, 184 P.3d 324). 6 ¶10 Here, because the court ordered the assets paid back into the estate, it impliedly found that Bob had not yet done so. This implied finding is supported by the evidence. While Bob claimed that he accounted for these policies and purchased a certificate of deposit after depositing them into Cleo’s checking account, the record does not support his claim. Even in his own testimony, Bob could not provide a direct response or remember exactly where the money came from and where it went. After examining the bank statements and his testimony, we conclude that Bob fails to meet his burden of proving clear error in the District Court’s findings. ¶11 Finally, Bob challenges the imposition of a constructive trust. The District Court relied on § 72-33-219, MCA, in conjunction with our ruling in McDermott, ¶¶ 25-26, for the proposition that imposing such a trust no longer requires a showing of fraud or other wrongful acts on the part of the defendant. Section 72-33-219, MCA, allows a constructive trust to arise “when a person holding title to property is subject to an equitable duty to convey it to another on the ground that the person holding title would be unjustly enriched if the holder were permitted to retain it.” See also N. Cheyenne Tribe v. Roman Catholic Church, 2013 MT 24, ¶ 30, 368 Mont. 330, 296 P.3d 450. Principles of equity allow courts broad discretion in creating constructive trusts. N. Cheyenne Tribe, ¶ 32 (citing Eckart v. Hubbard, 184 Mont. 320, 325, 602 P.2d 988, 991 (1979)). ¶12 McDermott is controlling here. There, we upheld a district court’s imposition of a constructive trust after a son attempted to retain property deeded to him by his father when there was evidence that the property was meant to be used for the benefit of his 7 disabled brother. McDermott, ¶ 28. Similar to the beneficiary and account designations in the present case, the deed met the requirements of a grant solely to the son. McDermott, ¶ 7. Bob does not distinguish McDermott or argue that it has no application to the instruments and accounts at issue here. He argues only that he was the clearly named joint tenant or beneficiary on the accounts and was not unjustly enriched. Given the District Court’s finding regarding Bob’s understanding of Dude’s overriding intent and our broad policy for allowing a court to impose a constructive trust in the interest of equity, we conclude that Bob has not demonstrated legal error in the District Court’s determination that Bob was unjustly enriched or its imposition of a constructive trust. ¶13 We have determined to decide this case pursuant to Section 1, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶14 Affirmed. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ BRIAN MORRIS /S/ JIM RICE /S/ LAURIE McKINNON	October 8, 2013
d8927f49-e523-4655-a52f-e976d35ee15c	Gold Creek and AT T v. DOR	2013 MT 273	DA 12-0768	Montana	Montana Supreme Court	DA 12-0768 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 273 GOLD CREEK CELLULAR OF MONTANA LIMITED PARTNERSHIP d/b/a VERIZON WIRELESS and AT&T MOBILITY, LLC, Plaintiffs and Appellees, v. STATE OF MONTANA, DEPARTMENT OF REVENUE, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. DDV 11-154 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellant: C. A. Daw, David R. Stewart, Courtney Jenkins, Special Assistant Attorneys General, Montana Department of Revenue, Legal Services Office; Helena, Montana For Appellees: Richard G. Smith; Hawley Troxell Ennis & Hawley, LLP; Boise, Idaho (Counsel for Appellee AT & T Mobility) R. Allan Payne, Marc G. Buyske, Doney, Crowley, Payne, Bloomquist, P.C.; Helena, Montana (Counsel for Appellee AT & T Mobility) Terry B. Cosgrove; Murry Warhank; Gough, Shanahan, Johnson & Waterman; Helena, Montana (Counsel for Appellee Verizon) Submitted on Briefs: August 28, 2013 Decided: September 24, 2013 Filed: __________________________________________ Clerk September 24 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Plaintiffs Gold Creek Cellular and AT&T Mobility (Plaintiffs) brought this action for declaratory judgment alleging that the Department of Revenue’s (Department) regulations Admin. R. M. 42.22.101(12), 42.22.101(10), and 44.22.109, were invalid. Judge James Reynolds granted summary judgment to Plaintiffs. The Department of Revenue now appeals from this order. STATEMENT OF ISSUES ¶2 Issue One: Did the District Court correctly conclude that the Department’s regulation defining “goodwill” is invalid because it conflicts with § 15-6-218(2)(b), MCA? ¶3 Issue Two: Did the District Court correctly conclude that the Department’s regulation defining “intangible personal property” is invalid because it conflicts with § 15-6-218(2)(a), MCA? ¶4 Issue Three: Did the District Court correctly conclude that the valuation manuals adopted by the Department are invalid to the extent they support its new rules? FACTUAL AND PROCEDURAL BACKGROUND ¶5 Section 15-6-218, MCA, grants tax exemption to intangible personal property. Intangible personal property is defined as property that is not tangible and (a) has no intrinsic value but is the representative of value, or (b) property that lacks physical existence. Section 15-6-218(2), MCA. The statute includes a non-exhaustive list of common intangible personal property items, including “certificates of stock, bonds, promissory notes, licenses, copyrights, patents, trademarks, contracts, software, and franchises.” Section 15-6- 218(2)(a), MCA. The statute gives only one non-exhaustive example of intangible property 3 that lacks physical existence, “goodwill,” but does not define the term anywhere in Title 15, MCA. ¶6 The Department of Revenue implements this statute with Admin. R. M. 42.22.110. That administrative regulation provides default exemptions that a taxpayer may use when declaring certain intangible items as exempt. If taxpayers disagree with the default exemption, they may provide the Department with information supporting a higher exemption. Admin. R. M. 42.22.110(2). ¶7 In 2010, the Department made substantial changes to its regulations implementing § 15-6-218, MCA. The Department amended its definition of intangible personal property to include a requirement that the property “be separable from the other assets in the unit and capable of being held under separate title or ownership.” Admin. R. M. 42.22.101(12). The regulation further required that the property be able to be bought and sold separate from the operating assets, that it be capable of earning income as a standalone entity, and also defined “intangible value” as separate from intangible property and non-exempt. Admin. R. M. 42.22.101(12). Finally, the Department defined “goodwill” as goodwill that can be calculated through the purchase price accounting method. Admin. R. M. 42.22.101(10). While the Department has used the purchase price accounting process for goodwill since 1999, this change in the definition of goodwill prohibits any other method for valuing this specific intangible. The Department also adopted tax assessment methods from the Western States Association of Tax Administrators Handbook (WSATA) and the National Conference 4 of Unit Value States (NCUVS) in conjunction with the regulations on goodwill and intangibles. ¶8 The District Court considered cross-motions for summary judgment concerning the validity of the Department’s new regulations. The District Court granted Plaintiffs’ motion upon concluding that the new definitions of intangibles and goodwill imposed additional and contradictory requirements on state law, and that the WSATA and NCUVS handbooks were invalid as applied to the new regulations. The Department now appeals from this order. STANDARD OF REVIEW ¶9 Whether an administrative regulation impermissibly conflicts with a statute is a question of law to be decided by the court. Thompson v. J.C. Billion, Inc., 2013 MT 20, ¶ 11, 368 Mont. 299, 294 P.3d 397. We review a district court’s conclusions of law to determine if they are correct. Talon Plumbing & Heating v. Dept. of Lab. & Indus., 2008 MT 376, ¶ 19, 346 Mont. 499, 198 P.3d 213. DISCUSSION ¶10 The Department of Revenue argues that its interpretations of “intangible personal property” and “goodwill” are compatible with the statute, and at any rate, are entitled to administrative deference pursuant to Chevron v. Nat. Resources Def. Council, 467 U.S. 837, 104 S. Ct. 2778 (1984). Plaintiffs argue that Chevron deference applies only to a state or federal agency’s implementation of federal law, or of state law companions to federal law. ¶11 When examining regulations from a state agency implementing purely state law, we have applied the standard of deference set forth in the Montana Administrative Procedures 5 Act (MAPA), § 2-4-305, MCA. See Musselshell Co. v. Yellowstone Co., 2012 MT 292, 367 Mont. 350, 291 P.3d 579 (DOR implementing state tax on coal gross proceeds); City of Great Falls v. Mont. Dep’t of Pub. Serv. Reg., 2011 MT 144, 361 Mont. 69, 254 P.3d 595 (Public Service Commission implementing state Deregulation Act); Fallon Co. v. State, 2009 MT 454, 354 Mont. 347, 223 P.3d 886 (DOR implementing state tax). In contrast, we have only relied on Chevron deference when a federal or state agency interprets federal law or a state law companion to federal law. See Thompson, (State Department of Labor implementing federal Fair Labor Standards Act and Montana Wage Protection Act); BNSF Ry. Co. v. Feit, 2012 MT 147, ¶ 8, 365 Mont. 359, 281 P.3d 225 (“The Montana Legislature has indicated clear intent that the MHRA be interpreted consistently with federal discrimination statutes and case law.”). Finally, our Legislature passed MAPA with the clear purpose to preserve legislative intent and to curb “the undisciplined growth of administrative powers. . . .” Mont. Sen. Admin. P. Subcomm. Rpt. No. 33, 7, 42d Legis., Reg. Sess. (December, 1970) (quoting the Revised Model State Administrative Procedure Act). ¶12 The issues on appeal concern a state agency’s implementation of purely state law, a law that has no federal counterpart. Thus, the District Court correctly declined to apply Chevron’s standard for administrative deference in this case, and examined this case under Montana’s deference standard. Administrative rules are invalid when they “(1) engraft additional and contradictory requirements on the statute; or (2) if they engraft additional, noncontradictory requirements on the statute which were not envisioned by the legislature.” Bell v. Dep’t of Licensing, 182 Mont. 21, 23, 594 P.2d 331, 333 (1979) (citations and 6 quotations omitted); Safeway, Inc. v. Montana Petroleum Release Compensation Bd., 281 Mont. 189, 194, 931 P.2d 1327, 1330 (1997). Regulations that are consistent with the statute must also be reasonably necessary to effectuate the statute’s purpose. Section 2-4-305(6)(b), MCA; Michels v. Dep’t of Social and Rehabilitation Servs., 187 Mont. 173, 177-78, 609 P.2d 271, 273 (1980). ¶13 When a department’s regulation restricts a broad statutory exemption, that regulation is in direct conflict with the statute. Thompson, ¶¶ 19-23. In Bell, the statute required that a barber college operator have 10 years’ experience and be able to withstand character investigation by the Board of Barbers. Bell, 182 Mont. at 23, 594 P.2d at 333. When the Department of Licensing required these same operators to pass an examination, we found that this additional requirement was not contemplated by the Legislature, and was therefore invalid. Bell, 182 Mont. at 23, 594 P.2d at 333. In Michels, a regulation required indigent persons to provide notice within five days of medical care in order for the State to cover the costs of such care. Michels, 187 Mont. at 173, 609 P.2d at 271. The statute in that case provided broad medical coverage for indigent persons, so we invalidated the five day limit, holding that such regulations were not reasonable to effectuate the purpose of the statute. Michels, 187 Mont. at 178, 609 P.2d at 273 (“[I]n what way is this ideal [providing medical care to indigent persons] furthered by distinguishing between those who apply for the benefits within five days of receiving medical services and those who apply after five days?”). 7 ¶14 Did the District Court correctly conclude that the Department’s regulation defining “goodwill” is invalid because it conflicts with § 15-6-218(2)(b), MCA? ¶15 Section 15-6-218(2)(b), MCA, broadly exempts goodwill as a subclass of intangible personal property. The Department’s regulation defines goodwill as “booked goodwill” that can only be valued with the purchase price accounting method. Admin. R. M. 42.22.101(10). We read § 15-6-218(2), MCA, as a broad statutory tax exemption for all valuable goodwill. ¶16 The requirement for purchase price accounting of goodwill imposes a restriction on a broad statutory exemption, and thus constitutes an additional requirement. While the Department’s method of valuation is the most common way to measure goodwill, it is not the only acceptable method. Baldwin v. Stuber, 187 Mont. 430, 433, 610 P.2d 160, 162 (1980). Because of the difficulty in valuing this particular intangible, we have held that “each goodwill case must be determined on its own facts and circumstances, and the determination of the value of goodwill is a question for the trier of fact. . . .” Baldwin, 187 Mont. at 432, 610 P.2d at 161. But the Department’s regulation allows for no such leeway, and restricts goodwill to calculation by only one method. This restriction constitutes an additional requirement analogous to the barber’s test in Bell or the five day rule in Michels. ¶17 The Department argues that it must specify the type of information that taxpayers provide to demonstrate the value of intangibles. But this does not grant the Department authority to entirely exclude alternative methods of valuation. Plaintiffs are entitled to have their goodwill valued in a method of their choosing, and the Department is free to dispute 8 that valuation by relying on its preferred accounting method. However, the actual value of goodwill is left to the trier of fact, not the rulemaking processes of the Department. ¶18 Finally, the Department contends that its additional standard is reasonable to effectuate the purpose of the statute because the purchase price accounting method provides certainty and consistency in the valuation of goodwill. But the goodwill exemption’s statutory purpose is to give a broad exemption to all intangible personal property, including valuable goodwill. As in Michels, we question whether mandating a specific accounting method and prohibiting taxpayers from using alternative methods in any way furthers the Legislature’s purpose of granting broad exemption to goodwill. We conclude it does not. The regulation restricts a taxpayer’s ability to consult other methods for valuation, and could hinder a fair and accurate determination of value. This was not the original purpose of the exemption as contemplated by the Legislature. ¶19 We do not rule that the Department must use all available methods to value goodwill. We simply hold that the Department may not define goodwill in a way that precludes a taxpayer from proposing alternative methodology or information relating to valuable goodwill. ¶20 Did the District Court correctly conclude that the Department’s regulation defining “intangible personal property” is invalid because it conflicts with § 15-6-218(2)(a), MCA? ¶21 Section 15-6-218, MCA, imposes two requirements on intangible personal property: That it have no intrinsic value but is the representative of value, or that it lack physical existence. The statute also contains a non-exhaustive list of property that is considered 9 intangible personal property. The Department’s regulation requires that intangible personal property satisfy all of the following: (1) Be separable from the other assets in the unit; (2) be able to be bought and sold without impairing value of assets; (3) must create earnings that exceed their contributory value to the unit, and; (4) must not have “intangible value,” which is the value of an entity to make excess revenues over the normal rate of return. Admin. R. M. 42.22.101(12). ¶22 The Department’s definitions impose requirements that directly contradict the statute’s non-exhaustive list of intangible personal property. Plaintiffs’ FCC licenses may be exempted by the statute, but under the Department’s rules are only exempt if they can be bought and sold without destroying the unit value of assets. Other intangible personal property, like trade names or an assembled workforce, also fit the statutory definition, but do not fit the Department’s rules because they are either inseparable from the business’ asset, or their separation will impair the business asset. The Department’s distinction between intangible property and intangible value appears to sweep up goodwill, as goodwill is often defined by its ability to make excess revenues over the normal rate of return. See In re Marriage of Hull, 219 Mont. 480, 487-88, 712 P.2d 1317, 1322-23 (1985). ¶23 The Department contends that, although its regulations read alone would contradict the statutory list, it would never interpret its regulations to tax any of the items on the list. Further, the Department states that it did not incorporate the list because it is bound against repeating statutory language in its regulations under § 2-4-305(2),MCA. This position suffers from two flaws of reasoning. First, and crucial to this issue, the Department’s 10 argument misunderstands the nature of a non-exhaustive list. The list itself illustrates applicable examples of the Legislature’s chosen definition; it does not merely designate those few items that must be exempted by the Department. State v. Good, 2004 MT 296, ¶ 17, 323 Mont. 378, 100 P.3d 644; Federal Land Bank v. Bismarck Lumber Co., 314 U.S. 95, 100, 61 S. Ct. 1, 4 (1941) (“[T]he term ‘including’ is not one of all-embracing definition, but connotes simply an illustrative application of the general principle.”). Accordingly, any rule defining intangible personal property must be consistent with the principle that the list represents. The Department cannot save its regulations by declining to enforce them against items on the statutory list; the fact that it must decline enforcement proves non-conformity with the statute’s definitions. ¶24 Second, the prohibition on repeating statutory language limits “unnecessarily” repeating the statutory language. Section 2-4-305(2), MCA. Here, even the Department’s own administrators misunderstand how the new regulations interact with the statutory list. (“Q: So, applying this definition to an FCC license, an FCC license would not be exempt if you apply this? A: Yeah, the FCC license would be exempt because it meets the list.” “Q: [I]s it your understanding that goodwill would satisfy that part of the intangible personal property definition? A: I don’t believe you can hold goodwill separate, no.”). In this instance, repetition of the statute is needed to ensure consistent and clear application of the statute and regulation. However, even if the Department repeated the statutory list in its regulations, it is still prohibited from formulating rules contradictory to that list, or the law illustrated by the list. 11 ¶25 The District Court correctly determined that the Department’s definition of intangible personal property contradicted state law, and was invalid under MAPA. ¶26 Did the District Court correctly conclude that the valuation manuals adopted by the Department are invalid to the extent they support its new rules? ¶27 Both parties agree that the NCUVS and WSATA handbooks are only challenged to the extent that they are used to enforce the Department’s new definitions of intangible personal property and goodwill. Because we find those definitions invalid, these handbooks are also invalid to the extent that they conflict with state law. CONCLUSION ¶28 The judgment of the District Court is affirmed. /S/ MICHAEL E WHEAT We concur: /S/ JIM RICE /S/ LAURIE McKINNON /S/ PATRICIA COTTER	September 24, 2013
a95e276d-8c19-450d-82a7-ea67fc00cb5b	Matter of AT RT JT	2013 MT 284N	DA 13-0219	Montana	Montana Supreme Court	DA 13-0219 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 284N IN THE MATTER OF: A.T. and R.T., Youths in Need of Care. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Sanders, Cause No. DN 11-03 Honorable Deborah Kim Christopher, Presiding Judge COUNSEL OF RECORD: For Appellant: Lucy Hansen, Hansen Law Practice; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General; Helena, Montana Robert Zimmerman, Sanders County Attorney, Amy Kenison, Deputy County Attorney; Thompson Falls, Montana Submitted on Briefs: September 11, 2013 Decided: October 1, 2013 Filed: __________________________________________ Clerk October 1 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 J.Z.T., the Father, appeals from the Order of the District Court for the Twentieth Judicial District of Montana, Sanders County, terminating his parental rights to his two children (Children). We affirm. ¶3 The Children were adjudicated Youths In Need of Care (YINC) on January 3, 2012, due to allegations of psychological abuse, physical neglect and exposure to unreasonable risk. ¶4 The record demonstrates that the Father and the Mother (parents) fight constantly in front of the Children, pushing each other and shouting profanities at each other. They smoke marijuana in the presence of, and while caring for, the Children. They also abuse prescription drugs. The Father has submitted urinalysis scans that were positive for amphetamine, opiates and benzodiazepines. The parents were evicted from rental homes twice in three months. They currently reside in a trailer behind the paternal grandfather’s home that does not have heat or running water. ¶5 The Department of Public Health and Human Services, Child and Family Services Division (the Department), made reasonable efforts to avoid protective placement of the Children or to make it possible to safely return the Children to their parents’ care. The 3 parents agreed to place the Children in foster care for a week in 2011 so the Mother could detox at home. The parents were offered voluntary treatment plans on April 15, 2011. The parents completed chemical dependency evaluations. Both evaluations recommended inpatient treatment. Neither parent completed inpatient chemical dependency treatment. ¶6 The District Court approved a treatment plan for the parents on February 27, 2012. The treatment plan sought to address chemical dependency issues and how they affect parenting skills; to work on anger management skills, communication skills, relationship skills and parenting skills; to complete psychological/parental evaluations and follow recommendations; to maintain safe and stable housing; to refrain from criminal activity; to improve parenting skills, child development, nutrition and life skills; and, to maintain income through employment or other legal means. Both parents signed the treatment plan on February 16, 2012. The Father’s attorney signed the plan on February 21, 2012. ¶7 The treatment plan was not successful. The Father claims he tried to gain admittance to the Montana Chemical Dependency Center (MCDC) on two occasions to receive inpatient treatment, but failed. The Father obtained some outpatient treatment from Flathead Valley Chemical Dependency Center. On August 7, 2012, the Flathead Valley Chemical Dependency Center sent the parents a letter stating that, due to no-show appointments, their files would be closed. From July through August, the Father attended only thirty-six percent of scheduled therapy sessions. The parents attended only approximately fifty percent of the parenting classes they were required to complete. In a report to the court on August 15, 2012, the child protection specialist assigned to the case reported that visits between the 4 parents and Children had been shortened to one two-hour visit a week. The parents attended only about fifty percent of the visits. Because the Children were disappointed when the parents failed to show up for visits, the parents were required to call the visitation supervisor twenty-four hours in advance for a visit. The parents failed to maintain safe and stable housing. They failed to find employment or provide a household budget. The Father pled guilty to driving with a suspended license and no insurance. ¶8 The District Court found that the parents had not complied with the treatment plan. It further found that the parents’ conditions rendering them unfit were unlikely to change because, even after the Children had been in foster care for over a year, both parents had unaddressed chemical dependency issues and were unable or unwilling to care for the Children. Accordingly, the District Court ordered termination of both parents’ parental rights. Only the Father appeals. ¶9 We review a district court’s decision to terminate parental rights for an abuse of discretion. In re E.Z.C., 2013 MT 123, ¶ 19, 370 Mont. 116, 300 P.3d 1174. This Court will not disturb a district court’s decision on appeal unless there is a mistake of law or a finding of fact not supported by substantial evidence that would amount to a clear abuse of discretion. In re D.B., 2012 MT 231, ¶ 17, 366 Mont. 392, 288 P.3d 160 (internal quotation omitted). We review a district court’s findings of fact to determine whether they are clearly erroneous and its conclusions of law to determine whether they are correct. In re E.Z.C., ¶ 19. 5 ¶10 A district court may order termination of a parent-child legal relationship when the court makes a finding that the child is an adjudicated YINC and both of the following exist: (1) an appropriate treatment plan that has been approved by the court has not been complied with by the parent, or has not been successful; and (2) the conduct or condition of the parent rendering the parent unfit is unlikely to change within a reasonable time. Section 41-3- 609(1)(f), MCA. Factors a court must consider in determining whether a parent’s conduct or condition rendering the parent unfit are likely to change include “emotional illness, mental illness, or mental deficiency of the parent of a duration or nature as to render the parent unlikely to care for the ongoing physical, mental, and emotional needs of the child within a reasonable time.” Section 41-3-609(2)(a), MCA. Prior to entering an order terminating parental rights, a district court must adequately address each applicable statutory criterion and the party seeking termination of parental rights must present clear and convincing evidence to the district court that the applicable statutory criteria have been met. In re M.T., 2002 MT 174, ¶ 26, 310 Mont. 506, 51 P.3d 1141. ¶11 The Father argues that the Department’s treatment plan was inadequate because it was not individualized and the Department did not assist him in entering an inpatient chemical dependency treatment program. He argues that the District Court therefore abused its discretion by terminating his parental rights relying, in part, on its finding that he failed to complete the treatment plan. ¶12 A parent who does not object to a treatment plan’s goals or tasks waives the right to argue on appeal that the plan was not appropriate. In re D.S.B., 2013 MT 112, ¶ 10, 370 6 Mont. 37, 300 P.3d 702 (quotation omitted). Where a parent fails to object to a treatment plan in a timely manner, the parent waives any argument regarding the propriety of the treatment plan. See In re A.A., 2005 MT 119, ¶¶ 21-28, 327 Mont. 127, 112 P.3d 993. ¶13 We will not consider the Father’s argument regarding his treatment plan’s propriety because he failed to object to the treatment plan in a timely manner. The Father signed the treatment plan on February 16, 2012. His attorney signed it on February 21, 2012. The Father did not object to the treatment plan at that time, or at any time until after his parental rights had already been terminated. We will not consider the Father’s challenge to the plan’s adequacy now. ¶14 The Father also challenges the District Court’s determination that the conduct or condition making him unfit was unlikely to change within a reasonable time. He alleges that the District Court’s determination was not based on clear and convincing evidence because it did not consider testimony from the psychologist who evaluated the Father. ¶15 Although § 41-3-609(2)(a), MCA, requires the District Court to consider a parent’s “emotional illness, mental illness, or mental deficiency” in determining fitness, no statutory criterion requires that such consideration be based on a professional psychological evaluation. Here, ample evidence supported the District Court’s determination that the Father’s conduct or condition was unlikely to change within a reasonable time. The Father had not completed inpatient chemical dependency treatment, had made minimal progress in counseling sessions with the Mother, had submitted several dirty urinalyses, and had failed to show for a number of treatment appointments. Further, the Father’s “emotional illness, 7 mental illness, or mental deficiency” were not the primary factors underlying the District Court’s decision about his fitness—his persistent drug problem, and failure to address that drug problem, were more determinative. ¶16 We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our Internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s determination that the Father’s conduct or condition was unlikely to change, under the circumstances cited above, did not amount to an abuse of discretion. ¶17 Affirmed. /S/ MICHAEL E WHEAT We concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE	October 1, 2013
f788e9c9-0475-4ecb-9b73-da69a14f5678	Tungsten Holdings v. Freyder	2013 MT 294N	DA 12-0782	Montana	Montana Supreme Court	DA 12-0782 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 294N TUNGSTEN HOLDINGS, INC., Plaintiff and Appellant, v. DAVID FREYDER, Defendant and Appellee. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 06-634C Honorable Stewart E. Stadler, Presiding Judge COUNSEL OF RECORD: For Appellant: Thane P. Johnson; Johnson, Berg & Saxby, PLLP; Kalispell, Montana For Appellee: Richard De Jana; Richard De Jana & Associates, PLLC; Kalispell, Montana Submitted on Briefs: September 4, 2013 Decided: October 8, 2013 Filed: __________________________________________ Clerk October 8 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Tungsten Holdings, Inc. (Tungsten) appeals from the order of the Eleventh Judicial District Court determining the location of the easement granted in the deed to Tungsten’s property. Tungsten is the owner of 80 acres: 40 acres are located immediately to the north of the other 40 acres (collectively Tungsten Property). David Freyder (Freyder) is the owner of 20 acres (Freyder Property). The Freyder Property is not contiguous to the Tungsten Property, but lies to the east of the Tungsten northern 40 acres, separated by a 20 acre parcel (Intervening Property). Neighboring property owners use an access road known as Moose Crossing that travels in a northerly direction, just barely crossing into the eastern boundary of the Freyder Property, before turning west and crossing property to the north. There is also a newer road along the southern boundary of the Freyder Property known as Apgar View. ¶3 Tungsten filed its complaint asserting Freyder was interfering with use of its easement. It asserted an easement through the entirety of the Freyder and Intervening Properties not along Moose Crossing or Apgar View, but along a small trail through the 3 woods just north of the Freyder house, about midway between the other two access roads. Alternatively, Tungsten requested the court declare that it had an easement by necessity to cross the Freyder and Intervening Properties. Freyder answered that the easement granted to Tungsten was not on the road it claimed, but along Moose Crossing. The owner of the Intervening Property was never a party to the case. After 6 years of pleadings, motions, and ultimately a bench trial, the District Court held that Tungsten’s easement was along Moose Crossing, traveling to the eastern border of the Freyder Property before heading north and around the Freyder and Intervening Properties and dropping into the northeast corner of the Tungsten Property. Because the District Court determined that access existed, it denied Tungsten’s claim to an easement by necessity. This appeal followed. ¶4 After thorough review of the transcript and the District Court record, the pertinent facts are as follows. By December 1968, Carrol and Myrna Wright (Wrights) owned approximately 520 contiguous acres, including the Freyder, Tungsten, and Intervening Properties (collectively Subject Properties), located just southwest of where the Middle Fork diverges from the North Fork of the Flathead River (Wright 520 acres). This land is between sections of the Flathead National Forest and, at the time of the Wrights’ ownership, had to be accessed by use of a Forest Service “jeep trail.” 4 ¶5 Between 1973 and 1978, the Wrights sold the 80 acres immediately to the north of the Subject Properties in three transactions.1 Only one deed specifically reserved an easement while the other two only noted that access to the property was by use of an “existing road.” On August 31, 1978, shortly after the last of these parcels was sold, the Wrights filed a Declaration of Easement (Declaration). The Declaration stated that the easement “follows as closely as possible jeep trails and the description thereof will be in general terms as it follows existing rights of way.” (Emphasis added.) The Declaration then set out a more thorough description of the easement describing the direction of travel through various portions of the Wright 520 acres. The Declaration specifically listed as a benefitted tract (dominant estate) all of Wrights’ remaining land including the Subject Properties, though it did not describe the easement as crossing any of the Subject Properties with the exception of it touching the eastern boundary of the Freyder Property. The description follows what is now Moose Crossing, however it does not describe the portion of road that passes through the previously sold properties to the north of the Subject Properties. ¶6 On September 8, 1978, the Freyder Property was conveyed to Freyder’s predecessor in interest. The conveyance reserved a right to use “an existing ‘jeep trail’ which crosses a portion” of the property. In 1987, Tungsten’s predecessors in interest acquired the Tungsten Property. The northern 40 acres and the southern 40 acres of the 1 In 1977, after 60 acres had been sold, the Wrights granted interests in nearly all the remaining 460 acres to Newman and Grisley. Subsequently, Newman and Grisley were parties to all transactions on the remaining joint land. As these conveyances are not relevant to the case at bar, we continue to refer only to the Wrights as to the entire 520 acres. 5 Tungsten Property were acquired through two separate contracts for deed, approximately six months apart. The deed for the northern 40 acres (the property with a border adjoining the Intervening Property) included use of an easement “along an existing jeep trail which crosses a portion of the” Freyder and Intervening Properties. (Emphasis added.) The deed for the southern 40 acres included use of an easement with a different description. ¶7 In 1996, Freyder’s predecessor in interest, the Nichols, executed an Exchange Easement with the owner of the Intervening Property allowing the owner to construct a road through the Freyder Property along the southern boundary into the Intervening Property. The road was subsequently created and referred to as Apgar View. ¶8 In February 2002, Tungsten purchased the Tungsten Property “subject to and together with all easements, restrictions and covenants apparent or of record.” It brought this action in 2006 asserting its right to use a path through the Freyder Property between Moose Crossing and Apgar View. Prior to trial, Tungsten agreed that its predecessors in interest had used a different road for access than the one they were now claiming. ¶9 A bench trial was held on October 19, 2010. Timothy Rooney (Rooney), a principal of Tungsten, was the only witness on behalf of Tungsten. Rooney presented aerial forest service photographs from 1964 and 1981, and Google maps from 1991, 2003, 2004, 2005, and 2009, alleging they showed the path through the trees it claimed as the easement. Rooney traveled the alleged path three times between 2002 and 2006. Rooney admitted that since the first time he came to the property there was a string or 6 ribbon blocking the path. He also admitted that Moose Crossing is “the most evident” road, and is likely the one referenced as “the existing road” in all the deeds for the properties to the north of the Subject Properties. ¶10 Freyder called Brenda Nichols (Nichols), Andrew Hohnberger (Hohnberger), and Tom Freyder (Tom). Nichols testified that her parents bought the Freyder Property in 1988, and she subsequently purchased it from them in 1996. Prior to 1996 her family used the property often, and after 1996 she lived on the property for five years. She testified with the aid of a map she had drawn for a prior, unrelated suit. This map showed the property boundaries for the Wright 520 acres and surrounding area, as well as what she claimed were the existing roads and rights of way. To her knowledge, the only jeep trail that existed for access was Moose Crossing. She also testified that the path alleged by Tungsten to be the easement was created by a logger that her parents hired in the 1990s. After moving onto the property permanently in 1997, she had some work done to flatten the path and remove large rocks so she could access another portion of her property. ¶11 Hohnberger is a real estate broker who was familiar with the Wright property. His father had been a real estate agent involved in selling portions of the Wright 520 acres since 1984. Hohnberger often went with his father to the Wright 520 acres, including the Tungsten Property. Hohnberger was only five when he first started visiting the land, but testified that since 1986 he had visited the area and traveled the existing jeep trail approximately five times per year. Hohnberger also used the map created by Nichols to 7 aid his testimony. Hohnberger testified that in all his visits to the area, the only road he ever knew of for access was Moose Crossing. He never saw a path traveling in the location alleged by Tungsten until approximately the mid-1990s when Nichols created the logging road. ¶12 Tom, Freyder’s brother, is a partial owner and manager of the Freyder Property. Tom testified that neither he nor his brother would have a problem with Tungsten using the Moose Crossing access road or the Apgar View road along the southern boundary.2 ¶13 The District Court found that the easement traveled along Moose Crossing, as described in the Declaration, and continued through portions of the properties to the north of the Subject Properties before dropping into the northeast corner of the Tungsten Property. Tungsten argues that the District Court erred for several reasons. First, it argues that as a matter of law the easement cannot exist where the court determined because by the time the Tungsten Property was severed from the Wright common ownership, it had already sold all the property to the north. Second, it argues that there is not substantial credible evidence to support the District Court’s finding. Finally, it argues that if the easement is not found to be where it alleges, the District Court erred by not granting it an easement by necessity. We address each of these arguments in turn. ¶14 To support its argument that there cannot be an easement granted through the property to the north of the Subject Properties, Tungsten points to the deeds conveying the two parcels that did not include an express reservation of an easement. Tungsten has 2 This case does not decide whether an enforceable easement exists for Tungsten to use Apgar View as that easement crosses through the property of a party not before the court. 8 provided no authority to support its argument that no easement could exist “as a matter of law” through these properties simply because the easement was not expressly reserved. See Blazer v. Wall, 2008 MT 145, ¶ 26, 343 Mont. 173, 183 P.3d 84 (listing the types of easements recognized in Montana). ¶15 Tungsten’s second argument is even more strained. First, it argues that the District Court “primarily” based its decision on pleadings of Tungsten’s predecessors in interest from an earlier, unrelated case. The District Court entered a finding that in 2000, Tungsten’s predecessors in interest “specifically pled the location” of the existing jeep trail to be where it found the easement. A review of all the pleadings, attachments, exhibits, and testimony before the District Court reveals no statement or pleading from Tungsten’s predecessors in interest. Rather, the reference to the earlier case, the substance of which is not in the record, is in regard to the map used by Freyder’s witnesses. The map was apparently created for a prior case in which Nichols and several other former Wright property owners, allegedly including Tungsten’s predecessors in interest, were all plaintiffs. Nonetheless, in this case, both Hohnberger and Nichols testified that the map accurately depicted the area and what they have always understood to be the location of the road easement. While we cannot confirm from the record that the District Court’s statement was correct that the location was specifically pled and agreed to by Tungsten’s predecessors in interest, we find no error with the District Court’s reliance upon a map created for a prior, unrelated proceeding when it was 9 properly authenticated, identified, and offered for purposes of illustrating the witnesses’ testimony herein. ¶16 Tungsten also repeatedly argues, without citing legal authority, that the District Court erred by relying on the understanding of “some subsequent person in the chain of title,” rather than discerning the intent of the Wrights when they first conveyed the property. However, Tungsten does not identify what evidence could have been produced to prove the location of the easement when the original grantor is not available. ¶17 The evidence presented at trial was that since approximately 1984 the only access road to the Tungsten property travels in the location found by the District Court. Two separate witnesses testified to their frequent and repeated personal observation of this access road for nearly three decades. Tungsten itself agreed that its predecessors in interest used a different path than the one it claims for access to the Tungsten Property. Additionally, Nichols testified that the path Tungsten claims was not created until sometime in the 1990s. Hohnberger confirmed this in his testimony. Clearly, there was substantial evidence for the District Court to find that the easement described in the deed was along Moose Crossing. ¶18 A “subsequent purchaser of the property” itself, Tungsten asks this Court to reverse the District Court’s factual findings as clearly erroneous based solely upon its observations and understanding of the location of the easement. Tungsten’s only witness, Rooney, had never been to the property until 2002. Tungsten’s only historical evidence was aerial photographs showing what may or may not be a path. This evidence alone is 10 not sufficient to leave this Court “with a definite and firm conviction” that the District Court’s reliance on direct testimony about the creation of the path was a mistake. Blazer, ¶ 22. ¶19 Tungsten’s final argument, claiming an easement by necessity, is implausible. While recognizing that an easement by necessity requires “strict necessity” at the time the property was severed from a common ownership, Tungsten presented absolutely no evidence at trial to establish such necessity. In fact, Tungsten conceded that its predecessors in interest used a different route to access the property and thus admitted that access exists other than by the logging path it has claimed. ¶20 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The issues in this case are factual and the District Court’s findings of fact are supported by substantial evidence. Any questions of law are controlled by settled law. ¶21 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON	October 8, 2013
30fb2fd1-0f58-4455-ade9-6b62fc8ba4d6	Draggin' Y Cattle Co., Inc. v. Addink	2013 MT 319	DA 13-0007	Montana	Montana Supreme Court	DA 13-0007 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 319 DRAGGIN’ Y CATTLE COMPANY, INC., and ROGER and CARRIE PETERS, Plaintiffs and Appellants, v. LARRY ADDINK, and JUNKERMIER, CLARK, CAMPANELLA, STEVENS, P.C., Defendants and Appellees. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 11-87A Honorable David Cybulski, Presiding Judge COUNSEL OF RECORD: For Appellants: Timothy B. Strauch; Strauch Law Firm; Missoula, Montana For Appellees: G. Patrick HagEstad, Tim E. Dailey; Milodragovich, Dale & Steinbrenner, P.C.; Missoula, Montana Submitted on Briefs: September 11, 2013 Decided: October 29, 2013 Filed: __________________________________________ Clerk October 29 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Draggin’ Y Cattle Company, Inc. and Roger and Carrie Peters (collectively the Peters) appeal from the order of the Eighteenth Judicial District Court granting summary judgment to defendants Larry Addink (Addink) and Junkermier, Clark, Campanella, Stevens, P.C. (JCCS). The case arose from a failed § 1031 tax-deferred exchange1 Addink structured for Peters. It was ultimately determined that the exchange did not qualify for deferred tax treatment under § 1031, resulting in significant tax liability for the Peters. The Peters filed a complaint against Addink and JCCS alleging professional negligence, breach of fiduciary duty, breach of contract, breach of the implied covenant of good faith and fair dealing, and misrepresentation. During discovery, the District Court granted Addink and JCCS a protective order preventing the Peters from obtaining certain of their pre-litigation communications. Ultimately, the court held that the two-year fraud and three-year tort claims were barred by the respective statutes of limitations, and dismissed the breach of contract claims despite the five-year or eight- year limitation periods applicable to such claims. We reverse and remand for further proceedings. ¶2 We review the following issues on appeal: ¶3 1. Did the District Court err in holding that the statute of limitations began to run when the real estate transactions closed? ¶4 2. Did the District Court err in dismissing the Peters’ breach of contract claim? 1 26 U.S.C. § 1031 allows a taxpayer to defer recognition of capital gain that would ordinarily be due upon sale for certain types of property exchanges. 3 ¶5 3. Did the District Court err in granting Addink and JCCS a protective order to prevent discovery of alleged work product and attorney-client communications? FACTUAL AND PROCEDURAL BACKGROUND ¶6 Roger and Carrie Peters, husband and wife, own Draggin’ Y Cattle Company, a cattle ranch in Dillon. The Peters also owned Alaska Basin Grazing Association (Alaska Basin). Since the 1980s, the Peters had been clients of accountant Larry Addink, both individually and for their businesses. In March 2005, Draggin’ Y and Addink, on behalf of JCCS, signed a written contract for general tax services, including compilation of month-end statements of assets, liabilities, and stockholders’ equity-income tax basis, and preparing year-end tax returns. This contract stated that Addink will “inform [Peters] of any material errors that come to our attention . . . unless they are clearly inconsequential.” ¶7 The origins and scope of the parties’ agreements regarding the subject transaction are disputed. The Peters allege that they, along with realtor Lon Morris (Morris), consulted Addink in 2005, shortly after signing the written contract, regarding sale of Alaska Basin property in a way that would reduce tax liability, and that Addink suggested a § 1031 exchange. Addink’s timesheet entries reflect that the Peters were billed in 2005 for conferences in which a § 1031 exchange for Alaska Basin property was discussed. Addink asserts his 2005 timesheet entries were related to a completely different transaction, and that his first involvement in this matter was in late 2006 when Morris contacted him about whether certain property would qualify for the exchange. Regardless, Addink does not dispute that he researched the possibility of § 1031 4 treatment of Alaska Basin’s sale of property and purchase of other property owned by the Peters that culminated in the transaction at issue. He concluded from his research that the transaction would qualify for § 1031 treatment, so he opined to the Peters that the exchange would be given tax-deferred treatment. Addink wrote a letter to the Peters outlining his plan and suggesting which property should be purchased as the replacement property. ¶8 In late 2006, Alaska Basin hired attorney Max Hansen (Hansen), whose practice includes § 1031 exchanges, to draft the closing documents for the transaction. The Peters assert that Hansen was not retained for any tax advice regarding the transaction, and that they instead relied solely on Addink for tax advice. Hansen likewise states that he deferred all tax advice to Addink, as the accountant involved in structuring the transaction, and repeatedly reminded Addink that he was not providing any tax advice or legal representation regarding tax issues. Nonetheless, Hansen was concerned that Addink’s plan would not qualify for § 1031 treatment due to a related-party issue—the property being purchased to replace the Alaska Basin property was owned by the principals of Alaska Basin. In December 2006, Hansen conveyed his concerns to Addink, who assured Hansen that he understood the issue and had researched it. ¶9 On January 17, 2007, the Alaska Basin property was sold. On January 18, 2007, Hansen again called Addink to express his concerns about the related-party issue. Addink agreed to check into it again and call Hansen if he discovered any problems. Hansen followed up on this conversation by faxing a letter to Addink detailing his 5 concerns, and reiterating that he was not engaged for tax purposes. Addink did not contact Hansen, and the transaction for purchase of the Peters’ property closed on January 22, 2007. Though the Peters were aware of Hansen’s concerns, they accepted Addink’s assurances that he had researched the tax implications and that the exchange would qualify. ¶10 In November 2007, Addink attended a seminar where he learned that, pursuant to a 2002 revenue ruling, the type of transaction he had structured for the Peters was prohibited by the related-party rule. He immediately notified JCCS, which in turn notified its insurer. JCCS began investigating its potential liability, and consulted with attorney Ralph Picardi sometime in 2008. During this time, the Peters were not informed that the transaction would fail to qualify under § 1031, and were billed for some of the time JCCS spent discussing the transaction’s failure. At least one JCCS email during this time noted that Addink was “uncomfortable knowing what he knows and not saying anything to his client.” ¶11 Addink met with the Peters on February 6, 2008, to inform them that the transaction would be taxable due to the related-party rule. Addink told the Peters that the transaction had failed to qualify under § 1031 because of new tax rulings that had changed the law on related parties. The failure of the § 1031 transaction required that the Peters report $2,862,279, and Draggin’Y report $5,692,434, of taxable gain. The Peters would face a state and federal tax bill estimated at $2.5 million within three weeks. 6 ¶12 Addink devised a plan to mitigate the tax consequences by seeking an extension for the 2007 tax filings, restructuring various entities to use losses to offset the gain, and negotiating with tax authorities to settle taxes, penalties, and interest due. Pursuant to this plan, the Peters were able to eliminate through 2008 and 2009 the taxable gain by offsetting it against restructured operating losses. However, during the time it took to eliminate the taxable gain, the Peters paid over $250,000 in interest on the taxes due, sums they paid by borrowing from a bank. ¶13 To further Addink’s tax mitigation plan, the Peters hired Hansen to negotiate a tax compromise with the IRS. In March 2009, Hansen informed the Peters that, during his representation on the compromise issue, he learned that Addink had misinformed them about the reason the transaction had failed to qualify. Hansen opined that Addink’s change of opinion was not due to a new law on related parties, but because of a new tax-preparer penalty rule that would have resulted in liability for Addink had he reported the exchange as tax-deferred. Hansen told the Peters that Addink should have informed them immediately of the failure of the transaction to qualify so they could have completed tax planning before the end of 2007, which would have avoided significant losses to the Peters. Upon learning this, the Peters ended their relationship with Addink. ¶14 On January 21, 2011, the Peters filed a complaint against Addink and JCCS alleging professional negligence, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and misrepresentation. They also claimed that Addink breached an implied contract for structuring and advising on the § 1031 exchange, and 7 breached the provision in the 2005 written contract to inform them of any not-inconsequential errors. ¶15 Addink moved for summary judgment on the ground the claims were time barred. Addink argued that the limitations period began to run for all claims on January 22, 2007, when the last property sale closed, because that was the point when all elements of the claims had accrued. The Peters replied that the limitations period did not begin to run until February 2008 for their tort claims, when they were first informed of the failure of the tax-deferred treatment, and until March 2009 for their fraud claim, when they learned from Hansen that Addink delayed informing them and likely misrepresented the reason for the failure. Because the statute of limitations for breach of an express contract is eight years, and for an implied contract five years, they argued these claims were timely. The District Court granted summary judgment to Addink and JCCS on all claims. STANDARD OF REVIEW ¶16 We review a district court’s grant of summary judgment de novo, using the same criteria applied by the district court under M. R. Civ. P. 56. Tin Cup Co. Water v. Garden City Plumbing & Heating, Inc., 2008 MT 434, ¶ 21, 347 Mont. 468, 200 P.3d 60. Summary judgment is appropriate when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact” and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56(c). The party moving for summary judgment has the initial burden to establish the absence of 8 a genuine issue of material fact and entitlement to judgment as a matter of law. Tin Cup Co. Water, ¶ 22. ¶17 We review a District Court’s rulings on discovery matters for an abuse of discretion. Hawkins v. Harney, 2003 MT 58, ¶ 17, 314 Mont. 384, 66 P.3d 305. DISCUSSION ¶18 1. Did the District Court err in holding that the statute of limitations began to run when the real estate transactions closed? ¶19 The District Court held that the statute of limitations began to run in January 2007, when the properties for the exchange had been bought and sold, and the “unexpected tax liability occurred.” A tort claim must be brought within a three-year period, § 27-2- 204(1), MCA, while a fraud or misrepresentation claim must be brought within two years, § 27-2-203, MCA. Because the Peters did not file their claim until January 2011, the District Court dismissed the claims as filed beyond the respective statutes of limitations. ¶20 Addink argues that the District Court was correct in holding that the limitations period began in January 2007. He relies on the accrual rule, which provides that a cause of action accrues when all elements of the claim exist or have occurred. Section 27-2- 102(1)(a), MCA. Generally, “all elements” includes a plaintiff’s damages. Uhler v. Doak, 268 Mont. 191, 199-200, 885 P.2d 1297, 1302-03. Addink argues that the Peters’ damages, if any, would have occurred at the time the flawed transactions closed, and thus all elements of their claims accrued at that time. 9 ¶21 The Peters answer that the discovery rule should toll the limitations period for their tort causes of action until they learned in February 2008, that the exchange failed to qualify, and should likewise toll the limitations period for their fraud claim until March 2009, when they discovered Addink’s alleged misrepresentation. The discovery rule provides that a limitations period does not begin until the party discovers, or in the exercise of reasonable diligence would have discovered, the facts constituting the claim. Section 27-2-102(3), MCA. However, this rule only applies when the facts constituting the claim are concealed, self-concealing, or when the defendant has acted to prevent the injured party from discovering the injury or cause. Section 27-2-102(3), MCA.2 ¶22 In McCormick v. Brevig, 1999 MT 86, ¶ 101, 294 Mont. 144, 980 P.2d 603, we held that an accountant’s withholding of information from a client rendered the client’s potential malpractice claim self-concealing. We noted that the discovery statute “protects plaintiffs against the harsh results of having their claims barred before they even know they exist.” McCormick, ¶ 100. We analogized to the medical malpractice case of Blackburn v. Blue Mt. Women’s Clinic, 286 Mont. 60, 78, 951 P.2d 1, 11-12 (1997), in which a counselor failed to disclose a negative HIV test result to a patient contemplating an abortion. McCormick, ¶¶ 99, 100. In Blackburn, we held that the alleged withholding, or nondisclosure, of accurate medical information by the Clinic counselor was by its nature self-concealing. 286 Mont. at 79, 951 P.2d at 12. 2 The Peters also argue that an accountant owes a fiduciary duty to his or her client such that the discovery rule must be applied to toll the statute of limitations. We decline to address this argument because we conclude that the discovery rule applies due to the self-concealing nature of the claim. 10 ¶23 In a legal malpractice case, we held that both the discovery rule and the accrual rule are applicable when determining when the statute of limitations begins to run. Watkins Trust v. Lacosta, 2004 MT 144, ¶ 39, 321 Mont. 432, 92 P.3d 620. In Watkins Trust, we held that the plaintiff’s failure to discover the attorney’s purported negligence could be excused due to the “complexity of the legal transaction involved.” Watkins Trust, ¶¶ 41, 43. We reasoned that “a drafting attorney may not impose upon her client a duty to understand defects in a technical instrument in order to defeat a malpractice claim.” Watkins Trust, ¶ 42. To require a layperson to recognize professional malpractice on a complex issue at the moment of its incidence would require the client to “hire a second professional to observe the work of the first, an expensive and impractical duplication, clearly destructive of the confidential relationship between the practitioner and his client.” Watkins Trust, ¶ 42 (citation omitted). ¶24 This reasoning applies equally to the facts of this case. The rules for qualifying a transaction under § 1031 are complex and, as we reasoned in Watkins Trust, for the Peters to know at the time of the transaction that it would not qualify under § 1031 would have required them to retain multiple professionals, duplicating research and expense. The injury was thus concealing in nature by its complexity. Assuming the damages to the Peters accrued in January 2007, nonetheless the limitations period did not begin to run until the discovery rule was also satisfied. The discovery rule tolls the running of a statute of limitations until the facts constituting the claim have been discovered, or in the exercise of reasonable diligence, should have been discovered, when either “the facts 11 constituting the claim are by their nature concealed,” or “the defendant has taken action which prevents the injured party from discovering the injury or its cause.” Section 27-2- 102(3), MCA. ¶25 The Peters consulted with Addink to provide expertise in structuring a tax-favorable land disposition. Addink advised the Peters that they could obtain tax- deferred treatment under § 1031 based on an exchange of certain properties that Addink identified. Addink did not equivocate or advise the Peters to consult a separate tax professional on the issue. Despite this initial advice, the Peters exercised reasonable diligence by making inquiry to Addink about the concerns raised by Hansen, but were reassured by Addink that he had researched the issue and the concerns were unfounded. Addink then withheld from the Peters information about the transaction’s failure, leaving them with the mistaken impression that their transaction was properly qualified until February 2008, when he advised them that his advice had been incorrect. The Peters acted diligently but were prevented from discovering the facts constituting their tort claims until February 2008, due to the concealing nature of the injury and the actions of Addink. ¶26 Addink argues that, even under the discovery rule, the Peters knew or should have known about the transaction’s failure almost immediately because Hansen, their agent, expressed his concern about the transaction and that, at a minimum, the Peters were put on inquiry notice by Hansen’s warnings. Even so, the Peters did exactly that—inquire. However, Addink again took action to “prevent[ ] the injured party from discovering the 12 injury,” § 27-2-102(3)(b), MCA, by reassuring the Peters that he had researched the problem raised by Hansen and confirming to them that the exchange transaction would qualify. ¶27 The discovery rule thus requires that the applicable three-year statute of limitations period for the tort claims began to run in February 2008. Because the complaint was filed in January 2011, within three years, the Peters’ tort claims were timely filed. ¶28 Regarding the claim for misrepresentation, the Peters argue that the two-year statute of limitations period did not begin to run until March 2009, when they were advised by Hansen that Addink had delayed telling them about the failure under § 1031, misrepresented the reason for the failure, and waited too long to inform them of the failure for the Peters to be able to respond most advantageously to avoid the potential damages. Addink argues that at the time he disclosed the tax consequences to the Peters in February 2008, they had all the facts necessary to make out a claim for fraud or misrepresentation. He points to the letter he sent to the Peters following the February 2008 meeting, stating “[i]n late 2007, I attended a seminar and workshop where [related-party] exchanges were discussed, and recent revenue rulings are now stating that the Internal Revenue Service is disallowing these exchanges between related parties.” Also, Addink emailed Hansen in February 2008, and provided citations to the revenue rulings upon which he based his conclusion that the exchange did not qualify under § 13 1031, and faxed the materials he received at the seminar to Jock Anderson, another tax attorney hired by the Peters to review the situation. ¶29 We have held that when material issues of fact exist about when a party discovered or reasonably should have discovered all the facts necessary to make out a claim, that issue is a question of fact for the jury. Young v. Datsopoulos, 249 Mont. 466, 473, 817 P.2d 225, 229 (1991). The parties have raised material issues of fact regarding when the Peters knew or should have known all the facts necessary to make out a claim for misrepresentation against Addink. Whether the information and materials provided by Addink in 2008 were sufficient for the Peters to have discovered with the exercise of reasonable diligence the facts constituting their misrepresentation claim is a question of material fact that a jury must resolve. ¶30 We reverse the District Court’s summary judgment on the Peters’ tort claims. We also reverse the entry of summary judgment on the Peters’ misrepresentation claim and remand the issue of the application of the two-year statute of limitations for a jury determination. ¶31 2. Did the District Court err in dismissing the Peters’ breach of contract claim? ¶32 The statute of limitations for a claim of breach of a written contract is eight years. Section 27-2-202(1), MCA. The statute of limitations for a breach of an implied contract is five years. Section 27-2-202(2), MCA. Although the Peters brought suit alleging breach of contract four years from the date the transaction closed, the District Court dismissed this claim. 14 ¶33 A claim for breach of a professional service contract can sound in either contract or tort. Tin Cup Co. Water, ¶ 25 (citing Northern Mont. Hosp. v. Knight, 248 Mont. 310, 315, 811 P.2d 1276, 1278-79 (1991)). When the facts warrant either type of action, potential liability for tort may coexist with liability in contract. Billings Clinic v. Peat Marwick Main & Co., 244 Mont. 324, 339, 797 P.2d 899, 908-09 (1990). Like other professionals, the accountant usually gets into the position where he must exercise his professional skill as the result of a contract. The contract says what he has undertaken to do, but the law says that he must do it with reasonable care, by professional standards. If he fails, he may be liable either for breach of his contract or in tort, for breach of the general duty to exercise due care arising out of the contract relationship. Billings Clinic, 244 Mont. at 339, 797 P.2d at 909 (quoting Carl S. Hawkins, Professional Negligence Liability of Public Accountants, 12 Vand. L. Rev. 797, 797 (1959)). ¶34 In Billings Clinic, a jury found an accounting firm had breached its implied contract with the clinic by failing to recognize substantial tax implications that resulted from a proposed corporate reorganization. We rejected the accounting firm’s argument that the verdict should be overturned. The firm had argued that the clinic had only a tort claim because no express contract existed and the parties never negotiated or agreed to the scope of the firm’s engagement. Billings Clinic, 244 Mont. at 337-39, 797 P.2d at 908-09. ¶35 Our prior cases dismissing a contract cause of action on the basis that the claim properly sounded in tort have dealt with situations where the tort statute of limitations has passed and the nature of the action did not support a breach of contract claim. E.g. Tin Cup Co. Water, ¶ 36; Erickson v. Croft, 233 Mont. 146, 153-54, 760 P.2d 706, 710-11 15 (1988); Bennett v. Dow Chem. Co., 220 Mont. 117, 122, 713 P.2d 992, 995 (1986). In such a case, the court must determine from “the substance of the complaint” whether the nature of the action supports the theory chosen by the plaintiff. “[O]nly if the gravamen of [the] complaint sounds in contract” may the plaintiff be allowed to pursue a contract cause of action and utilize the longer limitations period. Tin Cup Co. Water, ¶ 30. As we have already concluded that the tort statute of limitations period has not expired, no argument can be made here that the Peters are attempting to mislabel their action to avoid summary judgment on statute of limitations grounds. No authority has been presented to support dismissal of a claim, when the elements of the claim have been made out, in favor of a “better” claim. ¶36 As in Billings Clinic, we would need “[a] scissors more sharp than we command . . . to pare away the contract implications from the tort claim here.” 244 Mont. at 339, 797 P.2d at 909. The Peters allege that they have a written contract, signed in 2005, requiring Addink to inform them of any not-inconsequential errors or mistakes. They also claim an implied contract to research the requirements of § 1031 and how best to structure a land exchange to take advantage of tax-deferred treatment. Ultimately, whether a contract existed between the parties, and whether such contract was breached, are questions properly left to a jury. However, it is clear that the Peters have properly stated a claim for breach of contract and that the claim is not time barred. The District Court erred in dismissing the claim. ¶37 3. Did the District Court err in granting Addink and JCCS a protective order to prevent discovery of alleged work product and attorney-client communications? 16 ¶38 During discovery, the Peters sought certain records that Addink and JCCS claimed to be protected work product or covered by attorney-client privilege. The records include communications between Addink or JCCS and its attorneys (Picardi and G. Patrick HagEstad), Addink or JCCS and insurance adjusters, insurance adjusters and Picardi, and internal insurance company communications, as well as minutes from JCCS shareholder and director meetings during which the Peters’ failed § 1031 exchange was discussed. In response, Addink sought a protective order, which was granted by the District Court and later upheld after the court conducted an in camera inspection. The court found there was no “material relevant and discoverable” in the documents. We conclude that the court abused its discretion by doing so without having sufficient facts before it to determine the applicability of these privileges. We note that the law in this area is sparse, and provide the following discussion for guidance on remand. ¶39 As a preliminary matter, Addink argues the Peters failed to preserve this order for appeal because the Peters did not specifically list the February 6 or March 8, 2012 protective orders in their Notice of Appeal. However, Rule 4(4)(A) of the Montana Rules of Appellate Procedure clearly provide that “[a]n appeal from a judgment draws into question all previous orders and rulings excepted or objected to which led up to and resulted in the judgment.” A protective order denying discovery of certain documents is the type of interlocutory order encompassed by this rule. See e.g. State ex rel. Guar. Ins. Co. v. Dist. Ct. of Eighth Jud. Dist., 194 Mont. 64, 67-68, 634 P.2d 648, 650 (1981) 17 (ordinarily District Court orders on discovery matters are part of the day-to-day administration of the case and not subject to interlocutory appeal). A. Attorney-Client Privilege ¶40 The attorney-client privilege protects confidential communications between an attorney and client. Section 26-1-803, MCA. Its purpose is to “‘encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice. The privilege recognizes that sound legal advice or advocacy depends upon the lawyer’s being fully informed by the client.’” State ex rel. U.S. Fidelity & Guar. Co. v. Second Jud. Dist. Ct., 240 Mont. 5, 10, 783 P.2d 911, 914 (1989) (quoting Upjohn Co. v. U.S., 449 U.S. 383, 389, 101 S. Ct. 677, 682 (1981)). ¶41 “[T]he privilege must be construed narrowly because it obstructs the truth-finding process. The privilege ‘protects only those disclosures—necessary to obtain informed legal advice—which might not have been made absent the privilege.’” Am. Zurich Ins. Co. v. Thirteenth Jud. Dist. Ct., 2012 MT 61, ¶ 10, 364 Mont. 299, 280 P.3d 240 (quoting Fisher v. U.S., 425 U.S. 391, 403, 96 S. Ct. 1569, 1577 (1976)). Generally, the privilege only extends to communications made between attorney and client, however there are exceptions that permit extension of the privilege to communications involving third parties. Am. Zurich Ins. Co., ¶ 11. ¶42 In In re Rules of Professional Conduct, 2000 MT 110, 299 Mont. 321, 2 P.3d 806, we were asked to decide whether an insurer and an insured are co-clients of an 18 insurer-appointed attorney under the Montana Rules of Professional Conduct. Though we concluded that the Rules prohibited an insurer being accorded client status, In re Rules, ¶ 38, we recognized “a privileged community or magic circle within which confidential information may be shared without waiver of attorney-client or work product privilege.” In re Rules, ¶¶ 28, 33, 57 (citing Second Jud. Dist. Ct., 240 Mont. at 10, 783 P.2d at 914) We also discussed Linde Thomson Langworthy Kohn & Van Dyke, P.C. v. Resolution Trust Corp., 5 F.3d 1508 (D.C. Cir. 1993), regarding how far the “magic circle” extends. In re Rules, ¶ 64. The court in Linde Thomson noted that “[f]ederal courts have never recognized an insured-insurer privilege as such.” 5 F.3d at 1514 (citations omitted). While rejecting a blanket extension of attorney-client privilege to communications between an insurer and its insured, the court recognized that due to the essential purpose of the privilege—obtaining legal advice from a lawyer—“where the insured communicates with the insurer for the express purpose of seeking legal advice with respect to a concrete claim, or for the purpose of aiding an insurer-provided attorney in preparing a specific legal case” application of the attorney-client privilege is appropriate as an extension to those employed to assist the attorney. Linde Thomson, 5 F.3d at 1514-15 (citations omitted). “However, a statement betraying neither interest in, nor pursuit of, legal counsel bears only the most attenuated nexus to the attorney-client relationship . . . [I]f what is sought is not legal advice, but insurance, no privilege can or should exist.” Linde Thomson, 5 F.3d at 1515 (citations omitted; emphasis added). 19 B. Work Product ¶43 Montana Rule of Civil Procedure 26(b)(3), commonly referred to as the work product doctrine, protects from disclosure documents that are “prepared in anticipation of litigation or for trial.” Montana’s rule is identical to its federal counterpart. Cantrell v. Henderson, 221 Mont. 201, 208, 718 P.2d 318, 322 (1986). The work product rule is broader than the attorney-client privilege. Kuiper v. Dist. Ct. of Eighth Jud. Dist., 193 Mont. 452, 462, 632 P.2d 694, 700 (1981). There are two types of work product. Ordinary work product relates to factual matters and is only discoverable upon a showing of substantial need “to the extent that it is not privileged and is ‘relevant to the subject matter involved in the pending action.’” Opinion work product relates to the mental impressions, opinions, conclusions or legal theories of counsel and is given additional protection. Palmer by Diacon v. Farmers Ins. Exch., 261 Mont. 91, 115-16, 861 P.2d 895, 910 (1993) (citation omitted). ¶44 Whether something qualifies as work product is largely a case-by-case determination. “[I]t must be determined whether, in the light of the nature of the document and factual situation in a particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation.” Clark v. Norris, 226 Mont. 43, 50, 734 P.2d 182, 186 (1987) (citations omitted). The core purpose of the work product doctrine is to “‘shelter[ ] the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client’s case.’” Palmer by 20 Diacon, 261 Mont. at 116, 861 P.2d at 910 (quoting U.S. v. Nobles, 422 U.S. 225, 238, 95 S. Ct. 2160, 2170 (1975)). ¶45 In Kuiper, we held that work product protects “impressions [of an attorney] rendered during the investigation of a claim where no litigation is in progress.” 193 Mont. at 465, 632 P.2d at 701. We agreed that various memoranda and correspondence to and from corporate in-house counsel was work product “from the time the claim file [wa]s opened” because “[w]hen a claim file is opened, there is always some prospect of litigation and an investigation must be conducted geared to the ultimate eventuality of litigation.” 193 Mont. at 465, 632 P.2d at 701. ¶46 In Cantrell, we declined to extend this rule to situations where an insurance company claim file had been opened but no attorney was yet involved. 221 Mont. at 208, 718 P.2d at 322. We refused to recognize work product protection for the statement of an employee to the employer’s insurance company. We noted that no complaint had been filed and no attorney had been hired at the time the statement was given, and the statement was not given at the request of an attorney. Because “[a]n insurance company claim file is not the same as an attorney’s claim file, for purposes of the work product rule,” we held that the statement was not “made in anticipation of litigation” as contemplated by Rule 26(b)(3). Cantrell, 221 Mont. at 208, 718 P.2d at 322. ¶47 Other courts, applying the federal rule or a state counterpart, have agreed that investigation of potential claims by an insurance company does not automatically satisfy the requirement of “prepared in anticipation of litigation,” even though a suit may 21 eventually follow. “A litigant must demonstrate that documents were created with a specific claim supported by concrete facts which would likely lead to litigation in mind, not merely assembled in the ordinary course of business or for other nonlitigation purposes.” Linde Thomson, 5 F.3d at 1515 (quotation omitted; citing Petersen v. Douglas Co. Bank & Trust Co., 967 F.2d 1186, 1189 (8th Cir. 1992); McDougall v. Dunn, 468 F.2d 468, 473 (4th Cir. 1972) (holding that two and one-half year time lapse between witness statements to insurance adjuster and ensuing litigation demonstrated the communications were not in anticipation of litigation but in ordinary course of business). See also 27 C.J.S. Discovery § 124 (2009) (the privilege “extends only to documents that are prepared for, or placed in the hands of, an attorney in reference to an existing or anticipated controversy . . . [T]he privilege extends only to writings prepared during, and because of, the relation of attorney and client.”); Lanelogic, Inc. v. Great Am. Spirit Ins. Co., 2010 U.S. Dist. LEXIS 44392 at 13-15, 2010 WL 1839294 (N.D. Tex. May 6, 2010) (insurance investigative records held not work product because not created in anticipation of litigation but rather for ordinary business purpose of determining if coverage existed); Mole v. Millard, 762 S.W.2d 251, 254 (Tex. App. Houston 1988) (documents in claim files of hospital and its insurer not work product because “no evidence showing any involvement of an attorney in the case prior to or during the generation of the documents”); U.S. Fire Ins. Co. v. Bunge N. Am., Inc., 247 F.R.D. 656, 657-58 (D. Kan. 2007) (“Certainly by implication the . . . rule precludes any idea of extending the work product doctrine to reports or statements, even if written, obtained by the client or his 22 investigators which are not prepared under the supervision of an attorney in preparation for trial.”). ¶48 In Lanelogic, the court noted that determining whether a document is prepared in anticipation of litigation is a “slippery task.” 2010 U.S. Dist. LEXIS 44392 at 13. The court proposed factors to be considered in determining whether the primary motivation was preparation for litigation, including “the retention of counsel and his involvement in the generation of the document and whether it was a routine practice to prepare that type of document or whether the document was instead prepared in response to a particular circumstance.” Lanelogic, 2010 U.S. Dist. LEXIS 44392 at 14 (citations omitted). See also Natl. Eng. & Contr. Co. v. C & P Eng. & Mfg. Co., 676 N.E.2d 372, 378 (Ind. Ct. App. 1997) (photographs taken by defendant’s employees were not work product, but rather taken in ordinary course of business because even though there was the “potential” for a claim it was not “substantial and imminent . . . Litigation cannot be imminent when one party does not have knowledge of the facts that would give rise to a cause of action.”); Columbia/HCA Healthcare Corp. v. Eighth Jud. Dist. Ct., 936 P.2d 844 (Nev. 1997) (occurrence reports regarding treatment of child in medical malpractice case created following a request for investigation from hospital’s attorney were ordinary business documents rather than work product because hospital policy required employees to fill out pre-printed forms as standard practice when any “unexpected occurrence” happened to help improve the quality of care). 23 ¶49 Here, the District Court simply held there was no relevant or discoverable information in the protected documents. However, the information sought appears to be “reasonably calculated to lead to the discovery of admissible evidence.” M. R. Civ. P. 26(b)(1). Jerry Lehman, the Chief Executive Officer of JCCS, admits that, during the time prior to attorney involvement, the communications with the insurer involved the facts giving rise to a potential claim as well as JCCS’s potential exposure, that is, “steps JCCS was taking with regards to notifying the Peters of the issue and steps JCCS was taking to mitigate tax ramifications.” This kind of information would be potentially relevant for the Peters’ claim of misrepresentation for the delay in informing them of the problem, as well as the possibility that an earlier disclosure would have prevented significant losses. It may also be relevant to the issue of when the Peters knew or should have known about the potential misrepresentation claim. ¶50 Further analysis and perhaps fact finding are necessary to determine which documents are discoverable and which qualify for work product or attorney-client protection. For work product privilege it should be determined whether the various records were created or obtained due to the prospect of litigation or in the ordinary course of business for JCCS or the insurer. For attorney-client privilege the court should determine whether the communications not involving an attorney were made for the ultimate purpose of seeking legal advice. We understand that the time district courts have for resolution of discovery disputes is limited. However, that cannot permit 24 application of overbroad protective orders that fail to account for the limits of the privileges. This case will require a closer look. ¶51 The District Court’s order granting summary judgment on all claims is reversed. The Peters’ tort and breach of contract claims were timely filed and are remanded for further proceedings. We remand the misrepresentation claim for a determination by the fact finder of when the Peters knew or should have known all the facts necessary to make out the claim. The District Court’s order granting Addink and JCCS a protection order is likewise reversed, and remanded for further proceedings consistent with this opinion. /S/ JIM RICE We concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ BETH BAKER	October 29, 2013
39b34a51-afb4-4d64-8454-0c1ace4ae3dd	Matter of J.D.	2013 MT 315N	DA 13-0268	Montana	Montana Supreme Court	DA 13-0268 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 315N IN THE MATTER OF: J.D., A Youth in Need of Care. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. DDN 11-219 Honorable Dirk M. Sandefur, Presiding Judge COUNSEL OF RECORD: For Appellant: Lucy Hansen, Attorney at Law; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General; Helena, Montana John Parker, Cascade County Attorney, Matthew S. Robertson, Deputy County Attorney; Great Falls, Montana Submitted on Briefs: October 2, 2013 Decided: October 22, 2013 Filed: __________________________________________ Clerk October 22 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Father appeals the order of the Eighth Judicial District Court, Cascade County, that terminated his parental rights. We affirm. ¶3 The Department of Public Health and Human Services (Department) filed a petition for emergency protective services, adjudication of J.D. as a youth in need of care, and for temporary legal custody of J.D. Mother had given birth to J.D. in October 2011. J.D. had been premature at 33 weeks of gestation. J.D. tested positive for methamphetamines at birth. J.D. spent several weeks in the neonatal intensive care unit. ¶4 The Department informed the court that J.D. had been released from the hospital and placed with a relative in Browning, Montana. The Department presented testimony from a neonatologist and an expert from the Blackfeet Indian Tribe at a hearing on November 28, 2011. The District Court initially declared J.D. a youth in need of care, but later vacated that order due to the Department’s failure to serve Mother and Father. ¶5 The District Court set the matter for a second contested case hearing. The Department filed a supplemental affidavit in which its child protection specialist informed the court that the Department had attempted to have Mother move to Browning with J.D.’s kinship 3 provider to assist in bonding. Mother instead had left Browning and returned to Great Falls after a few weeks. Father had been arrested in late February 2012 and charged with robbery. ¶6 Both parties stipulated to adjudicate J.D. as a youth in need of care at the hearing on March 26, 2012. The court granted the Department temporary legal custody. The Blackfeet Tribe intervened pursuant to the Indian Child Welfare Act and monitored the proceedings. ¶7 The parties further stipulated to a treatment plan. Father’s treatment plan addressed four major issues: 1) chemical dependency; 2) mental health issues; 3) a lack of consistent contact with J.D.; and 4) Father’s lack of suitable housing and inconsistent employment. The Department eventually filed a petition for permanent legal custody and termination of parental rights in December 2012. ¶8 The court conducted a hearing on the Department’s petition on March 18, 2013. The child protection specialist testified regarding Father’s lack of contact with J.D. due to his failure to attend supervised visitations. The Department had offered to pay for travel and lodging costs for Mother and Father from Great Falls to Browning to facilitate supervised visitations with J.D. Mother and Father failed to take advantage of these accommodations. ¶9 The Department also presented evidence that Father failed to comply with random urine analysis testing. Father started, but failed to complete, chemical dependency treatment. Father also failed to attend two appointments to obtain a parenting assessment and one appointment for a psychological assessment. ¶10 An ICWA expert agreed that J.D. would be “in imminent risk of danger” if J.D. returned to her parents and that J.D. would likely suffer “serious emotional or physical 4 damage.” The ICWA expert testified regarding her concern that Father had not completed any of his treatment. She further testified that the termination would be in J.D.’s best interest. ¶11 Father countered that he had gone to intensive outpatient treatment four times a week for a month, but that his attendance had dropped when he had grown “sick of the Department.” Father admitted that he failed to finish his treatment plan. The District Court granted the Department’s petition to terminate. Father appeals. ¶12 We review for an abuse of discretion a district court’s decision to terminate a person’s parental rights. In re A.H.D., 2008 MT 57, ¶ 11, 341 Mont. 494, 170 P.3d 131. Father argues on appeal that the treatment plan to which he stipulated was not appropriate and that the Department had failed to make active efforts to reunify Father with J.D. as required under ICWA. We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our 1996 Internal Operating Rules, as amended in 2006, that provide for memorandum opinions. ¶13 The Department satisfied the requirement under ICWA that it made active efforts to reunify J.D. with her parents. The Department also presented sufficient evidence that reunification of J.D. with her parents likely would cause “serious emotional or physical damage” to J.D. It is manifest on the face of the briefs and the record before us that substantial evidence supports the District Court’s findings of fact and the District Court correctly applied the law to these facts. ¶14 Affirmed. /S/ BRIAN MORRIS 5 We concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE	October 22, 2013
64550d9e-ec2f-47b9-90aa-e09bebbf8b62	State Farm v. Freyer	2013 MT 301	DA 12-0543	Montana	Montana Supreme Court	DA 12-0543 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 301 STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff, Appellee and Cross-Appellant, v. FRANK FREYER, as Personal Representative of the Estate of Heath Evans Freyer, and as Conservator of the Estate of Alicia Freyer, a Minor Child, and VAIL FREYER, Defendants, Appellants and Cross-Appellees. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 07-754A Honorable Holly Brown, Presiding Judge COUNSEL OF RECORD: For Appellants: Allan H. Baris; Moore, O’Connell and Refling, P.C.; Bozeman, Montana (for Frank Freyer) Daniel P. Buckley; Buckley Law Office, P.C.; Bozeman, Montana (for Vail Freyer) For Appellee: Dale R. Cockrell; Jinnifer Jeresek Mariman; Moore, Cockrell, Goicoechea & Axelberg P.C.; Kalispell, Montana (for State Farm) Robert F. James; Ugrin, Alexander, Zadick, & Higgins, P.C.; Great Falls, Montana (for State Farm) October 15 2013 2 For Amici: Lawrence A. Anderson; Attorney at Law, P.C.; Great Falls, Montana (for Amicus MTLA) Submitted on Briefs: July 24, 2013 Decided: October 15, 2013 Filed: __________________________________________ Clerk 3 Justice Jim Rice delivered the Opinion of the Court. ¶1 This is the second appeal in this case. See State Farm Mut. Aut. Ins. Co. v. Freyer (Freyer I), 2010 MT 191, 357 Mont. 329, 239 P.3d 143. Generally, Heath Freyer (Heath) and Vail Freyer (Vail), who were married and the parents of Alicia Freyer (Alicia), were all riding in their vehicle, which was insured by State Farm Mutual Automobile Insurance Company (State Farm). Vail was driving when the vehicle was involved in a rollover accident that resulted in Heath’s death. In Freyer I, we held, based upon the language of the subject policy’s “Limits of Liability” clause, that there was coverage for Alicia’s claim for derivative damages stemming from the death of her father, Heath, under her own “Each Person” policy limit of $50,000, contrary to State Farm’s position that all damages arising from Heath’s death were covered only by the “Each Person” policy limit of $50,000 applicable to him. Freyer I, ¶¶ 13-16. After remand, State Farm paid the contested coverage amounts. Appellants then brought claims against State Farm under several theories for the wrongful denial of coverage for Alicia’s derivative claims. The District Court granted summary judgment to State Farm on all of those theories, which Appellants challenge on appeal. We reverse in part, affirm in part, and remand for further proceedings. We address the following issues: ¶2 1. Did the District Court err in concluding that State Farm had not breached the insurance contract when it failed to indemnify Vail for Alicia’s derivative claims because it had a “reasonable basis in law” to challenge coverage of those claims? 4 ¶3 2. Did the District Court err in granting summary judgment to State Farm on the common-law bad faith and breach of the covenant of good faith and fair dealing claims? ¶4 3. Did the District Court err in granting summary judgment to State Farm on the Unfair Trade Practices Act claims? ¶5 4. Did the District Court err in concluding State Farm waived its statute of limitations affirmative defenses? FACTUAL AND PROCEDURAL BACKGROUND ¶6 In October 2003, Vail was driving a family vehicle in the Bozeman area, and Heath and three-month-old Alicia (collectively the Freyers), were passengers. Vail maneuvered the vehicle to pass a string of cars ahead of them, but when they were nearly even with the lead vehicle, driven by Michelle Manning (Manning), Manning executed a left-hand turn. The vehicles collided, sending the Freyers’ vehicle off the road, where it overturned. Heath was ejected and suffered fatal injuries. Alicia, who was confined by her car seat, suffered minor injuries. ¶7 State Farm insured the Freyers’ three vehicles against liability arising from Vail’s driving. On the subject vehicle, State Farm’s automobile liability policy provided coverage limits of $50,000 per person and $100,000 per accident, as well as underinsured motorist coverage of $50,000. Within days of the accident, State Farm offered to pay Heath’s Estate the $50,000 per person coverage limit for Heath’s injuries, but Vail’s attorney asked State Farm to wait on payment until a probate proceeding had been 5 initiated. Heath’s father, Frank Freyer (Frank), was appointed as personal representative of Heath’s Estate and as conservator of Alicia’s Estate. ¶8 On August 4, 2004, Frank requested by letter that State Farm pay the $50,000 it had previously offered to Heath’s Estate. Frank also advised State Farm that he would be demanding $50,000 for settlement of Alicia’s claims. The next day, State Farm sent Frank a check for $49,723.22, the balance of the $50,000 per person coverage limit for Heath’s Estate’s claim after deduction for payments made for Heath’s funeral and medical care. ¶9 In September 2004, State Farm filed a declaratory judgment action in federal court in an unrelated case that sought a declaration that the “Limits of Liability” clause in its auto liability policy limited coverage to $50,000 for all claims arising from the bodily injury to one person. See State Farm Mut. Aut. Ins. Co. v. Bowen (Bowen I), No. 04-63- BU-RFC (D. Mont. Aug. 3, 2005). The Limits of Liability clause at issue in Bowen I was identical to the one in the policy insuring Vail. That clause provides, in pertinent part: The amount of bodily injury liability coverage is shown on the declarations page under “Limits of Liability–Coverage A-Bodily Injury [-W-], Each Person, Each Accident.” Under “Each Person” is the amount of coverage for all damages due to bodily injury to one person. “Bodily injury to one person” includes all injury and damages to other persons, including emotional distress, sustained by such other persons who do not sustain bodily injury. (Emphasis added.) ¶10 On November 18, 2004, Frank demanded by letter that State Farm also pay $50,000 to satisfy Alicia’s claims against Vail. Frank asserted that because Alicia 6 suffered “bodily injury,” she was entitled to payment for all her damages, including her derivative claims arising from her father’s death, out of her own $50,000 “Each Person” limit. Frank also asserted that Alicia had personally sustained over $50,000 in damages because she had suffered a “closed head injury.” ¶11 Four days later, State Farm contacted its in-house counsel, Jo Ridgeway (Ridgeway), concerning Frank’s interpretation of the Limits of Liability clause. Two days later, Ridgeway advised State Farm that the majority rule from courts that had interpreted the clause was that all “derivative claims”—damages arising from another person’s injury or wrongful death—were subject to the $50,000 Each Person coverage limit. In other words, any derivative claim Alicia had pertaining to Heath’s death was subject to the $50,000 Each Person coverage limit for his claims, which had already been paid to Heath’s Estate. Based on this advice, State Farm informed Frank that it had already paid the available coverage limits for damages stemming from Heath’s death. Further, State Farm advised that, based upon Alicia’s medical records indicating that her head CT scan was normal, and her doctor’s conclusion that she suffered only “minor bruising,” it would settle her personal bodily injury claim against Vail for $5,000. ¶12 On January 27, 2005, Frank rejected the $5,000 offer and renewed his demand for $50,000. Frank advised that, if State Farm tendered that amount, he would provide a full release for all claims against Vail. State Farm rejected that offer, responding that it had changed neither its position regarding the interpretation of the policy nor its $5,000 valuation of damages for Alicia’s own physical injuries. 7 ¶13 On August 3, 2005, the U.S. District Court for Montana ruled in Bowen I that a derivative claim was subject to the same Each Person coverage limit as other claims for that person. See Bowen I at 9. That decision was ultimately affirmed by the Ninth Circuit. State Farm Mut. Aut. Ins. Co. v. Bowen (Bowen II), 247 Fed. Appx. 901, 902-03 (9th Cir. 2007). ¶14 On September 19, 2006, Frank, in his capacity as personal representative of Heath’s Estate and conservator of Alicia’s Estate, sued his daughter-in-law Vail for the damages sustained in the accident due to Vail’s negligent driving. State Farm accepted defense of the lawsuit and retained counsel to defend Vail. ¶15 On October 30, 2007, State Farm filed an action seeking a declaration that it had complied with the payment obligations under the Limits of Liability clause. In their answers, Frank, on behalf of Heath’s Estate and Alicia, and Vail asked the court to declare that the policy provided the additionally claimed coverage, and counterclaimed that State Farm had breached the insurance contract and the implied covenant of good faith and fair dealing, and violated Montana’s Unfair Trade Practices Act (UTPA) by its mishandling of Alicia’s and Heath’s Estates’ claims. ¶16 Two days later, Frank sent to State Farm a settlement letter demanding $2.6 million to settle all of the claims against Vail. According to Frank, $1.7 million of that settlement represented the “low range” of the economic loss to Heath’s Estate because of his death, while approximately $1 million represented the loss of support, loss of companionship, loss of established course of life, and emotional distress damages 8 stemming from Alicia’s loss of her father. Frank subtracted from the $2.7 million the $100,000 he had already been paid ($50,000 from State Farm and $50,000 from Manning’s insurer). Although State Farm did not change its position regarding interpretation of the policy, it paid an additional $150,000 to Heath’s Estate for three stacked $50,000 underinsured motorist coverages for the Freyers’ three vehicles insured by State Farm on June 4, 2008. ¶17 On July 21, 2008, Frank and Vail executed a $2.6 million stipulated judgment that is the center of controversy in this case. The settlement agreement stated that $2.6 million was “a fair and reasonable” amount for settlement of Heath’s Estate’s claims and Alicia’s claims. In return for Vail’s confession of negligence and the assignment of all claims she may have against State Farm, Frank signed a covenant not to execute against Vail’s personal assets. ¶18 On May 4, 2009, in the declaratory proceeding, the District Court ruled that State Farm had correctly interpreted the Limits of Liability clause of its policy. However, the Freyers appealed, and on August 27, 2010, this Court reversed, ruling that coverage for Alicia’s derivative claims was not limited to Heath’s Each Person limit. See Freyer I, ¶¶ 13-16. State Farm then paid another $50,000 to Alicia under the Each Person coverage limit applicable to her, and paid $20,000 in attorney fees to compensate Vail’s attorney for his work in the declaratory judgment action. Further, because Freyer I had found there was coverage for Alicia’s derivative claims, State Farm also paid her $150,000 in stacked underinsured motorist coverage, as it had for Heath’s Estate. Thus, 9 State Farm paid Freyers a total of $400,000—$200,000 to Heath’s Estate and $200,000 to Alicia. ¶19 In January 2011, Vail and Frank filed amended counterclaims in the proceeding. Vail alleged an additional violation of Montana’s UTPA, and asked for a declaration that the $2.6 million stipulated judgment was valid and enforceable against State Farm. Frank also sought enforcement of the stipulated judgment against State Farm. State Farm denied and countered that the claims were barred by the statute of limitations. ¶20 All parties moved for summary judgment. The District Court granted State Farm’s motion for summary judgment and denied Frank’s and Vail’s motions. The court concluded that it was reasonable for State Farm to interpret its policy as it did because “‘every other court faced with the issue before this Court has concluded that the “Each Person” limitation applies to a wrongful death claim.’” (Quoting Bowen I at 9.) While the District Court acknowledged that additional coverage was found in Freyer I, it concluded that State Farm had not been unreasonable in the determination about coverage it had made. Because State Farm had a “reasonable basis in law” to contest coverage, the District Court dismissed all of Frank’s and Vail’s claims. As to State Farm’s statute of limitations defense, the court concluded that Vail’s and Frank’s 2011 amended complaints were filed merely to reflect the shift in the parties’ respective positions pursuant to the assignment of rights, and therefore did not “state any new theory or claim for relief” from their 2008 counterclaims. Thus, State Farm had waived its statute of 10 limitations defense by failing to assert the defense in its answer to the counterclaims filed in 2008. ¶21 All parties appeal the District Court’s order. Vail and Frank appeal from the District Court’s order disposing of all of their claims. State Farm cross-appeals the District Court’s order dismissing its statute of limitations defense. STANDARD OF REVIEW ¶22 A district court’s grant or denial of summary judgment is reviewed de novo, utilizing the same analysis as the district court pursuant to Rule 56 of the Montana Rules of Civil Procedure. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186. “The interpretation of an insurance contract [is] a question of law.” Modroo v. Nationwide Mut. Fire Ins. Co., 2008 MT 275, ¶ 23, 345 Mont. 262, 191 P.3d 389. A district court’s legal conclusions are reviewed for correctness. Crane Creek Ranch, Inc. v. Cresap, 2004 MT 351, ¶ 8, 324 Mont. 366, 103 P.3d 535. DISCUSSION ¶23 Frank and Vail assert that the District Court erred by dismissing their (1) breach of contract claims and (2) § 33-18-201(1) UTPA claims. In addition, Frank asserts that the District Court erred by dismissing his third-party bad-faith claim against State Farm and his first-party claim for breach of the covenant of good faith and fair dealing that was assigned to the Estate by Vail. The District Court held that State Farm was entitled to summary judgment on all of these claims because it had a “reasonable basis in law” to dispute coverage. We address these claims in turn, and hold that the District Court erred 11 by applying a “reasonable basis in law” defense to Frank and Vail’s breach of contract claim, but did not err by applying that defense to the remaining claims. ¶24 1. Did the District Court err by concluding that State Farm had not breached the insurance contract when it failed to indemnify Vail for Alicia’s derivative claims because it had a “reasonable basis in law” to challenge coverage of those claims? ¶25 Frank and Vail argue that, under contract law, a breach is a breach—it does not matter if the breaching party was “reasonable” in its breach. They assert the District Court erred by concluding that State Farm did not breach its duty to pay Alicia’s claims when it wrongfully denied coverage for her derivative claims because State Farm had a “reasonable basis in law” to contest coverage for those claims. State Farm responds that its payment of policy limits, prejudgment interest and Freyers’ attorneys’ fees in pursuing the coverage determination leading to Freyer I has mooted Frank’s and Vail’s breach of contract claims and, in any event, the District Court properly applied the reasonable basis in law defense. We reject the mootness argument. An issue is moot when “‘the court is unable due to an intervening event or change in circumstances to grant effective relief or to restore the parties to their original position . . . .’” Gateway Opencut Mining v. Bd. of Co. Commrs., 2011 MT 198, ¶ 16, 361 Mont. 398, 260 P.3d 133 (quoting Greater Missoula Area Fedn. of Early Childhood Educators v. Child Start, Inc., 2009 MT 362, ¶ 23, 353 Mont. 201, 219 P.3d 881). Freyers are seeking damages for breach of the insurance contract beyond the payments made by State Farm. As further developed herein, it is possible that further relief could be granted. 12 ¶26 The duty to defend and the duty to indemnify are different, and those differences compel the results ultimately reached herein. The duty to indemnify is independent of and narrower than the duty to defend. Unlike an insurer’s duty to defend, which arises “when ‘a complaint against an insured alleges facts, which if proven, would result in coverage[,]’” an insurer’s duty to indemnify arises only if coverage under the policy is actually established. State Farm Fire & Cas. Co. v. Schwan, 2013 MT 216, ¶ 15, 371 Mont. 192, ___ P.3d ___ (emphasis added) (quoting Farmers Union Mut. Ins. Co. v. Staples, 2004 MT 108, ¶ 21, 321 Mont. 99, 90 P.3d 381, in turn citing St. Paul Fire & Marine Ins. Co. v. Thompson, 150 Mont. 182, 188, 433 P.2d 795, 799 (1967) and Grindheim v. Safeco Ins. Co., 908 F. Supp. 794, 800 (D. Mont. 1995)). Put another way, while an insurer’s duty to defend is triggered by allegations, “[a]n insurer’s duty to indemnify hinges not on the facts the claimant alleges and hopes to prove but instead on the facts, proven, stipulated or otherwise established that actually create the insured’s liability.” 43 Am. Jur. 2d Insurance § 676 (West 2013). ¶27 “Insurance agreements are contracts that are subject to the general rules of contract law.” Fisher ex rel. McCartney v. State Farm Mut. Aut. Ins. Co., 2013 MT 208, ¶ 25, 371 Mont. 147, 305 P.3d 861 (citing Travelers Cas. & Sur. Co. v. Ribi Immunochem Research, Inc., 2005 MT 50, ¶ 17, 326 Mont. 174, 108 P.3d 469). This general principle includes the determination of whether an insurer has breached a provision of the insurance contract. Under contract law, “a breach of contract is a failure, without legal excuse, to perform any promise that forms the whole or part of a contract.” Richard A. 13 Lord, Williston on Contracts vol. 23, § 63:1 at 434 (4th ed., West Group 2002). Hence, the contractual duty to indemnify is breached when an “insurer has wrongfully refused to provide coverage to an insured.” Yovish v. United Servs. Aut. Assn., 243 Mont. 284, 291, 794 P.2d 682, 686 (1990) overruled on other grounds in Mt. West Farm Bureau Mut. Ins. Co. v. Brewer, 2003 MT 98, ¶ 20, 315 Mont. 231, 69 P.3d 652; accord Davis v. Criterion Ins. Co., 754 P.2d 1331, 1332 (Alaska 1988). An insurer thus breaches the duty to indemnify by failing to provide coverage when (1) the established facts trigger coverage under the terms of the policy, and (2) the extent of the claimant’s damages are undisputed or clearly exceed policy limits. Cf. Yovish, 243 Mont. at 286-88, 794 P.2d at 684-85 (USAA breached duty to indemnify because it denied coverage based on non-renewal even though clear terms of policy, and Montana law, required insurer to provide adequate notice of cancelation or non-renewal of coverage, and the property damage to insured’s car and other car was undisputed); Brewer, ¶ 36 (insurer breached duty to indemnify when it incorrectly interpreted policy to exclude newly acquired car from coverage) (factual history in Christensen v. Mt. West Farm Bureau Mut. Ins. Co., 2000 MT 378, 303 Mont. 493, 22 P.3d 624). “Established facts” in this context are facts that are either undisputed or are initially disputed but subsequently determined by the fact finder. When facts necessary to determine the existence of coverage are contested in an underlying action, the insurer cannot be said to have yet breached the duty to indemnify. See Skinner v. Allstate Ins. Co., 2005 MT 323, ¶¶ 18-19, 329 Mont. 511, 127 P.3d 359 (court could not issue order determining duty to indemnify because issues of personal liability of the 14 insured were yet to be determined in an underlying case); Northfield Ins. Co. v. Mont. Assn. of Cos., 2000 MT 256, ¶ 17, 301 Mont. 472, 10 P.3d 813 (court could not determine secondary insurer’s duty to indemnify because underlying litigation had not determined insured’s liability and primary insurer’s coverage cannot be said to have been exceeded). ¶28 Here, Freyers asserted derivative claims for damages sustained by Alicia arising from her father’s death caused by Vail’s negligent driving, and argued for coverage under State Farm’s policy. State Farm did not challenge Frank’s assertion that the value of Alicia’s derivative claims exceeded the $50,000 Each Person limits of the policy. This Court held that State Farm incorrectly interpreted its policy by applying a single Each Person coverage limit and refusing further payment for Alicia’s claims. Freyer I, ¶¶ 13-16. Consequently, State Farm breached its duty to indemnify Vail to the proper limits of its policy against Alicia’s derivative claims, and it breached the insurance contract by so doing. ¶29 A breach of contract cannot be ameliorated by the reasonableness of the breaching party’s actions. The District Court thus erred by permitting State Farm to raise a “reasonable basis in law” defense to Frank’s and Vail’s breach of contract claims. See Kerry B. Harvey & Thomas A. Wiseman III, First Party Bad Faith: Common Law Remedies and a Proposed Legislative Solution, 72 Ky. L.J. 141, 163 (1983-84) (“Contract law, being amoral, does not inquire into the defendant’s state of mind at the time of the breach.”). We thus turn to the measure of damages for State Farm’s breach. 15 ¶30 Frank and Vail entered a stipulated judgment against Vail for $2.7 million.1 Vail argues that this is the measure of damages and offers that this Court and Montana’s Federal District Court have “repeatedly held that an insurer who breaches the contract is liable for all damages flowing from that breach, including judgments against the insured,” citing Indep. Milk & Cream Co. v. Aetna Life Ins. Co., 68 Mont. 152, 156-57, 216 P. 1109, 1110 (1923); Staples, ¶¶ 20, 24, 27, 31; Lee v. USAA Cas. Ins. Co., 2004 MT 54, ¶¶ 19-21, 320 Mont. 174, 86 P.3d 562; Grindheim, 908 F. Supp. at 797, 808; Nielsen v. TIG Ins. Co., 442 F. Supp. 2d 972, 975-76 (D. Mont. 2006). However, as State Farm correctly notes, all of these cases cited by Vail involve breaches of the duty to defend, not the duty to indemnify, and “this Court has never approved a confessed judgment as the proper measure of damages where the insurer defended its insured.” ¶31 We start with the principle that an insurer’s wrongful refusal to indemnify entitles its insured to recover consequential damages. See Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, 2008 MT 2, ¶ 64, 341 Mont. 33, 174 P.3d 948; Safeco Ins. Co. v. Munroe, 165 Mont. 185, 192, 527 P.2d 64, 68 (1974) (holding that insured was entitled to consequential damages). “Consequential damages are those damages ‘within the contemplation of the parties when they entered into the contract, and such as might 1 In entering the stipulated judgment, Vail was represented by her counsel who was provided by State Farm, pursuant to the automobile liability policy. 16 naturally be expected to result from its violation.’” Crumleys, ¶ 64 (quoting Martel Const., Inc. v. State, 249 Mont. 507, 511, 817 P.2d 677, 679 (1991)).2 ¶32 The Colorado Supreme Court addressed a strikingly similar case in Old Republic Ins. Co. v. Ross, 180 P.3d 427 (Colo. 2008) (en banc). Surviving spouses and children (the Rosses) of two passengers who died in a plane crash sued the airline company for their wrongful deaths. Old Republic, 180 P.3d at 428. The airline company was insured by Old Republic under an aviation policy and a commercial general liability policy. Old Republic, 180 P.3d at 429. At the outset of litigation, Old Republic tendered $200,000 to the Rosses, which it believed was the maximum coverage available under the aviation policy. Old Republic, 180 P.3d at 429. Old Republic disputed coverage under the commercial general liability policy, which had a policy limit of $1 million, and therefore, rejected the Rosses’ settlement demand of $800,000. Old Republic, 180 P.3d at 429. Old Republic filed an action in federal court seeking a declaration that its policy interpretation was correct and that its contractual obligation to the Rosses had been fulfilled by the $200,000 payment. Old Republic, 180 P.3d at 429. While the declaratory action was pending, the Rosses entered a settlement with the airline company wherein the airline company confessed judgment in the amount of $4 million, plus prejudgment interest of $1.3 million, for a total stipulated settlement of $5.3 million. Rosses agreed not to execute upon the airline company. Old Republic, 180 P.3d at 429. 2 This definition of consequential damages is taken directly from § 27-1-311, MCA, which permits the recovery of both proximate and consequential damages for breach of contract. See Crumleys, ¶ 64. 17 ¶33 In the declaratory action, Old Republic contended that coverage under the aviation policy was limited to $100,000 for each passenger, or $200,000 total for the two passengers, and did not provide additional coverage for the derivative claims of mental anguish brought by deceased passengers’ family members. Old Republic Ins. Co. v. Durango Air Service, Inc., 283 F.3d 1222, 1226-27 (10th Cir. 2002) (hereinafter Old Republic Declaratory Action). The Tenth Circuit for the United States Court of Appeals ultimately concluded that the aviation policy provided $700,000 in coverage for the plane crash, and construed an ambiguity in the commercial general liability policy in favor of additional coverage for the airline company. Old Republic Declaratory Action, 283 F.3d at 1227-28, 1230. Thus, the Tenth Circuit concluded that the two policies provided $1.7 million in coverage. Old Republic Declaratory Action, 283 F.3d at 1231.3 ¶34 Consequently, there were now two judgments: the state court stipulated judgment against the airline company for $5.3 million, and the federal judgment declaring coverage limits of $1.7 million under the policies. Old Republic, 180 P.3d at 429. Old Republic paid $1.7 million to satisfy the declaratory judgment of policy limits, but refused to pay any further amount toward the stipulated judgment. Old Republic, 180 P.3d at 429. 3 The insurer was incorrect about its interpretation of the policy because the policy specifically distinguished between claims brought by passengers and claims brought by others. Old Republic Declaratory Action, 283 F.3d at 1227. Hence, the court held that the 10 family members of the passengers could bring individual claims for “mental anguish.” Old Republic Declaratory Action, 283 F.3d at 1227. However, a Colorado statute limited recovery of noneconomic damages in a wrongful death action to $250,000. Old Republic Declaratory Action, 283 F.3d at 1228. The policy therefore provided $200,000 ($100,000 x 2) for the bodily injury of the deceased passengers and $500,000 ($250,000 x 2) for the “mental anguish” suffered by the passengers’ family members. Old Republic Declaratory Action, 283 F.3d at 1228. 18 Similar to the case before us, the Rosses asked the Colorado Supreme Court to enforce the stipulated judgment with the airline company as the proper measure of damages for Old Republic’s incorrect interpretation of both its policies. Old Republic, 180 P.3d at 428. In rejecting the Rosses’ request, the court surveyed the jurisdictions that had addressed the enforcement of pretrial stipulated judgments: We find no jurisdiction that would enforce a pretrial stipulated judgment against an insurer who was not a party to the underlying settlement agreement unless the insurer acted in bad faith, denied coverage, or refused to defend the claim on behalf of the insured. We therefore decline to extend [Colorado law] to encompass a settlement agreement entered under these circumstances. The majority rule in states that have considered this issue is that a pretrial stipulated judgment may be enforceable against the defendant’s liability insurer if the insurer breaches its contractual obligation to defend the insured. Under the majority view, when an insurer improperly abandons its insured, the insured is justified in taking steps to limit his or her personal liability. . . . A number of states have adopted a modification of the majority rule, demonstrating a willingness to enforce pretrial stipulated judgments under various enumerated circumstances. . . . In sum, many states broaden the circumstances under which a stipulated judgment may be enforceable, but none of these states has enforced a pretrial stipulated judgment against an insurer where the insurer has conceded coverage and defended its insured, and where there has been no finding of bad faith against the insurer. . . . We conclude that under the facts of this case, where the insurer has conceded coverage and defended its insured, and where there has been no finding of bad faith against the insurer, a stipulated judgment entered before trial, to which the insurer is not a party, cannot be enforced against the insurer. Old Republic, 180 P.3d 432-34 (emphasis added; internal citations omitted). 19 ¶35 The California Supreme Court has likewise disapproved of stipulated judgments as a measure of an insured’s damages when the insurer has provided a defense for the insured. In Hamilton v. Maryland Cas. Co., 41 P.3d 128, 131 (Cal. 2002), the insurer defended its insureds but refused the claimants’ demand for the $1 million policy limits, instead countering with a $150,000 offer to settle. The insureds and claimants subsequently entered into a stipulated judgment of $3 million; the insureds assigned any breach of contract claims they might have against the insurer, and, in return, the claimants agreed not to execute the $3 million judgment against the insureds. Hamilton, 41 P.3d at 131. The claimants then sued the insurer for breach of contract arising from its failure to accept the claimants’ settlement offers, asserting that the $3 million stipulated judgment was the appropriate measure of damages for the breach. Hamilton, 41 P.3d at 131-32. The California Supreme Court disagreed, holding: Where, as here, the insured, without the insurer’s agreement, stipulates to a judgment against it in excess of both the policy limits and the previously rejected settlement offer, and the stipulated judgment is coupled with a covenant not to execute, the agreed judgment cannot fairly be attributed to the insurer’s conduct, even if the insurer’s refusal to settle within the policy limits was unreasonable. Hamilton, 41 P.3d at 137. Importantly, the Hamilton Court distinguished cases where the insurer had failed to defend from cases where the insurer did defend, and reasoned that a stipulated judgment was presumptively enforceable as the measure of damages only in the former instance, because the non-defending insurer has left its insured on its own to challenge liability, and the insurer should not be able to “reach back” and interject itself into a controversy it has sidestepped to “void a deal the insured has entered to eliminate 20 personal liability.” Hamilton, 41 P.3d at 135 (citation and quotation marks omitted). Conversely, however, when “the insurer has accepted defense of the claim, and might have prevailed at trial had the insured and the claimants not settled without the insurer’s participation, no presumption of the insured’s liability generally arises from the fact or amount of settlement.” Hamilton, 41 P.3d at 135 (emphasis in original). ¶36 These cases are representative of what occurred in the case before us, and we find their reasoning persuasive. When an insurer defends the insured against a claim, and challenges coverage in a separate declaratory action, a stipulated settlement that relieves the insured of any financial stake in the outcome of the case does not represent the damages “within the contemplation of the parties when they entered into the [insurance] contract, and such as might naturally be expected to result from its violation.” Crumleys, ¶ 64 (internal quotation omitted). The insured has little incentive to minimize the settlement amount in negotiating a stipulated judgment. Nor is there any assurance that a stipulated judgment represents a proper calculation of the actual damages incurred by way of the breach. These concerns are clearly evident in the case before us. First, under the settlement, Vail has escaped all risk by simply assigning her insurance dispute with State Farm to Frank. The size of the judgment was essentially irrelevant to her. Then, the stipulated judgment does not, by its own terms, represent the correct measure of damages for the denial of Alicia’s claims—the only denial forming State Farm’s breach. As explained above, the settlement agreement provides that $1.7 million of the $2.7 million total represents the economic loss to Heath’s Estate. Yet, State Farm did not err 21 in any way in adjusting and settling the claims made by Heath’s Estate. State Farm tendered the full $50,000 Each Person coverage limit to Heath’s Estate and did not breach its duty to indemnify Vail for Heath’s claims. Thus, the bulk of the face amount of the stipulated judgment does not represent any measure of damages resulting from State Farm’s breach of its duty to indemnify Vail for Alicia’s claims. Alicia would not be entitled to the $1.7 million in damages Heath’s Estate suffered even had the case proceeded to trial. The economic loss the decedent’s estate suffers, as measured by the “present value of [the decedent’s] reasonable earnings during his life expectancy,” is “personal to the decedent” and does not “include any damages suffered by the decedent’s widow, children, or other heirs.” Swanson v. Champion Intl. Corp., 197 Mont. 509, 515, 646 P.2d 1166, 1169 (1982) (emphasis added; citations omitted). Alicia’s claims, on the other hand, were to compensate her personal loss of her father—loss of support, loss of companionship, loss of established course of life, etc. These wrongful-death claims are measured, not by the economic loss to the decedent’s estate, but, rather, the emotional, physical, and monetary support the decedent would have provided the heir. Swanson, 197 Mont. at 517-18, 646 P.2d at 1170-71. ¶37 The rule articulated by these jurisdictions is even more appropriate for Montana, given that State Farm pursued the action we have repeatedly admonished insurers to take if there is a coverage question—defend the insured and file a declaratory judgment action to discern coverage. See e.g. Palmer by Diacon v. Farmers Ins. Exch., 261 Mont. 91, 102-03, 861 P.2d 895, 902 (1993); see also St. Paul Fire & Marine Ins. Co. v. Cumiskey, 22 204 Mont. 350, 358, 665 P.2d 223, 227 (1983) (“an insurer may use this procedural device in order to obtain a determination of the validity, continuance, or coverage of an insurance policy; a determination of the extent of liability; or a determination of the insurer’s duties under the policy.”) (emphasis added); Staples, ¶ 28 (“If FUMIC wished to dispute coverage, it could have defended Staples under a reservation of rights and later sought judicial determination through a declaratory judgment action to determine whether coverage existed.”); Brewer, ¶ 30; see also Nielsen, 442 F. Supp. 2d at 977. This practice is also urged by leading commentators. See Appleman, Insurance Law & Practice vol. 20, § 11354 at 332-33 (West Publg. 1980) (“The insurer thus has a right to test [through a declaratory judgment action] its liability to pay judgments which may be recovered against the insured, or to test its liability for penalties and interest.”) (collecting cases); Allan D. Windt, Insurance Claims & Disputes: Representation of Insurance Companies & Insureds vol. 2, § 8.3 at 8-5 to 8-6 (6th ed., Thomson Reuters 2013) (noting it is appropriate for insurer to institute declaratory action after insured suffers loss so insurer can “determine whether the company is obligated to pay all or any part of the judgment or loss.”); Couch on Insurance vol. 16, § 232:47 (Lee R. Russ & Thomas F. Segalla, eds., 3d ed., Thomson/West 2005) (“In essence, where language in the insurance contract is thought to need clarification in order to determine the legal positions of the parties, declaratory action is appropriate.”). Lord, Williston on Contracts vol. 11, § 30:2 at 36-37 (West 2012) (“A frequently employed means of demonstrating in an authoritative manner the intent of the parties to a contract, either for the purpose of establishing rights or the 23 nonexistence of liabilities, is the petition for declaratory judgment. Insurance companies have often used this procedure in seeking a declaration from the courts that because of some exclusionary provision or false representation by the insured, they are not liable on a given policy which they have issued.”).4 The rule also recognizes the distinctions between the duty to defend and the duty to indemnify. The broader duty to defend requires an insurer to act immediately to defend the insured from a claim. The insurer must do so on the basis of mere allegations that could implicate coverage, if proven. Schwan, ¶ 15. On the other hand, the narrower duty to indemnify typically involves complicated interpretational questions that often require legal opinions and separate declaratory actions to determine. ¶38 A rule to the contrary would allow insureds to unilaterally inflate policy limits anytime an insurer tests coverage through a declaratory action. As State Farm notes, “[b]asically, Frank’s and Vail’s position is that all an insured has to do is file suit, enter a confession of judgment, obtain a covenant not to execute, and the insurer becomes liable for the confessed judgment, regardless of whether the insurer pays limits as asked or has a reasonable basis in fact or law for disputing the amount of the claim and defending the underlying action.” Indeed, while Frank was willing to settle all claims against Vail for $100,000 if State Farm would foot the bill, the demand ballooned to $2.6 million when Vail’s financial responsibility was removed from the equation. 4 Alicia’s and Heath’s claims did not implicate State Farm’s duty to pay, in advance of final settlement, actual medical payments and lost wages of a tort victim when “liability is reasonably clear.” Ridley v. Guar. Natl. Ins. Co., 286 Mont. 325, 327, 951 P.2d 987, 988 (1997) (med pay); DuBray v. Farmers Ins. Exch., 2001 MT 251, ¶ 15, 307 Mont. 134, 36 P.3d 897 (lost wages). 24 ¶39 Vail points to several cases which, when closely analyzed, do not address the issue here. In Ariz. Prop. & Cas. Ins. Guar. Fund v. Helme, 735 P.2d 451, 460 (Ariz. 1987), the Arizona Supreme Court held that doctors sued for malpractice did not breach their duty to cooperate with their insurer’s defense of them by entering a settlement with the claimants after the insurer breached its duty to indemnify. The insurer erroneously interpreted the coverage available as limited to a per occurrence limit of $99,900. Helme, 735 P.2d at 454, 457. In a declaratory action, a court determined that there had been two occurrences. Helme, 735 P.2d at 455. Meanwhile, the doctors settled with the claimants for $350,000 in exchange for the claimants’ covenant not to execute against the doctors. Helme, 735 P.2d at 455. The insurer sought a declaration that it was not obligated to pay the survivors on the second claim—not the total settlement amount of $350,000— because the doctors had settled without the insurer’s permission. Helme, 735 P.2d at 458. The Court disagreed, holding that the insurer’s breach of its duty to indemnify under the policy permitted the insured to take “reasonable steps” to save himself from the financial disaster of an excess judgment, including settling with the claimants. Helme, 735 P.2d at 460. However, the Court specifically noted that it was not determining whether that settlement would be binding on the insurer: “The parties have not argued, and this opinion does not reach, any issue regarding the extent to which the stipulations which form part of the settlement agreement are binding upon the insurer.” Helme, 735 P.2d at 460. Put another way, the Arizona Court did not hold that the insurer was bound to pay the stipulated judgment, but rather concluded the insurer was required to pay the 25 appropriate policy limits for two occurrences, even though the insureds had settled without its permission. ¶40 Vail also cites Miller v. Shugart, 316 N.W.2d 729 (Minn. 1982). There, while the insurer was litigating whether it had coverage, the insured stipulated to a $100,000 judgment—twice the $50,000 limit of the policy—with the claimant in exchange for a covenant not to execute against him. Miller, 316 N.W.2d at 731-32. After the Court had determined that coverage existed, the claimant sought to enforce only $50,000 of the stipulated judgment, which represented the policy limits. The insurer countered that it owed nothing because the insured had breached the cooperation clause of the policy. Miller, 316 N.W.2d at 732. The Minnesota Supreme Court, like the Arizona Supreme Court in Helme, concluded that because the insurer had failed to indemnify its insured, the insured did not breach his duty to cooperate by entering a settlement to protect his personal finances: If, as here, the insureds are offered a settlement that effectively relieves them of any personal liability, at a time when their insurance coverage is in doubt, surely it cannot be said that it is not in their best interest to accept the offer. Nor, do we think, can the insurer who is disputing coverage compel the insureds to forego a settlement which is in their best interests. Miller, 316 N.W.2d at 733-34. While the Court ultimately concluded that the stipulated judgment was enforceable upon the insurer, it was only enforceable up to the policy limits: “Nor is there anything wrong with the insureds’ confessing judgment in an amount double the policy limits, since plaintiff, in her motion for summary judgment, has recognized [the insurer’s] coverage is only $50,000 and seeks to recover no more than 26 that sum from [the insurer].” Miller, 316 N.W.2d at 734. In sum, the Minnesota Supreme Court never approved binding the insurer to a stipulated judgment in excess of policy limits.5 ¶41 The other cases Vail cites are also unavailing because they are either cases involving a breach of the duty to defend and the court refused to enforce the stipulated judgment on the insurer, Great Divide Ins. Co. v. Carpenter ex rel. Reed, 79 P.3d 599 (Alaska 2003) or, like the cases above, hold that the insured did not breach its duty to cooperate, and therefore is entitled to be indemnified for the settlement up to policy limits. See Presrite Corp. v. Commercial Union Ins. Co., 680 N.E.2d 216, 217, 220-21 (Ohio App. 8th Dist. 1996) (insurer required to pay settlement the “policy afforded” because insured did not breach duty to cooperate when it settled lawsuit after insurer denied coverage thereby exposing insured to entire amount of potential damage award).6 In sum, none of the cases urged by Vail support the holding she asks for today: a 5 Moreover, three years later the Minnesota Supreme Court limited Miller’s holding to situations where the insurer had denied all coverage under the policy. Buysse v. Baumann-Furrie & Co., 448 N.W.2d 865, 873-74 (Minn. 1989). There, because the insurer was only arguing over the extent of coverage to a claim—whether the insured accounting firm was entitled to only the $500,000 “each error” limit or whether it was entitled to the $1,000,000 “per year” limit—the insured’s stipulated judgment with the claimants was not binding on the insurer. Buysse, 448 N.W.2d at 875. The Court’s decision was founded on the practical point that, without such a rule, insureds could unilaterally bind insurers to settlements in every case where coverage was contested. Buysse, 448 N.W.2d at 872. 6 Amicus MTLA and Vail argue that Peris v. Safeco Ins. Co., 276 Mont. 486, 493-94, 916 P.2d 780, 785 (1996) controls here. However, like the other cases cited, Peris does not stand for the proposition that an insurer who defends the insured while contesting coverage is bound to a stipulated judgment if it is later determined the insurer was wrong on the coverage issue. Instead, like Helme and Miller, Peris merely holds that the insured is permitted, without voiding the insurance contract via its duty to cooperate with the insurer, to enter settlement. 27 stipulated judgment in excess of policy limits coupled with a covenant not to execute against the insured is the proper measure of damages when an insurer is defending its insured but contesting coverage. ¶42 As noted above, an insurer’s wrongful refusal to indemnify entitles its insured to recover consequential damages. Crumleys, ¶ 64. In Crumleys, we awarded the insured’s assignee the “administrative costs” incurred when the insurer denied coverage to extract an underground storage tank and remediate the area for leaking gasoline. Crumleys, ¶¶ 70-71. We reasoned that the property liability policy contemplated management and oversight costs of pollutant cleanup and that the administrative costs incurred in coordinating and managing the extraction and remediation were the natural consequence of the insurer’s failure to step in and begin that cleanup. Crumleys, ¶¶ 70-71. An insurer is also “liable for attorney fees when the insurer breaches its duty to indemnify.” Brewer, ¶ 36. Other courts have permitted insureds to recover lost profits as consequential damages from the wrongful denial or delay of coverage. See Lawrence v. Will Darrah & Assocs., Inc., 516 N.W.2d 43 (Mich. 1994) (permitting insured to recover payment under an insurance policy for a stolen truck and for lost profits arising from insurer’s breach of duty to indemnify); Bettius & Sanderson, P.C. v. Natl. Union Fire Ins. Co., 839 F.2d 1009 (4th Cir. 1988) (professional corporation entitled to lost profits based on insurer’s unjustifiable delay in settling third-party claim); Salamey v. Aetna Cas. & Sur. Co., 741 F.2d 874 (6th Cir. 1984) (convenience-store owner permitted to recover lost profits resulting from insurer’s wrongful refusal to pay benefits for fire loss); accord Windt, 28 Insurance Claims & Disputes at § 6:39 (collecting cases which have held that the proper measure of damages arising from insurer’s “breach of a contract to pay money” includes consequential damages but not listing stipulated judgments as a measure of those consequential damages). We offer these cases merely as examples of cases employing the principle that consequential damages are “those damages ‘within the contemplation of the parties when they entered into the contract, and such as might naturally be expected to result from its violation.’” Crumleys, ¶ 64 (quoting Martel Constr., 249 Mont. at 511, 817 P.2d at 679). ¶43 The District Court correctly refused to require State Farm to pay the stipulated judgment. However, we remand to the District Court to determine, in the first instance, the amount of damages, if any, Vail incurred because of State Farm’s breach of its duty to indemnify. ¶44 2. Did the District Court err in granting summary judgment to State Farm on the common-law bad faith and breach of the covenant of good faith and fair dealing claims? ¶45 In his capacity as assignee of Vail’s claims, Frank asserts that State Farm breached its duty of “good faith and fair dealing” to Vail by refusing to accept the reasonable offer from Frank to settle Alicia’s claims for $50,000 (first party claim). On behalf of Heath’s Estate and Alicia, he asserts that State Farm committed bad faith when it failed to settle for this amount (third party claims). The District Court dismissed these claims on the ground that State Farm had a reasonable basis in law to contest coverage, which it reasoned was a complete defense to these causes of action. 29 ¶46 In Jessen v. O’Daniel, 210 F. Supp. 317 (D. Mont. 1962), Judge Jameson provided an early explanation of the origins of an insurer’s duty to settle. Although insurance policies do not contain explicit contractual provisions requiring an insurer to accept reasonable settlement offers within the policy limits, a duty of “good faith” consideration of settlement offers arises by implication from the policy’s delegation to the insurer the authority to settle third-party claims. Jessen, 210 F. Supp. at 325-26. Judge Jameson pointed out that an insurer’s “[e]rror in judgment in not settling a case within the policy limits is not in itself sufficient to impose liability upon the insurer for any recovery in excess of the limits; nor is the mere fact that the insurer was unsuccessful in the trial of the case sufficient to show that the defense was not made in good faith.” Jessen, 210 F. Supp. at 325. Rather, whether an insurer acted in “good faith” had to be made on a case-by-case basis. Jessen, 210 F. Supp. at 326. ¶47 In Fowler v. State Farm Mut. Aut. Ins. Co., this Court adopted the Jessen formulation of the duty to settle, and rejected the plaintiff’s request to adopt a strict-liability remedy for an insurer’s failure to settle a third-party claim that had led to an excess judgment. 153 Mont. 74, 78-80, 454 P.2d 76, 78-79 (1969) (“To the extent that [ ] Crisci [v. Security Ins. Co. of New Haven, 426 P.2d 173 (Cal. 1967)] is viewed as abandoning any requirement of proof of bad faith, we would reject it”); accord Thompson v. State Farm Mut. Aut. Ins. Co., 161 Mont. 207, 215, 505 P.2d 423, 427 (1973) overruled on other grounds by Watters v. Guar. Natl. Ins. Co., 2000 MT 150, ¶ 63, 300 Mont. 91, 3 P.3d 626. In Gibson v. Western Fire Ins. Co., 210 Mont. 267, 274, 682 P.2d 30 725, 730 (1984), we held “[i]t is now fairly established in American jurisprudence that an insurer which in bad faith fails to settle a bona fide third party liability claim against its insured, within policy coverage limits, takes the risk of a judgment by the trier of fact in excess of the coverage limits.” (Emphasis added.) We subsequently addressed the bad faith issue and held that an insurer does not act in bad faith in rejecting a settlement if it had a reasonable basis in law or fact to contest the claim or the amount of the claim. Safeco Ins. Co. v. Ellinghouse, 223 Mont. 239, 248, 725 P.2d 217, 223 (1986) (“It is generally held that an insurer is entitled to challenge a claim on the basis of debatable law or facts and will not be liable for the bad faith or punitive damages for denying coverage if its position is not wholly unreasonable.”); Palmer by Diacon, 261 Mont. at 102, 861 P.2d at 901 (“Under Montana common law, an insurer cannot be held liable for bad faith in denying a claim if the insurer had a reasonable basis for contesting the claim or the amount of the claim.”); White v. State ex rel. Mont. St. Fund, 2013 MT 187, ¶ 24, 371 Mont. 1, 305 P.3d 795 (same) (quoting Palmer by Diacon). We have never held an insurer liable in bad faith for failing to settle within policy limits when it had a reasonable basis in law or fact for contesting coverage. Although Freyers request that we deviate from our well-settled precedent on this issue, we decline. ¶48 “To determine whether an insurer had ‘a reasonable basis in law . . . for contesting the claim or the amount of the claim,’ it is necessary first to survey the legal landscape as it existed during the relevant time period.” Redies v. Attys. Liab. Protec. Socy., 2007 MT 9, ¶ 29, 335 Mont. 233, 150 P.3d 930 (quoting § 33-18-242(5), MCA). In Redies, ¶¶ 30- 31 35, we reconciled our previous cases analyzing whether reasonableness is a question of fact for the jury or a question of law for the court. We concluded that although the determination of whether a party acted reasonably was typically a question of fact for the jury, whether an insurer was reasonable in its interpretation of legal precedent in its coverage determination was a question of law for the court: [W]e now clarify that while the assessment of reasonableness generally is within the province of the jury (or the court acting as fact-finder), reasonableness is a question of law for the court to determine when it depends entirely on interpreting relevant legal precedents and evaluating the insurer’s proffered defense under those precedents. This distinction not only reflects the principle that the jury does not decide or determine the law, but also honors the relevant language of the [UTPA’s reasonable basis in law defense]. Redies, ¶ 35 (emphasis added; citations omitted). Then, the court must assess the insurer’s proffered defense in light of that legal landscape. The reviewing court is not to ask whether it “agree[s] with the plaintiff’s theories of liability in the underlying suit but, rather, whether the insurer’s grounds for contesting those theories were reasonable under the existing law.” Redies, ¶ 38. In the absence of caselaw on point, “the determinative question” is whether the law in effect at the time, caselaw or statutory, provided sufficient guidance to signal to a reasonable insurer that its grounds for denying the claim were not meritorious. See Redies, ¶ 43 (“Accordingly, the determinative question is whether this progression in our case law toward holding an attorney liable to certain nonclients had, by the time [the plaintiff] stated her claims against [her lawyer], reached the point at which [the insurer’s] assertion that [it] owed her no duty no longer constituted ‘a reasonable basis in law’ for contesting her claim.”). 32 ¶49 State Farm contested coverage for Alicia’s derivative claims because it believed the “Each Person” limit in the policy unambiguously limited coverage to $50,000 for all claims related to Heath’s death. Freyer I, ¶¶ 4, 7. State Farm asked its in-house counsel, Ridgeway, for an opinion about whether the policy covered Alicia’s derivative claims. Ridgeway advised that courts interpreting the clause had concluded that derivative claims were subject to the same each person limit as the survivorship claim. See McKinney v. Allstate Ins. Co., 722 N.E.2d 1125 (Ill. 1999) (“per person” limit of liability clause “clearly limited” all claims arising out of the decedent’s death to a single per person limit); Geico Gen. Ins. Co. v. Arnold, 730 So. 2d 782 (Fla. Dist. App. 3d Dist. 1999) (“each person” limit of liability clause not ambiguous and limited wrongful death and survival claims); Cradoct v. Employers Cas. Co., 733 S.W.2d 301 (Tex. App. El Paso 1987) (“per person” limitation applied to person injured in accident, not other persons suffering loss because of that injury). Thus, State Farm took the position that, once it paid the $50,000 Each Person limit to Heath’s Estate, it had fulfilled its contractual obligation under the policy for claims related to his death. Freyer I, ¶ 11. ¶50 The state of Montana precedent, discussed below, and this “legal landscape” across numerous jurisdictions certainly gave credence to State Farm’s decision to contest coverage for Alicia’s derivative claims. However, that did not end the inquiry, as State Farm was also required to analyze the claim in light of the specific language of the Limit of Liability clause in Vail’s policy, which read: 33 The amount of bodily injury liability coverage is shown on the declarations page under “Limits of Liability–Coverage A-Bodily Injury [-W-], Each Person, Each Accident.” Under “Each Person” is the amount of coverage for all damages due to bodily injury to one person. “Bodily injury to one person” includes all injury and damages to other persons, including emotional distress, sustained by such other persons who do not sustain bodily injury. (Emphasis added.) State Farm’s position was that the first emphasized sentence limited the amount of coverage for any and all claims arising from the bodily injury to one person to the $50,000 “Each Person” limit. Therefore, because Alicia’s derivative claims stemmed from her father’s death, and not her own bodily injury, those claims were subject to the same $50,000 limit as Heath’s Estate’s claims. As to the second sentence, State Farm read it as clarifying that emotional distress claims were likewise subject to the same $50,000 “Each Person” limit. ¶51 Montana precedent that came closest to addressing this issue was Bain v. Gleason, 223 Mont. 442, 726 P.2d 1153 (1986) and Treichel v. State Farm Mut. Auto. Ins. Co., 280 Mont. 443, 930 P.2d 661 (1997). In Bain, the plaintiff’s wife was injured by a negligent driver who was insured under a $25,000 per person and $50,000 per accident policy. Bain, 223 Mont. at 444, 726 P.2d at 1154. The insurer paid the $25,000 per person limit, arguing that it constituted the “full extent of and the limit” of coverage under its policy. Bain, 223 Mont. at 445, 726 P.2d at 1154. The policy limited the insurer’s liability applicable to “each person” to $25,000 “for all damages arising out of bodily injury sustained by one person in any one occurrence.” Bain, 223 Mont. at 447, 726 P.2d at 1156. Plaintiff-husband brought a loss of consortium cause of action seeking to recover 34 the additional $25,000 under the per accident limit. We rejected the plaintiff’s claim because it was “plain under our statutes, and under the policy provisions here that the ‘each person’ limitation refers to all damages imposed by law by whomever suffered resulting from one bodily injury and one accident; the ‘each accident’ limitation applies when two or more persons suffer bodily injury in the same accident.” Bain, 223 Mont. at 451, 726 P.2d at 1158. Bain did not specifically answer the question in Freyer I because there was only one person injured in the accident. However, its holding, especially when coupled with our analysis of the statutory minimum mandatory limits, suggested that the “Each Person” policy language restricting coverage to $25,000 “for all damages arising out of bodily injury sustained by one person in any one occurrence” meant that no matter how many others were injured in the accident, they could not use their own bodily injury to obtain additional “Each Person” coverage for derivative damages stemming from another’s bodily injury. ¶52 In Treichel, we analyzed another automobile liability policy that limited coverage to $25,000 per person and $50,000 per accident. Treichel, 280 Mont. at 445, 930 P.2d at 663. The operative provision read: “Under ‘Each person’ is the amount of coverage for all damages due to bodily injury to one person.” Treichel, 280 Mont. at 445, 930 P.2d at 663. The plaintiff was riding her bicycle some distance behind her husband when she witnessed a motorist, insured with the above-described policy, strike her husband and throw him into the air; she also saw the “severe head wound [the husband] received when his head hit the vehicle’s windshield before he fell to the pavement.” Treichel, 280 Mont. 35 at 444-45, 930 P.2d at 662. The insurer, State Farm, paid the husband’s estate the $25,000 per person coverage, but denied paying the plaintiff the remaining $25,000 because her claim was similar to the claim for loss of consortium presented in Bain. Treichel, 280 Mont. at 448, 930 P.2d at 664. We disagreed with State Farm, distinguishing Bain because the loss of consortium claims pursued by the husband there were materially different from the “on the scene, direct physical and emotional impact” the wife suffered in personally watching her husband’s grisly death in Treichel: As the District Court pointed out in the case before us “it is this personal, on the scene, direct physical and emotional impact which distinguishes emotional distress claims under Sacco from loss of consortium claims.” [The plaintiff] was a separate person who received an independent and direct injury at the accident scene. Treichel, 280 Mont. at 449, 930 P.2d at 665. Treichel’s holding suggested that, unlike derivative claims that were not considered “bodily injury” under Bain, emotional distress claims would be considered stand-alone bodily injury claims because they stemmed from the personal trauma experienced by an on-the-scene witnessing of bodily injury to another. State Farm then decided that the “Each Person” policy provisions of the kind at issue in Bain and Treichel needed to be revised. State Farm thereafter modified the language of its “Each Person” limit by adding the sentence at issue in Freyer I: “Bodily injury to one person includes all injury and damages to other persons, including emotional distress, sustained by such other persons who do not sustain bodily injury.”7 7 The record contains communications between State Farm and the State Auditor’s Office. State Farm advised the Auditor’s Office that it was amending its policy “in response to the court case of Treichel vs. State Farm.” 36 Consequently, the “legal landscape” for State Farm’s interpretation of the policy language as applied to derivative claims was even more favorable than the landscape that was sufficient to shield the insurer in Redies. There, despite noting a “progression in our case law” away from the insurer’s coverage position, Redies, ¶ 43, we nonetheless agreed with the insurer that at the time of the coverage decision, the law was not reasonably clear. Redies, ¶ 57. Here, although Bain did not involve a situation where two people suffered bodily injury, it appeared to hold that derivative claims were subject to the “Each Person” limit of the deceased person. Treichel appeared to nuance Bain by holding that emotional distress claims arising from on-the-scene traumatic experiences would also constitute a bodily injury of the observing person. Then, State Farm took action in response to Treichel by supplementing the language of the Limit of Liability clause—which, according to Bain, already provided that derivative claims were subject to the deceased person’s “Each Person” limit—with an additional sentence that specified that emotional distress claims were likewise subject to the “Each Person” limits of the deceased person. While this drafting fix failed to accomplish its intended purpose in Freyer I, ¶¶ 12-14 (interpreting by negative inference the clause’s specific mention of “people who do not sustain bodily injury” to mean that derivative claims of those who 37 did suffer bodily injury were not subject to “Each Person” limits of the deceased person), its interpretation, while ultimately wrong, was clearly not unreasonable.8 ¶53 Because under “Montana common law, an insurer cannot be held liable for bad faith in denying a claim if the insurer had a reasonable basis for contesting the claim,” State Farm did not breach the covenant of good faith and fair dealing with Vail, nor commit bad faith by failing to settle with Frank. Ellinghouse, 223 Mont. at 248, 725 P.2d at 223; Palmer by Diacon, 261 Mont. at 102, 861 P.2d at 901-02; White, ¶ 24. The District Court properly granted State Farm summary judgment on these claims.9 8 The reasonableness of State Farm’s position is further evidenced by the fact that Montana’s federal district court had agreed with it. Prior to Freyer I, Hon. Richard Cebull held that even in a case involving bodily injury to two passengers, the “Limits of Liability” clause prohibited an injured person from recovering derivative claims under their own “Each Person” policy limits. See Bowen I. There, like here, two people suffered bodily injury in an accident. A wife suffered “abrasions to her face, a broken right arm, glass imbedded in her forehead, chest contusions, and post-traumatic stress disorder.” The husband died from his injuries. Bowen I at 1. The vehicle was insured for policy limits of $100,000 for “Each Person” and $300,000 for “Each Accident.” After State Farm paid policy limits to the husband’s estate, the wife sought derivative damages for her husband’s death. Bowen I at 1-2. State Farm filed a declaratory judgment action, “seeking a judicial determination of whether the ‘Each Person’ limit contained in the Bowens’ policies applies when there are survival and wrongful death claims arising out of the injury and death of a single insured.” Bowen I at 2. Judge Cebull analyzed Bain and Treichel and concluded that the key question was “whether wrongful death and survival claims are more like the loss of consortium claims encountered in Bain or the emotional distress claims in Treichel.” Bowen I at 5. Judge Cebull concluded that they were more akin to Bain because of the fundamental difference between emotional distress claims and wrongful death/survival claims. Bowen I at 8, aff’d, 247 Fed. Appx. 901 (9th Cir. 2007). 9 Vail briefly argues that pursuant to our decision in Freyer I, the law-of-the-case doctrine and collateral estoppel prevent State Farm from arguing it had a reasonable basis in law to challenge coverage. To the extent Vail is arguing that because Freyer I turned on the Court’s interpretation of policy language, instead of case law, her argument is unavailing because the “interpretation of an insurance contract presents a question of law.” Modroo, ¶ 23. Collateral estoppel is likewise inapplicable because Freyer I did not decide that State Farm’s interpretation was unreasonable. Thus, State Farm is not reopening an issue already decided by this Court. See Baltrusch v. Baltrusch, 2006 MT 51, ¶ 15, 331 Mont. 281, 130 P.3d 1267. 38 ¶54 The Dissent would reverse and remand for trial on the basis of Shilhanek v. D-2 Trucking, Inc., 2003 MT 122, 315 Mont. 519, 70 P.3d 721, citing an insurer’s obligation to attempt to settle within policy limits when “liability is reasonably clear,” and the possibility that a “reasonable jury could conclude . . . State Farm breached its obligation to attempt settlement within policy limits, thus placing the insured in jeopardy.” Dissent, ¶ 68. However, this case is not a Shilhanek situation, because Shilhanek did not involve a coverage issue. Without coverage, a duty to settle does not arise, even if the facts of the accident indicate that the insured’s liability, i.e., her negligence, is reasonably clear. See Mowry v. Badger St. Mut. Cas. Co., 385 N.W.2d 171, 178 (Wis. 1986) (the insurer’s “duty to settle is dependent upon whether the policy extends coverage for the circumstances underlying the harm sustained.”). Here, State Farm contested, not whether Vail’s liability for the accident was reasonably clear, but whether there was coverage at all for the claim. The Dissent notes there was no question about Vail’s liability for the accident. Had there had been no coverage issues, and State Farm had still refused to budge from its $5,000 offer, Shilhanek would have been implicated and this would be a different case. ¶55 The Dissent cites Dean v. Austin Mut. Ins. Co., 263 Mont. 386, 869 P.2d 256 (1994), for the proposition that reasonableness is a jury question. See Dissent, ¶ 71. Oddly, the Dissent does not discuss Redies, in which we expressly concluded that the general rule stated in Dean did not apply when the insurer raises a “reasonable basis in law” defense because questions of law are resolved by the courts, reflecting “the principle 39 that the jury does not decide or determine the law.” Redies, ¶ 35; see also White, ¶ 24. While the issue did go to the jury in Palmer by Diacon, coverage there was denied because of factual disputes about the underlying accident that required resolution by the trier of fact. Palmer by Diacon, 261 Mont. at 102, 861 P.2d at 902 (“In this case, Farmers contested liability, contending that Palmer’s accident was not caused by another motorist, and therefore, Palmer’s uninsured motorist policy did not cover the accident.”). Ellinghouse is likewise consistent with our analysis. There, we held it was error for Ellinghouse to introduce evidence and argue to the jury on the question of whether the insurer had a reasonable basis in law defense, but concluded the error was harmless in light of other circumstances. Ellinghouse, 223 Mont. at 251, 725 P.2d at 224-25. None of our cases declare this issue of law to be a jury question, and Redies clearly resolved any doubt on the issue. Factual disputes affecting coverage are certainly decided by the trier of fact, and this opinion does not change that. Here, there were no such disputes of material fact.10 10 Of note, the Dissent relies heavily on the fact that State Farm revised its policy language after this claim was made to urge reversal. See Dissent, ¶¶ 67, 69. However, there is no indication in the record that State Farm’s subsequent language revision, which was applicable prospectively to future claims, was done as a result of this claim. Courts must be cautious about permitting evidence of post-claim actions to assess the reasonableness of claim decisions when no relation to the claim has been demonstrated. To do otherwise would prompt speculation and raise questions of relevance and prejudice. The question turns on an analysis of “the legal landscape as it existed during the relevant time period.” Redies, ¶ 29. In any event, State Farm’s post-claim actions here did not change the clear authority that existed in favor of State Farm’s interpretation of its policy at the time of the claim, and do not raise a material fact prohibiting summary judgment on this issue. 40 ¶56 3. Did the District Court err in granting summary judgment to State Farm on the Unfair Trade Practices Act claims? ¶57 Frank argues that the District Court erred by dismissing the UTPA claims because the “reasonable basis in law” defense does not apply to the particular provision of the UTPA he is claiming State Farm violated—§ 33-18-201(1), MCA. State Farm responds that the defense does apply to that provision of the UTPA, and the District Court correctly dismissed the claims. ¶58 Montana’s Unfair Trade Practices Act prohibits insurers from practicing certain claims-settlement practices. Subsection (1) of § 33-18-201, MCA, makes it illegal for an insurer to “misrepresent . . . insurance policy provisions relating to coverages at issue[.]” “An insured or a third-party claimant has an independent cause of action against an insurer for actual damages” if the insurer violates subsection (1) and “misrepresents” the insurance policy. See § 33-18-242(1), MCA. However, an “insurer may not be held liable under this section if the insurer had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.” Section 33-18- 242(5), MCA; Lorang, ¶ 116 (“Before analyzing these claims, we note that our statutory law provides the insurer with an affirmative defense whereby it may avoid liability in a UTPA action if it ‘had a reasonable basis in law or in fact for contesting the claim or the amount of the claim, whichever is in issue.’”) (citing Redies, ¶ 28, and quoting § 33-18- 242(5), MCA). 41 ¶59 Based on the plain language of § 33-18-242(5), MCA, State Farm cannot be held liable for violating the UTPA if it had a “reasonable basis in law” for contesting the claim. As noted above, we conclude that State Farm indeed had a reasonable basis in law to interpret its Limit of Liability clause in the manner it did. Therefore, the District Court did not err in granting summary judgment to State Farm on Frank’s and Vail’s UTPA claims. ¶60 4. Did the District Court err by concluding State Farm waived its statute of limitations affirmative defenses? ¶61 On cross appeal, State Farm challenges the District Court’s ruling that it waived the limitation defense. Citing M. R. Civ. P. 8(c), the District Court rejected State Farm’s statute of limitations defense because State Farm failed to raise that affirmative defense in its answer to Frank’s and Vail’s 2008 counterclaims to State Farm’s coverage action. State Farm asserts error, arguing that Frank’s and Vail’s 2011 amended counterclaims “superseded any previously filed counterclaims” which permitted State Farm to raise the statute of limitations defense anew. ¶62 We decline to reach this issue. In the District Court and on appeal, State Farm asserted the statute of limitations defenses for common-law bad faith, covenant of good faith and fair dealing, and the UTPA claims, but did not assert the defense for the breach of contract claim. Because we have held in State Farm’s favor on the claims for which State Farm asserted the defense, we need not address the issue. See Caldwell v. Sabo, 42 2013 MT 240, ¶ 5, 371 Mont. 328, 308 P.3d 81 (declining to address second issue because first issue was dispositive). ¶63 Affirmed in part, reversed in part, and remanded for further proceedings consistent therewith. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ BRIAN MORRIS Justice Patricia O. Cotter concurs and dissents. ¶64 I concur with the Court’s disposition of Issue One. I would reverse and remand Issues Two and Three for trial. ¶65 Issue Two presents the question of whether the District Court erred in granting summary judgment to State Farm on the common-law bad faith and breach of the covenant of good faith and fair dealing claims presented by Frank. Frank asserts two claims. In his first-party claim, in which he stands in the shoes of Vail pursuant to assignment, Frank argues that State Farm breached its duty of good faith and fair dealing to Vail, by refusing to accept Frank’s reasonable demand to settle Alicia’s claims against Vail for the additional $50,000 available under the policy. He presents a similar third-party claim on behalf of Heath’s estate and Alicia. The Court 43 agrees with the District Court’s conclusion that summary judgment was appropriate because State Farm had a reasonable basis in law to contest coverage. ¶66 Frank points out that by refusing to accept his demand, and by offering only $5,000 and refusing to further negotiate, State Farm put Vail in jeopardy of having an excess judgment entered against her. Vail asked State Farm to defend her in the underlying liability suit and indemnify her without limits, both of which State Farm refused to do. In fact, in a letter written to Vail in 2008, State Farm not only refused to indemnify her, but also indicated it would not pay for the defense of the declaratory judgment action that it had filed against her. Frank further points out that it was almost three years after he made a demand for the limits of liability upon State Farm that the company even began considering the filing of a declaratory judgment action. ¶67 In addition to the foregoing, it bears noting that in 2006, a year before it filed its declaratory action defending its limits of liability clause in the Freyer I litigation, State Farm amended its automobile policies in Montana to remove the key phrase in the limits of liability clause that reads “sustained by such other persons who do not sustain bodily injury.” This fact was not disclosed to Frank or Vail at all until December 2011 and only then because State Farm was asked in discovery to produce the text of the “Limits of Liability” clauses it had used both before and after the issuance of Freyer’s policy. ¶68 The Court errs in its analysis of Issue Two in two major respects. First, it focuses solely on the question of whether State Farm had a reasonable basis in law to contest coverage. It apparently concludes that the question of whether State Farm refused to settle within policy limits where liability is reasonably clear is wholly subsumed within the “reasonable basis in law” analysis. The questions are related but nonetheless distinct. There is no question of Vail’s liability for the accident. Where liability is reasonably clear, an insurer has an obligation to 44 attempt to settle within policy limits so as to protect its insured from the prospect of a judgment in excess of policy limits. Shilhanek v. D-2 Trucking, Inc., 2003 MT 122, ¶ 25, 315 Mont. 519, 70 P.3d 721. A reasonable jury could conclude that by refusing over a period of three years to budge from a $5,000 offer under the foregoing circumstances, State Farm breached its obligation to attempt settlement within policy limits, thus placing its insured in jeopardy. The Court cites Jessen with approval in ¶ 46, but then disregards the very point of the discussion: the question of whether an insurer acted in “good faith” is to be made on a case-by-case basis. As noted below, the question is one of fact, not law. ¶69 Second, the Court errs in construing all facts in favor of State Farm in reaching its conclusion that State Farm had a reasonable basis in law to contest coverage. It presumes throughout its analysis that State Farm acted in complete good faith, weaving into the Opinion an analysis of our case law so as to justify the amended language that State Farm added to its “each person” limit—language which this Court later interpreted against it. Noticeably, however, the Court does not even address the fact that State Farm again amended its automobile policies in Montana a year before filing this declaratory action, so as to remove the key phrase from its limits of liability clause. Given the timing of this policy revision, and the fact that it occurred while State Farm was steadfastly refusing to negotiate with Frank, a reasonable jury could certainly conclude that State Farm made the conscious decision to change its policy midstream because it concluded it may not have a reasonable basis in law for contesting such claims after all. ¶70 On summary judgment, a court should not be weighing the evidence or choosing one disputed fact over another. Cole v. Valley Ice Garden, L.L.C., 2005 MT 115, ¶ 4, 327 Mont. 99, 113 P.3d 275. This covert policy change in the midst of a settlement standoff plays an important 45 role in Freyers’ argument that State Farm engaged in bad faith. The Court errs in choosing to wholly disregard this significant factor and the potential bearing it could have on a jury’s analysis of State Farm’s reasonableness. ¶71 Unfortunately, making reasonableness determinations at the summary judgment stage is becoming a trend. In White (Cotter, J., concurring and dissenting), we upheld summary judgment in favor of State Fund, concluding that White’s bad faith claims must fail because State Fund had a reasonable basis in law for terminating his benefits. In so doing, we ignored a time- honored premise. White, ¶ 28. In Dean v. Austin Mut. Ins. Co., 263 Mont. 386, 389, 869 P.2d 256, 258 (1994), we said that “reasonableness is generally a question of fact; therefore, it is for the trier of fact to weigh the evidence and judge the credibility of the witnesses in determining whether the insurer had a ‘reasonable basis’ for denying a claim.” As in White, we again ignore Dean’s caution by concluding here that reasonableness is susceptible to determination on summary judgment, and by selecting the facts that support our conclusion. ¶72 The Court cites three cases for the proposition that an insurer cannot be held liable for bad faith if the insurer had a reasonable basis for contesting the claim. Opinion, ¶ 55. White is one of those cases. In the other two cases we cite—Ellinghouse and Palmer by Diacon—the question of whether the insurer engaged in bad faith was resolved by a jury. Though the verdict in favor of Palmer was reversed on other grounds, we stated in Palmer that the district court did not err “by concluding that reasonable people could draw different conclusions about whether Farmers’ had a reasonable basis for contesting Palmer’s claim.” Palmer, 261 Mont. at 104, 861 P.2d at 903. As in White, I again maintain here that while reasonable people could ultimately determine that State Farm had a reasonable basis for denying a claim, they could also conclude to the contrary. The point is that the reasonableness of State Farm’s conduct is for the trier of 46 fact to determine. I would therefore reverse and remand for a jury’s determination Freyers’ common-law bad faith claims and their claims that State Farm breached the covenant of good faith and fair dealing. ¶73 Finally, as to Issue Three, I conclude consistent with the above analysis that the Court also errs in upholding summary judgment on the UTPA claims. I would reverse and remand the UTPA claims for trial. ¶74 I therefore concur and dissent. /S/ PATRICIA COTTER Justice Michael E Wheat joins the Concurrence and Dissent of Justice Patricia O. Cotter. /S/ MICHAEL E WHEAT	October 15, 2013
c2c307c2-49a0-4632-b190-9794633e3f66	Marriage of Sagami	2013 MT 277N	DA 12-0747	Montana	Montana Supreme Court	DA 12-0747 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 277N IN RE THE MARRIAGE OF: TONY L. SAGAMI, Petitioner and Appellant, and KELLY J. SAGAMI, n/k/a KELLY JOHNS, Respondent, Appellee, and Cross-Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DR 07-392(B) Honorable Robert B. Allison, Presiding Judge COUNSEL OF RECORD: For Appellant: Marybeth M. Sampsel; Measure, Sampsel, Sullivan & O’Brien, P.C.; Kalispell, Montana For Appellee: Kelly Johns, self-represented, Kalispell, Montana Submitted on Briefs: September 4, 2013 Decided: September 24, 2013 Filed: __________________________________________ Clerk September 24 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Appellant Tony Sagami (Tony) appeals from the order of the Eleventh Judicial District Court, Flathead County, that recalculated his child support obligations, and found arrearages due to Appellee/Cross-Appellant Kelly Johns (Kelly) in the amount of $4,324.00. Kelly cross-appeals the District Court’s order that denied Kelly’s petition for contempt for non-payment of spousal support. We affirm. ¶3 We consider the Sagami marriage dissolution for the second time on appeal. The District Court entered a decree of dissolution of the Sagami marriage on August 22, 2008. Tony appealed the District Court’s October 26, 2011, order that modified child support and maintenance. We affirmed in part and vacated in part in an order on June 5, 2012, and remanded to the District Court to determine current child support obligations. ¶4 The parties each made filings with the District Court on remand. Tony filed information about his financial abilities and the current situation with the children. Kelly petitioned the District Court to hold Tony in contempt for non-payment of spousal support. ¶5 The District Court held a hearing on November 14, 2012, to address parenting and child support. The District Court rescheduled the hearing on Kelly’s contempt petition for February 19, 2013. The District Court entered an order on November 29, 2012, that 3 analyzed Tony’s current financial abilities and set Tony’s support obligation at $804.00 per month. The District Court calculated that Tony owed child support arrears in the amount of $268.00 per month from July 2011, to June 2012, and $536.00 per month from July 2012, to September 2012. These deficiencies, along with Tony’s payments to that point, left a total arrearage of $4,824. The court deducted $500.00 from Tony’s arrearage as an award of attorney’s fees to him based on Kelly’s failed motion. This adjustment left Tony owing $4,324 in arrearage. ¶6 The District Court held the hearing on Kelly’s petition to hold Tony in contempt on February 19, 2013. The court denied Kelly’s petition. Tony now appeals from the November 29, 2012, order that set his arrearage at $4,824. Kelly cross-appeals from the March 6, 2013, order that denied her motion to hold Tony in contempt. We issued an order on May 2, 2013, to set a combined briefing schedule. ¶7 In reviewing child support modification, we determine whether the District Court’s findings of fact are clearly erroneous. In re Marriage of Damschen, 2011 MT 297, ¶ 22, 363 Mont. 19, 265 P.3d 1245. We review a district court’s conclusions of law to determine whether the court’s conclusions are correct. Damschen, ¶ 22. ¶8 We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our 1996 Internal Operating Rules, as amended in 2006, that provide for memorandum opinions. It is manifest on the face of the briefs and the record before us that substantial evidence in the record supports the District Court’s findings and that the District Court correctly applied the law to these findings. 4 ¶9 We affirm the District Court’s order of November 29, 2012 that set Tony’s arrearages. We further affirm the District Court’s order of March 6, 2013 that denied Kelly’s motion to hold Tony in contempt. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT	September 24, 2013
09b476ec-73c1-46f8-aae4-c976d10009c0	Pedersen Trust v. Ziehl et al	2013 MT 306	DA 13-0026	Montana	Montana Supreme Court	DA 13-0026 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 306 GAYLE P. PEDERSEN, as Trustee of the Gayle P. Pedersen Trust, Plaintiff and Appellee, v. DEAN ZIEHL and NANCY ZIEHL, individually and as Trustees of Ziehl Family Trust dated January 16, 2004, Defendants and Appellants. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 09-312A Honorable Heidi Ulbricht, Presiding Judge COUNSEL OF RECORD: For Appellants: Donald V. Snavely; Snavely Law Firm; Missoula, Montana Evonne Smith Wells, Tal M. Goldin; Wells & McKittrick, P.C.; Missoula, Montana For Appellee: Randall A. Snyder; Snyder Law offices; Bigfork, Montana Submitted on Briefs: August 21, 2013 Decided: October 16, 2013 Filed: __________________________________________ Clerk October 16 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Dean and Nancy Ziehl (the Ziehls) appeal from the Judgment of the Montana Eleventh Judicial District Court determining that they do not own a prescriptive easement over a portion of dock that extends onto Gayle Pedersen’s (Pedersen) property. The District Court ordered that the intruding portion of dock be removed and costs be awarded to Pedersen. We affirm and address the following issue, restated by this Court: ¶2 Did the District Court err by holding that the Ziehls failed to adversely use the dock for the required statutory period in order to obtain a prescriptive easement? FACTUAL AND PROCEDURAL BACKGROUND ¶3 This case involves a big dispute over a small piece of dock located on the Swan River in Bigfork. To explain the dispositive facts about the conflict, it is necessary to trace the ownership history of the properties involved. Prior to 2000, Fred and Judy Bysshe (the Bysshes) owned the north half of Lot 4 and Lots 5, 6, and 7 of Block 1 of Bigfork Original. Lots 4, 5, and 6 directly bordered the Swan River, and Lots 5 and 6 each had their own dock. At that time, Lot 7 did not touch the river and had no dock. ¶4 In July of 2000, the Bysshes decided to sell Lot 7 to Paul Nicodemus (Nicodemus). The property was initially advertised as having river-front access even though it did not. In an effort to accommodate the advertised listing, the Bysshes commissioned a boundary adjustment survey to redraw the property lines. The survey shifted the boundary between Lots 6 and 7 in order to give Lot 7 access to the river. In so doing, the survey divided the dock that had previously fronted only Lot 6. After the 3 survey, most of the dock was located on Lot 7, but the Bysshes had purposefully retained a portion of the dock’s southwestern corner for Lot 6. The survey also renamed Lot 6 and Lot 7 as “Lot 6A” and “Lot 7A,” respectively. Nicodemus closed his purchase of Lot 7A and recorded the deed on September 8, 2000. ¶5 From the time of the survey until 2002, the Bysshes continued to own Lot 6A. Judy Bysshe discussed the dock situation with Nicodemus and her realtor. The District Court found that Judy Bysshe clearly told Nicodemus that the southwestern portion of the dock belonged to Lot 6A, but was to be shared and used permissively as a neighborly accommodation. And although the dock’s condition had deteriorated over the years, Nicodemus would occasionally use it and park his boat there. ¶6 Pedersen began considering purchasing Lot 6A from the Bysshes in 2001. Although she visited the property a number of times, Pedersen failed to observe anyone using the dock. On October 15, 2002, Pedersen closed on Lot 6A, and immediately began cleaning and clearing brush from the property. In 2003, Pedersen re-landscaped the riverfront area, and in 2004, she constructed a residence and business on the property. During this time, Pedersen did not use the dock, nor did she see Nicodemus using it. ¶7 In August of 2004, the Ziehls purchased Lot 7A from Nicodemus. The Ziehls began using the dock in June of 2005 and then hired a contractor, Dan Day (Day), to renovate it in 2006. Before beginning work, Day applied for a permit, which incorrectly identified the Ziehls as the exclusive owners of the existing dock. At some point during construction, Pedersen informed Day that he was trespassing on her property and 4 demanded that he cease working. Day told the Ziehls about Pedersen’s objections, but nothing was done to resolve the issue and construction continued. ¶8 The significantly improved new dock generally followed the footprint of the old one, although its width was increased by at least one additional foot outward into the river. By the time construction wrapped up in April of 2006, a 2.6 by 3.69 foot section of the dock extended onto Pedersen’s property. Throughout 2006, 2007, 2008, and part of 2009, the Ziehls used the dock for recreational purposes and boat parking. Pedersen occasionally used the dock when being picked up and dropped off by friends who boated to her residence. Pedersen and the Ziehls never discussed whether the Bysshes’ original grant of permission to Nicodemus had subsequently been revoked or amended. ¶9 On March 4, 2009, Pedersen filed a complaint in the District Court for the Eleventh Judicial District, seeking to eject the Ziehls from her property, quiet title to the portion of the dock located on Lot 6A, and obtain an order that the Ziehls permanently remove that portion. The Ziehls answered and counterclaimed, arguing that they had acquired a prescriptive easement allowing them to maintain and use the entire dock. On January 18, 2011, the case was tried before the District Court, Hon. Stewart E. Stadler, presiding, sitting without a jury. After receiving evidence and the arguments of both parties, the District Court issued its Findings of Fact, Conclusions of Law, and Decree on November 26, 2012. The District Court ruled in favor of Pedersen, determining that the Ziehls did not hold a prescriptive easement and granting Pedersen’s requested order. The Ziehls appeal. 5 STANDARD OF REVIEW ¶10 We affirm the factual findings of a district court sitting without a jury unless those findings are clearly erroneous. M. R. Civ. P. 52(a); Steiger v. Brown, 2007 MT 29, ¶ 16, 336 Mont. 29, 152 P.3d 705 (citation omitted). A district court’s findings are clearly erroneous if they are not supported by substantial evidence, if the district court has misapprehended the effect of the evidence, or if a review of the record leaves this Court with the definite and firm conviction that a mistake has been committed. Steiger, ¶ 16 (citing Ray v. Nansel, 2002 MT 191, ¶ 19, 311 Mont. 135, 53 P.3d 870). We view the evidence in the light most favorable to the prevailing party when determining whether substantial credible evidence supports the district court’s findings. Steiger, ¶ 16 (citing Ray, ¶ 19). We review a district court’s conclusions of law to determine whether those conclusions are correct. Steiger, ¶ 16 (citing Ray, ¶ 20). DISCUSSION ¶11 Did the District Court err by holding that the Ziehls failed to adversely use the dock for the required statutory period in order to obtain a prescriptive easement? ¶12 The parties generally do not dispute the factual findings of the District Court. Indeed, the Ziehls concede that any minor factual issues do not affect our analysis on appeal. The parties instead focus their arguments almost exclusively on the legal character of Nicodemus’ and the Ziehls’ use of the dock. More specifically, the entire outcome of this case turns on whether Nicodemus’ use of the dock after the Bysshes sold Lot 6A to Pedersen in 2002 was adverse or permissive. 6 ¶13 A prescriptive easement arises by operation of law when a claimant proves that his or her use of another’s property was open, notorious, exclusive, adverse, continuous, and uninterrupted for the statutory period. Heller v. Gremaux, 2002 MT 199, ¶ 12, 311 Mont. 178, 53 P.3d 1259 (emphasis added). Section 70-19-404, MCA, sets Montana’s prescriptive period at five years. See also §§ 70-19-405, 23-2-322, MCA. If a claimant establishes the elements of open, notorious, exclusive, continuous, and uninterrupted, “a presumption arises that the use is adverse to the servient estate and the burden then shifts to the owner to show the use was permissive.” Combs-Demaio Living Trust v. Kilby Butte Colony, Inc., 2005 MT 71, ¶ 13, 326 Mont. 334, 109 P.3d 252. However, proof of permissive use overcomes the presumption of adversity and causes a prescriptive easement claim to fail. Heller, ¶ 15. ¶14 The Ziehls and Pedersen stipulated that use of the disputed portion of dock was open, continuous, and uninterrupted throughout the entire period that Nicodemus and the Ziehls owned Lot 7A. The other two elements necessary to raise the presumption of adverse use—notorious and exclusive—were not squarely addressed by the District Court. The Ziehls argue that both of these elements were also clearly satisfied and therefore this Court must presume adversity. While the Ziehls offer a technically correct theory, we need not here engage in a burden-shifting analysis. A demonstration of permissive use overcomes any presumption of adversity and defeats a prescriptive easement claim as a matter of law. On this point, the District Court concluded that Nicodemus used the dock at all times during his ownership of Lot 7A with permission. We agree. 7 A. Permissive use ¶15 Under well-settled Montana law, use of another’s property based on neighborly accommodation or courtesy does not give rise to a prescriptive easement because adversity is lacking. Heller, ¶ 14; Rathbun v. Robson, 203 Mont. 319, 323, 661 P.2d 850, 852 (1983). Put another way, if permissive use is shown, “no easement can be acquired since the theory of prescriptive easements is based on adverse use.” Keebler v. Harding, 247 Mont. 518, 521, 807 P.2d 1354, 1356 (1991); Tanner v. Dream Island, 275 Mont. 414, 424-25, 913 P.2d 641, 648 (1996). “If a use begins as a permissive use it is presumed to continue as such.” Rettig v. Kallevig, 282 Mont. 189, 196, 936 P.2d 807, 811 (1997) (quoting White v. Kamps, 119 Mont. 102, 114, 171 P.2d 343, 349 (1946)). In fact, “[i]f the use begins as a permissive use, it cannot ripen into a prescriptive right, no matter how long it may continue, unless there is a distinct and positive assertion of a right hostile to the owner.” Morrison v. Higbee, 204 Mont. 515, 520, 668 P.2d 1025, 1027 (1983). ¶16 In its Findings of Fact, the District Court found: 14. Judy Bysshe not only acknowledged the encroachment, she discussed it with her realtor and with Paul Nicodemus. She clearly stated that her retained portion of the dock (on Lot 6A) was the property of 6A and use was to be shared and permissively used by each owner as a neighborly accommodation. 16. Nicodemus occasionally parked his boat at the dock and used it during his property ownership. 17. Gayle Pedersen began looking at Lot 6A in 2001. Lot 6A was then a bare lot. [Pedersen] looked at the property a number of times, but never saw any use along the dock before her purchase. She signed her purchase agreement in 2001 and closed her purchase on October 15, 2002. . . . 8 19. Although the dock was in deteriorated condition, the owners of Lot 7A were able to use the dock at times during their ownership. 21. Defendants Ziehl purchased Lot 7A from Nicodemus in August 2004. They used the existing dock in the summer of 2005 but did not undertake reconstruction of the riverfront or dock area until 2006. 24. Ziehls completed their dock reconstruction in April 2006, and used the dock in 2006, 2007, 2008 and minimally in 2009, for family recreation and for docking his boat between June and September of a given year. 28. No notice was ever provided by any party that the initial permissive and continuing use of the dock by the owners of Lot 6A and Lot 7A was altered or revoked. Based on these findings and our case law regarding the continuing nature of permissive use, the District Court concluded that the Bysshes’ original grant of permission to Nicodemus continued after Pedersen purchased Lot 6A from the Bysshes, and that Nicodemus enjoyed this permission until he sold Lot 7A to the Ziehls in August of 2004. The District Court was not convinced that the Bysshes’ initial permission terminated even after Nicodemus sold Lot 7A, but determined that even if the Ziehls’ use became adverse immediately upon acquiring Nicodemus’ property, “there is not five years of adverse use between Defendant’s purchase of Lot 7A in August 2004 and M[arch] 2009, when litigation was commenced.” Pedersen urges us to uphold the District Court’s decision for these same reasons and further contends that the Ziehls’ use did not become adverse until Pedersen ordered Day to leave her property when the dock was being renovated in 2006—only three years prior to the commencement of this action, well short of the five year prescriptive period. 9 ¶17 The Ziehls maintain that even though the Bysshes originally granted Nicodemus permission to use the dock in 2000, “Bysshe’s permission ended when she sold the servient estate [Lot 6A] to Pedersen [in 2002].” The Ziehls go on to explain that after acquiring the property, Pedersen never expressly authorized Nicodemus to use the dock. Therefore, Pedersen merely “acquiesce[d]” to Nicodemus’ use, which is not the same thing as permission. See Cremer v. Cremer Rodeo Land & Livestock Co., 192 Mont. 208, 211, 627 P.2d 1199, 1201 (1981). According to the Ziehls, Nicodemus’ use from 2002 to 2004 should have been included by the District Court when calculating the period of adverse use—approximately seven years by the time litigation commenced in 2009. In support of this argument, the Ziehls rely primarily on our decision in Han Farms, Inc. v. Molitor, 2003 MT 153, 316 Mont. 249, 70 P.3d 1238 for the proposition that “[o]ne owner’s grant of permission does not continue by default to the next owner”—that is, the Bysshes’ grant of permission to Nicodemus did not continue when Pedersen purchased Lot 6A. Pedersen, in turn, argues that Molitor is irreconcilable with our body of permissive use law and should not control in this case. ¶18 In Molitor, Han Farms utilized a road that crossed Molitor’s property to access Han Farms for residential and agricultural purposes. Molitor, ¶ 7. Certain tenants of Han Farms began using the road more frequently than in the past, prompting Molitor to withdraw permission. Molitor, ¶ 8. Han Farms brought suit claiming that it had acquired a prescriptive easement over Molitor’s property. At trial, Molitor testified that her predecessor in interest had given Han Farms’ predecessor in interest permission to use the road. Molitor, ¶ 14. 10 ¶19 On appeal, we affirmed the district court’s decision to grant Han Farms a prescriptive easement, explaining that although Molitor’s predecessors in interest may have given Han Farms’ predecessors in interest permission to use the road, the record contained no evidence that Molitor ever did, proving fatal to her defense. Molitor, ¶¶ 14- 16. As authority, we cited Rettig, 282 Mont. at 195, 936 P.2d at 811 for the blanket proposition that “[p]ermissive use is not transferable.” Molitor, ¶ 14. However, as Pedersen correctly points out, Rettig did not create or adopt a non-transferability of permissive use rule. In fact, Rettig’s discussion of the rule should have precluded its application in Molitor. ¶20 In Rettig, DeRudder gave his neighbor Englert permission to use a silage pit road that crossed his property. Rettig, 282 Mont. at 191, 936 P.2d at 808. Some years later, Englert decided to sell his property to the Rettigs. Before the sale went through, DeRudder told Englert that any purchasers of Englert’s property could continue to use the silage pit road, subject to his permission. Rettig, 282 Mont. at 191, 936 P.2d at 808. The Rettigs purchased Englert’s property and used and improved the silage pit road for eleven years without ever receiving express permission from DeRudder to do so. Rettig, 282 Mont. at 192, 936 P.2d at 809. DeRudder eventually sold his property to the Kallevigs, who immediately informed the Rettigs that they could no longer use the road. The Rettigs sued, claiming they had acquired a prescriptive easement. Rettig, 282 Mont. at 192, 936 P.2d at 809. ¶21 The district court rejected the Rettigs’ claim, and this Court affirmed. We explained that the Rettigs did not acquire a prescriptive easement because permissive use, 11 once granted, is presumed to continue as permissive. Rettig, 282 Mont. at 196, 936 P.2d at 811. Indeed, “periodic, express grants of permission are not required to maintain the permissive character of the use . . . .” Rettig, 282 Mont. at 196, 936 P.2d at 811. We found it convincing that the Rettigs continued to use the road in the same manner as Englert, and DeRudder did not object. Rettig, 282 Mont. at 196, 936 P.2d at 811. More importantly, we specifically rejected the Rettigs’ non-transferability of permissive use argument because that rule stands only for the proposition that “one who has received permission . . . may not transfer a ‘limited personal right or license . . . to any other person or persons.’” Rettig, 282 Mont. at 195-96, 936 P.2d at 811 (citing Luoma v. Donohoe, 179 Mont. 359, 363, 588 P.2d 523, 525 (1978) in turn citing Cope v. Cope, 158 Mont. 388, 493 P.2d 336 (1971)). In other words, the rule provides that if you receive permission to use your neighbor’s land, you cannot unilaterally extend that permission to others. ¶22 It is clear that Molitor incorrectly applied the non-transferability of permissive use rule. The issue in Molitor was not whether the dominant user could unilaterally transfer a permissive right of use to another—which is the nature and scope of the rule—but, rather, whether permission granted by the servient owner continued after the sale of the servient property. Indeed, contrary to Molitor’s blanket “permission does not transfer” holding, our other cases demonstrate that the approach of this Court is to examine the nature of the arrangement between the parties at the outset of the use in determining the extent and duration of permissive use. Keebler, 247 Mont. at 521-23, 807 P.2d at 1357-58 (concluding that historical uses and custom prior to Appellant’s acquisition of the 12 property provided evidence that use had “always been permissive”); Morrison, 204 Mont. at 520-21, 668 P.2d at 1027-28 (construing use by Defendant’s predecessors in interest as “indicat[ing] friendly cooperation between neighbors.”); Rathbun, 203 Mont. at 322-23, 661 P.2d at 852 (determining that initial homesteader practices were “sufficient to support a use permissive in its inception and not under a claim of right”); Cope, 158 Mont. at 390-94, 493 P.2d at 338-40 (finding strong support for permissive use based on the actions of the families prior to Plaintiff’s acquisition of the property, and stating “the courts look to a variety of acts [sic] and circumstances to determine whether the user in a particular case was adverse or permissive . . . .”). ¶23 The Ziehls argue that our cases discussing the continuing nature of permissive use are factually distinguishable from the case at bar because they “involve continuous ownership of the servient estate by the same owner who initially gave permission, or . . . direct evidence of subsequent permission to a new owner.” Certainly, neither of these scenarios exists in this case—the Bysshes did not maintain continuous ownership of the servient estate, and Pedersen never expressly granted Nicodemus permission to use the dock. Based on this factual distinction, the Ziehls urge us reject the permissive use line of precedent cited by Pedersen and instead apply the expansive rule stated in Molitor. ¶24 The facts in Molitor do appear very similar to the facts here, but, as we have explained, Molitor was premised upon an irrelevant principle of law, one which our prior cases neither recognized nor adopted in such a context. It makes little sense to follow a rule that clearly does not apply, based solely on factual similarities, when the weight of our existing law demands a contrary result. Thus, to the extent that Molitor determined 13 that permission can never carry over from one owner to another after sale of the servient property, it is overruled. “[S]tare decisis does not require that we follow a manifestly wrong decision.” Formicove, Inc. v. Burlington Northern, Inc., 207 Mont. 189, 194-95, 673 P.2d 469, 472 (1983). A thorough reading of our permissive use cases makes clear that this Court has always, with the exception of Molitor, considered the nature of the initial agreement and the attendant circumstances surrounding any continuing use when determining whether permission exists. This approach presents a more comprehensive and sound method of analyzing permissive use questions than ignoring case-specific facts and circumstances in favor of a rigid “permission never carries over” rule. ¶25 Resolving permissive use questions in this way does not result in “tacking” of permissive use periods, as the Ziehls describe Pedersen’s position to be. We are not holding that permission given by the servient owner automatically continues after sale of the servient property. Such an approach could, by default, subordinate the intentions of current property owners to the intentions of their predecessors in title and produce absurd results in some cases. At the same time, it cannot be said that the weight of our law supports the inverse proposition that the mere sale of property, without more, automatically transforms permissive use into use that is adverse to the purchaser’s ownership interest. ¶26 In its Findings of Fact, the District Court determined that Judy Bysshe expressly granted Nicodemus permission to use the dock, which he occasionally did throughout his ownership of Lot 7A. This finding is supported by substantial credible evidence in the record. The Ziehls attempt to undermine this finding by citing testimony from Judy 14 Bysshe about a conversation she had with Nicodemus wherein she stated: “[A]s far as [she] was concerned as long as we [Bysshes] owned [a portion of the dock] he [Nicodemus] was welcome to use it, and if somebody else owned it he’d have to work out an arrangement to share the space.” The Ziehls argue that this statement expressly limited Nicodemus’ permission to the Bysshes’ term of ownership. We do not agree. The fact that Judy Bysshe mentioned that Nicodemus would have to work out an arrangement with a new owner at some point in the future does not make the District Court’s finding that permission existed at all times during Nicodemus’ use of the dock clearly erroneous. Importantly, the District Court did not find, and the Ziehls do not argue, that Nicodemus ever changed the character of his use or took active steps to claim the entire dock as a matter of right. It is telling that Pedersen never even saw Nicodemus use the dock in 2003 and 2004. Our decision in Morrison makes quite clear that in order to transform a permissive use into an adverse one, there must be a “distinct and positive assertion of a right hostile to the owner.” Morrison, 204 Mont. at 520, 668 P.2d at 1027 (emphasis added). As the District Court reasoned, “[t]here was no ‘overt act’ or event which would notify Bysshes or Pedersen that either owner of Lot 7A claimed the use of the full dock as their right.” Given these facts, we cannot conclude that the mere sale of Lot 6A to Pedersen in 2002, without more, changed Nicodemus’ occasional use of the dock, which had at all times previously been permissive, into an adverse and hostile claim of right. ¶27 Since we have determined that Nicodemus used the dock with permission at all times during his ownership of Lot 7A, there is no need to pinpoint the exact date when 15 the Ziehls’ use became adverse. As the District Court correctly decided, even if the Ziehls’ use became adverse immediately upon purchasing Lot 7A in August of 2004, the statutorily imposed five-year adversity period had not yet elapsed by the time litigation commenced in March of 2009. ¶28 Accordingly, the Judgment of the District Court is affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BRIAN MORRIS	October 16, 2013
894ba742-8ea8-44da-8aaa-d163e4267b43	Roberts v. State Bd. of Labor Appeals	2013 MT 328	DA 13-0181	Montana	Montana Supreme Court	DA 13-0181 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 328 SHERRI ROBERTS, Plaintiff and Appellant, v. STATE OF MONTANA BOARD OF LABOR APPEALS; LAME DEER PUBLIC SCHOOL DISTRICT #6, Defendant and Appellee. APPEAL FROM: District Court of the Sixteenth Judicial District, In and For the County of Rosebud, Cause No. DV 2010-46 Honorable George W. Huss, Presiding Judge COUNSEL OF RECORD: For Appellant: Richard O. Harkins, Attorney at Law, Ekalaka, Montana For Appellee: Jeffrey A. Weldon, Felt, Martin, Frazier & Weldon, P.C., Billings, Montana Submitted on Briefs: October 2, 2013 Decided: November 5, 2013 Filed: __________________________________________ Clerk November 5 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Sherri Roberts appeals from an order of the Sixteenth Judicial District Court, Rosebud County, affirming the determination of the Board of Labor Appeals that she is disqualified from receiving unemployment benefits. We affirm. ¶2 We restate the following issues presented on appeal: ¶3 Issue One: Whether the District Court erred when it concluded that the findings of fact adopted by the Board of Labor Appeals were supported by substantial evidence. ¶4 Issue Two: Whether the District Court erred when it concluded that Roberts was discharged due to misconduct and is therefore ineligible to receive unemployment benefits. PROCEDURAL AND FACTUAL BACKGROUND ¶5 Sherri Roberts was hired as a vocational agricultural teacher at Lame Deer High School in the fall of 2005. She also served as faculty adviser for the school’s chapter of the National FFA Organization (formerly known as Future Farmers of America). Roberts’s first year went well, but her relationship with the superintendent of the Lame Deer School District soon became strained. A new superintendent, Daniel Lantis, was hired in the fall of 2007. Despite this change of leadership, Roberts’s conflict with school administration continued, particularly with regard to the use of FFA funds. Lantis objected to the FFA’s proposed purchase of animals to be kept on school grounds, citing inadequate facilities and liability concerns. Roberts maintained that FFA funds were independent and not subject to School District control. 3 ¶6 In April of 2008, Roberts’s contract came before the Board of Trustees (Board) for renewal for a fourth consecutive year, which would also grant her tenure. Lantis recommended non-renewal of her contract. The Board rejected this recommendation at its meeting on April 8, 2008, but also did not immediately offer to renew Roberts’s contract. Two weeks later, Roberts filed a complaint against Lantis, alleging that his recommendation for non-renewal constituted bullying and harassment. The Board requested an investigation of the matter. Meanwhile, Roberts’s contract was automatically renewed as a result of the Board’s rejection of the recommendation for non-renewal, and as a result, she attained tenure. ¶7 The conflict between Lantis and Roberts continued into the fall of 2008. Roberts believed that a renovation of the school’s shop building then in progress had rendered the facility unsafe for use by her students. A meeting between Lantis and Roberts on August 28, 2008, to discuss the renovation became hostile, and Lantis reprimanded Roberts for what he believed to be unprofessional conduct. ¶8 On March 3, 2009, the Board received the results of its investigation into Roberts’s complaint against Lantis. The Board voted unanimously to deny the grievance. Around this time, Lantis was also dealing with personal issues including the illness and death of his wife. The Board did not offer him a new contract in the spring, but his contract was ultimately renewed in June of 2009. ¶9 During the 2008-09 school year, Roberts learned of a loan program operated by the Montana Department of Agriculture (MDOA) and intended specifically for student FFA chapters. She applied for a $12,000 loan on behalf of the Lame Deer FFA for the 4 purpose of establishing a hay cutting business. The principal of the high school approved of the project, and Roberts did not believe that any further involvement from the School District was required. MDOA approved Roberts’s proposal, and on July 13, 2009, Roberts signed a promissory note as an authorized representative of the Lame Deer FFA. She also obtained the signature of an assistant principal and provided MDOA with the School District’s tax identification number. She then opened a checking account into which she deposited the loan proceeds. Two signatures were required to write checks from the account. Roberts and selected student FFA members were authorized to sign the checks. ¶10 Lantis became aware of the MDOA loan and FFA account in early August 2009, when a bank statement and printed checks were mailed to the school. As a student activity, the FFA chapter was subject to School District financial management policy 7425, which required all student activity funds to be deposited in an account maintained by the School District. Faculty advisers, including Roberts, were informed of this policy each year. ¶11 At 5:30 p.m. on August 11, 2009, Lantis delivered a letter to Roberts informing her that the separate account she had opened for the FFA funds was in violation of School District policy regarding student activity accounts. He directed her to turn over the funds and documentation of all account activity by 8:30 a.m. the following morning. Roberts did not comply with the request, claiming that it was impossible for her to do so because the bank did not open until 9:00 a.m. On the afternoon of August 12, 2009, Lantis informed Roberts that she was suspended with pay until further notice. 5 ¶12 Roberts and her attorney met with Lantis and counsel for the School District on or about August 27, 2009, at which time Lantis restated his demand that Roberts turn over the funds and all documentation to the School District. Roberts provided documentation of account activity, but did not turn over the funds. She claimed that she did not have the authority to transfer the funds without permission of the students in the FFA. She also claimed that asking one of the students to co-sign a check would require her to act as FFA adviser in violation of the terms of her suspension. In an e-mail to Roberts’s attorney, counsel for the School District again stated that Roberts needed to turn over the funds. Roberts never took any action to turn over the funds to the School District, despite repeated requests. ¶13 On September 4, 2009, Roberts went to the bank and obtained counter checks for the account. She and a student FFA member signed two checks, totaling $812.82, made out to Roberts. Roberts states that these checks were to reimburse her for expenses she had incurred in setting up the hay cutting business. ¶14 On October 27, 2009, Lantis recommended that the Board terminate Roberts’s employment. A hearing was held November 16, 2009, at which the Board accepted Lantis’s recommendation and terminated Roberts’s employment with the School District. Roberts filed for unemployment insurance benefits soon after. The Montana Department of Labor and Industry (Department) initially determined that she was eligible to receive benefits. The School District requested that the Department review its determination. Upon review, the Department maintained that Roberts was eligible to receive benefits. 6 ¶15 The School District then appealed the determination of the Department to a hearing officer. A ten-hour hearing was held on June 29, 2010. The hearing officer made 29 findings of fact, on the basis of which she concluded that Roberts had been discharged for misconduct and was ineligible to receive unemployment insurance benefits. Roberts appealed to the Board of Labor Appeals (BLA), which held a hearing on September 8, 2010. The BLA found that the hearing officer’s findings of fact were sufficiently supported by the record and that she had correctly applied the law to the facts. The BLA therefore adopted the findings of the hearing officer and affirmed the determination that Roberts was ineligible to receive unemployment insurance benefits. ¶16 Roberts then appealed the decision of the BLA to the District Court. The District Court found that the findings of fact made by the hearing officer and adopted by the BLA were supported by substantial evidence, and that the hearing officer and the BLA had correctly applied the law in determining that Roberts was discharged for misconduct. The District Court therefore sustained the determination of the BLA. Roberts then appealed to this Court. STANDARD OF REVIEW ¶17 On judicial review, the findings of the BLA must be treated as conclusive if supported by substantial evidence and in the absence of fraud. Section 39-51-2410(5), MCA; Johnson v. W. Transp., LLC, 2011 MT 13, ¶ 16, 359 Mont. 145, 247 P.3d 1094. Substantial evidence may be less than a preponderance of the evidence. Johnson, ¶ 17. If the findings of the BLA are supported by substantial evidence, the reviewing court is limited to considering questions of law. Section 39-51-2410(5), MCA. Whether the facts 7 of a case demonstrate misconduct is a legal conclusion that is reviewed for correctness. Somont Oil Co. v. King, 2012 MT 207, ¶ 11, 366 Mont. 251, 286 P.3d 585. DISCUSSION ¶18 Issue One: Whether the District Court erred when it concluded that the findings of fact by the Board of Labor Appeals were supported by substantial evidence. ¶19 The findings of the BLA, if supported by substantial evidence, must be treated as conclusive “even when there is also substantial evidence or even a preponderance of the evidence to the contrary.” Johnson, ¶ 17. A reviewing court may not, on appeal, substitute its own view of the evidence, determine which evidence is more substantial, or determine where the preponderance of the evidence lies. Johnson, ¶ 18. ¶20 In this case, the hearing officer made 29 findings of fact, which were later adopted by the BLA. The hearing officer heard testimony and arguments for ten hours and accepted into evidence over one hundred pages of documents. The District Court reviewed the full record and summarized its review in a 29-line table, wherein it identified portions of the record corresponding to each finding of fact. The District Court clearly established that substantial evidence did exist in support of each finding. The District Court correctly did so without attempting to reweigh the evidence or substitute its own judgment. This Court has also reviewed the full record, and we affirm the conclusion of the District Court that the findings of fact are supported by substantial evidence. Having determined that there is substantial evidence in the form of documents and sworn testimony to support each of the findings adopted by the BLA, this Court must consider the findings conclusive. Section 39-51-2410(5), MCA. 8 ¶21 Roberts argues that the findings were not supported by substantial evidence, because the hearing officer considered evidence that was irrelevant and therefore inadmissible. Roberts argues that the sole reason for her termination was her failure to turn over the funds in the FFA account as directed by Lantis on August 11, 2009, and therefore, any evidence regarding alleged misconduct prior to that date must be excluded. ¶22 A district superintendent who recommends the dismissal of a tenured teacher must supply to the trustees of the district a written statement of the reason or reasons for the recommendation. Section 20-4-204(1), MCA. Roberts acknowledges that Lantis’s October 27, 2009 letter recommending termination of her employment referred to “a pattern of insubordinate behavior” prior to 2009. Evidence of prior alleged insubordination is therefore relevant to the reason for Roberts’s discharge. ¶23 Nevertheless, the hearing officer did not rely on this evidence in making her determination. The hearing officer concluded that Roberts was discharged for her refusal to turn over the funds in the account and failure to follow School District policy regarding student activity funds. This conclusion is in accordance with Roberts’s own view of the reasons for her dismissal. The hearing officer based this conclusion on her findings that School District policy required student activity funds to be deposited in an account maintained by the School District; Lantis informed Roberts of this policy; he requested that she turn over the funds; and she took no action to do so. These findings are well supported in the record and do not rely on evidence of alleged misconduct prior to 2009. We hold that the District Court did not err by concluding that the findings of fact adopted by the BLA were supported by substantial evidence. 9 ¶24 Issue Two: Whether the District Court erred when it concluded that Roberts was discharged due to misconduct and was therefore ineligible to receive unemployment benefits. ¶25 An employee is disqualified from receiving unemployment insurance benefits if he or she has been discharged for misconduct. Section 39-51-2303, MCA. Specific examples of misconduct include “insubordination showing a deliberate, willful or purposeful refusal to follow the reasonable directions or instructions of the employer” and “violation of a company rule if the rule is reasonable and if the claimant knew or should have known of the existence of the rule.” Admin. R. M. 24.11.461(1)(a), (g).1 ¶26 School District financial management policy 7425 required student activity funds to be deposited in an account maintained by the School District. This policy was consistent with the requirements of § 20-9-504(1), MCA, which provides that “[a]ll extracurricular money of a pupil organization of the school must be deposited and expended by check from a bank account maintained for the extracurricular fund.” The statute also requires implementation of an accounting system recommended by the Superintendent of Public Instruction. Section 20-9-504(2), MCA. The policy of the School District was a reasonable rule, consistent with state law, intended to safeguard student funds. 1 These specific instances of misconduct were added to the statutory definition of misconduct, § 39-51-201(19), MCA, in 2013. No statutory definition had yet been adopted at the time of the events at issue in this case; therefore, we rely on the definition provided in the administrative rule, which was in effect at that time. 10 ¶27 Faculty advisers, including Roberts, were provided an orientation on School District policy regarding the management of student activity funds each year. Roberts was also personally informed of the policy by Lantis’s letter of August 11, 2009, which notified her that by opening a separate account for the FFA, she had acted in violation of School District policy. Despite being informed that she had violated School District policy, Roberts never took any action to comply with the policy by moving the funds to the student activity account as requested. Roberts knowingly violated a reasonable rule of the School District. The District Court correctly concluded that this was misconduct. ¶28 After being informed that her actions were in violation of School District policy, Roberts was directed to transfer the FFA funds to the School District on multiple occasions. Lantis first asked Roberts to turn over the funds in his letter of August 11, 2009. Roberts did not do so. In a meeting on August 27, 2009, Lantis again asked Roberts to turn over the funds. Roberts provided some documentation, but did not turn over the funds as instructed. In an e-mail to Roberts’s attorney following that meeting, counsel for the School District again stated that Roberts needed to turn over the funds. Roberts did not do so. ¶29 Roberts argues that the repeated instructions to turn over the funds were not reasonable, and therefore, her failure to comply did not constitute misconduct. Roberts claims that the request made in Lantis’s August 11, 2009 letter was unreasonable because it demanded compliance by 8:30 a.m., and the bank did not open until 9:00 a.m. Roberts does not explain why she needed to go to the bank, and she did not at that time provide documentation, such as deposit receipts, which should already have been in her 11 possession. Moreover, despite the 8:30 a.m. deadline, Roberts was not actually suspended until 1:30 p.m. on August 12, giving her more than four hours to visit the bank, if necessary, after its opening. ¶30 Lantis continued to request that Roberts turn over the funds after the August 12 deadline. She claims that these later requests were also unreasonable, because her suspension from FFA duties made it impossible for her to transact any business on the FFA account. She claims that it was impossible for her to write a check transferring the funds to the School District because the school had kept the printed checks issued by the bank. She claims that her suspension made it impossible for her to meet with the FFA students to ask one of them to co-sign a check. She also claims that the student FFA members refused to give control of the funds to the School District. ¶31 Despite her claim that it was utterly impossible to access the account or conduct any FFA business during her suspension, Roberts obtained counter checks from the bank and co-signed, with an FFA student, two checks payable to herself for a total of $812.82. This action belies her claim that she was unable to write a check or meet with FFA students. Roberts claims that she was unable to comply with School District policy during her suspension, but she was nevertheless fully able to secure reimbursement for herself from FFA funds. This reflects a purposeful refusal to follow Lantis’s reasonable direction to turn over the funds in the FFA account. Furthermore, her claim that she, as a teacher, was unable to instruct her students to follow Montana law and the policies of the School District is unreasonable. The District Court correctly concluded that her refusal to turn over the funds as directed was misconduct. 12 ¶32 The findings of fact adopted by the BLA are supported by substantial evidence in the record. Those facts demonstrate that Roberts acted in violation of a reasonable School District policy of which she was aware, and purposefully refused to follow the reasonable directions of the School District superintendent. These actions constituted misconduct, and she is therefore ineligible to receive unemployment insurance benefits. ¶33 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE	November 5, 2013
78a173c7-182e-4985-8873-ea7584316d38	Willis v. Fertterer	2013 MT 282	DA 13-0071	Montana	Montana Supreme Court	DA 13-0071 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 282 TERRY J. WILLIS, Plaintiff and Appellant, v. DAVID J. FERTTERER, DEBRA DIETZ, and RICHARD FERTTERER, Defendants and Appellees, APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. CDV-97-1689 Honorable Kenneth R. Neill, Presiding Judge COUNSEL OF RECORD: For Appellant: E. Lee LeVeque, Lee LeVeque Law Offices, PLLC; Great Falls, Montana For Appellees: Paul R. Haffeman, James A. Donahue, Davis, Hatley, Haffeman & Tighe, P.C.; Great Falls, Montana Submitted on Briefs: August 28, 2013 Decided: October 1, 2013 Filed: __________________________________________ Clerk October 1 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Terry Willis (Willis) appeals the findings of fact, conclusions of law, and order of the Eighth Judicial District, Cascade County that deemed valid a warranty deed that conveyed property from Willis to David Fertterer (Fertterer), and further determined that Fertterer had not converted any funds that belonged to Willis. We affirm. ¶2 We address the following issues on appeal: ¶3 Whether substantial evidence supports the District Court’s findings of fact? ¶4 Whether the District Court properly determined that Willis failed to prove that Fertterer had converted funds from Willis’s bank account? PROCEDURAL AND FACTUAL BACKGROUND ¶5 Willis lived in Florida at the time of the events that gave rise to this action. Willis visited Montana in 1988. Willis first met Fertterer, Fertterer’s wife Debra Ferterrer née Dietz (Debra), Fertterer’s brother Richard (Dick), and Fertterer’s late father Richard Fertterer Sr. (Richard Sr.) on this trip. The Fertterers live near Belt in Cascade County. Willis developed a friendship with Fertterer, Debra, and Richard Sr. ¶6 Willis travelled to Montana several times in 1988 and 1989 to socialize and to recreate. Willis also alleges that he delivered cocaine for Richard Sr. During one trip Willis requested that Fertterer tell Willis if Ferterrer learned of Montana recreational property available for sale. ¶7 Fertterrer learned in 1989, that the Weggeland Place (Weggeland), a property near the Ferterrers’ residence, was up for sale. Fertterer called Willis to alert him. Willis made 3 arrangements to travel to Montana to view the property. Willis viewed Weggeland with Fertterer, Richard Sr., and Lillian Schmasow (Schmasow), a local realtor. ¶8 Willis signed a buy/sell agreement to purchase Weggeland on May 17, 1989. Willis appointed Schmasow to be his attorney in fact for the transaction. Schmasow signed a contract for deed and escrow agreement on Willis’s behalf. The contract for deed lists a final purchase price of $240,700.32 plus interest. The contract states that this amount would be paid in a $50,000.00 down payment and four installments of $50,388.75 due on August 30, 1989, November 30, 1989, February 28, 1990, and May 30, 1990. Willis made the $50,000.00 down payment. A portion of those funds apparently represented proceeds from illegal drug sales. The escrow agreement appointed First American Title Company (First American) of Great Falls as escrow agent. The escrow agreement further required Willis to pay each remaining installment through First American. ¶9 Willis opened a post office box at the Belt Post Office and a checking account at Belt Valley Bank before he returned to Florida. Willis also had received mail from a separate post office box in Great Falls. Willis denied having opened the Great Falls post office box. Willis had received copies of the escrow agreement and payment coupon for Weggeland, however, at the post office box in Great Falls. ¶10 Willis thereafter made occasional trips to Montana. Willis chose not to tell his wife (Avelia) about his purchase of Weggeland or his account at Belt Valley Bank. Willis apparently failed to disclose these facts in an effort to protect her from involvement in Willis’s drug dealing. 4 ¶11 Willis claims that he had been unaware that the contract for deed required a $50,388.75 payment toward Weggeland on August 30, 1989. Willis failed to make this payment on time. Schmasow delivered a late payment in September 1989, to cover the August 30, 1989, payment. Ferterrer, in conjunction with Dick, contributed $22,408.75 to the August 30, 1989, late payment, and Willis apparently paid $27,980.00. ¶12 Fertterer and Dick characterize the $22,408.75 as a loan to Willis. Ferterrer and Dick possess no promissory note or other documentation, however, to verify their claim. Willis disputes that the contribution from Fertterer and Dick represented a loan. Willis instead claims that Fertterer and Dick had laundered Willis’s drug sale profits through their accounts and thus Willis had provided the sole source of the funds for the August, 30, 1989, late payment. ¶13 Federal authorities arrested Willis in Florida in November 1989. The United States charged Willis with conspiring to possess at least five kilograms of cocaine and possessing at least five kilograms of cocaine with intent to distribute. Willis potentially faced life sentences for each charge due to his previous drug offenses. Federal authorities seized, and Willis ultimately forfeited, over $150,000.00 in Willis’s possession at the time of his arrest. The federal district court sentenced Willis to two terms of life imprisonment in 1990 following his conviction. ¶14 Willis’s impending life sentences left him unable to pay for Weggeland as the contract for deed contemplated. Willis and Fertterer made an arrangement to save Weggeland. The parties disagree about the specifics of that arrangement. 5 ¶15 Willis claims that Fertterer agreed to make payments for Willis. Willis claims that Weggeland still would belong to Willis upon his release. Fertterer conversely claims that Willis relinquished Weggeland to Fertterer on condition that Fertterer agree to take over the remaining payments. Both parties agree that Ferterrer would be responsible for completing the payments to purchase Weggeland. The parties disagree about the effect that this plan would have on the ownership of Weggeland. ¶16 Willis further requested that Ferterrer and Debra remove funds from his Belt Valley Bank checking account in an apparent effort to prevent federal authorities from seizing those funds. Ferterrer and Debra complied. They used previously-signed checks that Willis had left with them to withdraw the entire remaining balance of $23,475.00 from Willis’s Belt Valley Bank checking account. Ferterrer and Debra stored these funds in the pocket of one of Willis’s jackets. Ferterrer claims that he delivered the jacket that contained all of these funds to Avelia. Avelia denies that she had received the funds. ¶17 Fertterer contacted his loan officer at Farm Credit Services to resolve the Weggeland matter. Ferterrer earlier had received an agreement from Willis to sell Weggeland to Ferterrer (Willis-Fertterer Deed) for $240,000.00. This notarized document suggests that Willis had agreed to sell Weggeland to Fertterer. Willis contests the validity of the deed. ¶18 First American Title prepared the Willis-Fertterer Deed. The Willis-Fertterer Deed bears a December 28, 1989, notarized signature that appears to read “Terry Willis.” Rita Crowell (Crowell), Florida Notary Public, and former employee at the Fort Pierce, Florida, 6 Federal Public Defender’s Office, notarized the signature. Willis denies that he signed the Willis-Fertterer Deed. ¶19 Willis’s expert witness testified that Willis’s signature had been forged on the Willis- Ferterrer Deed. Willis was in pre-trial detention on December 28, 1989, the date that the parties apparently executed the Willis-Fertterer Deed. At the time the federal district court had assigned Willis a public defender to represent him in the federal criminal proceeding. Willis ultimately retained private counsel. Willis’s private counsel testified that he remembered having worked earlier with Crowell at the Fort Pierce Federal Public Defender’s Office, but it appears that nobody could locate Crowell to testify. It remains unclear how the Willis-Fertterer Deed travelled from Montana to Florida, received Willis’s signature on December 28, 1989, and returned to Montana to be recorded the next day on December 29, 1989. ¶20 Armed with the notarized Willis-Fertterer Deed, Fertterer applied for a loan with Richard Sr. to purchase Weggeland. Farm Credit Services approved the loan for $152,935.00, secured by a mortgage. Fertterer paid the proceeds from this loan, in the amount of $149,492.95, to First American Title Company. This amount paid in full the balance on Willis’s contract for deed. Ferterrer therefore paid, including his contributions to the late August 30, 1989, payment, $171,901.70 of the $240,700.32 purchase price for Weggeland. Willis paid the remaining total and interest. ¶21 First American Title Company closed the transaction after having received payment in full. The Cascade County Clerk and Recorder recorded the warranty deed from the original 7 Weggeland owners to Willis on December 29, 1989, followed immediately by the warranty deed from Willis to Fertterer. ¶22 Ferterrer and Richard paid off the loan from Farm Credit Services that had secured Weggeland in 2001. Ferterrer has maintained and improved Weggeland since paying off the loan. Ferterrer also has paid all required property taxes. ¶23 Willis cooperated with the federal government in exchange for a reduced sentence. The federal district court granted a motion by the United States to modify Willis’s sentence in 1998. This modification reduced Willis’s federal sentence to fourteen years. Willis served part of this sentence on federal supervised release. Willis violated conditions of his federal supervised release. The federal district court revoked Willis’s supervised release on November 9, 2004, and returned Willis to federal prison. ¶24 The Federal Bureau of Prisons released Willis from all conditions on December 5, 2008. Willis soon thereafter filed an action in Cascade County that challenged Ferterrer’s ownership of Weggeland. Willis further alleged that Ferterrer and Debra had converted funds from Willis’s Belt Valley Bank account. The District Court conducted a bench trial in November 2012. The District Court affirmed the validity of the Willis-Fertterer Deed. The District Court also concluded that Fertterer had not converted any funds that belonged to Willis. Willis appeals. STANDARD OF REVIEW ¶25 We determine whether a district court’s findings of fact are clearly erroneous and whether its conclusions of law are correct. In re B.M., 2010 MT 114, ¶ 14, 356 Mont. 327, 8 233 P.3d 338. A factual finding is clearly erroneous if it is not supported by substantial evidence, if the trier of fact misapprehended the effect of the evidence, or if the record leaves the reviewing court with the definite and firm conviction that a mistake has been made. Varano v. Hicks, 2012 MT 195, ¶ 7, 366 Mont. 171, 285 P.3d 592. We view evidence in the light most favorable to the prevailing party, and we leave the credibility of witnesses and the weight assigned to their testimony for the determination of the trial court. Mowrer v. Eddie, 1999 MT 73, ¶ 36, 294 Mont. 35, 979 P.2d 156. DISCUSSION ¶26 Whether substantial evidence supports the District Court’s findings of fact? ¶27 Willis first challenges the District Court’s factual finding that the notarized signature on the Willis-Ferterrer deed was valid. Willis relies upon the Mississippi Supreme Court’s decision in Thompson v. Shell W. E & P Inc., 607 So. 2d 37 (Miss. 1992), for the unremarkable proposition that the presumption of validity of authenticity “can only be overthrown by a strong evidentiary showing.” Thompson, 607 So.2d at 41. The District Court identified, however, the “sharp conflict” between the parties’ testimony on the circumstances surrounding Willis’s notarized signature on the Willis-Ferterrer Deed. ¶28 Willis attacks the District Court’s determination that Willis personally had appeared before Crowell, and that Crowell had notarized the deed in Florida on December 28, 1989. Willis further challenges the feasibility of the Cascade County Clerk having recorded the Willis-Ferterrer deed in Montana on the next day, December 29, 1989. Willis lastly argues 9 that the District Court ignored the testimony of his handwriting expert that the signature on the Willis-Ferterrer deed had been forged. ¶29 Willis contends that these facts rise to the level of a strong evidentiary showing sufficient to overcome the presumptive validity of the Willis-Ferterrer Deed that Crowell had notarized. He cites two other cases from Mississippi, Woodson v. Jones, 33 So.2d 316 (Miss. 1948) and Continental Oil Co. v. Walker, 117 So.2d 333 (Miss. 1960) to bolster his position. The Mississippi Supreme Court invalidated a notarized document in each case. ¶30 The notary’s certification in Walker appears on the back of the deed. Walker, 117 So. 2d at 335. This suspicious factor, along with the fact that the grantor had been out of the county on military duty on the date that he allegedly had appeared before the notary, led the Court to uphold the trial court’s determination that the deed was invalid. Walker, 117 So.2d at 335-36. Similarly, in Woodson, the spelling of the purported notarized signature failed to match the spelling of the grantor’s name. Woodson, 33 So.2d at 316. This discrepancy, along with the grantor’s son’s testimony that he had signed the deed rather than the grantor, operated as compelling evidence to overcome the presumed validity of a notarized signature. Woodson, 33 So.2d at 316. ¶31 The District Court sits in the best position to resolve conflicting factual testimony and to evaluate expert witness testimony. Mowrer, ¶ 36. We will not disturb the District Court’s determination without finding either that substantial evidence fails to support the factual finding, that the District Court misapprehended the effect of the evidence, or that we are left with the firm conviction that the District Court made a mistake. Varano, ¶ 7. 10 ¶32 The District Court analyzed the conflicting evidence presented at trial and considered the credibility of the witnesses’s testimony. The District Court identified “unanswered questions” about how the Willis-Ferterrer Deed moved to Florida and back to Great Falls, but found that it was “apparently by overnight mail or personal delivery.” The District Court focused on the totality of the circumstances to determine that “Willis [w]as the one most likely to have involved [Crowell].” The District Court further highlighted that “[n]o one has challenged Ms. Crowell’s signature” on the Willis-Ferterrer deed. ¶33 Willis fails to identify any strong evidence of forgery on appeal. Willis dismisses as “somehow magic[],” the deed’s travel from Florida to Montana. Willis further accuses Ferterrer of having conspired to forge the deed without any evidence to support the argument. These factors fall short of the evidence of forgery in Woodson and Walker. ¶34 The District Court found Willis’s testimony less credible than Ferterrer’s. In particular, the District Court pointed to Willis’s multiple criminal convictions and his own testimony that he illegally had hidden assets to avoid forfeiture to the federal government as evidence of Willis’s lack of veracity. Willis further conceded on cross-examination that he had made a similar arrangement in July 1989 upon his arrest in which Ferterrer had taken over payments for a tractor that Willis had been purchasing. This earlier arrangement granted ownership of the tractor to Ferterrer when Ferterrer paid the balance in full. The District Court concluded based on “all of the matters listed in the Findings of Fact” that Willis had failed to present clear and convincing evidence of forgery needed to overcome the 11 presumption of authenticity of a notarized document. Substantial evidence supports the District Court’s finding of validity of the Willis-Ferterrer Deed. Varano, ¶ 7. ¶35 Willis next argues that the District Court should have quieted title in his name due to the alleged forgery of his signature on the Willis-Ferterrer Deed. Willis argues that the invalid deed could not transfer title as Willis had not ratified the invalidity. Willis failed to establish, however, that his signature had been forged on the deed that transferred Weggeland. A factfinder remains free to disregard an expert’s testimony. Stave v. Estate of Rutledge, 2005 MT 332, ¶ 21, 330 Mont. 28, 127 P.3d 365. The District Court’s finding of validity of the Willis-Fertterer deed conveyed Weggeland without requiring Willis to have ratified any alleged forgery. Willis’s contention that he did not ratify the Willis-Ferterrer Deed fails based on the fact that substantial evidence supports the District Court’s factual finding of the validity of the deed. Varano, ¶ 7. ¶36 Whether the District Court properly determined that Willis failed to prove that Fertterer had converted funds from Willis’s bank account? ¶37 Willis lastly argues that the District Court improperly found that Willis had failed to prove conversion of his funds. Conversion involves a distinct act of dominion wrongfully exerted over property in denial of, or inconsistent with, the owner’s right. Feller v. First Interstate Bancsystem, Inc., 2013 MT 90, ¶ 26, 369 Mont. 444, 299 P.3d 338. Willis needed to present facts at trial sufficient to show that Ferterrer wrongfully had exercised dominion over Willis’s property inconsistent with Willis’s right. Feller, ¶ 26. 12 ¶38 Willis identifies some evidence in the record that does not support the District Court’s findings of fact. Willis testified that Ferterrer had used Willis’s checks to withdraw all of the funds from Willis’s Belt Valley Bank account. The parties presented conflicting testimony about whether Willis had authorized that withdrawal. The District Court determined that “Willis le[ft] signed checks with [Ferterrer] and [Debra] to fill out.” ¶39 The parties also presented conflicting testimony regarding what had happened to the funds after the withdrawal. The District Court further determined that Ferterrer “delivered the money from the four checks he and [Debra] had used to take funds from Willis’[s] Belt Valley Bank account to Willis’[s] wife Avelia.” The District Court resolved these conflicting accounts when it found Ferterrer more credible. Mowrer, ¶ 36. Willis’s criminal convictions and testimony about having hidden assets during his criminal prosecution likely hampered his credibility. Ferterrer fails to identify any factual determination that lacks support by substantial evidence. Varano, ¶ 7. ¶40 Affirmed. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JIM RICE	October 1, 2013
7c25191b-c269-4fb0-97fa-fa67d7fd2440	Estate of Irvine v. Oaas	2013 MT 271	DA 12-0603	Montana	Montana Supreme Court	DA 12-0603 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 271 THE ESTATE OF VA VA IRVINE, Petitioner and Appellant, v. ERIK & DEBBIE OAAS, Co-Personal Representatives of The Estate of John Winkley Irvine, Jr., Respondents & Appellees, and MICHAEL DODGE, Interested Party and Appellee, and SHODAIR CRIPPLED CHILDREN'S HOSPITAL, Interested Party and Appellee. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte/Silver Bow, Cause No. DP 09-57 Honorable Kurt Krueger, Presiding Judge COUNSEL OF RECORD: For Appellant: Justin Starin; McKenna & Starin, PLLC, Missoula, Montana Mary Kay Starin; Mary Kay Starin, PC, Butte, Montana September 17 2013 2 For Appellees: Jeffrey W. Dahood; Bernard J. “Ben” Everett; Knight, Dahood, Everett & Sievers, Anaconda, Montana (Attorneys for Erik and Debbie Oaas) Robert J. Whelan, Frank J. Joseph, Butte, Montana (Attorneys for Interested Party Michael Dodge) John F. Sullivan; Kate McGrath Ellis; Hughes, Kellner, Sullivan & Alke, PLLP, Helena, Montana (Attorneys for Interested Party Shodair Crippled Children’s Hospital) Submitted on Briefs: April 24, 2013 Decided: September 17, 2013 Filed: __________________________________________ Clerk 3 Chief Justice McGrath delivered the Opinion of the Court. ¶1 The Estate of Va Va Irvine appeals from an order of the Second Judicial District Court, Silver Bow County, that granted summary judgment to Michael Dodge. We affirm. ¶2 We restate the dispositive issues on appeal: ¶3 Issue One: Whether the District Court correctly determined that the contracts could not be reformed. ¶4 Issue Two: Whether the District Court correctly determined that proceeds from the decedent’s investment accounts were properly paid to his estate. PROCEDURAL AND FACTUAL BACKGROUND ¶5 John Winkley Irvine, Jr. (John) married Deana Dodge (Deana) in 1979. When they got married, Deana had a son, Michael Dodge (Dodge), from a prior marriage. John had no other children. John and Deana executed wills in 1983 that included Dodge as a beneficiary. Many years later, John executed a number of written beneficiary designations for various investment accounts that he owned. ¶6 Three of John’s accounts are relevant to the case at bar, a Hartford Director Annuity (Hartford Account), a Pacific Life Individual Retirement Account (Pacific Life Account), and a Northwestern Energy Retirement Account (Northwestern Account). John executed the written beneficiary designations for each of the accounts between 2003 and 2006. For the Hartford Account and Pacific Life Account, John named Deana as the 4 primary beneficiary and the “estate of the annuitant” as the contingent beneficiary. John also listed Deana as the primary beneficiary for the Northwestern Account, but he did not name a contingent beneficiary for that account. ¶7 Deana died in August of 2008. Ten months later, John died on June 30, 2009. Upon John’s death, the proceeds from all three accounts were paid to his estate. In 2011, we affirmed the validity of John’s 1983 will in an unpublished opinion. See In re Est. of Irvine, 2011 MT 37N, 264 P.3d 127 (Table). John’s mother, Va Va Irvine (Va Va), has since sought a declaratory judgment that she is the sole beneficiary of all three accounts, which Dodge has opposed.1 After conducting discovery, Va Va and Dodge both filed summary judgment motions. ¶8 Va Va argued that John had intended for her to be the contingent beneficiary for all three accounts. To support her contention, Va Va offered testimony from John’s financial planner, Steven Daniel (Daniel). In a deposition on July 13, 2011, Daniel testified that he had helped John execute beneficiary designation forms for a number of accounts, including the Hartford Account and the Pacific Life Account. According to Daniel, John had told him that he wanted the proceeds of his accounts to pass to Deana or, if Deana died before he did, to Va Va or his brother, William. Daniel claimed that John clearly told him that he did not want Dodge to receive the proceeds of the accounts. ¶9 Daniel testified that he had asked John multiple times if he had a will. According to Daniel, John told him that he did not. Because Daniel did not know about John’s 1983 1 Va Va has since died and her estate has been substituted as the petitioner, but we continue to refer to Va Va as the party involved for clarity. 5 will, Daniel advised John that if he designated his estate as the contingent beneficiary and Deana died before he did, then, under the laws of intestacy, the proceeds of his accounts would pass first to Va Va and then to William. Daniel testified that he had filled out the forms for John that designated John’s estate as his contingent beneficiary and had watched him sign them. ¶10 Va Va argued to the District Court that Daniel’s testimony proves that John had intended to benefit his estate under the laws of intestacy, not under the terms of his 1983 will, if Deana died before him. Because John thought that Va Va would inherit the proceeds through his estate under the laws of intestacy, Va Va argued that the court should determine that she is John’s contingent beneficiary to fulfill John’s intent. Va Va also argued that Daniel’s testimony established John’s intent regarding the Northwestern Account even though Daniel had not helped John with that account and John had not designated a contingent beneficiary. Alternatively, Va Va argued that the written contracts should be reformed for mutual mistake due to Daniel’s erroneous belief that John did not have a will when he executed the beneficiary designation forms. ¶11 The District Court held a joint hearing on Va Va’s and Dodge’s competing motions for summary judgment on August 29, 2012. In an order issued on October 2, 2012, the District Court concluded that Dodge was entitled to summary judgment under the contract terms and that no legal basis exists to require reformation of the contested contracts. Va Va appeals from that order. 6 STANDARD OF REVIEW ¶12 We review de novo a district court’s rulings on motions for summary judgment. Parish v. Morris, 2012 MT 116, ¶ 10, 365 Mont. 171, 278 P.3d 1015. Summary judgment is appropriate only when there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56; Turner v. Wells Fargo Bank, N.A., 2012 MT 213, ¶ 11, 366 Mont. 285, 291 P.3d 1082. Summary judgment is not appropriate where there is a genuine dispute over facts that could affect the outcome of the suit under the substantive law governing the cause of action. Broadwater Dev., L.L.C. v. Nelson, 2009 MT 317, ¶ 15, 352 Mont. 401, 219 P.3d 492. If a reasonable fact-finder could return a verdict for the non-moving party, there is a genuine dispute precluding summary judgment. Broadwater, ¶ 15. All reasonable inferences must be drawn in favor of the non-moving party. Hopkins v. Super. Metal Workings Sys., L.L.C., 2009 MT 48, ¶ 5, 349 Mont. 292, 203 P.3d 803. DISCUSSION ¶13 Issue One: Whether the District Court correctly determined that the contracts could not be reformed. ¶14 A court’s equitable power to reform a contract is codified at § 28-2-1611, MCA. When a written contract does not express the intention of the parties due to fraud, mutual mistake, or a mistake by one of the parties that the other party knew of or suspected, the contract may be revised to reflect their true intention. Section 28-2-1611, MCA; E. H. Oftedal & Sons, Inc. v. State, 2002 MT 1, ¶ 47, 308 Mont. 50, 40 P.3d 349. A court is not limited only to correcting errors in the language of the instrument, but may inquire 7 into the intended meaning and effect of the instrument. Section 28-2-1613, MCA. The mutual intent of the parties serves as the standard from which the instrument may be reformed. Sullivan v. Marsh, 124 Mont. 415, 422, 225 P.2d 868, 872 (1950). A court may not, therefore, create a “‘new and different’” contract or make “‘significant additions.’” Rogers v. Relyea, 184 Mont. 1, 10, 601 P.2d 37, 42 (1979) (quoting Sullivan, 124 Mont. at 422, 225 P.2d at 872). ¶15 While the mutual intent of the parties is the appropriate standard by which a contract may be reformed, a donative instrument is by its nature unilateral, and its terms depend only on the intent of the donor. Laundreville v. Mero, 86 Mont. 43, 56, 281 P. 749, 752 (1929) (allowing reformation of description of real property in deed based on unilateral mistake of donor). The Restatement (Third) of Property: Wills and Other Donative Transfers allows for the reformation of donative documents to correct unilateral mistakes by the donor: A donative document, though unambiguous, may be reformed to conform the text to the donor’s intention if it is established by clear and convincing evidence (1) that a mistake of fact or law, whether in expression or inducement, affected specific terms of the document; and (2) what the donor’s intention was. In determining whether these elements have been established by clear and convincing evidence, direct evidence of intention contradicting the plain meaning of the text as well as other evidence of intention may be considered. Restatement (Third) of Property: Wills and Other Donative Transfers § 12.1 (2003). Life insurance contracts are specifically included among those donative instruments that may be reformed even after the death of the donor. Restatement (Third) of Property: Wills and Other Donative Transfers § 12.1 cmt. c. Notably, Montana has recently adopted 8 § 415 of the Uniform Trust Code, which copies § 12.1 of the Restatement and allows for reformation of trusts based on clear and convincing evidence of mistake by the settlor. Section 72-38-415, MCA; Unif. Trust Code § 415 cmt. (2011). Other jurisdictions have relied on the Restatement to allow the reformation of donative instruments including trusts and deeds. Pullum v. Pullum, 58 So. 3d 752, 759 (Ala. 2010) (applying Restatement to reform property description); Magnuson v. Diekmann, 689 N.W.2d 272, 274-75 (Minn. App. 2004) (applying Restatement to reform deed granting tenancy in common rather than joint tenancy); Clairmont v. Larson, 831 N.W.2d 388, 394 (N.D. 2013) (citing commentary to Restatement for interpretation of Unif. Trust Code § 415); Generaux v. Dobyns, 134 P.3d 983, 989-90 (Or. App. 2006) (adopting similar provision of Restatement (Second) of Property to rescind trust); but see In re Lyons Marital Trust, 717 N.W.2d 457, 461-62 (Minn. App. 2006) (declining to apply Restatement with respect to reformation of wills). ¶16 This Court finds the Restatement to be persuasive and consistent with Montana law. We adopt the Restatement as it pertains to donative instruments other than wills. ¶17 Nevertheless, we find that reformation is not an appropriate remedy here. First, we find that there is not clear and convincing evidence of a mistake by the donor in this case. Second, we find that although a donative instrument may, in some circumstances, be subject to reformation after the death of the donor, permitting a stranger to the contract to request reformation in order to name herself a beneficiary goes beyond the appropriate scope of this remedy. 9 ¶18 The evidence in this case does not show that any of the beneficiary designations are mistaken. Although the District Court did not consider Daniel’s testimony when it concluded that the contracts could not be reformed, the remedy of reformation is not available even if Daniel’s testimony is considered and believed. Daniel’s testimony would have established that John decided to name his estate as contingent beneficiary of the Hartford and Pacific Life Accounts. After consultation with Daniel in which they discussed potential beneficiaries, John decided not to specifically name Va Va as a contingent beneficiary on either account, and instead to name his estate. The contracts correctly reflect that decision, and thus there is no evidence of mistake. Whether that decision was sound is not a matter for this Court to decide. Daniel’s testimony does not address John’s decision not to name a contingent beneficiary on the Northwestern Account. Even with all inferences drawn in favor of Va Va, she has not presented evidence sufficient to allow a reasonable fact-finder to return a verdict in her favor under the clear and convincing standard required to support an action for reformation. ¶19 Furthermore, we find that reformation to allow a third party to alter a beneficiary designation in her favor is not appropriate. The circumstances in which this and other courts have permitted reformation of a donative instrument are markedly different from the present case. Reformation has been granted to correct mistaken property descriptions, Pullum, 58 So. 3d at 754-55; Laundreville, 86 Mont. at 48-49, 281 P. at 749; Dowding v. Dowding, 40 N.W.2d 245, 246 (Neb. 1949), or mistakes in the estate or tenancy conveyed, Yano v. Yano, 697 P.2d 1132, 1133 (Ariz. App. Div. 1 1985); Tyler v. Larson, 235 P.2d 39, 40 (Cal. App. 2d Dist. 1951); Magnuson, 689 N.W.2d at 273. Reformation 10 is most commonly granted at the request of the donor or his or her personal representative. Pullum, 58 So. 3d at 755; Yano, 697 P.2d at 1134; Tyler, 235 P.2d at 39; Clairmont, 831 N.W.2d at 389; Generaux, 134 P.3d at 984. Reformation may also be granted at the request of the donee if the error is not discovered until after the donor’s death. Magnuson, 689 N.W.2d at 274; Laundreville, 86 Mont. at 55, 281 P. at 752; Dowding, 40 N.W.2d at 250. In cases where the donee was permitted to reform against the heirs of the donor, the donee was already clearly named in the document. Magnuson, 689 N.W.2d at 273-74; Laundreville, 86 Mont. at 49-50, 281 P. at 749; Dowding, 40 N.W.2d at 249. ¶20 The request for reformation presented in this case is of a different nature. Va Va is not a named beneficiary seeking to correct details of the contracts. Rather, she asks to name herself as an entirely new beneficiary. This is not an appropriate use of reformation. John executed two contracts naming his estate as beneficiary, and a third in which he declined to name any beneficiary. To insert Va Va as beneficiary would be to make a substantial addition resulting in a different contract, which a court may not do. Rogers, 184 Mont. at 10, 601 P.2d at 42. The District Court did not err when it concluded that the contracts could not be reformed. ¶21 Issue Two: Whether the District Court correctly determined that proceeds from John’s accounts were properly paid to his estate under the terms of the contracts. ¶22 Having concluded that the District Court correctly determined that the written contracts should not be reformed, we now look at the terms of the contracts to determine if the District Court correctly determined that Dodge was entitled to summary judgment. 11 The interpretation of a written contract is a question of law. King Resources, Inc. v. Oliver, 2002 MT 301, ¶ 18, 313 Mont. 17, 59 P.3d 1172. When a contract has been reduced to writing, the intention of the parties is to be ascertained, if possible, from the writing alone. Section 28-3-303, MCA; Wurl v. Polson Sch. Dist. No. 23, 2006 MT 8, ¶ 16, 330 Mont. 282, 127 P.3d 436. If the terms of a contract are unambiguous, a court must apply the language of the contract as written. State v. Asbeck, 2003 MT 337, ¶ 18, 318 Mont. 431, 80 P.3d 1272. A court considers extrinsic evidence when interpreting a contract only when the terms are ambiguous. Rich v. Ellingson, 2007 MT 346, ¶ 15, 340 Mont. 285, 174 P.3d 491. An ambiguity exists if the language of the contract, taken as a whole, is reasonably subject to two different interpretations. Wurl, ¶ 17. ¶23 John’s written beneficiary designations specifically designated his estate as the contingent beneficiary. The term “estate” in this context has only one meaning and requires no further interpretation or consideration of extrinsic evidence. Because John’s designation was clear, Daniel’s testimony is not admissible to create an ambiguity where none exists. The District Court correctly determined that the proceeds from the Hartford and Pacific Life Accounts were properly paid to John’s estate according to the express terms of the contracts. ¶24 As an interested party, Shodair Crippled Children’s Hospital asserts that the District Court should have applied § 28-3-304, MCA, and disregarded the clear and unambiguous beneficiary designations. Section 28-3-304, MCA, provides that “[w]hen through fraud, mistake, or accident a written contract fails to express the real intention of the parties, such intention is to be regarded and the erroneous parts of the writing 12 disregarded.” Shodair argues that because of a mistake by John as to the existence of the 1983 will, the designations should be disregarded. However, John did not make a mistake as contemplated by the statute. Even when all reasonable inferences are drawn in Va Va’s favor, the evidence still shows that John intended to list his estate as his contingent beneficiaries. Whether his decision to do so was sound, given the existence of his 1983 will, is not a matter for this Court’s consideration. No part of the written beneficiary designations were erroneous, and § 28-3-304, MCA, is not applicable. ¶25 Moreover, § 28-3-304, MCA, governs the interpretation of contracts, not their reformation. Although § 28-3-304, MCA, is similar to § 28-2-1611, MCA, in that both address mistakes in written contracts, they were originally borrowed from different parts of the California Civil Code, respectively, “Contracts” and “Relief.” Section 1640 Cal. Civ. Code (1885); § 3399 Cal. Civ. Code (1885). The codification of the Montana Code Annotated has maintained a distinction between the two. Section 28-3-304, MCA; § 28- 2-1611, MCA. Accordingly, this Court has applied § 28-3-304, MCA, to disregard portions of a contract inconsistent with the parties’ intention. Pulse v. N. Am. Land Title Co., 218 Mont. 275, 281, 707 P.2d 1105, 1109 (1985) (deleting “no exceptions” clause from contract). Even if § 28-3-304, MCA, were applicable here, it would result only in disregarding the beneficiary designation of the Hartford and Pacific Life Accounts. It would not authorize the insertion of a new beneficiary designation. See Bradbury v. Higginson, 140 P. 254, 256 (Cal. 1914) (holding California statute identical to § 28-3- 304, MCA, “cannot have the effect of authorizing a court, in the absence of a showing of a right of reformation, to find, upon oral testimony, that a written contract includes 13 provisions which do not appear upon its face, and to enforce such provisions as a part of the written contract.”) ¶26 The District Court also correctly concluded that the proceeds from the Northwestern Account should be paid to John’s estate. For the Northwestern Account, John designated Deana as the primary beneficiary but failed to designate a contingent beneficiary. The terms of the contract provide: If no beneficiary is named, or if no named beneficiary survives You, We may, at Our option, pay: 1) the executors or administrators of Your estate; or 2) all to Your surviving Spouse; or 3) if Your Spouse does not survive You, in equal shares to Your surviving Children; or 4) if no child survives You, in equal shares to Your surviving parents. (Emphasis added.) Like the other accounts, the terms of the contract for the Northwestern Account are clear and unambiguous. According to the plain language of the contract, the proceeds of John’s Northwestern Account were properly paid to his estate because he died without a surviving named beneficiary. ¶27 For the reasons stated above, the District Court’s order that denied Va Va’s motion for summary judgment and granted Dodge’s motion for summary judgment is affirmed. Dodge’s request for sanctions is denied. /S/ MIKE McGRATH We concur: /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT 14 /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE	September 17, 2013
8b378061-d480-4264-94b0-13bf7c69712a	State v. Morgeson	2013 MT 287N	DA 12-0703	Montana	Montana Supreme Court	DA 12-0703 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 287N STATE OF MONTANA, Plaintiff and Appellee, v. JOSEPH MICHAEL MORGESON, Defendant and Appellant. APPEAL FROM: District Court of the Seventh Judicial District, In and For the County of Dawson, Cause No. DC 11-055 Honorable Katherine Bidegaray, Presiding Judge COUNSEL OF RECORD: For Appellant: Julie Brown, Montana Legal Justice, PLLC, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Pamela P. Collins, Assistant Attorney General, Helena, Montana Olivia Norlin-Rieger, Dawson County Attorney; Marvin Howe, Deputy County Attorney, Glendive, Montana Submitted on Briefs: September 4, 2013 Decided: October 1, 2013 Filed: __________________________________________ Clerk October 1 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Joseph Michael Morgeson appeals from an order of the Seventh Judicial District Court, Dawson County, denying his motion to withdraw guilty plea. We affirm. ¶3 The following issues are raised on appeal: ¶4 Whether the District Court erred by denying Morgeson’s motion to withdraw his plea. ¶5 Whether the District Court erred in finding that Morgeson’s plea was voluntary. ¶6 Whether Morgeson was entitled to assistance of counsel in filing his motion to withdraw guilty plea. ¶7 Morgeson was charged with burglary and felony theft on September 2, 2011. He reached an oral plea agreement with the State under which the burglary charge would be dismissed. At the change of plea hearing on December 22, 2011, defense counsel asked that the agreement be memorialized in the record. It then became apparent that the defense and the State did not have the same understanding of their agreement. The defense believed the agreement was for a joint recommendation of a two year suspended sentence, while the State did not recall agreeing to the two year term. The Court allowed counsel to discuss the agreement outside the courtroom, and then recessed for eight minutes to allow Morgeson to review the agreement with his attorney. 3 ¶8 After the recess, the State indicated that it would not oppose the recommendation made by the defense and asked for a provision stating that the Court would not be bound by the agreement. The Court noted the defense’s recommendation of a two year suspended sentence. The Court then asked Morgeson if he had the recommendations “clear in [his] mind,” to which he replied yes. The Court asked Morgeson if he understood that the Court would not be bound by the agreement. Morgeson replied yes. The Court asked if he understood that he could not withdraw his guilty plea if the Court did not follow the recommendation. Morgeson replied yes. The Court then accepted Morgeson’s plea, and the State dismissed the burglary charge as agreed. Morgeson was sentenced to a term of five years, with three years suspended. ¶9 On appeal of the denial of a motion to withdraw guilty plea, this Court reviews findings of underlying fact for clear error and conclusions of law for correctness. State v. Warclub, 2005 MT 149, ¶ 24, 327 Mont. 352, 114 P.3d 254. This Court reviews mixed questions of law and fact regarding the voluntariness of a plea de novo. Warclub, ¶ 24. ¶10 Morgeson claims that his plea is controlled by § 46-12-211(1)(a), MCA, and therefore, he should have been allowed to withdraw his plea as a matter of right. If the State agrees to dismiss other charges as a component of a plea agreement under § 46-12-211(1)(a), MCA, Morgeson asserts that the defendant has the right to withdraw his plea if the court does not accept the agreement, pursuant to § 46-12-211(4), MCA. By contrast, if the State agrees not to oppose the defendant’s request for a particular sentence under § 46-12- 211(1)(c), MCA, the defendant specifically does not have the right to withdraw his plea. Section 46-12-211(2), MCA. Morgeson’s plea contained both types of agreement, because 4 the State agreed first to dismiss the burglary charge, and second, not to oppose the defendant’s request for a two year suspended sentence. Consequently, both provisions apply. Because the provisions of § 46-12-211(1)(c), MCA, apply, the defense recommendation is not binding on the court and Morgeson does not have the right to withdraw his plea. ¶11 Morgeson next argues that he should have been allowed to withdraw his plea for good cause, because it was not voluntary due to the confusion at the change of plea hearing. A guilty plea may be withdrawn for good cause, including involuntariness. Section 46-16- 105(2), MCA; Warclub, ¶ 16. This Court will not overturn a district court’s denial of a motion to withdraw guilty plea if the defendant was aware of the direct consequences of the plea, and the plea was not induced by threats, misrepresentation, or improper promises. Warclub, ¶ 32 (citing Brady v. United States, 397 U.S. 742, 755, 90 S. Ct. 1463, 1472 (1970)). The record here clearly establishes that Morgeson was aware of the consequences of his plea. After the State had explained its position on the plea agreement and Morgeson had been permitted a recess to confer with counsel, the District Court specifically advised him that the plea was not binding on the Court, the Court was not a party to the agreement, and he was not entitled as a matter of right to withdraw his plea. Morgeson stated that he understood each of these conditions. Following his motion to withdraw his plea, the District Court held that Morgeson was aware of the consequences of his plea and entered his plea knowingly and voluntarily. We affirm. ¶12 Morgeson also claims that he was entitled to the assistance of counsel in preparing his motion to withdraw guilty plea. It is well-settled that the right to counsel does not attach to a 5 motion to withdraw guilty plea, absent potential for substantial prejudice. State v. Garner, 2001 MT 222, ¶¶ 43-44, 306 Mont. 462, 36 P.3d 346. Substantial prejudice exists where the defendant may face further loss of liberty or an increased sentence. Ranta v. State, 1998 MT 95, ¶ 25, 288 Mont. 391, 958 P.2d 670. Morgeson admits that he did not face such an outcome. Morgeson was not entitled to assistance of counsel in preparing his motion to withdraw plea. ¶13 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶14 Affirmed. /S/ MIKE McGRATH We concur: /S/ BETH BAKER /S/ JIM RICE /S/ LAURIE McKINNON /S/ PATRICIA COTTER	October 1, 2013
632f0a7e-a351-4f20-9c9c-3ad99ac819bf	Tri-County Implement, Inc. v. Weaver	2013 MT 3009, 2013 MT 309	DA 13-0099	Montana	Montana Supreme Court	DA 13-0099 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 309 CR WEAVER, Plaintiff, v. TRI-COUNTY IMPLEMENT, INC., and TAMI CHRISTENSEN, Defendants. TRI-COUNTY IMPLEMENT, INC. and TAMI CHRISTENSEN, Counter Plaintiffs, Third Party Plaintiffs and Appellees, v. CR WEAVER, Counter Defendant and Appellant. MIKART TRANSPORT, LLC and MICHAEL ROBERT SMITH, Third Party Defendants. APPEAL FROM: District Court of the Seventh Judicial District, In and For the County of Richland, Cause No. DV 11-156 Honorable Katherine M. Bidegaray, Presiding Judge COUNSEL OF RECORD: For Appellant: William L. Managhan; Managhan Law Firm; Kalispell, Montana October 22 2013 2 For Appellees: Ben T. Sather, Eric E. Holm; Sather & Holm, PLLC; Billings, Montana Submitted on Briefs: September 26, 2013 Decided: October 22, 2013 Filed: __________________________________________ Clerk 3 Justice Jim Rice delivered the Opinion of the Court. ¶1 C.R. Weaver (Weaver) appeals from the Montana Seventh Judicial District Court’s order granting summary judgment in favor of Tri-County Implement, Inc. (Tri-County) and Tami Christensen,1 and imposing joint and several liability on Weaver in his individual capacity. We reverse the imposition of personal liability on Weaver, addressing the following issue: ¶2 Did the District Court err in holding Weaver jointly and severally liable for the obligations incurred on behalf of Mikart Transport, LLC? FACTUAL AND PROCEDURAL BACKGROUND ¶3 In January of 2011 Weaver formed Mikart Transport, LLC (Mikart), a domestic limited liability company. At that time, the Articles of Organization named Weaver and Michael Smith (Smith) as members or managers. Smith was named as Mikart’s registered agent. ¶4 Tri-County is a small business located in Sidney, specializing in sales and service of farm and industrial machinery, trucks, and trailers. During March of 2011, Smith submitted a credit application with Tri-County to open a line of credit on behalf of Mikart, which Tri-County approved. Smith represented on the credit application that he was the “owner” of Mikart. The application contained a provision requiring reimbursement of attorney fees and costs incurred by Tri-County in any court action necessary to collect amounts owed. 1 Tami Christensen is an owner of Tri-County and performs its bookkeeping. She is named in the pleadings as a co-defendant, co-counter plaintiff, and co-third party plaintiff with Tri-County. References herein to “Tri-County” include Christensen. 4 ¶5 On March 31, 2011, Smith requested that Tri-County perform service work to a Freightliner truck under Mikart’s account. Tri-County provided parts, service, and labor in the amount of $12,252.74. Payments totaling $6,980.84 were made toward this debt, leaving $5,271.90 unpaid. ¶6 On April 19, 2011, Smith requested that Tri-County mount a tank on a 1991 Volvo semi-truck under Mikart’s account. Tri-County accepted the project and created a service order. It ordered the specified tank and outsourced the necessary welding work to Niehenke Welding, Inc. Tri-County issued an invoice for the work performed on the Volvo in the amount of $1,086.00, which was not paid. As a result, Tri-County refused to release the Volvo from its possession pursuant to its asserted agisters’ lien on the vehicle. See § 71-3-1201(2)(a), MCA. The Volvo is titled in Weaver’s name. ¶7 Proceeding pro se, Weaver filed a complaint against Tri-County on December 12, 2011, alleging that payments he and his daughter had made to Tri-County were misapplied and that his Volvo was being wrongfully held.2 He argued that in so doing, Tri-County had committed “fraud, misrepresentation, unethical business practices and violations of good faith and fair dealings.” In response, Tri-County filed an answer and counterclaim against Weaver, as well as third-party complaints against Mikart and Smith, demanding payment in full for the work that had been performed on the Freightliner and Volvo. Weaver then filed an answer to the counterclaim and an answer to the third-party 2 Weaver initially claimed that an agreement had been reached between his daughter and Tri- County requiring application of payments he had arranged to the Volvo bill. However, the District Court concluded that Weaver had failed to meet his responsive burden on summary judgment to lay a factual foundation for his theories, and we conclude this claim was properly rejected for this reason. 5 complaint against Mikart. The District Court struck the latter on procedural grounds and also noted that Weaver was not licensed to practice law and could not personally represent Mikart. Smith failed to answer or otherwise appear, so the District Court entered default judgment against him. ¶8 Tri-County moved for summary judgment on its counterclaim against Weaver, its third-party complaint against Mikart, and Weaver’s complaint against Tri-County. The District Court granted summary judgment in favor of Tri-County on each count, finding that no dispute existed over the fact that Mikart incurred, and then failed to pay, the $6,357.90 owing to Tri-County for the work it had performed. Consequently, Tri-County had claimed a valid agisters’ lien against the Volvo and was entitled to compensation for the Freightliner pursuant to the credit agreement. The District Court entered judgment against Mikart, ordering it to pay $1,086.00 for work performed on the Volvo and $5,271.90 for parts, service, and work performed on the Freightliner. The District Court further awarded Tri-County $21,180.34 in attorney fees and costs based on the fee provision of the credit application. Finally, the District Court held Mikart, Smith, and Weaver jointly and severally liable for these amounts. Weaver appeals only the District Court’s imposition of personal liability on him. STANDARD OF REVIEW ¶9 We review de novo a district court’s ruling on a motion for summary judgment, performing the same analysis as the district court pursuant to Rule 56 of the Montana Rules of Civil Procedure. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186. Summary judgment is appropriate only if the moving party demonstrates 6 the absence of any genuine issue of material fact and entitlement to judgment as a matter of law. Turner v. Wells Fargo Bank, N.A., 2012 MT 213, ¶ 11, 366 Mont. 285, 291 P.3d 1082. A district court’s determination that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law is a legal conclusion that we review for correctness. Turner, ¶ 11. DISCUSSION ¶10 Did the District Court err in holding Weaver jointly and severally liable for the obligations incurred on behalf Mikart Transport, LLC? ¶11 Weaver does not challenge the District Court’s determination that no genuine issue of material fact exists that would preclude summary judgment. Rather, Weaver maintains that “[t]he District Court erred by ordering [him] jointly and severally liable with Smith and Mikart” because he never assumed legal responsibility for their actions. He argues that, absent some proof of his own wrongdoing, he cannot be held liable under a service contract that “(1) is in someone else’s name; (2) was applied for by someone else; and (3) involved work on two vehicles that was requested by someone else.” ¶12 Montana’s statute governing the liability of members or managers of a limited liability company (LLC) to third parties provides in pertinent part: [A] person who is a member or manager, or both, of a limited liability company is not liable, solely by reason of being a member or manager, or both, under a judgment, decree or order of a court, or in any other manner, for a debt, obligation, or liability of the limited liability company, whether arising in contract, tort, or otherwise or for the acts or omissions of any other member, manager, agent, or employee of the limited liability company. 7 Section 35-8-304(1), MCA. “[T]his Court has recognized [LLCs] as legal entities distinct from their members, with obligations separate from their members.” White v. Longley, 2010 MT 254, ¶ 34, 358 Mont. 268, 244 P.3d 753 (citing Ioerger v. Reiner, 2005 MT 155, ¶ 20, 327 Mont. 424, 114 P.3d 1028). LLCs provide their members and managers with “a corporate-styled liability shield . . . .” White, ¶ 34 (citing § 35-8-101, MCA, Official Comments). However, this liability shield is not absolute and does not provide immunity to a member for his own wrongful conduct. White, ¶ 37. ¶13 In White, Steve and Donna White purchased property near Troy with the intent to build a retirement home thereon. White, ¶ 2. The Whites contacted Tom Longley in Washington State about performing the construction work, which he agreed to do in his capacity as general manager of Castle Homes, LLC. White, ¶ 2. From the outset, Longley attempted to deceive the Whites about his credentials, his experience, and the work he would perform, eventually resulting in the construction of a home “so substandard that it could not reasonably be repaired” and that “the Whites would have to tear down . . . .” White, ¶¶ 26-27, 51. We noted: It is clear from the facts that Longley knowingly made any number of material representations about the Whites’ house project that induced them to trust him and to invest substantial sums of money with him. Longley knew exactly what was going on. He knew the limits of his own qualifications and abilities. He knew the deficiencies in the project because they were obvious to any experienced contractor and because his crew foreman Ellis told him. There is abundant evidence to support the District Court’s findings and conclusions regarding constructive fraud. 8 White, ¶ 29. The district court held Longley jointly and severally liable with Castle Homes, LLC for damages incurred by the Whites throughout the disastrous building process. White, ¶¶ 38-39. ¶14 On appeal, Longley argued that Montana’s Limited Liability Company Act provides LLC members complete liability protection for actions taken on behalf of that LLC. White, ¶ 32. We summarily rejected Longley’s position, explaining that Montana law “does not offer blanket protection from liability to a member of an LLC for the member’s own conduct . . . .” White, ¶ 37. Rather, § 35-8-304, MCA, “allow[s] personal liability against a member or manager of an LLC based upon contract or tort if the member or manager would be liable if acting in an individual capacity.” White, ¶ 37 (citing § 35-8-304, MCA, Official Comments). We concluded that Longley’s individual misconduct subjected him to liability under both contract and tort, which “remove[d] any protection from liability that Longley might otherwise have based upon the organization of Castle Homes as a limited liability company.” White, ¶ 38. ¶15 Turning to the case before us, our holding in White establishes that Weaver’s liability as a member depends on whether he engaged in conduct that would give rise to contract or tort liability if he were acting in his individual capacity. In other words, did Weaver personally breach a contract obligation or commit a tort with regard to Tri- County? As the Official Comments to § 35-8-304, MCA, explain, “[a] member or manager, as an agent of the company, is not liable for the debts, obligations, and liabilities of the company simply because of the agency.” 9 ¶16 The District Court concluded that “Weaver is not afforded the protections of § 35- 8-304, MCA” based on the following facts: “the Volvo at issue was owned by Weaver[;] Weaver failed to make payment either on his own behalf or on behalf of Mikart Transport, LCC[;] [and] Weaver personally brought this action against Tri-County.” Tri-County offers these points from the District Court’s analysis and adds that Weaver is personally liable because both Weaver and Smith entered into transactions on Mikart’s behalf; Weaver knew about and never objected to any of the transactions; and Weaver personally arranged some payments but then refused to make others. ¶17 Even taking these factual assertions as true, they do not establish a basis for imposing individual liability on Weaver in contract or tort. Turning first to a contract analysis, Weaver correctly argues that the agreements in this case for the work performed on the two trucks were solely between Tri-County and Mikart. Weaver did not guarantee Mikart’s payments or make any other promises. “A contract is an agreement to do or not to do a certain thing.” Section 28-2-101, MCA. Without an agreement between Weaver and Tri-County regarding the vehicle repairs, individual liability for breach of contract by Weaver does not lie. It is immaterial that Weaver held title to the Volvo, sued Tri- County, knew about Mikart’s transactions and failed to object, or arranged to make some payments to Tri-County. Again, an LLC’s “obligations are separate from its members.” Ioerger, ¶ 20. It is critical here to distinguish between Mikart’s failure to pay its own debts on the one hand, and Weaver’s failure to pay Mikart’s debts, on the other, when he had no contractual obligation to Tri-County to do so. Conflating the two would 10 eviscerate the protection afforded by Montana’s Limited Liability Company Act and render the LLC business form superfluous. ¶18 Turning to our tort analysis, Tri-County suggests that failing to impose individual liability on Weaver “would allow an agent to hide behind the LLC so that a victim of wrongful conduct is deprived of compensation if the LLC is insolvent, which is likely the case with Mikart Transport.” The key words here are “wrongful conduct.” The allegation that Mikart may be unable to pay its debts does not, by itself, amount to wrongful conduct that imposes liability on Weaver. As with the contract analysis, it is also immaterial that Weaver held title to the Volvo, sued Tri-County, knew about Mikart’s transactions and failed to object, or arranged for some payments to be made. Unlike the constructive fraud claim at issue in White, Weaver’s conduct in this case does not constitute an actionable tort. If a member or manager operates an LLC as an empty shell to perpetuate fraud and avoid personal responsibility, that situation would be different, but those are not the facts here. Apart from agency theory, which § 35-8-304, MCA, clearly rejects as a basis of member or manager liability, there is no basis on which to hold Weaver individually liable for the obligations of Mikart to Tri-County. ¶19 We conclude that the District Court erred in holding Weaver jointly and severally liable with Smith and Mikart for the work performed on the two vehicles, and for the attorney fees and costs assessed pursuant to the fee provision of the credit application, and therefore reverse the same. The remainder of the judgment is unaffected by reversal of this issue. We remand for entry of an amended judgment consistent herewith. 11 /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ PATRICIA COTTER /S/ BRIAN MORRIS	October 22, 2013
0605babb-68e8-4686-84fb-c950db585ffd	Benjamin v. Benjamin	2013 MT 293N	DA 13-0199	Montana	Montana Supreme Court	DA 13-0199 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 293N DELMAR BENJAMIN, Plaintiff and Appellant, v. JOYCE BENJAMIN and CECIL BENJAMIN, Defendants and Appellees. APPEAL FROM: District Court of the Ninth Judicial District, In and For the County of Toole, Cause No. DV-11-086 Honorable Laurie McKinnon and Honorable Robert G. Olson, Presiding Judges COUNSEL OF RECORD: For Appellant: Delmar Benjamin (Self-Represented); Shelby, Montana For Appellees: Jason T. Holden, Dana A. Ball; Faure Holden Attorneys at Law, P.C.; Great Falls, Montana Submitted on Briefs: September 11, 2013 Decided: October 8, 2013 Filed: __________________________________________ Clerk October 8 2013 2 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Delmar Benjamin (Delmar) appeals the orders of the Ninth Judicial District Court, Toole County, dismissing his complaint and denying his motion for relief from the order granting dismissal. We affirm. ¶3 Delmar filed an amended complaint in December 2011 in the District Court. He raised three claims in his amended complaint: (1) that his brother and mother, Cecil Benjamin (Cecil) and Joyce Benjamin (Joyce), had breached a farmland lease; (2) that Joyce had breached a gas well agreement; and (3) that Cecil had inappropriately distributed their father’s probate assets. Cecil and Joyce filed a motion to dismiss, alleging Delmar failed to state a claim upon which relief may be granted under M. R. Civ. P. 12(b)(6). The District Court granted the motion to dismiss on May 22, 2012. ¶4 A restatement of the dispositive issue on appeal is whether the District Court erred when it determined that Delmar failed to state a claim upon which relief may be granted. A district court’s determination that a complaint failed to state a claim presents a conclusion of law, which we review for correctness. Jones v. Mont. Univ. Sys., 2007 MT 82, ¶ 15, 337 Mont. 1, 155 P.3d 1247 (internal citations omitted). 3 ¶5 Regarding the farm lease, Delmar asserts the District Court did not take the allegations set forth in the complaint as true and failed to even consider them. He argues that the lease was not oral but was a “periodic tenancy with the expectation of renewal” based on a written contract. Cecil and Joyce counter that “[t]he written farm lease agreement upon which Delmar relies terminated by its own terms on March 1, 1995,” and that there was no renewal provision in the lease or other lease agreement. Because the lease was not in writing, they argue this claim was barred by the statute of frauds pursuant to § 28-2-903(1)(d), MCA. Moreover, they argue “the facts alleged by Delmar did not disclose the elements necessary to make a claim for breach of contract.” ¶6 The District Court correctly dismissed Delmar’s claim regarding the farm lease. The written lease agreement between Delmar and his father was for a term of one year (from 1994 to 1995) and did not include a renewal provision. Pursuant to § 70-26-204, MCA, an implied renewal period based on Delmar’s continued possession may be presumed for a year after the termination of the lease agreement, but not in excess of that one year. As the lease agreement is not evidenced by a writing, the District Court correctly concluded that Delmar’s claim was barred by the statute of frauds pursuant to § 28-2-903, MCA. ¶7 To support his second claim regarding the gas well agreement, Delmar again argues that the District Court ignored the contentions set forth in the complaint. He maintains he set forth a set of facts that, if proven, could result in a claim of tortious interference with a contract. Joyce and Cecil counter that Joyce owns the gas well and that Delmar fails to allege that plugging the gas well constituted a breach of any 4 purported gas well agreement. Given Delmar’s failure to establish a breach, we determine the District Court correctly concluded that Delmar failed to state a claim for relief. ¶8 Delmar’s final claim is that Cecil breached his fiduciary duty as personal representative of their father’s estate. Though the District Court dismissed this claim for lack of subject matter jurisdiction, Delmar argues that the District Court had jurisdiction pursuant to the doctrine of equity. He further argues the District Court failed to honor his father’s intent by not granting him possession of his portion of his father’s tangible personal property. ¶9 Because the estate was probated in the Ninth Judicial District Court in a case with a separate cause number, the district court that probated the estate, rather than the District Court in this cause, had subject matter jurisdiction over the estate pursuant to § 72-1-202(1)(a), (2), MCA. Delmar failed to attend any hearings regarding the settlement and distribution of the estate in the probate matter. Delmar did not challenge the will when it was probated, and he cannot do so now in this action in the District Court. The District Court correctly concluded that it did not have subject matter jurisdiction over this claim. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶11 For the foregoing reasons, we affirm the District Court’s decision. 5 /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ BRIAN MORRIS	October 8, 2013
cc3bece3-5529-4cc8-ba87-432ed736fa11	Geiszler v. Sayer	2013 MT 295, 2013 MT 295N	DA 13-0036	Montana	Montana Supreme Court	DA 13-0036 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 295N TIMOTHY GEISZLER, Plaintiff and Appellee, v. KYEANN SAYER, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV-10-1586 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Kyeann Sayer (Self-Represented); Missoula, Montana For Appellee: David J. Steele, II; Geiszler & Froines, PC; Missoula, Montana Submitted on Briefs: September 18, 2013 Decided: October 8, 2013 Filed: __________________________________________ Clerk October 8 2013 2 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Timothy Geiszler filed a Complaint in the Fourth Judicial District Court, Cause No. DV-10-1586, against Kyeann Sayer on November 24, 2010, alleging she had defamed and libeled him in a website Sayer created, published, and maintained. He sought the permanent removal of the defamatory publications and a permanent injunction against the publication by Sayer of other defamatory statements. ¶3 As litigation proceeded, the District Court issued multiple interlocutory orders, including an order dated June 25, 2012, granting Geiszler’s motion for an injunction. On June 28, 2012, Sayer filed a Notice of Appeal appealing the court’s June 25 order. The Montana Supreme Court assigned Cause Number DA 12-0397 to Sayer’s appeal. However, at the time Sayer filed the appeal, the District Court had not yet issued a final order in DV-10-1586. This was done on July 26, 2012. Also on July 26, 2012, the District Court ordered Sayer to post a supercedeas bond in the amount of $50,000 pending her appeal. On September 5, 2012, the District Court entered an amended judgment against Sayer in the amount of $16,087.30. ¶4 Sayer failed to file the bond in accordance with the District Court’s order; therefore, on September 11, 2012, we ordered her to do so within 20 days and to file an 3 amended notice of appeal within 30 days of the notice of entry of judgment in the District Court. Rather than comply, Sayer challenged our Order. We issued a subsequent Order on October 9, 2012, with which Sayer also failed to comply. Consequently, on December 4, 2012, we dismissed Sayer’s appeal with prejudice on the grounds that she had appealed without substantial or reasonable grounds and refused to obey this Court’s orders. We further ordered that Geiszler was entitled to sanctions in the form of his attorney fees and costs incurred in responding to Sayer’s appeal. We remanded the matter to the District Court for a determination of the appropriate amount of attorney fees and costs to be assessed against Sayer. ¶5 Upon receipt of the case on remand, Geiszler moved for an amended judgment in the amount of $27,361.70 which included interest on the original judgment and his fees and costs on appeal. In accordance with our order of December 4, Geiszler moved for a reasonableness hearing on these requested fees and costs. On December 17, the District Court ordered that the reasonableness hearing would be conducted on December 24, 2012. Sayer objected to Geiszler’s motion for an amended judgment, to the amount of fees and costs he claimed, and to the court’s scheduling of the reasonableness hearing. ¶6 On the morning of December 24, the clerk of the District Court notified the parties by telephone that the hearing scheduled for that day was continued until December 26 because the judge was ill. On December 26, Sayer filed another challenge to the reasonableness hearing, acknowledging receipt of the clerk’s phone message continuing the hearing to December 26. She also claimed that the scheduled hearings on December 24 and December 26 were “unnoticed” hearings in violation of her due process rights and 4 the court’s procedural rules. Sayer did not attend the December 26 hearing. At that hearing, the District Court notified Geiszler, who was in attendance, that the hearing was continued to December 31 due to the late notice to both parties. The court issued a Minute Entry that was mailed to both parties notifying them of the new hearing date and time. ¶7 Once again, on the morning of December 31, Sayer filed a notice to the court that she would not attend the December 31 hearing, again asserting that the hearing was not properly “noticed.” The District Court conducted the hearing and approved the submitted fees and costs Geiszler claimed to have incurred as a result of Sayer’s appeal to this Court. On January 8, 2013, the District Court issued an Order and Amended Judgment, awarding Geiszler a total of $30,041.27 which included the original September 5, 2012 judgment of $16,087.30, $515.97 in accrued interest on that judgment, and $13,438 in appellate attorney fees. ¶8 Sayer filed her Notice of Appeal from the January 8 Order and Amended Judgment on January 14, 2013. This Court assigned Montana Supreme Court Cause Number DA 13-0036 to this new appeal. Sayer attempts to raise multiple issues on appeal; however, we issued an order on July 10, 2013, striking most of these issues as they had been previously raised but dismissed with prejudice in Sayer’s earlier appeal under Cause No. DA 12-0397. As a result, the only issue properly before us on appeal is whether the District Court failed to provide Sayer with notice of the December 31, 2012 reasonableness hearing. 5 ¶9 Sayer does not dispute that she received actual notice of the December 31 hearing and that she refused to appear. In her notice to the District Court, she cited no circumstances beyond her control that prevented her attendance; rather, she again chastised the District Court for its alleged failure to notice the hearing in accordance with M. R. Civ. P. 6(c)(1) (Rule 6). In State v. Bekemans, 2013 MT 11, 368 Mont. 235, 293 P.3d 843, we held that a defendant who voluntarily fails to appear at a hearing waives her right to be personally present at all critical stages of her trial. We explained that an absence is voluntary “if the defendant knew of the hearing and failed to appear due to circumstances that were within her control.” Bekemans, ¶ 25. On November 5, 2010, the district court issued notice of Bekemans’ show-cause hearing to be held on November 9. Bekemans, ¶ 15. It was undisputed that Bekemans received actual notice of the hearing but failed to appear. Bekemans, ¶ 26. Bekemans claimed she missed the hearing because she did not have enough time to make arrangements to take time off from work. Bekemans, ¶ 26. We stated, “[w]hile attending the court proceeding may have been inconvenient, such an excuse is insufficient to make her absence involuntary.” Bekemans, ¶ 26. ¶10 Sayer makes no excuses for her failure to attend; she simply argues that the District Court failed to give her two weeks notice of the hearing in accordance with Rule 6. However, Rule 6(c)(1)(C) provides for an exception to the 14-day standard notice: In General. A written motion and notice of the hearing must be served at least 14 days before the time specified for any hearing, with the following exceptions: . . . 6 (C) when a court order -- which a party may, for good cause, apply for ex parte -- sets a different time. In the case before us, as in Bekemans, the District Court set a “different time” as provided in Rule 6(c)(1)(C). Sayer having received notice, her refusal to attend the hearing was voluntary and thus is unexcused. ¶11 We note that Geiszler moved this Court for an order of sanctions in the amount of $5,000 against Sayer in an effort to “avoid continued protracted litigation.” We deny Geiszler’s sanction request at this time but will re-consider sanctions against Sayer if these or related arguments are resurrected again. ¶12 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The issue in this case is legal and is controlled by settled Montana law which the District Court correctly interpreted. ¶13 We therefore affirm the District Court. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ JIM RICE /S/ LAURIE McKINNON /S/ BRIAN MORRIS	October 8, 2013
4cc2e1ac-ae05-4935-b637-6db69c452493	State v. Stevie J. McPherson	2013 MT 279N	DA 12-0372	Montana	Montana Supreme Court	DA 12-0372 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 279N STATE OF MONTANA, Plaintiff and Appellee, v. STEVIE JOE McPHERSON, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC-2011-116 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Lisa S. Korchinski, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Pamela P. Collins, Assistant Attorney General; Helena, Montana Fred R. Van Valkenburg, Missoula County Attorney; Andrew Paul, Deputy County Attorney; Missoula, Montana Submitted on Briefs: September 11, 2013 Decided: September 24, 2013 Filed: __________________________________________ Clerk September 24 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 The State of Montana charged Stevie Joe McPherson in the Fourth Judicial District Court, Missoula County, with three offenses committed on or about March 9, 2011: criminal distribution of dangerous drugs, in violation of § 45-9-101, MCA; criminal possession of dangerous drugs with intent to distribute, in violation of § 45-9-103, MCA; and obstructing a peace officer or other public servant, in violation of § 45-7-302, MCA. ¶3 McPherson and the State entered into a plea agreement under § 46-12-211(1)(c), MCA. The agreement provided that the State would recommend 15 years at Montana State Prison on each of the two drug offenses, with no time suspended, and 6 months on the obstruction offense, all suspended except time served. The three sentences were to run concurrently. The District Court accepted McPherson’s guilty pleas as to all three offenses at a change-of-plea hearing held October 11, 2011. ¶4 On January 24, 2012, McPherson—who had since dismissed his public defender and was now representing himself—filed a motion to withdraw his guilty pleas. He alleged that, due to “incompetent” representation by his public defender, he was “pressured to inadvisedly sign the guilty plea agreement on the spot during the October 11 hearing.” McPherson claimed that he had not been given an opportunity to consider the terms of the agreement. 3 He further asserted that he had signed the agreement “under duress,” based on the “threat of a worse result conveyed to me by my then public defender.” ¶5 In response, the State pointed out that the plea agreement had been provided to McPherson five days before the hearing and, thus, McPherson had been given plenty of time to review it. Further, the State argued that McPherson’s lengthy criminal history and his status as a persistent felony offender indicated that he is at least somewhat familiar with criminal penalties. The State maintained that McPherson had knowingly entered into the agreement and had obtained a significant reduction of his criminal liability as a result. ¶6 The District Court denied McPherson’s motion. In its Order, the District Court set forth the colloquy with McPherson at the October 11, 2011 hearing. Based on this colloquy, the court found no evidence of coercion or any lack of voluntariness in McPherson’s guilty pleas. The District Court also set forth the standards for withdrawing a guilty plea under § 46-16-105(2), MCA. See State v. Brinson, 2009 MT 200, ¶ 8, 351 Mont. 136, 210 P.3d 164; State v. Deserly, 2008 MT 242, ¶¶ 11-13, 344 Mont. 468, 188 P.3d 1057. Applying those standards, the court found that McPherson had acted voluntarily and had failed to show good cause to withdraw his guilty pleas. Quoting State v. Leitheiser, 2006 MT 70, ¶ 20, 331 Mont. 464, 133 P.3d 185, the court stated: “[T]he evidence shows he ‘voluntarily pled guilty—that is, his defense counsel, the State and the District Court fully advised [McPherson] of the consequences of pleading guilty and did not induce him to enter the [plea] agreement based on threats, misrepresentation or improper promises.’ ” Finally, the District Court found that McPherson had provided no factual or legal basis for his contention that his public defender was “incompetent.” The court ultimately gave McPherson a more 4 lenient sentence on the two drug counts than called for in the plea agreement: he was sentenced to 15 years in prison, but with five years suspended, on each of these counts, to run concurrently. ¶7 On appeal, McPherson (now represented by appellate counsel) acknowledges that his guilty pleas were the result of a plea agreement and that this Court would likely deem the District Court’s colloquy “satisfactory.” He also acknowledges that the District Court halted the change-of-plea hearing so that defense counsel could talk with him about a change to the terms of the plea agreement. McPherson maintains, nevertheless, that his pleas were entered involuntarily because he did not have the opportunity to consider the terms of the agreement which had been discussed with him just “moments” before he entered his pleas. He claims that he did not understand what the plea agreement meant, and he asserts that his answers at the change-of-plea hearing “were made only for the purpose of satisfying the court.” The State responds that McPherson’s contentions are not supported by the record and that he has failed to establish good cause to support withdrawal of his guilty pleas. ¶8 As an initial observation, we doubt that a defendant could establish “good cause” for withdrawing his guilty pleas under § 46-16-105(2), MCA, based on the rationale that, although he did not fully understand the terms of his plea agreement with the State, he nevertheless remained silent about this fact and proceeded at the change-of-plea hearing to give answers “only for the purpose of satisfying the court.” McPherson’s argument in this regard is implausible and unpersuasive. When asked by the court whether he understood the documents he had just signed in open court, McPherson replied, “Yes, sir, Your Honor.” When asked whether he had been given adequate time to go over them with his attorney, 5 McPherson replied, “Yep.” A defendant cannot be permitted to make such unequivocal representations to the court only to turn around three months later and claim that he in fact did not understand the documents he had signed and did not have adequate time to go over them with his counsel. To hold otherwise would undermine the “good cause” standard. ¶9 As we have stated, “ ‘allegations of having had certain mental impressions at the time of the plea must be supported by objective proof in the record.’ ” Brinson, ¶ 12 (quoting State v. Humphrey, 2008 MT 328, ¶ 23, 346 Mont. 150, 194 P.3d 643). Here, there is no objective proof in the record supporting McPherson’s belated and self-serving claims of confusion and coercion. The District Court found that McPherson entered his guilty pleas voluntarily, having been fully advised by his counsel, the prosecution, and the court of the consequences of pleading guilty. McPherson has not shown that the District Court’s factual findings are clearly erroneous, and we conclude, applying de novo review, that the District Court’s ultimate determination of voluntariness is correct. State v. Warclub, 2005 MT 149, ¶¶ 23-24, 327 Mont. 352, 114 P.3d 254. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The District Court’s factual findings are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶11 Affirmed. /S/ LAURIE McKINNON 6 We Concur: /S/ MIKE McGRATH /S/ BRIAN MORRIS /S/ PATRICIA COTTER /S/ BETH BAKER	September 24, 2013
2bf981f8-d959-406c-a47c-e3c90f57d738	Bridgman v. Union Pac. R.R. Co	2013 MT 289	DA 12-0606	Montana	Montana Supreme Court	DA 12-0606 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 289 GENE BRIDGMAN, Plaintiff and Appellant, v. UNION PACIFIC RAILROAD CO., Defendant and Appellee. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. DDV 11-68 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellant: Jon M. Moyers; Moyers Law P.C.; Billings, Montana For Appellee: J. Daniel Hoven, Sara S. Berg; Browning, Kaleczyc, Berry & Hoven; Helena, Montana Submitted on Briefs: July 24, 2013 Decided: October 7, 2013 Filed: __________________________________________ Clerk October 7 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Gene Bridgman appeals an order of the First Judicial District Court, Lewis and Clark County, granting summary judgment to Union Pacific Railroad Company on Bridgman’s Federal Employers’ Liability Act (FELA) claim and denying his request for additional discovery. We address the following issues on appeal: ¶2 1. Whether the District Court erred in concluding as a matter of law that Bridgman’s FELA claims are barred by the applicable statute of limitations. ¶3 2. Whether the District Court erred in denying Bridgman’s request for additional discovery pursuant to M. R. Civ. P. 56(f). ¶4 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶5 Gene Bridgman worked in the Operating Department for Union Pacific Railroad Company from 1972 until his retirement in 2008. Bridgman worked as a locomotive engineer for much of his career, operating trains on rough tracks and getting on and off moving equipment. In 1995, Bridgman began experiencing back pain, a condition for which he sought medical treatment numerous times over the next twelve years. ¶6 Bridgman initially sought medical help for his back pain from his chiropractor, Dr. Judson Pierce, and his medical doctor, Dr. Thomas Hope, on November 3, 1995. He reported extreme back pain beginning a few days earlier and discussed how the injury may have occurred when he was on his hands and knees replacing a refrigerator seal. He returned to Dr. Pierce for a follow-up visit three days later. 3 ¶7 Bridgman first received treatment for his leg pain on January 6, 1998, when he saw Keri Blasingame, APN, and complained of radiating pain into his right calf. She referred him to Dr. Janet Albright, who examined him two days later. Bridgman returned to Dr. Pierce twice in June of that year with complaints of low back pain. ¶8 Two years later, on December 14, 2000, Dr. Pierce treated Bridgman for low back pain and numbness in his left lateral calf. At this appointment, Dr. Pierce and Bridgman discussed possible causes of his injury. Dr. Pierce first observed at that time a potential relationship between Bridgman’s employment and his injury, noting that Bridgman “does carry a heavy bag at times for work.” Four days later, Bridgman returned to Dr. Pierce, complaining about the pain worsening while sitting; Dr. Pierce discussed the possibility of a herniated disc and a potential referral to a medical doctor if the pain continued. In May 2001, Dr. Pierce again treated Bridgman for low back and leg pain. ¶9 Bridgman sought treatment from Dr. Pierce for low back pain four times over a two-month period in the fall of 2002. During the last of these appointments, on October 22, 2002, Dr. Pierce told Bridgman that a referral to a medical doctor for an MRI would be appropriate if he desired or if his pain did not improve. ¶10 Bridgman did not seek an MRI at that time. Four months later, he returned for two more treatments from Dr. Pierce. During the first appointment, on February 24, 2003, after Bridgman complained of low back and leg pain, Dr. Pierce referred Bridgman to a medical doctor for his leg pain. 4 ¶11 On April 23, 2003, following a visit to Dr. Hope, Bridgman saw a podiatrist, Dr. Craig Karrasch, for treatment of burning pain in his left calf. Dr. Karrasch diagnosed peroneal tendonitis and bilateral plantar fasciitis, a musculoskeletal overuse syndrome, and prescribed custom orthotic devices for pain management. He also provided a letter to Union Pacific notifying it of the necessity for Bridgman to wear the orthotics while on the job. Bridgman returned to Dr. Pierce for two more treatments of his low back pain in February 2005. ¶12 On December 26, 2007, Bridgman sought treatment from Dr. Hope for persistent aching of his right calf. The next month, he complained of low back pain and persistent right leg pain to Dr. Pierce, who again suggested the possibility of a herniated disc. Bridgman visited Dr. Thomas Fyda for an orthopedic evaluation on January 25, 2008, at which time he complained of lower extremity pain. Dr. Fyda noted that Bridgman was “a few weeks” into the symptoms. He ordered an X-Ray, which showed a mild degenerative disc disease. Bridgman returned for another appointment with Dr. Pierce and told him Dr. Fyda had informed him that he was suffering from low back degeneration. ¶13 On February 22, 2008, Bridgman, on a referral from Dr. Fyda, had an orthopedic evaluation from Dr. Steve Cunningham for his low back and leg pain. During the visit, Bridgman complained of the pain worsening while sitting for long periods of time. Dr. Cunningham’s notes indicate that Bridgman “[was] very concerned . . . that this may 5 be a job-related abnormality.” An MRI taken by Dr. Cunningham showed evidence of a degenerative disc disease. ¶14 On that same day, Bridgman filed a Report of Personal Injury with Union Pacific regarding pain in his back and legs. Bridgman reported that he became aware from his physician on February 22, 2008, that his condition may have been caused by his work. Bridgman also reported that he first noticed symptoms “recently” and that he was first treated or diagnosed on February 22, 2008. ¶15 On a referral from Dr. Cunningham, Bridgman visited Dr. Dante Vacca for a neurosurgical consultation in March 2008. Bridgman reported to Dr. Vacca that his pain began the previous December. Bridgman consulted in April with Dr. Andrew Wesely, whose notes indicate that Bridgman had experienced low back and leg pain for “at least four to six months” prior to the appointment. ¶16 On January 20, 2011, Bridgman filed a complaint against Union Pacific under FELA, 45 U.S.C. § 51 et seq., for the back and leg injuries he allegedly sustained during his employment with the company. The complaint alleged that he “began experiencing low back and leg pain” on or about January 22, 2008. Bridgman alleged that Union Pacific knew or should have known that the types of tasks assigned to Bridgman, including getting on and off moving equipment and riding rough tracks, cause cumulative trauma disorder and repetitive musculoskeletal injuries in railroad workers. ¶17 Union Pacific filed a motion for summary judgment arguing that Bridgman’s claim was time-barred under FELA’s three-year statute of limitations. In support of its 6 argument, Union Pacific detailed the numerous occasions Bridgman sought medical help for his back and legs to demonstrate the lack of an issue of material fact as to when Bridgman knew or should have known about the possibility of a work-related injury. Bridgman opposed the motion, claiming that a question of material fact existed, and arguing in the alternative that further discovery should be permitted under M. R. Civ. P. 56(f). ¶18 The District Court granted Union Pacific’s motion for summary judgment on August 30, 2012. The court held that the statute of limitations began running once Bridgman learned that his back and leg pain may have been caused by his employment; according to the medical records, that was as early as December 14, 2000, when Bridgman and his chiropractor, Dr. Pierce, discussed aspects of his work as a potential cause for his pain. The court rejected Bridgman’s argument that knowledge of the specific cause of an injury is required to trigger the limitations clock in a FELA action, stating, “A plaintiff who discovers his job may be a potential cause of his injury is on notice of the running of this statute.” ¶19 The court also rejected Bridgman’s argument that further discovery should be allowed. The court determined that Bridgman did not show what possible discovery would need to be undertaken that would bear on the issue of the statute of limitations. Given that the applicable medical records already were collected and submitted to the court, the court denied Bridgman’s request. Bridgman appeals both the District Court’s summary judgment ruling and its denial of his request for additional discovery. 7 STANDARD OF REVIEW ¶20 We review de novo a district court’s summary judgment ruling. Johnston v. Centennial Log Homes & Furnishings, Inc., 2013 MT 179, ¶ 24, 370 Mont. 529, 305 P.3d 781. Under M. R. Civ. P. 56(c), the moving party has the burden of demonstrating the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Dovey v. Burlington N. Santa Fe Ry. Co., 2008 MT 350, ¶ 12, 346 Mont. 305, 195 P.3d 1223. The burden then shifts to the non-moving party to prove by more than mere denial or speculation, and by competent evidence, that a genuine issue of material fact exists. Roy v. Blackfoot Tel. Coop., Inc., 2004 MT 316, ¶ 11, 324 Mont. 30, 101 P.3d 301. ¶21 We review a district court’s M. R. Civ. P. 56(f) ruling for an abuse of discretion. Rosenthal v. Co. of Madison, 2007 MT 277, ¶ 23, 339 Mont. 419, 170 P.3d 493. DISCUSSION ¶22 1. Whether the District Court erred in concluding as a matter of law that Bridgman’s FELA claims are barred by the applicable statute of limitations. ¶23 FELA requires an injured railroad employee to commence a claim for injury within three years from the date the cause of action accrued. 45 U.S.C. § 56. The Act does not define when an injury accrues, but case law distinguishes the standard based upon whether the injury was an accident from a one-time occurrence or an occupational disease accumulating over time. See Urie v. Thompson, 337 U.S. 163, 69 S. Ct. 1018 (1949) (recognizing occupational disease claims under FELA for the first time). Claims 8 based upon medical injury accrue when the plaintiff has actual or constructive knowledge of the injury and its cause. Urie, 337 U.S. at 170; Winter v. U.S., 244 F.3d 1088, 1090 (9th Cir. 2001). ¶24 Courts recognize that determining the date of accrual is more difficult in cases involving latent injuries that can go unnoticed or injuries without a definite onset. Matson v. Burlington N. Santa Fe R.R., 240 F.3d 1233, 1235 (10th Cir. 2001). To avoid applying a strict limitations period requiring plaintiff to file suit before a latent injury manifests itself, the Supreme Court created the “discovery rule,” which starts the limitations period running “when the plaintiff knows or has reason to know of the existence and cause of the injury which is the basis of his action.” Matson, 240 F.3d at 1235; see also U.S. v. Kubrick, 444 U.S. 111, 121-23, 100 S. Ct. 352, 361 (1979). Although the Supreme Court applied the discovery rule under the Federal Tort Claims Act, many circuits have applied the discovery rule in FELA actions as well. Matson, 240 F.3d at 1235 (citing Aparicio v. Norfolk & W. Ry. Co., 84 F.3d 803, 814 (6th Cir. 1996); Fries v. Chicago & N.W. Transp. Co., 909 F.2d 1092, 1095 (7th Cir. 1990); Albert v. Maine Cent. R.R. Co., 905 F.2d 541, 544 (1st Cir. 1990); Townley v. Norfolk & W. Ry. Co., 887 F.2d 498, 501 (4th Cir. 1989); Kichline v. Consol. Rail Corp., 800 F.2d 356, 359 (3d Cir. 1986); Dubose v. Kansas City S. Ry. Co., 729 F.2d 1026, 1030 (5th Cir. 1984)). ¶25 To keep the limitations period from being too open-ended, the discovery rule imposes an affirmative duty upon plaintiffs to exercise reasonable diligence and investigate the cause of a known injury. It is enough to know that work is a possible 9 cause of an injury to trigger a duty to investigate work conditions and pursue potential claims. Matson, 240 F.3d at 1235-36. Although Urie allowed for tolling the limitations period while an injury is undetectable, it did not extend that tolling to plaintiffs who are aware that some type of injury exists yet do not “seek diagnosis and investigate the cause.” Fries, 909 F.2d at 1095 (citing Kubrick, 444 U.S. at 120-21). ¶26 On December 14, 2000—more than ten years before filing the complaint— Bridgman and Dr. Pierce discussed the possibility that Bridgman’s work contributed to his condition. A few days later, Dr. Pierce communicated with Bridgman the possibility that his back pain may be caused by a herniated disc and discussed a potential referral to a medical doctor. Bridgman argues that requiring him to file within three years of this date would be an “absurd” result given that he was still working full, unrestricted duty and because his symptoms were “distant, benign, infrequent, and resolved.” The nature and extent of Bridgman’s symptoms over the ensuing years, however, establish that he was on notice of a possible link between his injury and his work prior to the February 2008 appointment with Dr. Cunningham. He went to a doctor seeking treatment for back pain, leg pain or both more than twenty times over the twelve-year period preceding the February 22, 2008, appointment that ultimately resulted in his filing a report of injury claim with Union Pacific. He was alerted to a musculoskeletal overuse condition in 2003. And, though Bridgman’s first report of injury stated that he first experienced symptoms in February 2008, even a generous view of the facts establishes that Bridgman had experienced considerable leg and back pain at least since December 10 2007—more than three years before filing his complaint in January 2011. Even if the statute was not triggered in December 2000, Bridgman’s experience of similar symptoms over the following years put him on sufficient notice before January 2008 that gave rise under FELA to an affirmative duty to investigate. ¶27 Bridgman’s argument is made particularly difficult because the symptoms or contributing factors that led to his report of injury did not differ from those he experienced in the previous twelve years. Although Bridgman claims that he complained of symptoms “unlike anything he had ever experienced in his low back, with new pain radiating into his lower extremities,” the symptoms do not differ in character from those indicated in the medical records. Instead, Dr. Cunningham’s report from the February 22, 2008 evaluation states that Bridgman’s back pain was not significant, and the previous medical records establish that Bridgman had experienced leg pain for years. Additionally, consistent with his prior complaints to Dr. Pierce, Bridgman reported his symptoms as worse after sitting for long periods of time. The primary difference between this and previous appointments was that Bridgman affirmatively told Dr. Cunningham he was concerned the injury was work-related—something he already should have known was a possibility. Though Bridgman’s affidavit states that he did not know until Dr. Cunningham told him that his back and leg pain were related and likely caused by operating rough riding locomotives, this is identical to the “specific cause” argument rejected by the federal circuit courts. See Fries, 909 F.2d at 1096; Matson, 240 F.3d at 1236; Townley, 887 F. 2d at 501. 11 ¶28 This case is not controlled by our recent rulings in Dvorak v. Mont. State Fund, 2013 MT 210, 371 Mont. 175, 305 P.3d 873 or Siebken v. Voderberg, 2012 MT 291, 367 Mont. 344, 291 P.3d 572. Although there also are factual distinctions, the important difference between these and the present case is the applicable law. FELA is a federal statutory scheme, and we are required to follow the federal substantive law interpreting its provisions. St. Louis S.W. Ry. Co. v. Dickerson, 470 U.S. 409, 411, 105 S. Ct. 1347, 1348 (1985). Such substantive law includes the applicable statute of limitations. See Engel v. Devenport, 271 U.S. 33, 38-39, 46 S. Ct. 410, 412-13 (1926). As noted, FELA imposes an affirmative duty upon plaintiffs to investigate the cause of their injury upon notice of a possible job-related connection. See Matson, 240 F.3d at 1236. That affirmative duty is not imposed by the Montana law considered in our prior cases. Dvorak, ¶ 19; Siebken, ¶¶ 21-23. ¶29 In conclusion, Bridgman fails to raise a genuine issue of material fact and we agree that summary judgment in favor of Union Pacific was appropriate. The medical records establish that Bridgman was on inquiry notice that he may be suffering from a work-related back and leg condition before the three years preceding his complaint on January 20, 2011. The claim is time-barred under FELA’s three-year statute of limitations and Union Pacific is entitled to judgment as a matter of law. ¶30 2. Whether the District Court erred in denying Bridgman’s request for additional discovery pursuant to M. R. Civ. P. 56(f). 12 ¶31 M. R. Civ. P. 56(f) states that if a party opposing a motion for summary judgment shows, for specified reasons, that it cannot present facts essential to justify an opposition, the court may deny summary judgment or order a continuance to allow additional discovery. “A district court does not abuse its discretion in denying a Rule 56(f) motion if the party moving for additional discovery fails to establish how the proposed additional discovery will prevent summary judgment.” Hinderman v. Krivor, 2010 MT 230, ¶ 16, 358 Mont. 111, 244 P.3d 306 (citing Rosenthal, ¶ 38). The District Court determined that Bridgman failed to meet this burden. Bridgman argues that the District Court ignored his argument that additional discovery about Union Pacific’s failure to inform him of the signs and symptoms of cumulative trauma injuries would potentially prevent the railroad from asserting a statute of limitations defense under our holding in Bevacqua v. Union Pac. R.R. Co., 1998 MT 120, 289 Mont. 36, 960 P.2d 273. ¶32 While the District Court did not discuss this particular argument, we conclude that it did not abuse its discretion. Bridgman failed to show what discovery would have been material to the issue before the court. The undisputed facts establish that Bridgman first apprised Union Pacific of the existence of a work-related injury on February 22, 2008. His assertion that discovery may exist showing he was misled by Union Pacific about the signs and symptoms of his injuries up until that date is not compelling in light of the fact that Union Pacific was unaware of any injury to Bridgman. Our ruling in Bevacqua is inapplicable. There, the plaintiff was examined over the years by physicians of Union Pacific’s choosing who were determined to be agents of the railroad. Since their 13 misrepresentation misled plaintiff into not filing suit within the three-year period, we determined that plaintiff was entitled to have his case heard on the merits. Bevacqua, ¶¶ 57-60. Bridgman failed to meet his burden as the moving party under M. R. Civ. P. 56(f) in showing specific reasons requiring further discovery. The court was within its discretion to determine that no further discovery was necessary and to deny Bridgman’s request. ¶33 For the foregoing reasons, the judgment of the District Court is affirmed. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ JIM RICE /S/ LAURIE McKINNON /S/ BRIAN MORRIS Justice Patricia O. Cotter dissents. ¶34 I respectfully dissent from the Court’s decision to affirm the order granting the Union Pacific Railroad Company’s motion for summary judgment. I would reverse the decision and remand the case for a factual determination by the jury as to whether the statute of limitations has run. ¶35 Summary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3). 14 A plaintiff’s burden in a FELA action is significantly lighter than in an ordinary negligence case, and some FELA cases have been “submitted to juries based upon evidence ‘scarcely more substantial than pigeon bone broth.’ ” Grogg v. CSX Transp., Inc., 659 F. Supp. 2d 998, 1002 (2009) (citing Williams v. Natl. R.R. Passenger Corp., 161 F.3d 1059, 1061 (7th Cir. 1998) (internal quotations omitted)). ¶36 While the Court correctly concluded that federal substantive law applies in this FELA case, the issue of whether summary judgment was appropriate is governed by state law. “The rule in Montana, and in the majority of jurisdictions, is that when there is conflicting evidence as to when a cause of action accrued, the question of whether an action is barred by the statute of limitations is for the jury to decide.” Nelson v. Nelson, 2002 MT 151, ¶ 24, 310 Mont. 329, 50 P.3d 139 (citing Hill v. Squibb & Sons, E.R., 181 Mont. 199, 212, 592 P.2d 1383, 1390-91 (1979) (internal citation omitted)). See also McCormick v. Brevig, 1999 MT 86, ¶¶ 102-03, 294 Mont. 144, 980 P.2d 603 (it is for the trier of fact to determine at what point the plaintiff discovered or should have discovered through due diligence any negligence by the accountant when the existence of a trust was self-concealing); Werre v. David, 275 Mont. 376, 384, 913 P.2d 625, 630 (1996) (the point at which the plaintiff discovered a connection between the sexual abuse she experienced as a child and her mental disorders as an adult was a question of fact for the jury; thus, denial of the defendant’s motion for a directed verdict was correct). ¶37 Drawing all reasonable inferences that may be drawn from the offered proof in favor of Bridgman, I conclude genuine issues of material fact exist. Though the Court 15 determines that the discussion at the February 22, 2008 doctor appointment was no different than the discussions held during the previous appointments, Bridgman argues that he complained of symptoms “unlike anything he had ever experienced in his low back, with new pain radiating into his lower extremities.” Here, as in Fonseca v. Consol. Rail Corp., 246 F.3d 585 (6th Cir. 2001), there is a genuine issue of material fact as to whether the symptoms Bridgman complained of for three years prior to filing the lawsuit were separate from the symptoms he experienced periodically beginning in 1995. Bridgman is entitled to have a jury decide whether and when a reasonable person in his circumstances would have realized that he had suffered more than a de minimus injury and that the injury was work-related. For example, a jury could have determined Dr. Pierce’s note that Bridgman “carr[ies] a heavy bag at times for work” would not put a reasonable person on inquiry notice that the injury was work-related when there was no evidence that the doctor indicated to Bridgman that carrying a heavy bag was related to his injury, or that Bridgman himself identified the bag as a possible cause of the injury. ¶38 I acknowledge that FELA imposes an affirmative duty on plaintiffs to investigate the cause of their injury upon inquiry notice, but I conclude that whether Bridgman exercised reasonable diligence to investigate his injury is a question of fact for the jury. A jury could have concluded that Bridgman made reasonable efforts to investigate his pain complaints by visiting his chiropractor and doctors, but that his physicians did not know the effect of his occupational exposures on his condition. 16 ¶39 For the foregoing reasons, I dissent from the Court’s decision to affirm the District Court. /S/ PATRICIA COTTER Justice Michael E Wheat joins the Dissent of Justice Patricia O. Cotter. /S/ MICHAEL E WHEAT	October 7, 2013
427aa1e2-b99d-4e56-8c1e-77d832868543	Yorlum Props., Ltd. v. Lincoln County	2013 MT 298	DA 12-0707	Montana	Montana Supreme Court	DA 12-0707 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 298 YORLUM PROPERTIES, LTD., Plaintiff and Appellee, v. LINCOLN COUNTY, a political subdivision, and WILLIAM and JANET BIGGERSTAFF, Defendants and Appellants. APPEAL FROM: District Court of the Nineteenth Judicial District, In and For the County of Lincoln, Cause No. DV 11-74 Honorable James B. Wheelis, Presiding Judge COUNSEL OF RECORD: For Appellants: Clifton W. Hayden; Hedman, Hileman & LaCosta, PLLP; Whitefish, Montana (for William and Janet Biggerstaff) Bernard G. Cassidy; Lincoln County Attorney; Libby, Montana (for Lincoln County) For Appellee: Amy N. Guth; Attorney at Law; Libby, Montana Submitted on Briefs: July 24, 2013 Decided: October 15, 2013 Filed: __________________________________________ Clerk October 15 2013 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Carol Miller owned two adjacent parcels of real property in Lincoln County near Eureka, Montana. In March 2005, she conveyed one of the parcels to William and Janet Biggerstaff (the Biggerstaffs). Miller purported in the conveyance to reserve an easement over the Biggerstaffs’ parcel for the benefit of Miller’s retained parcel. In August 2006, Miller conveyed her retained parcel to Yorlum Properties Ltd. (Yorlum). ¶2 Thereafter, a dispute arose among Yorlum, the Biggerstaffs, and Lincoln County concerning the validity of the reserved easement. Yorlum commenced this action in the Nineteenth Judicial District Court, Lincoln County, seeking to quiet title to its property and access rights. The District Court granted summary judgment to Yorlum, and both the Biggerstaffs and Lincoln County now appeal. ¶3 We address three issues: 1. Whether the easement over the Biggerstaffs’ parcel is valid. 2. Whether Miller lacked title to convey to Yorlum. 3. Whether Yorlum’s complaint is barred by equitable principles. We conclude that Yorlum is entitled to summary judgment on each of these issues, and we accordingly affirm the District Court’s decision. BACKGROUND ¶4 Miller’s property at issue in this case initially consisted of a 5.534-acre parcel designated “Lot 5” in the Dukes Vista Ridge subdivision, plus an adjacent 35.746-acre parcel north of Lot 5. Access to Lot 5 is provided over Dukes Vista Drive (a cul-de-sac). In 2004, Miller proposed a boundary adjustment to combine her two parcels into one 3 41.28-acre parcel, designated “Lot 5A.” Lincoln County approved this boundary adjustment on January 10, 2005, as depicted on Amended Plat No. 6576. This plat is shown here, with the boundary of Lot 5A bolded:1 ¶5 Miller next proposed to divide Lot 5A into two parcels. The northerly parcel, “Lot 5-B,” would be 20.26 acres, and the southerly parcel, “Lot 5-A-1,” would be 21.00 acres. This division is depicted on Amended Plat No. 6588. The plat, shown below, also 1 The diagrams contained in this Opinion are part of the record in this case. Dukes Vista Drive 4 depicts a “30' private easement” running northerly through the middle of Lot 5-A-1 from the terminus of Dukes Vista Drive to the southern boundary of Lot 5-B. ¶6 The Lincoln County Planning Department received objections from neighboring landowners regarding Miller’s proposed division of Lot 5A. The landowners claimed that the Dukes Vista Ridge subdivision covenants prohibited further subdivision of any Dukes Vista Drive 5 lot. They also claimed that the covenants prohibited access to any further added land using the subdivision’s private roads. In this regard, the final plat of the Dukes Vista Ridge subdivision (Plat No. 5846, recorded March 26, 1997) indicates that Dukes Vista Drive and Linda Vista Drive (with which Dukes Vista Drive intersects to the south) are both 60-foot-wide “private” roads. ¶7 Despite the landowners’ objections, the Lincoln County Board of Commissioners granted preliminary plat approval on February 2, 2005. As a condition of final approval, Miller was expected to resolve the access dispute with her neighbors; however, although Miller contacted several of the landowners, no agreement was reached. Nevertheless, the Board of Commissioners granted final plat approval on February 15, 2005. Amended Plat No. 6588 was recorded that same day. Two weeks later, Miller sold Lot 5-A-1 to the Biggerstaffs by a warranty deed dated March 1, 2005, and recorded March 2, 2005. The deed describes the property being conveyed as “Lot 5-A-1 of the Amended Plat of Dukes Vista Ridge Lot 5A, according to the plat thereof on file in the office of the Clerk and Recorder, Lincoln County, Montana. Plat #6588.” ¶8 None of the neighboring landowners appealed, pursuant to § 76-3-625, MCA, from the Board’s preliminary approval or final approval of Amended Plat No. 6588. Nor did any of the landowners sue to enforce the subdivision covenants. A number of the landowners, however, appeared at the Board’s regular session on April 20, 2005, and reasserted their objections to the division of Lot 5A into two parcels. They claimed that Miller had “manipulated” the law and had employed “tactics” designed to “get[ ] around the legalities of our Covenants.” They asked the Board to return Miller’s property to a 6 single 41-acre parcel, or to remove Lot 5-B from the Dukes Vista Ridge subdivision and eliminate the easement over Lot 5-A-1. ¶9 On August 24, 2005, the Board of Commissioners executed a document which purports to invalidate the easement over Lot 5-A-1. The document was recorded with the Lincoln County Clerk and Recorder that same day. It states: NOTICE OF NO AUTHORIZED ROAD ACCESS Lincoln County hereby asserts that there is NO AUTHORIZED ROAD ACCESS for use of Linda Vista Drive nor access across Lot 5-A-1 for the benefit of Lot 5-B of the Amended Plat of Dukes Vista Ridge located in the NE1/4 of Section 14, Twp. 36 N., R. 28 W., P.M.M., all as shown on Amended Plat 6588, Lincoln County records. No agreement between the original developer of the amended plat and landowners within the Plat of Dukes Vista Drive could be reached for use of Linda Vista Drive for access to Lot 5-B. This was a condition of the approval of the Amended Plat of Dukes Vista Ridge, Amended Plat No. 6588. ¶10 Yorlum acquired Lot 5-B from Miller on August 15, 2006. The following year, Yorlum notified the Biggerstaffs that a surveyor would be staking off the easement over Lot 5-A-1 and that a roadway would then be constructed to Lot 5-B. The Biggerstaffs responded that “no easement of any kind crosses Lot 5-A-1 for the benefit of Lot 5-B.” Additionally, a spokesperson for the property owners in Dukes Vista Ridge subdivision sent Yorlum a letter stating that subdivision roads could not be used to access Lot 5-B. Yorlum attempted to resolve this issue with the landowners, but was not successful. ¶11 On March 21, 2011, Yorlum filed the instant action under Title 70, chapter 28, part 1, MCA, seeking a determination that it “is the owner in fee simple of property described in Amended Plat 6588” and “is entitled to subdivision access as described in 7 Amended Plat 6588.” The Biggerstaffs and Lincoln County filed answers, and the parties subsequently filed cross-motions for summary judgment. The District Court determined that the documents of conveyance from Miller to the Biggerstaffs created an easement over Lot 5-A-1 as depicted and labeled on Amended Plat No. 6588. The District Court further ruled that once the Board of Commissioners granted final plat approval, the Board had no statutory authority to then record a “Notice of No Authorized Road Access.” The District Court noted that if Miller or her surveyor in fact misrepresented the legal access in Amended Plat No. 6588, then Lincoln County and any affected landowners could have pursued available remedies under the Montana Subdivision and Platting Act (Title 76, chapter 3, MCA), none of which included placing a cloud over Yorlum’s easement in the form of a Notice of No Authorized Road Access. Finally, the District Court rejected the Biggerstaffs’ claim that Yorlum should be equitably precluded from legal access to its lot. The court reasoned that Yorlum took whatever title Miller could lawfully convey and that any awareness Yorlum may have had of the Notice of No Authorized Road Access was not salient to the validity of the Notice or the easement. STANDARDS OF REVIEW ¶12 This Court reviews a district court’s ruling on a motion for summary judgment de novo, applying the criteria set forth in M. R. Civ. P. 56. Gordon v. Kuzara, 2012 MT 206, ¶ 13, 366 Mont. 243, 286 P.3d 895. Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c)(3). Where the material facts are 8 undisputed—as is the case here—the district court must simply identify the applicable law, apply it to the uncontroverted facts, and determine who prevails. Corp. Air v. Edwards Jet Ctr., 2008 MT 283, ¶ 28, 345 Mont. 336, 190 P.3d 1111. The determination as to whether a party is entitled to judgment on the facts is a conclusion of law, which this Court reviews to determine whether it is correct. Gordon, ¶ 13. DISCUSSION ¶13 Issue 1. Whether the easement over the Biggerstaffs’ parcel is valid. ¶14 Yorlum claims it has an easement by reservation over the Biggerstaffs’ property. An easement arises by reservation where a landowner conveys part of his or her property to another but reserves an easement over the transferred property in favor of the landowner’s retained property. Blazer v. Wall, 2008 MT 145, ¶ 27, 343 Mont. 173, 183 P.3d 84. A reserved easement may be created only when the dominant and servient estates are split from single ownership. Blazer, ¶¶ 38, 44; Ruana v. Grigonis, 275 Mont. 441, 448-51, 913 P.2d 1247, 1252-54 (1996). Hence, the easement over Lot 5-A-1 was reserved, if at all, when Lot 5A was split from single ownership into two separately owned parcels. That occurred on March 1, 2005, when Miller conveyed Lot 5-A-1 to the Biggerstaffs and retained Lot 5-B for herself. Thus, the Miller-Biggerstaff transaction is decisive. Blazer, ¶ 44. ¶15 The Miller-Biggerstaff deed contains no language expressly reserving an easement over the conveyed property—such as, “Grantor reserves a 30-foot-wide private access easement over Lot 5-A-1 for the benefit Lot 5-B.” See Davis v. Hall, 2012 MT 125, ¶ 19, 365 Mont. 216, 280 P.3d 261. The deed does state (in the Property Description) that the 9 conveyance of Lot 5-A-1 is “SUBJECT TO easements on the recorded plat #5846, #6576 and #6588, records of Lincoln County, Montana.” However, this Court has held that “subject to” language in a document of conveyance does not create an easement. Wild River Adventures, Inc. v. Bd. of Trustees, 248 Mont. 397, 401, 812 P.2d 344, 346-47 (1991); Bache v. Owens, 267 Mont. 279, 286, 883 P.2d 817, 821 (1994); Ruana, 275 Mont. at 449, 913 P.2d at 1252-53; Blazer, ¶ 28. Consequently, given the absence of any language in the deed expressly reserving the claimed easement over Lot 5-A-1, Yorlum relies instead on this Court’s easement-by-reference doctrine. ¶16 In a series of cases, this Court has recognized that an express easement may be created by referring in an instrument of conveyance to a recorded plat or certificate of survey on which the easement is adequately described. See Bache, 267 Mont. at 283-86, 883 P.2d at 820-22; Halverson v. Turner, 268 Mont. 168, 172-74, 885 P.2d 1285, 1288-89 (1994); Ruana, 275 Mont. at 449, 913 P.2d at 1253; Tungsten Holdings, Inc. v. Parker, 282 Mont. 387, 390, 938 P.2d 641, 642 (1997); Pearson v. Virginia City Ranches Assn., 2000 MT 12, ¶¶ 19-20, 26, 298 Mont. 52, 993 P.2d 688; Blazer, ¶¶ 30-43; Conway v. Miller, 2010 MT 103, ¶ 19, 356 Mont. 231, 232 P.3d 390; Davis, ¶ 19; see also Broadwater Dev., LLC v. Nelson, 2009 MT 317, ¶ 26, 352 Mont. 401, 219 P.3d 492. “When the deed itself contains no language reserving (or granting) an easement, our easement-by-reference doctrine contemplates that an explicit reference in the deed to a plat or certificate of survey on which an easement is clearly depicted and adequately described is sufficient to establish the easement.” Blazer, ¶ 41. 10 ¶17 As noted, the Miller-Biggerstaff deed describes the property being conveyed as “Lot 5-A-1 of the Amended Plat of Dukes Vista Ridge Lot 5A, according to the plat thereof on file in the office of the Clerk and Recorder, Lincoln County, Montana. Plat #6588.” This is sufficient to incorporate the plat into the deed. Blazer, ¶ 45. Accordingly, the dispositive question is whether the easement shown on Amended Plat No. 6588 is “adequately described.” Blazer, ¶¶ 41, 45; Broadwater Dev., ¶ 38. ¶18 We have noted two requirements for adequately describing an easement: first, the identities of the dominant and servient tenements must be “ascertainable with reasonable certainty” from the transaction documents; second, the transaction documents must give the owner of the property being burdened by the servitude “knowledge of its use or its necessity.” Davis, ¶¶ 20, 24-25; Blazer, ¶¶ 36, 51, 54, 56-57; Broadwater Dev., ¶ 38. The Biggerstaffs argue that, in order to satisfy these requirements, the precise location of the easement on the ground must be provided. ¶19 This is a question we have not previously addressed in our easement-by-reference cases. In Bache, Halverson, and Blazer, the certificates of survey showed a 30-foot-wide easement along the boundary of the servient estate. Bache, 267 Mont. at 282, 291, 883 P.2d at 819, 823; Halverson, 268 Mont. at 170-71, 885 P.2d at 1287; Blazer, ¶¶ 2-4. There was no dispute about where the alleged easement was situated. Likewise, the location of the building restriction line at issue in Conway was identified by corners and measurements on the face of the plat. Conway, ¶ 2. In Tungsten Holdings, the alleged easement was a meandering strip of land 40 feet wide, approximately 2,700 feet long, and identified as “lot 34”; however, this parcel served as a boundary between property to the 11 north and property to the south of lot 34, and thus its precise location was not in question. 282 Mont. at 388-89, 938 P.2d at 641-42. Finally, in Ruana, Pearson, and Davis, there was no dispute about the easement’s location; the only question was its validity. Ruana, 275 Mont. at 444-45, 450, 913 P.2d at 1249-50, 1253; Pearson, ¶ 17; Davis, ¶¶ 3-4. ¶20 In contrast, the precise location of the easement on Amended Plat No. 6588 is not specified—for example, with a metes-and-bounds description.2 For reader convenience, an excerpt of the plat is provided here: ¶21 The District Court, while it did “not necessarily disagree with the Biggerstaffs’ claims that a metes and bounds description would be helpful,” nevertheless concluded that the lack of such a description does not invalidate the easement. In the Biggerstaffs’ view, this was error. They argue that a depiction is inadequate—and, thus, the purported 2 Metes and bounds: “The territorial limits of real property as measured by distances and angles from designated landmarks and in relation to adjoining properties.” Black’s Law Dictionary 1080 (Bryan A. Garner ed., 9th ed., Thomson Reuters 2009). 12 easement is void—if no courses, bearings, distances, angles, radiuses, centerline location, or other similar information is provided. They characterize this information as essential to locate the easement and to determine the burden on the servient estate. ¶22 It is true that a land description is necessary in an instrument conveying title so that the extent of the claim to the property may be determined. Blazer, ¶¶ 51, 70; Halverson, 268 Mont. at 172, 885 P.2d at 1288. However, contrary to the Biggerstaffs’ argument, failing to fix an easement’s precise location in the transaction documents does not render the easement void as a matter of law. In Anderson v. Stokes, 2007 MT 166, 338 Mont. 118, 163 P.3d 1273, for example, the owners of a 160-acre parcel granted Donald Treloar an easement to erect, construct, operate, and maintain radio towers. The instrument of conveyance recited that Treloar desired to erect the radio towers on “certain portions” of the 160-acre parcel, but the exact location was “impossible to determine” at that time. Anderson, ¶ 4. The grantors thus gave Treloar “the right to select the place or places at which the above described facilities shall be erected and maintained.” Anderson, ¶ 4. Treloar then selected a site within the 160 acres and built two radio towers along with a transmission line, wires, conduits, and ground radial antennas. Anderson, ¶ 5. We held that the selection of a site and the construction of towers on that site fixed the location of the easement. Anderson, ¶¶ 37-47. ¶23 Other cases recognize, at least implicitly, that the failure to specify an easement’s precise location in the documents of conveyance is not necessarily fatal to the easement’s validity. See e.g. Ponderosa Pines Ranch, Inc. v. Hevner, 2002 MT 184, ¶ 27, 311 Mont. 82, 53 P.3d 381 (“Where, as here, an easement is reserved without designating a location, 13 and a road exists at the time of the reservation, then a court will treat the road as the easement that the parties contemplated.”); Wills Cattle Co. v. Shaw, 2007 MT 191, ¶ 26, 338 Mont. 351, 167 P.3d 397 (“If a document fails to adequately fix the location of an easement, a court may ascertain the location by use.”); Larson v. Amundson, 414 N.W.2d 413, 417 (Minn. App. 1987) (where the location of an easement is indefinite, the grantor or the grantee may designate the roadway in a reasonably suitable location); Evans v. Bd. of Co. Commrs., 2005 UT 74, ¶¶ 12-14, 123 P.3d 432 (although certainly desirable in most instances, language fixing the location of an easement is not always necessary when other terms of the easement safeguard the servient estate from the risk that its burden may be greater than that for which it bargained); Smith v. King, 620 P.2d 542, 543 (Wash. App. Div. 1 1980) (a right-of-way not definitely located in the deed may be located by the parties by parol agreement anywhere within the boundaries of the land over which the right is granted; the location of an easement may be established also by implication through customary use); Brumbaugh v. Mikelson Land Co., 2008 WY 66, ¶ 21, 185 P.3d 695 (where the location of an express easement is not stated, courts consider certain factors in locating the easement); see also Jon W. Bruce & James W. Ely, Jr., The Law of Easements and Licenses in Land §§ 7:4 to 7:6, 7-5 to 7-17 (Thomson Reuters 2013) (discussing this subject). ¶24 Of course, the foregoing cases are factually distinguishable from the present case in the respect that each case involved an easement that was created using express language in a deed, covenant, or declaration, but whose location was not fixed. The courts did not find the easements void for lack of a specified location; they instead 14 applied various approaches for determining the easement’s location. The present case, in contrast, involves an easement that was not created using express language of grant or reservation in a deed; it instead was created solely by means of a depiction on a plat referenced in the deed. ¶25 Nevertheless, whether an easement is created using express language (e.g., Broadwater Dev.), or by merely depicting it on a plat or certificate of survey referenced in the deed (e.g., Bache, Halverson, Pearson), or through some combination of these two methods (e.g., Davis), the essential requirement in all three situations is the same with regard to the description: an individual examining the transaction documents must be able to ascertain, with reasonable certainty, the intended dominant and servient tenements and the easement’s use or necessity. Blazer, ¶ 75; Broadwater Dev., ¶¶ 26, 38; Davis, ¶¶ 24-25. The purpose of requiring this information is to ensure that the owner of the servient estate can determine the extent of the burden on the servient land. It also enables the dominant and servient landowners to ensure that the terms of the easement are being honored, see Evans, ¶ 12, and it gives notice of the burden to prospective purchasers of the servient estate under the recording statutes, see Blazer, ¶¶ 73-74. While there may be instances where the depicted easement’s location is so vague and uncertain as to render it impossible to ascertain, with reasonable certainty, the easement’s burden on the servient estate, we do not agree with the Biggerstaffs’ argument that the failure to provide a metes-and-bounds description is necessarily fatal in every case. ¶26 Here, Amended Plat No. 6588 provides a metes-and-bounds description (with angles, distances, and corners) of the boundaries of Lot 5-A-1 and Lot 5-B. The depicted 15 easement begins at the terminus of Dukes Vista Drive and is aligned with the easterly 30 feet of that road. (Dukes Vista Drive is 60 feet wide.) The easement proceeds a short distance north, then veers to the northeast, and gradually returns to a northerly direction, ultimately terminating at the southernmost boundary of Lot 5-B. The easement runs through the middle of Lot 5-A-1, and its course can be fairly approximated using the Graphic Scale provided on the plat and measuring from the boundaries of Lot 5-A-1 and Lot 5-B. The easement is labeled 30 feet wide and “private.” The plat thus imparts sufficient information for an individual to ascertain, with reasonable certainty, the dominant tenement (Lot 5-B), the servient tenement (Lot 5-A-1), the easement’s approximate course across Lot 5-A-1, and the easement’s use or necessity (to provide a means of private access to Lot 5-B). The easement’s burden on the servient estate is reasonably clear to any purchaser of Lot 5-A-1. ¶27 Based on this analysis, we hold that the Miller-Biggerstaff transaction documents created a valid easement over Lot 5-A-1 for the benefit of Lot 5-B. ¶28 Issue 2. Whether Miller lacked title to convey to Yorlum. ¶29 Lincoln County and the Biggerstaffs advance two separate but related arguments concerning the validity of Miller’s sale of Lot 5-B to Yorlum. We reject these arguments for the reasons which follow. ¶30 First, Lincoln County cites § 76-3-608(3)(d), MCA, which states: “A subdivision proposal must undergo review for . . . the provision of legal and physical access to each parcel within the proposed subdivision . . . .” The County opines that because Miller failed to secure legal access to her property using the Dukes Vista Ridge subdivision 16 roads, the Board’s final approval of Amended Plat No. 6588 was “mistaken or negligent,” “in violation of the Montana Subdivision and Platting Act,” and “taken without authority.” In this regard, the County cites a 1980 opinion of the Montana Attorney General (Mont. Atty. Gen. Op. 38-106, 1980 Mont. AG LEXIS 13 (Sept. 12, 1980)), for the proposition that “[t]he board’s illegal grant of final approval does not legitimize Miller’s transfer of the lot to Yorlum.” ¶31 As an initial matter, there is conflicting evidence in the record underlying the County’s assertion that Miller had no right to use the subdivision roads to access her property. As explained, the County permitted Miller to add a 35.746-acre parcel outside the subdivision to her 5.534-acre parcel (Lot 5) inside the subdivision, which resulted in a 41.28-acre parcel designated Lot 5A. The County then permitted Miller to divide Lot 5A into two parcels, one 21 acres and the other approximately 20 acres. During this process, neighboring landowners and the developer of Dukes Vista Ridge told the County that the subdivision covenants barred access over subdivision roads “to any further added land.” In other words, “none of the property added to original Lot 5 has any easement rights on the [subdivision roads].” This would mean that the subdivision roads cannot be used to access Yorlum’s Lot 5-B, as well as the bulk of the Biggerstaffs’ Lot 5-A-1. At the same time, however, the landowners took the seemingly inconsistent position that subdivision roads could be used to access Lot 5A. At the Board’s April 20, 2005 meeting, the Road Users Association and Landowners of Dukes Vista Ridge represented that restoring Miller’s land to its “originally platted and recorded 41 acres [i.e., Lot 5A] . . . would easily remedy this situation.” They expressed no objections to accessing the 41 acres, as 17 a single parcel, using subdivision roads. As a result, the evidence in the record regarding Miller’s right to use subdivision roads to access the 35.746 acres she appended to original Lot 5 is, at best, open to dispute. ¶32 But even assuming that the subdivision roads cannot be used to access Miller’s 35.746 acres, this fact does not render the Board’s grant of final plat approval “illegal” and “without authority” as the County claims.3 In the Attorney General opinion on which the County relies, the Attorney General concluded that because the governing body lacked statutory authority to review and approve the certificate of survey at issue, any illegalities in the underlying land transfer could not be cured by the governing body’s unauthorized approval of that certificate of survey. 1980 Mont. AG LEXIS 13 at **10-11. That is not the situation in the present case. Here, the governing body did have statutory authority to review and approve the plat at issue, see Title 76, chapter 3, part 6, MCA, and the Board of Commissioners in fact reviewed and granted final approval to Amended Plat No. 6588. Thus, this is not a case where the landowner sold property following an unauthorized act of the governing body; rather, it is a case where the landowner sold property following an authorized act of the governing body, but the governing body then found that not all conditions of final plat approval had been met. In such situations, § 76-3-301(3), MCA, states: “If transfers not in accordance with [the Montana Subdivision and Platting Act] are made, the county attorney shall commence action to enjoin further sales or transfers and compel compliance with all provisions of 3 Notably, under the County’s argument, Miller’s failure to secure legal access to her property would invalidate not only the Miller-Yorlum sale, but also the Miller-Biggerstaff sale. The Biggerstaffs do not express any support for this argument in their separate appellate briefs. 18 [the Act].”4 Here, the Board granted final plat approval on February 15, 2005; Miller sold Lot 5-A-1 to the Biggerstaffs on March 1, 2005; the landowners raised the access issue in their objections to the Board on April 20, 2005; and Miller sold Lot 5-B to Yorlum on August 15, 2006. At no point following Miller’s sale to the Biggerstaffs did the Lincoln County Attorney commence an action “to enjoin further sales or transfers and compel compliance with” the Act. Section 76-3-301(3), MCA. For these reasons, the County’s argument that the Miller-Yorlum transaction was void is without merit. ¶33 The Biggerstaffs present a slightly different theory challenging the Miller-Yorlum transaction. They point to a letter from Miller to the Board of Commissioners dated February 11, 2005, four days before the Board granted final plat approval. The body of this letter states, in its entirety: “Lot No. 5-B will not be transferred until the access agreement through Linda Vista Drive is completed.” The letter was recorded on February 15, 2005. The Biggerstaffs claim that since no “access agreement” was ever reached between Miller and the landowners, “Miller had no title to be lawfully conveyed to Yorlum.” Yet, the Biggerstaffs fail to cite any legal authority for the proposition that an ostensible promise not to convey land until access is established means that the promisor lacks “title” to the land or that the conveyance is void as a matter of law. As discussed, the Montana Subdivision and Platting Act provides remedies for such situations, including injunctive relief and criminal prosecution. See §§ 76-3-105, -301(3), 4 The violator might also be subject to prosecution under § 76-3-105, MCA, which states: “Any person who violates any provision of this chapter or any local regulations adopted pursuant thereto shall be guilty of a misdemeanor and punishable by a fine of not less than $100 or more than $500 or by imprisonment in a county jail for not more than 3 months or by both fine and imprisonment.” 19 MCA. These remedies were not pursued here. Nor did any aggrieved landowner appeal the Board’s decision pursuant to § 76-3-625, MCA, or file suit to enforce the subdivision covenants. As a result, the Biggerstaffs’ arguments in this regard ring hollow. ¶34 The Biggerstaffs and Lincoln County have failed to establish any basis for concluding that Miller lacked title to convey to Yorlum. ¶35 Issue 3. Whether Yorlum’s complaint is barred by equitable principles. ¶36 The Biggerstaffs and Lincoln County contend that Yorlum’s complaint should be dismissed under equitable principles. The basis for this assertion is that Yorlum had notice of adverse claims against its right of access when it purchased Lot 5-B. However, the existence of adverse claims is a reason for bringing a quiet title action, not a reason for precluding it. See § 70-28-101, MCA.5 As Yorlum points out, what it sought in this lawsuit is a determination of its property interests under Amended Plat No. 6588. This included determinations of whether it has an easement over the Biggerstaffs’ lot and whether the County had authority to record the Notice of No Authorized Road Access. Yorlum did not seek a decree concerning its use of subdivision roads not shown on the plat, and any dispute concerning the use of such roads is beyond the scope of Yorlum’s requested relief.6 Amended Plat No. 6588 clearly depicts and adequately describes an 5 “An action may be brought and prosecuted to final decree, judgment, or order by any person or persons, whether in actual possession or not, claiming title to real estate against any person or persons, both known and unknown, who claim or may claim any right, title, estate, or interest therein or lien or encumbrance thereon adverse to plaintiff’s ownership or any cloud upon plaintiff’s title thereto, whether such claim or possible claim be present or contingent, including any claim or possible claim of dower, inchoate or accrued, for the purpose of determining such claim or possible claim and quieting the title to said real estate.” 6 For this reason, the Biggerstaffs’ separate argument that Yorlum failed to join necessary parties is without merit. 20 easement over Lot 5-A-1 for the benefit of Lot 5-B. The fact that the Biggerstaffs and the County did not believe this easement was valid—assuming Yorlum was aware of this fact when it purchased Lot 5-B from Miller—does not constitute an equitable basis for precluding Yorlum’s complaint.7 CONCLUSION ¶37 The District Court correctly granted summary judgment to Yorlum and denied summary judgment to the Biggerstaffs and Lincoln County. ¶38 Affirmed. /S/ LAURIE McKINNON We concur: /S/ MIKE McGRATH /S/ JIM RICE /S/ PATRICIA COTTER /S/ BETH BAKER 7 Regarding the Board’s August 24, 2005 “Notice of No Authorized Road Access,” the County did not challenge, in its opening brief on appeal, the District Court’s conclusion that the Board lacked authority to record the Notice. The County touches on this issue in a two-sentence paragraph near the end of its reply brief; however, arguments and issues first raised in a reply brief are not properly before this Court and will not be considered on appeal. State v. Murphy, 2003 MT 276, ¶ 14, 317 Mont. 500, 78 P.3d 843.	October 15, 2013
f069c98c-db44-47e8-a553-f87adbc83498	Ostlund v. Abraham	2013 MT 291N	DA 12-0754	Montana	Montana Supreme Court	DA 12-0754 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 291N IN THE MATTER OF THE PARENTING OF L.M.O., JORDYN RAEANNE OSTLUND, Petitioner and Appellee, v. JAMIE MICHAEL ABRAHAM, Respondent and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DR 12-251 Honorable Susan P. Watters, Presiding Judge COUNSEL OF RECORD: For Appellant: Jamie M. Abraham, self-represented; Butte, Montana For Appellee: George T. Radovich; Attorney at Law; Billings, Montana Submitted on Briefs: September 4, 2013 Decided: October 8, 2013 Filed: __________________________________________ Clerk October 8 2013 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Jamie Michael Abraham appeals two orders in which the Thirteenth Judicial District Court, Yellowstone County, established a parenting plan for the parties’ minor child, L.M.O., and entered a permanent order of protection against Abraham. We affirm. ¶3 On appeal, Abraham argues the District Court violated his due process rights in that he was “not given the opportunity” to be present at trial. He also claims the District Court failed to follow the Montana Rules of Evidence when it did not arrange for him to be present at the trial, that the court did not have sufficient evidence to support its findings of fact, that the court’s calculation of his child support payments was incorrect and not based on sufficient evidence, and that the court violated procedural requirements for converting a temporary order of protection into a permanent order of protection. ¶4 Abraham was served with Jordyn Raeanne Ostlund’s petitions for a parenting plan and temporary order of protection in this matter on April 2, 2012. At that time, Abraham was in the intake unit at Montana State Prison (MSP). His default was entered for failing to respond but the District Court set aside the default on June 8, 2012, and allowed 3 Abraham’s late-submitted answer to be filed. Abraham’s typewritten, twelve-page answer addressed both the allegations of abuse for issuance of an order of protection and the specifics of a proposed parenting plan and child support order. On June 8, 2012, the court also entered a scheduling order setting trial for September 28, 2012, and requiring the parties to participate in mediation at least twenty days before trial. The scheduling order was mailed to Abraham at MSP. ¶5 On August 17, 2012, Abraham filed a motion to compel mediation, stating he had been unable to find a pro bono mediator. The court did not act upon that motion. ¶6 The case proceeded to trial as scheduled on the morning of September 28. Abraham was not present. The court took evidence from Ostlund, adopted her proposed parenting plan, and ordered Abraham to pay Ostlund $171 per month, imputing income to Abraham based on his previous work history. ¶7 On the afternoon of September 28, Abraham filed a motion for an order setting a hearing “in regards to mediation for the Proposed Parenting Plans” with the Clerk of the Yellowstone County District Court. Apparently because trial already had occurred, the court took no action on the motion. ¶8 The record establishes, and Abraham does not dispute, that he was properly served with the summons, petitions, and the order setting this case for non-jury trial. No due process violation has been established. The Montana Rules of Evidence do not require a 4 court to ensure that a respondent is present at trial, and Abraham did not move to continue the trial date or to appear at trial by VisionNet. ¶9 Because Abraham has not provided this Court with transcripts of the September 28 hearing, he has not met his duty, as the appellant, to provide this Court with a sufficient record to rule on the two issues he has set forth concerning whether the District Court’s findings are supported by sufficient evidence. See M. R. App. P. 8(2). ¶10 Finally, § 40-15-204(2), MCA, provides that, “[i]n a dissolution proceeding, the district court may, upon request, issue either an order of protection for an appropriate period of time or a permanent order of protection.” That statute allows the court to enter a permanent order of protection as part of a dissolution proceeding, rather than under the separate statutes governing proceedings on a petition for order of protection. Although the parties in this case never had been married, the proceeding was for a parenting plan under Title 40, Chapter 4, MCA—the same chapter as dissolution proceedings. Abraham had notice of and responded in his answer to the allegations seeking an order of protection. We conclude that his substantial rights were not prejudiced by the District Court’s decision to consider Ostlund’s request for a permanent order of protection in conjunction with the parenting proceedings instead of holding a separate hearing. See Mont. R. Civ. P. 61. Moreover, Ostlund acknowledges that when Abraham is released from prison, he may seek modification of the parenting plan and the order of protection based on the change in his status. 5 ¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. Having reviewed the briefs and the record on appeal, we conclude that Abraham has failed to establish reversible error by the District Court. ¶12 Affirmed. /S/ BETH BAKER We concur: /S/ JIM RICE /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BRIAN MORRIS	October 8, 2013
a98df279-ae14-4f7c-aa68-b417e29e8524	Clugston v. State	2013 MT 278N	DA 13-0001	Montana	Montana Supreme Court	DA 13-0001 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 278N CHARLES TODD CLUGSTON, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause Nos. DC-07-495(C), DC-09-511(B), DV-11-341(C) Honorable Stewart E. Stadler, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad M. Wright, Wright Legal, P.C., Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Pamela P. Collins, Assistant Attorney General, Helena, Montana Ed Corrigan, Flathead County Attorney; Travis R. Ahner, Deputy County Attorney, Kalispell, Montana Submitted on Briefs: August 28, 2013 Decided: September 24, 2013 Filed: __________________________________________ Clerk September 24 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Charles Todd Clugston appeals from an order of the Eleventh Judicial District Court, Flathead County, denying his Motion to Withdraw Guilty Pleas and Petition for Postconviction Relief. We affirm. ¶3 We rephrase the following issues on appeal: ¶4 Issue One: Whether the District Court properly denied Clugston’s motion to withdraw his guilty pleas. ¶5 Issue Two: Whether there was a sufficient factual basis for Clugston’s plea to criminal endangerment. ¶6 Issue Three: Whether Clugston was denied effective assistance of counsel. ¶7 Issue Four: Whether the State violated the plea agreement by opposing Clugston’s parole. ¶8 Clugston was arrested October 20, 2007, after a dispute with his wife. He was charged with sexual intercourse without consent, tampering with or fabricating physical evidence, and criminal destruction of or tampering with communications. Trial began May 11, 2009. On the fourth day of trial, an oral plea agreement was reached. Clugston pled 3 guilty to amended charges of criminal endangerment and tampering with or fabricating physical evidence. ¶9 The District Court questioned Clugston under oath to determine that his plea was voluntary and of his own free will. Clugston was then questioned by his attorney, Eduardo Gutierrez-Falla, to establish a factual basis for the plea. With regard to the criminal endangerment charge, he testified that in Flathead County on or about October 20, 2007, he had knowingly engaged in a course of conduct that created a substantial risk of serious bodily injury to Heather Clugston. The District Court accepted Clugston’s plea. The State then informed the Court that a sex offender evaluation would be needed prior to sentencing. Defense counsel confirmed that an evaluation was part of the agreement. ¶10 Sentencing was ultimately set for December 11, 2009. On November 10, 2009, Clugston was arrested in a drunk driving incident. He pled guilty to criminal endangerment and driving under the influence of alcohol. Because the plea agreement on the previous charges had been oral, Clugston signed written plea agreements on November 18, 2009, pertaining to both sets of charges. The written agreements show that the State would recommend a ten year sentence, with all time suspended, for the first criminal endangerment and tampering. The State would recommend a ten year sentence, with no time suspended, for the second criminal endangerment. The sex offender evaluation was not mentioned in the agreement, because it had already been completed. The sex offender evaluation and pre- sentencing investigation recommended that Clugston complete phase I sex offender treatment. 4 ¶11 Clugston was sentenced on all four charges on December 11, 2009. The State made its recommendation in accordance with the plea agreements. For the first criminal endangerment and tampering, Clugston received a ten year sentence, with all time suspended, and was required to complete phase I sex offender treatment. For the second criminal endangerment, he received a ten year sentence with five years suspended. For driving under the influence, he received a six month sentence, to run concurrently. The written judgment and sentence was issued January 27, 2010. ¶12 On December 30, 2010, Clugston appeared before the parole board. Flathead County Attorney Ed Corrigan wrote a letter opposing Clugston’s parole. The parole board denied Clugston’s application and recommended that he complete phase II sex offender treatment. ¶13 Clugston, acting pro se, moved to withdraw all four guilty pleas on January 24, 2011, and filed a petition for postconviction relief on March 23, 2011. With respect to his plea to the first charge of criminal endangerment, Clugston claimed his attorneys had told him the charge was based on a reckless driving incident. He claimed he was never informed of the sex offender evaluation condition. He did not claim that his pleas to the other three charges were entered involuntarily or without sufficient understanding. Clugston also claimed ineffective assistance of counsel on the grounds that his attorneys conspired with the State to coerce his plea, and then failed to petition for correction of the written judgment and sentence, which he perceived to be inconsistent with the sentence delivered at the hearing. Finally, Clugston argued that Corrigan’s letter violated the plea agreement. ¶14 An evidentiary hearing was held on July 6, 2012, at which Clugston was represented by counsel. He did not testify. Gutierrez-Falla testified that he had told Clugston the plea to 5 criminal endangerment was based on “what was taking place in their bedroom between him and his then wife just before his arrest.” He said he had avoided stating the details in open court because he did not want the record to contain any reference to sex offenses. Gutierrez- Falla and co-counsel Scott Hilderman both testified that Clugston was informed of the sex offender evaluation requirement before entering his plea. Clugston did not question either attorney about their failure to object to or appeal the sentence. The District Court denied both the motion to withdraw guilty pleas and the petition for postconviction relief in an order dated December 24, 2012. ¶15 On appeal of the denial of a motion to withdraw plea, this Court reviews findings of underlying fact for clear error and conclusions of law for correctness. State v. Warclub, 2005 MT 149, ¶ 24, 327 Mont. 352, 114 P.3d 254. The same standard is applied to petitions for postconviction relief. Rose v. State, 2013 MT 161, ¶ 15, 370 Mont. 398, 304 P.3d 387. This Court reviews mixed questions of law and fact regarding the voluntariness of a plea de novo. Warclub, ¶ 24. Claims of ineffective assistance of counsel are also mixed questions of law and fact, and reviewed de novo. St. Germain v. State, 2012 MT 86, ¶ 7, 364 Mont. 494, 276 P.3d 886. Finally, this Court reviews de novo the issue of whether the State has breached a plea agreement. State v. Lewis, 2012 MT 157, ¶ 13, 365 Mont. 431, 282 P.3d 679. ¶16 Issue One: Whether the District Court properly denied Clugston’s motion to withdraw his guilty pleas. ¶17 A defendant may be permitted to withdraw his guilty plea within one year of final judgment for good cause. Section 46-16-105(2), MCA. A guilty plea must be voluntary, knowing, and intelligent, with awareness of the likely consequences. Brady v. United States, 6 397 U.S. 742, 748, 90 S. Ct. 1463, 1469 (1970). A district court’s denial of a motion to withdraw a guilty plea will not be overturned unless the defendant was unaware of the consequences of his plea or was induced by threats, misrepresentations, or improper promises. Warclub, ¶ 32 (citing Brady, 397 U.S. at 755, 90 S. Ct. at 1472). ¶18 The District Court accepted the testimony of Gutierrez-Falla and Hilderman that they had fully informed Clugston of the basis of the plea and its conditions. Their testimony was contradicted only by Clugston’s parents’ testimony that they were surprised by the plea. The District Court’s finding that Clugston was fully informed about the plea is supported by substantial evidence and is not clearly erroneous. ¶19 Before entering his plea, Clugston testified under oath that his plea was voluntary and of his own free will. Months later he signed a written plea agreement. Clugston did not move to withdraw his plea until nearly two years after it had been entered, one year after sentencing, and after he had completed both the sex offender evaluation and phase I sex offender treatment. Clugston received a significant benefit from the plea agreement because the amended charge of criminal endangerment allowed him to avoid sex offender registration, an important objective to him. The conclusion of the District Court that Clugston understood the consequences of his plea and entered his plea knowingly and voluntarily is correct. ¶20 Issue Two: Whether there was a sufficient factual basis for Clugston’s plea to criminal endangerment. ¶21 A court must determine that there is a factual basis for a guilty plea before the plea can be accepted. Section 46-12-212(1), MCA. The court must obtain admissions 7 demonstrating “that the acts of the defendant, in a general sense, satisfy the requirements of the crime to which he is pleading guilty.” State v. Frazier, 2007 MT 40, ¶ 20, 336 Mont. 81, 153 P.3d 18. ¶22 Clugston’s testimony, following three days of trial, established that he engaged in conduct that created a substantial risk of serious bodily injury to Ms. Clugston, that he did so knowingly, and that Ms. Clugston was not seriously injured, but his conduct created a substantial risk of injury. This was sufficient to show that his acts satisfied the elements of the crime of criminal endangerment. ¶23 Issue Three: Whether Clugston was denied effective assistance of counsel. ¶24 Contrary to the State’s assertions that Clugston did not raise this issue in the District Court, it is clear from the record that he did; if not specifically, it was generally raised throughout his pleadings in his complaints about trial counsel. ¶25 Both defense counsels indicated that Clugston was aware of all the provisions of the plea agreement, as well as the sexual offender treatment recommendation made in the presentence investigation. Clugston’s attorney verbally advised the District Court at the time of the change of plea hearing that a sex offender evaluation was part of the plea agreement. Hilderman’s affidavit advised that his client never asked the attorney to amend his sentence or to move to withdraw his guilty plea. ¶26 The District Court accepted the testimony of counsel and determined that Clugston failed to establish that “counsels’ performance fell below that guaranteed to Petitioner by the Sixth Amendment.” We concur with the District Court. 8 ¶27 Issue Four: Whether the State violated the plea agreement by opposing Clugston’s parole. ¶28 A plea agreement is subject to contract law standards, and the State must fulfill its contractual obligations strictly. State v. McDowell, 2011 MT 75, ¶ 14, 360 Mont. 83, 253 P.3d 812. The State may not act in a way that undermines its sentencing recommendation. State v. Rardon, 2005 MT 129, ¶ 19, 327 Mont. 228, 115 P.3d 182. ¶29 The written plea agreement entered on November 18, 2009, contained no agreement regarding parole. The State fulfilled its obligation by recommending the sentence outlined in the written plea agreement. The State did not undermine its recommendation to the sentencing court, and in fact, the sentence received was five years less than that recommended by the State. The District Court did not err in concluding that the State did not violate the plea agreement. ¶30 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for memorandum opinions. The District Court’s findings of fact are supported by substantial evidence and the legal issues are controlled by settled Montana law, which the District Court correctly interpreted. ¶31 Affirmed. /S/ MIKE McGRATH We concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ PATRICIA COTTER /S/ LAURIE McKINNON	September 24, 2013
cddaff0a-512f-4e17-af97-1241a8a7c944	Lyon v. Mountain Pacific	2013 MT 288N	DA 13-0016	Montana	Montana Supreme Court	DA 13-0016 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 288N GINA M. LYON, Plaintiff, Appellee and Cross-Appellant, v. MOUNTAIN PACIFIC GENERAL, INC., Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 11-397(C) Honorable Stewart E. Stadler, Presiding Judge COUNSEL OF RECORD: For Appellant: P. Mars Scott, Stephanie K. Mann, P. Mars Scott Law Offices; Missoula, Montana For Appellee: Penni L. Chisholm, Dean D. Chisholm, Chisholm & Chisholm, P.C.; Columbia Falls, Montana Submitted on Briefs: September 11, 2013 Decided: October 1, 2013 Filed: __________________________________________ Clerk October 1 2013 2 Justice Brian Morris delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Appellant Mountain Pacific General, Inc. (MPG) appeals the order of the Eleventh Judicial District Court, Flathead County, that directed the Clerk of Court to distribute to Gina Lyon (Gina) $132,000 held in a dissolution proceeding involving Gina and Jeffrey Lyon (Jeffrey). Gina cross-appeals the District Court’s denial of her motion forattorneys’ fees and costs. We affirm. ¶3 Gina filed a petition for dissolution of marriage in the Eleventh Judicial District Court in 2005 in Cause No. DR-05-154C. The petition named Gina and Jeffrey as the only two parties to the action. The District Court entered the decree of dissolution on February 4, 2008. ¶4 Gina filed a motion for contempt against Jeffrey on June 29, 2010. The District Court awarded Gina $113,104 for past medical expenses and child support. The District Court also entered judgment against MPG “for the care and support of the parties’ children” even though MPG had not been a party to the action. MPG filed a limited appearance to set aside the judgment and quash the execution against its corporate property. ¶5 In the meantime, MPG sold real property owned by the marital estate on which it had filed a lien. Gina contended that she should receive MPG’s portion of the sale to satisfy 3 Jeffrey’s debt to her. The parties agreed to deposit $132,000 with the Flathead County Clerk of Court until the District Court determined ownership and directed disbursement. The $132,000 represented MPG’s interest in the sale proceeds from the real property. ¶6 The District Court set aside the judgment against MPG on March 30, 2011. The District Court directed the Clerk of Court to issue a check for $132,000 to MPG’s counsel. ¶7 Shortly thereafter, Gina filed a complaint against MPG in the Eleventh Judicial District in Cause No. DV-11-397C. Gina sought a ruling that MPG serves as Jeffrey’s alter ego. The District Court granted a temporary restraining order that directed the Clerk of Court to retain the $132,000 previously deposited in Cause No. DR-05-154C. ¶8 MPG filed a motion to dismiss on the grounds that Gina had failed to raise the issue of MPG having served as an alter ego for Jeffrey at the dissolution proceedings. MPG argued that Gina should be prevented from raising this issue in a separate proceeding. The District Court denied MPG’s motion and directed the Clerk of Court to continue to hold the $132,000. MPG filed a petition for alternative writ of mandate with this Court. We denied MPG’s petition. Lyon v. Stadler, No. OP 11-0752 (Feb. 14, 2012). ¶9 The District Court granted summary judgment in Gina’s favor based upon its finding that MPG, in fact, represents the alter ego of Jeffrey. The District Court denied Gina’s motion, pursuant to M. R. Civ. P. 11, for attorneys’ fees and costs. The District Court later entered judgment against MPG for $160,655 in addition to any future child support or medical support owing by Jeffrey, with interest at the rate of 10% per annum. The District Court ordered the Clerk of Court to distribute to Gina the $132,000 being held in Cause No. 4 DR-05-154C to satisfy the judgment in Cause No. DV-11-397C. MPG appeals and Gina cross-appeals. ¶10 MPG argues on appeal that the District Court lacked authority to attach funds in Cause No. DR-05-154C to satisfy a judgment in Cause No. DV-11-397C. Gina responds that the District Court acted properly and, regardless, this issue is moot. Even if the District Court could not order the Clerk of Court to distribute the $132,000, Gina points out that MPG still would owe Gina $160,655. Gina contends that success on appeal would be inconsequential unless MPG intended to reclaim the funds and avoid paying the amount that it owes Gina. Gina cross-appeals the District Court’s denial of her motion for attorneys’ fees and costs pursuant to M. R. Civ. P. 11. ¶11 We typically review a district court’s decision to grant or deny a preliminary injunction for a manifest abuse of discretion. Mont. Cannabis Indus. Ass’n v. State, 2012 MT 201, ¶ 12, 366 Mont. 224, 286 P.3d 1161. We review a district court’s decision on Rule 11 sanctions to determine whether the findings of fact are clearly erroneous, and whether the conclusions constitute an abuse of discretion. Morin v. State Farm Mut. Auto. Ins. Co., 2013 MT 146, ¶ 33, 370 Mont. 305, 302 P.3d 96. ¶12 We have determined to decide this case pursuant to Section I, Paragraph 3(d), of our 1996 Internal Operating Rules, as amended in 2006, that provides for memorandum opinions. The District Court did not manifestly abuse discretion when it directed the Clerk of Court to distribute to Gina $132,000 held from the dissolution proceedings, because the judgment in Cause No. DV-11-397C entitled Gina to receive this amount from MPG one 5 way or another. MPG has failed to establish that the $132,000 deposited with the Clerk of Court represents anything other than fungible assets of MPG. Based on the briefs and record, the District Court’s findings of fact are not clearly erroneous and the District Court did not abuse discretion when it denied Gina’s M. R. Civ. P. 11 motion for attorneys’ fees and costs. ¶13 Affirmed. /S/ BRIAN MORRIS We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ LAURIE McKINNON	October 1, 2013
e3ceee1a-9485-47b7-8567-a2d3fec5a21f	State v. Lundberg	2013 MT 268N	DA 12-0589	Montana	Montana Supreme Court	DA 12-0589 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 268N STATE OF MONTANA, Plaintiff and Appellee, v. CRYSTAL LEE LUNDBERG, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DC 11-0025 Honorable Russell C. Fagg, Presiding Judge COUNSEL OF RECORD: For Appellant: Wade Zolynski, Chief Appellate Defender; Deborah S. Smith, Assistant Appellate Defender; Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Jonathan M. Krauss, Assistant Attorney General; Helena, Montana Scott Twito, Yellowstone County Attorney; Ed Zink, Senior Deputy County Attorney; Billings, Montana Submitted on Briefs: August 28, 2013 Decided: September 17, 2013 Filed: __________________________________________ Clerk September 17 2013 2 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Crystal Lee Lundberg appeals her conviction by guilty plea of aggravated assault and evidence tampering on the ground the District Court did not conduct an adequate inquiry into her concerns of ineffective assistance of counsel. She also appeals the amount of restitution ordered in her judgment as well as the requirement that she pay the public defender fee and certain other costs imposed in her sentence. We affirm on the first two issues and remand on the third issue. ¶3 On January 18, 2011, Lundberg was charged by Information with felony attempted deliberate homicide with a weapons enhancement, felony tampering with or fabricating physical evidence, and felony criminal endangerment. These charges were in connection with a shooting on December 20, 2010, that left L.S., a then 25-year-old female and mother of three, blind in one eye, paralyzed in parts of her body, and disfigured from a gunshot wound to her face. ¶4 Subsequently, in an amended Information, in addition to the deliberate homicide charge, Lundberg was charged with aggravated assault with a weapons enhancement, two counts of tampering with evidence and one count of criminal endangerment, all felony charges. 3 ¶5 On March 26, 2012—the day her jury trial was set to begin—Lundberg entered a change of plea and pled guilty to aggravated assault with a weapons enhancement and one count of tampering with physical evidence. In return, the State agreed to dismiss the remaining charges including the attempted deliberate homicide charge. Consequently, the court conducted a change of plea hearing instead of the scheduled trial. Prior to commencement of the hearing, Lundberg and her counsel met in chambers with the District Court judge for approximately two minutes to discuss “defense representation.” Subsequently, all parties with counsel met in the judge’s chamber to discuss discovery matters and Lundberg’s decision to change her plea. These were off-the-record meetings with no transcripts or audio recordings. At the change of plea hearing following the in-chambers meetings, Lundberg unequivocally testified in open court that she was satisfied with her counsel. Her counsel also restated, as he claimed to have done in chambers, that Lundberg withdrew her Finley claim.1 ¶6 A sentencing hearing was conducted on July 18, 2012. L.S.’s testimony was followed by a statement by the prosecutor who, among other things, informed the court for the first time that the amount of restitution Lundberg owed was $27,120.55. Defense counsel then addressed the court and challenged particular probation conditions included in the State’s sentence recommendation. Lastly, Lundberg read a statement into the record in which she complained that she had pled guilty “due mostly to coercion to scare 1 A Finley claim occurs when a defendant complains about effectiveness of counsel. Upon a showing of a seemingly substantial complaint about counsel, the district court should conduct a hearing to determine the validity of the defendant’s claim. State v. Finley, 276 Mont. 126, 142-43, 915 P.2d 208, 218-19 (1996), overruled on other grounds by State v. Gallagher, 2001 MT 39, 304 Mont. 215, 19 P.3d 817. 4 tactics [sic].” Despite the length and detail of her statement, she did not elaborate on the “coercion” or “scare tactics” she claimed caused her to enter her plea. At the conclusion of her statement, the District Court immediately proceeded to sentence Lundberg without questioning her regarding her allegations of coercion. ¶7 Lundberg was sentenced as follows: Aggravated Assault: 20 years at Montana Women’s Prison (MWP) plus a consecutive term of 10 years in MWP for weapons enhancement, with 5 suspended. Payment of restitution in the amount of $27,120.55. Tampering with Evidence: Five years at MWP, suspended to run consecutive to the aggravated assault sentence. As noted above, Lundberg objected to several conditions of her sentence including payment of the recommended public defender fee but did not object to the ordered restitution. ¶8 Lundberg appeals her conviction. We affirm in part and remand in part. ¶9 Relying on Finley, Lundberg complains that the District Court failed to conduct an inquiry into her in-chambers, off-the-record allegations of ineffective assistance of counsel (IAC) and her in-court references to coercion and scare tactics. She urges this Court to vacate her conviction, set aside her guilty plea and remand the matter to the District Court with instructions to conduct an adequate inquiry into her IAC claims. Unlike Finley, however, where Finley made a pro se motion complaining of the effectiveness of counsel, Lundberg made no such motion to the District Court. Rather, she testified in open court that she was satisfied with counsel and her counsel reiterated to the court that Lundberg had withdrawn her Finley claim. Lundberg did not dispute this 5 statement nor did she file, at any time prior to the change of plea or sentencing hearings, a motion claiming ineffective assistance of counsel, requesting another attorney, or asking to be allowed to proceed as a self-represented litigant. ¶10 In State v. Clary, 2012 MT 26, ¶ 27, 364 Mont. 53, 270 P.3d 88, we stated that a defendant “cannot predicate error on the District Court’s failure to examine the substance of a motion he never filed.” Based upon Lundberg’s failure to file a motion and her withdrawal of any previously-expressed oral concern about counsel, we conclude the District Court did not err in failing to conduct a Finley hearing. ¶11 Lundberg next claims the District Court erred in failing to order that the pre-sentence investigation (PSI) completed on May 23, 2012, include an affidavit setting forth a list of her assets, and describing specifically “the victim’s pecuniary loss and the replacement value in dollars of the loss, submitted by the victim,” as required by §§ 46-18-201(5), -241(1), and -242(1)(a) and (b), MCA.2 She opines this failure renders the order that she pay $27,120.55 in restitution illegal. She also acknowledges that she failed to object to the restitution order at the time of sentencing but, relying on our decision in State v. Lenihan, 184 Mont. 338, 343, 602 P.2d 997, 1000 (1979), she asserts that because her sentence for restitution is illegal, this Court may review the sentence despite the absence of a contemporaneous objection. ¶12 In Lenihan, we recognized a narrow exception to the contemporaneous objection rule and held that this Court may review a criminal sentence that is alleged to be illegal or 2 We note that while the PSI did not include a statement of L.S.’s pecuniary losses until the day Lundberg was sentenced, the May 2012 PSI did list Lundberg’s assets as $0. 6 in excess of statutory mandates, even if the defendant failed to raise an objection in the district court at the time of sentencing. Lenihan, 184 Mont. at 343, 602 P.2d at 1000. Subsequently, however, we concluded that while “a sentencing court’s failure to abide by a statutory requirement rises to an objectionable sentence,” it is “not necessarily an illegal one that would invoke the Lenihan exception.” State v. Kotwicki, 2007 MT 17, ¶ 13, 335 Mont. 344, 151 P.3d 892; see also State v. Johnson, 2011 MT 286, ¶ 14, 362 Mont. 473, 265 P.3d 638. As in the case before us, Johnson argued his order of restitution was illegal because the PSI did not contain the statutory documentation pertaining to restitution. Citing Kotwicki, we held, “the sentence imposed, despite the asserted deficiencies in the PSI, rose ‘to an objectionable sentence,’ but it does not constitute an illegal sentence for purposes of Lenihan review.” Johnson, ¶ 14. ¶13 Therefore, under our ruling in Johnson, Lundberg’s sentence is “objectionable” rather than “illegal.” Consequently, her failure to object to the lack of the affidavit at the sentencing hearing or to the order of restitution, the amount of restitution, or the manner in which the District Court derived the amount to be paid, constitutes a waiver of her right to challenge her restitution order on these grounds. ¶14 Lastly, the District Court included in the Judgment the requirement that Lundberg pay various costs, charges and fees, including a $500 payment to assigned defense counsel. Lundberg claims the court failed to conduct the statutorily-required inquiry into her ability to pay this counsel fee. Section 46-8-113(3), MCA (2009); § 46-8-113(3), MCA (2011). On appeal, the State concedes that both the 2009 and 2011 statutes require such an inquiry and recommends that Lundberg’s sentence be remanded with instructions 7 to the District Court to determine on the record Lundberg’s ability to pay the costs of defense counsel in accordance with the 2009 statute in effect at the time of Lundberg’s sentencing. ¶15 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. Issue 1 presents a legal issue that is controlled by settled Montana law which the District Court correctly interpreted. Issue 2 was not preserved for appellate review. Issue 3 presents a legal issue which the District Court incorrectly interpreted. We therefore remand this issue to the District Court for a determination on the record of Lundberg’s ability to pay counsel fees. /S/ PATRICIA COTTER We Concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ BRIAN MORRIS /S/ JIM RICE	September 17, 2013
ff066aea-267d-4df5-94e3-c314961f4f76	In re Estate of Harless	2013 MT 283	DA 13-0189	Montana	Montana Supreme Court	DA 13-0189 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 283 IN THE MATTER OF THE ESTATE OF CATHERINE MARIE HARLESS, Deceased. APPEAL FROM: District Court of the Fifth Judicial District, In and For the County of Beaverhead, Cause No. DP-11-5237 Honorable Loren Tucker, Presiding Judge COUNSEL OF RECORD: For Appellant Linda Hyde: Stephanie Gehres Kruer; Kruer Law Firm, P.C.; Sheridan, Montana For Appellee Kelli Martin: J. Blaine “J.B.” Anderson, Jr.; Attorney at Law; Dillon, Montana Submitted on Briefs: September 4, 2013 Decided: October 1, 2013 Filed: __________________________________________ Clerk October 1 2013 2 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 Catherine Harless, deceased, was the sister of Linda Hyde and the mother of Kelli Martin. Martin petitioned to be appointed personal representative to probate her mother’s estate. Hyde opposed the petition, asserting Harless had executed a will in 2002 (hereinafter Will) naming Hyde as executrix. The Fifth Judicial District Court ruled that Harless had revoked the 2002 Will upon which Hyde was relying, and that Harless therefore died intestate and her daughter was entitled to be appointed personal representative. Hyde appeals. We reverse and remand. FACTUAL AND PROCEDURAL BACKGROUND ¶2 In May 2002, then-fifty-five-year-old Catherine Harless was preparing to depart on a season-long work experience aboard a fishing ship working in Alaskan waters. Prior to departure, she acquired a form “Last Will and Testament” which she completed in her handwriting on May 28, 2002. In this Will, she expressly devised $1.00 each to her two daughters (Kelli Martin and Heather Gordon) and $1.00 each to her two grandchildren. She also expressly declared that her daughters and grandchildren were “not allowed” to have anything else of her belongings or to be on any real property Harless owned. ¶3 Harless then devised all her personal belongings, real property, dwellings, and animals to her sister Linda Hyde, or alternatively—if for any reason Hyde was unable to fulfill Harless’s expressed wishes—to Hyde’s two sons, Ted and Todd Holverson (hereinafter Ted and Todd). She named Hyde as executrix and the Will was signed by a notary and two witnesses. However, the parties dispute whether Harless properly signed the Will. 3 ¶4 In October 2003, Harless executed a Warranty Deed granting real property she owned in Montana to Ted. She later claimed she had deeded the property to Ted based upon a mutual agreement that Ted would return the property to her at any time upon her request. Harless asserted that in 2007 she asked Ted to return the property but he refused. As a result of Ted’s refusal, in July 2008, Harless sued Ted for breach of contract, fraud, and undue influence, among other things. This litigation remains pending. ¶5 Shortly thereafter, Harless wrote a letter to Hyde declaring that she (Harless) was out of Hyde’s life and the lives of Hyde’s family, including Hyde’s husband and sons Ted and Todd. In 2009, at a deposition taken in her legal action against Ted, Harless stated that her 2002 Will was “no longer valid” because it was “a joke.” ¶6 Harless did not execute another will prior to her death in California on October 2, 2010. In December 2010, Hyde commenced probate proceedings in the Superior Court of California based upon Harless’s 2002 Will. In March 2011, the California Court dismissed Hyde’s action in a “minute order,” stating that the 2002 Will was not a validly executed will because it did not contain Harless’s signature. In May 2011, Martin petitioned Montana’s Fifth Judicial District Court to (1) adjudicate that her mother died intestate, (2) appoint her as personal representative, and (3) determine the heirs to her mother’s estate. Hyde opposed Martin’s petition. ¶7 In February 2013, the District Court ruled that Harless died intestate and Martin was entitled under the priorities set forth in § 72-3-502, MCA, to be appointed as personal representative. The court found that Harless had not signed the Will because her name was printed rather than written in cursive script. The court concluded that the 4 California probate court’s determination that Harless’s 2002 Will was not a valid will was “persuasive” and agreed that the Will was invalid. Additionally, the court concluded that three separate actions taken by Harless constituted a revocation of the 2002 Will: (1) suing her nephew who was an heir under the Will; (2) writing Hyde a letter in 2008 denouncing a relationship with her and her family; and (3) stating in her 2009 deposition that the Will was not valid and was a joke. It is from the District Court’s February 2013 order that Hyde appeals. ISSUES ¶8 Hyde raises the following issues on appeal: ¶9 Did the District Court incorrectly apply the Montana Uniform Probate Code to the holographic writing Hyde claims is Harless’s Will? ¶10 Did the District Court err by concluding that Harless revoked the subject Will? ¶11 Did the District Court misapprehend the evidence concerning the testamentary intent of Harless? ¶12 Did the District Court err by relying on an informal ruling in a separate California probate case concerning Harless’s estate? STANDARD OF REVIEW ¶13 We review a district court’s findings of fact to ascertain whether they are clearly erroneous. A finding is clearly erroneous if it is not supported by substantial credible evidence, if the trial court has misapprehended the effect of the evidence, or if a review of the record leaves us with the definite and firm conviction that a mistake has been 5 committed. We review a district court’s conclusions of law for correctness. In re Estate of Hannum, 2012 MT 171, ¶ 19, 366 Mont. 1, 285 P.3d 463 (internal citation omitted). DISCUSSION ¶14 Did the District Court err in its application of the Montana Uniform Probate Code to the holographic writing Hyde claims is Harless’s Will? ¶15 Hyde argues that the District Court repeatedly relied upon incorrect statutes in its determination that Harless’s 2002 Will was not entitled to probate under Montana law. Rather than recite and analyze the alleged statutory errors, we will look to the correct statutes and determine if they support the court’s conclusion. ¶16 We note at the outset that, as the proponent of a will in a contested case, Hyde has the burden of presenting a prima facie case of “due execution” of the will. Section 72-3-310, MCA; In re Estate of Brooks, 279 Mont. 516, 521-22, 927 P.2d 1024, 1027 (1996); In re Estate of Hall, 2002 MT 171, ¶ 11, 310 Mont. 486, 51 P.3d 1134. Section 72-2-522(1), MCA, contains the requirements of a duly executed will and provides: (1) Except as provided in 72-2-523, 72-2-526, 72-2-533, and subsection (2) of this section, a will must be: (a) in writing; (b) signed by the testator or in the testator’s name by some other individual in the testator’s conscious presence and by the testator’s direction; and (c) signed by at least two individuals, each of whom signed within a reasonable time after having witnessed either the signing of the will as described in subsection (1)(b) or the testator’s acknowledgment of that signature or acknowledgment of the will. (2) A will that does not comply with subsection (1) is valid as a holographic will, whether or not witnessed, if the signature and material portions of the document are in the testator’s handwriting. (3) Intent that the document constitute the testator’s will may be established by extrinsic evidence, including, for holographic wills, portions of the document that are not in the testator’s handwriting. 6 ¶17 Hyde asserts that Harless’s Will was duly executed and satisfies the requirements set forth in § 72-2-522(1)(a)-(c), MCA. She maintains that Harless completed the Will in her own handwriting, using both block printing and cursive writing, which was typical for Harless. Hyde acknowledges that Harless may not have signed the Will in the place designated on the form for her signature but explains that the notary inadvertently signed the Will “in [Harless’s spot].” Relying on In re Estate of Kuralt, 1999 MT 111, ¶ 3 n. 1, 294 Mont. 354, 981 P.2d 771, in which we concluded that a letter signed with the single printed initial “C” constituted a valid signature to a will codicil, Hyde maintains that Harless’s printed signature is adequate to satisfy the requirements of § 72-2-522, MCA. ¶18 Martin counters that her mother did not sign the 2002 document because she did not intend it to be her will and therefore it is not a valid will. She claims that Harless knew how to sign a legal document and referred the Court to the Warranty Deed with Ted and a 2003 landlord-tenant agreement executed by Harless. ¶19 If Harless’s printed name constitutes a valid signature, Harless’s Will satisfies the requirements of § 72-2-522, MCA. Because the validity of the signature is brought into question, however, as did the District Court and the parties, we next consider the Will under § 72-2-523, MCA. As we stated in Edwards, immediately before analyzing the applicability of § 72-2-523, MCA, to the will in that case: “Even absent due execution . . . document still can be admitted to probate as a valid will under certain circumstances.” Edwards, 279 Mont. at 522, 927 P.2d at 1027. Section 72-2-523, MCA, captioned “[w]ritings intended as wills,” provides in relevant part: 7 Although a document . . . was not executed in compliance with 72-2-522, the document . . . is treated as if it had been executed in compliance with that section if the proponent of the document . . . establishes by clear and convincing evidence that the decedent intended the document . . . to constitute: (1) the decedent’s will; (2) a partial or complete revocation of the will; (3) an addition to or an alteration of the will . . . . ¶20 Both the notary and one of the witnesses to the 2002 Will testified that the two witnesses and the notary were all present when Harless signed the document in block printed letters on the second page of the document and that it was presented to them as her Last Will and Testament. Moreover, the record reflects that Harless acknowledged the document as her will in 2009 in a sworn deposition. These undisputed facts establish that Harless intended the 2002 Will to be her will under § 72-2-523, MCA. ¶21 In light of the foregoing, we conclude Harless executed a valid will in 2002 under either §§ 72-2-522 or -523, MCA. We therefore conclude Hyde, as the proponent of the Will, has met her burden of presenting a prima facie case of due execution as required by § 72-3-310, MCA. We next address whether Harless revoked this Will. ¶22 Did the District Court err by concluding that Harless revoked the subject Will? ¶23 There are finite and specific statutory means by which a will may be revoked. Section 72-2-527(1)(a), MCA, provides that a will or any part of a will is revoked when the testator executes a later will expressly revoking all or part of a previous will. Section 72-2-527(1)(b), MCA, alternatively provides that a testator may take an action that effectively demonstrates his or her intent to revoke a will, by burning, tearing, canceling, obliterating, marking on, or destroying the will or any part of it. These are the sole means 8 of revocation under the statute. As Hyde notes, Harless took none of these actions. She did not execute a subsequent will nor did she deface or destroy the 2002 Will. Hyde maintains that the actions Harless took—suing her nephew, writing a nasty letter to her sister, and remarking in a deposition that the Will was not “valid” and was a “joke”— simply are not actions that suffice under law to revoke a duly executed will. ¶24 Martin, on the other hand, asserts that both the letter to Hyde and the complaint in Harless’s action against Ted are acts that illustrate Harless’s intent to revoke her Will under §§ 72-2-5221 and -523, MCA. Martin relies on Kuralt but we find that case distinguishable. In Kuralt, Kuralt’s letter was intended to be a will expressly devising certain real property to an identified heir; therefore it was appropriately analyzed under § 72-2-523, MCA. Here, Harless’s letter to Hyde was not intended to be a will, nor did it provide for distribution of Harless’s assets upon Harless’s death. Similarly, Harless’s complaint against Ted was not intended as a will. As such, § 72-2-523, MCA, does not apply; rather, § 72-2-527, MCA, the statute that specifically describes the method for revoking a will is applicable. ¶25 As the parties note, and as evidenced by the colorful and adamant language used by Harless in her correspondence with her family, Harless was disposed to sharp mood swings and histrionics. It is apparent that she was inclined at times to change her mind. However, we are not at liberty under the applicable statutes to conclude that Harless’s 1 Section 72-2-522, MCA, addressing the execution of holographic wills, does not include a reference to “a holographic revocation of a will,” as argued by Martin. This statute, on its face, does not address revocation of a will. 9 conduct sufficed to revoke her Will, as our discretion is cabined by the terms of § 72-2-527, MCA. Harless did not satisfy the terms of this statute, and neither her letter to her sister nor her complaint against her nephew qualify as actions sufficient to revoke a will under the governing statute. We further note that § 72-2-528, MCA, provides that a change of circumstances does not revoke a will or any part of it. We therefore conclude that Harless’s 2002 Will is valid, and that it has not been revoked. CONCLUSION ¶26 Having concluded that Harless’s 2002 Will was a valid will that Harless did not revoke, we need not address Hyde’s remaining issues. We reverse the order of the District Court and remand with instructions that Harless’s 2002 Will be probated. /S/ PATRICIA COTTER We Concur: /S/ MICHAEL E WHEAT /S/ JIM RICE /S/ LAURIE McKINNON /S/ BRIAN MORRIS	October 1, 2013
b982431c-08d9-4481-9c45-a0bbec300580	Pedersen v. Ziehl	2013 MT 306	DA 13-0026	Montana	Montana Supreme Court	DA 13-0026 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 306 GAYLE P. PEDERSEN, as Trustee of the Gayle P. Peterson Trust, Plaintiff and Appellee, v. DEAN ZIEHL and NANCY ZIEHL, individually and as Trustees of Ziehl Family Trust dated January 16, 2004, Defendants and Appellants. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 09-312A Honorable Heidi Ulbricht, Presiding Judge COUNSEL OF RECORD: For Appellants: Donald V. Snavely; Snavely Law Firm; Missoula, Montana Evonne Smith Wells, Tal M. Goldin; Wells & McKittrick, P.C.; Missoula, Montana For Appellee: Randall A. Snyder; Snyder Law offices; Bigfork, Montana Submitted on Briefs: August 21, 2013 Decided: October 16, 2013 Filed: __________________________________________ Clerk October 16 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Dean and Nancy Ziehl (the Ziehls) appeal from the Judgment of the Montana Eleventh Judicial District Court determining that they do not own a prescriptive easement over a portion of dock that extends onto Gayle Pederson’s (Pederson) property. The District Court ordered that the intruding portion of dock be removed and costs be awarded to Pederson. We affirm and address the following issue, restated by this Court: ¶2 Did the District Court err by holding that the Ziehls failed to adversely use the dock for the required statutory period in order to obtain a prescriptive easement? FACTUAL AND PROCEDURAL BACKGROUND ¶3 This case involves a big dispute over a small piece of dock located on the Swan River in Bigfork. To explain the dispositive facts about the conflict, it is necessary to trace the ownership history of the properties involved. Prior to 2000, Fred and Judy Bysshe (the Bysshes) owned the north half of Lot 4 and Lots 5, 6, and 7 of Block 1 of Bigfork Original. Lots 4, 5, and 6 directly bordered the Swan River, and Lots 5 and 6 each had their own dock. At that time, Lot 7 did not touch the river and had no dock. ¶4 In July of 2000, the Bysshes decided to sell Lot 7 to Paul Nicodemus (Nicodemus). The property was initially advertised as having river-front access even though it did not. In an effort to accommodate the advertised listing, the Bysshes commissioned a boundary adjustment survey to redraw the property lines. The survey shifted the boundary between Lots 6 and 7 in order to give Lot 7 access to the river. In so doing, the survey divided the dock that had previously fronted only Lot 6. After the 3 survey, most of the dock was located on Lot 7, but the Bysshes had purposefully retained a portion of the dock’s southwestern corner for Lot 6. The survey also renamed Lot 6 and Lot 7 as “Lot 6A” and “Lot 7A,” respectively. Nicodemus closed his purchase of Lot 7A and recorded the deed on September 8, 2000. ¶5 From the time of the survey until 2002, the Bysshes continued to own Lot 6A. Judy Bysshe discussed the dock situation with Nicodemus and her realtor. The District Court found that Judy Bysshe clearly told Nicodemus that the southwestern portion of the dock belonged to Lot 6A, but was to be shared and used permissively as a neighborly accommodation. And although the dock’s condition had deteriorated over the years, Nicodemus would occasionally use it and park his boat there. ¶6 Pederson began considering purchasing Lot 6A from the Bysshes in 2001. Although she visited the property a number of times, Pederson failed to observe anyone using the dock. On October 15, 2002, Pederson closed on Lot 6A, and immediately began cleaning and clearing brush from the property. In 2003, Pederson re-landscaped the riverfront area, and in 2004, she constructed a residence and business on the property. During this time, Pederson did not use the dock, nor did she see Nicodemus using it. ¶7 In August of 2004, the Ziehls purchased Lot 7A from Nicodemus. The Ziehls began using the dock in June of 2005 and then hired a contractor, Dan Day (Day), to renovate it in 2006. Before beginning work, Day applied for a permit, which incorrectly identified the Ziehls as the exclusive owners of the existing dock. At some point during construction, Pederson informed Day that he was trespassing on her property and 4 demanded that he cease working. Day told the Ziehls about Pederson’s objections, but nothing was done to resolve the issue and construction continued. ¶8 The significantly improved new dock generally followed the footprint of the old one, although its width was increased by at least one additional foot outward into the river. By the time construction wrapped up in April of 2006, a 2.6 by 3.69 foot section of the dock extended onto Pederson’s property. Throughout 2006, 2007, 2008, and part of 2009, the Ziehls used the dock for recreational purposes and boat parking. Pederson occasionally used the dock when being picked up and dropped off by friends who boated to her residence. Pederson and the Ziehls never discussed whether the Bysshes’ original grant of permission to Nicodemus had subsequently been revoked or amended. ¶9 On March 4, 2009, Pederson filed a complaint in the District Court for the Eleventh Judicial District, seeking to eject the Ziehls from her property, quiet title to the portion of the dock located on Lot 6A, and obtain an order that the Ziehls permanently remove that portion. The Ziehls answered and counterclaimed, arguing that they had acquired a prescriptive easement allowing them to maintain and use the entire dock. On January 18, 2011, the case was tried before the District Court, Hon. Stewart E. Stadler, presiding, sitting without a jury. After receiving evidence and the arguments of both parties, the District Court issued its Findings of Fact, Conclusions of Law, and Decree on November 26, 2012. The District Court ruled in favor of Pederson, determining that the Ziehls did not hold a prescriptive easement and granting Pederson’s requested order. The Ziehls appeal. 5 STANDARD OF REVIEW ¶10 We affirm the factual findings of a district court sitting without a jury unless those findings are clearly erroneous. M. R. Civ. P. 52(a); Steiger v. Brown, 2007 MT 29, ¶ 16, 336 Mont. 29, 152 P.3d 705 (citation omitted). A district court’s findings are clearly erroneous if they are not supported by substantial evidence, if the district court has misapprehended the effect of the evidence, or if a review of the record leaves this Court with the definite and firm conviction that a mistake has been committed. Steiger, ¶ 16 (citing Ray v. Nansel, 2002 MT 191, ¶ 19, 311 Mont. 135, 53 P.3d 870). We view the evidence in the light most favorable to the prevailing party when determining whether substantial credible evidence supports the district court’s findings. Steiger, ¶ 16 (citing Ray, ¶ 19). We review a district court’s conclusions of law to determine whether those conclusions are correct. Steiger, ¶ 16 (citing Ray, ¶ 20). DISCUSSION ¶11 Did the District Court err by holding that the Ziehls failed to adversely use the dock for the required statutory period in order to obtain a prescriptive easement? ¶12 The parties generally do not dispute the factual findings of the District Court. Indeed, the Ziehls concede that any minor factual issues do not affect our analysis on appeal. The parties instead focus their arguments almost exclusively on the legal character of Nicodemus’ and the Ziehls’ use of the dock. More specifically, the entire outcome of this case turns on whether Nicodemus’ use of the dock after the Bysshes sold Lot 6A to Pederson in 2002 was adverse or permissive. 6 ¶13 A prescriptive easement arises by operation of law when a claimant proves that his or her use of another’s property was open, notorious, exclusive, adverse, continuous, and uninterrupted for the statutory period. Heller v. Gremaux, 2002 MT 199, ¶ 12, 311 Mont. 178, 53 P.3d 1259 (emphasis added). Section 70-19-404, MCA, sets Montana’s prescriptive period at five years. See also §§ 70-19-405, 23-2-322, MCA. If a claimant establishes the elements of open, notorious, exclusive, continuous, and uninterrupted, “a presumption arises that the use is adverse to the servient estate and the burden then shifts to the owner to show the use was permissive.” Combs-Demaio Living Trust v. Kilby Butte Colony, Inc., 2005 MT 71, ¶ 13, 326 Mont. 334, 109 P.3d 252. However, proof of permissive use overcomes the presumption of adversity and causes a prescriptive easement claim to fail. Heller, ¶ 15. ¶14 The Ziehls and Pederson stipulated that use of the disputed portion of dock was open, continuous, and uninterrupted throughout the entire period that Nicodemus and the Ziehls owned Lot 7A. The other two elements necessary to raise the presumption of adverse use—notorious and exclusive—were not squarely addressed by the District Court. The Ziehls argue that both of these elements were also clearly satisfied and therefore this Court must presume adversity. While the Ziehls offer a technically correct theory, we need not here engage in a burden-shifting analysis. A demonstration of permissive use overcomes any presumption of adversity and defeats a prescriptive easement claim as a matter of law. On this point, the District Court concluded that Nicodemus used the dock at all times during his ownership of Lot 7A with permission. We agree. 7 A. Permissive use ¶15 Under well-settled Montana law, use of another’s property based on neighborly accommodation or courtesy does not give rise to a prescriptive easement because adversity is lacking. Heller, ¶ 14; Rathbun v. Robson, 203 Mont. 319, 323, 661 P.2d 850, 852 (1983). Put another way, if permissive use is shown, “no easement can be acquired since the theory of prescriptive easements is based on adverse use.” Keebler v. Harding, 247 Mont. 518, 521, 807 P.2d 1354, 1356 (1991); Tanner v. Dream Island, 275 Mont. 414, 424-25, 913 P.2d 641, 648 (1996). “If a use begins as a permissive use it is presumed to continue as such.” Rettig v. Kallevig, 282 Mont. 189, 196, 936 P.2d 807, 811 (1997) (quoting White v. Kamps, 119 Mont. 102, 114, 171 P.2d 343, 349 (1946)). In fact, “[i]f the use begins as a permissive use, it cannot ripen into a prescriptive right, no matter how long it may continue, unless there is a distinct and positive assertion of a right hostile to the owner.” Morrison v. Higbee, 204 Mont. 515, 520, 668 P.2d 1025, 1027 (1983). ¶16 In its Findings of Fact, the District Court found: 14. Judy Bysshe not only acknowledged the encroachment, she discussed it with her realtor and with Paul Nicodemus. She clearly stated that her retained portion of the dock (on Lot 6A) was the property of 6A and use was to be shared and permissively used by each owner as a neighborly accommodation. 16. Nicodemus occasionally parked his boat at the dock and used it during his property ownership. 17. Gayle Pederson began looking at Lot 6A in 2001. Lot 6A was then a bare lot. [Pederson] looked at the property a number of times, but never saw any use along the dock before her purchase. She signed her purchase agreement in 2001 and closed her purchase on October 15, 2002. . . . 8 19. Although the dock was in deteriorated condition, the owners of Lot 7A were able to use the dock at times during their ownership. 21. Defendants Ziehl purchased Lot 7A from Nicodemus in August 2004. They used the existing dock in the summer of 2005 but did not undertake reconstruction of the riverfront or dock area until 2006. 24. Ziehls completed their dock reconstruction in April 2006, and used the dock in 2006, 2007, 2008 and minimally in 2009, for family recreation and for docking his boat between June and September of a given year. 28. No notice was ever provided by any party that the initial permissive and continuing use of the dock by the owners of Lot 6A and Lot 7A was altered or revoked. Based on these findings and our case law regarding the continuing nature of permissive use, the District Court concluded that the Bysshes’ original grant of permission to Nicodemus continued after Pederson purchased Lot 6A from the Bysshes, and that Nicodemus enjoyed this permission until he sold Lot 7A to the Ziehls in August of 2004. The District Court was not convinced that the Bysshes’ initial permission terminated even after Nicodemus sold Lot 7A, but determined that even if the Ziehls’ use became adverse immediately upon acquiring Nicodemus’ property, “there is not five years of adverse use between Defendant’s purchase of Lot 7A in August 2004 and M[arch] 2009, when litigation was commenced.” Pederson urges us to uphold the District Court’s decision for these same reasons and further contends that the Ziehls’ use did not become adverse until Pederson ordered Day to leave her property when the dock was being renovated in 2006—only three years prior to the commencement of this action, well short of the five year prescriptive period. 9 ¶17 The Ziehls maintain that even though the Bysshes originally granted Nicodemus permission to use the dock in 2000, “Bysshe’s permission ended when she sold the servient estate [Lot 6A] to Pederson [in 2002].” The Ziehls go on to explain that after acquiring the property, Pederson never expressly authorized Nicodemus to use the dock. Therefore, Pederson merely “acquiesce[d]” to Nicodemus’ use, which is not the same thing as permission. See Cremer v. Cremer Rodeo Land & Livestock Co., 192 Mont. 208, 211, 627 P.2d 1199, 1201 (1981). According to the Ziehls, Nicodemus’ use from 2002 to 2004 should have been included by the District Court when calculating the period of adverse use—approximately seven years by the time litigation commenced in 2009. In support of this argument, the Ziehls rely primarily on our decision in Han Farms, Inc. v. Molitor, 2003 MT 153, 316 Mont. 249, 70 P.3d 1238 for the proposition that “[o]ne owner’s grant of permission does not continue by default to the next owner”—that is, the Bysshes’ grant of permission to Nicodemus did not continue when Pederson purchased Lot 6A. Pederson, in turn, argues that Molitor is irreconcilable with our body of permissive use law and should not control in this case. ¶18 In Molitor, Han Farms utilized a road that crossed Molitor’s property to access Han Farms for residential and agricultural purposes. Molitor, ¶ 7. Certain tenants of Han Farms began using the road more frequently than in the past, prompting Molitor to withdraw permission. Molitor, ¶ 8. Han Farms brought suit claiming that it had acquired a prescriptive easement over Molitor’s property. At trial, Molitor testified that her predecessor in interest had given Han Farms’ predecessor in interest permission to use the road. Molitor, ¶ 14. 10 ¶19 On appeal, we affirmed the district court’s decision to grant Han Farms a prescriptive easement, explaining that although Molitor’s predecessors in interest may have given Han Farms’ predecessors in interest permission to use the road, the record contained no evidence that Molitor ever did, proving fatal to her defense. Molitor, ¶¶ 14- 16. As authority, we cited Rettig, 282 Mont. at 195, 936 P.2d at 811 for the blanket proposition that “[p]ermissive use is not transferable.” Molitor, ¶ 14. However, as Pederson correctly points out, Rettig did not create or adopt a non-transferability of permissive use rule. In fact, Rettig’s discussion of the rule should have precluded its application in Molitor. ¶20 In Rettig, DeRudder gave his neighbor Englert permission to use a silage pit road that crossed his property. Rettig, 282 Mont. at 191, 936 P.2d at 808. Some years later, Englert decided to sell his property to the Rettigs. Before the sale went through, DeRudder told Englert that any purchasers of Englert’s property could continue to use the silage pit road, subject to his permission. Rettig, 282 Mont. at 191, 936 P.2d at 808. The Rettigs purchased Englert’s property and used and improved the silage pit road for eleven years without ever receiving express permission from DeRudder to do so. Rettig, 282 Mont. at 192, 936 P.2d at 809. DeRudder eventually sold his property to the Kallevigs, who immediately informed the Rettigs that they could no longer use the road. The Rettigs sued, claiming they had acquired a prescriptive easement. Rettig, 282 Mont. at 192, 936 P.2d at 809. ¶21 The district court rejected the Rettigs’ claim, and this Court affirmed. We explained that the Rettigs did not acquire a prescriptive easement because permissive use, 11 once granted, is presumed to continue as permissive. Rettig, 282 Mont. at 196, 936 P.2d at 811. Indeed, “periodic, express grants of permission are not required to maintain the permissive character of the use . . . .” Rettig, 282 Mont. at 196, 936 P.2d at 811. We found it convincing that the Rettigs continued to use the road in the same manner as Englert, and DeRudder did not object. Rettig, 282 Mont. at 196, 936 P.2d at 811. More importantly, we specifically rejected the Rettigs’ non-transferability of permissive use argument because that rule stands only for the proposition that “one who has received permission . . . may not transfer a ‘limited personal right or license . . . to any other person or persons.’” Rettig, 282 Mont. at 195-96, 936 P.2d at 811 (citing Luoma v. Donohoe, 179 Mont. 359, 363, 588 P.2d 523, 525 (1978) in turn citing Cope v. Cope, 158 Mont. 388, 493 P.2d 336 (1971)). In other words, the rule provides that if you receive permission to use your neighbor’s land, you cannot unilaterally extend that permission to others. ¶22 It is clear that Molitor incorrectly applied the non-transferability of permissive use rule. The issue in Molitor was not whether the dominant user could unilaterally transfer a permissive right of use to another—which is the nature and scope of the rule—but, rather, whether permission granted by the servient owner continued after the sale of the servient property. Indeed, contrary to Molitor’s blanket “permission does not transfer” holding, our other cases demonstrate that the approach of this Court is to examine the nature of the arrangement between the parties at the outset of the use in determining the extent and duration of permissive use. Keebler, 247 Mont. at 521-23, 807 P.2d at 1357-58 (concluding that historical uses and custom prior to Appellant’s acquisition of the 12 property provided evidence that use had “always been permissive”); Morrison, 204 Mont. at 520-21, 668 P.2d at 1027-28 (construing use by Defendant’s predecessors in interest as “indicat[ing] friendly cooperation between neighbors.”); Rathbun, 203 Mont. at 322-23, 661 P.2d at 852 (determining that initial homesteader practices were “sufficient to support a use permissive in its inception and not under a claim of right”); Cope, 158 Mont. at 390-94, 493 P.2d at 338-40 (finding strong support for permissive use based on the actions of the families prior to Plaintiff’s acquisition of the property, and stating “the courts look to a variety of acts [sic] and circumstances to determine whether the user in a particular case was adverse or permissive . . . .”). ¶23 The Ziehls argue that our cases discussing the continuing nature of permissive use are factually distinguishable from the case at bar because they “involve continuous ownership of the servient estate by the same owner who initially gave permission, or . . . direct evidence of subsequent permission to a new owner.” Certainly, neither of these scenarios exists in this case—the Bysshes did not maintain continuous ownership of the servient estate, and Pederson never expressly granted Nicodemus permission to use the dock. Based on this factual distinction, the Ziehls urge us reject the permissive use line of precedent cited by Pederson and instead apply the expansive rule stated in Molitor. ¶24 The facts in Molitor do appear very similar to the facts here, but, as we have explained, Molitor was premised upon an irrelevant principle of law, one which our prior cases neither recognized nor adopted in such a context. It makes little sense to follow a rule that clearly does not apply, based solely on factual similarities, when the weight of our existing law demands a contrary result. Thus, to the extent that Molitor determined 13 that permission can never carry over from one owner to another after sale of the servient property, it is overruled. “[S]tare decisis does not require that we follow a manifestly wrong decision.” Formicove, Inc. v. Burlington Northern, Inc., 207 Mont. 189, 194-95, 673 P.2d 469, 472 (1983). A thorough reading of our permissive use cases makes clear that this Court has always, with the exception of Molitor, considered the nature of the initial agreement and the attendant circumstances surrounding any continuing use when determining whether permission exists. This approach presents a more comprehensive and sound method of analyzing permissive use questions than ignoring case-specific facts and circumstances in favor of a rigid “permission never carries over” rule. ¶25 Resolving permissive use questions in this way does not result in “tacking” of permissive use periods, as the Ziehls describe Pederson’s position to be. We are not holding that permission given by the servient owner automatically continues after sale of the servient property. Such an approach could, by default, subordinate the intentions of current property owners to the intentions of their predecessors in title and produce absurd results in some cases. At the same time, it cannot be said that the weight of our law supports the inverse proposition that the mere sale of property, without more, automatically transforms permissive use into use that is adverse to the purchaser’s ownership interest. ¶26 In its Findings of Fact, the District Court determined that Judy Bysshe expressly granted Nicodemus permission to use the dock, which he occasionally did throughout his ownership of Lot 7A. This finding is supported by substantial credible evidence in the record. The Ziehls attempt to undermine this finding by citing testimony from Judy 14 Bysshe about a conversation she had with Nicodemus wherein she stated: “[A]s far as [she] was concerned as long as we [Bysshes] owned [a portion of the dock] he [Nicodemus] was welcome to use it, and if somebody else owned it he’d have to work out an arrangement to share the space.” The Ziehls argue that this statement expressly limited Nicodemus’ permission to the Bysshes’ term of ownership. We do not agree. The fact that Judy Bysshe mentioned that Nicodemus would have to work out an arrangement with a new owner at some point in the future does not make the District Court’s finding that permission existed at all times during Nicodemus’ use of the dock clearly erroneous. Importantly, the District Court did not find, and the Ziehls do not argue, that Nicodemus ever changed the character of his use or took active steps to claim the entire dock as a matter of right. It is telling that Pederson never even saw Nicodemus use the dock in 2003 and 2004. Our decision in Morrison makes quite clear that in order to transform a permissive use into an adverse one, there must be a “distinct and positive assertion of a right hostile to the owner.” Morrison, 204 Mont. at 520, 668 P.2d at 1027 (emphasis added). As the District Court reasoned, “[t]here was no ‘overt act’ or event which would notify Bysshes or Pederson that either owner of Lot 7A claimed the use of the full dock as their right.” Given these facts, we cannot conclude that the mere sale of Lot 6A to Pederson in 2002, without more, changed Nicodemus’ occasional use of the dock, which had at all times previously been permissive, into an adverse and hostile claim of right. ¶27 Since we have determined that Nicodemus used the dock with permission at all times during his ownership of Lot 7A, there is no need to pinpoint the exact date when 15 the Ziehls’ use became adverse. As the District Court correctly decided, even if the Ziehls’ use became adverse immediately upon purchasing Lot 7A in August of 2004, the statutorily imposed five-year adversity period had not yet elapsed by the time litigation commenced in March of 2009. ¶28 Accordingly, the Judgment of the District Court is affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BRIAN MORRIS	October 16, 2013
26a74e80-5593-41f9-a9d6-0b0f80d1fea1	MATTER OF A R	2004 MT 22	03-400	Montana	Montana Supreme Court	No. 03-400 IN THE SUPREME COURT OF THE STATE OF MONTANA 2004 MT 22 IN THE MATTER OF A.R. and S.A.R., Youths in Need of Care. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, Cause No. DN 2001-004 The Honorable Gregory R. Todd, Judge presiding. COUNSEL OF RECORD: For Appellant: Mark Anderson, Attorney at Law, Billings, Montana For Respondent: Hon. Mike McGrath, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana; Dennis Paxinos, Yellowstone County Attorney, Richard Helm, Deputy County Attorney, Billings, Montana For Youths: Patrick Kenney, Attorney at Law (Guardian ad Litem), Billings, Montana Submitted on Briefs: December 23, 2003 Decided: February 3, 2004 Filed: __________________________________________ Clerk 2 Justice Patricia O. Cotter delivered the Opinion of the Court. ¶1 S.A. is the biological mother of two minor children, A.R. and S.A.R. In March 2003, the Thirteen Judicial District Court, Yellowstone County, issued its Order terminating S.A.’s parental rights to both children, and awarded custody of the children to their biological father, L.R. S.A. appeals. We affirm. ISSUE ¶2 The issue presented on appeal is whether the District Court, the State, and the Department of Public Health and Human Services (DPHHS or the Department) violated S.A.’s Constitutional right to due process. FACTUAL AND PROCEDURAL BACKGROUND ¶3 S.A. was adjudicated a youth in need of care in 1985 at the age of fourteen. The DPHHS retained protective custody over her until she turned eighteen in March 1989. Around that time she married L.R. and in 1991 gave birth to their son, A.R. In 1993, she bore another son, S.A.R. In 1994, the Colorado state protective agency received its first report of abuse and neglect in the family. L.R. left the family around this time and moved to Montana. S.A. remained in Colorado, where she was subsequently arrested on drug- related charges and the children were placed into temporary foster care. When the children and S.A. were reunited, they moved to Montana as well. S.A. and L.R. did not reunite and ultimately were divorced in December 1999. L.R. took custody of the boys from their arrival in Montana until February 1998, when he relinquished custody. During this time, S.A. had supervised contact with the children. Between February 1998 and December 1999, 3 L.R. saw his sons every Sunday. ¶4 S.A. has a history of abusive relationships with men. After L.R. relinquished custody to S.A. in 1998, the Department began receiving reports of abuse, neglect, and drug and alcohol-related problems in the home. Upon investigation, some reports were substantiated while others were not. ¶5 S.A. was involved in a severely physically abusive relationship in 1999. That relationship exposed her sons to extreme violence, threats of violence and physical injury at the hands of both S.A. and her boyfriend at the time. Around August 1999, the children were removed from the home and placed in foster care. Upon contact by the Department, L.R., who had undergone drug and alcohol rehabilitation after returning the children to S.A. in February 1998, said he wanted custody of the boys. The children remained in foster care, however, until they were reunited with S.A. a few months later in December 1999. ¶6 By January 2001, S.A. was involved in another dysfunctional relationship with a live- in partner, M.W. On January 3, M.W., in an alcohol and drug-induced rage, violently assaulted and raped S.A. in the presence of her children, and choked A.R., beat his head against a headboard and threatened to kill him. The Department took the then ten-year old and eight-year old boys into protective custody on or around January 4, 2001, and placed them in foster care. Thereafter, it began working with S.A. in an attempt to reunify her with her children, provided reunification proved to be in the boys’ best interests. ¶7 After months of monitored visits between S.A. and her sons, psychological evaluations of S.A., L.R. and the children, and failed treatment plans, the District Court 4 declared the boys to be “youths in need of care.” It subsequently held a hearing, terminated S.A.’s parental rights, and placed the boys in the custody of L.R. and his wife. S.A. appeals. We affirm. STANDARD OF REVIEW ¶8 Our review of the constitutional issue of due process involves a question of law and, as such, our review is plenary. See Pickens v. Shelton-Thompson, 2000 MT 131, ¶ 7, 300 Mont. 16, ¶ 7, 3 P.3d 603, ¶ 7. In re Mental Health of K.G.F., 2001 MT 140, ¶ 17, 306 Mont. 1, ¶ 17, 29 P.3d 485, ¶ 17. DISCUSSION ¶9 S.A. claims that as a result of due process violations, the court erred when it terminated her parental rights. She cites the following examples of due process violations: 1. the State and the Department failed to hold a permanency plan hearing within the statutorily-required time; 2. the overall length of the proceeding, including the delay in the availability of the District Court record between the November 2002 bench hearing in which her parental rights were terminated and the record being filed in June 2003; and 3. the District Court’s denial of her request for an independent evaluation, an independent drug test and to videotape her visitation with her sons. ¶10 S.A. makes further due process violation assertions that she does not develop or support with authority in her Brief to this Court; therefore, we decline to address those matters. Rule 23(a)(4), M.R.App.P. 5 ¶11 We note that S.A. is not challenging the District Court’s decision to terminate her parental rights. While S.A. summarizes her argument by stating that the District Court erred by terminating her parental rights, her argument is grounded exclusively in claims of due process violations, and therefore we analyze and decide this case on due process grounds. This Court has previously concluded that the phrase “due process” cannot be precisely defined but that the “phrase expresses the requirements of ‘fundamental fairness’.” In re A.F.-C., 2001 MT 283, ¶ 50, 307 Mont. 358, ¶ 50, 37 P.3d 724, ¶ 50 (citation omitted). ¶12 In evaluating the fundamental fairness of S.A.’s proceeding, we first recognize that S.A. was represented by competent counsel throughout this proceeding and was allowed and encouraged to fully participate in all requirements to regain custody of her children. Moreover, she did not challenge any court rulings throughout this process. We now review S.A.’s individual claims. ¶13 S.A. claims that the State’s and the Department’s failure to hold a permanency plan hearing within the statutorily-prescribed time resulted in the District Court losing jurisdiction over this matter and required a dismissal. Section 41-3-445(1)(a)(i)(B), MCA, requires that a permanency plan hearing must be held “no later than 12 months after the initial court finding that the child has been subjected to abuse or neglect or 12 months after the child’s first 60 days of removal from the home, whichever comes first.” The boys were removed from S.A.’s home in early January 2001. It is undisputed that a permanency plan hearing was not held within the statutory time frame. 6 ¶14 Under § 41-3-445(1)(b), MCA, however, a permanency plan hearing is not required if the children have been returned to a biological or adoptive parent, stepparent, or legal guardian. In this case the children were placed with their biological father on August 22, 2002. S.A. claims that because the hearing was not held in a timely manner, her due process rights were violated, or in other words, the proceeding was fundamentally unfair. ¶15 We conclude that under the facts of this case, failure to hold the permanency plan hearing within the statutory time frame was not fundamentally unfair and did not warrant dismissal of this action. ¶16 Immediately after the children were removed the S.A.’s custody, attorneys were appointed for both S.A. and L.R., and a guardian ad litem was appointed for the children. While S.A. had obtained a court order at the time of their divorce prohibiting L.R. from visiting with the children, visitation was restored at some time between January 4, 2001, and June 26, 2001. By June 26, L.R. had already developed a record of regular Friday afternoon visits with his sons. He had not cancelled or missed any visits up to that date. He had also verified his attendance and completion of orientation at the Journey Recovery Program and was awaiting an opening in a chemical dependency treatment program. ¶17 On August 24, 2001, L.R. went to DPHHS to meet with the case worker and inquire what else he needed to do in order to get his children returned to his care. It was apparent to the DPHHS at that time that L.R. wished to regain custody of A.R. and S.A.R. and was actively pursuing that goal. 7 ¶18 On September 10, 2001, L.R. met with a DPHHS case worker to discuss a treatment plan that was being developed for him. It included a requirement that he complete a chemical dependency treatment program. He informed the case worker that he had already completed such a program and would provide verification. ¶19 On September 20, 2001, Dr. Chessen, the experienced psychologist who had evaluated S.A., A.R. and S.A.R., evaluated L.R. Dr. Chessen also met with L.R. weekly for approximately six weeks after the evaluation. Dr. Chessen testified at the January 2002 temporary custody hearing that L.R. had scored well on the child abuse test indicating an unlikelihood of abuse. He gave a qualified recommendation that the boys be placed in L.R.’s custody contingent upon family counseling. ¶20 On February 21, 2002, L.R. willingly signed the court-approved treatment plan for the period from February 11, 2002 to August 11, 2002. On August 12, 2002, DPHHS submitted its periodic affidavit, testified that L.R. had successfully completed his treatment plan and recommended that the boys be placed in L.R.’s temporary custody. The boys were placed with their natural father on August 22, 2002. ¶21 While we do not condone DPHHS’ failure to petition for the permanency plan hearing within the statutorily-required time period, we conclude that dismissal of this action for failure to hold such a hearing is unnecessarily draconian and not required by the statute. The purpose of a child custody proceeding is to discern what living and custodial arrangement is in the best interests of the children involved. The purpose of the permanency plan hearing is to assure that children taken into protective custody by the DPHHS do not languish in 8 foster care or fall through the proverbial administrative crack. In the case before us, DPHHS was actively working with both biological parents in an attempt to reunify the children with one of them. The Department knew well before March 2002 that the children’s natural father was aggressively seeking custody. L.R. was a willing parent seeking custody and conscientiously satisfying the terms of his treatment plan. Moreover, DPHHS, while recognizing that S.A. was not displaying the same level of success with her treatment plans, continued instructing her toward the goal of reunification as well. ¶22 Under these circumstances, had a permanency plan hearing been held, it undoubtedly would have formalized DPHHS’ goal of reunifying these children with either S.A. or L.R., depending upon which parent successfully proved to the Department and the court that he or she was adequately prepared to care for these children. Therefore, the children were not destined to languish in foster care. Rather, given the circumstances at the time a permanency plan hearing should have occurred, the plan was that the children would be placed in the custody of either one of their biological parents. We note also that the Department ultimately petitioned for such a hearing in October 2002 and the District Court concluded that such a hearing was unnecessary under § 41-3-445(1)(b), MCA, as the boys had been placed with their father. ¶23 Again, we caution that DPHHS must diligently comply with abuse and neglect statutory requirements, as failure to do so could result in unfortunate and traumatic consequences. Given the particulars of this case, however, because the Department was working closely with two parents living in separate households, both of whom were actively 9 seeking custody, and one of whom subsequently received custody, the failure to hold such a hearing was neither fundamentally unfair nor a violation of S.A.’s due process right. ¶24 S.A. also claims that she was prejudiced by the length of the proceeding. She asserts that her children were removed from her home in early January 2001, and the District Court did not issue its bench ruling until November 2002. She filed her appeal in March 2003, but because the District Court granted an extension of time in which to file the transcripts, such transcripts were not available until June 17, 2003. She argues that this unreasonable period of time violated her rights. ¶25 The State responds that the length of the proceeding was intended, in part, to benefit S.A. DPHHS did not initially move to adjudicate these boys as “youths in need of care,” but rather attempted to give S.A. sufficient time to demonstrate her ability to adequately care for her sons. The Department provided regularly-scheduled monitored visits, offered suggestions and advice, encouraged counseling and stressed the importance of successful completion of S.A.’s treatment plans. It was only after all these attempts failed that the Department sought adjudication of the boys as “youths in need of care.” The court so decided on April 22, 2002, a full sixteen months after the children were removed from the home. ¶26 DPHHS continued working with S.A., however, for months after the April adjudication. It was not until August 12 that the Department sought termination of S.A.’s parental rights, and then only after it was clear that S.A. failed to satisfy the terms and goals of multiple treatment plans, acted inappropriately during numerous visits with her sons 10 which ultimately resulted in the discontinuation of visits, maintained a combative attitude toward DPHHS, and had “not benefitted from the multitude of services that [had] been offered to her.” ¶27 S.A. correctly acknowledges that § 41-3-604(1), MCA, contains the presumption that a child’s best interests are served by terminating a parent’s rights to the child if the child has been in foster care for fifteen of the past twenty-two months. S.A. claims that because this case took so long, this statutory presumption worked against her and lessened her chances of getting her children back. We disagree. As the record indicates, despite S.A.’s failure to show progress toward reunification goals, after fifteen months the Department was still actively working with her to accomplish those goals. It did not seek termination of her rights until more than twenty months after the children had been removed from her home. Under these circumstances we conclude that the length of time for this proceeding did not prejudice S.A.’s rights. ¶28 We do not fault the District Court for granting the court reporter a single extension of time in which to file the transcripts of the proceeding. Such an extension was authorized by Rule 10, M.R.App.P., and is commonly granted. Moreover, S.A. did not object at the time of this request nor did the extension appear to unduly delay the filing of her appeal with this Court, as her opening brief was not filed until three months after the transcripts were filed. ¶29 S.A. also claims that the court’s denial of her request for certain services denied her due process. The record shows, however, that the District Court did not deny S.A. the right 11 to an independent evaluation or an independent drug test; it merely placed the burden of paying for these services on S.A. The court concluded that the State had already paid for one psychological evaluation and for psychological counseling, as well as random drug tests. At the time the psychological evaluation was submitted, S.A. had not challenged the evaluation of Dr. Chessen, the psychologist. She did not argue that Dr. Chessen was biased against her or evaluated her unfairly. Just before the termination hearing, however, when S.A. submitted her request for a new evaluation, she claimed that Dr. Chessen had a conflict of interest because he had evaluated the children and L.R. as well. She failed to establish such a conflict, however, and in light of the fact that Dr. Chessen evaluated L.R. months after he had submitted his report of S.A.’s evaluation, it is unlikely that she could have done so. ¶30 S.A. likewise failed to challenge the drug analysis results, the technicians or the efficacy of laboratory procedures at the time these results were submitted to the court. Moreover, the court received testimony from a representative of Alternatives, Inc., the facility that performed S.A.’s drug analyses. He explained that when the lab initially detected a “positive” sample from S.A., as was done in October 2001, the lab ran it a second time. This second run confirmed the presence of amphetamines and methamphetamine. The lab then submitted the sample to the State Crime Lab, which confirmed the results as well. Under these circumstances, we conclude that denial by the court of an additional state-paid evaluation and lab analysis was not a deprivation of due process. 12 ¶31 Lastly, S.A. complains that the District Court’s denial of her request to allow her counselor to be present during S.A.’s visits with her children and to videotape those visits denied her “due process rights to make a record for appeal.” Again, the record indicates that the court did not deny this request. At the time the request was made, S.A. had no visitation rights with her sons. The Department had suspended such rights due to S.A.’s inappropriate actions during multiple visits. The court ruled that upon reinstatement of visitation rights, S.A.’s counselor could be present and videotaping would be allowed if done in a discreet manner and unbeknownst to the children. We conclude, therefore, that the District Court did not violate S.A.’s due process rights by denying these requests. ¶32 Accordingly, we hold that S.A.’s due process rights were not violated by the District Court, the State or the Department. CONCLUSION ¶33 For the foregoing reasons, we affirm the District Court. /S/ PATRICIA O. COTTER We Concur: /S/ JIM REGNIER /S/ JAMES C. NELSON /S/ W. WILLIAM LEAPHART /S/ JIM RICE	February 3, 2004
7e35ceba-b179-45e3-9f1d-117deb587373	In re T.S.	2013 MT 274	DA 13-0177	Montana	Montana Supreme Court	DA 13-0177 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 274 IN THE MATTER OF: T.S., T.S., T.S., T.S., Youths in Need of Care. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause Nos. ADN 11-155, -156, -157, -158 Honorable Greg Pinski, Presiding Judge COUNSEL OF RECORD: For Appellant: Anne-Marie K. Simeon, Attorney at Law, Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Tammy K Plubell, Assistant Attorney General; Helena, Montana Theresa L. Diekhans, Child Protection Unit, Great Falls, Montana John Parker, Cascade County Attorney, Great Falls, Montana Submitted on Briefs: September 4, 2013 Decided: September 24, 2013 Filed: __________________________________________ Clerk September 24 2013 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 K.S., the Father, appeals from the Order of the Montana Eighth Judicial District Court, Cascade County, terminating his parental rights. We affirm. ISSUES ¶2 The issues presented for our review are as follows: ¶3 Did the Father preserve for review the issue of his treatment plan’s appropriateness, when he did not timely object to the plan? ¶4 Did the District Court abuse its discretion by terminating the Father’s parental rights without also terminating the Mother’s parental rights? FACTUAL AND PROCEDURAL BACKGROUND ¶5 The order at issue terminates the Father’s parental rights to his four children, T.S.1, T.S.2, T.S.3, and T.S.4 (Children). ¶6 T.S.1 was born in 2002. She has cerebral palsy, a seizure disorder, and is hard of hearing. T.S.2 was born in 2003. He is deaf. T.S.3 was born in 2007. T.S.4 was born in 2008. K.S., the Father, is the natural father of all four Children. He is hard of hearing. E.S., the Mother, is the natural mother of all four Children. She is deaf. ¶7 The Children were removed from the Father’s care at approximately 5:00 p.m. on July 22, 2011. The Children had been found, at approximately 2:00 a.m., at the park across the street from the Father’s apartment. When they were returned to the Father’s care, the Father was “passed out” on the couch and could not be awakened. ¶8 The State filed a Petition for Emergency Protective Services, Adjudication as Youth- in-need-of-care and Temporary Legal Custody on July 29, 2011. The Children were 3 adjudicated youths-in-need-of-care on September 21, 2011, and the State was granted temporary legal custody. The District Court approved a treatment plan for the Father and ordered the Father to complete his treatment plan at a hearing on December 7, 2011. Temporary legal custody was extended on May 2, 2012, and on November 21, 2012. The State filed a Petition for Termination of Parental Right of Father on November 8, 2012, citing the statutory theory of “Failure of Court Ordered Treatment.” In its petition the State requested that if the Mother relinquished her rights to the Children, the Court should grant permanent legal custody to the Montana Department of Public Health and Human Services (Department). The Father’s termination hearing occurred on January 16, 2013. ¶9 In an affidavit supporting the State’s July 29, 2011 Petition, the child protection specialist who investigated the case stated that the Father had often been heard screaming obscenities at his Children. She reported that the maintenance man at the Father’s apartment building observed the Father would yell “all the time.” She stated that the two older Children reportedly were missing approximately fifty percent of their days at school and being tardy a significant amount of the time. She also stated the Father had had three doors in his apartment repaired due to being “kicked in.” When the child protection specialist investigated the home, she observed dog feces throughout the home, including on the Children’s toys, blankets and clothes. She also observed nine empty liquor bottles on top of the Father’s kitchen cabinets, as well as “numerous” beer cans on the cabinets and counter top. The Father admitted that he had been drinking since the Mother had left him, approximately two years earlier. When the child protection specialists asked the Father to 4 pack a bag for each of the Children, he had a difficult time finding clean clothes for them. When the Children unpacked their bags, dog feces were discovered mixed in with their clothing. It appeared at the time of the investigation that T.S.1’s seizure medicine was out of date and that the Father had not been giving her the medication on a regular basis. ¶10 Nancy Reppe, LCPC, has counseled all four Children. She testified that the Children suffer from adjustment disorders and anxiety. T.S.2 has symptoms of Post-Traumatic Stress Disorder (PTSD). In counseling, T.S.2 has been the most vocal of the Children in disclosing physical abuse perpetrated by the Father against T.S.2 and his siblings. Because he remembered physical abuse at the Father’s home, T.S.2 had a very difficult time with in- home visitations and did not make progress in overcoming those problems. Nancy Reppe described the trauma as extensive and added that T.S.2 and the others never felt safe and secure. T.S.4 has emotional issues and was very reserved during counseling. T.S.4 felt comfortable speaking if he was hiding underneath cushions and often hid in the corners of the room. Nancy Reppe believed that the Children would have to go through extensive counseling with the Father in order to feel safe and secure with him. Nancy Reppe stated this had not occurred during visitations and it could take an additional year before the Children might not be afraid of living with the Father. ¶11 T.S.1 and T.S.2 have been reunited with the Mother since February 14, 2012. T.S.3 and T.S.4 have been in foster care since removal. The Mother testified she is willing to continue attempting to parent T.S.3 and T.S.4 and in order to do so, she will need additional time to work with the State. Nancy Reppe observed the Mother with T.S.1 and T.S.2. 5 Nancy Reppe does not have any concerns about the Mother’s ability to provide security and stability for T.S.1 and T.S.2. ¶12 The Father’s treatment plan, to which he stipulated on December 7, 2011, required him to address his alcohol abuse by: (1) successfully completing chemical dependency treatment and following the recommendations of his counselors; and (2) completing random urinalysis (UA) testing. In regard to this task, the treatment plan states: “What will success look like: …[The Father] will complete chemical dependency treatment as recommended and will have maintained sobriety.” (Emphasis original). ¶13 In October 2011, the Father entered and successfully completed inpatient treatment at Montana Chemical Dependency Center (MCDC). Upon completion of MCDC, the Father enrolled in aftercare with Gateway Community Services (Gateway). His counselor, Stan Coulter, testified that the Father was recommended for Level 2.1 treatment, which is intensive outpatient treatment. The Father completed intensive outpatient treatment and was stepped down to Level 1 treatment, which is outpatient treatment. The Father did not complete outpatient treatment and stopped attending outpatient treatment altogether around August 2012. While attending treatment at Gateway the Father had an interpreter. A problem arose with the interpreter services during the summer of 2012; butthe Father did not advise the social worker of the problem until a week or two prior to the January 16, 2013, termination hearing. The District Court found by clear and convincing evidence that the Father failed to successfully complete chemical dependency treatment because he did not complete outpatient treatment. 6 ¶14 Stan Coulter further testified that the Father suffers from high levels of anxiety. In order to address the anxiety, Stan Coulter recommended the Father receive mental health counseling. The Father never followed through on mental health counseling, nor did he address his anxiety. Managing his anxiety is crucial for the Father to ultimately maintain sobriety. The District Court found by clear and convincing evidence that the Father failed to successfully complete chemical dependency treatment because he did not follow the recommendation of his counselor to resolve his anxiety problems. ¶15 The Father was placed on the Department’s UA list. The list is random and required the Father to call in Monday through Friday to find out if he needed to submit to a UA on any given day. Overall, the Father failed to call or show for 115 UAs since December 2011. The Father also produced several UAs that were positive for alcohol. The Father missed UAs every month except March 2012 and December 2012. Stan Coulter testified that a pattern of missed UAs indicates it is highly likely the individual is still using alcohol. Accordingly, in the realm of chemical dependency treatment, missed UAs are considered “hot” or positive UAs. The District Court found by clear and convincing evidence that the Father failed to comply with random UA testing. ¶16 The Father testified that the last time he drank alcohol was on September 2, 2012. He testified he has maintained his sobriety since then. This is only somewhat corroborated by the UAs; the Father has failed to submit to nineteen UAs since September 2. However, he has provided nine clean UAs since September 2. The Father has not been in chemical dependency treatment since prior to September 2. Stan Coulter testified that it was not likely 7 the Father maintained his sobriety on his own, without treatment. The District Court found by clear and convincing evidence that the Father has not yet been successful in maintaining sobriety. ¶17 The Father’s treatment plan required him to complete a parenting evaluation and follow its recommendations. The Father completed this task. ¶18 The Father’s treatment plan required him to participate in an in-home parenting program upon the return of his Children to his care. The Children were not returned home because of unresolved safety issues. One safety issue was his alcohol use. Another safety issue was the Children’s concerns about physical abuse. Those concerns were based on their recent disclosures of physical abuse while previously in the Father’s care. The Father did not successfully address either issue. The District Court found that the Father failed to complete this task. ¶19 The Father’s treatment plan required him to attend visitations with the Children and to demonstrate during visitations that he is able to attend to the Children’s physical and emotional needs. The Father attended his visitations, which occurred primarily at Healthy Mothers, Healthy Babies. After the Father obtained appropriate housing, visits during fall 2012 occurred at his home for approximately a month and a half. The visits were moved back to Healthy Mothers, Healthy Babies upon the Children’s counselors’ recommendations because the Children had unresolved safety concerns about being in a home environment with the Father. T.S.2 had a very difficult time with visitations because of the prior physical abuse and those difficulties were not resolved. Visitations remained supervised because of 8 the Children’s concerns. The Father was not able to establish a close parent-child bond with any of the Children during the visitations. The District Court found that while the Father faithfully attended the visitations, he was ultimately unsuccessful in strengthening his bond with his Children and being able to meet the Children’s basic needs. ¶20 The Father’s treatment plan required him to obtain a safe and stable home environment. He obtained appropriate housing. The home environment was not safe and stable because unaddressed safety concerns prevented the Children from being returned to his care. The District Court found that the Father failed to complete this task. STANDARD OF REVIEW ¶21 This Court reviews a district court’s decision to terminate parental rights for an abuse of discretion. In re E.Z.C., 2013 MT 123, ¶ 19, 370 Mont. 116, 300 P.3d 1174 (citing In re T.W.F., 2009 MT 207, ¶ 17, 351 Mont. 233, 210 P.3d 174). A district court abuses its discretion when it acts arbitrarily, without employment of conscientious judgment, or in excess of the bounds of reason, resulting in substantial injustice. In re E.Z.C., ¶ 19 (citing In re A.J.W., 2010 MT 42, ¶ 12, 355 Mont. 264, 227 P.3d 1012). This Court will not disturb a district court’s decision on appeal unless “there is a mistake of law or a finding of fact not supported by substantial evidence that would amount to a clear abuse of discretion.” In re D.B., 2012 MT 231, ¶ 17, 366 Mont. 392, 288 P.3d 160 (quoting In re M.N., 2011 MT 245, ¶ 14, 362 Mont. 186, 261 P.3d 1047) (internal quotations omitted). We review a district court’s findings of fact to determine whether they are clearly erroneous and its conclusions of law to determine whether they are correct. In re E.Z.C., ¶ 19 (citing In re T.W.F., ¶ 17). 9 DISCUSSION ¶22 A district court may order termination of a parent-child legal relationship when the court makes a finding that the child is an adjudicated youth-in-need-of-care and both of the following exist: (1) an appropriate treatment plan that has been approved by the court has not been complied with by the parent, or has not been successful; and (2) the conduct or condition of the parent rendering the parent unfit is unlikely to change within a reasonable time. Section 41-3-609(1)(f), MCA. Prior to entering an order terminating parental rights, a district court must adequately address each applicable statutory criterion and the party seeking termination of parental rights must present clear and convincing evidence to the district court that the applicable statutory criteria have been met. In re M.T., 2002 MT 174, ¶¶ 24, 26, 310 Mont. 506, 51 P.3d 1141. ¶23 Did the Father preserve for review the issue of his treatment plan’s appropriateness, when he did not timely object to the plan? ¶24 The Father argues that the Department’s treatment plan was inadequate because it did not mention his hearing impairment. He argues that the District Court therefore abused its discretion by terminating his parental rights relying, in part, on its finding that he failed to complete the treatment plan. ¶25 “A parent who does not object to a treatment plan’s goals or tasks waives the right to argue on appeal that the plan was not appropriate.” In re D.S.B., 2013 MT 112, ¶ 10, 370 Mont. 37, 300 P.3d 702 (quoting In re H.R., 2012 MT 290, ¶ 10, 367 Mont. 338, 291 P.3d 583) (internal quotations omitted). When evaluating the appropriateness of a treatment plan, 10 we consider whether the parent was represented by counsel, whether the parent stipulated to the treatment plan, and whether the treatment plan takes into consideration the particular problems facing both the parent and the child. In re H.R., ¶ 10 (citing In re C.J.M., 2012 MT 137, ¶ 15, 365 Mont. 298, 280 P.3d 899). Where a parent fails to object to a treatment plan in a timely manner, the parent waives any argument regarding the propriety of the treatment plan. See In re C.J.M., ¶ 16; In re A.A., 2005 MT 119, ¶¶ 21-28, 327 Mont. 127, 112 P.3d 993 (parent who, with representation of counsel, negotiated and agreed to several treatment plans, and failed to object in a timely manner, waived her argument that portions of the plans were not appropriate). ¶26 The Father relies substantially on In re D.B. and D.B., 2007 MT 246, 339 Mont. 240, 168 P.3d 691, to argue that a court must consider whether a treatment plan addresses a parent’s disabilities in evaluating the plan’s propriety. In In re D.B. and D.B., however, the parent objected repeatedly to the treatment plan. In re D.B. and D.B., ¶¶ 9-11, 15. ¶27 This Court will not consider the Father’s argument regarding his treatment plan’s propriety because he failed to object to the treatment plan in a timely manner. The Father’s treatment plan came before the District Court for a dispositional hearing on December 7, 2011. The Father and his attorney stipulated to the treatment plan. The Father did not object to the treatment plan on the basis that it did not address his hearing impairment at that time. Nor did the Father inform the social worker of the problems with his sign language interpreter, which began in summer 2012, until a week or two prior to the January 2013 termination hearing. The Father’s difficulty hearing does not appear to have been an 11 obstacle to his treatment until the summer of 2012, at least six months after the treatment plan was set in place. If the Father believed his hearing impairment was impeding his treatment, he could have objected to his treatment plan either at its inception or when the issue arose. He did not do so. If the Father was serious about completing the tasks he knew were necessary to regain custody of his Children, he should have made immediate efforts to remedy any difficulties with those tasks. Here, as in In re C.J.M. and In re A.A., the Father waived any argument regarding the propriety of his treatment plan. ¶28 Did the District Court abuse its discretion by terminating the Father’s parental rights without also terminating the Mother’s parental rights? ¶29 The Father argues that the District Court abused its discretion when it terminated his parental rights without terminating the Mother’s parental rights to the Children. He argues that although the two older Children have been reunited with their Mother, the two younger Children’s placement is still uncertain. Therefore, he asserts, there is no harm in postponing termination of his parental rights and giving him more time to complete his treatment plan. ¶30 “[T]he best interests of the children are of paramount concern in a parental rights termination proceeding and take precedence over the parental rights.” In re Custody & Parental Rights of D.A., 2008 MT 247, ¶ 21, 344 Mont. 513, 189 P.3d 631 (quoting In re E.K., 2001 MT 279, ¶ 33, 307 Mont. 328, 37 P.3d 690) (internal quotations omitted). Section 41-3-609(3), MCA, provides that, in determining whether the condition of the parent that renders the parent unfit is likely to change within a reasonable time, a court should “give primary consideration to the physical, mental, and emotional conditions and needs of the 12 child.” If a district court finds the statutory criteria supporting termination, set forth in§ 41- 3-609(1), MCA, are met, no limitation requires the district court to consider other options prior to terminating parental rights. In re E.A.T., 1999 MT 281, ¶ 33, 296 Mont. 535, 989 P.2d 860. Most importantly, children need not be left to “twist in the wind” when their parents fail to give priority to their stability and permanency. See In re A.D.B., 2013 MT 167, ¶ 80, 370 Mont. 422, 305 P.3d 739. ¶31 The District Court concluded, by clear and convincing evidence, that the criteria for termination were satisfied because the Father failed to complete his treatment plan and the conduct or condition that rendered him unfit—specifically, his alcohol abuse—was unlikely to change within a reasonable time. The District Court concluded the Father “never successfully maintained sobriety for an appreciable period of time.” In addition, the Father had not completed outpatient treatment, had not resolved or attempted to resolve his anxiety issues, and “was not engaged in therapy with his children to help his children resolve their fears of him.” Accordingly, the District Court concluded the best interests of the Children would be served by terminating the Father’s parental rights. ¶32 The Father’s and the Mother’s parental rights are separate and distinct matters. The District Court may determine that terminating the Father’s parental rights is in the Children’s best interests without factoring the Mother’s situation into its decision. We hold that the District Court did not abuse its discretion when it declined the Father’s request for additional time to complete his treatment plan. Nor did the District Court abuse its discretion when it determined terminating the Father’s parental rights was in the Children’s best interest and, 13 accordingly, terminated his parental rights. These Children have twisted in the wind for long enough. ¶33 Affirmed. /S/ MICHAEL E WHEAT We concur: /S/ MIKE McGRATH /S/ BRIAN MORRIS /S/ PATRICIA COTTER /S/ LAURIE McKINNON	September 24, 2013
47ebb8c0-120e-4712-9953-deae4a050aa3	Matter of M.A.	2013 MT 341N	DA 13-0171	Montana	Montana Supreme Court	DA 13-0171 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 341N IN THE MATTER OF: M.A., A Youth in Need of Care. APPEAL FROM: District Court of the Fifth Judicial District, In and For the County of Jefferson, Cause No. DN 01-402 Honorable Loren Tucker, Presiding Judge COUNSEL OF RECORD: For Appellant: Johnna K. Baffa; Van de Wetering & Baffa, P.C.; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General; Jonathan M. Krauss, Assistant Attorney General; Helena, Montana Matthew Johnson, Jefferson County Attorney; Boulder, Montana Submitted on Briefs: October 23, 2013 Decided: November 12, 2013 Filed: __________________________________________ Clerk November 12 2013 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 On January 24, 2013, the Fifth Judicial District Court, Jefferson County, entered its Findings of Fact, Conclusions of Law, and Order Terminating Birth Mother’s and Birth Father’s Rights to M.A., age 11. M.Z. (Mother) appeals. L.A. (Father) does not appeal, but the record indicates that Mother and Father have resumed their relationship and reside together. ¶3 This case involves a very unfortunate set of circumstances spanning back to the early 1990s. Mother and Father (collectively Parents) have previously had their parental rights terminated to nine children: three children in Nevada in 1992, and six in Oregon between 1994 and 1999. This case, involving the tenth child, is the first in Montana. ¶4 Parents moved to Boulder, Montana in 2001, while Mother was pregnant with M.A. Montana Department of Health and Human Services (DPHHS) received notification from Oregon outlining the history of concerns for children residing with Parents. This notification suggested immediate removal of any child in their home due to “imminent danger.” Documentation from the Oregon and Nevada agencies was submitted to DPHHS, resulting in “hundreds of pages” of history. 3 ¶5 A Petition for Temporary Legal Custody was filed by the State on November 15, 2001, and M.A. was removed from Parents’ custody upon his birth. This petition resulted in a treatment plan for Parents, and the petition was ultimately dismissed on November 20, 2002, upon the State’s motion. At that time the case worker noted that Parents were making good progress on their treatment plan, and recommended continuation of parental monitoring and skill building, as well as continuation of therapy and other services. ¶6 Over the nearly 10 years that M.A. lived with Parents, reports were received by DPHHS that Parents were not following through with community resources or mental health services made available under their treatment plan, as well as reports of drug abuse, and physical and sexual abuse towards M.A. M.A. had repeated involvement with law enforcement and the court system beginning at age eight. On one occasion M.A. was picked up by law enforcement walking down the interstate intoxicated, and on another he was transported by ambulance from his home where he was found unconscious from drinking whiskey. In 2010, while seeking a dissolution from Father, Mother informed DPHHS that M.A. had disclosed sexual abuse by Father. ¶7 On October 17, 2011, the State filed for Emergency Protective Services and Temporary Legal Custody of M.A., who was then admitted to Shodair hospital. On May 10, 2012, the State filed a Petition for Permanent Legal Custody and Termination of Parental Rights. The State asserted that no treatment plan or attempt at reunification was necessary pursuant to § 41-3-423(2)(e), MCA, which provides that such efforts are not 4 required when the circumstances related to prior involuntary terminations of parental rights are relevant to the current petition. The District Court held hearings on the termination petition on November 7, November 14, and December 12, 2012. ¶8 Evidence demonstrated that the reasons Parents’ rights to the prior nine children were terminated were “severe and chronic physical neglect,” a history of domestic abuse by Father against Mother and the children, the “substantial threat” of sexual abuse posed by Father to any child in the home, and drug abuse by Parents. Witnesses testified that they believed the same circumstances were present in the current case. ¶9 The psychologist who evaluated Father for the present case testified that Father’s prior evaluations and history showed Father had consistent problems with impulse control, mood disregulation, and “a significant lack of ability to follow through with recommendations.” Ultimately, the psychologist did not make any treatment recommendations for Father “based on consistent failure over the last two decades.” He testified that it was his belief that Father “is treatment resistant, and he likely will not make gains from future treatment towards reunification with yet another child.” He stated that his concerns regarding Father’s parenting ability were “equally applicable” to a newborn or to an eleven-year-old. ¶10 Although Mother had admitted to repeated physical abuse over the years by Father, she denied it at the hearing. She has also previously admitted that Father physically abused their children, including M.A. She had filed for orders of protection against him on several occasions, but always resumed her relationship with him. In 5 Nevada in 1990, Mother had left Father and filed for an order of protection. At this time she reported that Father was physically abusive toward her and her children, and described one instance where Father punched one of the children in the face resulting in two broken teeth. However, Mother resumed her relationship with Father a few months later and did not follow up on these allegations of abuse. In 2010, Mother filed for an order of protection against Father in Jefferson County. The petition noted that Father has been “abusing [M.A.] by picking him up tossing him and hitting and pushing him around.” However, Mother has again resumed her relationship with Father. At the hearing in this case, Mother testified that she could not remember stating previously that Father was violent toward her or M.A. ¶11 The evidence presented by Parents consisted of their own testimony. Parents both denied drug abuse and claimed only occasional drinking. Parents denied that Father was abusive towards Mother, and claimed there had only been one instance of violence towards M.A., which resulted in an ultimately dismissed charge for Partner or Family Member Assault. Mother further denied ever saying that M.A. had disclosed sexual abuse by Father. Over the years, Parents have given conflicting stories regarding termination of their parenting rights to the prior children. At the hearing, they claimed that the children were taken away due to vindictive reports to family services agencies, misunderstandings about accidents or illnesses of the children and, generally, the fault of others. 6 ¶12 On appeal, Mother claims that the District Court erred in terminating her parental rights to M.A. based on the prior terminations because the District Court failed to make specific findings concerning the circumstances surrounding the previous terminations; the Order did not reference any specific circumstances from the prior terminations; and no witnesses testified concerning the Nevada and Oregon terminations. Mother further argues that any evidence concerning the prior terminations was stale and outdated, and was insufficient to establish by clear and convincing evidence that the prior circumstances were relevant to the current termination proceeding. Finally, Mother argues that because the prior children were removed from her custody as infants or very young children, the circumstances surrounding those terminations were not relevant to the parenting of a ten-year-old child. ¶13 We review a district court’s decision to terminate parental rights for an abuse of discretion. In re T.S.B., 2008 MT 23, ¶ 17, 341 Mont. 204, 177 P.3d 429. To satisfy the statutory requirements for terminating a parent-child relationship, a district court must make specific factual findings. We review a lower court’s findings of fact for whether they are clearly erroneous. In re T.S.B., ¶ 18. In a parental rights termination proceeding, the physical, mental and emotional conditions and needs of the child are of paramount concern and take precedence over the parental rights. In re T.S.B., ¶ 19. ¶14 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our Internal Operating Rules, which provides for noncitable memorandum opinions. No specific factual findings regarding the prior terminations were necessary so long as the 7 findings demonstrate that the circumstances culminating in the prior terminations are relevant to the one at issue. The District Court’s oral and written findings of fact are supported by substantial evidence and demonstrate a sufficient connection between the circumstances of the prior terminations and the one at issue, despite the significant span of time between the terminations. The District Court did not abuse its discretion in ordering termination of Mother’s parental rights. ¶15 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BRIAN MORRIS /S/ BETH BAKER	November 12, 2013
7b2254d9-a6ca-4a67-9806-4b217cdca7af	State v. Madsen	2013 MT 281	DA 13-0057	Montana	Montana Supreme Court	DA 13-0057 IN THE SUPREME COURT OF THE STATE OF MONTANA 2013 MT 281 STATE OF MONTANA, Plaintiff and Appellant, v. THOMAS LENARD MADSEN, Defendant and Appellee . APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DC 12-0168A Honorable Holly Brown, Presiding Judge COUNSEL OF RECORD: For Appellant: Timothy C. Fox, Montana Attorney General; Barbara C. Harris, Assistant Attorney General; Tammy K Plubell, Assistant Attorney General, Helena, Montana For Appellee: Al Avignone; Lisa A. Banick; Avignone, Banick & Williams, PLLC, Bozeman, Montana For Amicus: Anna Conley, ACLU of Montana, Missoula, Montana Submitted on Briefs: August 21, 2013 Decided: September 26, 2013 Filed: __________________________________________ Clerk September 26 2013 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 The State of Montana appeals the District Court’s “Order on Defendant’s Motion to Dismiss,” filed January 11, 2013. We reverse. ¶2 The issue on appeal is whether the District Court erred in dismissing a charge against Madsen under § 45-5-204, MCA. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In 2011 Thomas Madsen was a Gallatin County Sheriff’s Deputy. On February 9, 2011, K.J. was a female juvenile whose parents brought her to the Gallatin County Law & Justice Center and requested law enforcement assistance in getting her transported to residential treatment. At the time of the incident involved in this case, officers detained K.J. in a small interview room, with her hands cuffed to a waist belt and shackles on her legs. When she attempted to turn off the light and lie on the floor, Madsen, who was outside the room, ordered her to sit at the table with the lights on and warned that if she did not do so she would “find [herself] in a whole world of hurt.” ¶4 When K.J. did not comply with Madsen’s orders he entered the room, grabbed her by the neck, and pushed her against the wall, banging her head. Another officer entered the room and separated Madsen from K.J. In his brief on appeal Madsen refers to the incident as a “physical control maneuver.” ¶5 On September 4, 2012, the State charged Madsen with mistreating prisoners, a felony offense, pursuant to § 45-5-204, MCA. Madsen subsequently moved to dismiss the charge, contending that K.J. was not a “prisoner” under that statute. The District 3 Court agreed, holding that a “prisoner” under § 45-5-204, MCA, means only “an individual who is serving a sentence at the State prison or another State facility as the result of a conviction.” The District Court dismissed the charge against Madsen because K.J. was a juvenile, she had not been convicted of an offense, and she was not being held in a State facility. The State appeals. STANDARD OF REVIEW ¶6 This Court reviews de novo, for correctness, a district court’s decision on a motion to dismiss a criminal case, and its decision on the interpretation and construction of a statute. State v. Dugan, 2013 MT 38, ¶ 13, 369 Mont. 39, 303 P.3d 755 (dismissal of a criminal case); State v. Brown, 2009 MT 452, ¶ 6, 354 Mont. 329, 223 P.3d 874 (construction of a statute). DISCUSSION ¶7 The issue on appeal is whether the District Court correctly construed the term “prisoner” as used in § 45-5-204, MCA. That statute provides: Mistreating prisoners. (1) A person commits the offense of mistreating prisoners if, being responsible for the care or custody of a prisoner, the person purposely or knowingly: (a) assaults or otherwise injures a prisoner; (b) intimidates, threatens, endangers, or withholds reasonable necessities from the prisoner with the purpose to obtain a confession from the prisoner or for any other purpose; or (c) violates any civil right of a prisoner. Section 45-5-204(1), MCA. The District Court concluded that the word “prisoner” in the statute is ambiguous. The District Court determined that the Legislature could have used 4 another word besides “prisoner” and had done so in other statutes. The District Court analyzed the amendment history of the various statutes incorporated into the present § 45-5-204(1), MCA, and determined that the Legislature meant something narrow and restrictive by using the word “prisoner.” The District Court concluded that “prisoner” meant only a person who is serving a sentence at the State prison or another State facility as the result of a conviction. ¶8 As noted, this Court reviews an issue of statutory interpretation as a question of law to determine whether the District Court’s interpretation was correct. Langemo v. Mont. Rail Link, 2001 MT 273, ¶ 18, 307 Mont. 293, 38 P.3d 782. A judge’s role in statutory interpretation is to “ascertain and declare what is in terms or substance contained therein, not to insert what has been omitted or to omit what has been inserted.” Section 1-2-101, MCA. A court’s function is to determine legislative intent, and where that can be determined from the plain meaning of the words used, the plain meaning controls and a court need not go further or apply other means of interpretation. Gulbrandson v. Cary, 272 Mont. 494, 500, 901 P.2d 573, 577 (1995); State v. Ankeny, 2010 MT 224, ¶ 21, 358 Mont. 32, 243 P.3d 391. Statutory terms must be interpreted reasonably and logically, and given the natural and popular meaning in which they are usually understood. Jones v. Judge, 176 Mont. 251, 254, 577 P.2d 846, 848 (1978); Maney v. La. Pac. Corp., 2000 MT 366, ¶ 19, 303 Mont. 398, 15 P.3d 962. ¶9 The Legislature need not define every term it employs in a statute. If a term is one of common usage and is readily understood, a court should presume that a reasonable 5 person of average intelligence can understand it. The failure to include definitions of all terms does not automatically make a statute vague as long as the meaning is clear and provides a defendant with adequate notice of the proscribed conduct. State v. Trull, 2006 MT 119, ¶ 33, 332 Mont. 233, 136 P.3d 551. ¶10 The common understanding of the word “prisoner” is that it describes a person who is held, confined or detained by someone else. The State correctly argued below that a “prisoner” commonly means a person whose liberty is restrained by law enforcement personnel, for any reason, including by reason of a conviction and sentence to a state prison.1 The District Court incorrectly determined that this argument only proved that the word “prisoner” in the statute was ambiguous. The fact that a term such as “prisoner” may apply to individuals in several different circumstances does not make it ambiguous, it only makes the term inclusive. ¶11 The District Court’s constrained definition of “prisoner” omits a wide range of people who can find themselves in some kind of detention. Those include but are not limited to anyone doing time in a county jail; anyone being held on charges waiting trial; anyone being held after arrest and awaiting an initial appearance; and, as in the present 1 The State cited definitions of “prisoner” from Merriam-Webster Collegiate Dictionary (10th ed.)(a person deprived of liberty and kept under involuntary restraint, confinement or custody); American Heritage Dictionary (5th ed.)(a person held in custody, captivity or a condition of forcible restraint, especially while on trial or serving a prison sentence); and Black’s Law Dictionary (9th ed.)(a person who is serving time in prison; a person who has been apprehended by a law-enforcement officer and is in custody, regardless of whether the person has yet been put in prison). 6 case, any detained juvenile. It is evident that the common understanding of the term “prisoner” varies from the narrow interpretation applied by the District Court. ¶12 The language of the statute itself suggests a broader definition of the word “prisoner” than the one adopted by the District Court. Subsection (1)(b) of § 45-5-204, MCA, expressly applies to situations where improper conduct is used to “obtain a confession from the prisoner.” While a confession might be sought from a person already convicted of a crime, generally a confession would most commonly be sought from a person who is detained after arrest or after being charged. ¶13 The word “prisoner” is one in common usage with a common understanding. It is clear from the ordinary and common understanding of the word that “prisoner” includes a person detained by law enforcement officers, confined to a small room, and shackled hand and foot. Nothing in the statute or elsewhere in Montana law precludes application of the statute to the facts alleged in the information. The District Court’s conclusion that such a person is not a “prisoner” is incorrect. ¶14 K.J. was a “prisoner” as provided in § 45-5-204(1), MCA, and the charging information filed in this case was adequate to state an offense. ¶15 The District Court is reversed and this matter is remanded for further proceedings consistent with this Opinion. /S/ MIKE McGRATH 7 We concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ BRIAN MORRIS Justice Jim Rice, dissenting. ¶16 The sum total of the Court’s analysis of the legal question before us is to repeat seven times that the “common” meaning of the term “prisoner” requires that K.J. was one. This lay1 approach to the issue may be well suited for coffee klatch world-problem- solving conducted at the corner café, but should not trump the application of legal principles governing this case. I believe the District Court properly applied the canons of statutory construction to reach its determination. ¶17 As the District Court noted, the term “prisoner” is not as straightforward as the State contends, as even the dictionary definitions the State has offered tend to incorporate the idea that a prisoner is confined due to conviction, service of a prison sentence, or a pending trial on criminal charges. The Legislature has enacted various code provisions that define or use the term “prisoner” in connection with service of a prison sentence. See § 46-31-101, MCA (describing a “prisoner” as one who “has entered upon a term of imprisonment in a penal or correctional institution”); § 46-1-202(16), MCA (defining 1 “Lay: adj. . . . 3: not of a particular profession [the ~ public]; also: lacking extensive knowledge of a particular subject.” Merriam-Webster’s Collegiate Dictionary 660 (10th ed., Merriam- Webster 1998). 8 parole as “the release to the community of a prisoner . . . prior to the expiration of the prisoner’s term”). Similarly, the Legislature has commonly distinguished the term “prisoner” by using other terms to reference other detainees. See § 7-32-2208, MCA (distinguishing an “inmate committed to a detention center for trial or examination” and “a prisoner convicted” of an offense); § 7-32-2144, MCA (a sheriff is entitled to state reimbursement for “delivering prisoners at the state prison or a juvenile correctional facility or mentally ill persons at the Montana state hospital”). Consistent with this general distinction, the Criminal Law Commission Comments to the subject statute, § 45- 5-204, MCA, indicate that the statute was designed to support a “policy that a sentence to imprisonment should be rehabilitative in nature. Clearly, little rehabilitation or reorientation to social norms can be accomplished when those responsible for the custody and care of prisoners mistreat them.” ¶18 “‘[A]mbiguity concerning the ambit of criminal statutes should be resolved in favor of lenity.’” United States v. Bass, 404 U.S. 336, 347, 92 S. Ct. 515, 522 (1971) (citing Rewis v. United States, 401 U.S. 808, 812, 91 S. Ct. 1056, 1059 (1971)). Our Court has likewise applied this “classic rule of construction of criminal statutes,” sometimes referred to as the rule of lenity. See State v. Goodwin, 249 Mont. 1, 23-24, 813 P.2d 953, 966-67 (1991); but see State v. Turner, 262 Mont. 39, 49, 864 P.2d 235 (1993). ¶19 “We seek to implement the legislature’s intent when we interpret a statute.” State v. Hicks, 2013 MT 50, ¶ 19, 369 Mont. 165, 296 P.3d 1149 (citation omitted); § 1-2-102, 9 MCA (“In the construction of a statute, the intention of the legislature is to be pursued if possible.”). The District Court closely analyzed this uncertain statute and, on the basis of the statutory context and legislative history, determined that the Legislature had not clearly expressed an intention to include detainees beyond those prisoners who are subject to a sentence of imprisonment. “‘Statutory construction is a ‘holistic endeavor’ and must account for the statute’s text, language, structure, and object.’” State v. Heath, 2004 MT 126, ¶ 24, 321 Mont. 280, 90 P.3d 426 (citation omitted). “When the plain meaning of a statute is subject to more than one reasonable interpretation . . . we will examine the legislative history to aid our interpretation.” Heath, ¶ 33. ¶20 I agree with the District Court’s analysis and its conclusion that the Legislature did not clearly extend this statute to the acts alleged to have been committed by Madsen. Further, it is not our duty to extend it. “[L]egislatures and not courts should define criminal activity.” Bass, 404 U.S. at 348, 92 S. Ct. at 523. While there are other statutes under which Madsen could have been charged, I believe dismissal under this statute was warranted. ¶21 I would affirm the District Court. /S/ JIM RICE Justice Laurie McKinnon joins in the dissenting Opinion of Justice Rice. /S/ LAURIE McKINNON	September 26, 2013

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