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5f04a33d-fac5-4f3d-9364-b1ec851e573c | SCYPHERS v H H LUMBER | N/A | 88-573 | Montana | Montana Supreme Court | NO. 88-573 IN THE StJPREME COURT OF THE STATE OF MONTANA 1 9 8 9 DANIEL SCYPHRRS, Claimant and Respondent, -VS- H & H LUMBER, Employer, and STATE COMPENSATION INSTTRANCE FTJND, Defend-ant and Appellant. APPEAL FROM: The Workers' Compensation Court, The Honorable Timothy Reardon, Judge presiding. COTJNSEL OF REC0R.D : For Appellant: Jeff Hedger; Crowley Law Firm, Billings, Montana For Respondent : Thomas J. T,ynaugh, Billings, Montana Submitted on Briefs: April 20, 1 9 8 9 Decided: June 1, 1 9 8 9 Mr. Justice Fred J. Weher delivered the Opinion of the Court. The State Compensation Insurance Fund appeals a decision by the Workers' Compensation Court. Mr. Daniel Scyphers was injured in an industrial accident on November 21, 1986 and was awarded temporary total disability benefits. In April of 1987, Mr. Scyphers petitioned the Workers' Compensation Court for recalculation of his temporary total disability rate. This matter was submitted on briefs to the examiner, who granted a recalculation of Mr. Scyphers' rate. The Workers' Compensation Court affirmed this decision, and the State Compensation Insurance Fund appeals. We affirm. The issue presented for our review is whether the three cents per mile paid to a long haul- truck driver as per diem is "wages" for purposes of fixing workers' compensation benefits. The claimant in this case, Mr. Scyphers, worked for H & H Lumber Co. as a long haul truck driver. His hauls often put him on the road for two or three weeks at a time. On November 10, 1985, W & H Lumber began compensating its long haul drivers at the rate of fourteen cents per mile, plus three-cents-per-mile "per diem." Prior to this time, the drivers did not receive a per diem amount. Rather, each driver was required to keep records of expenses on the road, such as meals and lodging, which were later reimbursed by the company. Mr. Harding, president and general manger of H & H Lumber, testified by deposition that it is no longer neces- sary for drivers to keep these records. Under the new ar- rangement, the drivers are not reimbursed for meals or lodging, but are simply paid the per diem amount. The compa- ny pay schedule which effectuated this change listed both the fourteen cent and the three cent amounts under the heading, "wages. " H & H Lumber pays its long haul drivers with two checks. One check, reflecting the fourteen-cents-per-mile compensa- tion, has taxes and social security withheld. The second check, representing the three-cents-per-mile per diem amount, has no deductions withheld. Mr. Harding testified that the three cent figure was chosen by him because the IRS has approved of this amount as a per mile per diem expense reim- bursement. It is also significant that H & H Lumber pays its short haul drivers, who work local-ly, seventeen cents per mile, plus a fl.at daily rate of $1.5. Mr. Harding explained that the short haul drivers do not register as many miles in a day because they stop to make del-iveries; therefore, they are given the additional compensation of the flat daily rate. In reviewing a decision of the Workers' Compensation Court, the standard of review is to determine whether suh- stantial credible evidence exists to support the findings and conclusions of the Workers' Compensation Court. Stangler v. Anderson Meyers Drilling Co. (Mont. 1987), 746 P.2d 99, 101, 44 St..Rep. 1944, 1947. Findings of fact are not clearly erroneous if they are supported by substantial credible evidence. Tenderholt v. Travel Lodge Intern. (Mont. 1985) , 709 P.2d 1011, 1013, 42 St.Rep. 1792, 1794. Where the testimony in the lower court was presented solely by deposition, this Court. is free to examine the findings of the court more closely, as this Court is in the same position as the Workers' Compensation Court in assessing the evidence. Stangler, 746 P. 2d at 101-02. In the present case al.1 testimony was presented hy deposition, thus the broader standard of review applies. The definition of "wages" under the Workers ' Compensa- tion Act is set out in 4 39-71-11.6(203, MCA (1985), and provides: "Wages" means the average gross earnings received by the employee at the time of the injury for the usual hours of employment in a week, and overtime is not to be considered. Sick leave benefits accrued by employees of public corpora- tion.~, as defined by subsection (16) of this sec- tion, are considered wages. Montana has not previously considered whether "wages," as this term is applied to Workers' Compensation benefits, includes a "per diem" type of compensation. The Workers' Compensation Court determined that the statute defining wages simply contemplates that any gross earnings are wages, and does not allow for any artificial distinctions. The court found that the employer, by paying the short haul driver in one method, and the long haul driver in another method, had created two distinct wage classifications which "bear little relationship to the definition of wages in the Act." The Workers' Compensation Court suggested that tax considerations may have motivated this arrangement, but that the Act does not provide for this type of differentiation. The Workers1 Compensation Court then determined that the per diem amount paid to Mr. Scyphers should be included in his wages. We agree with the analysis of the Workers' Compensation Court. Under the statute, "wages" simply means gross earn- ings. We agree with the conclusion of the Arizona Supreme Court in Hobbs v. Industrial Commission (Ariz. App. 1975), 533 P.2d 1159, 1160-61, that how the parties may have treated a per diem amount for tax purposes is not determinative regarding Workers1 Compensation benefits. In determining what constitutes gross earnings, other courts have applied the "real economic gain" rule. Ridgway v. Board of Ford County Com'rs (Kan. App. 1987), 748 P.2d 891; Gonzales v. Mountain States Mut. Cas. Co. (N.M. App. 1986), 728 P.2d 1369. Blake Stevens Const. v. Henion (Utah 1985), 697 P.2d 230; Moorehead v. Industrial Commission (Ariz.App. 1972), 495 P.2d 866. Under this analysis, the critical distinction is whether a payment was actually a reimbursement for employment-related expenses or whether it constituted real economic gain to the employee. We approve of this analysis, as stated by Professor Larson in his treatise on workers' compensation: In computing actual earnings as the beginning point of wage-basis calculations, there should be includ- ed not only wages and salary but any thing of value received as consideration for the work, as, for example, tips, bonuses, commissions, and room and board, constituting real economic gain to the employee. (Emphasis added.) 2 A. Larson, The Law of Workers' Compensation 5 60.12 (1987). In the present case, the testimony demonstrates that the three-cents-per-mile per diem was not actually reimbursement for Mr. Scyphers' out-of-pocket employment-related expenses, but rather constituted real economic gain to Mr. Scyphers. Mr. Scyphers testified that when he was traveling on a long haul he slept in the sl-eeper compartment of his truck. While he ate meals on the road, this expense certainly continued after he was laid off; that is, his meal expense was not tied exclusively to his job. The per diem amount was not reim- bursement for expenses such as truck repairs. These types of expenses were either charged to the company credit card, or reimbursed to Mr. Scyphers when he presented a receipt for the repair. Mr. Scyphers testified that he simply used the proceeds from both checks for living expenses. Be was not required to prove any actual employment-related expenses in order to receive the per diem amounts, and Mr. Harding stated that the employees could use the money to buy groceries, or anything ~ l s e . The evidence supports Mr. Scyphers' assertion that the three-cents-per-mile per diem was gross earnings in this case and should properly be included in his wages. We have con- cluded that the three cents per mile constituted real econom- ic gain to Mr. Scyphers. We affirm the decision of the Workers' Compensation Court. Affirmed. | June 1, 1989 |
04ddee21-14bf-4c38-bde8-47daeda6e4df | PERETTI v STATE | N/A | 88-499 | Montana | Montana Supreme Court | No. 8 8 - 4 9 9 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 MICHAEL PERETTI, HENRI HODNIK, e t a l . , P l a i n t i f f s and R e s p o n d e n t s , -vs- THE STATE OF MONTANA; THE BOARD OF PUBLIC EDUCATION and i t s m e m b e r s , D e f e n d a n t and A p p e l l a n t . APPEAL FROM: D i s t r i c t C o u r t of t h e F o u r t h J u d i c i a l D i s t r i c t , I n and for t h e C o u n t y of M i s s o u l a , T h e H o n o r a b l e J a m e s B. Wheelis, Judge presiding. COUNSEL OF RECORD: F o r A p p e l l a n t : H o n . M a r c R a c i c o t , A t t o r n e y G e n e r a l , H e l e n a , M o n t a n a John P a u l s o n argued, A s s t . A t t y . G e n e r a l , H e l e n a For R e s p o n d e n t : W i l l i a m s L a w F i r m ; R i c h a r d R a n n e y argued, Missoula, Montana p - - -- - - - S u b m i t t e d : June 2 0 , 1 9 8 9 D e c i d e d : J u l y 1 9 , 1 9 8 9 F i l e d : ' i-., ;... 1 . . I 6 . &. r - 1 --.i . . - , . . , ! 1 i : r 1 , . . . Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Defendants appeal from the final judgment of the Fourth Judicial District Court of Missoula County awarding the fourteen plaintiffs a sum total of $2,479,916 in damages. This judgment was based upon the District Court's earlier grant of partial s m a r y judgment in favor of the plaintiffs on the issue of liability. The court ruled that the State was liable for a breach of implied contract caused by the premature termination in 1977 of the Aviation Technology Program at the Missoula Technical Center. We reverse. The issues presented for review: 1. Did the District Court err in granting partial summary judgment in favor of plaintiffs on the issue of liability? 2. Did the District Court err in determining the measure and amount of damages to be awarded plaintiffs? In the fall of 1976, plaintiffs enrolled in the Aviation Technology Program at the Missoula Technical Center (Center). This Center is one of five such post-secondary vocational education centers financed by state appropriations. Permissive county levies may supplement State financing. The Board of Public Education (Board) retains overall control over the budget and curriculum of each center. In 1977, the legislature appropriated $7,042,721 in funding for the five centers, a reduction of $819,388 from the 1975 biennial legislative appropriation. This reduction entailed a cutback in vocational programs. After consideration of various alternatives, the Board decided to eliminate the Aviation Technology Program (Program) because it had the highest cost per student of all the programs offered at the Center and because it would affect fewer students (approximately 30 to 45 students) than a cut in many other programs. In June of 1977, the Board notified those sixteen students at the Center who had already successfully completed one year of the integrated two-year program, that they would be unable to complete the second year of training because the program was being discontinued. The students thereafter filed suit alleging breach of the State's implied contract to provide a two-year, six-quarter course of study which would prepare them for a career as a commercial pilot. As alleged by the students, the "Career Pilot Program" detailed in the Training Course syllabus was designed as a two-year integrated whole, with completion of course work and flight training more than sufficient to meet minimum FAA requirements and to qualify students for employment as commercial pilots and certified flight and ground instructors. Plaintiffs also alleged that this breach summarily deprived them of liberty and property interests without due process of law. Plaintiffs initially filed suit in federal district court for damages allegedly resulting from the premature termination of the Program. See Peretti v. Montana (D. Mont. 1979), 464 F.Supp. 784. The Ninth Circuit Court of Appeals, however, subsequently held the State of Montana had not consented to suit in federal court and the Eleventh Amendment therefore precluded district court jurisdiction over the suit. Montana v. Peretti (9th Cir. 1981), 661 F.2d 756. Plaintiffs then filed suit in the Fourth Judicial District Court of Missoula County. The parties agreed to bifurcate the issues of liability and damages. The issue of liability was then submitted on cross-motions for summary judgment; the parties stipulated t h a t t h e c o u r t could render a d e c i s i o n on t h e s e cross-motions based upon i t s c o n s i d e r a t i o n of an agreed statement o f f a c t s and t h e e x h i b i t s and t r a n s c r i p t from t h e e a r l i e r f e d e r a l c o u r t t r i a l s . On J u l y 12, 1985, t h e D i s t r i c t Court r u l e d t h a t an implied c o n t r a c t u a l r e l a t i o n s h i p e x i s t e d between t h e p a r t i e s which e n t i t l e d p l a i n t i f f s t o an o p p o r t u n i t y t o complete t h e Program's s i x - q u a r t e r t r a i n i n g period and t o r e c e i v e a diploma upon completion. The c o u r t h e l d t h a t t h e S t a t e breached i t s implied c o n t r a c t w i t h t h e s t u d e n t s when it prematurely terminated t h e Program. The c o u r t t h u s granted p a r t i a l summary judgment i n f a v o r o f p l a i n t i f f s , f i n d i n g defendants l i a b l e f o r t h o s e damages r e s u l t i n g from t h i s breach. The S t a t e requested and received a c e r t i f i c a t i o n o f t h e p a r t i a l summary judgment a s f i n a l under Rule 5 4 ( b ) , M.R.Civ.P., s o it could then f i l e an i n t e r l o c u t o r y appeal p r i o r t o r e s o l u t i o n o f t h e i s s u e o f damages. The S t a t e , however, subsequently decided n o t t o i n i t i a t e an appeal u n t i l a f t e r judgment on t h e i s s u e o f damages. The i s s u e o f damages was l a t e r t r i e d without a jury. On J u l y 15, 1988, t h e c o u r t i s s u e d i t s Findings o f F a c t , Conclusions of Law, Opinion and Order awarding damages t o each o f t h e f o u r t e e n p l a i n t i f f s who were deposed and p r e s e n t e d evidence o f t h e i r damages. The c o u r t held t h a t t h o s e seven s t u d e n t s n o t engaged i n a c a r e e r a s p i l o t s ( h e r e i n a f t e r " t h e non-pilots") received no f i n a n c i a l b e n e f i t from t h e one-year a v i a t i o n t r a i n i n g . The c o u r t t h u s concluded t h a t t h e d e t r i m e n t s u f f e r e d by t h e s e non-pilots equaled t h e l o s s e s t h e y i n c u r r e d i n a t t e n d i n g t h e one-year a v i a t i o n program ( r e l i a n c e damages) p l u s t h e l o s t expectancy of t h e i r bargain. The c o u r t t h e n m u l t i p l i e d t h e t o t a l amounts expended i n 1977 t o a t t e n d one y e a r of t h e Program by an i n f l a t i o n index of 1 . 9 t o a r r i v e a t t h e 1988 equivalency of t h e t o t a l amount of damages incurred by t h e non-pilots i n r e l i a n c e on t h e implied c o n t r a c t . The t o t a l amounts awarded t o each non-pilot ranged from a low of $193,940 t o a high of $237,979. The damages awarded those seven students who went on t o become p i l o t s , on t h e o t h e r hand, equaled t h e increased average c o s t of a l t e r n a t e t r a i n i n g , t h e average l o s t income caused by t h e average one-year delay i n beginning a c a r e e r a s p i l o t s , and t h e value of t h e employment b e n e f i t l o s t by lack of a degree from a school with a formal i n t e g r a t e d two-year p i l o t t r a i n i n g program. The t o t a l awarded t o each p i l o t , a f t e r consideration of t h e 1 . 9 i n f l a t i o n index, amounted t o $147,350. The c o u r t dismissed t h e claims of t h e two students who presented no evidence of damage. Defendants t h e r e a f t e r f i l e d t h i s appeal from t h e f i n a l judgment of t h e D i s t r i c t Court. The S t a t e contends t h a t t h e D i s t r i c t Court e r r e d i n holding it l i a b l e f o r breach of an implied c o n t r a c t s i n c e t h e S t a t e has not c l e a r l y and unambiguously waived i t s sovereign immunity a s t o implied c o n t r a c t a c t i o n s . Absent such a c l e a r waiver, a l l e g e a p p e l l a n t s , t h e S t a t e may n o t be sued i n i t s own c o u r t s . W e recognize t h a t t h e modern t r e n d among t h e s t a t e s favors a diminution of those sovereign immunity p r o t e c t i o n s a v a i l a b l e t o t h e s t a t e s . The Colorado case of Evans v. Board of County Comm'rs o f E l Paso County (Colo. 1971), 482 P.2d 968, provides a s t r i k i n g r a t i o n a l e f o r t h i s l a t e n t trend toward abolishing many forms of sovereign immunity previously recognized: The monarchical philosophies invented t o solve t h e m a r i t a l problems of Henry V I I I a r e not s u f f i c i e n t j u s t i f i c a t i o n f o r t h e d e n i a l of t h e r i g h t of recovery a g a i n s t the government in today's society. Assuming that there was sovereign immunity of the Kings of England, our forbears [sic] won the Revolutionary War to rid themselves of such sovereign prerogatives. Id. at 969. 7 Montana similarly has endorsed this trend toward diminishing sovereign immunity protections, as evidenced by the 1972 constitutional abolishment of the State's sovereign immunity as to all actions involving injuries to a person or property. As stated in the 1972 Montana Constitution, Article 11, sec. 18: The state, counties, cities, towns, and all other local governmental entities shall have no immunity from suit for injury to a person or property, except as may be specifically provided by law by a 213 vote of each house of the legislature. While Art. 11, sec. 18 diminishes sovereign immunity protections previously available to the State, it does not abolish all sovereign immunity. This Court has previously held that the waiver found in Art. 11, sec. 18 extends only to tort actions, and not contract actions, involving injuries to a person or property. LeaseAmerica Corp. of Wis. v. State (Mont. 1981), 625 P.2d 68, 71, 38 St.Rep. 398, 403. By interpreting Art. 11, sec. 18 as applying only to tort actions, this Court effectuated the intent to prevent a constitutional waiver of sovereign immunity as to contract actions, an intent expressed by Constitutional Convention Delegate Habedank: . . . I think there are many instances where there may be some governmental employees [who] do some things in connection with contractual fields that we try to stick the government for where there is a good reason to maintain our governmental immunity in those situations. Montana Constitutional Convention, Vol. V, at 1761. Moreover, this interpretation comports with the principle that any waiver of a State's sovereign immunity must be strictly construed. Storch v. Board of Directors of E. Mont. Region Five Mental Health Center (1976) , 169 Mont. 176, 179, 545 P.2d 644, 646, citing 72 Am.Jur.2d, States, Etc., S 121. Finding no waiver of sovereign immunity for contract actions in the Constitution, we next turn to an examination of the statutes for such a waiver, because a state cannot be sued in its own courts without its plain and specific consent to suit either by constitutional provision or by statute. See, e.g., Heiser v. Severy (1945), 117 Mont. 105, 158 P.2d 501; State ex rel. Freebourn v. Yellowstone County (19391, 108 Mont. 21, 88 P.2d 6. Read by itself, 5 18-1-404, MCA, appears to provide just such an unambiguous and specific waiver of the State's immunity as to all contract actions, express and implied alike. Section 18-1-404(1), MCA, reads: The state of Montana shall be liable in respect to any contract entered into in the same manner and to the same extent as a private individual under like circumstances, except the state of Montana shall not be liable for interest prior to or after judgment or for punitive damages. (Emphasis added. ) This individual statutory provision, however, may not be read and properly understood in a vacuum. Rather, it must be read and construed in such a manner "as to insure coordination with the other sections of an act." Hostetter v. Inland Dev. Corp. of Mont. (1977), 172 Mont. 167, 171, 561 P.2d 1323, 1326; see also Barney v. Board of R.R. Comm'rs (19321, 93 Mont. 115, 129, 17 P.2d 82, 85 (requiring a court to consider all statutes in their entirety relating to the matter at issue). The meaning of § 18-1-404, MCA, is ambiguous when read in conjunction with the other provisions in part 4, specifically § 18-1-401, MCA. Section 18-1-404, MCA, appears to waive sovereign immunity as to both express and implied contracts, yet 5 18-1-401, MCA, expressly grants district courts jurisdiction only over express contract actions. As stated in S 18-1-401, MCA: The district courts of the state of Montana shall have exclusive original jurisdiction to hear, determine, and render judgment on any claim or dispute arising out of any express contract entered into with the state of Montana or any agency, board, or officer thereof. (Emphasis added. ) Because these two above-mentioned statutes, when read together, render the plain meaning of each ambiguous, we turn to the legislative history of each to determine the legislative intent, and thereby the proper statutory construction of each provision. See, e.g., Thiel v. Taurus Drilling Ltd. 1980-11 (1985), 218 Mont. 201, 710 P.2d 33. These two statutory provisions were first enacted by the 34th Legislature in 1955. They were enacted as part of Chapter 138, which was entitled "An Act Permitting Actions on Express Contracts Against the State of Montana and Describing the Practice and Procedure Therefor." 1955 Laws of Montana, Ch. 138. The title provides a clear indication that the legislature intended only to waive the State's sovereign immunity as to express contracts. As stated in Dept. of Revenue v. Puget Sound Power & Light Co. (1978) , 179 Mont. 255, 263, 587 P.2d 1282, 1286, the title of an act is presumed to indicate the legislature's intent with regard to the provisions contained therein. See also Barney, 17 P.2d a t 85 ( s t a t i n g t h e t i t l e of an Act " i s i n d i c a t i v e o f t h e l e g i s l a t i v e i n t e n t and purposes i n enacting i t " ) . Because t h e l e g i s l a t u r e intended only t o waive t h e S t a t e ' s immunity a s t o express c o n t r a c t s , a s i s r e a d i l y apparent from t h e t i t l e , we hold t h a t § 18-1-404(1), MCA, does not s u b j e c t t h e S t a t e t o l i a b i l i t y on implied c o n t r a c t s . Having concluded t h u s , we f i n d t h a t t h e D i s t r i c t Court e r r e d i n finding t h e S t a t e l i a b l e on a breach of implied c o n t r a c t theory and i n then awarding damages. The s t u d e n t s a l s o included arguments throughout t h e i r b r i e f which were based on contentions t h a t t h e "premature termination" of t h e Program v i o l a t e d t h e i r c o n s t i t u t i o n a l r i g h t t o due process, t h e S t a t e ' s duty t o d e a l f a i r l y and i n good f a i t h with i t s c i t i z e n s , and t h e S t a t e ' s express c o n t r a c t t o provide a two-year i n t e g r a t e d program. The l i a b i l i t y and damages imposed by t h e D i s t r i c t Court and appealed by t h e S t a t e , however, were based only on t h e determination t h a t t h e S t a t e breached an implied c o n t r a c t . The s t u d e n t s d i d not contend by way of cross-appeal t h a t t h e D i s t r i c t Court e r r e d i n f a i l i n g t o base its judgment on these o t h e r c o n s t i t u t i o n a l and express c o n t r a c t t h e o r i e s . W e t h e r e f o r e w i l l n o t consider t h e p o t e n t i a l m e r i t s and e f f e c t of t h e s e o t h e r t h e o r i e s on t h e i s s u e s of l i a b i l i t y and damages. The orders of t h e D i s t r i c t Court finding. t h e S t a t e l i a b l e and awarding damages a r e reversed and we remand t o t h e D i s t r i c t Court f o r e n t r y of judgment We concur: Justices Mr. Justice John C. Sheehy, concurring in part and dissenting in part: I dissent from that portion of the majority opinion which finds state immunity to exist here on two grounds: (1) this case involves an express, and not an implied contract; (2) the legislature intended to waive sovereign immunity as to any contract. In the fall of 1976, the plaintiffs enrolled in the Career pilot Program in the Department of viat ti on Technology at the iss sou la ~echnical Center, one of five state-designated post secondary vocational education centers. The program was advertised and represented by the state as a six quarter program, extending to two years. Before making their decision to enroll in the aviation technology program, the students received a brochure describing it and the iss sou la ~echnical Center's catalogue of course offerings. After enrolling, they received a detailed outline of the program, including two full years of classes. The brochures and outlines plainly contained full representation by the state that the program was being offered for six quarters and would not be terminated. The students relied on these documents, and on various statements from their instructors throughout the first year in enrolling in the course and continuing in the course. The plaintiffs first brought this case in the federal court, and the decision in favor of the plaintiffs in that court was appealed to the Court of Appeals for the Ninth Circuit. The opinions in ~aretti v. State of Montana (D. Mont. 1979), 464 F.Supp. 784. The decision was reversed not because it was incorrect, but because the Ninth circuit Court felt that it had no jurisdiction, in this case, of the cause against the state. What is important to this case is that in a reply brief filed in the Court of Appeals for the Ninth Circuit, pp. 9, 10, the state admitted: While the District Court found and "implied contract" as the result of the solicitation c~ntained in exhibits 1, 2, and 3 , it could have just as easily found "express contract" as that term is defined in 5 28-2-103 which provides in pertinent part: . . . an express contract is one the terms of which are stated in words . . . ' I would hold that an express contract existed here. But even if the contract is regarded as one arising from implication, the statute waiving state immunity, S 18-1-404(1), MCA, provides: The state of Montana shall be liable in respect to contract entered into in the same manner-and to --- -- the same extent as a private individual under like -- - - circumstances . . . In an exercise of nimble sophistry, the majority determined that the word "any" excludes implied contracts. One has to be fast to keep up with this Court. The finding that an implied contract is involved here, and that immunity does not extend to implied contracts violates the policy of this state set forth in S 20-30-101 (I), MCA, as follows: It is the policy of this state to encourage and enable its citizens to obtain and receive an education commensurate with their abilities and desires. It is recognized that institutions offering post secondary education, vocational, and professional instruction perform a useful an6 necessary service to the citizens of this state in achieving this objective. It is found that certain institutions have either by unscrupulous, unfair, and deceptive practices or through substandard instruction deprived the citizens of this state of education opportunity and subjected them to financial loss. In the light of our public policy, in which class of educators shall we place the state of Nontana? I concur in part as to the damages awarded. They should have been individualized and not generalized. I would remand only for the purpose of adjusting the damages based on the individual losses. - Justice i Mr. Justice William E. Hunt, Sr., dissenting: I concur in the foregoing dissent of Justice Sheehy. | July 19, 1989 |
52e52727-f0f9-4fd4-9d23-1e8d7f49f1d3 | STATE v BAKER | N/A | 88-197 | Montana | Montana Supreme Court | I N T H E SUPREME COTJRT O F T H E STATF OF MONTANA STATE O F M O N T A N A , P l a j n t i f f and Respondent, VERN TRAVIS BAKER, Defendant and Appellant. APPEAL FROM: D i s t r i c t Court o f t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Missoula, The Honorable James B. Wheelis, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Morgan Modine & Douglas Anderson; Missoula, Montana For Respondent : Hon. Marc Racicot, Attorney General; Helena, Montana Robert J. Deschamps 111, County Attorney; Missoula, MT B e t t y Wing, Deputy County Attorney Karen Townsend, Deputy County Attorney Submitted on B r i e f s : February 1 6 , 1989 Decided: A p r i l 2 5 , 1989 M r . J u s t i c e Fred J. Weber d e l i v e r e d t h e Opinion of t h e Court. Defenclant was convicted on a j u r y v e r d i c t b e f o r e t h e D i s t r i c t Court, F c u r t h J u d i c i a l D i s t r i c t , Missoula County, of robbery, a felony; t h e f t , a felony; tamperinq with a w i t n e s s , a felony; and t h e f t , a misdemeanor. The D i s t r i c t Court s e t a s i d e t h e robbery c o n v i c t i o n . Defendant was sentenced t o 50 y e a r s a t Pontana S t a t e P r i s o n f o r f e l o n y t h e f t , and 50 y e a r s f o r tampering w i t h a witness. He was a l s o sentenced t o 6 months i n jail f o r misdemeanor t h e f t . These sentences a r e t o run c o n c u r r e n t l y . Defendant a p p e a l s t h o s e c o n v i c t i o n s . W e a f f i r m . The i s s u e s a r e : 1. Did t h e D i s t r i c t Court err i n c o n s o l i d a t i n g t h e charges? 2 . Did t h e D i s t r i c t Court err i n a d m i t t i n g c e r t a i r , evidence? 3. Did t h e District Court err i n g i v i n g an i n s t r u c t i o n on a c c o u n t a b i l i t y d u r i n g jury d e l i b e r a t i o n s ? O n February 5 , 1987, t h e P i s s o u l a County Attorney f i l e d an information charging M r . Baker w i t h robbery, a felony. O n March 6, 1987, M r . Baker was charged with felony theft-. The second information was ame~decl t o i n c l u d e a charge o f bur- g l a r y . On Pay 4 , 1987, defendant was t r i e d on t h e robbery count h u t t h e j u r y d i d n o t reach a v e r d i c t . L a t e r t h e i n f o r - mation charging robbery was amended t o i n c l u d e t h e o f f e n s e of tampering with a w i t n e s s . A f t e r t h e t r i a l on Kay 4 , 1987, t h e county a t t o r n e y f i l e d a t h i r d information charging defendant with misdemeanor t h e f t . T h e r e a f t e r , t h e county moved t o c o n s o l i d a t e a l l t h e charges and t h a t motion was g r a n t e d on October 28, 1987. The c o n s o l i d a t e d causes w e r e t r i e d by jury on November 3 3 , 1 9 8 7 . Defendant was found g u i l t y of robbery, felony theft., tampering with a wi t-ness, and misdemeanor theft. Defendant moved the court to set aside the verdicts of guilty to robbery and felony theft. The court subsequently set asifie the verdict of guilty of robbery. The relevant facts in this case began on December 13, 1986, when Gary Deschene reported to the Missoula County Sheriff's office that a gun was missing from his home. Following a Crimestopper's tip, detectives searched the home of Mr. Baker for this gun, but did not find it. On July 14, 1987, a skindiver found a gun underneat.h Buckhouse Bridge in the Bitterroot River. He turned the gun over to the sheriff and Mr. Deschene isentified it as the one missing from his home. At trial, Mr. Raker's girlfriend, Katherine Lamb, testi-- fied that Mr. Baker had told her he had a gun he had to dispose of, and that she haZ accompanied him to the Buckhous~ Bridge where Nr. Baker threw the gun into the river. A friend of Mr. Raker, Lance Sprout, testified at trial that on January 17, 1987, he and Mr. Faker entered the home of Lloyd Killumsen and took two rifles and a box of pistols. Mr. Sprout stated that Mr. Baker later went hack to that residence and took a shotgun, binoculars, and several other items. Mr. Sprout also testified that five days later, on January 22, 1987, he approached his cousin about borrowing a car. The cousin arranged for Mr. Sprout to borrow a car from a friend. The car Mr. Sprout borrowed was a blue Honda Civic with personalized license plates which said, "MARSBAR." Mr. Sprout stated that he picked up Mr. Baker in the borrcwec? czr, and after a couple of st-ops, they decided to rob Paylesc Shoe Store in Missoula. Mr. Sprout testified that he and Mr. Baker robbed the store, using the sawed-off shotgun taken fron the Willumsen residence. A citizen driving by observed the two men leavinq Payless Shoe Store with stockings over their heads. The citizen followed them as they drove a-way, obtaining a vehicle description and license plate identification. Later that night the car was stopped by a Missou1.a deputy who observed it near the Missoula County Courthouse. b?hen the car was searched, detectives found items used in the robbery and items taken from the store. They also found rifles and other items taken from the Willumsen home. When detectives searched defendant's grandmother's house, where Mr. Baker lived, they found a sh-otgun scabbard in her car, also belonging to Mr. Willumsen. At trial Mr. Raker' s girlfriend, Katherine Lamb, testi- fied that Mr. Raker called her while he was awaiting trial-, and asked her to testify that he had called her on the phone at 8:00 p.m. on the night of the robbery. She testified that he later sent a letter to her in which he suggested that she get together with his mother and grandmother, decide on how they would answer questions, and "rehearse, rehearse, re- hearse." Be said they all needed to stick together and not discuss It with anyone else "until we have it down to a 'T'." This letter, which was admitted into eviderc~ at trSal, implied that an alibi should be formulated. I Did the Distrlct Court err in consolidating the charges? The first issue cn appeal is whether the District Court properly joined the various charges against Mr. Baker. The relevant statute on joinder, 5 46-11-404, MCA, pro~ridec in pertinent part: (1) An indictment, information, or complaint may charge two or more different offenses connected together in their commission, different statements of the same offense, or two or more different offenses of the same class under separate counts. If two or more indicl:ments, informati.ons, or com- plaints are filed in such cases in the same court, the court may order them to be consolizated. . . . ( 4 ) Tf it appears that a defendant or the state is prejudiced by a joinder of related prose- cutions or defendants in a sin.cf1.e charge or by joinder of separate charges or defendants for tria,, the court may order separate trials, grant a severance of defendants, or provide any other relief as justice may require. Joinder is proper where the offenses are logically linkec?. hy motive and where overlapping proof must be offered. United States v. Hoelker (9th Cir. 1985), 765 F.2d 1422, 1425. In this case the burglary and felony theft charges stemmed from the same incident, which was the burglary of the Willumsen residence. These charges were connected to the robbery charge in that the gun stol-en from Mr. Willumsen was used in the robbery. Additicnally, other items stolen from the Will-umsen residence were found in the car which was used in the robbery. Separate trials would have required overlap- ping evidence, and many of the same witnesses. The robbery supplied the motive for the witness tampering charge which was therefore properly joined. State v. Bingman (198?), 745 P.2d 342, 44 St.Rep. 1813. There was evidence indicatinq that the misdemeanor theft of the Deschene gun, committed a month prior to the other crimes, was done in furtherance of a plan to commit an armed rohhery. The crimes were logically connected by motive and there was a large area of overlapping proof among the separate charges. We therefore hold that the District Court's joincler OF these charges was not clearly erroneous. Having concluded that joinder was not clearly erroneous, the second inquiry is whether the motion to sever should have been granted due to prejudice to the c?efe~dant. F l e have previously enumerate6 three basic types of prejudice which may occur on consolidation. State v. Campbell (1980), 189 Mont. 107, 120, 615 P.2d 190, 198. State v. Orsborn (1976), 170 Mont. 480, 489, 555 P.2d 509, 514-515. In Campbell, we stated: The first kind of prejudice results when the jury consi6ers a person facing multiple charges to be a bad man and tends to accumulate evidence against him until it finds him guilty of something. The second type o? prejudice manifests itself when proof of guilt on the first count in an information is used to convict the defendant of a second count even though the proof would be inadmissible at a separate trial on the second count. The third kind of prejudice occurs when the defend-ant wishes to testify on his own behalf on one charge but. nct on another. (Citation omitted.) 615 P.2d at 198. Prejudice to defendant is balanced against judicial economy. This balancing is left to the sound discretion of the trial judge and the appellate court will not substitute i.ts jusgment for that of t-he trial court, absent a showing of abuse of discretion. Zudicial economy weighs heavily in the balancing process, and the burden is on the defendant to show t.hat prejudice outweighs this. Campbell, 615 P.2d at 198. In the present case defendant contends that consolida- tion of the charges was prejudj-cj-a1 because the number of charges against him allowed the jury to regard him as a "had man." In the recent case of St.ate v. Slice (19881, 753 P.2d 1309, 1311, 45 St.Rep. 752, 754, this Court stated that the cumulative effect of multiple charges is "rarely a sufficient reason to justify severance." In Slice, the defendant faced 16 criminal counts at trial, yet the court found insufficient prejudice to require severance. See also, Campbell, 615 P.2d at. 199, (where the district court. refused to sever a habitual traffic offender charge); -- Orshorn, 555 P.2d at 515. In support of his contention that the first type of prejudice occurred, Mr. Baker cites answers given by two jurors when the jurors were polled after trial. In polling the jurors, the court asked if the multiple charges made them think that the defendant was more likely to be guilty. The court and defense counsel framed this question several dif- ferent ways in attempts to clarify precisely what was being asked of the jurors. The court. fina.l.l?- directed the jurors as follows: THE COURT: Well, see if you can answer that. If you can't understand, just say, "I can't answer. I don't understand." Two jurors responded, "I dcn't know." It is not at all clear that these jurors were indicating that they may have convict- ed Mr. Raker due to multiple charges. The jurors may have been responding to the court's direction to not answer if they did not understand the question as posed. F l e conclude that neither the cumulative effect of the multj-ple charges nor the jurors' answers to the polling demonstrates prejudice to the defendant sufficient to deny him a fair trial. "In showing prejudice, it is not suffi- cient that the defend-ant prove some prejudice or that a better chance of acquittal. exists if separate trials are held. Rather, the defendant must show the prejudice was so great as to prevent a fair trial." Campbell, 615 P.2d at 198 (citing United States v. Dohm (5th Cir. 1979), 597 F.2d 535, 5 3 0 ; Vnited States v. Martinez (1st Cir. 1973), 479 F.2d 824, 828.) F7e affirm the holding of the District Court that defendant faLLed to demonstrate prejudice which would require severance. Mr. Raker also contends that the second type of preju- dice from joinder occurred at his trjal. This type of p r e j u d i c e e x i s t s when t h e jury u s e s proof of g u i l t on one count i n t h e information t o c o n v i c t a defendant on a n o t h e r count i n t h e information even though proof would have been inadmissib1.e a t a s e p a r a t e t r i a l or t h e second count. A s w e s t a t e d i n C a m ~ h e l l : N c p r e j u d i c e of t h i s n a t u r e w i l l be found when t h e evidence presented a t a j o i n t t r i a l i s simple an? d i s t i n c t . This r u l e i s based on t h e r a t i o n a l e t h a t when the charges are f e w and the evidence straight forward, t h e r e i s no reason t o assume t h e jury was confused and could n o t keep t h e r e l e v a n t evidence s e p a r a t e . ( C i t a t i o n s omitted. ) I n t h e p r e s e n t c a s e t h e charges were n o t complicated and t h e evidence was n o t complex. Defendant has f a i l e d t o stat^ what evidence was used t o f i n d him g u i l t y on one count whj-ch would have been i n a d m i s s i b l e i n a s e p a r a t e t r i a l . The jurj, was i n s t r u c t e d t h a t each count charges a d i s t i n c t o f f e n s e en6 t h a t each count must be decided separately. Defendant contends, however, t h a t t.his second type of p r e j u d i c e occurred because t h e j u r o r s were confused. I n s u p p c r t of t h i s c o n t e n t i o n he n o t e s t h a t upon p o l l i n g t h e j u r o r s a f t e r t r i a l , t h r e e j u r o r s s a i d t h e y d i d n o t belielTe defendant was i n t h e P a y l e s s S t o r e when it was robbed. PF' a r g u e s t h a t t h i s shows t h e j u r o r s were confused because n o evidence was p r e s e n t e d which portrayed defendant i n a l i g h t o t h e r t h a ~ as p e r p e t r a t o r . A s a d d i t i o n a l evidence t h a t cc>nfusion was "rampant" i n t h e t r i a l , defendant n o t e s t h a t t h e p r o s e c u t o r made an i n c o r r e c t statement about t h e evidence i n cl.osing argument. However, t h e j u r o r s were a l s o poll-ed on t-he speci5j.c q u e s t i o n of whether t h e m u l t i p l e charges caused confusion i n t h e i r minds, and each j u r o r answered, "No. I' Defendant has n c t m e t his burden o f showing t h e second t y p e nF p r e j ~ l d i c e . PTe t h e r e f o r e cnnc1ud.e that: t h e ( J e F e ~ d a n t has demonstrated no prejudice sufficient to deny him a fair trial or to require severance under S 46-11-404 (4) , MCA. We hold that the District Court's refusal to sever the charges was not clearly erroneous. We affirm the holding of the District Court on the motion to sever. II Did the Pistrict Court err in admitt-ing certain impeach- ment evidence? Mr. Baker objects to the admission of a letter written by him to Randy Clark, an inmate at Montana State Prison. The letter contained a message to Lance Sprout, who w a . s aLse lncarcerated at Kontana State Prison. In the message to Mr. Sprout, r . Baker suggests that "if someone accj.dentaIly somehow bumped his head and he got amnesia, they could not hold that egainst him," and "possibly the next statement in court will be so mixed up that it will he thrown out." At the end of the letter, Mr. Raker offers to send money, indi-. cating that he will send generous amounts if his innocence is proven. This letter was introduced by the State on cross examination of Mr. Baker. The State first asked Mr. Raker if it would have been tc his advantage if Lance Sprout had not testified at Mr. Bak- er's trial, and if it would have been to his advantage if Mr. Sprout had gotten amnesia while he was at the prison. The State next asked Mr. Baker if he had ever written a letter making those suggestions. Mr. Raker's answers to the State's questions were evasive. Also, by his answers he attempted to suggest that the possibility of amnesia was Mr. Sprout's idea. Mr. Faker was then asked to read the letter to the jury. Defense ccunsel objected on grounds of relevancy an2 foundation. On appeal, the 6.efense argnes that the letter was irrelevant an? pre j u ? i c j a ! . The letter was relevant to show consciousness of guilt a n c l is admissible under Rule 404(b) M.R.Evid., which provides: Other crimes, wrongs, acts. Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in crzer to show that he acted in conformity therewith. It m a l r , however, be admissible for other purposes, such. as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident. The second sentence of this subpart provides a list of excep- tions to the general rule that other crimes, wrongs or acts are inadmissible to prove a person's character. Evidence of act may be admissible t . o prove any of the enumerated reasons; however, this list is not exclusive and has been held to include evidence which tends to prove consciousness of gullt. State v. Shaw (1982), 199 Mont. 248, 648 P.2d 287, 289. In Shaw, evidence of intimidation of a witness was an act which was admissible to show consciousness of guilt. See also State 77. Clark (1984), 209 Mont. 473, 682 P.2d 1339, 1350. in Shaw this Court stated that "[iln a criminal prosecu- tion any attempted intimidation of a witness is properly attributable to a consciousness of guilt and testimony relat- ing thereto is relevant and admissible in evidence." -- Shaw, 648 P.2d at 389-290, quoting People v. Smith (1972), 3 I1l.App.3d 958, 279 N.E.2d 512, 513. In Clark we noted that this rationale applies to documentary as well as testimonial evidence. Clark, 6 8 2 P . 2 6 at 1350. In the present case we believe that the letter in which Mr. Baker attempted to influence Mr. Sprout ' s testimony evidences defendant ' s con- sciousness of g u i l t . As such, we conclude that the letter was relevant and admissible pursuant to Rule 404(b), M.R.Evid. Defendant argues that even if this evidence were admis- sible as "other acts" pursuant to 404(b), the four element test of admissibility and procedural requirements established in State 17. Just (1973) , 184 Mont. 262, 602 P.2d 957, were not met. However, the Just requirements do not apply in the present case. The defendant in Shaw raised the same argument but this Court disagreed, stating: Both the admissibility test. and the procedural requirements found in Just pertain to evidence of other prior crimes but do not apply to evidence establishing consciousness of guilt regarding the crime with which the defendant is charged. Shaw, 648 P.2d at 290. We hold that the District Court's ruling which admitted the letter was not clearly erroneous. Did the District Court err i.n giving an accountabil-ity instruction during jury deliberations? During deliberations, the jury submitted a question to the court which stated, "The charge of robbery, Instructior. No. 8, how does it appl-Y to Instructi-on 11 regarding accom- plLce?" The court and counsel for both parties considered this question in chambers hut were unsure what the jurors actually wanted to know. After the court asked the jurors to clarify their question, and after discussion with counsel, the court decided to instruct the jury on the offense of accountability as defined by 55 45-2-301 and 302, KCA. The jury later returned verdicts of not guilty to burglary of the Willumsen residence, but guilty of theft of the items taken in that burglary. Defendant argues that this is an inconsis- tency caused b y the giving of the accountability instruction. Defendant also contends that the accountability instruc- ticn was a material variation of the crimes charged and that it was error to give this instruction after closing argument because he was precluded from discussing this theory with the jury, citing State v. Bretz 1 9 , 180 Mont. 307, 590 P.2d 614. Defenclant's ultimate contention on this issue is that the District Court erred in not setting aside the verdict. of guilty to theft. We decline to address whether the court erred in giving this instruction during jury deliberations because we con- clude that the jury's determination that Mr. Baker was guilty of felony theft need not be premised on an accountability theory in this case. There was sufficient evidence presented for the jury to find Mr. Baker guilty of theft without the accountahj ! j-ty instruct:iorl, ar,d without finding him guilty of burglary. We hold that the Cistrict Court properly refused to set aside the convj.ct.i.on. for theft. | April 25, 1989 |
1ff98d04-3fe6-48c0-a561-b68acb74d23e | THOMPSON v BD OF TRUS OF SCH DI | N/A | 88-513 | Montana | Montana Supreme Court | No. 88-513 IN THE SUPREME COURT OF THE STATE OF MONTANA ROGER THOMPSON, Plaintiff and Appellant, -vs - BOARD OF TRUSTEES OF SCHOOL DISTRICT NO. 2, YELLOWSTONE COUNTY, MONTANA, said board consisting of the following; MAURICE R. COLBERG, JR.; FRANK J. KOLENDICH; HEWES D. AGNEW; ELLEN ALWEIS; KAREN TRASK DOOLEN; JIM LOGAN, DOUGI,AS R . SIPES; and MIKE YOUNG, Defendants and Respondents. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Russell K. Fillner, Judge presiding. COUNSEL OF RECORD: For Appellant: Charles F. Moses; Moses Law Firm, Billings, Montana For Respondent: I _ P- Laurence R. Martin and Sol Lovan; Felt & Martin, - J Billings, Montana .--, q- ' Submitted on Briefs: April 27, 1 9 8 9 Decided: June 7, 1989 Clerk Mr. Justice Fred J. Weber delivered the Opinion of the Court. This suit arises out of the nonrenewal of plaintiff's teaching contract with School District No. 2 in Billings, Montana. Plaintiff appealed the Board of Trustees' decision to terminate his employment and the reasons given for nonrenewal therein to the District Court for the Thirteenth Judicial District, Yellowstone County. The District Court granted summary judgment in favor of the School District on plaintiff's claims for tort liability, punitive damages, violation of due process, and breach of the implied covenant of good faith and fair dealing. The court granted the plain- tiff's cross-motion for summary judgment based on the insuf- ficiency of the reason given for nonrenewal. The court remanded the case back to the School District for a more sufficient statement of reasons. On appeal, the plaintiff challenges the adequacy of the District Court's remedy, alleging that there has been a breach of the employment contract and that he is entitled to monetary damages. Based on our holding that the plaintiff is not entitled to pursue this remedv, we affirm the District Court's granting of summary judgment in favor of the School District and vacate the Order of remand. We reframe the issues as follows: Where a nontenure teacher has received notice of termi- nation under § 20-4-206, MCA 1985, and challenges the suffi- ciency of the reasons given for termination, to what extent has the teacher the following remedies: (1) Remedies under the grievance procedure of the Professional Agreement or union contract between the School Board and the Teacher's Association. ( 2 ) The right of appeal under the nontenure teacher's severance policv contained in the union contract providing for appeal of the notification to the School Board; and subsequent rights to appeal to the County Superintendent of School, and then to the State Superintendent, and finally to the court system under the Montana Administrative Procedure Act. (3) Right to proceed in District Court seeking a recov- ery of damages suffered as a claimed result of the insuffi- ciency of the notice of termination given to the teacher by the school district. Section 20-4-206, MCA 1985, with regard to nontenure teacher notification, provides in pertinent part as follows: Notification of nontenure teacher reelection -- acceptance -- termination and statement of reasons. (1) The trustees shall provide written notice by April 15 to all nontenure teachers who have been reelected. Any nontenure teacher who does not receive notice of reelection or termination shall be automatically reelected for the ensuing school fiscal year. (3) When the trustees notify a nontenure teacher of termination, the teacher may within 10 days after receipt of such notice make written request of the trustees for a statement in writing of the reasons for termination of employment. Within 10 days after receipt of the request, the trustees shall furnish such statement to the teacher. The pertinent portion of the Professional Agreement, or union contract, between the Board of Trustees of School District No. 2 and the Billings Education Association are as follows: Article IV, Section 7. Non-Tenure Teacher Severance - - Policy: - - Subd. 1. Every non-tenured teacher shall be entitled to the following rights if his/her contract i . s not being renewed. (a) The teacher shall be notified by the Superintendent, in writing, that his or her contract will not be renewed pursuant to Montana statutes. fb) The notice shall state the specific reasons for non-renewal. (cl The teacher may appeal his/her non-renewal to the Board of Trustees or a committee thereof, by May 1. The Board, or its committee, shall reach a decision within twenty ( 2 0 ) days of the submit-tal of the appeal. Subd. 2. The decision of the Board, or its - committee, shall not be subiect to the griev- ance procedure as outlined in Article XIT. Article XIL, Section 4. Adjustment of Grievance, Time %imitation and Waiver: The parties shall attempt to adjust all grievances which may arise during the course of employment of any teacher within the School District in the following manner: T f a grievant believes there has been a grievance, he/she shall discuss the matter with the responsible administrator in an attempt to arrive at a satisfactory solution. If the griev-- ance is not resolved as a result of this meeting, the grievance shall be reduced to writing, setting forth the facts and the specific provisions of the Agreement allegedly violated, and the particular relief sought. An alleged grievance must be pre- sented in writing within twenty (20) days of the occurrence of the event, or within twenty (20) days of the time that the grievant through the use of diligence should have known of the alleged grievance. Subd. 1. Level I: The written grievance, siqned by the grievant involved must be pre- sented to the responsible administrator within t.he time limits provided in Section 4. The responsible administrator shall meet with the grievant within seven (7) days after receipt of the written grievance and give a written answer to the grievance within five (5) days of the meeting. The Grievant has five (5) days in which to either accept the answer or appeal it in writing to the next level. Subd. 2. Level 11: If the grievance has not been resolved in Level I, it may then be processed to Level I1 by presenting the writ- ten grievance to the Superintendent. The Superintendent or his designee shall meet within ten (10) days after receipt of the written appeal to discuss the problem with the grievant. Within seven ( ? ) days of the meet- ing the Superintendent or his designee shall submit his written answer to the grievant. Subd. 3 Level LIL: If the grievance remains unresolved at the conclusion of Level 11, i . t may he submitted for binding arbitration at the discretion of the Associati-on provided written notice of the request for submission to arbitration is delivered to the Superinten-, dent's Office within ten (10) days after the date of receipt of the decision at level TT. The case has a complex procedural history which unfortu- nately extends over a period starting in 1983. Mr. Thompson was employed by School District No. 2 ! as the choir director at Billings West High School. He served in that capacitv for three years, each year being offered a one-year contract. Tn March, 1983, the Board of Trustees voted not to renew Mr. Thompson's contract for the 1983-84 school year. That con- tract would have granted him tenure rights. Mr. Thompson was notified of the Board's deci-sion by letter dated March 30, 1983 which said: In accordance with Section 20-4-206, of the School Laws of Montana, Annotated, (copy attached!, you are provided notice of termination of your contract with School District No. 2, at the close of the 1 9 8 2 - 8 3 school year. In keeping with the philosophy of School District No. 2 of retaining only the best teachers for tenure, School District No. 2 would be better served by another teacher in this position. On March 31, 1983, Mr. Thompson responded by letter which stated: In accordance with Section 20-4-206, MCA, I am requesting the reason or reasons for the board's decision to terminate my employment with the district. Also, in consideration with the board's statement at the March 29, 1983 meeting, I am requesting a hearing before the board to address this matter. In response to the foregoing letter, the Board sent a letter to Mr. Thompson dated April 6, 1983, which stated: This responds to your letter of March 31, 1983. You have already been notified of the termination of your contract with School District No. 2, by letter from Dr. Poore, dated March 30, 1983. This letter included the reasons for the termination of your employment. Pursuant to your request, you may appeal your nonrenewal to the Roard of Trustees at the Board meeting to be held at 4:00 p.m., Monday, April 11, 1983, at the Administration Building. This appeal is granted you under the provisions of Article IV, Section 7, of the Professional Agreement between the Board of Trustees and the Billings Education Association. On April 11, 1983, Mr. Thompson and his counsel appeared hefore the Board of Trustees. Mr. Thompson's counsel pre- sented argument but was not allowed to call any witnesses. The Roard characterized the proceeding as an "appeal" rather than a "hearing" and therefore did not allow the presentation of witness testimony. Fol..l.owing the presentation by Mr. Thompson's counsel, the Roard voted to affirm its prior decision not to renew Mr. Thompson's contract. In a letter dated April 11, 1983, addressed to Mr. Thompson, he was advised as follows: You have been afforded an appeal OF the termination of your employment with School District No. 2 at the cl.ose of the 1982/83 school year, pursuant to Article IV, Section 7 of the Professional Agreement between the Roard of Trust-ees of SchooJ- District No. 2, and the Billings Education Association. This is to notify you of the Board's decision, denying your appeal, and affirming the prior c-leci--. sion of the Board of Trustees, to terminate your contract and employment with School District No. ?, at the close of the 1982/83 school year. The Board did not advise Mr. Thompson orally or by the above letter of any additional reasons in support of the nonrenewal. By notice dated April 19, 1985, Mr. Thompson appealed to the County Superintendent of Schools. By order denyina appeal dated April 28, 1983, the County Superintendent con- cluded that the appeal had failed to meet the requirements set forth in the Administrative Rules of Montana in Failing to set forth a proper caption, names and addresses, clear and concise statement of the matters asserted., a statement indi- cating that the petitioner has a contested case and that the County Superintendent has proper jurisdiction together with references to the particular sections of the statutes and rules involved. The County Superintendent concluded that he did not consider this a contested case and that he lacked jurisdiction. No appeal was taken by Mr. Thompson from that order. As a result, there was no further attempt to follow the procedure outlined in such cases as Throssell v. Board of Trustees of Gallatin County (Mont. 1988), 757 P.2d 348, 45 St.Rep. 1228, and Yanzick v. School District No. 23, Lake County (1982), 196 Mont. 375, 641 P.2d 431. This was the extent of the appeal procedure exercised under the administrative law approach as outlined in the above cited cases. In addition to proceeding under the appellate approach as previously described, Mr. Thompson also proceeded under the grievance provisions of the union contract, and in par- ticular Article XII, Section 4 which is previously set forth. On April 5, 1983, Mr. Thompson filed a grievance with the School District under the provisions of Article XII, Section 4 of the union contract. The grievance was made on the regular Grievance Report form used by the Billings School District and was signed by the Billings Education Association representative. The key portions of that form stated: Date grievance occurred: March 29, 1983 Statement of facts: Teacher was terminated on March 29, 1983. Inaccurate evaluations are a factor in this termination. Specific Provisions of Agreement Alleqedly Violat- ed: Article XV - Sections 1, 2, 5, 6 Particular Relief Sought: Evaluation dated March 1, 1983, is to be removed from his file and grievant is to be offered a contract for the 1983-84 school year. In support of the School District's motion for summary judg- ment, the uncontradicted affidavit of the Director of Person- nel of the School District established that the grievance was denied through Level I and I1 administratj-ve hearings. As previously set forth, those levels provide at Level I for the presentation of the grievance to the responsihle administra- tor who is required to meet with the grievant, and denied the written grievance. A.t Level IT, the grievance was presented to the Superintendent, and such Superintendent also denied the grievance. The next choice under the contract for Mr. Thompson was to submit that grievance for binding arbitration at Level 111. The affidavit establishes that the Billings Education Association, Mr. Thompson's representative, dropped its attempts to move the grievance to binding arbitration. As a result, the record establishes that Mr. Thompson failed to proceed through to binding arbitration and thereby obtain a final binding arbitration determination of his grievance. In considering the grievance requirements under the union contract, it is important to keep in mind that Mr. Thompson's grievance as stated in the Report. Form was limited to his argument that the evaluation dated March 1, 1983, was inaccurate and should he removed from the file and that he should be offered a contract for the next school year. At that point, Mr. Thompson made no suggestion that the reasons given in the notice of nonrenewal were insufficient. This is significant because he now urges that the insufficiency of such notice should be a proper basis for the award of damages in the District Court action which was brought against t.he School District. The next procedural aspect is the filing of the com- plaint by Mr. Thompson against the School District. On June 16, 1983, after all the above-described procedures were followed, Mr. Thompson filed his complaint in the District Court of Yellowstone County. In that complaint he alleged that the defendants had negligently, wrongfully and unlawful- ly terminated his employment and that the School Board did not provide standards or guidelines for termination, that his termination was prejudged, that the District violated the open meeting law, that such termination did not represent the independent and informed judgment of each member, and that the notice was defective "in that it did not set forth the specific reasons for his termination as required by law." The compl aint cl aimed damages by hei-no deprived of empl o\pent and terminated without r i g h t . EF-L.er 'she r i l i n g o f variouc pleadinvs, a motion f o r p a r t i a l sumr11cir;7 judgment was f i l e d by t h e plaint_;-ff 5 x 1 6 t h e rlefenclant a l s o f i l e d motions f o r surruna- r y judgment. By order c7,ate6 Parch 1 , 1.988, t h e D i s t r i c t Court granted summary juc-Igment t o both t h e p l a i n t i f f and t h e d f? F t ~ : f \ ~ l h r*? , -r . n 9 r a n t l n y t h e motion of t h e p l a i n t i f ' vhorrip~rn f o r summary iudgment a s t o t h e s u f 5 c j ~ r r c y o r t h e n n t j c e , t h e O r d e r sf-ate?: ?. That t h e P7ajn-f-i .'T'F C:rcss-Potion f o r Summary Judgment crf the a13eged i n s u f f i c i e n c y of +he ztatu-- t o r y n o t i c e r e q u i r e m e ~ t s is hereby GRANTED. T h i s i s s u e i s REMANDED t o t h e school board of t h e F i l l - i n g s ''! $ 1 Sc:!lc\c-I. r i s t r i c t No. 2 , Yellowstone Cour,-. t y , Wontana, ant: saic-1 school hoard i s d i r e c t & t o provide t h e P l a i n t i "F wF+h speci f i c r e a s o r s fcr rc.r.--renewal of h i s c o n t r a c t within t h i r t y days o' t h e d a t e hereoT. The C o i l r t recogr?Fzes that t h i s cause arose over five vears aqo and t h a t t h e school boar?. rr.&y no ionger be able t o prov:i-de ?he P1.a.in- t i f f with speciLic reasons 'or non-renewal due t c changes 0 5 members or. t h e schocl board, and chang6-s of personnc! , l o s t o r misplaced records a ~ c l t h e 1;-ke. T-F t h e hoard i s 1117abie to comply with t h e Caul-kl:l: Crcleu due t o such reasons, it may c e r t i f y such + ' a c t t o t h e Court within t h e t i n e h e r e i ~ before provide6 and serve a copy o f such c e r t i f i - c a t i o n t o counsel f o r t h e P l a i n t i f + . On t h e o t h e r ha-nc!, i f +he board i s able t o comply by providing PI a i n t i FF w i t h spw:.; l ( * reZscns f o r non-renewal and ceutifiricatiorr oF such compliance i s rnac7e together with proof of s e r v i c e o f s u c h c c r t i f i - c a t i o n on counsel f o r P l a i n t i f f , then judgne~lt may he entered accnrei rclv. The Crcler c;T +he Dist-rict Court a l s o granted the de5eendan+s1 ~no-lion f o r summary judgmer~t. " n 1- he "ollowj-ng r e s p e c t s : r e - gardin9 the nonapplicahilif-y of +he fi7orltana Opcn Feeting law; regardS r l q i hc. derendants ' claim t h a t t h e i ndivFc?ual.ly named Trustees a r e immune Trom !!c?hi! j t j 7 ; 2s t c l p l a i n t i ' q ' s clajrn f o r imposition of p u ~ i t i v e clamages a s t o both t h e S c h o ~ l Pi 1 - r - I T i lit. r e ; detendants ' motion i-egariJ;nc t h e f a i l u r e t o s t a t e a claim f o r bread1 01 the covenant o f good f a i t h an< f a i r d e a l i r g : and d~Tenc7arlf s' m t i o n l o r t h e f a i l - u r e t o s t - a t e a claim f o r wrongful d i s c h a r g e . The ~ ~ C ' e c t oi t h e toregoing Order on summary iudgmert v 7 c s t o remand t o t h e School G i s t r i c i - 5 11 order t o provide M r . Thompson w i t h n o t i c e O F reascjr~s vrhir.11 n e t the requirement or' Bridyer Eciuca'r-i o ~ i Association v. Board o f T r u s t e e s , Carbon County (19841, 203 P:o~t. 21, 678 P.22 059. r . Tho~rpson challenged t h e adequacy of t h e remedy by motion t o z l t e r or amencl cvhicl- C!-IP F i s t r i c t Court denied. I n h i s appeal Ilr, Thompson contends t h a t t h e Schc~n: D i s t r i c t was o b l i g a t e d t o Zurnish s p e c i f i c r e a s o ~ s f c r t r i r t h e t he was n o t affc)~-cit.cl a nieaninqful appeal o r a h e a r i n g , t h a t t h e r e has bec11 breach o f c o n t r a c t .mil khzt he i s eritjtles t o darvages. The key element i s t h a t M r . Thompson contends he i s e n t i t l e d t o damaqes whi(-.!? fla~rc~ e F 3 t c t i v e l y been denied him by t h e s u n juc7qr11ent: h e D i s t r i c t Court and t h e above-described remanc?. T L . PXPV".EI~LrJ:,C, ITNDER GRTEVANCE PROCEDITFF O F UNION CONTRACT I I h i s Grievance & p o r t M r . Thcmpscn r e f e r r e d t o h i s t e r ~ i l i a t i o n on March 29, 1983. IIe thcn c l s i n e d t h a t i n a c c u - r a t e eva1uet.ions w e r e a f a c t o r i n t h a t deterniniltion and asked t h a t t h e e~raluatsorl Sated biarch 1, 1983, b e removed from h i s f i l e . fEis c)tm G~rievance Report c o n t r a 2 j c t s t h e b a s i c a s s e r t i o n i r ! t h e complaint f i l e d i n t h e Districtf Ccurt where he complains t h a t t h e n o t i c e was i n s u f f i c i e n t . 1 ~ ~ ~ 1 conc,l1~dc "hzt t h e grievance procedure under t h e u r i n n c o n t r a c t i s t h e binding metl?c?c7 o r cirisposj-ng of t h e i s s u e s ra: .;eF 11nc'er t h e qrievance ~ r o c e r ? ~ i r c - , F ' e t h e r e f o r e conclude t-hat Ylr - I ~ I c o u l d not h a v e procee?ec' ; n t c Disl-rj-ct Court on the same issues raised in the grievance procedure. Under the agreement negotiated by the Billings Education Association with the School District, the final decision in the grievance process is a binding arbitration. Because Mr. Thompson chose not to proceed to binding arbitration, that terminated any further rights with regardt to the claimed grievance. As we review Article IV, Section 7 of the union con- tract, we conclude that the issue of the sufficiency of the notice of termination properly could have been included in the Grievance Report form and handled through the gri-evance procedure. Had he properly proceeded in that manner, his right to receive a specific statement of reason for nonrenewal would have been satisfied through the grievance procedure. In this instance he chose not to proceed to arbitration as he apparently concluded that he preferred to make a claim for damages in District Court. We hold that the proper method for obtaining a statement of specific reasons for nonrenewal by Mr. Thompson was set forth in the grievance provisions of the union contract. We further hold that by failing to follow these contract provisions, Mr. Thompson has lost his right to obtain specific reasons for nonrenewal. We therefore conclude that that the District Court improperly remanded to the School District. 11. RIGHT OF APPEAL UNDER CONTRACT SEVERANCE POLICY In his complaint in District Court Mr. Thompson argues that the notice did not contain specific reasons for nonrenewal. In making these contentions he overlooks the procedure which he previously followed. We pointed out that Mr. Thompson appealed his nonrenewal to the Board of Trustees of the School District. Pursuant to the contract, he was given an appellate hearing and the decision by the School Board was affirmed. At that point Mr. Thompson appealed to the County Superintendent of Schools. As previously de- scribed, the County Superintendent declined to rule on his appeal. Under the administrative procedure outlined in Throssell and Yanzick, Mr. Thompson was required to appeal to the State Superintendent and in the event of an adverse ruling, only then did he have the right to proceed in Dis- trict Court, following the procedure under the Administrative Procedure Act. As a result, his remedies would have been limited to recovery appropriate under the union contract and the Act. We hold that by failing to follow the administ-rative procedure outlined in the mentioned two cases, Mr. Thompson gave up his right to a final determination under the adminis- trative procedure required in Montana. We therefore conclude that he no longer had a claim for nonrenewal of his contract. 111. nISTRICT COURT CLAIM OF DAMAGES Mr. Thompson argues extensively that he has a right to recover all damages which he has suffered in all- of these proceedings, including references to the idea of reinstate- ment, and most important, to monetary damages. As Mr. Thomp- son summarized in his own brief, he claims he is entitled to damages for the breach by the School District of his con- tract. We conclude that he does not have such a right under the facts of this case. As previously outlined, Mr. Thompson had the opportunity of grieving the sufficiency of the notice itself under the grievance procedures. He chose not to go to binding a r b i t r a t i o n . A s a r e s u l t , he no longer had a r i g h t t o con- tend! i n t h e Pi-strip:. Cnllv: ~ ~ c { - k o n t h a t t h e n o t i c e i t s e l f w a s - i n s u f f i c i e n t . -n a sirnjlar w a y , if M r . Thompscn believer- t h a t he properl;: chnn7d have been r e t a i n e d as a n o n + c $ ~ ~ ~ i r e t e a c h e r , t h e ~ r o c e c l ~ r e t c be foilowed was t h a t previously nizt-linrcy ur.6er F a r t I1 o f t h i s opinion. A s he Fai7ecl t o foT-?.ow the a p p r o p r i a t e adnlinistra t 5 vt. proceclure , he i s barred "ram rnak?'r.cr t h e sarre c o n ? - ~ n ' ; c ) l t : . In '-hc p r e s e n t proceedings b e f o r e t h e D i s t r i c t Court. ICe thereCc,rt~ hci1(7 I t t h e r e w e r e no f u r t h e r remedLcs a v a i l a b l e t o M r . Thompscr~ ur1~3er 1.lle complaint which he f j ! ~ ? . i n the 0:stri ct Court; anc? ccnc!vde t h a t tht2 l?.'s-l r i c t Court 1 1 o r q r a n t e d sumrnarv j u d a r n ~ r t on t h e v a r j ous t h e o r i e s requested by t h e School D i s t r i c t . P'e v a c a t e t b e rerranc! by the E;n: I-ic:: Cc,urt t o t h e School ~ i ~ t ~ : ci a:, ' h e r e i s no requirement f o r such f u r t h e r consid- e r a t i o n by t h e School D l s t + r i c t u.nc'~r the unicr ccnt:rii(--'. P S t h thzt f:>:ception we a f f i r m t h e D i s t r i c t Cclurf-. %e Concur: ,A M r . J u s t i c e John C . Sheehy d i d n o t p a r t i c i p a t e i n t h i s d e c i s i o n . | June 7, 1989 |
7949815d-03ef-4082-a591-ad740fe02d82 | MELLEM v KALISPELL LAUNDRY DRY C | N/A | 89-066 | Montana | Montana Supreme Court | NO. 89-66 IN THE SUPREME COIJRT OF THE STATE OF MONTANA MARIE MELLEM , Claimant and Appell-ant, -vs- KALISPELL TJAUNDRY & DRY CLEANERS, Empl-oyer , and STATE CONPENSATION INSURANCE FUND, Insurer and Respondent. APPEAL FROM: The Workers' Compensation Court, The Honorahl e Timothy Reardon, Judge presiding. COUNSEL OF RECORD: For Appellant: Allan M. McGarvey; McGarvey, Feberling, Sullivan and McGarvey, Kalispell, Montana For Respondent: Steven J. Shapiro, Chief Legal Counsel and Charles Adams, Legal Counsel, Div. of Workers' Compensation, Helena, Montana L- 6, : c-3 ., ' . . , , Submitted on Briefs: April 2 7 , 1989 ?$ - 0 ; T ; , a Decided: June 1, 1989 a 6-L a Fi 3&!: - 1 -- d L .- e * d - f.2 . < =! 1 3 . -. - f-2 f 1 Mr. Justice R. C. McDonough del.iverecJ the Opinion 0 . F +.he Court. This appeal concerns the requirements for perfecting an appeal to the Montana Workers' Compensation Court under the terms of the Montana Occupational Disease Act (MODA) . Mari-e Mellem appeals from the court's order dismissing her appeal. for failure to comply with the jurisdictional requirements of MODA. We reverse and remand with instructions. Mellem presents three issues ' o r review: 1. Did Mellem fail to perfect an appeal to the Workers' Compensation Court because her request for rehearing was denominated "Statement of Exceptions"? 2. Did the Workers' Compensation Court abuse its discretion by dismissing Mellem's appeal. without granting Leave to seek rehearing and later application for appeal? 3. Has Me1I.em been denied due process of law bv the procedural errors of the Division o-F Workers' Compensation and the Workers' Compensation Court.? Mellem was employed by a Kalispell laundry from 1981. until 1986. She suffers from severe chronic obstructive pulmonary disease along with chronic pneumonia. Mellem alleges that her lung problems are due in part to her exposure to certain fumes and particles while employed at the laundry. She filed a claim for occupational disease benefits with the State Compensation Insurance Fund, which denied liability. Mellem's claim was then referred to the Division of Workers' Compensation, which in turn referred her to a member of the Occupational Disease Panel for medical examination. Based on the report of the medical examination, the Division issued an order stating its preliminary determination that Mellem would not be entitled to benefits. Mellem then requested a hearing before the Division, which b r a s held before a Hearing Examiner. After reviewing the record of Mellem's cl-aim, the Hearing Examiner issued his Findings of Fact, Conclusions of Law and Order, finding Mellem not entitled to occupational disease benefits. This document also contained a paragraph entitled "Notice", which reads in part as follows: You are hereby notified that you have the right to file exceptions and to present briefs and oral argument to the Administrator of the Division of Workers" Compensation who will decide whether or not to adopt or modify the foregoing Proposed Order. According to Mellem's brief to this Court, her counsel. contacted the Division to verify that the "exceptions" procedure was the same as the "rehearing" procedure required by § 39-72-61.2, MCA, and was informed that it was in fact the same. Mell-em then filed a Statement of Exceptions with the Division. The Administrator of the Pi-vision reviewed the Hearing Examiner's Findings of Fact, Conclusions of Law and Order, as well as the record of Mellem's claim. He then issued a Final Order, which again concluded that Mellem was not entitled to benefits. The Final Order reads i . n part: This Final Order is signed by the Administrator of the Division of Workers' Compensation under the authority of Section 39-72-202, MCA. Any party in interest may appeal this order to the Workers' Compensation Court as provided in Sections 39-71-2401 and 39-72-612, .MCA . Mellem thereafter filed an appeal with the Workers' Compensation Court. The court determined that it lacked jurisdiction to hear Mellem's appeal. According to the court, Mellem had not perfected an appeal, because she had failed to request a rehearing before the Division as required by $ 39-72-612, MCA. The court thus felt "compelled, - sua sponte, to dismiss" Mellem's appeal, which it did. This appeal followed. The Workers' Compensation Court began its discussion by reciting the basis of its jurisdiction under MODA, which is defined by $ 39-72-612, MCA. The court noted the specific requirement in 5 39-72-612 (l), MCA, that in order to perfect an appeal, "the appealing party must request a rehearing before the division." According to the court, a careful review of the record failed to disclose such a request by Mellem. The Workers' Compensation Court was correct in that its jurisdiction is statutorily defined in 5 39-72-612, MCA, and that the record in Mellem's case does not conform strictly to that statute. There is no document entitled "Request for Rehearing" to be found in the file. However, the reason for the absence of such a request appears on the face of the two Division orders quoted above. The court noted that the record of this case showed "some confusion over procedures before the Division. " The court cited as examples the improper labelling of orders issued by the Division, which contained instructions for procedures not discussed in MODA. The court concluded that these variations were in form only, and did not affect Mellem's entitlement to an appeal. We disagree. This situation has not been addressed by this Court under MODA. Fowever, we have held in similar situations under the statute of limitations in the Workers' Compensation Act that where misstatements hy an employer or insurer prevent a claimant from filing a Workers' Compensation claim in a timely fashion, or mislead the claimant into believing that no claim can or need be filed, the doctrine of equitable estoppel applies to to]-1 the limitation period and allow filing of the claim. Davis v. Jones (1983), 203 Mont. 464, 661 P.2d 859. The doctrine is equally applicable to the facts in this case, as is the maxim "No one can take advantage of his own wrong." Section 1-3-208, MCA. There are essentially six elements to equitable estoppel: "1. There must be conduct--acts, languaqe, or silence--amounting to a representation or a concealment of material facts. 2. These facts must be known to the party estopped at the time of his said 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 when it was acted upon by him. 4. The conduct must be done with the intention, or at least with the expectation, that it will he acted upon by the other party, or under such circumstances that it is both natural and probable that it will. be so acted upon. . . . 5. The conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it. 6. He must in fact act upon it in such a manner as to change his position for the worse ...." Davis, 661 P . 2 d at 861 (quoting Lindbolm v. ~mpl-oyers' T,iability Assurance Corp. (19301, 88 Mont. 488, 494, 795 1007, 1009). As to the first element, the conduct at issue here is reflected in the language of the Division's orders. The Hearing Examiner's order stated that Mellem could file exceptions with the Division. Mellem's counsel asserts that he contacted the Division to confirm that the "excepti.onsW procedure was the same as the "rehearing" procedure, and was told that it was in fact the same. While this statement is not disputed in the Division's brief to this Court, assuming it to be untrue does not negate the Division's conduct. It is apparent from the face of the Division Administrator's Final Order that the Division considered a request for rehearing to have been made. The second element of estoppel is also present. Knowledge of the proper procedures under MODA can certainly be imputed to the Division. The third element is evident from the course of conduct of Mellern's attorney and the Division. Mellem's attorney could not have known that the Division did not treat an exceptions procedure as a rehearing procedure, especiallv given the Division's continued conduct as if proper procedures were being followed. The fourth element is evident from the fact that the Division's conduct took the form of orders. There was clearly an expectation that Mellem's counsel would act in accordance with those orders. The fifth and sixth elements are self-evident. This opinion is the result of Mellem's detrimental reliance on the Division's conduct. The Division cannot now be heard to argue that Mellem's counsel was on notice of the statutory requirements for perfecting an appeal to the Workers' Compensation Court, and therefore at fault for the appeal's dismissal. The Division is estopped from doing so by its own actions. Taking that position also violates the maxim quoted above. We therefore reverse the decision of the Workers' Compensation Court dismissing Mellem's appeal, and remand with instructions to return the case to the Division to afford Mellem the opportunity to perfect her appeal in accordance with 5 39-72-612, MCA. We Concur: 4TVA Chief Justice | June 1, 1989 |
2fccf5e3-4587-4bd4-8f57-9f2d710c72f9 | HALSE v MURPHY | N/A | 88-351 | Montana | Montana Supreme Court | No. 88-351 IN THE SUPREME COURT OF THE STATE OF M O N T A N A 1989 KRISTIE ANN HALSE, p l a i n t i f f and A p p e l l a n t , -vs- JAMES P. MURPHY, Defendant and Respondent. APPEAL FROM: ~ i s t r i c t C o u r t o f t h e Second ~ u d i c i a l ~ i s t r i c t , I n and f o r t h e County o f silver Bow, The Honorable Mark P. S u l l i v a n , ,Tudge p r e s i d i n g . COUNSEL OF RECORD: F o r A p p e l l a n t : Michael E . Wheat; Cok & Wheat, Rozeman, Montana For Respondent: Douglas Buxbaum; Poore, Roth & ~ o b i n s o n , B u t t e , Montana Submitted on R r i e f s : Feb. 3, 1989 Decided: June 8 , 1989 F i l e d : Mr. Justice John C. Sheehy delivered the Opinion of the Court. Appellant Kristie Ann Halse appeals to this Court from a summary judgment of the Second Judicial ~istrict, Silver Bow County, in favor of respondent, Dr. James Murphy on a medical malpractice action which Halse had instituted on May 3, 1984. Halse alleged that Dr. James Murphy was negligent when he failed to externally immobilize Halse' s fractured arm after he had removed a rod which he had inserted into the ulna bone of her right arm. The fracture was a result of a car accident. The initial medical records, entered when she was admitted to the hospital following the accident, indicate that Halse was 19 years old and well-nourished, appeared to be hypovolemic and had resultant hypovolemic shock; had a comminuted compound ~onteggia ' s fracture of the ulna; had a ruptured bladder and gross hematuria; had multiple face contusions with closed head injury; was comatose; and had multiple pelvic fractures. Dr. James Murphy repaired her right arm fracture. Two other physicians attended to the bladder repair and repair of inter-abdominal organs that were hemorrhaging. The fractures to the ulna could not be repaired by casting and surgery was necessary to repair the ulna and to insert a rod. Halse was transferred to St. Peter's ~ospital in Helena on December 23, 1980 because she showed persistent renal failure. She underwent multiple renal dialysis procedures there. Her urinary function returned and she was transferred back to St. James Hospital in Butte where "she was begun on physical therapy." Because of some persistent problems relating to nursing staff orders, the family transferred Kristie to the Sheridan Hospital in Sheridan, Montana, eight days later, on January 25, 1981. Her private physician accepted continuing care of the appellant. In March, 1981, two and a half months after her fracture was repaired, Halse began experiencing palsy in her right hand. Dr. Murphy referred her to Dr. Charles Jennings, an orthopedic surgeon practicing in Great Falls, who specializes in hand problems, for a second opinion. Dr. Jennings ' medical records indicate that he removed the cast put on by Dr. Murphy in order to completely evaluate Halse's injuries and to get good X-rays. The X-rays indicated that there was some displacement of the proximal fracture fragment which resulted in some relative shortening of the ulna; and that there was some callus at that site and that the distal fracture site showed "healing." The medical records also stated that Halse was having considerable difficulty with elbow pain due to protrusion of the pin; and that Halse could not flex her elbow more than 30 degrees due to the pain. Dr. ~ennings wrote to Dr. Murphy stating his opinion that Halse would probably recover from the nerve palsy and that Halse had "not developed significant deformity" from this palsy. Dr. Jennings recommended that the pin be removed from the forearm because it was such an irritation to her. He also recommended that if the fracture were not stable enough without immobilization, Halse should be placed in an arm cast again; and that if the proximal fracture fragment appeared to be significantly unstable, he would open it, realign it and fix it with a plate and screws. Dr. Jennings had his occupational therapist fabricate a resting splint to be worn at night which would hold Halse's wrist in slight extension and support the joints at 45 degree flexion. Dr. Jennings encouraged active motion of the wrist and fingers to regain range of movement. Two weeks after consulting Dr. Jennings, Halse again saw Dr. Murphy. One week after that, on March 31, 1981, Halse was taken to the operating room at St. James where Dr. Murphy removed the pin under regional anesthetic. The hospital medical records indicate that a stab wound was made over the tip of the rod; an extractor was then screwed into the rod; and it was removed by means of a mallet. The wound was irrigated and the skin was closed with two sutures of stainless steel wire. A sterile dressing was applied and Halse left the operating room awake and in good condition to go to the ward. No bleeding occurred. Dr. Murphy did not recast the arm but gave Halse a removable splint to use as she deemed necessary. Dr. Murphy continued to see Halse after the removal of the pin. It is at this stage that Halse, and subsequently Dr. Humberger, allege that Dr. Murphy was negligent. Halse asserts that Dr. Murphy did not X-ray the arm after removal of the rod, nor did he palpate the arm. Halse asserts that had he done so the unhealed fracture in the arm would have been detected. Dr. Humberger, in his late affidavit, states that if these facts are true, Dr. Murphy was negligent. Halse moved to Great Falls in the summer of 1981. while there, she consulted Dr. ~ennings' associate, Dr. Bloemendaal and a Great Falls surgeon, Dr. Mungas. On September 9, 1981, she was seen by Dr. Murphy in Bozeman and again on October 23, 1981. Murphy's records show no complaint about her arm. One year later, on October 29, 1982, Halse consulted physicians at the orthopedic department of the university of Washington. She was seen there by Dr. Theodore Greenlee. Dr. Greenlee X-rayed her arm and found that there was a non-union of the proximal ulnar fracture and possibly of the middle one-third of the distal ulnar fracture. He recommended a bone graft and plating of her fracture. On November 9, 1982, Halse underwent surgery at the University of Washington. The two ulnar non-union sites were debrided and plates were attached to the bone. On April 29, 1983, Halse was seen by Dr. Humberger in his office. Dr. Humberger's records indicate that Halse's wound was well healed. However, Dr. Humberger indicated that Halse had contracted osteomyelitis and that there "is a potential for the infection to flare up at any time." Dr. Humberger discontinued Halsers antibiotic treatment for the osteomyelitis on June 10, 1983. On July 22, 1983, Halse returned to Dr. Humberger with complaints of an aching sensation and tenderness in the ulna. The X-rays showed the wound to be well healed but there was a small lytic area beneath the plate which had been attached in Seattle. For this reason, Humberger put Halse back on Tegopen, a penicillin drug. Humberger suggested removal of the plates and curretage of the bones. This was done on August 10, 1983. On August 22, 1983, the surgical staples were removed. The wound appeared well healed. Halse was advised, "warm soaks, active range of motion exercises, proper wound care, minimal resistance activity." Two weeks later, on September 6, Dr. Humbergerrs records indicate that the wound was healing well. He did not feel X-rays were necessary. He advised the same care of the arm as before and asked Halse to come back in one month. One month later, October 6, Dr. Humberger's records indicate that Halse bumped her arm while driving. She now had a transverse crack across the ulna and a small fracture through one of the screw holes. Dr. FIumberger advised her to continue wearing her present splint, to perform range of motion exercises to the elbow and to remove the splint while bathing. On October 25, Halse was started back on Tegopen again by Dr. Blackwood, an associate of Dr. Humberger, because she felt "the infection might be back." On November 3, Halse entered Dr. Humberger's office without her brace and said she had no symptoms referable to her forearm. On physical examination, she was tender over the ulna but had good flexion/extension. The X-rays showed that the midshaft ulna fracture was in good position and alignment, but the bone was not healed. Dr. Humberger advised Halse of the necessity of wearing the splint to protect the ulna in hope that it would heal. He expressed his disappointment that Halse had not been wearing the splint. He noted that Halse was very discouraged in regard to the prolonged treatment necessary for her arm. Dr. Humberger advised her to wear her brace to protect her arm. On December 13, 1983, X-rays showed that the new fracture was not healing. On April 30, 1984, Halse commenced this action against Dr. Murphy. An answer was filed on August 8, 1984. Extensive discovery took place over a two year period. On July 16, 1987, appellant requested a trial date. rial was set for September 22, 1987. On August 28, respondent made a motion for summary judgment. On September 1, twenty-one days before the trial date, Halse's counsel withdrew. Two months later, on November 23, 1987, Attorney Michael Wheat requested, in writing, 30 additional days to evaluate Halse's case and to respond to respondent's motion for summary judgment. On January 1, 1988, respondent again noticed his motion for summary judgment and the motion was heard on February 5, 1988. Appellant again requested additional time to have "the file reviewed by a physician for an opinion. " The court again gave appellant thirty additional days (until March 6, 1988) to respond to the summary judgment motion. On March 10, 1988, the respondent's motion for summary judgment was granted. On April 7, 1989, Dr. Frank Humberger, in a written affidavit, stated, it was his opinion that, if facts were correct, that it was his opinion that Dr. Murphy was negligent in his care and treatment of Halse. On April 21, 1988, appellant's counsel filed a motion for relief from the judgment. Michael Wheat, appellant's counsel, testified by affidavit that Halse had made every effort to locate expert testimony in her medical malpractice case. Halse was unable to elicit an opinion from Dr. Humberger concerning Dr. Murphy's care and treatment of her. Appellant's counsel contacted various medical doctors in California and New Mexico in an effort to obtain an expert opinion but to no avail. Halse's motion for relief from final judgment was under the provisions of Rule 60(b), M.R.Civ.P. That rule provides: On motion and upon such terms as are just, the court may relieve a party or his legal. representative from a final judgment, order, or proceeding for the following reasons: . . . (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b). Rule 59 (b) provides : Time for motion. A motion for a new trial shall be -- served not later than 10 days after service of notice of the entry of the judgment. The first issue before this Court is whether an opinion of a trial expert, offered for the first time after final judgment and based upon a fact asserted by the plaintiff and within her knowledge prior to the judgment, can constitute "newly discovered evidence" under Rule 60, M.R.Civ.P. We see no reason to distinguish between opinion evidence and other kinds of evidence, if the opinion evidence itself meets the tests ordinarily required of newly discovered evidence. This case is not a judgment as a result of a trial on the merits. The negligence issue presented by Halse was never litigated. The purposes of our Rules of Civil Procedure are to speed up court processes and facilitate the deciding of cases on their merits. The new rules encourage disposition of cases quickly and on the merits, and it is a serious matter when a party moves to have a case disposed of on grounds other than the merits. Rambur v. Diehl Lumber Co. (1964), 144 Mont. 84, 394 P.2d 6A J. Moore, J. Lucas & G. Grotheer, Jr. Moore's Federal Practice 9 60.23 [3] (2d ed. 1983) states: . . . [I] f new evidence is discovered, or by due diligence could have been, in time for a new trial under Rule 59(b), then a motion for a new trial must be made within that time; and that party cannot delay beyond that time and seek relief under Rule 60 (b) (2) . . . . If so, the motion must be made within a reasonable time, and, in any event, not later than one year after the "judgment, order or proceeding was entered or taken." 6A J. Moore, J. Lucas & G. Grotheer, Jr. Moore's Federal practice 9 60.23 [4] (2d ed. 1983) states: [F] or relief to be granted under Rule 60 (b) (2) , the failure to produce the evidence at the trial must not have been caused by the moving party's lack of due diligence. The failure to produce the evidence at the trial must not have been caused by the moving party's lack of due diligence. See Kansas City Area Transportation v. State of ~issouri (8th Cir. 1981), 640 F.2d 173. For years, ~alse's counsel sought extensions to obtain an expert who would testify in her behalf. would be unjust for this Court deny Halse her day in court. The history of Rule 59(b) has aided us in making this decision. Original Rule 59(b) made an exception for a motion for new trial on the ground of newly discovered evidence by providing that such a motion could be made within the time allowed for appeal, which, at that time, was three months as a general proposition. The grounds for substantial relief from a final judgment under original Rule 60(b) did not originally include newly discovered evidence . . .; The 1946 revision of the Rules did the following things. It eliminated the exception in Rule 59(b) relative to a motion for a new trial on the ground of newly discovered evidence, so that a motion under Rule 59 on this ground, as on any other ground, must be served not later than 10 days after the entry of judgment. (~mphasis added.) . . . If new evidence is discovered, or by due diligence could have been, in time to move for a new trial under Rule 59 then a party is subject to the 10 day limit of Rule 59; and such a timely motion destroys the finality of the judgment for purposes of appeal. Otherwise a party may move under Rule 60(b) within a reasonable time, but not more than one year after the judgment was entered. Such a motion under 60(b) does not affect the finality of the judgment or suspend its operation. 6A J. Moore, J. Lucas & G. Grotheer, Jr. Moore's Federal Practice 9 59.04 (2d ed. 1983). The evidence must be admissible and credible, must be of such a material and controlling nature as will probably change the outcome. 6A J. Moore, J. Lucas & G. Grotheer, Jr. Moore's Federal practice 9 60.23[4]. Twenty-four days after respondent's summary judgment was granted, Dr. Hurnberger testified by signed affidavit that when he gave his deposition testimony on December 22, 1986, he was unable to render an opinion concerning Kristie's case because he had not had the opportunity to review Dr. Murphy's notes and records. This fact shows the requisite diligence on Halse's part. The belated evidence submitted by Dr. Humberger would have precluded the granting of the summary judgment. For this reason, the summary judgment must be reversed. The second issue before this Court is whether this expert opinion, if it is "newly discovered evidence," would change the outcome where it simply shows that the defendant was negligent but fails to show that such negligence was the proximate cause of any injury. In our court system, it is the jury, not witnesses, who decide such questions of negligence. We reverse the judgment and remand this action to the District Court for further proceed Justlce We Concur: \ , , ' Chief ~ustice Mr. Justice John Conway Harrison, dissenting. I dissent and would find that the af f idavit testimony of Dr. Humberger does not constitute "newly discovered evidence" which entitles appellant to relief from judgment. In December, 1980, Halse was involved in an automobile accident in which she suffered, among several other injuries, a tri-segmental fracture of her right forearm. Halse was treated by Dr. Murphy, an Orthopedic surgeon practicing in Butte, Montana. Dr. Murphy treated the fracture by placing a metal rod through the ulna. After numerous medical visits to Dr. Murphy and after examination by another Orthopedic surgeon in Great Falls, Montana, Dr. Murphy removed the rod from Halse's arm on March 31, 1981. Halse was examined on October 29, 1982, by Dr. Theodore Greenlee of University Hospital, Seattle, Washington. From x-rays, Dr. Greenlee discovered Halse had a "nonunion of her proximal ulna fracture as well as possibly a middle one-third distal one-third ulnar fracture. I' On November 9 , 1982, Dr. Greenlee repaired the two nonunion sites with plates and screws. After returning to Montana, Halse was under the care of Dr. Frank Humberger, an Orthopedic surgeon practicing in Bozeman, Montana. In October, 1983, Halse bumped her right arm while traveling to Denver, Colorado and suffered a transverse crack across the ulna. However, this crack apparently is unrelated to the original fractures suffered in the 1980 automobile accident. Halse remained under the care of Dr. Humberger for the treatment of the fracture. Halse instituted a medical malpractice action against Dr. Murphy on May 3, 1984. The Complaint alleged Dr. Murphy removed the metal rod before her arm healed, and that Dr. Murphy negligently failed to x-ray or otherwise determine whether the fracture had healed before he removed the metal. rod. Additionally, Halse alleged Dr. Murphy negligently failed to externally immobilize the arm so as to permit it to heal, but merely gave Halse a splint to wear as needed. After interrogatories were propounded and depositions noticed and taken by both parties, the preliminary pretrial order set an August 7, 1987 deadline for notices of depositions. On August 25, 1987, Murphy moved for summary judgment on the grounds that Halse's claim "fails for fundamental want of proof" because none of Halse's expert witnesses testified applicable standards of medical care were violated. On September 3, Halse's original counsel moved to withdraw from the case and for a continuance. The District Court vacated the September 4 hearing date scheduled for Murphy's summary judgment motion. On January 22, 1988, counsel for Murphy rescheduled the hearing for February 5, 1988, and sent notice of the hearing to Halse's original counsel. On February 4, attorney Michael Wheat moved the court for a continuance and submitted his affidavit in which he stated he had not yet decided whether to represent Halse. He stated he was attempting to find a doctor who would review the medical records and render an opinion about Murphy's care and treatment of Halse. During the brief hearing on February 5, 1988, Mr. Wheat again informed the Judge he was not counsel of record but need-ed time to find an expert witness. THE COURT: Mr. Wheat said they have an expert that might qualify [to testify against Dr. Murphy]. MR. WHEAT: This is an expert independent of any of the experts that Mr. Buxbaum has had notice of up to this date. THE COURT: OK. Well, something I don't see is an order dismissing . . . [original counsel] . You haven 't taken the position of being counsel of record. MR. WHEAT: No. THE COURT: I think in all fairness to the Plaintiff here, we are going to allow Mr. Wheat time to confirm that doctor. When can you do that, Mr. Wheat? MR. WHEAT: I think it can be done within thirty (30) days . . . I think we can easily be prepared to know within thirty days. THE COURT: I will give you a continuance here but I would like to hear in thirty (30) days. MR. WHEAT: You will, your honor. THE COURT: Nevertheless if you don't come up with some evidence from an expert that there is a case of malpractice here, you are going to be out of Court. MR. WHEAT: I understand that. THE COURT: There is no chance going to trial if you can't come up with an expert. MR. WHEAT: Absolutely, your honor, and I have explained that to Mrs. Halse. She understands. THE COURT: OK, you have thirty (30) days. When no evidence was forthcoming, Judge Sullivan granted Murphy's motion for summary judgment on March 10, 1988. F i n a l judgment was e n t e r e d i n favor o f Murphy on March 1 4 , 1988. On A p r i l 22, 1988, Halse f i l e d a Motion f o r R e l i e f From Judgment, pursuant t o Rule 6 0 ( b ) , M.R.Civ.P., "on t h e s t r e n g t h o f h e r A f f i d a v i t . . . and t h e newly discovered evidence set o u t i n t h e A f f i d a v i t o f Frank W. Humberger, M.D. . . . " On May 2, 1988, t h e D i s t r i c t Court ordered t h a t Murphy would have u n t i l May 31, 1988, t o respond t o t h e motion. Murphy responded t o t h e motion by b r i e f on May 19, 1988 and t h e District Court ordered a J u l y 1, 1988 h e a r i n g on t h e motion. On June 27, 1988, Murphy requested t h e J u l y 1 h e a r i n g be vacated. Under Rule 6 0 ( c ) , Murphy argued, t h e motion was deemed denied s i n c e 45 days had e l a p s e d from t h e d a t e t h e Rule 6 0 ( b ) ( 2 ) motion was made, which p u t t h e motion o u t o f t h e D i s t r i c t C o u r t ' s j u r i s d i c t i o n . On June 29, 1988, t h e D i s t r i c t Court vacated t h e h e a r i n g on t h e ground t h e motion was deemed denied. Halse appealed t h e d e n i a l o f h e r Rule 6 0 ( b ) ( 2 ) motion t o t h i s Court. Rule 6 0 ( b ) , M.R.Civ.P., provides i n p a r t : On motion and upon such terms a s a r e j u s t , t h e c o u r t may r e l i e v e a p a r t y o r h i s l e g a l r e p r e s e n t a t i v e from a f i n a l judgment, o r d e r , o r proceeding f o r t h e following reasons: ( 2) newly discovered evidence which by due d i l i g e n c e could n o t have been discovered i n t i m e t o move f o r a new t r i a l under Rule 59(b) . . . I n Kartes v. Kartes (1977), 175 Mont. 210, 2 1 4 , 573 P.2d 191, 193, t h i s Court s t a t e d t h e b a s i c c r i t e r i a f o r determining whether to grant relief from judgment under Rules 59 and 60, M.R.Civ.P.: 1. The substantial rights of the party moving for new trial must be materially affected. 2. The "newly discovered" evidence sought to be introduced must be material to the issue involved in the trial. 3. The "newly discovered" evidence must be such as could not have been discovered and produced - at trial with -- the exercise o f reasonable - (or "due", per Rule 60, M : R . C ~ V , P . ) diligence, or could -- not have been discovered by reasonable --- diligence in time to move f o r a new trial under Rule 59, M.R.Civ.P. (Emphasis added. ) Additionally, in Kerrigan v. Kerrigan (1943), 115 Mont. 136, 144, 139 P.2d 533, 535, this Court correctly noted that the burden is on the moving party to show: (1) That the evidence must have come to the knowledge of the applicant since the trial; (2) that it was not through want of diligence that it was not discovered earlier; (3) that it is so material that it would probably produce a different result upon another trial; (4) that it is not cumulative merely--that is, does not speak as to facts in relation to which there was evidence at the trial The essence of Halse's "newly discovered" evidence is the affidavit testimony of Dr. Humberger, in which he gives an opinion based upon circumstances which were available for his consideration prior to the grant of summary judgment. Humberger's affidavit states in part: 3. On December 22, 1986, I gave deposition testimony concerning my care and treatment of Kristie. During that deposition, I was unable to render an opinion concerning the care and treatment of Kristie by Dr. James P. Murphy because I had not had the opportunity to review - - - Dr. ~ u r ~ h ~ ' s m e d i c a 1 notes andrecords . - 4. Since the date of my deposition, I have reviewed all of Dr. ~ u r p h ~ ' s medical notes and records related to his care of Kristie, including an x-ray taken on March 24, 1981, and I have also reviewed --- the Affidavit of Kristie. wherein she - states -- that Dr. Murphy faiied to palpate her arm following removal of the rod on -- ---- March 31, 1981. Based on my review of the ~ a E h 2 4 , 1981, x-ray of Kristiels arm, Dr. Murphy's medical notes and records, and Kristiel s Affidavit testimony that Dr. Murphy did not clinically assess the stability of her arm by palpating her arm following removal of the rod. and assumincr this - fact to be true, then it is my opinion - - - - that Dr. Murphy was negligent in his care and treatment of Kristie, and failed to exercise that degree of care and skillfulness ordinarily used in like cases by other doctors practicing in Dr. Murphy's specialty. (Emphasis added. ) Halse claims that, despite her "previous diligent attempts to obtain an opinion," Dr. Humberger would not render an opinion prior to entry of summary judgment. However, Humberger's own affidavit states that he was unable to render an opinion because he did not have Murphy's notes and records. I can only assume that Humberger would have rendered his opinion had he been given the opportunity to review those records and consider the testimony of Halse. There is no evidence before this Court showing that Humberger was asked to give his opinion based upon a hypothetical set of circumstances prior to entry of judgment. If, based upon those hypothetical circumstances, Humberger had been of the opinion Murphy was not negligent, but, subsequent to the entry of summary judgment, changed that opinion, Halse could more plausibly argue this constitutes "newly discovered" evidence. However, notwithstanding Halse ' s label of "conspiracy of silence, " Humberger ' s opinion, whatever it may have been, could have been discovered prior to entry of summary judgment. Halse argues the District Court's deemed denial of her Rule 60 (b) (2) motion constitutes an abuse of discretion. I disagree. It is my conclusion that Hwnberger's affidavit testimony does not constitute newly discovered evidence under Rule 60(b) ( 2 ) , M.R.Civ.P., and I would find no abuse of discretion. I would affirm the decision of the District Court. Mr. Chief Justice Gulbrandson join in Conway Harrison. J. the A. Turnag/ land Mr. Justice L. C. foregoing i sent of Mr. Justice John | June 8, 1989 |
dfb12a37-0612-4a72-a7a0-0a918160bbf2 | AVCO FINANCIAL SERVICES v FOREMAN- | N/A | 89-015 | Montana | Montana Supreme Court | No. 89-15 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 AVCO FINANCIAL SERVICES, formerly d/b/a ITT FINANCIAL SERVICES, Plaintiff and Respondent, -vs- DEBORAH H. FOREMAN-DONOVAN, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth ~udicial ~istrict, In and for the County of Yellowstone, The Honorable ~illiam J. Speare, Judge presiding. COUNSEL OF RECORD: For Appellant: Deborah H. Foreman-Donovan, pro se, Denver, Colorado For Respondent: Fred E. Work, Jr.; Work Law Firm, Billings, Montana Submitted on ~riefs: ~ p r i l 6, 1989 Decided: May 2, 1989 Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Appellant Deborah H. Foreman-Donovan appeals a summary judgment granted to Avco Financial Services (Avco) in the District Court for the Thirteenth Judicial District, Yellowstone County. We affirm. The issue is whether the District Court erred in granting summary judgment for Avco. In November 1984, appellant and her husband executed a promissory note to Avco for $2,977.94 plus finance charges of $1,270.06. The note called for thirty-six monthly payments of $118 each and was secured by a purchase money security interest in certain furniture along with a security interest in a Ford pickup truck used in the husbandfs business. In April 1986, appellant was late in two payments on the note. She went to Avcofs office and asked to add these payments to the end of the contract as she claims she had been offered in the past. Avcofs representative refused this request. He stated that either the three payments then due must be made within twenty-four hours or the security interest would be foreclosed. Appellant and her husband chose a third option and executed a renewal note in the amount of $2,411.02 plus finance charges of $1,296.98. This note called for thirty-six monthly payments of $103 each. Appellant claims that in late 1986 Avco again offered to and in fact did defer a payment to the end of her contract. At that time she stopped making payments on the second note. Avco filed suit to foreclose the security against appellant and her husband in December 1986. Default judgment was taken against the husband in February 1987 and his appeal to this Court was dismissed about one year later for failure to prosecute. Appellant, a law school graduate appearing pro se, answered the complaint. She alleged that the note was voidable at her option, filing counterclaims alleging fraud and economic duress. Avco moved for summary judgment and the motion was granted based on the briefs and affidavits filed. Did the District Court err in granting summary judgment for Avco? Summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c), M.R.Civ.P. Appellant argues that her counterclaims raise.materia1 issues of fact concerning Avco's denial of her request to add the delinquent payments to the end of the first contract. She contends that the statement that Avco would not add delinquent payments to the end of the contract was untrue in light of Avco's offers in prior and later months to do just that. She also contends that her request was denied so as to extract greater interest payments from her by getting her to sign the renewal note. She asserts that these circumstances amount to both fraud and economic duress, so that summary judgment is not proper. Fraud is generally a question of fact. Section 28-2-404, MCA. However, summary judgment on the issue of fraud is not precluded where the opposing party has not made out an issue of material fact for fraud. Sprunk v. First Bank Western M . Missoula (Mont. 1987), 741 P.2d 766, 44 St.Rep. 1429. The party alleging fraud must make out a prima facie case on nine elements: 1. a representation; 2. its falsity; 3. its materiality; 4. the speaker's knowledge of its falsity or ignorance of its truth; 5. the speaker's intent that it should be acted upon by the person and in the manner reasonably contemplated; 6. the hearer's ignorance of its falsity; 7. the hearer's reliance upon its truth; 8. the right of the hearer to rely upon it; 9. the hearer's consequent and proximate injury or damage. In Gallatin Trust and Savings Bank v. Henke (1969), 154 Mont. 170, 461 P.2d 448, this Court pointed out that the mere making of a promise which the promisor fails to keep is not actionable fraud. Therefore, even taking the allegations in the light most favorable to appellant, as we must in considering a summary judgment, the withdrawal of the "promisew to add delinquent payments to the end of the first contract does not amount to fraud. Further, appellant has not presented a prima facie case on element number 8 above, 'that she had the right to rely upon Avco's representation. A defrauded party has a right to rely on another' s representations when the parties are not on equal footing. Sprunk, 741 P.2d at 770. The evidence here does not disclose two parties on unequal footing. Appellant was a law school graduate and was working as a law clerk for a district judge at the time this action arose. She was in as good a position as was the Avco representa- tive to understand the parties' contractual rights and obligations. Finally, appellant has not presented a prima facie case as to element number 9, consequent and proximate injury or damage. Avco cannot by any stretch be held responsible for appellant's predica- ment of being unable to make her payments on the original contract. Also, under the circumstances as alleged by appellant, Avco cannot be said to have induced her to take out a renewal note with it rather than get money from some other source. Appellant's second claim of material issues of fact arises from her counterclaim alleging economic duress. She cites cases from Utah and Minnesota which she believes support her position. However, these cases are not controlling. There have been no allegations that Avco threatened to do anything other than that which it was contractually entitled to do in foreclosing the original contract for default. To threaten only those actions which one has a legal right to do under an existing contract does not constitute duress. Pederson v. Thoeny (1930), 88 Mont. 569, 575, 295 P. 250, 252. Further, Avco is not responsible for appellant's inability to make payments on the original note or to obtain money elsewhere. "It is not duress where a party is constrained to enter into a transaction . . . by force of cir- cumstances for which the other party is not responsible." 25 Am.Jur.2d1 Duress and Undue Influence, section 3, p. 357. As the District Court stated, it was undisputed that from December of 1986 to the time of the June 1988 summary judgment, no payments were made on the second note. This clearly put appellant in breach of the contract, entitling Avco to "declare the entire unpaid balance of the note . . . immediately due and payable." We conclude that the District Court did not err in ruling that appellant failed to raise an issue of material fact precluding summary judgment for Avco. We affirm the judgment of the District Court. Chief Justice We concur: c -.-. 1 , , , /. , ) ~ ~ A / ' , & ~ . i/& bpi- --, ' / /' ,/ ' : / F - [; ; / , - 7 < , L C / Z / J ' O ( , , I / c & , I Justices | May 2, 1989 |
08fe7248-c3a7-4c1b-b3a4-11656cc68125 | MARRIAGE OF STEPHENSON | N/A | 88-417 | Montana | Montana Supreme Court | NO. 88-417 IN THE SIJPREME COURT OF THE STATE OF MONTAJYA 1989 IN RE THE MARRIAGE OF KATHRYN K . STEPHEI!SON, Petitioner and Respondent, and SAM STPPHENSON, 111, Respondent and Appellant. APPEAL FROF: District Court of the Second Judicial District, In and for the County of Silver BOW, The Konorahle Arnol.6 Olsen, Judge presiding. COIJNSEL OF F.ECORD : For Appellant: Pichael J. McKeon, Anaconda, Montana For Respondent : Mark A Vucurovich; Henningsen, Purcell, TTvcurovich & i- Richardson, Rutte, Fontana C i ' Submitted. on Briefs: March 23, 1989 Decided: April 25, 1989 - + ----- -- Clerk Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Petitioner, Kathryn K. Stephenson, filed for divorce from her husband of twenty-one years in 1986. The dissolution was tried on May 12, 1988, in the District Court of the Second Judicial District, County of Silver Bow. Judge Arnold Olsen divided the marital assets and provided maintenance to petitioner. Appellant, Sam Stephenson, 111, appeals the findings of the court. We affirm. Appellant asks us to resolve three issues in dispute: 1. Whether the District Court, in a dissolution of marriage proceeding, erred in not making a specific finding of net worth for the purpose of separating marital assets. 2. Whether the District Court erred in the award of main- tenance to petitioner. 3. Whether the District Court erred in awarding one-half of husband's inheritance to wife. The District Court entered findings of fact and conclusions of law on June 29, 1988, separating the marital estate and providing maintenance for petitioner, Kathryn Stephenson (Kathryn). During the time that the parties were married, respondent Sam Stephenson (Sam) was employed with ~tlantic Richfield Company as an environmental coordinator. Kathryn graduated from high school prior to the marriage but attained no further degrees, nor does she have any job experience. Kathryn was mother and housewife during the marriage. When the parties separated, both children were over eighteen years of age but continue to live with Kathryn. On June 29, 1988, the findings of fact and conclusions of law were filed by the District Court. In dispensing the marital assets to the parties, the court did not make a determination of the net worth of the parties. Instead, Judge Olsen distributed the assets without calculating the net worth. The following is a list of the property divided from the marital estate: (1) extensive gun collection of Sam's acquired during marriage to be ap- praised and Sam would get the gun collection; (2) husband received all household fur- nishings located in the cabin at Elk Park, all mechanical tools, milling machine, lathe and accessories; (3) husband received 1986 Ford pickup, 1972 Kawasaki, 1971 Suzuki motor- cycle, 1969 Bell trailer, and 1976 Layton trailer; (4) wife received household furnishings in the Butte family residence and all household yard tools and equip- ment ; (5) stocks valued in excess of $54,000 and a money market account with Piper, Jaf f ray and Hopwood was equally divided between the parties; (6) husband awarded the cabin and thir- ty-eight acres located at Elk Park, Jefferson County; (7) wife awarded family residence in Butte ; (8) all debts of the marriage the re- sponsibility of the husband; (9) Kathryn was awarded the sum of $750 per month for at least five years, until she could rehabilitate her- self; (10) Sam was also required to pay the house payments of $244 a month. Sam contends that the stocks valued at $54,000 and the cabin at Elk Park were inherited by him in 1981 and are his sole and exclu- sive property. These, he asserts, should not be included in the marital estate. The first issue is whether the District Court erred in not determining the net worth of the marital estate. Appellant Sam contends that if the District Court does not appraise the value of all the assets from the marriage, the Supreme Court cannot review the division of property to determine whether it was equitable or arbitrary. The standard of review by which we judge the District Court's determination, as adopted by this Court in In re the Marriage of Stewart (Mont. 1988), 757 P.2d 765, 45 St.Rep. 850 is: [that the] District Court has far-reaching discretion in dividing the marital property. Our standard of review is that the District Court's judgment, when based upon substantial credible evidence, will not be altered unless a clear abuse of discretion is shown. Stewart, 727 P.2d at 767, 45 St.Rep. at 852; Marriage of Watson (Mont. 1987), 739 P.2d 951, 954, 44 St.Rep. 1167, 1170. Section 40-4-202 (I), MCA, provides that in a proceeding for division of property, the court shall "equitably apportion between the parties the property and assets belonging to either or both, however and whenever acquired and whether the title thereto is in the name of the husband or wife or both.It The statute does not specifically require the District Court to determine the net worth of the assets of the parties. We have specifically held in previous cases that the District Court must determine the net worth. As a guideline, it is helpful to this Court in reviewing the findings of fact and conclusions of law of the District Court that a determination of net worth is made, but in this case it is not imperative. The test is whether the findings as a whole are sufficient to determine the net worth and to decide whether the distribution was equitable. Nunally v. Nunally (Mont. 1981), 625 P.2d 1159, 1161, 38 St.Rep. 529, 531. We hold that the District Court in this case made an equitable distribution of the assets of the Stephensons and did not abuse its discretion in not determining a net worth of the assets. In reviewing the assets of the parties and the distribution by the court, each party received an equitable portion of the marital estate. "Here, the emphasis placed on the parties1 needs and their relative financial situations indicates a careful exercise of the court's discretion.I1 Bailey v. Bailey (1979), 184 Mont. 418, 420, 603 P.2d 259, 260. The second issue is whether the District Court erred in awarding Kathryn maintenance of $750 per month. Sam contends that Kathryn has done nothing to "rehabilitate" herself in the two years since the dissolution of the marriage. However, Kathryn has no training for employment and spent the twenty-one years of the marriage as a mother and a homemaker. The District Court established that she was to receive $750 per month for no less than five years. This, we believe, is a reasonable time for Kathryn to rehabilitate herself. Although Sam contends she is physically capable, good health alone is not enough for providing for oneself. . Proper training for some employment is necessary in the rehabilitation process. Section 40-4-203, MCA, directs under what circumstances maintenance can be awarded. The court can order maintenance for either spouse only if it finds that the spouse seeking maintenance: (1) (a) lacks sufficient property to provide for his reasonable needs; and (b) is unable to support himself through appropriate employment . . . (2) The maintenance order shall be in such amounts and for such periods of time as the court deems just, without regard to marital misconduct, and after considering all relevant facts including: (a) the financial resources of the party seeking maintenance, including marital proper- ty apportioned to him, and his ability to meet his needs independently . . . (b) the time necessary to acquire sufficient education or training to enable the party seeking maintenance to find appropriate em- ployment ; (c) the standard of living established during the marriage; (d) the duration of the marriage; (e) the age and the physical and emotional condition of the spouse seeking maintenance; and (f) the ability of the spouse from whom maintenance is sought to meet his needs while meeting those of the spouse seeking mainten- ance. Maintenance is necessary in the case at bar, and we hold that the District Court made a just determination. The court did not abuse its discretion. The third issue is whether the District court erred in award- ing one-half of Sam's inheritance to Kathryn. In 1981, Sam inherited $50,000 worth of stocks and bonds, and real estate located at Elk Park in Jefferson County, valued at approximately $20,000. Sam contends that Kathryn has not partici- pated in the enhancement of the stocks and bonds and has not contributed to the maintenance of the Elk Park property. The District Court, though, included both of these inheritances in the assets of the marital estate. The court divided equally the $54,000 value of the stocks and bonds. The court awarded the husband the Elk Park property. It is Sam's contention that the property is exclusively his and should not be considered in the division of property. In dividing property in a marriage dissolution the District Court has far-reaching discretion and its judgment will not be altered without a showing of clear abuse of discretion. The test of abuse of discretion is whether the trial court acted arbitrarily without employ- ment of conscientious judgment or exceeded the bounds of reason resulting in a substantial injustice. Becker v. Becker (1985), 218 Mont. 229, 232, 707 P.2d 526, 528; In re the Marriage of Rolf (1985), 216 Mont. 39, 45, 699 P.2d 79, 83, citing In re the Marriage of Vert (1984), 210 Mont. 24, 680 P.2d 587. Section 40-4-202(l)(a), MCA, provides that in dividing property acquired by gift, bequest, devise or descent, the court shall consider the contributions of the other spouse, including nonmonetary contribution of the homemaker contributions facilitat- ing the maintenance of the property. The determining factor is whether an equitable distribution was made and within the bounds of reason. In this case, we hold that the District Court did not abuse its discretion and acted soundly in dividing the marital assets. Affirmed. , - . - Chief Justice We concur: | April 25, 1989 |
e4e08fe7-542e-4644-a30a-d00c9640ce7f | NORTHERN BORDER PIPELINE CO v STA | N/A | 88-619 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA NORTHERN BORDER PIPELINE COMPANY, a partnership, Plaintiff and Respondent, -vs- THE STATE OF MONTANA; THE DEPARTMENT OF REVENUE OF THE STATE OF M0NTANA;KEN NORDTVEDT, Director of the Department of Revenue of the State of Montana; VALLEY COUNTY, MONTANA, a political division of the State of Montana having corporate power; ARDEN NICHOLS, Valley County Commissioner, ARTHUR ARNOLD, Valley County Commissioner,ELEANOR PRATT, Valley County Commissioner,MARLA J. DeBRAY, Valley County Treasurer; ELLEN BYRNES, Valley County Assessor,ROOSEVELT COUNTY, MONTANA, a politicaL division of the State of Montana having corporate power; JAMES R HALVERSON, Roosevelt County Commissioner; LaVERN SCHLEDEWITZ, Roosevelt County Commissioner; ALFRED KASCHUBE, Roosevelt County Commissioner; and VIRGINIA W PLOUFFE, Roosevelt County Treasurer, LEO F KASCHUBE, Roosevelt County Assessor, Defendants and Appellants. APPEAL FROM: The District Court of the Seventeenth Judicial District, In and for the County of Valley, The Honorable Leonard Langen, Judge presiding. COUNSEL OF RECORD: For Appellants: Marc Racicot, Attorney General; Helena, Montana Clay R. Smith, Assistant Attorney General; Helena, MT David W. Woodgerd, Dept of Revenue; Helena, Montana David L Nielsen, Valley County Attorney; Glasgow, MT James A McCann, Roosevelt County Attorney; Wolf Point, MT For Respondent : Michael E Webster and Ronald R Lodders, Crowley, Haughey, Hanson, Toole & Dietrich; Billings, Montana I- CT. Submitted on Briefs: March 21, 1989 03 3 0 2- : ' c > Decided: April 20, 1989 ; I I-: V Filed: 6~ I I m 6:- 1' t =i r 3 - - " - k, 0 4 , , . L C I-; .A P : i, ,.,,= L "- ( J < . I <-3 . . .".- r . Justice John C. Sheehy delivered the Opinion of the Court. The defendants above named appeal from an order and 4udgment of the District Court, Seventeenth Judicial District, Valley Countv, denyinq appellants attorneys' fees in a case where the appellants were successfuL in securing the dissolution of an injunctive order. The District. Court reasoned that It would not award attorneys' fees as an element of damages here because Roosevelt County, Valley County and the State of Montana each pay their respective attorneys a salarv for representation in matters affecting those entities, and because the affidavits filed in the case did not show that the attorneys' services burdened the taxpayers beyond their salaries. We uphold and affirm the District Court. Respondent Northern Border Pipeline Company initiated an action on November 23, 1987, seeking injunctive relief against the imposition of 1987 state property taxes on its pipeline Located within the exterior boundaries of the Fort Peck Indian Reservation. Northern Border proceeded under 5 15-1-405, MCA, which permits a district court to restrain the collection of any tax or part thereof "where the tax or the part thereof sought to be enjoined is illegal or not authorized by law." As a basis for the injunction, Northern Border set out in its complaint six claims for relief- (1) that the assessing, levying and collecting of taxes hv Valley and Roosevelt Counties on the property interests o+ Northern Border within the exterior boundaries of the Fort Peck Indian Reservation were inconsistent with federal policies and were preempted by federal law; (2) that such assessina, levyinq and toll-ectinq of taxes interfered to an impermissible extent with the right of the tribes thereon to govern themselves; (3) that no nexus existed between the counties and the property interests of Northern Border located on trust land within the boundaries of the Fort Peck Indian Reservation; (4) that the proposed taxes violated Art. I, Section 8, Clause 3, of the United States Constitution; (5) that the proposed collection of taxes violated Section 4 of the Enabling Act for the State of Montana and Article I of the Montana Constitution; and, (6) that the imposition of taxes by the two counties was confiscatory as to Northern Border and violated Northern Border's rights to equal protection and due process of law under the United States Constitution. The appellants herein, the defendants below, include the State of Montana, the Montana Department of Revenue and its director, Roosevelt County, Valley County and various officials of those counties. While the tax dispute was in the District Court, the parties filed cross-motions for summary judgment, and on June 29, 1988, the motion of the appellants was granted and that of Northern Border was denied. In relevant part, the June 29 order dissolved the previously issued preliminary injunctjon and directed entry of judgment in the appellants' favor. On July 11, 1988, the appellants filed a motion for attorneys' fees and expenses, requesting $7,027.76 as damages. Of that amount, $5,695.26 was attributed to attornevs' fees, later increased bv $192.00; and $1,320.00 9 7 a s attributed to transportation expenses in connection with two hearings before the District Court in Glasgow, Montana. In the same order in which the District Court denied the appellants' attorneys' fees, it granted the award For transportation expenses. Northern Border has not cross-appealed as to the transportati on expenses. This appeal relates solely to the item of attorneys' fees claimed by the appellants. Section 27-19-306, MCA, provides that when a district court grants an injunction or restraining order, the court shall require a written undertaking to be given by the applicant, in such sum as the court considers to be proper, "for the payment of such - - costs - and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained." (Emphasis added.) In Sheridan County Electric Co-op., Inc. v. Ferguson (1951), 124 Mont. 543, 551, ? 2 7 P.2d 597, 601, this Court held that: Where . . . the sole purpose of the action was to obtain injunctive relief, then after dissolution of the injunction and upon final adjudication, counsel fees are recoverable for defense of the entire suit. In that case, Ferguson, a minority stockholder of the cooperative, sought to restrain and en-join the corporation from moving its principal place of business from Westhy, Montana, to Medicine Lake, Montana and a restraining order was granted. In that case, also, Ferguson had posted an undertaking. The actFon by the cooperative was upon the injunction bond after the injunctive order was dissolved, and this Court held in that case: The measure of damages in an action on the injunction bond is the a.mount which will compensate for all the detriment proximately caused b l 7 the injunction during the time it is operative, or which in the ordinary course of things, wou1.d be likely to result therefrom. 124 Mont. at 549, 227 P.2d at 601. In Marta v. Smith (1981), 622 P.2d 1011, this Co,urt stretched the right to recover attorneys' fees by a litigant who successfully procures a dissolution of an injunctive order to cases where an undertaking was not filed. In that case, this Court said: . . . Despite the fact that section 27-19-306 provides for recovery by an action on an injunction bond, we apply the same reasonable standard to those actions for attorney fees in which a bond is not involved. In making attorney fees an element of damaqes under section 27-19-306, the legislature surely did not intend to make the recovery depend on the judge's discretion in demanding an injunction bond. Thus we find that the district judge should have awarded reasonable fees as an element of damages, pursuant to section 27-19-306, MCA, and not as costs of suit. Thus, Marta clearly established that recovery of attorneys' fees was not dependent upon the furnishing of a bond or undertaking but just as clearly held that reasonable attorneys' fees were an element of damages and not costs of suit. In this case, appellants are aslcing this Court to stretch - - Marta even further, bv allowing the recovery oF attorneys' fees where no monetary damages are established. The motion of the Attorney General for attorneys' fees was supported by affidavits from a Deputy Attorney Genera! who claimed 54.5 hours of services at $48 per hour; an attorney for the Department of Revenue, who claimed 32 hours of services at $ 3 0 per hour (based on the budget given to the Department of Revenue); another attorney for the Department of Revenue who claimed 1 8 hours of services at $ 3 0 per hour; and the County Attorney of Roosevelt County, who claimed 1 8 hours of services at $21.07 per hour. Each of the affidavits was made by persons who were salaried employees of the state or of the county. Section 27-1.-202, MCA, defines the right to compensatory damaqes to persons who suffered. detriment from the unlawful. act or omission of another. Although Northern Border did not act unlawfully here in pursuing its perceived rights under S 15-1-405, MCA, under Marta, supra, damages in cases such as this include attorneys' fees. Yet, attorneys' fees here were not incurred in the sense that the State and two counties involved would have had the salary expense of the respective attorneys with or without Northern Border's litigation. As the District Court reasoned, no additional burden has been placed upon the taxpayers of any governmental entity bv virtue of Northern Border's actions, although the appellants argue that the time spent by the respective attorneys on this litigation was time taken from other matters which those attorneys could have handled. We hold that such a claim for damages is too remote to be considered a proper basis for the assessment of damages. In this case, no bond or undertaking was required of Northern Border when it applied for its injunctive relief. Part I, Title 15, MCA, provides several alternative remedies that may be taken by a taxpayer that wishes to contest the assessment, levying or collection of a tax. One of those alternatives is the injunctive method provided in 5 15-1-405, MCA. No mention in that statute is made that a taxpayer seeking injunctive relief under B 15-1-405, MCA, must comply with the undertaking provisions of 5 27-19-306, MCA. It is not necessary to decide that point here, however. Our decision here does not affect our holding in City of Helena v. Brule (1895), 15 Mont. 429, 39 P.2d 456 where we held that public entities may recover attorneys' fees paid to retain outside counsel as damages for being wrongfull-v enjoined. Our holding in this case is compatible with the generally accepted view of compensatory damages that the reason for the award of damages is to make the damaged person whole. W e a f f i r m the holdinq of the District Court. W e Concur: A J u s t i c e s Mr. Justice R. C. McDonough dissents: The rationale of the majority lacks consistency and ignores reality. It carves out an unlisted exception to the meaning of statutory damages as applied to attorney fees and contradicts our previous holding in Sheridan County Electric Co-op, Inc. v. Ferguson (1951), 124 Mont. 543, 221 P.2d 597. Temporary restraining orders and injunctions are extraordinary remedies and if the party obtaining such orders later loses such party should pay the winner's damages as provided by statute. That is the statutory scheme. There is damage to the State of Montana and the public entities. They here have adequately and with precision proved their reasonable legal costs (damages) as per hour salaried costs. They did not include secondary costs such as pro rata costs of library, equipment, secretarial costs, rent, utilj-ties, etc., which would he charged by private counsel. Flours billed are one way of 1-ife between attorneys and clients. To say damages based on proved hours are too remote is to close one's eyes to the way its being done. The taxpayer, or any defendant, should not ultimately bear the cost of damages incurred in a winninq defense to an extraordinary remedy, just because in-house counsel are used. Salaried attornevs do not come free. Any legislator, county commissioner, or corporate executive wou1.d affirm this statement. A number of these cases requesting declaratory injunctive relief are now and have recently been before this Court. The message of the majority is that a public entity, a private person or corporation should not use in-house counsel in a defense to an injunction, because only the charges of outside counsel will be reimbursed as statutory leqal damage if one prevails. This is so even though outside counsel's charges in all likelihood will be computed on an hourly basis and in some instances their employment would be costly and inefficient. 1 vrould reverse the District Court. Justice / Justice John C. Harrison and Justice Fred J. Weber concur in the foregoing dissent. | April 20, 1989 |
565e3653-1f7d-4907-b950-3da12a284117 | SCHENDEL v BD OF ADJUSTMENT OF TH | N/A | 88-519 | Montana | Montana Supreme Court | N o . 88-519 I N THE SUPREME COURT OF THE STATE O F MONTANA 1989 WEND1 SCHENDEL and DALE W. SCHENDEL, P l a i n t i f f s and A p p e l l a n t s , -vs- BOARD O F ADJUSTMENT O F THE C I T Y O F BOZEMAN, MONTANA, and C I T Y O F BOZEMAN, MONTANA, D e f e n d a n t s and R e s p o n d e n t s . APPEAL FROM: D i s t r i c t C o u r t of t h e E i g h t e e n t h J u d i c i a l D i s t r i c t , I n and for t h e C o u n t y of G a l l a t i n , T h e H o n o r a b l e T h o m a s O l s o n , Judge presiding. COUNSEL O F RECORD: For A p p e l l a n t : R i c h a r d J. C a r s t e n s e n , B i l l i n g s , M o n t a n a For R e s p o n d e n t : L i n e b e r g e r & H a r r i s ; Peter S. L i n e b e r g e r , B o z e m a n , M o n t a n a S u b m i t t e d on B r i e f s : M a r c h 9, 1 9 8 9 D e c i d e d : M a y 4, 1 9 8 9 Mr. Justice John Conway Harrison d.elivered the Opinion of the Court. This appeal arises from the July 18, 1988 decision of the District Court of the Eighteenth Judicial District, Gallatin County, Montana, and that court's September 1.9, 1988 order refusing to reconsider and amend its order upholding the decision of the Roard of Adjustments of the City of Bozeman (Board) . We affirm. This matter appeared in the District Court on a writ of certiorari and was returned to the Board for a full hearing on December 1, 1986. The case was ultimatelv submitted to t-he District Court upon stipulated facts, exhibits and issues, and on July 1 . 8 , 1988, the District Court found in favor of the Roard. Upon the court's denial of appellants' request for "reconsideration" they appeal to this Court. In 1977, appellants Wendi and Dale Schendel [Schendels) purchased 3 . 7 acres in an R-S zone adjacent to the Cit.y of Bozeman. Shortly after the Schendels built their home they began to collect and care for various types of waterfowl.. They initially began raising only a Few birds and by 1986 gradually built up the bird population to 350 or more, especially during the summer months. While acquiri-ng more and more waterfowl the Schendels spent over $35,000 in pens, ponds and fences to accommodate and control. the various birds. The Schendels testified that they have arranged the qround level basement of their house to accommodate many of the ducks and geese during the winter months. In 1985 an unsigned complaint was received by the Board concerning the waterfowl in the Schendels' area. A hearing was held before the Board as a result of the determination a ~ d subsequent order of the Rozeman building official that the Schendels' use of their property violated the Bozeman Municipal Zoning Code. This first hearing before the Board was held May 5, 1986. As a result of the May 5, 1986 hearing, the matter went to the District Court on a petition for writ of certiorari and was then returned to the Board for a full hearing. A transcript was taken at this second Board hearing held on December 1, 1986, which indicates a number of people appeared in support of the Schendels' continuation of their homesite operation. There were also a number of other people who appeared objecting to the noises caused by the numerous ducks and geese heard throughout the major portion of the year. Some of the neighbors testified that they were awakened and kept awake from 2:00 a.m. and 3:00 a.m., particularly in the spring and fall of the year and that they had discussed this with the Schendels. The Schendels testified at the hearing that they did not realize there was much objection to the waterfowl and the resulting noise. The Schendels further testified that some of their operations were in conjunction with the Federal and State government in raising rare waterfowl. As noted, the Schendels originally began their operation with very few ducks and geese but, when the population increased to over several hundred, it became "ducks unlimited" and the noise, combined with the unsanitary conditions of the waterfowl made an intolerable situation for some of the neighbors. After the Board's December 1, 1986 full hearing, it granted a variance which required the Schendels limit the number of birds on their property to only 40 resident birds, and 200 transient hirds during the nesting period. The terms of the variance were made effective for two years or unt.il their property was sold, which ever first occurred. Following the first hearing on May 5, 1986, the Schendels filed a petition for a writ of certiorari in the District Court. The petition requested relief by certiorari under Title 27, Chapter 25, MCA, and under the zoninq regulation, Section 18.66.080, of the Rozeman Municipal Zoning Code which provides: Any person or persons . . . aggrieved by any decision of the Board of Adjustment, or any taxpayer, or any officer, department, board or bureau of the municipality, may present to the court of record a petition, duly verified, setting forth that such decision is illegal in whole or in part specifying the grounds of illegality. Such petition shall be presented to the court within thirty days after the filing of the decision in the office of the Roard. The Schendels allege that the District Court had before it not only their request for writ of certiorari relief, but also an appeal as to whether the Board's decision was legal and that the District Court erred in deciding this case on only the first point. The principal issue before the District Court and before this Court is whether the Board of Adjustment of the City of Rozeman acted outside its jurisdiction in granting a variance to the Schendels which imposed limits on the number of waterfowl the Schendels could raise; and. whether the District Court properly approve the action of the Board. The District Court received the writ of certiorari on stipulated facts which state as follows: 1. Wendi Schendel and Dale W. Schende!., plaintiffs, are the owners of the following described property in Gallatin County, Montana: Lot 7 in Sourdough Ridge No. 2 Subdivision according to the official plat thereof, on file and of record in Book 1 of Plats, Page 30, Office of the Clerk and Recorder in such county. 2. Wendi and Dale Schendel have raised water fowl and endangered birds on those premises since 1978. These activities progressively increased on the premises until about 1986. The Schendels ' property has carried, at times, as many as 350 water fowl; and the Schendels' [sic] plan to indefinitely continue to have as many as 300 water fowl on the premises during the summer months. 3. Pursuant to a notice by the defendant, Board of Adjustment of the City of Bozeman, a copy of which is attached as Exhibit "A", plaintiffs appeared before such board on December 1, 1986. 4. At the time of the hearing, the board received testimony and affidavits in support of the Schendels' water fowl production, as well as testimony and affidavits in opposition of [sic] the granting of variance to Wendi and Dale Schendel. . . . 5. At the hearing on December 1, 1986, the Board acknowledged that raising water fowl was an agricultural use as per the adopted definition listed under Section 18.04.030, accepted by the Board. 6. Following testimony in the hearing, the board made a decision allowing the Schendels a variance for the raising of water fowl on the following conditions: The water fowl population on your property will not exceed 4 0 permanent birds, and 2 0 0 transient birds; the variance shall be for two years, or until the property is sold, whichever is first. . . 7. Plaintiff's [sic] property is located in zone R-S-2, that zoning allows by Section 18.1.?.020 a permitted use by any party of their property if it is for "agricultural purposes". 18.04.030 defines agricultural use as: Agriculture means the tilling of soil, the raising of crops, horticulture and gardening, dairying or animal husbandry, including uses customary [sic] incidental thereto, but not including any agricultural industry or business such as fruit, plants, fur farms, animal hospitals, commercial feed. lots, or similar use. . . Section 18.1.2.020 also provides: J. The keeping of animals and fowl for family food production and the keeping of horses for private use, together with their dependant young as hereinafter set forth per two and one-half acres: one h.orse, or one cow, or two sheep, or two goats, or ten rabbits, or t.hirty-six fowl (chickens, pheasants, pigeons, etc. ) , or six larger fowl (ducks, geese, turkeys, etc. ) . It is the Schendels' position that the Board recognized t-he use of their property was for agricultural purposes, yet the Board's decision illegally restricted the number of waterfowl they could keep on their property. The Schendels cite a number of out-of-st.ate cases pertaining to agricultural land. use, but in view of the Board's findings and the fact that the District Court uphe1.d the Board in finding the Schendels' property was being used for aqricultural purposes, we hold that the Schendels' argument and case law, while creative, is not persuasive. This Court must consider whether the District Court, on certiorari, properly considered this matter under § 76-2-327, MCA, which provides that a district court may hold a hearing, take further evidence on the matter, "reverse or affirm, whol!~ or partly, or may modify the decision brought up for review. " Section 76-2-304(2), MCA, sets forth the fundamental purposes of zoning: (2) Such [zoning] regulations shall be made with reasonable consfderation, among other things, to the character of the district and its peculiar suitability for particular uses and with a view to conserving the value of buildings and encouraging the most appropriate use of land throughout such municipality. The above quoted sections from the Bozeman Municipal Zoning Code and Montana Code Annotated are of import to this case when considering the suitability of the presence of some 300 waterfowl in a suburban neighborhood adjacent to the City of Bozeman . There are two levels of judicial review to be considered here: a review by the District Court of the Board's decision, and a review by this Court of the District Court's decision. As to the review by the District Court, Montana law provides the procedures for a writ of certiorari. in Title 27, Chapter 25, MCA. Section 27-25-303, MCA, states: The review upon this writ cannot be extended further than to determine whether the inferior tribunal, board, or officer has regularly pursued the authority of such tribunal, board, or officer. Under these provisions, the District Court's function was to determine whether the Board's action was legal and whether the Board acted within its jurisdiction. It is in this light that the case was presented to the District Court by the parties. Under the provisions of S 76-2-327, MCA, and Section 18.66.080, Bozeman Municipal Zoning Code, numerous cases have set forth Montana law with respect to the full standard of review by a district court. See, Lambros v. Board of Adjustment of City of Missoula (1969), 153 Mont. 20, 452 P.2d 398, where this Court held that upon review of the district court's decision on a variance question before a board of adjustment, the only question for this Court was whether an abuse of discretion was committed by the district court. See also, Whistler v. Burlington Northern (Mont. 1987), 741 P.2d 422, 44 St.Rep. 1415. This Court has established the principle that an abuse of discretion must be shown before the district court may set aside a board's decision. See, e.g., Wheeler v. Armstrong (1975), 166 Mont. 363, 533 P.2d 964; Rygg v. Kalispell Board of Adjustment (1976), 169 Mont. 93, 544 P.2d 1328; and Cutone v. Anaconda-Deer Lodge 1 1 9 8 0 ) , 187 Mont. 515, 610 P.?d 691. The Schendels have asked this Court to hold that the Roard abused its discretion in issuing the order limiting the number of waterfowl they can raise on their property. It is not the function of this Court to examine the wisdom of the Foarcl's decision if i t . is esteblished that the Board acted within its jurisdiction and that its action was not illegal. The Distri.ct Court upheld the Board's decision and we find no abuse of discretion by the District Court. As to the jurisdiction of this matter, we note the Schendels sought a review and reversal of the Board's decision regarding their land use. However, the Board acted on the administrative appeal and limited its jurisdiction and decision to purely factual zoning matters. The Schende1.s fail to address or support the argument that the Board lacked jurisdiction to review the decision of the building official. While agricultural uses are permitted. under Section 18.12.020, subparagraph B, Bozeman Municipal Zoning Code, subparagraph J of that same code section provides: Permitted uses in the R-S district are as f o l ! . o w s : J. The keeping of animals and fowl. for family food production . . . : one horse, or one cow, or two sheep, or two goats, or ten rabbits, or thirty-six fowl (chickens, pheasants, pigeons, etc. ) , or six large fowl (ducks, geese, turkeys, etc. 1 . The ruling by the Board appears liberal in view of the "six large fowl (ducks, geese, turkeys, etc. ) " language contained as a limitation factor in the cod-e section. An integral part of the Bozeman Municipal Zoning Code is Chapter 18.66, entitled Board of Adjustment. Section 18.66.030 defines the powers and duties of the Board and A. The Board shall set its operating rules in accordance with MCA 5 76-2-323, 1981, and shall have the foil-owing powers. 1. To hear and decide appeals where it is alleged there is error in any order, requirement, decision, or determination made by an administrative official in the enforcement of this act or of any ordinance adopted pursuant thereto. 2. To authorize upon appeal in specific cases such variance from the terms of this title as will not be contrary to the public interest, where owing to special conditions, a literal enforcement of the provisions will result in unnecessary hardship, and so that the spirit of this title shall. be observed and substantial justice done. The Board has the authority to hear appeals from the decisions of municipal administrative officers, which is the fact situation here. Section 18.66.060 of the Bozeman Municipal Zoning Code sets forth the criteria the Board must use when considering appeals. In approving applications of appeal, the Board designates such lawful conditions as will secure substantial protection for the public health, safety and general welfare. That section also provides that the Board's findings and its decision will not be inconsistent with the intent and purpose of the Code. Similarly, the lawful conditions stated in any approval may include time periods and "[alny other conditions as will make possible the development of the City in an orderly and efficient manner and in conformity with the intent and purpose set forth in this chapter." Section 18.66.060, subparagraph D ( 4 ) , Rozeman Municipal Zoning Code. We find the Board lawfully set forth limitations on the number of waterfowl a-llowed on the Schendels' property and set a time limit for resolution of the matter in accordance with the specific statutory and ordinance mandates. This Court has repeatedly held that statutes and ordinances will not be read so narrowly as to restrict the plain meaning of the whole law. See, Montana Automobile Association v. Greeley (Mont. 1981), 632 P.2d 300, 306, 38 St.Rep. 1174, 1180, where this Court stated: If possible, subsections of a statute should be construed in a manner that will give effect to them all. . . This Court must reconcile conflicting statutory provisions and make them operative in accordance with the legislative intent, insofar as it is possible to do so . . . (Citations omitted.) This Court has established the rule of statutory construction that a statute derives its meaning from the entire body of words taken together. See, Crist v. Segna (Mont. 1981), 622 P.2d 1028, 38 St-Rep. 1.50; Darby Spar, Ltd. v. Department of Revenue (1985\, 211 Mont. 376, ?05 P.?d 1-11; and F J y s e v. District Court (1981), 195 Mont. 435, 636 P. 2d 865. The Schendels ' operation of a large noncommercial, waterfowl production facility presented the Board with an unusual situation. Clearly, under § 18.66.060 of the Rozeman Municipal Zoning Code, the Board rendered its decision by balancing the interests of the Schendels against the interests of upholding the zoning ordinance as a whole. In view of these facts, the District Court found the Board acted within its jurisdiction and that its decision was not illegal. We hold that the Roard of Adjustment had jurisdiction to place t h e restrictions as to the number of waterfowl and we affirm the decision of the District Court that t-he Board acted within its jurisdiction and in accordance with Montana law. The decision of the District Court is affirmed. We concu u Mr. dustice Fred J. Weber specially concurs as follows: I concur in the result reached by the majority that the Board of Adjustment has the power to reasonably restrict the number of waterfowl on plaintiffs' property. However, I do not agree that the Board's analysis of plaintiffs' use of property was correct. I would there-r"ore have reached the same conclusion but for different reasons. Under the Eozeman Municipal Zoning Code, Section 18.04.020!b), agricultural use is defined as follows: Agricultural means the tilling of soil, the raising of crops, horticulture and gardening, dairying or animal husbandry, including customary uses inciden- tal t.hereto, but not including any agricultural- industry or business such as fruit, plants, fur farms, animal hospital-s , commercial feed lots, or simi!.ar use. The Board concluded that the carinq for wil-d waterfowl con- stituted an agricultural use. In apparent contradiction, the Board Later concluded that the caring for wild waterfowl was similar to the keeping of fowl for family food production, and granted a variance under subsection J of the Zoning Code. While 1 disagree with the use of subsection J, I would ap- prove the Board's conclusion for the following reasons: The definition of agricultural use under the Zoning Code emphasizes that it does - not include agricultural industry or business such as fruit, plants, fur farms, animal hospital.^, commercial feed lots, or similar use. The drafters recog- nized that these types of agricultural industry or business use might be thought of as being agricultural use but concluded that such use did not qualify as agricultural use under this Zoning Code. I would conclude that the raising of wild waterfowl is simil-ar to such things as fur farms and animal hospitals and that it could be classed as a "similar use" as mentioned at the end of the agricultural use defini- tion. This would of course mean that a variance would he required before the Schende1.s would be allowed to proceed with such a business. The function of a variance is to grant relief to a property owner against strict compliance with the general law. See 1 0 1 C.J.S. Zoning, S 269. Montana case law has established that the following conclitions be present before the granting of a variance is proper: (1) the variance must not be contrary to the public interest; ( 2 ) a literal en- forcement of the zoning ordinance must result in unnecessary hardship owing to conditions unique to the property; and ( 3 ) the spirit of the ordinance must be observed and substantial. justice done. Cutone v. Anaconda Deer Lodge (1980), 1 8 ' Mont. 51.5, 521, 610 P.2d 691, 695. 1 would conclude that these conditions have been met in the present case. I would therefore affirm the decision of the Eoard to 1-imit the number of wild waterfowl on the Schendels property, conclud- ing that it was an appropriate variance on the above de- scribed agricultural use theory. I agree with the majority that substantial iu-stice was achieved by the decision of the Roard. | May 4, 1989 |
b16c962f-0aaa-4bd5-a79b-408af8a12733 | AETNA FINANCE COMPANY v BALL | N/A | 88-551 | Montana | Montana Supreme Court | No. 88-551 IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 AETNA FINANCE COMPANY, a corporation, Plaintiff and Appell-ant, -VS- COURT E. BALL and TOWE, BALL, EMRIGHT & MACKEY, a partnership, Defendants and Respondents. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Diane G. Barz, Judge presiding. COUNSEL OF RECORD: For Appellant: Robert J. Phillips; Snavely & Phillips, Missoula, Montana For Respondent: Richard E. Gillespie; Keller, Reynolds, Drake, Stern- hagen & Johnson, Helena, Montana - -- Submitted on Briefs: April 27, 1 9 8 9 - . L : I L-" Decided: June 15, 1 9 8 9 l i M r . J u s t i c e L. C. Gulbrandson delivered t h e Opinion o f t h e Court. Aetna Finance Company (Aetna) appeals t h e f i n a l judgment entered September 9, 1988, by t h e Thirteenth J u d i c i a l D i s t r i c t Court i n favor of t h e defendants. The c o u r t held t h a t Aetna's a t t o r n e y , defendant Court B a l l , f u l f i l l e d h i s duty t o advise Aetna a s t o whether a proposed borrower had a mortgageable i n t e r e s t i n c e r t a i n r e a l property, such t h a t Aetna could o b t a i n a secured i n t e r e s t i n t h e property, and whether t h e mortgagee t i t l e insurance would a p p r o p r i a t e l y i n s u r e t h i s secured i n t e r e s t . Therefore, defendants were held not l i a b l e f o r any l e g a l malpractice. W e affirm. The i s s u e s presented f o r our review a r e a s follows: 1. Did a t t o r n e y B a l l have a duty t o assure t h a t c l i e n t Aetna had a v a l i d secured i n t e r e s t and t h a t it received mortgagee t i t l e insurance covering t h a t secured i n t e r e s t ? 2. Did t h e a t t o r n e y breach t h i s duty t o h i s c l i e n t ? The ownership h i s t o r y o f t h a t r e a l property c e n t r a l t o t h e i s s u e s r a i s e d i n t h i s appeal i s q u i t e lengthy and involved. W e w i l l d e t a i l only those s t i p u l a t e d f a c t s regarding t h i s property which a r e d i r e c t l y r e l e v a n t t o t h e l e g a l malpractice i s s u e s r a i s e d by Aetna. O n September 9, 1980, Anne Zemple executed a t r u s t agreement conveying i n t r u s t a c e r t a i n p a r c e l of r e a l property i n G a l l a t i n County t o Henry Richner. Richner, a s t r u s t e e , assumed t h e r e s p o n s i b i l i t y of making improvements t o t h e property. To t h i s end, Richner secured a loan f o r $25,000 from Aetna on August 7 , 1981. This loan was secured by a t r u s t indenture prepared by a t t o r n e y B a l l and signed by Richner. B a l l prepared t h i s t r u s t indenture per i n s t r u c t i o n s from Aetna a f t e r having advised Aetna t o ensure t h a t Richner had authority to grant a security interest in the property. In response, Aetna obtained from Zemple a Consent to Mortgage which gave her agreement to a mortgage of the property as security for this loan. On March 2, 1983, Richner executed, without designation of capacity, a Quit Claim Deed conveying his interest in the property back to Zemple. Thereafter, Richner began making arrangements with Aetna to obtain another loan totaling $38,829.66. On November 4, 1983, the USLIFE Title Insurance Company (Company) issued a commitment for title insurance which stated it would generally insure title to the property from all claims except those affecting title and arising out of the trust agreement dated September 9, 1980 and/or the Quit Claim Deed executed on March 2, 1983. The Company later issued a mortgagee title policy containing these exceptions. During a meeting in Ball's office on November 11, 1983, Aetna informed him of Richner's request for an additional loan against the property. Ball testified that after examining the Quit Claim Deed and title commitment, he advised Aetna to determine if the trust was still effective, and if so, to obtain another Consent to Mortgage from Zemple. Ball then prepared a consent form, and Aetna subsequently obtained the necessary signature. Ball also advised Aetna to get the two above-mentioned exceptions on the title insurance commitment removed. During a telephone conversation on November 18, 1983, Aetna told Ball that the Company would delete the Quit Claim Deed Exception. Consequently, Ball advised Aetna it could proceed with the closing of the loan, and he subsequently prepared a trust indenture which Richner then signed. Ball was present at the closing of this loan that same day. Ball prepared a post-closing written opinion on November 21, 1983, upon request of Aetna, stating that the trust indenture signed by Richner had created a valid security interest in the property sufficient to enable Aetna to obtain mortgagee title insurance. Ball testified that this opinion was based upon review of the Consent to Mortgage, the title commitment naming Richner as the vested trustee owner, and Aetna's verbal assurance that the Company would delete the Quit Claim Deed exception. Ball did not see the mortgagee title insurance policy, which was issued November 21, 1983 and which in fact retained the two exceptions, prior to issuance of this written opinion. Richner defaulted on his loan obligation on January 3, 1984. Ball, acting on behalf of Aetna, commenced foreclosure proceedings. Zemple filed suit against Aetna and Ball to obtain damages and a permanent injunction against foreclosure of the trust indenture. Aetna filed a counterclaim against Zemple and a third party complaint against Ball. The lawsuit against Aetna was subsequently settled by Zemple's payment of $23,998.26 to Aetna in exchange for Aetna's reconveyance of the trust indentures, cancellation of the promissory notes, and dismissal of the counterclaim against Zemple. Thereafter, the court ordered a realignment of the remaining parties with Aetna as the plaintiff and Ball and his law firm as defendants. Following a non-jury trial on July 5 and 6, 1988, the District Court issued its findings and rendered judgment in favor of defendants in this realigned lawsuit. The court held that Ball had not assumed the duty of guaranteeing that the title company would issue appropriate coverage insuring Aetna's interest in the property. Rather, Ball was employed as an attorney with limited duties and he fulfilled these by advising Aetna how to proceed to insure its interest in the property. Defendants thus were held not liable for any loss Aetna incurred by virtue of its loss of a security interest in the property, an interest which had guaranteed repayment of monies loaned to Richner. Aetna alleges that Ball had a duty to ensure that it received a security interest and appropriate title insurance for that security interest. Aetna contends Ball's failure to fulfill these duties constituted a breach of contract as well as negligence. This whole case turns on a determination of what duties Aetna retained Ball to fulfill. The parties dispute the specific duties for which the attorney-client relationship was created, and not the general duties owed clients in general. See generally, Huszagh and Molloy, Legal Malpractice: A Calculus For Reform, 37 Mont.L.Rev. 279, 335 (1976) (recognizing the two subparts to the duty element). This dispute is one of material fact. The broad standard of review urged by Aetna, which would allow this Court to make a determination of this case based upon our own findings, therefore is not applicable to this case. Such a broad standard of review would be applicable only if the facts were relatively uncontested. See, e.g., Johnson v. Division of Motor Vehicles (1985), 219 Mont. 310, 312, 711 P.2d 815, 816. Because a factual dispute exists as to the specific duties Ball was obligated to perform, we will rely on the District Court's findings and presume that they are correct unless unsupported by substantial, credible evidence and thus clearly erroneous. As stated in Rule 52 (a) , M.R.C~V.P. : Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses. The D i s t r i c t Court examined t h e nature of p a s t l e g a l dealings between Aetna and B a l l t o determine t h e terms of t h e i r a t t o r n e y - c l i e n t c o n t r a c t u a l r e l a t i o n s h i p . The c o u r t d i d n o t abuse i t s d i s c r e t i o n i n a s c e r t a i n i n g t h e e x a c t d u t i e s Aetna intended B a l l t o perform from an examination of t h e p a r t i e s ' conduct. W e have previously held t h a t when c o n t r a c t terms a r e ambiguous, t h e conduct of t h e p a r t i e s i s t h e b e s t i n d i c a t i o n of t h e t r u e i n t e n t of t h e p a r t i e s a t t h e time of contracting. E.g., Souders v. Montana Power Co. (1983), 203 Mont. 483, 486, 662 P.2d 289, 291; Rumph v. Dale Edwards, Inc. (1979), 183 Mont. 359, 368, 600 P.2d 163, 168. A c o u r t then must i n t e r p r e t t h e terms of a c o n t r a c t s o a s t o give e f f e c t t o t h i s i n i t i a l i n t e n t . See § 28-3-301, MCA. From an examination of t h e p a r t i e s ' conduct, t h e D i s t r i c t Court determined t h a t t h e p a r t i e s intended B a l l t o determine i f t h e proposed borrower had a mortgageable i n t e r e s t which could a c t a s s e c u r i t y f o r t h e proposed loan. Moreover, B a l l was t o review t h e t i t l e commitment t o determine i f t h i s secured i n t e r e s t would be covered under an appropriate mortgagee t i t l e insurance policy. I f Aetna d i d n o t have a v a l i d i n t e r e s t , B a l l was t o advise Aetna what a c t i o n s t o take t o obtain such a v a l i d s e c u r i t y i n t e r e s t and/or appropriate t i t l e insurance coverage. Aetna, not B a l l , had t h e r e s p o n s i b i l i t y f o r a c t i n g upon t h i s advice. The c o u r t concluded t h a t Ball f u l f i l l e d t h e s e advisory d u t i e s and thus he was n o t l i a b l e f o r any negligence o r breach of c o n t r a c t . S u b s t a n t i a l c r e d i b l e evidence e x i s t s i n support of t h e c o u r t ' s findings a s t o t h e nature of t h e d u t i e s B a l l was r e t a i n e d t o perform. B a l l t e s t i f i e d t h a t Aetna h i r e d him t o advise it a s t o t h e v a l i d i t y of t h e s e c u r i t y i n t e r e s t and t i t l e insurance coverage, t o i s s u e a w r i t t e n opinion a s t o t h e v a l i d i t y of each, t o prepare t h e t r u s t indenture document, and to attend the closing. He testified that he was not expected to ensure the validity of the security interest or appropriateness of the title insurance coverage. In Ball's opinion, Aetna routinely handled all these other details and problems, arising in regards to loan transactions, to save the cost of attorney's fees and thereby to remain competitive in the lending market. Memos from a telephone conversation and meeting prior to the 1981 loan by Aetna reveal that Ball assumed the responsibility only for advising Aetna of the steps necessary to ensure appropriate mortgagee title insurance coverage. Memos from a November 11, 1983 meeting with Aetna again reveal that Ball only advised Aetna of steps it should take to ensure a valid security interest and appropriate title insurance in regards to the proposed 1983 loan. Moreover, Ball testified he advised Aetna to obtain a consent to mortgage from Zemple, which Aetna subsequently obtained. Ball also testified he advised Aetna to ensure appropriate mortgagee title insurance coverage by having the title company remove from the policy those two exceptions detrimental to insurance coverage. A telephone call from an Aetna representative on November 18, 1983, as documented on a message pad, indicated that Aetna had assumed the duty of resolving those problems brought to its attention by Ball and had induced the title company to delete the quit claim deed exception. Ball testified that his subsequent written opinion was based upon this telephone assurance that Aetna, in fact, had acted upon his legal advice. Given all the foregoing evidence indicating Ball routinely assumed only an advisory responsibility regarding Aetna's security interest and mortgagee title insurance, we hold that the District Court's findings, that Ball did not have a duty to ensure the validity of the security interest and the appropriateness of mortgagee t i t l e insurance coverage, were n o t c l e a r l y erroneous. The evidence i n d i c a t e d t h a t B a l l d i d n o t " d e l e g a t e " t o Aetna a d u t y t o e n s u r e t h e accuracy o f t h e s e c u r i t y i n t e r e s t and a p p r o p r i a t e n e s s o f mortgagee t i t l e insurance. Rather, Aetna only c o n t r a c t e d w i t h B a l l t o o b t a i n h i s advisory opinion about whether o r n o t a v a l i d s e c u r i t y i n t e r e s t and a p p r o p r i a t e mortgagee t i t l e insurance e x i s t e d , and i f n o t , what s t e p s t o t a k e t o achieve a p p r o p r i a t e coverage. The D i s t r i c t Court t h u s d i d n o t abuse i t s d i s c r e t i o n i n f i n d i n g t h a t B a l l had f u l f i l l e d a l l t h o s e d u t i e s undertaken and, consequently, i n holding B a l l n o t l i a b l e f o r breach of c o n t r a c t . The judgment of t h e D i s t r i c t Court -5S affirmed. ' / J u s t i c e . W e concur: // | June 15, 1989 |
0d149b5b-dfc2-483d-90ce-52cbd3a9efed | GENTRY v CITY OF HELENA | N/A | 88-405 | Montana | Montana Supreme Court | No. 88-405 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 PATRICK GENTRY, THOMAS DAMON, and ROBERT GLEICH, Petitioners and Appellants, -vs- CITY OF HELENA and THE POLICE COPMISSION OF THE CITY OF HELENA, Respondents and Respondents. APPEAL FROM: District Court of the First Judicial District, In and for the County of ~ e w i s & Clark, The Honorable Henry Loble, Judge presiding. COUNSEL OF RECORD: For Appellant: Charles A. Graveley argued, Helena, Montana Gregory A. Jackson argued; Jackson & ice, Helena, Montana For Respondent: David Hull argued, City Attorney, Helena, Montana I' . A r l r .-... Submitted: March 9, 1989 Decided : May 11, 1989 Mr. Justice John C. Sheehy delivered the Opinion of the Court. Appellants patrick Gentry, Thomas Damon and Robert Gleich, police officers for the city of Helena, appeal from a decision of the District Court, First Judicial District, Lewis and Clark County, which upheld on judicial review the decision of the Helena Police commission and the modification of its findings by the Helena City Manager which resulted in appellants' termination. Charges of misconduct against each of the three officers before the police Commission of the city of Helena were reduced to writing and timely served upon the officers in accordance with S 7-32-4156, MCA. A subsequent trial was held before the Commission pursuant to 5 7-32-4162, MCA. After trial, the majority of the Commission determined that Officer Gleich should be suspended from the Helena Police Department for 30 days without pay; that Sergeant Damon should be demoted to the rank of patrolman; and that Patrolman Gentry should be suspended without pay for a period of 90 days and that a letter of reprimand be permanently placed in his personnel file. One member of the Commission dissented, agreeing that Officer Gleich was the least culpable of the three officers involved and agreeing with his punishment as determined by the Commission, but disagreeing as to Officer Gentry and Sergeant Damon. It was the minority member's opinion that the latter two officers should be terminated. Under the statutes providing for procedures before the Police Commission, the decision of the Police Commission is subject to modification or veto by the mayor. Section 7-32-4160 (2) , MCA. The term "mayor" includes the city manager. Section 7-32-4153, MCA. When a charge against a member of the police force is found proven by the Police commission and is not vetoed by the mayor, the mayor (or city manager) must make an order enforcing the decision of the Board or the decision as modified by the mayor (city manager). Section 7-32-4161, MCA. In this case, the city manager of Helena modified the Helena police Commission decision by permanently terminating the employment of Officers Damon, Gleich and Gentry from the Helena Police Department, effective immediately. Decisions of the Helena Police Commission, as modified by the mayor or city manager, are subject to review in the ~istrict Court. Section 7-32-4164, MCA. In this case, the officers petitioned for review before the District Court, ~ i r s t ~udicial District, ~ e w i s and Clark County. The District Court affirmed the decision, opinion and order of the Helena Police commission and the modification thereof by the city manager of June 1, 1988. The decision of the ~istrict Court on review is now appealed by the officers to this Court. On consideration, we affirm. We find the principal issue, raised directly by the attorney for Gleich, and indirectly by the attorney for the others, is whether substantial evidence supports the decision of the police commission as modified by the city Manager. To avoid an unnecessary recitation of facts, we will set out only those facts found by the Police omm mission as requiring discipline. The Police Commission found that Officer Gentry was properly charged by two citizens' complaints and for dishonesty; that Sergeant Damon was properly charged under a citizens' complaint and for dishonesty; and, that Officer Gleich was properly charged with dishonesty. The Commission reported on dishonesty and the citizens' complaints as follows: DISHONESTY It is undisputed that Gentry and Damon were at the Hofbrau from 12:OO p.m. on July 31 until at least 4:30 p.m. Capt. Morley testified that when Gentry and Damon left the Hofbrau, they were "under the influence." Given Capt. Morley's years of admirable experience with the Helena Police Department, the Commission yields to his determination as to Gentry and Damon's condition. ~ollowing the Hofbrau, the two officers went to the Red Meadow, where they stayed for several hours, and then O'Toole's, Glen's Western Bar, back to the Red Meadow, down to Jester's, and back to the Red Meadow again. Mrs. ~eating, whose testimony the Commission finds credible, testified that both Gentry and Damon were intoxicated during their conversation with her the evening of July 31. During his telephone conversations with the police dispatcher, Gentry stated that he was drunk and also later stated that Damon was drunk. Officer Zaharko, both in his statement and in his testimony before the Commission, indicated that Damon was "intoxicated" to the point where he was passing out and waking up in the front seat of Gentry's vehicle. The Commission finds it very difficult to believe that these officers, after being at the party and later to a number of bars for a total of eight or nine hours, were sober. But, in fact, that is exactly what the officers have asked the Commission to believe. All credible evidence is to the contrary and the Commission finds the officers' testimony in this regard not worthy of belief. Not only did the officers misrepresent the condition of Gentry and Damon to their superiors during the investigation, they continued this misrepresentation under oath before the Commission. For the charges of dishonesty, therefore, the Commission finds the charges proven. CITIZEN'S COMPLAINTS Turning then to the citizen's complaint lodged by Kathy Keating concerning the July 31, 1987, incident, the Commission finds that the credibility of the officers' version is again highly suspect. Mrs. Keating was returning from a church music festival at the lake when she encountered Damon and Gentry. She testified that she was not personally acquainted with either officer, and had to identify them from a department photograph during the investigation. She further testified that the officers' intoxicated condition caused her concern. Phil Keating, Kathy's husband, testified that she relayed the same version of the events to him immediately after the incident. He further testified that he had no grudge against the Helena Police Department. The officers, on the other hand, have a great deal to lose in this proceedings. They could be subject. to discipline up to and including termination. While the officers' attempted "cover u p ' ' of their activities that evening, from their point of view, may be understandable, it is certainly not excusable. The omm mission therefore finds that the testimony of Mrs. eating is credible, and believes that Officer Gentry represented that he and Sgt. Damon were "undercover" during their conversation on the evening of July 31. The Commission further finds that such a statement, made by an intoxicated police officer, even though off-duty, certainly constitutes conduct such as to bring reproach upon the Helena Police Department. In regard to the second citizen's complaint concerning Patrolman Gentry confronting Mrs. Keating on August 9, 1987, and telling her that "we" could lose our jobs over her complaint--the Commission again finds that Mrs. Keating's version is the more credible version. his conduct on the part of officer Gentry was again conduct such as to bring reproach upon the Helena police Department. The findings of the Commission concerning the charges against Officer ~ l e i c h are as follows: The Commission finds that Officer Gleich, although guilty of covering up his fellow officers' misdeeds, is the least culpable of the three officers involved. Officer Gleich was not involved in the citizen's complaint, and at worst he merely went along with his fellow officers' version of the night's events. In doing so, however, officer Gleich has not only misrepresented the facts to his superior officers, he has misrepresented them to the Commission while under oath. The Commission finds that such conduct cannot be condoned and therefore has determined that Officer Gleich be suspended from the Helena police Department for 30 days without pay. The written report of the Helena Police Commission recited a number of other facts which supported its findings of fact foregoing. We do not set those out in this Opinion in full because it is unnecessary for our review and it would be painful to detail the day's progress of these three officers following their attendance at a luncheon in honor of a retiring police officer. The District Court noted that the standard of review of a decision of the police commission in the ~istrict Court is whether the findings of the Commission are supported by substantial evidence. ~iskovich v. City of Helena (1976) , 170 Mont. 138, 143, 551 P.2d 995-998; In the Matter of Raynes (1985), 215 Mont. 484, 493, 698 P.2d 856, 862. The findings of the Commission are final and conclusive if supported by substantial evidence. ~ailey v. City of Helena (1910), 42 Mont. 216, 218, 112 P.2d 69, 70; Raynes, 698 P.2d at 862, 42 St.Rep. at 576. The ~istrict Court, sitting as an appellate court, is not authorized to determine penalties, sanctions or disciplinary measures that may be taken against a police officer. City of Helena v. ~istrict Court (1975), 166 Mont. 74, 77, 530 P.2d 464, 465-466. When the decision on review by a district court of proceedings before a Police Commission is conducted under § 7-32-4164, MCA, and the District Court decision is appealed to us, we adopt the standard of review set forth in the Montana Administrative Procedure Act, S 2-4-704(2) (el, MCA, to the effect that the administrative findings, inferences and conclusions and decisions will not be reversed or modified unless they are "clearly erroneous in view of the reliable, probative and substantial evidence on the whole record. " We determine that substantial evidence on the whole record does support the findings and conclusions of the Helena police omm mission, and the decision as modified by the City Manager. Aside from the substantial evidence issue, the officers raise other issues which they contend require a reversal. They are: (1) The Police Commission's findings of dishonesty cannot be supported as a matter of fact or law; (2) The testimony that Mrs. eating had taken a polygraph examination was improperly admitted; (3) The police commission unduly prolonged the hearing by requiring the officers to begin their case in chief at 9:30 after the case had already been in progress for 114 hours ; (4) The City Manager should not have testified before the police Commission because of his veto authority over the actions of the Police Commission; and, (5) That the citizens' complaints should not have been considered because no citizen had signed any complaint against any officer. The officers also complained, without listing the subjects as issues, that Officer Gentry had not been advised prior to the formal filing of charges of any administrative or disciplinary proceedings against him; that the officers should not have been suspended in excess of 10 days; that the "modification of findings" made by the City Manager was not an "order" required by the statute; and that the punishment, that is the termination of employment of the officers, was disproportionate to the misconduct charged. DISHONESTY FINDINGS This issue involves whether the Police Commission b r a s correct in determining that all these officers lied during the investigation and under oath to the police Commission when they denied that officers Damon and Gentry denied being drunk but admitted to drinking from 12:30 in the afternoon until late the same evening at several bars in Helena. Gleich testified that both officers were sober when he transported them in a city police car from the Red Meadow bar in Helena to the parking lot of the Hofbrau, another bar, where the officers had left their car. Several witnesses who met or observed Damon and Gentry during the course of the afternoon and evening testified that they were intoxicated or that they exhibited strong evidence of drinking by their actions. An audiotaped telephone record of Gentry's call for a ride in a police car are revealingly stark about his condition. The amount of liquor they admit drinking over the period of time militates against their sobriety. Very substantially, the record supports the Police Commission that these officers were in fact intoxicated, and that they were dishonest in denying it, especially under oath. The appellants, especially Gleich, maintain that when they testified that Damon and Gentry were sober, and not impaired by their drinking, they were merely expressing a matter of their judgment or opinion, not fact, and thus cannot be guilty of dishonesty. The officers cannot escape the tenor of their testimony this easily. heir statements were intended to state facts, and for the Commission to accept their statements as facts. The evidence supports the Commission's findings of dishonesty. The police Commission did find that Officer Gleich was "less culpable." He undoubtedly was torn between loyalty to his brother officers and his duty to state the facts openly. He apparently chose the wrong course, and the Commission and the City Manager set the consequences. EVIDENCE OF A POLYGRAPH EXAMINATION - - Before the Police Commission, witness Kathy Keating answered the following questions: Q. Now, Kathy, subsequent to all this, were you asked to take a lie detector test? A. Yes. Q. And did you take a test? A. Yes I did. Under S 37-62-302, MCA, "results" of a polygraph examination may not be introduced into or admitted as evidence in a court of law. Here the "resultsw were not admitted into evidence, but the fact that Mrs. eating took a polygraph examination was admitted. There was no objection, however, and the chairman of the omm mission later admonished the other members that evidence of taking the polygraph examination was not to be considered by them in determining the credibility of Mrs. Keating. The District Court, in examining this issue, found no prejudice to the officers from the admission of this testimony so as to be reversible. We agree. LENGTH OF HEARING - The hearing before the Commission began early in the morning, October 8, 1987, and, approximately 114 hours thereafter, at 9:15 p.m., the City finished presenting its case. The chairman of the Commission told counsel that he wanted to finish the case and that they were to proceed with their presentation. At 12:30 p.m., October 9, 1987, the chairman informed counsel for the appellants that the matter could be continued until Tuesday of the following week. However, the appellants decided to go forward and the hearing was completed after about 204 hours. The session was inordinately long, and undoubtedly a wearying one for the Commission, and all the counsel for all parties. However, as the District Court noted, again one cannot put a finger upon any prejudice as to the officers as a result of the long hearing. There is no reversible error in the manner which the hearing was conducted. TESTIMONY OF THE CITY MANAGER --- The appellants argue that because the City Manager has veto and modification powers over the Commission's decision, there is an inherent conflict of interest in allowing his testimony. The District Court examined the record and found no specific incidence of a biased or prejudicial statement in the record, and his review of the City Manager's testimony did not reveal any such prejudicial statement. On appeal the petitioners have failed to demonstrate any prejudicial effect of this witness's testimony and there is no rule otherwise which prevents the testimony of the City Manager before the police Commission even though subsequently he will make a decision which may modify or reverse the findings of the Police Commission. NO SIGNATURE ON COMPLAINT - - The complaint lodged by Mrs. Keating was not signed by her. Appellants rely on § 7-32-4156, MCA, which states that any charge brought against a member of the police force must be in writing. There is however no statutory requirement that the complainant sign the charge and so no error occurred in the lack of her signature on the formal complaint filed. SUSPENSION FOR MORE THAN TEN DAYS ----- Section 7-32-4163, MCA, provides that the mayor or the chief of police subject to the approval of the mayor has the power to suspend the policeman for a period not exceeding ten days in any one month with or without pay. The statute further provides that any officer suspended with or without pay is entitled to appeal that suspension to the Police commission. In this case the officers were suspended with pay from September 4 to November 30, 1987. They did not appeal the suspension to the police Commission as allowed by $ 7-32-4163, MCA. The record shows no prejudice to the officers by their suspension pending the disposition of the charges against them. MODIFICATION OF FINDINGS - The objection of appellants here to the modification made by the city Manager is that it is not an "order" required by S 7-32-4161, MCA. The tenor of the instrument as modified by the City Manager is certainly an order because it was the subject of review before the Helena police commission and before this Court on appeal. We do not find the issue to be substantive. LACK OF NOTICE -- Under this issue, the appellant Gentry contends that he had not been advised prior to the formal filing of charges of any administrative or disciplinary proceedings against him. He had received two notices but neither one referred to an "incident" which occurred on August 9, 1987. However, our examination of the procedures leading up to the hearing before the Police Commission shows that the charges against the officers were in writing and copies served upon them 15 days before the time fixed for hearing of such charge. The provisions of 5 7-32-4156, MCA, were complied with and on that basis the Police Commission was empowered to proceed in the matter. PROPORTIONALITY OF DISCIPLINE - We find no merit in this issue which would require a reversal of the District Court's review or of the findings and conclusions of the Helena Police Commission, as modified by the City Manager. The extent of the penalty to be levied against a police officer or officers for proven charges of misconduct, absent a constitutional violation, are generally matters for determination by the police Corrmission and subject to the modification of the mayor or city manager. They are thus empowered by statute. If the city of Helena determines, as it did in this case, that officers who are dishonest under oath are not trustworthy enough to serve as police officers for the city of Helena, that kind of decision relating to the personnel of the city is beyond our reach and jurisdiction. City of Helena v. ~istrict Court, supra, 166 Mont. at 77. Section 7-32-4155, MCA, gives the Police Commission the power to decide all charges of misconduct. brought against any police officer who has been guilty of misconduct in his office, or of conduct unbecoming a police officer, or whose conduct has been such as to bring reproach upon the police force. If the charges are proven, the Commission, and thereafter the mayor or city manager are empowered to discipline, suspend, remove or discharge any officer who has been found guilty of the charge filed against him. Section 7-32-4160, MCA. In this case, it appears that the Commission, and the City Manager, acted within the powers given to them by statute. We find no reversible error in their decisions. Affirmed. -- ._ We Concur: /C Mr. ~ustice John C. Harrison, dissenting. I would concur with this Court's opinion finding no reversible error in the termination of the two officers, Patrick Gentry and Thomas Damon, but would hold contrary to this Court's opinion regarding Robert Gleich who I feel should be reinstated. His contact with the other two off-duty officers was when he brought the patrol car to the Red Meadow bar's parking lot at approximately 9:30 p.m. on the evening in question and drove them home. In arriving at my decision it is important to note that the Police Commission recommended that Gleich be suspended from the Department for 30 days without pay. I would follow the recommendation of the omm mission as to Officer ~leich and not that of the City Manager who set all the findings of the Police Commission aside and made his own decision. While I agree that the City Manager has set a high standard of honesty for police officers, which standard will undoubtedly be well-drilled into the Department, I feel that that ~leich was somewhat of an innocent bystander in this matter and I believe he was salvageable and should have been eventually kept on the force. A | May 11, 1989 |
ff8fdcb1-e2b4-4499-8c68-b2112a6a58cf | FELLER v FOX | N/A | 88-325 | Montana | Montana Supreme Court | I N THE SUPREME COURT O F THE STATE O F M O N T A N A NANCY A. FELLER, P l a i n t i f f and Appellant, -VS- JAKE FOX, Defendant and Respondent. APPEAL FROM: D i s t r i c t Court o f t h e T h i r t e e n t h J u d i c i a l District, I n and f o r t h e County of Yellowstone, The Honorable Diane G. Rarz, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Joseph P. Hennessey; Hennessey L?.w O f f i c e , Billi.ngs, Montana For Respondent: 1,awrence R . Martin; F e l t & Martin, n i l l i n g s , Montana James D. Walen; Keefer, Royhal, Hanson, Stacey & v7al.en, B i l l i n g s , Nontana Submitted on B r i e f s : March 2 , 1989 Decided: A p r i l 2 5 , 1989 0 Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Nancy A. Feller (Feller) appeals the April 12, 1988 order of the District Court of the Thirteenth Judicial District, Yellowstone County, denying her motion for a new trial. Feller also appeals the court's denial o= her motion in limine to exclude the testimony of Dr. Gary Ray. Having examined the record and the law we affirm the rulings of t h e District Court. This case arose from an automobile accident which occurred on April 20, 1986, at an intersection in Billings, llontana. Feller, a passenger in her own 1977 Chevrolet Nova, sustained injuries when her vehicle was rear-ended by a vehicle driven by the respondent, Jake Fox (Fox). Feller was transported to a Billings hospital by ambulance, treated for trauma to her neck and hack an2 then released. This trauma condition is more commonly known as whiplash. In the following days and months Feller consulted with her family physician in Rridger, Montana, several other doctors in the Billings area and a physical therapist. She complained of pain in the neck area and severe, disabling headaches. One of the doctors Feller contacted was Dr. Gary Ray, an osteopathic physician. Feller made an appointment with Dr. Ray and was examined by him three days after the accident. Feller indicated on a patient information sheet that she had been referred by a Dr. Berg, who had an office in the same building. Based upon the examination, which lasted 15 to 30 minutes, Dr. Ray found Feller's symptoms were exaggerated. As she was already being treated by several other physicians, Dr. Ray declined to treat her and forwarded a copy of his findings to her regular physician. In October of 1986, Feller filed suit against Fox seeking damages for her physical injuries and pain, mental anguish and emotional distress, and medical and non-medical expenses. The complaint also sought compensation for lost wages and for damages arising because of her potential-ly permanent inability to engage in her normal work or activities. Prior to trial, Fox admitted liability and then filed an offer of judgment in the am'ount of $20,000. Feller, however, declined this offer o+ judgment and the case proceeded to trial before a jury on the issue of damages. Feller filed a motion in limine prior to FOX'S case-in-chief, seeking to exclude the testimony of Dr. Gary Ray. The District Court denied the motion and Dr. Ray's deposition testl'mony was read into the record. The jury returned a verdict in favor of Feller in the amount of $7,837.49. Feller filed a motion for a new trial pursuant to § 25-11-102 ( I ) , (2), (6) , ( 7 ) , MCA, alleging irregularity in the proceedings, misconduct of the jury, insufficiency of the evidence to justify the verdict, that the verdict was against law, and error in law occurring a t trial. The court denied. the motion for a new trial after finding that the motion was procedurally flawed for failure to include juror affidavits and. further, that substantial credible evic?ence existed to sustain the jury's verdict. From this holding Feller appeals and presents the following issues for review: (1) Did the District Court err in denying Feller's motion in limine to exclude the testimony of Dr. Ray? (2) Did the District Court abuse its djscretior, in denying Feller's motion For a new trial? ( 3 ) Did the Distrj-ct Court. abuse its discretion in refusing to give Feller's offered jury instructtons, numbers 4 a r ? P : In Feller's first issue she claims the District Court incorrectly allowed the introduction of Dr. Ray's deposition testimony. Initially, we note that "questions of the admissibility of evidence are left largely to the sound discretion of the trial court . . . " Rrittorl v. Farmer's Insurance Group (Mont. 1986), 721 P.2d 303, 315, 43 St.Rep. 641, 654; Cooper v. Rosston (Mont. 1988), 756 P.2d 1125, 45 St.Rep. 978; Cech v. State (19791, 184 Mont. 522, 604 P.2d 97. The district court's decision in such evidentiary matters will be subject to review only in cases of manifest abuse of that discretion. Britton, 721 P.?d at 315: Cooper, 756 P.2d at 1127. The purpose of the motion in limine is to prevent the introduction of evidence which is irrelevant, immaterial or unfairly prejudicial. Wallin v. Kenyon Estate (1974), 164 Mont. 160, 165, 519 P.2d 1236, 1238. This Court thus has held that the authority to grant or deny a motion in limine "rests in the inherent power of the court to admit or exclude evidence and to take such precautions as are necessary to afford a fair trial for all parties." Wallin, 519 P.2d at 1238. Feller claims the court ahused its discretion in denying the motion in 1i.mine for the following reasons. Dr. R a : r ' s testimony did not tend to prove or disprove any of the elements of this case. Dr. Ray was not Feller's attending . . phys~clan. Dr. Ray was not hired by either the plaintiff or defendant as an independent expert. Dr. Ray's testimony would be hiqhly prejudicial and w o u l - c j . have no true value to the litigation. And, Dr. Ray only s a w Feller for fifteel-r minutes on one occasion. The trial in this case dealt with two central issues. As the 6efendant admitted liability, the jury was charged w j t h determining the e ~ t e ~ t of Feller's i-njuries which resulted from the accident and what compensation was reasonable and necessary to fully compensate her for the in juries sustained. Dr. Ray's testimony was presented for the purpose of impeaching the credibility of Feller and Dr. Asbury, her treating physician. Specifically, Dr. Ray's testimony contradicts their testimony regarding the extent of Feller's injury three days after the accident. In Cooper, this Court examined a district court ' s exclusion of testimony relating to a witness's credibility. Cooper, 756 P.2d at 1127-1128. There we examined 5 26-1-302, MCA, which provides that while a witness is presumed to speak the truth, that presumption may be overcome "by any matter that has a tendency to disprove the truthfulness of a witness's testimony;" including "evidence contradi.cting the witness's testimony." Section 26-1-302(9), MCA. We also founz Rule 401, M.R.Evid., provides that: "[rlelevant evidence may include evidence bearing upon the credibility of a witness or declarant. " Credibility evidence, though relevant, "may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice. . ." Rule 403, M.R.Evid. Cooper, 756 P.2d at 1128. As the jury is the exclusive judge of a witness's credibility, S 26-1-302, MCA, the district court is obliged to admit evidence bearing on that credibility. Cooper, 756 P.2d at 1128. - Dr. Ray's testimony in this case goes directly to the credj.bility of witnesses for the appellant. As such, his testimony is relevant. Rule 401, M.R.Evid. Further, his testimony is probative of the issues before the court on the extent of Feller's injuries. We find that this testimony is not so unfairly prejudicial that it substantiallv outweighs its probative value. Rule 403, M.R.Evid.; Cooper, 756 P.2d at 1128. The record shows Feller herself solicited the additional medical examination after the accident. Her own physician testified that his examinations were routinely completed in 10-15 minutes. The fact that the examination failed to support her position is insufficient to exclude this testimony. We find the District Court correctly allowed the introduction of Dr. Ray's deposition. Feller's second contention is that the District Court abused its discretion in denying her motion for a new trial. Feller's primary complaint on this issue is based upon her contention that the jury returned an inadequate damage award.. She maintains the award of $7,837.49 is contrary to all the evidence presented at trial. Recently, this Court reviewed another district court's denial of a motion for a new trial. Tope v. Taylor (Mont. 1988), 768 P.2d 845, 45 St.Rep. 2242. There we rej-terated that the decision to grant or deny a new trial is within the sound discretion of the trial court, and this Court will not overturn, absent a showing of manifest abuse of that discretion. Tope, 768 P.2d at 849-850, 45 St.Rep. at 2248, citing Walter v. Evans Products Co. (1983), 207 Mont. 26, 672 P.2d 613. "The lower court's discretion to grant a new trial for insufficiencv of the evidence is exhausted when it finds substantial evidence to support the verdict." Tope, 768 P.2d at 850, 45 St.Rep. at 2248, citing Lindquist v. Moran (1983), 203 Mont. 268, 662 P.2d 281. We are also constrained to view the evidence in a light most favorable to the prevailing party at trial, when making our determination of whether the record supports the adequacy of an award. WaI.1-s v. Rue (Mont. 1988), 759 P.2d 169, 171, 45 St.Rep. 1451, 1455, citing Lauman 17. Lee (Monk. 1981), 626 P.2d 830, 833, 41 St.Rep. 499, 502. In the present case, the parties presented conflicting medical testimony on the extent of Feller's injuries. This conflict of the evidence was also present in the lay witness testimony. When faced with a similar conflict. under similar . c ,acts, this Court stated: Apparently the jury concluded that in certain medical aspects, testimony submittec? in behalf of the defendant was more believable than that of the plaintiff. That w a s the function of the jury. As we review this evidence submitted on behalf of the defendant, we conclude t.hat it was clearly substantial. The evidence which supports the verdict was presented by a well-qualified medical doct.or, who was adequate!-y examined and cross-examined to establish the contentions on the part of the defendant with regard to the nature of the injury and the degree of disability. We conclude that there clearly was substantial credible evidence to support the verdict of the jury. Rrown by Rrown v. blarkve (1985), 216 Mont. 145, 140, 700 P.2d As in Brown, we conclude substantial credible evidence exists to support the verdict of the jury. Dr. Ray gave an opinion as to the extent of Feller's injuries after examining her history, noting her symptoms and complaints, performing a 15-30 minute examination of her three days after the accident and viewing x-rays of her taken shortly after the accident. His opinion was that: Having gone over her x-rays and I see no abnormalities in t-he skull or cervical spine and I find no hard evidence of neurologic deficit. I do find evidence that the patient is exaggerating her symptomatology and that she is refusing to move her neck and is claiming far more than could be related to the rear-end motor vehicle accidert. The fact that she is receiving medications from three physicians, none of whom know what is being done by the other ones, and I told her that I did not want to get involved in her medical care, end that she was evaluated only and no treatment was rendered. A copy of this is being sent to Dr. Asbury, whom the patient says is her primary treating physician. Dr. Ray's testimony is supported by the video deposition testimony of Dr. Meyer that Feller was not suffering 6ue to injuries which he would attribute to the accident, hut rather to c?epression caused hy the extended medication prescribed by Dr. Asbury. Dr. Meyer examined Feller approximately 18 ncrt-hs after the accident when Dr. Ashury referred Feller to him for a neurological examination. Additionally, Fox introduced the testimony of a private investiga.tor who observed Feller at work on two separate occasions shortly before the t.rial. Pis testimony conflicted with that of Feller and others who testified on her abilities to complete certain physical tasks at work. Also, on cross-examination of Feller at trial, Fox's attorney brought the jury's attention to a number of discrepancies between Feller's trial testimony and previous deposition testimony. Fox introduced sufficient credible evidence for the jury to conclude Feller's injuries were not as extensive as she herself claimed. We find no manifest abuse of discretion on the part of the District Court in denying Feller's motion for a new trial. Feller's final contention is that the District Court erred. in failing to give plairtiff's offered jury instructions, numbers 4 and 8. When examini.ng whether or not certain jury instructions were properly given or refused, we must consider the jury instructions in their entirety, and in connection with the other inst.ructions given and the evidence introduced at trial. Brothers v. Town of Virginia City (1976), 171 Mont. 352, 359, 558 P.2d 464, 468. Where the instructions presented to t.he jury state the applicable law, "a party cannot claim reversible error as to the giving or denying of certain instructions." Id., citing Franck v. - Hudson (1962), 140 Mont. 480, 373 P.2d 951. Our review of the jury instructi.ons leads us to conclude that the instructions adequately covered the law applicable to the case. Feller's proposed instruction number 4, that proof may be based on subjective symptoms, was adequately covered in the court's instructions numbers 3, 5, 11, 15, a-nd 18. Further, the District Court correctly found the proposed instruction had no basis in Montana law ("i. e. , sources for the instruction were from California cases with the most recent being 1963"). Feller's proposed instruction number 9 on loss of established course of life and expenses, was offered without citing to any authority. Additionally, number 8 was adequately covered by the court's instructions numbers 10, 12, 13, 14, 15 and 16. F J e do not find reversible error from our review of the jury instructions. Finding that the testimony of Dr. Ray wa.s properly admitted, that substantial credible evidence existed supporting the jury's lrerdict, and that the jury was adequately instructed on the applicable law, we affirm the District Court's denial of appellant's motion in limine and motion for a new trial. Affirmed. We concur: | April 25, 1989 |
2af7a292-d0f4-4deb-90a2-00067b47f4da | PORTLAND GENERAL ELECTRIC CO v MT | N/A | 88-160 | Montana | Montana Supreme Court | No. 88-100 IN THE SUPREVP COURT OF THY STATE OF MOFTANF PORTLANG GENERAL ELECTRIC COMPANY, 4 , Plaintiff and Appellant, -vs- MONTANA DEPARTMENT OF REVENUE, et al., Defendants and Respondents. APPEAL FROM: District Court of the First Judicial District In and for the County of Lewis & Clark, The Honorable Henry Lohle, Judge presiding. COUNSEL OF RECORD: For Appellant : Donald R. Murray; Murphy, Robinson, Heckathorn & Phillips, Kalispell, Kontana Thomas H. Nelson argued; Stoel Rives, Roley, Jones h Grey, Port1 and, Oregon For Respondent: Larry G. Schuster argued, Department of Revenue, Helena, Montana Filed: Submitted: February 28, 1989 Decided: May 10, 1989 Mr. Justice John Conway ~arrison delivered the Opinion of the Court. Appellant, Portland General Electric (hereinafter PGE), appeals an order entered by the Honorable Henry Loble, ~ i r s t Judicial District Court, Lewis and Clark County, Montana, denying injunctive and declaratory relief. We affirm. This case concerns the imposition of beneficial use taxes, pursuant to $ 15-24-1203, MCA (1983), for appellant's use of the Hot Springs to Idaho Border portion of the BPA 500 kilovolts (KV) transmission line system within the State of Montana. [Tlhere is imposed and shall be collected a tax upon the possession or other beneficial use enjoyed by any private individual, association, or corporation of any property, real or personal, which for any reason is exempt from taxation . . . The tax shall be imposed upon the possession or other beneficial use of an electric transmission line and associated facilities, except that lines and facilities of a design capacity of less than 500 kilovolts shall not be subject to the tax. Section 15-24-1203, MCA. Much of the factual background surrounding this case has previously been discussed in our decision, pacific Power & ~ i g h t Co. v. Department of Revenue, No. 88-151, decided April 17, 1989. Therefore, we will limit the extensive background discussion and instead focus on the additional facts relevant to this case. PGE is an investor-owned utility which provides retail electric utility service to customers located in the State of Oregon. PGE owns an undivided 20% interest in Colstrip Units IIi and IV, which began operation in October of 1983 and 1985, respectively. The other four Colstrip owners are Pacific Power & Light Company, washington Water Power Company, Puget Sound Power & Light Company, and Montana Power Company. Collectively, these companies are referred to as the "Colstrip Owners." With the development of Colstrip Units I11 and IV, additional transmission capacity was needed from the Colstrip facilities to the west. To accommodate the increased generation, Colstrip Owners initially converted one 230 KV line extending from the generating facilities to a substation near Broadview, Montana, to 500 KV and constructed a second 5 0 0 KV line. From the Broadview substation, the Colstrip Owners' 5 0 0 KV lines extend westward to a point near Townsend, Montana. At Townsend, the Colstrip Owners' 500 KV lines interconnect with the Bonneville Power Administration's (BPA) 5 0 0 KV lines. The portion extending from Townsend to the BPA's Garrison substation is referred to as the Montana Intertie, and is extensively discussed in our previous opinion, Pacific Power & Light Co. In 1986, anticipating the completion of Colstrip Unit IV, the BPA, at the request of the Colstrip Owners, completed the Garrison-West lines connecting the Garrison substation to the Taf t , Montana, substation and points to the west. Prior to the completion of the Garrison-Taft 500 KV transmission lines, the Hot Springs-Dworshak lines were the only existing 500 KV lines providing access to the west. From the BPA substation at Garrison, Montana, the transmission of Colstrip power is governed by separate contracts, commonly referred to as the Garrison-West Agreement. These contracts continue for a period of 22 years, with a right to renew at comparable terms. Under each Owners' separate contract with the BPA, power would be introduced at the ~arrison substation and transmitted across the entire BPA "main grid" which included both 230 and 500 KV lines. Notably, appellant entered into no other agreement for the transmission of its Colstrip power to points west. Under the terms of PGE's agreement with the BPA, PGE requested BPA provide adequate transmission facilities west of Garrison, Montana, to transmit power on a firm basis over the Federal Transmission System to PGE's system load at the Pearl substation in Oregon. PGE made available and BPA was required to accept scheduled power not to exceed the reserved transmission demand set forth on Exhibit D of the Garrison-West Agreement. Exhibit D provided that from the date of commercial operation of Colstrip Unit I11 until the date when the 500 KV transmission lines connecting Garrison to the Federal 500 KV transmission system first became available for scheduling power (the ~arrison-Taft lines), the transmission demand for PGE was zero. However, a footnote to Exhibit D provided for the five Colstrip owners to allocate BPA's available 330 megawatts transmission capacity. At this point, a brief explanation describing the 330 megawatt limitation is in order. From the Garrison substation to points west, the BPA lacked transmission line capacity to accommodate full transmission of Colstrip power to the Owners' individual system loads. This lack of "transmission capacity is due to a gap in the 500 KV lines between the Garrison substation and the Hot Springs substation, referred to in this litigation as the "bottleneck." Between the two substations, the BPA had only 230 KV lines, which proved insufficient to accommodate the total scheduled Colstrip power. Recognizing its inability to fulfill obligations under the Garrison-West Agreements, the BPA imposed a 330 megawatt limitation upon the amount of power which could be scheduled west of the Garrison substation, until the Garrison- aft 500 KV lines were completed. On December 20, 1983, a Montana Power Company representative contacted BPA officials indicating Colstrip Owners had reached an agreement on the allocation of BPA's 330 megawatts. Respectively, PGE was allocated 65 megawatts transmission demand. The reserved amount is reflected in a revised Exhibit D to the PGE's ~arrison-West Agreement. In turn, the BPA responded on February 4, 1984, stating: This is to confirm that each of your companies [Colstrip Owners] has sent BPA a letter agreeing with the allocation, contained in The Montana Power Company's letter dated December 20, 1983, of the 330 MW of transmission capacity available to the Colstrip owners on BPA1s Garrison-Hot Springs transmission line during the period starting with commercial operation of Colstrip unit No. 3 and ending at 2400 hours on the date when the Garrison- aft 500 kV transmission line is available for scheduling power, pursuant to existing contracts for wheeling Colstrip power. Transmission Company ~onneville Contract No. Demand . . . Portland DE-MS79-81BP00167 65 MW Once scheduling of Colstrip power over the Hot Springs to border line began, PGE was required to pay BPA a monthly charge calculated pursuant to the terms of the Garrison-West Agreement. The transfer of energy was "deemed" to have occurred whether or not there was actual physical transmission. Therefore, the monthly charge was due BPA regardless of PGE1s actual transmission flow across the lines. Beginning in the tax year 1985, the Department of Revenue (DOR) imposed taxes upon appellant for its "beneficial use" of the BPA 500 KV transmission lines from Hot Springs to the Idaho border. The assessment was based upon a report submitted by PGE, pursuant to Rule 42.22.107, ARM, stating that it "had no possession or use of a government-owned transmission line in 1984; it had only a contract right to certain services provided by the ~onneville Power Administration ("Bonneville") on the 500-kilovolt transmission line" between Townsend-to-Garrison and Hot Springs-to-Idaho border. The other Colstrip Owners did not submit similar reports to the DOR. The DOR prepared a beneficial use assessment for PGE using the unitary approach. Initially, the DOR assessed PGE's use of the Hot Springs to border lines based upon the capitalized payments made by PGE to the BPA in 1984. However, shortly before trial, depositions revealed such payments represented charges for the use of both 230 and 500 KV lines. Thereafter, the DOR prepared a revised assessment excluding the effect of tax-exempt 230 KV lines. Appellant presents eight issues on appeal, each of which would invalidate the imposition of the challenged taxes. Three of the issues arise under the United States ~onstitution, three under the Montana Constitution and two are statutory challenges. However, our decision in Pacific Power & Liqht, Co. forecloses appellant's arguments of the first seven issues. Therefore, our opinion will deal exclusively with appellant's eighth issue contending that a portion of the beneficial use tax assessment was attributable to exempt property. This case comes to us against a backdrop of extensive technological changes in the electrical transmission industry. Goldberg v. Sweet (1989) , U.S. , 109 S.Ct. 582, 102 L.Ed.2d. 607. As noted in the factual discussion, BPA's entire integrated network is used to schedule power. The power transmitted across electrical lines can not be accurately identified, and indeed, the path taken is often indirect and bears no relation to contract requisites. Instead, we have only the input point and the eventual withdrawal of energy at a specified location. Between the two, various factors indicate a likely, though not actual, transmission path. Initially, we discuss our determination that PGE possessed a "beneficial use" within the meaning of the statute. Contrary to appellant's argument, no physical possession, exclusive use or control of the facilities is necessary. Rather, "beneficial use" has long been defined as a right recognized by law and enforceable by the courts. The expression "beneficial use" or "beneficial ownership or interest" in property is quite frequent in the law, and means, in this connection, such a right to its enjoyment as exists where the legal title is in one person and the right to such beneficial use or interest is another, and where such right is recognized by law, and can be enforced by the courts, at the suit of such owner or of some one in his behalf. Montana Catholic Missions v. iss sou la County (1906), 200 U.S. 118, 127-128, 26 S.Ct. 197, 200, 50 L.Ed. 398, 402; See also Harrison v. City of Missoula (1965), 146 Mont. 420, 407 ~ . 2 d 703; Pacific Power & Light, Co. To advance its commercial activities, and thereby increase profits, PGE contracted for firm transmission capacity over the BPA lines. This is an enforceable contract interest in firm megawatts of power. While PGE may not possess the lines, nonetheless, the power flowing through the lines remain under PGE's ownership. ina ally, PGE pays for the use of the lines regardless of the actual transmission flow. We find the reservation of firm transmission demand grants PGE an exclusive right taxable under S 15-24-1203, MCA. The physical wheeling of energy is not specific as to which line it passes through, but rather the energy can travel through various lines as long as the delivery point is where the contract specifies. However, the facts reflect the essential nature of the Hot Springs-Dworshak lines. PGE contracts to transmit bulk transfers of power, necessitating the use of the higher voltage, lower impedance, 500 KV lines. Without the Hot Springs lines, the transfer capability of Colstrip power to the west would be substantially affected. Indeed, BPA officials indicated that it could not fulfill. contract obligations absent the Hot Springs lines. Clearly, the Hot Springs lines are a vital portion of the RPA's main grid. Appellant contends the DOR's assessment erroneously assumed that only 500 KV facilities would be used in providing services, ignoring the fact that a substantial portion of the transmission facilities consist of tax exempt 230 KV lines. PGE argues that in reality, the power is scheduled over the entire BPA transmission system and generally no line or path is associated with a particular power schedule. The 500 KV lines from Hot Springs to the Idaho border are in the direct transmission path of PGE's bulk energy transfers to its Pearl substation. It is significant to note that no 230 KV lines exist parallel to the 500 KV lines. This fact strengthens the assumption that the 500 KV lines are essential to PGE's energy transfers in this case, and are properly taxed. It is not disputed that the DOR did not rely on actual transmission flows. Rather, the assessment was based exclusively upon PGE's Garrison-west Agreement with the BPA providing for firm transmission rights. To eliminate any influence of 230 KV lines in the assessment, the DOR requested BPA to provide detailed information regarding the actual cost of the installed Hot Springs lines located within the State of Montana, and information regarding the total capacity of the lines and date of installation. From the total cost, the DOR applied a straight line depreciation to the amount, awarding 13 years depreciation based upon a 35 year life. To the depreciated cost, the DOR multiplied a fraction isolating PGE's interest in the lines, (denominator represents the lines' capacity; and the numerator consists of PGE1s firm transmission demand). This value was then integrated into PGE's centralized assessment, and thereby subject to a 40% weighting figure which the DOR ascribes to the cost indicator. Puget Sound Power and ~ i g h t Co. v. Department of Revenue (Mont. 1988), 761 P.2d 336, 45 St.Rep. 1078. A tax for the beneficial use of property, as distinguished from a tax on property itself, is commonplace. Likewise, the United States Supreme Court decisions support a tax measured by the value of the tax-exempt property: In measuring such a use tax it seems neither irregular nor extravagant to resort to the value of the property used; indeed no more so than measuring a sales tax by the value of the property sold. . . In our judgment it was not an impermissible subterfuge but a permissible exercise of its taxing power for [the State] to compute its tax by the value of the property used. United States v. City of Detroit (19581, 355 U.S. 466, 470, 78 S.Ct. 474, 476, 2 L.Ed.2d 424, 427; united States v. Boyd (1964), 378 U.S. 39, 84 S.Ct. 1518, 12 L.Ed.2d 713. Reviewing the facts, we conclude that the tax was imposed on the privilege of using the property. The assessment reflects PGE's contractual reserve arrangement with the BPA, thereby ignoring actual flows and the lines' west to east transmission capacity. Affirmed. We concur: L@" | May 10, 1989 |
9ff5026c-23ad-45d2-9b59-9f91bfdda7f5 | MITCHELL v BOYER | N/A | 89-054 | Montana | Montana Supreme Court | JN THF SUPREME COURT OF THE STATE OF MOl\TTANA FRANK MITCHELL and EVELYN MITCHELL, P l a i n t i f f s a n d R e s p o n d e n t s , -VS- LYLE BOYER and M I N N I E BOYER, D e f e n d a n t s and A p p e l l a n t s . APPEAL FROM: D i s t r i c t C o u r t of t h e Fourth J u d i c i a l D i s t r i c t , Jn and for t h e C o u n t y of R a v a l l i , T h e H o n o r a b l e J a m e s R . Wheelis, Judge p r e s i d i n g . COTJNSEL OF RECORD: For A p p e l l - a n t : J e f f r e y H . L , a n q t o n , H a m i l t o n , M o n t a n a For R e s p o n d e n t : B r i a n 1 , . D e l - a n e y ; M u l r o n e y , D e l - a n e y & Scott, Missoula, Montana S u b m i t t e d on R r j e f s : A p r i l 2 0 , 1989 D e c i d e d : June 1 1 1 9 8 9 . -' . . . ? ' .- + . , - -- F i l e d : u-) .: , , - -. I .,. < -. .( ,.J, i l & [ & & . - - ~ - - 7 1 - -- 3 - 4 .. , Mr. Justice R. C. McDonough delivered the Opinion of the Court. This appeal involves an agreement to purchase land located near Corvallis, Montana. Defendants Lyle and Minnie Boyer (Boyers) appeal from the judgment of the District Court of the Fourth Judicial District, Ravalli County, granting recision of the agreement. The Court awarded plaintiffs Frank and Evelyn Mitchell (Mitchells) damages based on the down payment, earnest money and escrow payments made; amounts expended for improvements to the property; and prejudgment interest at an annual interest rate of ten percent from a date thirty days after Mitchells initially offered to rescind the agreement. We affirm. Boyers present two issues for review: 1. Did Mitchells ' reliance on the innocent misrepresentations of Lyle Boyer constitute negligent reliance, barring the remedy of recision? 2. Did the District Court err in finding that Lyle Royer's misrepresentations gave rise to a breach so material as to excuse Mitchells' duty of performance and rescind the contract? The property at issue in this case was originally part of a larger tract belonging to David and Clara Leicht. In 1978, the Leichts s o l - c i two parcels of their land to the Tices, who are not parties to this suit. Lyle Boyer was the real estate agent involved in that sale. At some point after the sale had! been negotiated, but before the deeds to the property had. been delivered, a disagreement arose between the Leichts and the Tices as to what would constitute allowable use of the parcels. The end result of this disagreement was that the parcel. here at issue was subjected to a restrictive co~renant, duly recorded in the Ravalli County Clerk and Recorder's O f f i c e a t Book 1-48, page 117, which: a ) p r o h i b i t e 6 subdividing t h e p a r c e l i n t o more than t h r e e l o t s , b ) r e s t r i c t e d use o f t h e property t o a g r i c u l t u r a l purposes and c ) provided t h a t no more than two houses with a t t e n d a n t o u t h u i l d i n q s could be b u i l t on t h e p a r c e l . This covenant was t o remain i n f o r c e f o r a s long a s t h e L e i c h t s continued t o hold any i n t e r e s t i n t h e i r remaining p r o p e r t y , which bordered t h e p a r c e l . Soon a f t e r t h i s i n i t i a l t r a n s a c t i o n took p l a c e , t h e Tices subdivided t h e p a r c e l i n t o t h r e e l o t s . Tices then sold two o f t h e l o t s t o t h e Boyers under a c o n t r a c t f o r deed. The d e s c r i p t i o n o f t h e p r o p e r t y i n t h e c o n t r a c t executed by t h e Tices and t h e Royers r e f e r s t o it a s being p a r t o f Orchard V i e w E s t a t e s , and s u b j e c t t o r e s t r i c t i o n s "as contained i n Book 148 Deeds, page 117." However, a t t h e end of t h e c o n t r a c t , i n a paragraph e n t i t l e d "Miscellaneous", t h e c o n t r a c t s t a t e s t h a t t h e r e s t r i c t i o n s w i l l be l i f t e d when t h e L e i c h t s no longer own any i n t e r e s t i n t h e p r o p e r t y t h a t i s t h e s u b j e c t o f t h e c o n t r a c t . I n o t h e r words, t h e r e s t r i c t i o n s w i l l be l i f t e d when t h e T i c e s pay o f f t h e i r o b l i g a t i o n a s pu-rchasers o f t h e p a r c e l from t h e L e i c h t s . Boyers then l i s t e d t h e l o t s t h e y had j u s t purchased a s being f o r s a l e . The M i t c h e l l s saw an advertisement f o r t h e l o t s i n a newspaper, contacted t h e Boyers and set up an appointment t o view t h e property. A t t h i s appointment, t h e M i t c h e l l s i n d i c a t e d t h e i r i n t e r e s t i n t h e p r o p e r t y , and asked about t e r m s . Lyle Boyer t o l d t h e M i t c h e l l s t h a t b a s i c a l l y t h e y would pay a sum t o t h e Boyers and t h e n assume Boyers' i n t e r e s t i n t h e c o n t r a c t f o r deed with t h e Tices. A t t h e end o f t e n y e a r s , t h e M i t c h e l l s would make a balloon payment. The M i t c h e l l s r e l a t e d t o Lyle Boyer t h e i r plan t o f u r t h e r subdivide t h e l o t s , i f necessary, i n o r d e r t o r a i s e money t o make t h e balloon payment. He t o l d them of t h e b u i l d i n g restrictions, and indicated that the restrictions would be lifted as soon as the Tices paid off their obligation to the Leichts, which he estimated would happen in the near future. Based on these discussions, the Mitchells entered into an agreement to purchase the Boyers' interest. For reasons that are not relevant here, the Leichts became concerned about how the land they had sold was being developed. In early 1986, they contacted an attorney, who sent a letter to lot owners, including the Mitchells, describing the restrictions and noting that they would not be lifted while the Leichts remained on their adjacent property. IJpon receiving the letter, the Mitchel-1s discussed the matter with the attorney who wrote the letter, the attorney who had closed their purchase of Boyers' interest, and their own attornes. They contacted the Boyers, but apparently were unsuccessful in attempting to work things out. Mitchell's attorney offered to rescind the contract, but the Boyers were unwilling to do so. The Mitchells filed. a complaint against the Boyers on April 23, 1987. According to the complaint, Lvle Boyer had misrepresented the duration of the restrictions, and the MitchePls agreed to purchase the property in reliance on those misrepresentations. Count One of the complaint alleged that Lyle Boyer ' s actions amounted to negligent misrepresentation, Count Two alleged actual or constructive fraud, and Count Three alleged mutual. mistake. All three counts sought basically the same measure of damages: recision of the contract, return of moneys paid out by the Mitchells for the property, and their costs and attorney's fees incurred in the action. The case was tried to the District Court, sitting without a jury. On Ju1.y 3.8, 1.980, the court issued its Findinqs of Fact, Conclusions of Law, and Judgment. The court held in favor of the Mitchells on Count One. The court found that Royer's misrepresentations had been made innocently, hut were negligent in that as a real estate agent, he should have known they were false. This appeal. followed. This case is in equity. As a result, the scope of our review is set by statute, and is very broad. Under S 3-2-204, MCA, this Court reviews all questions of fact and law in equity cases and makes its own determination based on that review. In this case, the District Court held Boyers liable for Lyle Boyer's negligent misrepresentations. On appeal, Boyers assign error to this ruling. Their first argument asserts that the Mitchells' reliance on those misrepresentations was in itself negligence, which precluded the court's award of recision. Our review of the case shows that we need not address Boyers' arguments. In fact, Royers' first argument points to a resolution to this case that present itself prominently in the record. Irrespective of any negligence, this is a case of mutual mistake. A mutual mistake occurs when, at the time the contract is made, the parties share a common misconception about a vital fact upon which they based their bargain. Carey v. Wallner (Mont. 1986), 725 P.2d 557, 43 St.Rep. 1706. Such a mistake is a proper ground for recision. Section 28-2-1711, MCA; Wallner, 725 P. 2d at 561. It was very important to the Mitchell's when they considered buying these lots from the Royers that they have the option to subdivide the lots in order to make the scheduled balloon payment. According to Boyers' contract with the Tices, the restrictions on subdividing and building would be removed once the Tices finished paying the Leichts for the parcel out of which the Boyers' lots were carved. Lyle Boyer related this to the Mitchells. Lyle Royer t e s t i f i e d a t t r i a l t h a t h i s r e p r e s e n t a t i o n s t o t h e M i t c h e l l s h o n e s t l y r e f l e c t e d h i s impression o f t h e r e s t r i c t i o n s . He had n o t been p r i v y t o t h e n e g o t i a t i o n s t h a t r e s u l t e d o r i g i n a l l y i n t h e r e s t r i c t i o n s being placed i n t h e deeds, and had never heen informed a s t o t h e i r c o n t e n t beyond t h e language found i n t h e c o n t r a c t between t h e Royers and t h e T i c e s . H e f u r t h e r t e s t i f i e d t h a t he d i d n o t d i s c o v e r t h e t r u t h about t h e r e s t r i c t i o n s u n t i l 1 9 8 6 , when he read t h e l e t t e r w r i t t e n by t h e L e i c h t s ' a t t o r n e y . The M i t c h e l l s t e s t i f i e d t h a t because Lyle Boyer was a r e a l e s t a t e a g e n t , t h e y assumed t h a t h i s r e p r e s e n t a t i o n s w e r e a c c u r a t e and t r u t h f u l . I t i s t h e r e f o r e apparent t h a t t h e Royers and t h e Mi-tchells were both mistaken a t t h e t i m e t h e c o n t r a c t was made; t h e y were l a b o r i n g under a common misconception about when t h e r e s t r i c t i o n s wou.ld be removed. Recision was t h e r e f o r e proper. W e a f f i r m t h e d e c i s i o n o f t h e D i s t r i c t Court. --- Chief J u s t i c e @<zit, u s t i c e | June 1, 1989 |
0639722e-e8ff-4884-9611-e820680a54a8 | WESTLAND ENTERPRISES INC v BOYN | N/A | 87-465 | Montana | Montana Supreme Court | NO. 87-465 IN THE SUPREME COURT OF THE STATE OF MONTANA 1389 MESTLAND ENTERPRISES, INC., an<. VERNON F. TAYLOR, Trustee, Plaintiffs and Respondents, -vs- BOYNE USA, INC.; RURAL IMPROVEMENT DISTRICT # 3 0 5 and its Directors, JACK HARPER, JOHN McCULLEY, and RAYMOND J. TOUT; GALLATIN COUNTY COMMISSIONERS, RAY WHITE, JANE JELINSKI and WILBUR VISSER; and MADISON COUNTY COMMISSIONERS, MARIE McALEAR, RILL DRINGLE and JOHN ALLHANDS, Defendants and Appellants. APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Peter 1 , . Rapkoch, Judge presiding. COUNSEL OF RECORD: For Appellant: Kirwan & Barrett; Peter M. Kirwan, Bozeman, Montana A. Michael Salvagni, County Attorney; Duke Wolf, Deputy County Attorney, Rozeman, Montana Loren Tucker, County Attorney, Virginia City, Montana For Respondent: Morrow, Sedivy & Bennett; Edmund P. Sedivy, Rozeman, Montana '2 m 7 ' \ > J- . < , , - - Submitted on Briefs: March 9, 1989 De~ided: April 27, 1989 Mr. Zustj.ce R.. C. McDonough deli.vered the Opinion of the Court This appeal involves a dispute over contract terms granting use of a sewer system located at Rig Sky, Montana. Defendants Royne USA, et al. (Royne) appeal from the judgment OF the District Court of the Eighteenth Judicial Di.strict, Gallatin County. The District Court enjoined Royne from allowing further connections to the system until the sewage facility had been expanded sufficiently to accommodate sewage from future real estate development contemplated by plaintiffs Westland Enterprises, et al. (Westland). The court also granted declaratory relief by quantifying the treatment capacity to be provided for Westland under the terms of the contract. We affirm in part and reverse in part . Boyne presents six issues for review: 1. Were the District Court's original Findings of Fact supported by the record? 2. Did the District Court have jurisdiction to make a de novo determination of the capacity and adequacy of the RIP P305 Sewage Treatment Facility? 3. Was the District Court's Order entered after the second trial supported by any findings of fact or evidence of record? 4. Did the District Court err in interpreting the con- tract at issue to require that RID # 3 0 5 provide Plaintiffs with present unused sewage treatment capacity for their future development? 5. Does the contract at issue contain a condition prece- dent and, if so, have Plaintiffs performed the condition? 6. Is an injunction a proper remedy where the contract at issue could not be specifically enforced? The record from t h e D i s t r i c t Court i n t h i s c a s e i s lengthy. The f a c t s a r e many, and some have been argued vehemently. There a r e a l s o a number o f p a r t i e s involved. I n t h e i n t e r e s t s o f keeping t h e d i s c u s s i o n o f t h e i s s u e s a s simple a s p o s s i b l e , t h e f a c t s and t h e r e l a t i o n s h i p s among t h e p a r t i e s w i l l be summarized. Royne i s t h e successor c o r p o r a t i o n t o Rig Sky o f Mon- t a n a , I n c . , t h e e n t i t y which began devel-opment of t h e Big Sky ski r e s o r t , g o l f c a u r s e and r e s i d e n t i a l r e a l e s t a t e n e a r t h e s k i a r e a . For purposes o f t h i s appeal., a l l a c t i v i t i e s of Rig Sky of Montana, I n c . , p r i o r t o t h e takeover o f t h e p r o j e c t by Boyne w i l l be regarded a s having been undertaken by Boyne. Westland i s t h e c r e a t i o n o f i n d i v i d u a l owners of land a d i a - c e n t t o t h e Rig Sky r e s o r t '?or t h e purposes o f developin? t h a t p r o p e r t y . The c o n t r a c t a t i s s u e was signed by t h e indjvj_c?ual landowners, h u t was f o r thle b e n e f i t o f Westland, and w i l l t h e r e f o r e be t r e a t e d a s a c o n t r a c t between Royne and Westland. Rig Sky is located. j.n t h e m0untai.n~ along t h e W e s t Fork o f t h e West G a l l a t i n River. Due t o t h e r e s o r t ' s r u r a l l o c a t i o n , p l a n s c a l l e d f o r t h e b u i l d i n g of a sewage treatment p l a n t t o s e r v e t h e s k i a r e a , condominiums and o t h e r r e s i d e n t i a l . u n i t s a s s o c i a t e d w i t h t h e r e s o r t . The b e s t l o c a t i o n f o r t h i s p l a n t was a s i t e on Westland p r o p e r t y . Royne and Westland e n t e r e d i n t o a c o n t r a c t i n 1 9 7 1 whereby Westland conveyed approximately 2 1 a c r e s of land. t o Foyne i n exchange f o r t h e rj.ght t o use t h e sewage faci1i.t.y. The c o n t r a c t r e a d s i n r e l e v a n t p a r t a s follows: 3 . I n c o n s i d e r a t i o n f o r t h e g r a n t i n g o f t h i s t r a c t of land by t h e Grantors t o R i g Sky, Rig Sky i n t u r n a g r e e s t o a l l o w t h e Grantors t o connect w i t h i t s sewer p l a n t f o r t h e subsequent development o f t h e a d j a c e n t lands o f t h e Grantor [sic] w i t h no charge tc t h e Grantors by Rig Sky f o r such connection and to further provide free sewage service as more particularly set forth below. 4. Accordingly, simultaneously upon the execution of this agreement by all parties and as reciprocal consideration, the Grantors agree to convey by Warranty Deed, accompanied by evidence of unencum- bered merchantable title through a memorandum OF title, the legal title to the property described in Exhibit "A". Big Sky in turn conveys to the Gran- tors upon the execution of this Agreement the right to connect to the sewer lines of Big Sky in order that the Grantors can utilize the said central tertiary sewer plant to be constructed by Big Sky and Big Sky further agrees to provide to the Gran-- tors sewage treatment at no charge for up to one million gallons per year for twenty (20) years from and after the date use of Big Sky's sewer system is commenced by the Grantors or by July 1, 1981, whichever is the sooner. Any useage [sic] by the Grantors over the said figure of one million gal- lons of sewage per year would be assessed against the Grantors at the same rate charged to other users of the plant. Big Sky reserves the right to refuse service to any user who is a successor of the Grantors who refuses to join any rural improve- ment district which may hereafter he created to own, operate and maintain the said sewer plant. After twenty (20) years from the date use commences by the Grantors under this agreement or July 1, 1981, whichever is the sooner, subsequent use by the Grantors of the sewer plant shall be subject to charge at the same rate charged for all other users. After this contract was signed, the plant was built and development of Big Sky proceeded. Several proiects were connected to the treatment facility. Westland did not begin plans for development of its property until approximately 1982. An initial- study drawn up by a consulting firm hired hy Westland called for a hotel, golf course, condominiums and other recreational facilities. The calculated "population equivalency" of the devel-opment was 3,700, which would re- quire t-reatment of 43 milljon gallons of sewage annually. Westland's study indicated that Boyne's treatment facility did not have sufficient capacity remaining to accommodate this much sewage. The study results were submitted to defendant Rural Improvement. District #305 (a quasi-public entity created at Royne 's request to operate the treatment plant) , along with the suggestion that steps be taken to expand the plant's capacity. The District consented to accept the amount of sewage forecast by the plan, subject to certain conditions: "peak flow" from Westland ' s devel-opment would be limited, eight more acres of Westland property would be conveyed to the District for expansion of the plant, and Westland would allow disposal of treated waste water on its property (by irrigating the proposed golf course). Westland disagreed with Boyne as to its rights under the contract, which eventually resulted in Westland filing suit. Westland's complaint contained three alternative prayers for relief. The first sought an injunction against Royne and the District prohibiting further connections to the treatment plant until Boyne could show that it had the capacity to satisfy the needs of Westland's planned development, and a declaration of the parties' rights under the contract. The second alternative prayer sought rescission of the contract. and return of the land to Westland. The third alternative prayer sought money damages for breach of contract. After trial by the District Court sitting without a iury, the court issued its judgment on August 19, 1985. The court ruled: (1) the contract between Bovne and Westland was a valid and enforceable agreement; (2) Westl-and was entitled to use the facility for treatment of 43 million gallons of sewage per year as proiected by its plan; 13) neither Westland nor its land could be assessed for the costs of improvements to or enlargement of the t-reatment facility necessary to accommodate Westland's use; (4) Westland was entitled to treatment of its first one million gallons of sewage per year without charge for the remainder of the 20-year period from July 1, 1981, to June 30, 200L; (5) Royne and the District were en-joined from allowing any further connections to the treatment facility until projects were completed to expand the capacity of the facility to accommo- date Westlandls projected sewage; ( 6 ) if Royne determined that it would be impossible to complete any necessary expan- sion, Westland would be entitled to full rescission of the contract and return of the land in question; and (7) Westland was entitled to costs and djshursements. Royne moved for a stay of execution of the judgment pending an appeal to this Court, and the parties filed a Stipulation for Stay of Fxecution on September 30, 1985. The Stipulation stated terms for the stay agreed to by hoth sides. Most importantly, hoth parties agreed that paragraph two of the court's judgment was valid and not subject to appeal. That paragraph reads: 2. That by virtue of said agreement, Plaintiffs are entitled to the use of the storage capacity of the existing sewage facility and the next addition to the facility in an amount of 43 million gallons of sewage per year which, usinq a 60-gallon per person per day figure, would allocate a population equiva- lency of 3,700 for the development of the Plain- tiffs ' lands. The court then entered an order conforming to the terms of the Stipulation. Boyne brought its appeal. to this Court, in the course of which a factual dispute arose between the parties as to what acti.on was required of Royne under the Dist-rict Court's judgment. We refused to hear the appeal due to the existence of the factual dispute, and remanded the case to the District Court. After a second trial, the District Court entered its order finding that Boyne had not "completed any projects which have expanded the capacity of the sewer treatment facilities" and therefore had not satisfied the court's August, 1985, judgment. This appeal followed. While Boyne raises six issues on appeal, its arguments to this Court center on two portions of the District Court's judgment: the quantification of rights in paragraph 2 of the judgment and the injunction requiring Boyne to expand the capacity of the treatment plant to accommodate Westland's entitled use. There have been no serious arguments advanced concerning the court's other holdings, which basically are corollary to these two main components. As to the quantification of Westland's right of use, the Stipulation for Stay of Execution controls. It is improper to raise an issue on appeal as to a question of law or fact after the parties have stipulated to that law or fact. In re Marriage of Prevost (Mont. 1987), 731 P.2d 344, 44 St.Rep. 84. The langua-ge of the Stipulation states that paragraph 2 of the court's judgment is not subject to appeal. The arguments put forth by both parties alleging withdrawal from the stipulation by their opponent are unconvincing. We therefore decline to address Boyne's issues as they relate to the quantification of rights found in that paragraph. Westland has the judicia1l.y determined right to utilize the treatment facility to the extent of 43 million gallons of sewage per year. That right will be res judicata in any future dispute between these parties. Boyne's second challenge raises a novel issue. Injunc- tions are rarely used to enforce contract rights or prevent breaches, and applicable court decisions concerning the propriety of this tactic are scarce. However, the legislature has set forth st-atutory guidelines for the use of injunctions. An applicable guideline is found at 5 27-19-103!5), MCA. Under this sect.ion, an injunction cannot be obtained "to prevent the breach of a contract the performance of which w o u l . c l not be specifically enforced." A . list of "obligations which cannot be specifical1.y enforced" is found at S 27-1-41?, MCA. At subsection ( S ) , that list. includes "an agreement- the terms of which are nvt sufficiently certain to make the precise act whj-ch is to he done clearly ascertainable." In this case, Westland has alleged that its rights under the contract are not clear. Westland sought and obtained a quantification of its entitlement to use the treatment plant from the District Court. However, if Westland's rights under the contract are unclear, then Royne ' s corresponding duties are equally unclear. Those duties have not been clarified in this action. Both parties admit. that bargaining terms such as the amount of land required for the treatment plant an6 the scope of future developments were necessarily based on estimates and assumptions used by the engineers involved in desi9n.i-ng the pl.ant. During this action, both parties have hired engineering firms to produce reports concerning questions such as the capacity of the facility as it currently stands; how much of that capacity is in actual use; how much will be used by developments currently being built; and how much capacity, if any, must be added to the plant in order to accommodate Westland's future needs. This evidence conflicts. Engineers for each party disagree on the answers to these questions and cast doubt upon the methods used to arrive at the answers given in the other party's report. The second trial in this case dealt with these ques- tions, but failed to produce any real clarification. The arguments using the engineering evidence were directed toward Royne's allegation that it had satj sfied the court's prior judgment by taking more accurate measurements of the plant's capacity and making certain repairs. The court held that Boyne had failed to satisfy the judgment because it had not. "completed any projects which have expanded the capacity" (emphasis ours) of the facility. The precise acts to be carried out by Boyne cannot be ascertained from the contract. itself or the record of this case. Nor have the parties argued on appeal that Boyne's obligation has been or should be quantified. Section 27-1-412(5), MCA, thus forbids specific enforcement of that obligation. The court's injunc- tion requiring expansion of the plant to prevent a possible breach of contract by Royne was improper. By requiring that Boyne somehow build current capacity into the system for use that will not occur until some indef- inite point in the future, the District Court appears to have sanctioned waste. There is evidence in the record to show that enlargements to the system constructed now could he useless (due to weed qrowth, rust, etc.) by the time Westland is read-y to utilize it. Considering the embryonic status of F7estlandfs development plans, it is also possible that the chemistry and the mechanics used to treat sewage at Rig Sky will have changed when the time to connect to the sewer system arrives. 'The right granted to Westland on the face of the con- tract is that of connecting to Foyne's sewer system. At Westland's request, the District Court looked to extrinsic evidence to quantify the amount of sewage Westland could place in the system. When Westland wishes to exercise its right to connect, Boyne and the District must comply or be in breach of the contract. Unt.il that time, no breach of this contract will have occurred, and adjudi-cation of this quest'on will be premature. 4 Corbin on Contracts 9.?3 (1951-1 ; s $ ? 7 - ? - 1 r ) 3 , MCA. HOW F T ~ s t J a n d ' s s~tnrage will he accommodated is a concern for Royne and the District tc address. It was not a proper subject for an Fniunction. We have held that the District Court's quantification of rights was stipulated to by the part.i.es, and is therefore binding. We have also held that the injunction was improper- ly granted. Given these holdings, v 7 e affirm those portions of the court's judgment upholding the validity of the con- tract, quantifying Westland's right to utilize the facility, forbidding assessment of Westland or its property for anv costs of enlargement of the facility, affirming Westland'c right to free treatment of sewage in the amount of 1 million gallons per year for a 20-year period prescribed in the contract, and granting Westland costs and disbursements of $519.25. We reverse that portion of the court's judgme~t enjoining Boyne from making further connections to the treat- ment facility until current capacity is built into the system for Westland's future use, and remand the case for the Dis- trict Court tc strike paragraphs 5 and 6 from its judgment. | April 27, 1989 |
56fcd46b-b123-4cc2-b1d7-06bc1fb26cdf | MATTER OF C C | N/A | 88-214 | Montana | Montana Supreme Court | No. 88-214 I N T H E SUPREME C O U R T O F T H E STATE O F MONTANA 1989 I N THE M A T T E R O F C.C., Youth i n Need o f Care. APPEAL FROM: ~ i s t r i c t Court o f Eighth ~ u d i c i a l ~ i s t r i c t , I n and f o r t h e County of Cascade, The Honorable J o e l G. Roth, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: John ~ e i t h , Great F a l l s , Montana For Respondent: Hon. Marc Racicot, Attorney General, Helena, Montana Kathy Seeley, A s s t . Atty. General, Helena p a t r i c k L. Paul, County Attorney; Tammy P l u b e l l , Deputy County A t t y . , Great F a l l s , Montana Antonia Marra, ( f o r c h i l d ) , Great F a l l s , Montana E. June Lord, ( f o r f a t h e r ) , Great F a l l s , Montana I-n L ' : ; F i l e d : ; : Submitted on B r i e f s : March 31, 1989 Decided: M a Y 2, 1989 Clerk Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. The Youth Court, Eighth Judicial District, determined C.C. to be a youth in need of care. C.C. was removed from her mother's (K. C. Is) home pursuant to a petition for temporary custody filed by the Department of Social and Rehabilitation Services (SRS) (now Department of Family Services) . Later C. C. was taken out of foster care and, after a dispositional hearing, she was placed in the custody of her natural father, B.C. Additionally, K.C. was ordered to pay monthly child support to the youth's father. The mother appeals. The respondents are the State of Montana on behalf of the Department of Family Services (Department), the youth, and the father. The three issues on appeal are stated by the mother as follows: (1) Did the Youth Court err by transferring custody of C.C. because it had no jurisdiction to do so; (2) Did the Youth Court err in awarding child support payments to the father; (3) Did the Department of Family Services act arbitrarily in making its recommendation to the court. We affirm the custody award and reverse the child support award. The third issue is without merit. C.C. is a nine-year-old caucasian female. She first came to the attention of SRS in the spring of 1985 when it was reported that C.C. was left at home alone after preschool every day until 5 : 0 0 p.m. when her mother returned home from work. C.C. was just six years old at the time. C.C. was then living in the sole custody of her mother and had been since her parents divorced when she was an infant. Her mother was employed as a phone receptionist at a local business and, in fact, was not providing any supervision of C.C. while the mother was at work. After being contacted by SRS and advised that this was unacceptable supervision of a minor of C.C.'s young age, K.C. placed C.C. in an SRS-approved daycare at county expense. However, K.C. was defensive and not open to the suggestions of SRS. She was resentful of their interference and told them of her financial inability to provide daycare for C.C. K.C. denied that the previous arrangements she had made for C. C. were harmful to her and explained that she had obtained a large dog to keep C.C. company and that she had instructed her to go to the neighbor's if she were frightened. Further, C.C. and K.C. had a phone-calling system of daily check-in calls. C. C. continued in daycare until the next fall, but then was removed by her mother. Her mother again had the child walk home alone from school and remain in the family home alone until the mother returned from work each evening. C.C. came to the attention of SRS again in March of 1986 when it was reported that C.C. had multiple deep purple bruises on her buttocks from a severe spanking inflicted by her mother. At roughly the same time, C.C. showed a social worker a bump on her head and bleeding gums she had from her mother harshly brushing her teeth as discipline. This information was outlined in the affidavit filed by SRS in support of its petition seeking temporary custody of C.C. and an investigation. Hearing on that petition was held April 4, 1986, and the Youth Court determined C.C. to be a youth in need of care. She was removed from the temporary receiving home in which she had been staying since the petition was filed and was then placed in a foster home. Foster care continued for about a year. The mother exercised visitation of C.C. throughout these proceedings. To make a final disposition, the court ordered an investigation and psychological studies. Psychological evaluations of all parties and home studies of each parent were conducted in the months that followed the original hearing. The dispositional hearing, which was continued a number of times, began January 8, 1988, and concluded on January 22, 1988. Testimony at trial was undisputed that C.C. had emotional problems that manifested themselves in peculiar behavior. C.C. was extremely afraid to get dirty for fear of being disciplined. She would not play with other children or with toys in order to keep clean. She had trouble completing homework at school, for fear of making a mistake and being disciplined. At the same time, C.C. exhibited some surprising social skills. Although shy and fearful at some times, she became quite talkative at other times and always responded positively to outside nurturing. C.C. impressed everyone as a bright and alert child. Dr. Kuka, a clinical psychologist, testified at trial as C.C.Is therapist. He relayed many instances of psychological abuse of C.C. by K.C. in addition to the limited physical abuse. C.C. had an older sister, Brenda, who died of cancer. K. C. compared C.C. to Brenda on many occasions in a harsh and detrimental fashion: telling her to behave or she would be in the grave with her dead sister; telling her that she was not as pretty or well- behaved as Brenda. K.C. also instructed C.C. never to get out of bed at night or the Itmonsters from under the bed would get her." This terrified her greatly, which led to severe nightmares, headaches, and crying fits. Dr. Kuka testified that C.C. should not live with K.C. until K. C. could recognize the effect her actions had on C.C. K. C. could not admit that this conduct was harmful to or abusive of C.C. K.C. was defensive and consistently denied responsibility for her actions. At one point, she told Dr. Kuka that it was C.C.'s fault and that C. C. forced K. C. to behave that way. Dr. Kuka recommended that K.C. continue her own psychotherapy program, to continue visitation of C.C. to foster trust and abate the fear in that relationship, and that permanent custody be transferred away from the mother. Dr. Rushworth, a clinical psychologist, testified at trial as K. C. s therapist. She testified to K. C. Is progress in the two years since the case began, but expressed reservations about K.C. having custody. Dr. Rushworth ultimately could not recommend that K.C. have custody at that time. All experts at trial testified that a final disposition of this case would be to C.C.'s benefit. She had been in foster care for a year and had since been living with her father on a "tempor- ary" basis, which had continued for several months. Stability for C.C. and knowing definitely where she would be living permanently were stressed at trial as being in C.C.'s best interest. B.C., C.C. Is natural father, lived in a different city when these proceedings began and had little contact with C.C. from the time of her birth until the time he became aware of her circum- stances. However, B.C. had always provided for the financial support of C.C. and moved to the same city as K.C. during the proceedings. B.C. testified at trial that he had never been the custodial parent of C.C. and that he hesitated earlier to do so because of his lack of parenting skills. Over the course of the proceedings, however, B.C. sought advice on parenting and began exercising visitation and custody of C.C. He testified that he now wanted custody of C.C., was comfortable in parenting her, and would allow visitation with the mother. Home study of B.C. as conducted by the Department showed that B.C. had adequate parenting skills; no abusive tendencies; no history of abusive behavior; no alcohol or chemical dependency or tendency for same. The Department concluded that B.C. could receive and care for the youth and recommended to the court in its report and by oral testimony in court that B.C. be awarded custody of C.C. The Youth Court awarded custody to B.C., awarded him child support and allowed visitation by K.C. K.C.'s parental rights were not terminated. K.C. appeals that judgment and order. I. Jurisdiction Appellant's first challenge to the Youth Court order is that the court erred in transferring permanent custody because it had no jurisdiction to do so. Sole jurisdiction, the mother argues, for that type of action lies exclusively with the district court which originally dissolved the marriage and awarded sole custody to her. (The parties were divorced in Fort Benton less than one year after they married.) She claims that a transfer of custody can only be made by that court, on affidavit, after a change of circumstance, pursuant to the family law statutes set out in 40-4- 219 et seq., MCA. We do not agree. The Youth Court is created and governed by statute in Montana. However, because this case does not involve a youth charged with a violation of law, it is not within the Youth Court Act, section 41-5-101 et seq., MCA. Actions brought under that Act are within the exclusive jurisdiction of the Youth Court. Rather, in this case, the Youth Court and the District Court have concurrent jurisdiction. Section 41-3-103, MCA, reads in pertinent part: (1) In all matters arising under this chapter, the Youth Court shall have concurrent juris- diction with the district court over: (a) all youths who are within the state of Montana for any purpose; (c) any person who is alleged to have abused, neglected, or caused the dependency of a youth who is in the state of Montana for any pur- pose. Thus, the Youth Court had jurisdiction over C.C. and K.C. and any challenge to that jurisdiction is unfounded. Once a child such as C.C. has been determined to be a youth in need of care, the Youth Court has many options. The award of custody to B.C. is statutorily provided for in section 41-3-406, MCA. That section provides: If a youth is found to be abused, neglected, or dependent under 41-3-404, the court after the dispositional hearing may enter its judg- ment making any of the following dispositions to protect the welfare of the youth: (1) permit the youth to remain with his parents or guardian subject to those condi- tions and limitations the court may prescribe; (3) transfer legal custody to . . . a relative or other individual who, after study by a social service agency designated by the court, is found by the court to be qualified to receive and care for the youth[.] The Youth Court properly took in testimony that B.C. was qualified to receive and care for C.C. The findings made by the court are based on the substantial credible evidence of the experts and of B.C. The transfer of custody was lawful under this statute and no challenge to that transfer can be sustained. The court is affirmed on that issue. Appellant contends that affirming the Youth Court on that issue would encourage parties who were not successful in obtaining custody pursuant to the family law statutes to try again to get custody through a Youth Court proceeding. That argument has no merit. We note only that this was not a custody battle between two parents. Rather, this action was instituted by the State of Montana when a petition for temporary custody was brought by SRS to protect C.C. The natural father later was apprised of the continued abuse and neglect of his child by his ex-wife. After being investigated and interviewed over many months, the court determined the father to be a qualified person to receive and care for the youth as provided by the statutes and ordered that legal custody be transferred to the father for the welfare of the child. That transfer of custody was lawful, was made to protect the welfare of the child and will not be overturned. 11. Child Support The court erroneously awarded child support to B.C. That portion of the Youth Court order is reversed. Child support in Montana is awarded only after the trial court considers I1all relevant factorsI1 pursuant to section 40-4-204(1), MCA. Such factors include, but are not limited to, (a) the financial resources of the child; (b) the financial resources of the custodial parent ; (c) the standard of living the child would have enjoyed had the marriage not been dissolved; (d) the physical and emotional condition of the child and his education needs; (e) the financial resources and needs of the noncustodial parents . . . Additionally, in order to award an equitable amount, the court must consider the formula set forth in In Re Marriage of Carlson (Mont. 1984), 214 Mont. 209, 693 P.2d 496. There is no record that the trial judge considered either the factors in section 40-4-204 (1) or the Carlson formula, except to note that the father had just started a new business and that the mother was employed as a receptionist. Where there is insufficient evidence to support a finding that child support is necessary, there has been an abuse of discretion. See for discussion, In re the Marriage of Keel (Mont. 1986), 726 P.2d 812, 43 St.Rep. 1742. There is insufficient evidence in this case. The child support award is reversed. It should be noted here that B.C. did not request an award of child support. If, in fact, he is financially in need of child support from his ex-wife, he could petition the proper forum at a later date and put forth evidence of the factors listed herein. Lastly, K.C. contends that the Department acted arbitrarily in its recommendation to the court regarding custody of C.C. K.C. bases that allegation on her suspicion that the Department had been following her and just wanted a reason to take her child away. She states that the Department acted arbitrarily in recommending she not have custody because they did not recognize the progress she had made with Dr. Rushworth during the months of therapy. Rather, they had already made their minds up months ago that K.C. should lose custody of her child, K.C. argues. That argument is without merit. The only proper question for review that K.C. could pose to this Court on appeal is whether the Youth Court acted arbitrarily in following the recommendation of the Department. We have already held that the custody award was both lawful and supported by the substantial credible evidence in this record. We will not discuss further challenges to the custody award. The custody award to B.C. is a child support is reversed. We concur: | May 2, 1989 |
707ce16b-c7c4-43e4-aac3-1f8d6a430a95 | USF G v CROMWELL | N/A | 88-566 | Montana | Montana Supreme Court | No. e?-566 IN THE SUPREME COTJRT OF THE STATE OF 1 9 8 9 -- i ' - , / . . UNITED STATES FIDELITY and GIJARANTY I ' ' , \ ., ' . . i . COMPANY, a Maryland corporation, C , ? L , [/ ,+ > I PI-aintiff and Appell-ant, RICHARD CROMWELTJ, Defendant and Respondent. APPEAL FROM: District Court of the Fifteenth Judicial District, In and for the County of Daniels, The Honorable M. James Sorte, Judge presiding. COTJNSETI OF RECORD : For Appellant: William P. Driscoll, Gough, Shanahan, Johnson and Waterman; Helena, Montana For Respondent: Jerrold L . Nye, Nye and Meyer; Billings, Montana Submitted on Briefs: March 23, 1 9 8 9 Decided: April 13r 1 9 8 9 . . - . . , ,. > . - : ,,. , 7: rd ; 4 -- r - . . . " Clerk , ? : -4 -- .d ,- Clerk Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Plaintiff, United States Fidelity and Guaranty Company (USF&G), is a bond surety appealing a judgment by the District Court, Fifteenth Judicial District, Daniels County, which denied recovery from defendant Cromwell for monies paid out by USF&G on a performance bond. The District Court sitting without a jury found that the plaintiff had not carried its burden of proof in proving that a signed and duly executed contract existed between the parties which could be enforced against Cromwell. USF&G appeals. The sole issue on appeal is whether the District Court's findings and conclusions are clearly erroneous because USF&G argues that the record contains substantial credible evidence requiring recovery on the bond for the plaintiff. We affirm the District Court. The standard of review for a judge sitting without a jury pursuant to Rule 52 (a) , M.R. Civ. P. , is that the court s findings shall not be set side unless clearly erroneous. Thus, when the District Court's findings are based on substantial credible evidence, they are not clearly erroneous. Parker v. Elder (Mont. 1988), 758 P.2d 292, 45 St.Rep. 1305. Defendant Richard Cromwell and Terry Forchak were farmers in Scobey, Montana. In 1983 they leased farm land owned by Howard Smith, Randy G. Smith and Debra K. Hersel (lessors). Cromwell and Forchak both signed the farm lease dated February 3, 1983; however, each maintained separate farming operations and were not business partners. The existence and the terms of the farm lease are not disputed. The annual rent payment under the lease was $10,543 per lessee, for a yearly total of $21,086. On June 13, 1984, Cromwell and Forchak entered into an addendum to the farm lease which required both Cromwell and Forchak to furnish the lessors "a performance bond in the amount of the annual lease payment . . . I t On May 1, 1984, Cromwell and Forchak executed an IvApplication for License and Miscellaneous Bondsn1 with USF&G. The application was signed by both parties and offered into evidence at trial. The purpose of the application was to obtain the issuance of a bond from USF&G as surety with Cromwell/Forchak as principals to the lessors as obligees, in the amount of $10,543 which would assure the annual payments under the farm lease. The terms of the application stated that Cromwell and Forchak would : indemnify [USF&G] against all losses, damages, claims, suits, costs, and expenses whatever, including court costs and counsel fees at law or in equity or liability therefor which [USF&G] may sustain or incur by reason of: executing or procuring said bond, or making an investigation on account of same, or evi- dence thereof from same, or procuring its release or evidence thereof from same, or defending, prosecuting or settling any claim, suit or other proceedings which may be brought or threatened by or against any of the under- signed or [USF&G] in connection with the same or any other agreements herein contained. On June 25, 1984, USF&G claimed it issued bond number 28-0130- 10341-84-6 with USF&G as surety and allegedly with Cromwell/Forchak as principals; lessors were named as obligees for the amount of $10,543. On August 29, 1984, Cromwell individually executed an "Application for License and Miscellaneous Bondsvv (rider) from USF&G to increase the previous bond from $10,543 to $21,086 so that the entire annual amount due under the farm lease would be pro- tected. Cromwell identified his signature on the second applica- tion offered into evidence at trial. On September 10, 1984, USF&G issued the rider to the previous bond increasing the total amount to $21,086. The remaining terms and parties were identical to the original bond. Cromwell paid his one-half of the rent in 1985 in the amount of $10,543. Forchak did not pay the remaining rent. He subse- quently declared bankruptcy and was discharged from this obligation leaving an unpaid balance of $10,543 due the lessors. The lessors notified USF&G of the default and made a claim against the bond in the fall of 1985 in the amount of $10,543. Williams testified on behalf of USF&G that he notified Cromwell and Forchak of the claim. After receiving no satisfaction from either of them, Williams paid the claim in January 1986 in the amount of $10,543 plus interest as demanded by the lessors/bond obligees. USF&G filed suit against Cromwell and Forchak to recover on the bond for USF&Gts monies paid out and the cost of their lawsuit. Forchak was dismissed later from the suit because his debt was discharged under the bankruptcy proceeding. USF&G proceeded against Cromwell individually as a principal on the bond. The case went to trial on June 10, 1988. The trial court made several findings leading to the ultimate conclusion that USF&G did not prove that an indemnification contract existed between USF&G and Cromwell because the best evidence of the contract (the contract/bond itself) had not been admitted into evidence and all of the oral testimony offered to prove the contents of the contract was disputed. It is that conclusion and the findings leading up to it which USF&G cites as error by the District Court. We note here at the outset that this is not a question of suretyship law nor contract interpretation. The dispositive issue is whether the plaintiff followed the rules of evidence to prove that an indemnification contract existed such that the contract could be enforced against the defendant and the plaintiff would prevail. The District Court found that the plaintiff did not. Section 28-2-903, MCA, provides that a promise to answer for the debt, default or miscarriage of another must be in writing. The district judge concluded in Conclusion of Law #1 that no such written document was introduced in evidence in this case. We agree. I. Best Evidence At trial USF&G failed to introduce the original bond or the original rider. Instead, Williams, as custodian of the records for USF&G, introduced a sample form of the bond and the rider with the appropriate information typed into show the court what obligations the bond purported to impose. Williams testified that the origi- nals were likely in the hands of the lessors. However, USF&G offered no certainty as to where the originals were and no reason as to why they were not produced. That is not acceptable under the Rules of Evidence. Rule 1004, M.R.Evid., states that the original writing is not required if it is (1) lost or destroyed; (2) not obtainable by judicial process; (3) in the hands of the opponent; or (4) if it relates only to a collateral matter. The District Court was not allowed to make a finding under this rule as to whether the original was necessary because the plaintiff offered no reason for its absence. Rule 1007, M.R.Evid., states that no accounting for the nonproduction of the original will be required if the contents of the writing (1) may be proved by testimony or (2) by written admissions of the party against whom it is offered. However, this rule is inapplicable to these facts because USF&G tried both approaches and failed. During discovery USF&G requested Cromwell to admit the authenticity of a copy of the bond. Cromwell declined, stating that he had no actual knowledge that a bond had been issued and did not recall ever signing a bond. During trial Cromwell testified that while he believed a bond may have been issued, he did not know if he was the named principal and had no recall of signing a bond charging him with its obligations. Cromwell stated that he only signed an application filled out by an insurance agent in order to fulfill his obligations under the farm lease. When Cromwell declined to admit to the authenticity of a copy of the bond during discovery, it became incumbent upon USF&G at trial to come forth and produce the bond, or put in evidence the reason why -the original bond was not produced and why secondary evidence should be allowed to prove that the contract existed, Rule 1004, M.R.Evid. Those failures by USF&G were fatal to its case. The District Court had no evidence from which it could make a finding that Cromwell signed the bond, thus duly executing the contract, or that he was named as a co-principal on the bond in order to enforce it against him. Moreover, Williams testified that he did not know for certain to whom bond number 28-0130-10341-84- 6 was paid. He brought no documentation or business records with him to trial to refresh his memory of the transaction, his recollection was only that $10,543 plus ' ' a couple hundred dollars1' interest was paid out on the bond to someone. USF&G argues that a conclusion that the contract existed is supported by the record because Cromwell signed an application to procure a bond and because on cross-examination Cromwell stated he believed a bond had been issued. Likewise, during discovery, Cromwell admitted that he believed a bond had been issued, although he had not signed one and had no record of one. From there, USF&G wishes us to fill in the blank spaces in its case because it, in fact, issued a bond and paid a claim against it to someone. But this Court cannot do that. The findings made by the court were not clearly erroneous in light of the evidence. Because the entire case turns on existence of the contract, we decline discussion on plaintiff's other citations of error by the District Court. The District Court was correct in ruling that the best evidence of a contract had not been received into evidence and that the existence of a contract enforceable against Cromwell had not been proved. Judgment affirmed. 6 We concur: | April 13, 1989 |
cb4ea6f4-63ed-44a9-bf06-9f3178976b39 | MINUTEMAN AVIATION INC v SWEARI | N/A | 88-552 | Montana | Montana Supreme Court | No. 88-552 IN THE SUPREME COIJRT OF THE STATE OF M O M T A P I T A 1989 MINUTEbIAP.5 AVIATION, INC. , Plaintiff and Appellant, -VS- M.R. SWEARPNGIN, d/b/a SWEARINGIN AIRCRAFT ENGINE SERTTICE, Defendant and Respondent. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable James R . Wheelis, Judge presiding. COUNSEL OF RECORD: For Appellant: Roone, Karlberg & Haddon; Sam E. Haddon, Missoula, Montana For Respondent: John 0 . Mudd; Kelly M. Willis; Garlington, Lohn & Robinson, Missoula, Montana Submitted on Briefs: March 2, 1989 Decided: ~ p r i l 27, 1989 Mr. Justice Fred J . Peber delivered the Opinion of the Court. Minuteman Aviation, Inc. brought an action against M.R. Swearingen d/b/a/ Swearingen Aircraft Services in the State of Montana, Fourth Judj-cia1 District, Mj-ssoul-a County. Mr. Swearingen, a resident of Oklahoma, moved to quash service or to dismiss for lack of personal jurisdiction. His motion to dismiss was granted, and Minuteman appeals. We reverse and remand. The issue presented for our review is whether the defen- dant in this action can be subjected to personal jurisdiction in Montana. Minuteman Aviatj-on, Inc . (Minuteman) is a Montana corpo- ration, whose operations include aerial crop sprayj ng. Kr. Swearingen doing business as Swearingen Aircraft Engine Services (Swearingen) , does business in the State of Oklahoma where Swearingen overhauls and repairs aircraft engines. Affidavits were filed by both parties. In part the affidavits contradict each other. The uncontradicted portion of such affidavits shows that in March of 1987, Swearingen completely overhauled an aircraft engine for Minuteman. The repair work was done in Oklahoma. After installation in a Minuteman aircraft, the engine failed while the aircraft was used for crop spraying in Montana on April 5, 1987, and the aircraft crashed near Conrad, Montana. The affidavits fur- ther establish that at the request of FAA, Mr. Swearingen and one of his representatives came to Montana in May of 1987 to inspect the tear down of the engine in an attempt to deter- mine the cause of the engine failure. The engine was re- turned by Minuteman to Swearingen in the State of Oklahoma for another repair. After repair, the engine was shipped back to Montana and placed in the aircraft. The engine failed aaain and the aircraft was taken out of service. Minuteman filed suit in Montana against Swearingen, alleging negligence, breach of warranty and breach of con- tract. In response to the complaint Swearingen filed an affidavit and motion to quash or in the alternative to dis- miss for lack of personal jurisdiction. In Mr. Swearingen's affidavit he asserts facts which wou1.d defeat jurisdictional requirements. The president of Minuteman, Mr. Kenneth Mamuzich, then filed an affidavit in support of allegations made in the complaint regarding Swearingen's contacts within the State of Montana. Mr. Swearinqen then filed an opposing affidavit. After a hearina on the issues, the court granted Mr. Swearingen's motion to dismiss. Did the District Court err in granting defendant's motion to dismiss for lack oC personal iurisdiction? Whether the State of Montana may claim personal juris- diction over a nonresident defendant is a t-wo-part inquiry. As stated in Simmons v. State (1983), 306 Mont. 264, 271-7?, 670 P.26 1372, 1376: For a Montana court. to exercise jurisdriction over a nonresident defendant, two questions must be considered. ( 1) Does the nonresident defendant come within the provisions of Montana's long-arm jurisdiction statutes; and 1 2 ) would exercise of 1-ong-arm jurisdiction over the nonresident comport with traditional notions of fair play and substan- tial justice. May v. Figgins (Mont. 1980), 607 P.2d 1132, 37 S.Rep. 493; Haker v. Southwestern Ry. Co. 11978), 1 7 ' 6 Mont.. 364, 578 P.2d 724. See, generally, International Shoe Co. v. Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95. If we find, as a matter of statutory construction, that the nonresident does not engage in any of the several activities enumerated in our long-arm statute, then our analysis ends and we must decline jurisdiction. However, even if the nonresident has done something which potentially confers jurisdic- tion, we must advance to the due process component which is ultimately determinati-ve of the jurisdic- tional question. In accordance with the first inquiry, personal jurisdic- tion mu-st initially be established pursuant to Rule 4 R , M. R..Civ.P. The relevant portions of that statute provider (1) Subject to jurisdiction. All persons found within the state of Montana are subject to the jurisdiction of the courts of this state. In addi- tion, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the fol- lowing acts: (a? the transaction of any business within this state; (b) the commission of any act which results in accrual within this state of a tort action. . . . (el entering into a contract for services to he rendered or for material-s to be furnished in this state by such person; or . . . ( 2 ) Acquisition of jurisdiction. Jurisdic- tion may be acquired by our courts over any person through service of process as herein provided; or by the voluntary appearance in an action by any person either personally, or through an attorney, or through any other authorized officer, agent or employee. While the plaintiff does not claim that Swearingen was "found within" Montana, it does contend that Swearingen transacted business within Montana and also committed acts which resulted in accrual of a tort action in Montana. As pointed out in - - Simmons, in order to exercise jurisdiction consistent with due process, it is necessary that an entity have had "minimum contacts" with the forum state so that requiring it to defend will not offend traditional notions of fair play and! substantial justice. Simmons, 670 2.2d at 1377. This Court has previously acfirmes a three-part test in analyzing the due process component. In Simmons, 670 P.2d at 13?8, we quoted the Ninth Circuit Court of Appeals in ac- knowledging the following test: "If the nonresFdent defendant's activities within a state are 'substantial' or 'continuous and system- atic,' there is a sufficient relationship between the defendant and the state to support jurisdi-cti-on even tf the cause of action is unrelated to the defendant's forum activities. [citations omitted] If, however, the defendant's activities are not so pervasive as to subject him to general jurisdic- tion, the issue whether jurisdiction will lie turns on the nature and quality of the defendant's con- tacts in relation to the cause 05action. In our circuit, we use the 5011-owing approach in making this evaluation: (1) The nonresident defendant r r l u s t do some act or consummate some trsnsaction with the forum or perform some act by which he purposefully avails himself of the privilege oC conducting activities in the forum, thereby invok- ing its laws. (2) The claim must be one which arises out of or results from the defendant's forum-related activities. (3) Exercise of juris-. diction must be reasonable. [citations omitted]." Inherent in this approach is the recognition that while a nonresident defendant may be found to have purposely availed itself of activities within a forum state, the exercise of jurisdiction may still be unreasonable. In the present. ca.se facts relevant to whether Mr. Swearingen can be subjected to personal jurisdiction in Montana are disputed. Both parties support their respective positions with an affidavit. By its affidavit Minuteman establishes that it became aware of Swearingen and his busi- ness through "Trade-a-Plane" magazine, subscription copies of which were received at Minuteman in Nissoula, Montana. Einuteman also establishes by affidavit that Swearingen shipped the engine back to Montma after repair, knowing that it was to be used for crop spraying operations in Montana. Minuteman alsc asserts that Mr. Swearingen voluntarily came to Kontana to inspect the engine after the crash and that at that time Mr. Swearingen reaffirmed his guarantee of the prior engine overhaul and requested the engine be sent back to Oklahoma for additional repair. Finally, Minuteman as- serts that two torts occurred in Montana, each caused hy Swearingen. The facts sworn to by Mr. Swearingen in his affidavit are materially different. He states that he had not adver- tised in "Trade-a-Plane" magazine for seven years prior tc 1987. He states that a 3 e r the first engine repair, plain-, tiff instructed him to ship the engine t . o Texas to be in- stalled i.n an aircraft which was being repaired there. He denies that he knew this engine was to be used by plaintiff in Montana. He asserts that his appearance in Montana tc inspect the engine was not. voluntary but was at the insis- tence of the FAA. Mr. Swearingen denies that he reaffirmed his guarantee while in Nontana, stating rather that Minuteman contacted him in Oklahoma after he had returned. He states that he agreed to repair the engine in Oklahoma, but wlth no future guarantee. And finally, Swearingen asserts that the engine failures were caused by Minuteman's own negligence. He states his belief that the FAA's official report will indicate that the engine failure was due to negligent instal- lation of a carburetor by Minuteman, causing the first fail- ure. He asserts that the second failure was caused either by negligent maintenance by P'linuteman or by third party sabo- tage. Swea.rlngen thus denies that his actions caused the accrual of a tort in Montana. In the present case there are conflicting facts relevant to both prongs of the jurisdictional inquiry. The conflict- ing facts assertec'? by the parties are material to whether personal jurisdiction may initially be found pursuant to the requirements of Rule 4B, P?. R.Ci1r.P. The second inquiry, involving a sue process analysis, also involves conflicting material facts. Minuteman asserts facts which could confer personal jurisdiction over Mr. Swearingen. In contrast, Mr. Swearingen asserts facts which could support a motion to Zismiss for l a c 1 5 of personal jurisdiction. In this situs- tion, the trial ,court cannot properly weigh the evidence through a "battle of affid-avits." The Ninth Circuit. Court of Appeals faced a similar impasse in Data Disc, Incorporated v. Systems Technology Associates, Inc. (9th Cir. 1977), 557 F.2d 1280. In that case the appellate court stated: Where affidavits are directly conflicting on mate- rial points, we do not see how it is possible for the district judge to "weigh" the affidavits in order to resolve disputed issues. Except in those rare cases where the facts alleged in an affidavit a . r e inherently incredible, and can be so charac- terized solely by a reading of the affidavit, the district judge has no basis for a determination of credibility. Data Disc, 557 F.2d at 1284. - - - Where materia!. jurisd.ictional facts are disputed, the appropriate proceclure is a preliminary hearing by the Dis-- trict; Court pursuant to Rule 12 (d) , N.R.Civ.P. Data Disc, 557 F.2d at 1285; See also, Gatecliff v. Great Republic Life Ins. (Ariz. App. 1987), 744 P.2d 29, 33. Additionally, the court has discretion to permit discovery to resolve factual issues. Data Disc, 557 F.2d at 1285; Wells Fargo & Co. v. Flells Fargo Express Co. (9th Cir. 1977), 556 F.2d 406, 430. Where the district court takes evidence at a preliminary hearing plaintiff must establish the jurisdictional facts by a preponderacce of the evidence. Data Disc, 557 F.2d at 1285. In a situation where the jurisdictional facts are intertwined with facts involving the merits of the case, the district court may determine its jurisdiction in a plenary pretrial proceeding. Land v. Dollar ( 1 9 4 7 ) , 330 U.S. 731, 67 S.Ct. 1009, 91 I,.Ed. 1209. See also 2A J. Moore, Moore's Federal Practice S 12.07 (1987). We conclude that a pretrial hearing is appropriate in the present case to resolve factual disputes which are mate- rial to the jurisdictional issue. The district court has ?iscretion to allow discovery relevant to these issues. V T e reverse the order of dismissal and remand for further pro- ceedings consistent with this opinion. We Concur: , , : ? | April 27, 1989 |
edde1a4d-67e3-4ea1-a3af-836ae9229809 | PACIFIC POWER LIGHT CO v MT DE | N/A | 88-151 | Montana | Montana Supreme Court | NO. 88-151 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 P A C I F I C POWER & LIGHT COMPANY, PUGET SOUND POWER & LIGHT COMPANY, PORTLAND GENERAL ELECTRIC COMPANY, WASHINGTON WATER POWER COMPANY, AND THE MONTANA POWER COMPANY, P l a i n t i f f s and A p p e l l a n t s , MONTANA DEPARTMENT OF REVENUE, e t a!.. , D e f e n d a n t s and R e s p o n d e n t s . APPEAL FROM: D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t , I n and for the C o u n t y of L e w i s and C l a r k , T h e H o n o r a b l e H e n r y L o b l e , Judge presiding. COUNSEL OF RECORD: F o r A p p e l l a n t : D o n a l d R. i4urray; Murphy, R o b i n s o n , e t a1 . , K a l i s p e l l , JJT T h o m a s H. N e l s o n ; S t o e l , Rives, B o l e y , Jones & G r e y , P o r t l a n d , O r e g o n F o r ~ekpondent: 0 : . 3 x--4 : - -" . + ' L a r r y S c h u s t e r , M o n t a n a D e p a r t m e n t of R e v e n u e , H e l e n a , r-I ' "kontana [- 2 i A . .... . . " - . . I , t ; , r- i , - I I L . i ... ( - 1 : : -1 !.-" -2 . . t .> t-3 i i .. - F i l e d : -- S u b m i t t e d : February 2 1 , 1 9 8 9 Decqided: A p r i l 1 7 , 1 9 8 9 C l e r k Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Appellants appeal the order of the First Judicial District Court, Lewis and Clark County, in a declaratory judgment action, upholding the validity of the Montana Department of Revenue ' s (DOR) assessment of beneficial use taxes for the year 1984 against the appellants pursuant to S 15-24-1203, MCA. These beneficial use taxes were assessed for the appellants' firm transmission demands upon certain Bonneville Power Administration (BPA) , 500 kilovolt (KV) transmission lines located between Townsend, Montana and Garrison, Montana. We affirm the order of the District Court. In the mid-1970s, two mine-mouth, coal-fired electric generating plants were built by Montana Power Company (MPC) and Puget Sound Power and Light Company (Puget), at Colstrip, Montana. Each of these plants produce 330 megawatts of electrical power consuming 30 megawatts internally at each plant. These plants have been operated and maintained by the Montana Power Company since being placed in service in 1975 and 1976. To market the power produced by Colstrip Units I and 11, two 230 KV electrical transmission lines were built to transmit the power from Colstrip to a point near Broadview, Montana. Other 230 KV lines moved the energy from Broadview to markets or "loads" located in western Montana and the Pacific Northwest. This system of 230 KV lines proved adequate for transmitting the energy generated from Colstrip Units I and 11. In the late 1970s and early 1980s, MPC and Puget, in conjunction with Portland General Electric Company (PGE), Washington Water Power Company (WWP) and Pacific Power and Light Company (PPL) foresaw an increased demand in the Pacific Northwest for electrical power. Consequently, they decided to build Colstrip Units IJI and IV. (Colstrip Units I11 and IV each have a generation capacity of 770 megawatts (MW) of electrical power with each plant consuming approximately 70 MW internally.) These five companies, the appellants in this case, were the owners of undivided j-nterests in Colstrip [Jnits I11 and IV at the time of the assessment of the beneficial use taxes which are the subject of this litigation. They shall hereinafter be collectively referred to as the Owners. Realizing that the existing system of 230 RV transmission lines would be insufficient to transmit the additional 1,400 MW produced by Colstrip Units I11 and IV in 1977, the Owners entered into negotiations with the RPA to build two 500 KV transmission lines from Townsend to the BPA's existing 500 KV lines at Taft, Montana. The Owners would convert the existing 230 KV lines stretching from the Colstrip generating point to a substation located at Rroadview, Montana, into 5 0 0 KV lines. They then would construct new 500 K T 7 lines from Rroadview, Montana. to the anticipated RPA 500 KV Lines beginning in Townsend. For its part, the RPA executed two primary agreements with the Owners. These agreements stated the BPA would construct and operate those 500 KV lines referred to as the Montana Intertie line, which runs from Townsend, Montana to Garrison, Montana, and the Garrison West line, which runs from Garrison, Montana, to a point designated as the Taft substation on the Montana-Idaho border. These lines would link with the RPA's currently existing 500 KV system a t . the Taft substation. In preparation for Colstrip Unit 111 going on-line i.n January, 1984, the BPA completed construction of the 500 KV lines from Townsend, Montana to Garrison, Montana, i . n 1.983. There is no substation at the point where the RPA and Owners' lines meet near Townsend. The RPA completed the Garrison West line in 1986. This facilitated the transmission of Colstrip Unit IV power to the Taft substation and points to the west. In 1983, the Montana Legislature, realizing use of the proposed BPA 500 KV lines extending from Townsend to Taft would be exempt from state property taxes, passed an amendment to 5 15-24-1203, MCA, to close the loophole which provided this tax windfall. The amendment provides for the assessment of a beneficial use tax against users of exempt electrical transmission lines having a 500 KV or greater rating. After passage of this amendment, the DOR began meeting with the Owners, their representatives and the BPA to determine a value for the Montana Intertie line which wou1.d be placed in service in 1984. A definite value for the Montana Intertie line had not been established by early 1984. The DOR thus based its assessment on the average of the initial agreement's project value and estimates of the actual cost of constructing these lines. The resulting value for the Montana Intertie line was established at $92,000,000. The DOR then factored this value into the cost portion of the standard unitary method and assessed taxes to each owner based upon their firm transmission demands under the Montana Intertie Agreement. The Owners protested the imposition of these beneficial use taxes and this lawsuit resulted. In 1985 and each subsequent year, the DOR has assessed beneficial use taxes against the Owners for their use of the 500 KV lines referred to in this opinion and in each case the Owners have protested and filed lawsuits seeking declaratory injunctive rel-ief from the imposition of those taxes. The individual facts of those cases are not dealt with in this opinion. The Owners present seven separate issues in this appeal : 1. Whether the Owners' lacked that sufficient "Bene- ficial Use" of the subject facilities necessary for the imposition of beneficial use taxes under 15-24-1203, MCA? 2. Whether the chal.l.enged taxes violate the Commerce Clause of the United States Constitution? 3. Whether the challenged taxes violate the Supremacy Clause of the United States Constitution? 4. Whether the challenged taxes violate the guarantee of due process and equal protection found in the Fourteenth Amendment? 5. Whether the challenged taxes violate the "Private Tnterests" clause of the Montana Constitution? 6. Whether the challenged taxes violate the "Retro- spective Laws" clause of the Montana Constitution? 7. Whether the challenged taxes violate the "Impair- ment of Obligation of Contracts" c1.ause of the Montana Constitution? BENEFICIAL USE A stat.efs right to impose beneficial use taxes on a private citizen or corporation's possession or use of property owned by the United States is wel.1 established. United States v. County of Fresno ( 1 9 7 7 ) , 429 U.S. 452, 462, 97 S.Ct. 699, 704, 50 L.Ed.2d 683, 692. However, these taxes must be imposed equally on others similarly situated. - Id. at 462, 9 7 S.Ct. at 705, 5 0 L.Ed.2d at 692. The policy reason for allowing these taxes is to prevent the unfair trade advantage accruing to those private users of exempt properties over their competitors who must pay ad valorem taxes on similar, privately held properties. - Id. at 463, 97 S.Ct. at 705, 50 L.Ed.2d at 692-693. The Owners maintain that the beneficial use taxes may not be imposed upon them as they do not have a beneficial.. interest in or receive a beneficial use from the 500 KV lines. They contend in order to impose beneficial use taxes the state must show that the Owners have possession of the exempt property and that this possession is exclusive, excluding other users of the lines an2 restricting physical access to the property. As evidence of their lack of possession or exclusive use, the Owners cite to the following facts. The maintenance and actual operation of the Townsend to Garrison 500 KV lines is controlled by the BPA. The BPA has reserved 185 MW of East to West transmission capacity unto itself and the Owners do not have access to the West to East transmission capacity over the Montana Intertie. Further, the testimony of experts at trial and in depositions established that it is impossible to identify the exact path that electrical power will follow when introduced into an integrated system such as exists between Colstrip and Garrison. In other words, one cannot identify whether the Owners' Colstrip power injected into the system at Colstrip flows over the 500 KV transmission lines or over other existing 230 KV transmission lines which interact with the 500 KV lines at the Broadview and Garrison substations. We find, however, that the Owners do possess a sufficient beneficial use interest in the 500 KV lines, from Townsend to Garrison, which justifies the imposition of beneficial use taxes. The United States Supreme Court has defined "beneficial use," in a case arising out of Missoula County, Montana, as follows: The expression "beneficial use" or "beneficial ownership or interest" in property is quite frequent in the law, and means, in this connection such a right to its enjoyment as exists where the legal title is in one person and the right to such beneficial use or interest is in another, and where such right is recognized by law, and can be enforced by the courts, at the suit of such owner or of someone on his behalf. Montana Catholic Missions v. Missoula County (19061, 200 U.S. 118, 127, 26 S.Ct. 197, 200, 50 L.Ed. 398, 402. See also Harrison v. City of Missoula (1965), 146 Mont. 420, 407 P.2d 703. Further the U.S. Court of Appeals for the Ninth Circuit has recognized a state may tax those contract rights granting such a beneficial use interest. International Paper Co. v. County of Siskiyou (9th Cir. 1974), 515 F.2d 285. In the International Paper Co. case the counties attempted to tax the companies' interest in standing timber located in national forests. Under the sale contracts, title to the timber remained with the Forest Service until it had been cut, scaled and paid for. The Ninth Circuit held that the timber property, from which the company derived profit, was not exempt from taxation merely because the United States retained legal title to it as security. - Id. at 289, citing S.R.A., Inc. v. State of Minnesota (1946), 327 U.S. 558, 570, 66 S.Ct. 749, 756, 90 L.Ed. 851, 860. In the present case, the Colstrip Owners have an enforceable contract interest which gives them the right to the beneficial use of firm (a guaranteed level of the available transmission capacity) megawatts of power transmitted over the Montana lntertie line. The Montana lntertie Agreement gave the Owners the right to inject electrical power into and remove electrical power from the lines up to specific maximum megawatts of power. This right. is subject only to the RPA's ability to transmit these amounts onward from the Garrison substation. We note the project scheduled power, (the amount of electric power each company schedules on an hour over the Montana Intertie up to the maximum allowed for each Company's East-West transmission demand) remained under the ownership of the Owners. The Owners have exercised this right and used these lines to transmit power for their own commercial profit -making activities. Further, absent the transmission of any RPA or non-firm energy, the Owners are responsible for the total annual cost of the lines. The total annual cost of the transmission lines includes the cost of the government's investment in the Montana Tntertie line and the Garrison substation, the annual cost of operating and maintaining the transmission line system, the BPA's administrative costs attributable to the lines and the cost to BPA of any impact-aid payments. The payment formula provides that the Owners receive a credit for RPA and non-firm transmission over the lines. The Owners are liable for these payments whether they use the lines or not. Under such an arrangement, we find the Owners clearly have a beneficial use interest in the Montana Intertie 500 KV lines. The Owners contend, however, that even if a beneficial use existed, the interest was not excl.usive, and thus it could not be taxed. The Owners assert they have no reservation of the remaining 185 MW of East to West transmission capacity nor to any of the West to EasC transmission capacity of the lines. Therefore, the imposition of beneficial use taxes resulted in the Owners being taxed on the full value of the property when they only had use of part of the lines. United States v. County of Allegheny (1944), 322 U.S. 174, 64 S.Ct. 908, 88 I,.Ed. 1209. This argument is without merit as the Montana Intertie Agreement provided that the BPA could not exercise its East to West reservation until the Garrison West 500 KV lines were operational. Thus, the BPA had no right to exercise its reservation in 1984, the year in which the taxes in this case were imposed. Secondly, testimony at trial established that the BPA would only allow reservation of a firm transmission demand on the West to East capacity of the lines if a requesting party showed a demonstrated need for use of the lines. Until such a demonstrated need was shown, the only firm transmission users of the lines were the Owners, for whom the lines were constructed, and the BPA. Testimony at trial established that the Montana Intertie line consisted of two bi-directional 500 KV electrical transmission lines. These bi-directional lines are capable of transmitting electrical power in either direction, however, they are not capable of transmitting power in both directions simultaneously. These lines are stability limited at approximately 2,000 MW, although a BPA employee testified that actual loading of the system at capacity would be lower. In negotiating the Montana Intertie, the Owners and BPA provided for maximum firm transmission demands, East to West, of 1,915 MW. Further, the Owners' intention has been to operate the Colstrip generating units as base loaded units. Base loaded generating units are intended to run at full capacity supplying constant power levels to the system. We find the Montana Intertie 500 KV lines were built to transmit base load power from East to West. No other parties could use the lines because of the Owners' reservation of more than the amount which could be transmitted beyond the Garrison substation. Until other parties are able to exercise reservations i.n the I.inesl transmission capacity in either direction, at which time the Owners will be credited, the Montana Intertie's total capacity was reserved exclusively to the Owners. Consequently, the State had the statutory right to tax the Owners based upon the full value of the facilities. COMMERCE CLAUSE Having found the Owners possessed a taxable beneficial use interest in the exempt facility, we now address the Owners' claims that the imposition of these taxes violated certain sections of the United States and Montana Constitutions. The Owners' first claim is that the imposition of beneficial use taxes on their use of the Montana Intertie line violated the Commerce Clause of the United States Constitution. The Owners contend that the Legislature intended to discriminate against interstate commerce by giving preferential treatment to Montana REA cooperatives and that the DOR has implemented the beneficial use statute in a discriminatory manner. It is well established that a state may raise revenues by taxing a private person or corporation's use of federal property within its jurisdiction, provided the state is taxing the possession or use of the property. United States v. County of Fresno (1977), 429 U.S. 452, 462, 97 S.Ct. 699, 704, 50 L.Ed.2d 683, 692. However, the fact that such a tax mav have an impact on interstate commerce will subject the tax to commerce clause scrutiny. Commonwealth Edison Co. v. Montana (1981), 453 U.S. 609, 616, 101 S.Ct. 2946, 2952-2953, 69 L.Ed.2d 884, 893. A state may exact its fair share of the cost of state government from interstate commerce activities within the state, so Long as the tax meets the test promulgated in Complete Autc Transit, Inc. v. Brady (1977), 430 1 J . S . 274, 97 S.Ct. 3076, 51 L.Ed.2d 326. Commonwealth Edison, 453 U.S. at 617, 101 S.Ct. at 2953, 69 L.Ed.2d at 894. The Complete Auto Transit test requires, upon examination of the practical effect of the tax, that the tax be applied to an activity having a substantial nexus with the taxing state, be fairly apportioned, not discriminate against interstate commerce, and be fairly related to the services provided by the taxing state. Complete Auto Transit, 430 U.S. at 279, 97 S.Ct. at 1079, 51 L.Ed.2d at 331. Applying this test to the facts in this case the Owners' activities, subject to the tax, had a substantial nexus to the State of Montana. They had exclusi~re contract rights to use approximately 90 miles of BPA 500 KV transmission lines across Montana. These lines were constructed for the purpose of transmitting the Ownersq electrical power generated at Colstrip, Montana to Garrison, Montana, and from there to the Owners' service loads. Further, as the Montana Intertie line is entirely within the state there is no potential for multiple state taxation of the use of the facilities. No other state would have jurisdiction to impose beneficial use taxes on these facilities. See, Commonwealth Edison, 453 U.S. at 617, 101 S.Ct. at 2953, 69 L.Ed.2d at 894. Similar to the appellants in Commonwealth Edison, the Owners contend the tax assessed had a discriminatory effect on interstate commerce as the majority of the electrical power transmitted over these lines was destined for out-of-state consumers. These beneficial use taxes thus effectively exported the state's tax burden. However, as in Commonwealth Edison, the tax was computed at the same rate regardless of the destination of the power transmitted. MPC and Pacific used the power to service Montana customers and were assessed and taxed in the same manner as the other users of the lines. The fact the Legislature realized the brunt of the tax would fall upon out-of-state users of these lines would not invalidate the tax. As stated by the United States Supreme Court: [Mlotives alone will seldom, if ever, invalidate a tax that apart from its motives would be recognized as lawful. (Citations omitted.) Least of all will they be permitted to accomplish that result when equity and not preference is the end to be achieved. Henneford v. Silas Mason Co. (1937), 300 U.S. 577, 586, 57 S.Ct. 524, 528, 81 L.Ed. 814, 820. The Owners also contend this amendment effectively discriminates against bulk transferors of power by benefiting local users of the federal transmission system and those utilities and cooperatives which use lower capacity transmission lines. In support of this contention the Owners point to the fact the amendment to the statute, § 15-24-1203, MCA, only applies to users of 500 KV and larger electrical- transmission lines. However, state legislatures have a wide range of choice when they classify or limit items subject to taxation. Henneford, 300 U.S. at 587, 57 S.Ct. at 529, 81 L.Ed. at 821, citing Bell's Gap R. Co. v. Pennsylvania (1890), 134 U.S. 232, 237, 10 S.Ct. 533, 535, 33 L.Ed. 892, 895; Ohio Oil Co. v. Conway (1930), 281 1 J . S . 146, 159, 50 S.Ct. 310, 313, 74 L.Ed. 775, 781-782. In the case at hand, the Legislature has identified a class of users of exempt property. This class consists solely of users of 500 KV and larger electrical transmission lines. These lines are used for the bulk transfer of electrical power. In this specific instance the Owners have contracted with the RPA to construct and operate 500 R v lines. As a result of the Owners' contract with the RPA, the Owners have the use of these lines which they otherwise would have been forced to construct themselves. Absent the implementation of the beneficial use tax, the Owners would have received the use of the Montana Intertie transmission facilities, essential to the sale of Colstrip generated. power, free of the taxes they would be subject to if they had constructed the lines themselves. We do not find the effect of the legislation was 5 0 unfairly tax out-of-state users of the lines, rather the effect is to prevent all users of such exempt lines from unfairly reaping a tax windfall. The Owners point to cases where the United States Supreme Court and Federal courts have found that state taxes discriminate against interstate commerce in favor of local businesses or consumers. However, these cases are distinguishable. In Boston Stock Exchange v. State Tax Comm'n (1977), 429 U.S. 318, 97 S.Ct. 599, 50 L.Ed.2d 514, the Supreme Court found a transfer tax on out-of-state sales of stocks violated the commerce clause. The Court found that no state "may 'impose a tax which discriminates against interstate commerce . . . by provid.ing a direct commercia1. advantage to 1-ocal business.'" Boston Stock Exchange, 429 U.S. at 329, 97 S.Ct. at 607, 50 L.Ed.2d at 524, citing Northwestern States Portland Cement Co. v. Minnesota (1959) , 358 U.S. 450, 458, 79 S.Ct. 357, 362, 3 L.Ed.2d 421, 427. Tn the case at hand, however, the beneficial use tax has been imposed upon both local and interstate users of the 500 KV lines for the purpose of eliminating a tax windfall and competitive advantage which enure to the users of tax exempt federal property. This tax imposes no greater tax liability on interstate users of these lines than on instate users. See Boston Stock Exchange, 429 U.S. at 332, 97 S.Ct. at 608, 50 L.Ed.2d at 526. Recently in the case of United States v. City of Manassas, Va. (4th Cir. 1987), 830 F.2d 530, the Fourth Circuit Court of Appeals dealt with a Virginia statute which taxed users of federally owned property, but exempted users of similar state owned property from taxation. There the court found the controlling case for discriminatory state use taxes is Phillips Chemical Co. v. Dumas School Dist. (1960), 361 U.S. 376, 80 S.Ct. 474, 4 L.Ed.2d 384. In Phillips, the Court held such taxes must be examined based on "how other taxpayers similarly situated are treated." requiring "'an examination of the whole tax structure of the state.' Cf. Tradesmens National Bank v. Oklahoma Tax Comrn'n, 309 U.S. 560, 568." Phillips, 361 U.S. at 383, 80 S.Ct. at 479, 4 L.Ed.2d at 389. The Phillips Court provided a two-part test for evaluating allegedly discriminatory state use taxes: 1) Are the users of federal property treated less favorably than similarly situated users of state property; and 2) If so, is that discrimination justified in light of the state and federal interest involved. City of Manassas, 830 F.2d at 534. The Fourth Circuit Court of Appeals in City of Manassas, interpreted the justification in part two of the test as requiring a determination of whether the user of federal exempt property is similarly situated to a user of state exempt property. City of Manassas. 830 F.2d at 534. At trial the only references to imposition of beneficial use taxes on state exempt property dealt with two short line railroads and the Great Falls Industrial Park. The Bureau Chief for the Intercounty Property Bureau testified that in 1986 the DOR determined these railroads qualified for imposition of beneficial use taxes under 5 15-24-1203, MCA. She testified that those taxes were appealed to the State Tax Appeal Board, but that at the time of the trial, LTanua-ry 19, 1987, the railroads were still subject to beneficial use taxation. The Cascade County Assessor testified that the DOR had assessed beneficial use taxes on users of facilities at the Great Falls Industrial Park where the DOR found private parties' use met the requirements of S 15-24-1203, MCA. Neither party introduced any other beneficial use of similarly situated state exempt property, though several instances of beneficial use of other federal exempt properties were described. Based upon the above testimony we do not find the DOR discriminated against. users of federal property in favor of similarly situated users of state exempt property. Since the trial, the 1987 Legislature amended S 15-24-1203, MCA, to exempt the beneficial use of railroad. right-of-way and track acquired by the state through abandonment, provided the state retains ownership and the right-of-way and track are used exclusively for rail transportation. This amendment was not considered by the District Court in its order of December 21, 1987, and we find it is not properly before this Court on appeal. Hanley v. Dept. of Revenue (1983), 207 Mont. 302, 673 P.2d 1257. The fourth prong of the Complete Auto Transit test questions whether the tax is fairly related to the services provided by the taxing state. In Commontvealth Edison, the Court found the "operating incidence" of the tax was on the mining of coal in Montana. As the tax was measured. as a proportion of the value of the coal taken, it was in proper proportion to the appellant's activities in the state. The present case involves an "operating incidence" similar to Commonwealth Edison which falls upon the Owners' beneficial. use of exempt electrical transmission lines found within the state. This tax is measured as a percentage of the value of the property in which the Owners possess their beneficial use Because it is measured as a percentage of the value of the coal taken, the Montana tax is in "proper proportion" to appellants' activities within the State and, therefore, to their "consequent enjoyment of the opportunities and protections which the State has afforded" in connection with those activities. (Citations omitted. ) When a tax is assessed in proportion to a taxpayer's activities or presence in a State, the taxpayer is shouldering its fair share of supporting the State's provision of "police and fire protection, the benefit of a trained work force, and 'the advantages of a civilized society. ' " (Citations omitted. ) Commonwealth Edison, 453 U.S. at 626-627, 101 S.Ct. at 2958, 69 L.Ed.2d at 900. As the appropriate level of that tax percentage is a legislative matter, we find the tax fairly reflects the taxpayer's activity in the state. -- Id. at 626-627, 101 S.Ct. at 2958-2959, 69 L.Ed.2d at 901. SUPREMACY CLAUSE The Owners' second claim is that the imposition of beneficial use taxes violated the supremacy clause of the United States Constitution. The Owners correctly assert there are two means by which a state tax may be invalidated under the supremacy clause. The state statute may be preempted by federal action or the tax may improperly place the legal incidence of the tax upon the property of the federal government. The Owners contend that two federal statutes do in fact preempt Montana's imposition of beneficial use taxes upon private use of federally owned electrical transmission lines. The first is Section 2121(a) of the Tax Reform Act of 1976, 15 U.S.C. 5 391 (Anti-Discrimination Act) (1982). This statute provides: N o S t a t e , o r p o l i t i c a l subdivision t h e r e o f , may impose o r a s s e s s a t a x on o r with r e s p e c t t o t h e generation o r transmission of e l e c t r i c i t y which discriminates a g a i n s t out-of -State manufacturers, producers, wholesalers, r e t a i l e r s , o r consumers of t h a t e l e c t r i c i t y . For purposes of t h i s s e c t i o n a t a x i s discriminatory i f it r e s u l t s , e i t h e r d i r e c t l y o r i n d i r e c t l y , i n a g r e a t e r t a x burden on e l e c t r i c i t y which i s generated and transmitted i n i n t e r s t a t e commerce than on e l e c t r i c i t y which is generated and transmitted i n i n t r a s t a t e commerce. This s t a t u t e has been examined i n Arizona Public Service Co. v. Snead (1979), 4 4 1 U.S. 1 4 1 , 99 S.Ct. 1629, 60 L.Ed.2d 106. There t h e Court examined N e w Mexico's t a x on e l e c t r i c a l generation and complimentary t a x c r e d i t f o r e l e c t r i c a l s a l e s i n New Mexico. The e f f e c t of t h i s c r e d i t was t o eliminate t h e 2 percent e l e c t r i c a l generation t a x f o r s a l e s t o N e w Mexico's e l e c t r i c a l consumers, while taxing s a l e s t o out-of-state consumers. 1.5 U.S.C. $ 391 (1982) was passed specifical.ly t o outlaw such taxes which place a g r e a t e r t a x burden upon e l e c t r i c i t y generated o r transmitted i n i n t e r s t a t e commerce. The Court found t h a t because t h e e l e c t r i c a l energy t a x i n d i r e c t l y discriminat.ed a g a i n s t e l e c t r i c i t y s o l d o u t s i d e t h e s t a t e , it v i o l a t e d t h e f e d e r a l s t a t u t e . Arizona Public Service Co., 4 4 1 U.S. a t ]50, 99 S.Ct. a t 1634, 60 L.Ed.26 a t 113. The f e d e r a l s t a t u t e does n o t prevent a s t a t e from t a x i n g t h e generation and transmission of e l e c t r i c i t y , b u t only r e q u i r e s t h a t i n t e r s t a t e and i n t r a s t a t e generation and transmission be t r e a t e d equally. - Id. a t 150-151, 99 S.Ct. a t 1634, 60 L.Ed.2d a t 1 1 4 . I n i t i a l l y , we note t h a t no c r e d i t is provided under Montana's b e n e f i c i a l use t a x t o anyone a f f e c t e d by i t s imposition and none i s alleged. Further, t h e b e n e f i c i a l use tax on 500 KV electrical transmission lines applies equally to intrastate and interstate users of these lines. Testimony at trial established that Montana Power Company removed all of its power from the system at the Garrison substation for transmission to its load customers. MPC as an intrastate user is taxed at the same rate as the other users of the facilities. Also, this tax falls neither upon the generation nor the transmission of electrical power, but upon the use of tax exempt facilities. As such, this tax does not violate 15 U.S.C. § 391. The Owners next contend 16 D. S.C. S 839 (e) (m) preempts S 15-24-1203, MCA. This statute provides for the payment of impact-aid payments to offset the added cost to affected counties for the three construction phases of the Montana Intertie line. The three construction phases are pre-construction, which was complete before the Act was passed., construction, for which the three affected counties received over $150,000 in impact-aid payments, and post-construction. In the post-construction phase the counties may bill the BPA for any services provided as a result of the presence of the lines. The Owners' contention that these impact-aid payments were in lieu of taxes fails in light of testimony at trial. At trial, BPA's project information officer for the Colstrip transmission project testified that these impact-aid payments were not intended to be in lieu of taxes which the counties were losing as a result of federal ownership of the 500 KV lines. This statement is reinforced by U.S. Representative Dingell's statement contained in the environmental impact statement. 48 Fed. Reg. 55765. ("This is not a payment-in-lieu of taxes provision. " ) The Owners also advance an implied preemption argument based. upon a line of cases holding that preemption may he inferred when a scheme of federal regulation leaves no room for state regulation, or when the regulation is so dominant as to "preclude enforcement of state laws on the same subject." Hillsborough County v. Automated Medical Laboratories (1985), 471 U.S. 707, 105 S.Ct. 2371, 85 L.Ed.2d 714. The argument fails, however, in light of our previous findings regarding statutory preemption. The impact-aid payments contained in 15 U. S.C. S 839 (e) (m) , do not preclude a state's right to levy taxes on a private party's beneficial use interest in exempt federal transmission facilities. Further, 15 U.S.C. S 391 only precludes the implementation of a state tax scheme which places a greater tax burden on generation or transmission of electricity placed in interstate commerce. As previously stated the Montana beneficial use tax is levied on the beneficial use of the facilities and is equally applied to interstate and intrastate users of the facilities. The Owners' last supremacy clause argument is that the legal incidence of the beneficial use tax falls on the federal government. In order to find a state tax on use of such exempt properties unconstitutional under a legal incidence argument, the taxed entity must be "'so intimately connected with the exercise of a power or the performance of a duty' by the Government that taxation of it would be 'a direct interference with the function of government itself.'" United States v. New Mexico (1982), 455 U.S. 720, 736, 102 S.Ct. 1373, 1383, 71 L.Ed.2d 580, 593, citing James v . Dravo Contracting Co. (1937), 302 U.S. 134, 157, 58 S.Ct. 208, 219, 82 L.Ed. 155, 171. Where the legal incidence of the tax falls on a private party, and they are independent entities from the United States, the tax cannot be considered a tax on the government itself. U.S. v. Mew Mexico, 455 U.S. at 738, 102 S.Ct. at 1385, 71 L.Ed.2d at 594. In the New Mexico case, the government sought to show that beneficial use taxes, based upon management contracts which transferred payment of any state taxes imposed to the federal government, placed the legal incidence of the tax on the federal government. The United States Supreme Court found that the fact the federal property involved was being used for the government's benefit was irrelevant. - Id. at 739, 102 S.Ct. at 1385, 71 L.Ed.2d at 595. The Court found the contractors remained "distinct entities pursuing 'private ends,' and their actions remained 'commercial activities carried on for profit. " - Id. at 739-740, 102 S.Ct. at 1385, 71 L.Ed.2d at 595, citing United States v. Boyd (1964), 378 U.S. 39, 44, 84 S.Ct. 1518, 1521-1522, 12 L.Ed.2d 713, 718. Such a tax does not fall upon the federal government, but rather upon the contractor's independent commercial enterprise. In the instant case the tax is levied directly upon the Owners for their beneficial use of the federal government's facilities. There is no transfer of the tax liability to the government. In fact, the Montana Intertie Agreement provides any costs the government incurs by way of the Owners' use of these transmission lines are billable annually to the Owners. The "legal incidence" of the beneficial use tax in this case clearly falls upon the Owners and not upon the federal government. The Owners argue that the imposition of these taxes on the Owners' use of the Montana Intertie line would adversely affect the government's ability to secure adequate lease fees from these types of lines. This argument must fail for two reasons. First, the United States Supreme Court has upheld use taxes even where the government by contract agrees to pay the state use or excise tax. See, James v. Dravo Contracting Co. (19371, 302 U.S. 134, 58 S.Ct. ?08, 82 L.Ed. 155. Second, in the contracts which grant the use in this case, the Owners are obligated not only to pay the cost of operating and maintaining the lines each year, (less credits for BPA transmissions and non-firm transmissions), but the cost of constructing these lines as well. Under such an arrangement it is implausible that imposing these taxes upon the use of the exempt lines would adversely impact the government's ability to secure adequate lease values. FOURTEENTH AMENDMENT The Owners contend the imposition of beneficial use taxes in this case violates the Due Process Clause and the Equal Protection Clause under the Fourteenth Amendment to the United States Constitution. The Owners contend that the Due Process Clause requires that the amount of the tax must bear some relation to the value of the property assessed against the taxpayer. Norfolk & Western Railway Co. v. Missouri State Tax Commission (1968), 390 U.S. 317, 88 S.Ct. 995, 19 L.Ed.2d 1201. The Owners allege that the defendant counties have conferred no benefit upon the Owners because of their use of the Townsend to Garrison facilities, that the defendant counties have already been fully compensated through the impact-aid portions of the Montana Intertie Agreement and that the taxes imposed are based on the full value of the facilities. Further, the Montana Intertie Agreement gives appellants rights which are fax less than full ownership. State tax statutes will not normally be set aside based upon Due Process Clause violations, except in rare and unusual circumstances. A. Magnano Co. v. Hamilton (19341, 292 U.S. 40, 54 S.Ct. 599, 78 L.Ed. 1109. Further, to attack the tax statute, the appellants must show a failure to satisfy two tests. First, the object of the tax must lack a nexus with the state imposing the tax, and second, the tax must fail to fairly reflect the taxpayer's activity in the taxing state. Sufficient nexus with the state has already been established under the Commerce Clause section previously discussed. Additionally, we previously found under the fourth prong of the Complete Auto Transit test, that the tax is fairly related to the services provided by the state. Thus, there is no violation of the Due Process Clause. The Owners contend the Equal Protection Clause invalidates the beneficial use tax because the state has not equally administered the beneficial use taxes. Raymond T T . Chicago Union Traction Co. (1907), 207 U.S. 20, 28 S.Ct. 7, 52 L.Ed. 78; and Larson v. State ( 1 9 7 5 ) , 166 Mont. 449, 534 P.2d 854. The Owners claim that the Department has never attempted to apply the beneficial use tax in analogous situations, specifically referring to the Montana Rural Electrification Administration Cooperatives (MAS). These REAs, as preference customers, are entitled to purchase federal power at a preferred or "Priority Firm Rate." This rate is lower than the rate investor-owned utilities are entitled to when they purchase federal power. These REAs also have a right to first call on federal power, before investor-owned utilities. The Owners claim the beneficial use taxes would be applicable to RPA's preference customers based on their use of the BPA transmission system, including the BPA1s 500 KV lines. The Owners also contend this is the first attempt to apply the beneficial use tax upon any entity that did not have "exclusive use" of the subject facilities. The Owners equate exclusive use to a requirement that they have possession of the facilities and transmission lines. The standard which must be achie~~ed to invalidate the tax on equal protection grounds is one of invidious discrimination, as opposed to the existence of a rational relationship. Lehnhausen v. Lake Shore Auto Parts Co. (1973), 410 U.S. 356, 93 S.Ct. 1001, 35 L.Ed.2d 351. The existence of a rational relationship is met here by the intent to close the loophole which would have allowed these companies to avoid paying any taxes. In regard to the Owners' claims regarding the REAs, we note they do not use the Montana Intertie line, nor possess firm transmission demands in 500 KV lines which may be taxed in 1984, under § 15-24-1203, MCA. We agree with the DOR that the Legislature was not required to tax all beneficial users before it could reach the beneficial users of 500 KV lines. ( " [TI axation of certain objects need not be universal in nature.") Citing to Louisiana v. Pilsbury (1881), 105 U.S. 278, 26 L.Ed. 109. The 1,egislature in this case has identified benefj-cia1 users of 500 KV lines as a distinct tax classification. THE MONTANA CONSTITUTION Additionally, the Owners claim the imposition of beneficial use taxes in this case violates three provisions of the 1972 Montana Constitution. The Owners contend that while Art. VIII, sec. 5 (1) (a) allows "private interests" in exempt properties to be taxed separately, such a tax necessarily requires the user to have possession. The Owners base this requirement of possession upon statements made at the Constitutional. Convention that in closing an existing loophole the delegates provided for taxation of private interests in government-owned property, "things like right-of-ways and things like that . . . " Further, the Owners contend the Montana Supreme Court, in identifying an "interest" i . n real property as an estate, has implied one must have the right to possess and control property before beneficial use taxes may be imposed. Brown v. Hart (1.9841, 213 Mont. 517, 692 P.2d 14. We disagree. What is involved here is a private contractual right to use a portion of the transmission capacity of the exempt Townsend-Garrison line. This private interest in exempt federal lands fits within the plain language employed by the 1972 Constitutional Convention delegates in closing this loophol-e contained i . n the prior constitution. (1) The 1egi.slature may exempt from taxation: (a) Property of the United States, the state, counties, cities, towns, school districts, municipal corporations, and public libraries, but any private interest in such property may be taxed separately. Art. VIII, sec. 5(l)(a), 1972 Montana Constitution. The Owners next claim that the imposition of beneficial use taxes on their use of t.he Montana Intertie line violates Art. XI11 , sec . 1 (3) , prohibiting retrospective laws. Specifically the Owners contend that since the Montana Intertie Agreement was entered in 1981 and S 15-24-1203, MCA, was not amended to specifically include 500 KV transmission lines until 1983, the effect of imposing these taxes is precisely the type of retrospective action the 1972 Constitutional Convention was prohibiting. We find several problems with the Owners' argument. First, the argument ignores the ongoing nature of their use of these lines. Second, this contention is weakened by Art. VIII, sec. 5 (1) (a) which specifically allows for taxation of the interests conveyed to the Owners under the Montana Intertie Agreement. We agree with the District Court that the position the Owners advance would have the effect of prohibiting all new forms of taxation. "The imposition of a new tax, or an increase in the rate of an old one, is simply one of the usual hazards of the business enterprise." Westfield-Palos v. City of Rancho Palos Verdes (Cal.App. 1977), 141 Cal.Rptr. 36, 42, citing John McShain, Inc. v. District of Columbia (D.C. Cir. 19531, 205 F.2d 882, 883. Only where the measuring formula for the tax draws upon such disparate or long past antecedents so as to have little relation to the volume of current business might a business license tax fall on retroactivity grounds. (Citations omitted. ) Westfield-Palos, 141 Cal.Rptr. at 42. We find that the beneficial use tax involved here, like the business license tax in Westfield-Palos applies to the ongoing, current business activity of the Owners. As such, the tax does not violate Art. XIII, sec. 1(3), of the 1972 Montana Constitution. The Owners1 final issue relies on Art. 11, sec. 31, of the 1972 Montana Constitution in contending the imposition of these beneficial use taxes constitutes an impairment of their contract with the BPA. This argument is without merit as it has long been established that "[a] contract between individuals cannot have the effect of depriving the state or any municipal subdivision of any power of taxation otherwise belonging to it." Forbes v. Mid-Northern Oil Co. (1935), 100 Mont. 10, 22, 45 P.2d 673, 679, citing Newman v. Commercial Waterway District (Wash. 1923), 217 P. 9. As long as the state does not violate a fundamental right of the individual, the state is free to vary the existing mode of taxation. Forbes, 45 P.2d at 679. As Art. 11, sec. 31 of the 1972 Montana Constitution is essentially identical to Art. 3, sec. 11 of the 1889 Montana Constitution, under which the Forbes case was decided, we find the Owners have presented no reason to find there has been any impairment of their contract. CONCLUSION The Owners en:joyed a beneficial use interest in the Montana Intertie Agreement 500 KV lines, which use we hold was properly taxable under 5 15-24-1203, MCA. That use was evidenced by the Owners' contractual reservation of firm transmission demands in the lines and the fact the lines were constructed for the purpose of transmitting the Owners' electrical power generated at the Colstrip generating facilities. The State's levy of these beneficial use taxes did not violate the United States Commerce Clause, the United States Supremacy Clause, the Fourteenth Amendment to the United States Constitution, nor the cited sections of the Montana Constitution. Therefore we District Court. We concur: , / | April 17, 1989 |
cc42b649-fe27-445d-a2f7-23b1caced1f0 | EASTMAN v ATLANTIC RICHFIELD COMPA | N/A | 88-452 | Montana | Montana Supreme Court | No. 88-45:! IN THE SIJPREME COURT OF THE STATE OF MONTANA 1989 PAUL R. EASTMAN, Claimant and Appellant, -VS- ATLANTIC RICHFIELD COMPANY, Employer, CefenZant and Respondent. APPEAL FRON: The Corkers' Compensation Court, The Ilonorahle Timothy Reardon, zudge presiding. COUNSEL OF RECORD: For Appellant: Paul R. Eastman, pro se, Kalispell, Montana For Respondent: Andrew 2 . IJtick; [Jtick & Grosfield, Helena, Montana Suhmitted on Briefs: March 9, 1989 i - Decided: May.10, 1989 Mr. Justice Fred J. Weher delivered the Opinion of the Court. The claimant, Paul Eastman, appeals from a final deci- sion of the Workers' Compensation Court denying him benefits under the Workers' Compensation Act and affirming a compensa- tion award of $10,000 under the Occupational Disease Act. Me affirm. Mr. Eastman appears pro se and requests this Court to review the decision of the Workers' Compensation Court in two respects. First, we are asked to determine the constitution- ality of the Occupational Disease Act, and then to review the sufficiency of the evidence to support the lower court's determination. We phrase the issues as follows: 1. Does the treatment of employees suffering work-related diseases under the Occupational Disease Act violate equal protection or deny a claimant's right to full legal redress? 2. Did the Workers' Compensation Court err in determin- ing that Mr. Eastman is ent-itled to benefits under the Occu- pational Disease Act rather than the Workers' Compensation Act? 3. Is claimant entitled to reasonable costs and attor- ney fees and a 20% penalty? Pa-ul Eastman began working for Atlantic Richfield Compa- ny (ARCO) at its Columbia Fa1l.s Aluminum plant in June 19?7. He was employed! as a welder, and continued i . n that position until he was laid off on April 26, 1985, following the clo- sure of the Columbia Falls plant. Two weeks prior to the lay off, Mr. Eastman was exposed to an unusually large and con- centrated dose of fumes while welding at the plant. He was working with a heavy metal pot in which aluminum ore is refined, when the welding debris dripped onto plastic and tar belcv, 1-he area and ignited those materials. The smoke and fumes from the burning materials were much more j-ntense and concentrated than normal. Following the incident, Mr. Eastman left work and drove himself to t.he emergency room at Kal-ispel: Regional Hospitz! for treatment. He was hospitalized for three days, during which time he was given large doses of: steroids. Followj-ng hospitalization, Mr. Eastman returned to work urrtil he was laid off two weeks Later. b i r . Eastman had a history of asthma prior to the inci- dent of April 8, 1985. He first began to experience short-- ness 05 breath in 1973 during periods of heavy exercise. Re continued. to experience shortness of breath during exertion while empl-oyed with ARC0 between 1978 and 1980, during whj-ch time he al.so experienced recurring bouts of bronchitis. R y 1983, Mr. Eastman's condition had developed into full-blown, severe asthma, which was mefiically diagnosed as Chronic ObstructFve Pulmonary Cisease. He was first treated with antibiotics and steroid medication in April, 1983, under the care of Dr. Rosetto. The steroid treatments have continued on and off since that time. Dr. Rosetto described Mr. East.-. man as "steroid dependent," meaning that the claimant is unable to go off the medication without his ast-hma flaring to the point where he either couldn't do anything or would end up in the hospit.al. Dr. Rosetto testified that the claim-- ant's steroid dependency had existed prior to the incident which occurred in April, 1985. The medication he must take to control his asthma has severe physical and emotional side effects, which the claimant. testified affects his ability to find and perform work. Since his layoff in April, 1985, Mr. Eastman has con- ducted an extensive job search through the Montana Department of Social and Rehabi.l.itative Services. Despi.te applying for 2 C t-c 30 jobs, Mr. Rastman has failed t . o find steady employment. He worked as a retail clerk in 1986, but had tc quit after one day because the job required him to lift and carry 10 pound boxes which exacerbated his breathing problems and precipitated an asthma attack. A vocational counselor .for the Career Exploration and Development Center t-estified. that Mr. Eastman has the work habits, grooming, and aptitudes of competitive employment and has many transferable skills. Kith the exception of one c l a y of employment, the cl-aimant did not work at all between April 1985 and June 1 9 8 7 . I . Eastman filed a claim for compensation with the Division of Workers1 Compensation on May 1 , 1985. The Division designated the claim as one for benefits under the Occupational Disease Act, although the claimant later filed a . petition alleging that he was entitled to benefits under the Workers' Compensation Act because of his April 8, 1985 "inju- ry." The determination of "injury" was consolidated with the claimant's appeal from the Division's final decision regard- ing compensation under the Occupational Disease Act. In that order, the Division determined that Mr. Eastman suffered from a nondisabling occupational disease and was awarded the maximum statutory allowance of $10,000 pursuant tc 5 39-72-405 ( 2 ) , MCA. The Workers1 Compensation Court affirmed the decision of the Division that the claimant's occupational disease was nondisabling. The court also addressed the "injury" issue, noting that the claimant did not elect to pursue either form of ccmpensation, but instead presented both theories of recovery for determination. The court held that the unex- pected occurrence of abn~rmally dense fumes at work on April 8, 1985, caused an aggravation of the claimant's preexisting asthma condition, and therefore qualified as an " l i n j u r . ; . " ?Towever, the court then concluded that, . . . the mezical evidence from claimant's treating physician Dr. Rosetto clearly indicates that the claimant's medication during his three days of hospitalization returned him to his pre-exacerbation state. The claimant was then released from the hospital to return to his full- time work which he continued until he was laid off some two weeks later. A1 though the claimant's incident is technically an "injury, " his asthma condition returned to its pre-injury state with no loss of wages or impairment being established. Having satisfied the statutory criteria for an injury, the Court's function has not encied. The overwhelming medical evidence is that claimant's April 8, 1985 exposure was disabling only for a few days and upon receiving medication he was essen- t i a ! l y restored to his pre-April 8, 1985 condition. That condition, as well as his health after the three-day hospital stay, was a product of an occu- pational disease exposure as found by the Division. Although the court determined that Mr. Eastman suffered an injury on April 8, 1985, it concluded that the injury was noncompensable under the Workers' Compensation Act. The court also concluded that the claimant was not entitled tc a 2C% increase in award pursuant to S 39-71-2907, MCA, nor was he entitled to reasonable costs and attorney fees under 5 39-71-61.?, NCA. It j.s from this jud-gment that Kr. Eastman appeals. Does the 0cc.upational Cisease Act violate equal protec- tion or deny a claimant's right to full legal redress? The employer argues that this Court should not address the claimant's constj.tuti.onal arguments because he failed to present them before the lower court. It is a general ru1.e that new issues may not be raised for the first time o r ! appeal. Bauer v. Kar Products, Inc. (~ont. 19881, 749 P.2d. 1385, 1318, 45 St.Rep. 322, 326. However, this Court "re- serves to itself the power to examine constitutional issues that. involve broad public concerns," and even if raised for the 5 r s t time on appeal, this Court can hear the issue if the alleged error affects the substantial. right of a liti- gant. Cot-trill v. Cottrill Sodding Service (Mont. 1987), 744 P.2d 895, 896, 44 St.Rep. 1762, 1763. Claimant has not briefed his constitutional contentions in detail. Nonethe- less, considering the nature of such ccntentions as well as his pro se status, we will consider his constitutional challenges. EQUAL PROTECTION ----- Mr. Eastman first challenges the State's classification of diseasecl workers under the Occr~pational Disease Act as arbitrary and discriminate and in violation of the Equal Protection Clauses of the U . S . and Montana Constitutions. In determining what level of scrutiny is to be applied to this legislation under an equal protection analysis, it is neces-- sary to determi-ne what rights are involved and whether the legislation infringes ,upon the rights of any suspect cl-ass. Cottrill, 744 P.2d at 897. -- We have held that the right to receive b?srkers1 Cornpen-.- sation benefits is not a fundamental right. Cottrill, ?44 --- P.2d at 897, citing Shapiro v. Thompson (19691, 394 U.S. 618, 89 S.Ct. 1322, 22 T,.Ed.2d 600. This same rule applies to benefits under the Occupational Disease Act, which are also a form of disability benefits, so that no fundamental right is at stake here. The classification dces not affect the rights of a suspect class, which woul-d. i.ncl.ude race, nationality, alienage and wealth. Cottrill, 744 P.2d at 897. We conclude that the Act is not subject to strict scrutiny. As a result. ARC0 nee$. not show a compelling state interest. We conclude that the Act should be analyzed under the rational basis test. That test requires a legitimate governmental objective whi ch bears some identifiabl e rational relationship t c : the c!asstfication in question. --- Cottrill, - -- - 744 P.2d at 897. Mr. Eastman argues that there is no rational basis upon which to distinguish an employee who suffers from an occupa- tional disease from an employee who suffers an injury. F 7 e disagree. A historical inquiry into the subject reveal-s a legislative purpose for this differentiation. Historically workers' conpensation was enacted to com- pensate vFctims of industrial. accidents and injuries. It was not set up to respond to workers suffering occupational c',is~ase. That distinction was partial-ly explained by the common law historical background which had allowed tort suits fcr i.njuries but generally had shown that the negligence of an employer was not a basFs for a common law action. As state6 in 1 F Iarson, I4Torkmen's Cornpensat<-on T,aw , Section 41.20 (1987) : To the extent that compensation acts were thought of as substituting nonfault liability for the kind of in-juries that were potential subjects of fault liahil-ity, there was thought to he no place for occupational diseases, which (in the sense of a disease due to the "normal" conditions of t-he industry as distinguished from the negligence of the employer) had consistently been hel-d incapable of supporting a common-law act!-on. As the incidence of devastating diseases of the work place increased, legislatures concluded that some system of compen- sation was needed. Gradually the law was expanded to provide henefits for the victims of occupational disease, notably silicosis and ashest-osis. 32 Labor Law Journal (1981), 313, By 1978, every state had enacted statutes making occupa- tional di.seases compensable. 1B Larson, Workmen's Compensa- tion Law, Section 41.00. Larson points out that this lag in coverage can be attributed to the heavy incidence of silicc- s_is a ~ d asbestosis in certain j.ndustries, for whi-ch full coverage under workers' compensation would have created a difficult burden. 1R Larson, supra, Section 41.10. Kontana creat.ed a statutory remedy for work-related eiseases in 1959 by the enactment of t . h e Occupational Disease Act, S 92-1301 RCM (19471 et seq., now S S 39-72-101 to 7 1 6 , MCA. In the workers' compensation field, this Court upheld the power cf the legislature to enact workers' compensation which replaced common law remedies. Shea v. North-Butte Plining Co. (1919), 55 Mont. 522, 534, 179 P.2d 499, 503. We conclude that the same rationale properly can be applied to the Occupational Disease Act. We concl-ude there is a ration- al basis for the enactment of the Occupational Disease Act. by the legislature. Claimsnt argues that the benefits payable under both workers' compensation and the Occupational Disease Act shou.15 be the same. We recognize the fairness of F i n argument for equal compensation for similar disabilities. However, the equal protection clause does not require that all aspects of occupational disease and occupational injury be dealt with in the same manner. As stated. bl7 the Unite? States Supreme Court in Iqilliamson v. Lee Optical Co. (19551, 348 1T.S. 483, 99 L.Ed. 563, 75 S.Ct. 461: The problem of legislative classification is a perennial one, admitting of no doctrinaire defini-- tion. Evils in the same field may be of different dimensions and proportions, requiring different remedies. Or so the legislature may think. (case cited) Or the reform may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind. (case cited) The legislature may select one phase of one field and apply a remedy there, neglecting the others. (case cited) We conclude that the claimant has failed to show that the legislature is required to award the same or comparable benefits under the Gccupational Eisease Act as compare6 to the Workers' Compensation Act. We hold that there is a rational basis for the benefits awarded under the Occupation- al Disease Act and that the claimant has failed to establish a viclation under the equal protection clauses of the Montana Consti-tution and of the Constj.tution of the United St-ates. While we find that claimant has failed to show a consti- tutional violation of the equal protection clauses, our review of the Occupational Disease Act has shown there are serious questions which should be addressed by the legisla- ture. In this instance Mr. Eastman has proved permanent partial disabiLity which would entitle him to extensive benefits i f he came under the Workers' Compensation Act. However, under the Occupational Disease Act, because he is not totally disabled, his award is limited to $10,000. We suggest that a review of the benefjts under this Act is certainly Cue cn the part of the leaislature. FUIdL LEGAL REDRESS . Eastrnan next argues that he was denied full legal redress under the Occupational Disease Act because of the requirement that a worker be disabled for more than five days t . o receive compensation. He argues that had he remained off the joh For more than five days, he would have received full compensation under the Workers' Compensation Act, but because he missed only two days of work, the statutory requirement arbitrarily denies him his right to full legal redress. We p ~ i n t out that the five day requirement appears under 9 39-71-736, MCA ( 1 9 8 5 ) , of t h e Wor1;ers' Compensation Act, and no similar requirement is contained in the Occupational Disease Act as Mr. Eastmarl asserts. Plhile the lower court concluded that the claimant suffered an injury nnder the Workers ' Compensation Act, it further concluded that the injury was only temporary an2 did not continue to be dis- abling. Based on that evidence, the court held that claim- ant's injury was noncompensahle and affirmed the Division's award under the Occupational Disease Act. Even if claimant had proved an injury which resulted in e Zisahility of more than five days, under the medical evi- dence of this case he would n u t be entitled to compensation unler the klorkers' Compensation Act. The court found that the medical evidence established that his condition returned to its pre-exacerbation state following medical. treatment which extended over just a few days. We therefore hold that claimant has "ailed to establish a denial of his right to full legal redress because he ha-s not been denied any compen- sation under the Workers' Compensation Act. I1 Did the Workers' Compensation Court err in determining that Mr. Eastman was entitled to benefits under the Occupa- tional Disease Act rather than the Workers' Compensation Act? The Workers' Compensation Court found that the claim- ant's asthma was a preexisting condition which was aggravated by his 8 years of enployment as a welder with ARCO. This Court has he12 that a preexisting condition of Chronic Ob- structive Pulmonary Disease, which includes asthma, is com- pensable under the FJorkers' Compensation Act if a claimant can identify an unexpected tangible happening on a specific date which aggravate6 the condition. Flhittington v. Ramsey Construction and Fabrication (Mont. 1987), 744 P.2d 1251, 44 St.P.ep. 1823. Ridenour v. Equity Supply Co. 11983), 204 Mont. 473, 665 P.2d 783. Fhere the claimant was unable to show that his asthma was significantly aggravated by an unexpected incident. rather than a deteriorating condition over time, t-hjs Ccurt has upheld the lower court's conclusion that the claimant suffered from an occupational disease rather than an injury compensable under the Workers ' Compen- sation Act. Whittington, 744 P.2d at 1257. -- In this case, the court determined that the unexpected occurrence of abnormal.2.y dense fumes at work on April 8, 1985 caused an aggravation of claimant's preexisting asthma, and that the incident was unexpected and time definite enough to qualify as an "injury" under the Workers' Compensation Act. g 39-71-119, MCA (1985). Fowever, the court went on to conclude that the injury was noncompensable under the Work- ers' C o m p e n s c ; t : : ' . o n Act based on the medical evidence which established that the injury did not continue to be disabling. Following hospitalization and medication, the court found that Mr. Eastman was returned to his pre-exacerbation state and failed to prove any loss of wages or additional physical Impairment. The court concluded that his pre-April 8, 1985 condit.i.on, as well as his health following the three day hospital stay, was a product of an occupational disease and affirmed the Division's award under the Cccupati.onal Disease Act. . It is not the function of this Court to reweigh the evidence. We will uphold the findings and conclusions of the Workers' Compensation Court if they are supported by substan- tial credible evidence in the record. Snyder v. San Francis- co Feed and Grain (Mont. 1987), 748 P.2d 924, 929, 44 St.Rep. 2216, 2221. The testimony which led the lower court to conclude that Mr. Eastman's injury did not continue to be disabling and was therefore noncompensable under the Workers' Compensation Act was given hy several medical experts. The claimant's own treating physician, Dr. Rosetto, testified that Mr. Eastman's asthma condition would not change in the f.uture, that his disease was n o t : caused by any single e v e ~ t , a n c l tha-t any "incident" which occurred during the progression of his 6isease would not change the status of his condition as it was at the time of trial. Dr. Rosetto also testified that having worked at ARC0 for 8 years as a we]-der, the worsening of claimant's disease could have heen expected, and that the incident of breathing toxic fumes did not cause any permanent significant additional impairment. Another physician, Dr. Schimke, testified that the fluctuations in claimant's condition over 8 years showed a norseni-ng trend, and that his employment as a welder was the cause of the dFsease becoming disabling. Dr. Power examined Mr. Eastman at the request of the claims division to determine whether claimant suffered an occupationaL disease. The examination consisted of a general physical, chest X-rays, and a pulmonary function test, which took place in November 1985, seven months after the April 8 incident. Dr. Power testified that any aggravation caused b : - the incident was only temporary and that claimant's asthma had stabilized to its pre-April 8 condition. The conclusion of the lower court that claimant's condi-- tion had returned to his conditjon prior to the April 8, 1985 injury does not suggest that he had returned to good health. The evidence shoo~s that he had disability from the disease prier to April 8, 1985 and that such disability continued and grew worse thereafter. Our examination of the record demon- strates there is substantial medical evidence which show^ that claimant experienced no additional physical impairment as a result of the injury of April 8, 1985. The record also contains substantial evizence to support the conclusion that his condition was the result of an occupational disease. Ve hold that it was not error For the lower court to conclude that r . Eastman's injury was not compensahle under the Florkers' Compensation Act. Is claimant entitled to reasonable costs a n c l attorney fees and/or a 20% penalty? The provi-sions for costs and attorney fees and a 20% penalty are found in the Workers' Compensation Act, 5s 33-71-61? and 39-72-2907, MCA (1985). Since this Court affFrms the determination by the lower court that Mr. Eastman i . s not entitled to benefits und.er the Workers' Compensation A c t , those provisions do not apply in this case. Affirmed. We Concur: A Chief Justice -- -- - - - - -- Justices Mr. ~ustice ~illiam E. Hunt, Sr., dissenting: I dissent. From the beginning, Eastman has been forced to surmount hurdles that would challenge even the greatest trial tactician. He appears before this Court pro se because his attorney, after collecting his fee, merged his law firm with the firm representing ARCO. Added to this burden, is the fact that Steven J. Shapiro, chief legal counsel for the Workers' Compensation Division--the same division that actively opposed Eastman every step of the way--was appointed the first hearing examiner. The facts found by Shapiro and adopted by Robert J. Robinson, administrator for the division, are the facts Eastman has had to struggle with throughout this legal and medical morass. The wonder here is not that Eastman was denied his rights as an injured Montana worker. The wonder is that he got anything at all. The majority holds that Eastman's April 8, 1985, injury did not significantly aggravate his preexisting disease. Eastman's medical history, however, tells a different story. Prior to the April 8, 1985, injury, Eastman's breathing difficulties forced him to seek treatment at Kalispell Regional Hospital on only two occasions. In July, 1983, he consulted with the hospital emergency room. In June, 1984, he was hospitalized. Within the four months following the accident, however, his visits to the hospital became much more frequent. He visited the hospital emergency room twice--once on May 20, 1985, and again on July 31, 1985. On August 20, 1985, he was hospitalized for four days with severe asthma. In addition, Eastman's need to consult with his treating physician had subsided in the months preceding the injury. In 1983, he called or visited Dr. Rossetto almost monthly. In 1984, however, he saw Dr. Rossetto twice--once in June and once in July. He called the doctor three times. His last flare up of asthma prior to April 8, 1985, occurred in December, 1984. After the April accident, however, his asthma repeatedly flared. He consulted Dr. Rossetto at least once a month thereafter. In ide en our v. Equity Supply Co. (1983), 204 Mont. 473, 665 P.2d 783, a claimant's preexisting Chronic Obstructive Pulmonary ise ease (COPD) was aggravated by a high concentration of grain dust. We awarded the claimant permanent total disability benefits under the Workers' Compensation Act. Yet in this case, where the facts are almost identical, we award claimant a mere $10,000 under the Occupational Disease Act and send him on his way. In Ridenour, the claimant was injured on December 18, 1978. He was unable to perform his usual job from that date, though he did attempt less strenuous work. A little over five months after the accident, his breathing difficulties became so severe that he was forced to cease employment. Unlike the claimant in ide en our, Eastman returned to his normal job for two weeks after the accident. He was able to do so, however, only because he was heavily medicated with steroids. He returned to work rather than remaining on sick leave because he knew ARC0 was planning a large reduction in force and he wanted to work as much as possible before being laid off. Had Eastman not been laid off as part of ARCO's general reduction in force, his breathing problems would have soon forced him to quit, just as the claimant in Ridenour eventually ceased working. Slightly over two months after the accident, on June 11, 1985, Dr. Rossetto wrote a letter to Job Service in which he sta.ted that Eastman's condition had progressively worsened and he would be unable to work in the foreseeable future. On September 9, 1985, Dr. Rossetto noted on the medical record that Eastman should not return to work because of recent extensive asthma attacks. Eastman himself testified that, due to his physical condition, he had not been able to return to work since the lay off even though ARC0 had called him back two or three times. The medical record amply demonstrates that the April 8, 1985, injury aggravated Eastman's disease. Nevertheless, the majority refuses to acknowledge this objective evidence. Instead, the majority relies on the deposition testimony of three doctors--even though one of the doctors, Dr. Power, did not have access to Eastman's medical record. Dr. Power's testimony indicates that he was unaware of Eastman's complete medical history. Furthermore, the testimony of the remaining doctors does not unequivocally support the majority's holding. Dr. Rossetto testified that the injury was unlikely to change Eastman's medical status as of the time of the deposition. He acknowledged that since the accident, Eastman continued to have periods of severe exacerbations. He also stated that Eastman had been on steriods almost continuously since that time and was steroid dependent. Dr. ~chimke's testimony is more telling. Dr. Schimke testified that the ~ p r i l 8, 1985, incident was not the single underlying cause of Eastman's disease. However, he could not state with medical certainty that Eastman's status returned to his preexacerbated condition following the accident. He stated: I view the ~pril, 1985, incident as but one in a long series of similar incidents. And I believe I stated if the incident caused hospitalization--and I believe that one did--it could have had some long-term lasting effect. And it is medical speculation, I think, to tell you how much or how little. We have previously recognized that "'cautious medical testimony' should, whenever possible, be interpreted in favor of the claimant.'' Wheeler v. Carlson Transport (1985), 217 Mont. 254, 262, 704 P.2d 49, 54. Indeed, in Ridenour, we granted disability benefits based on testimony very similar to that given by the doctors in this case--testimony that the claimant's accident "may have resulted in more asthma and more bronchitis, which could flare up more readily in the ensuing months and years." (Emphasis added.) Ridenour, 204 Mont. at 475-76, 665 P.2d at 785. The majority in this case, however, ignores the precedent set in Ridenour and unfairly denies Eastman disability under the Workers' Compensation Act. The majority also asserts that there is a rational basis for paying benefits to claimants under the Occupational Disease Act at a lower rate than those paid to claimants under the Workers' Compensation Act. I wish somebody would tell me exactly what that rational basis is. I certainly cannot find it in this opinion. n I would reverse the Workers' We join Mr. Justice William E. Hunt, Sr., in his dissent to the majority opinion. / | May 10, 1989 |
2b4de783-fefc-477a-92ff-9a84a60db7d2 | GRABENSTEIN v SUNSTED | N/A | 88-545 | Montana | Montana Supreme Court | NO. 88-545 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 BETTY GRABENSTEIN, Plaintiff and Appellant, -vs- TERRY SUNSTED, Defendant and Respondent. APPEAL FROM: ~istrict Court of the Twentieth ~udicial ~istrict, In and for the County of Sanders, The Honorable C. R. ~ c ~ e i l , Judge presiding. COUNSEL OF RECORD: For Appellant: M. ~ichard Gebhardt, Missoula, Montana For Respondent: Robert I,. Fletcher, Thompson Falls, Montana Submitted on Briefs: April 6, 1989 Decided: May 2, 1989 \ .. .8 . ., Filed: o , . ,I C ' 3 . . r. I . . 03 1 , . . . h . .. -. ' C" ! : & : ! . Clerk , 1 c . J LL. L " . * ' T ; Z ;- - L * J @ . . , . .,.- 0 3 C I C.iJ ." ". - - M r . J u s t i c e Fred J. Weber d e l i v e r e d t h e Opinion of t h e Court.. The p l a i n t i f f , M r s . Grabenstein, i n i t i a t e d t h i s s u i t i n j u s t i c e c o u r t t o recover t h e v a l u e o f h e r dog which was s h o t and k i l l e d by t h e defendant, M r . Sunsted, upon discovery of t h e dog i n h i s chicken coop. Following a t r i a l d e novo, t h e D i s t r i c t Court f o r t h e Twentieth J u d i c i a l D i s t r i c t , Sanders County, e n t e r e d judgment f o r t h e defendant and awarded him $30 damages f o r t h e l o s s o f h i s chickens and $45.50 f o r c o s t s i n c u r r e d i n l i t i g a t i o n . From t h a t judgment, t h e p l a i n t i f f a p p e a l s . W e a f f i r m . The i s s u e s a r e : 1. Did t h e D i s t r i c t Court err i n determining t h a t t h e defendant had a r i g h t t o shoot t h e dog which was k i l l i n g h i s p o u l t r y ? 2 . Did t h e D i s t r i c t Court e r r i n i t s r e f u s a l t o r e c e i v e proposed f i n d i n g s o f f a c t o r conclusions o f law and t o waive c o u n s e l ' s r e q u e s t f o r o r a l argument? Both p a r t i e s l i v e i n a r u r a l s e t t i n g approximately 5 m i l e s from Heron, Montana. Defendant S u n s t e d ' s p r o p e r t y i s l o c a t e d j u s t over 1.5 m i l e s from t h e Grabensteins, where t h e Sunsteds c a r r y on v a r i o u s a g r i c u l t u r a l p u r s u i t s , i n c l u d i n g t h e r a i s i n g o f chickens. The Grabensteins w e r e t h e owners o f a l a r g e , black Labrador r e t r i e v e r named Duke, whose f a t e is t h e s u b j e c t o f t h i s appeal. While performing h i s morning chores on J u l y 1 6 , 1985, M r . Sunsted heard a dog bark i n t h e v i c i n i t y o f h i s chicken coop. Having p r e v i o u s l y experienced problems w i t h coyotes, M r . Sunsted grabbed a shotgun from t h e barn b e f o r e proceeding t o t h e coop. Outside t h e coop he found f i v e dead chickens. The door t o t h e coop was broken down. Ins+-de t h e coop, which was a f u l l y enclosed s t r u c t u r e , six more chickens l a y dead. The black Labrador, which was 1 a t e r claimed by t h e Grabensteins t o be "Duke," was found i n t h e c o r n e r t r y i n g t~ c a t c h t h e l a s t remaining l i v e chicken i n t h e coop. M r . Sunsted s h o t t h e dog, k i l l i n g him i n s t a n t l y , then r e p o r t e d t h e i n c i d e n t t o t h e deputy s h e r i f f . The deputy t r a c e d t h e ownership o f t h e dog t o t h e Grahensteins, who w e r e n o t i f i e d o f t h e shooting. M r . Sunsted disposed o f t h e dog himself. The Grahensteins l a t e r sought damages f o r t h e Toss of nuke, e s t i m a t i n g h i s v a l u e a t $3,500. Did t h e Di-strict Court err i n determini-ng t h a t t h e defendant had a r i g h t t o shoot t h e dog which was k i l l i n g h i s p o u l t r y ? The common law r u l e on t h i s m a t t e r i s a s foll.ows: . . . t o j u s t i f y t h e k i l l i n g o f a dog i n defense o f p r o p e r t y t h e r e must he an apparent n e c e s s i t y f o r t h e defense, h o n e s t l y believed t o be r e a l , and t h e a c t s of defense must i n themselves be reasonable, o r i n o t h e r words, it i s necessary t o show t h a t t h e danger from i t s a t t a c k was imminent a t t h e t i m e , and t h a t t h e i n j u r y could n o t otherwise have been prevented. Trenka v. Moos (1946), 118 Mont. 607, 613, 168 P.2d 837, 840-41. Trenka was t h e f i r s t c a s e i n Montana involving a "dog i n t h e chicken coop" s c e n a r i o . This Court s t a t e d t h a t a person p r o t e c t i n g h i s p r o p e r t y has t h e r i g h t t o a c t upon t h e reason- a b l e appearance o f t h i n g s and i f t h e r e i s reasonable cause t o b e l i e v e t h a t n e c e s s i t y f o r k i l l i n g t h e dog e x i s t s , t h a t person i s n o t l i a b l e . 168 P.2d a t 841. I n Trenka, t h i s Court h e l d t h a t t h e chicken owner was n o t reasonably j u s t i - f i e d i n shooting t h e dog because t h e dog was n o t i n t h e a c t o f molesting t h e fowl a t t h e time t h e f a t a l s h o t w a s f i r e d . 168 P.2d a t 841. Although p l a i n t i f f i n t h i s c a s e argues t h a t t h e D i s t r i c t C o u r t ' s conclusion should have been t h e same a s t h a t reached i n Trenka, w e conclude t h a t t h e f a c t s o f t h i s c a s e a r e s i g n i f i c a n t l y d i f f e r e n t from t h o s e p r e s e n t e d i n Trenka s o a s t o j u s t i f y a d i f f e r e n t r e s u l t . When t h e defendant was asked t o d e s c r i b e b ~ h a t t h e dog was doing when he f i r s t saw him, he s t a t e d : Well, he was kind o f i n a pounce p o s i t i o n with h i s f r o n t down. And t h e r e was a chicken t h a t was i n t h e c o r n e r t r y i n g t o escape h i s goings on. And he was b i t i n g a t it and the chicken would f l y and h e l d reach up -- now he was a b i g dog l i k e , you know, w e l l over 1 0 0 pounds I would guess. I r e a l l y d o n ' t know b u t t h a t ' s what I would guess. And he would rise up t r y i n g t o c a t c h t h e chicken and t h e chicken would come d.own. And of course i n t h a t s m a l l o f c o n f i n e s w i t h water and f e e d e r i n t h e r e , he had it p r e t t y well., you know, cornered. While t h e defendant d i d n o t a c t u a l l y see t h e chicken i n t h e d o g ' s mouth, he described. t h e b i r d a s being "poked f u l l of t e e t h h o l e s and p r e t t y well. chewed up" a s i f "something has had a hold o f it . . ." The defendant e v e n t u a l l y had t o k i l l t h e chicken because o f i t s mangled s t a t e . Testimony was o f f e r e d t o t h e e f f e c t t h a t Duke was a g e n t l e clog who was accustomed t o livj-ng and even s l e e p i n g w i t h chickens. Re- g a r d l e s s o f t h i s testimony a s t o Duke1 s s t o i c c h a r a c t e r , t h e lower c o u r t found t h a t t h e defendant had no p r i o r knowledge of t h e d o g ' s temperament o r d i s p o s i t i o n toward poul.try when he came upon t h e s i g h t o f a dog c o r n e r i n g one chicken s u r - rounded by numerous dead chickens. The evid.ence s u p p o r t s t h i s f i n d i n g t h a t defendant had no reason t o b e l i e v e t h a t t h e dog would j u s t a s soon s l e e p with chickens a s t e r r o r i z e them. The p l a i n t i f f argues t h a t because e l e v e n chickens a?-- ready l a y dead and t h e only p r o p e r t y remaining i n p e r i l was a 9;?.50 chicken, it was n o t reasonable f o r t h e defendant t o shoot t h ~ C 7 o q i n what p l a i n t i f f c h a r a c t e r i z e s a s an a c t of vengeance. The D i s t r i c t Court determined otherwise, and w e w i l l n o t s e t a s i d e t h a t determination i f it i s supported by s u b s t a n t i a l c r e d i b l e evidence. Parker v. Elder (Mont. 1988), 758 P.2d 292, 293, 45 St.Rep. 1305, 1307. Again, t h e defendant caught t h e dog l a t e r i d e n t i f i e d a s Duke i n t h e a c t o f molesting one O F h i s chickens. The e v i - dence e s t a b l i s h e s t h a t it reasonablv appeared t o t h e defen- d a n t t h a t t h e dog had broken i n t o a ful1.y enclosed chicken house, had k i l l e d 11 chickens, was a t t a c k i n g a 1 2 t h chicken, could n o t be contained i n t h e coop because o f i t s broken door, and t h a t t h e s i z e and unknown temperament o f t h e dog made p h y s i c a l r e s t r a i n t u n r e a l i s t i c and p o t e n t i a l l y danger- ous. TJnder t h o s e circumstances, w e conclude t h a t it was reasonable f o r defendant t o shoot t h e dog under t h e common law r u l e a s set f o r t h i n Trenka. W e hold t h a t s u b s t a n t i a l c r e d i b l e evidence e x i s t s t o support t h e D i s t r i c t C o u r t ' s determination. The p l a i n t i f f argues t h a t t h e common law r u l e i s abro- g a t e d by s t a t u t e i n Montana. The two r e l e v a n t s t a t u t e s a r e $ S 81-7-401 and 402, MCA. The f i r s t s t a t u t e , $ 81-7-401, MCA, allows t h e k i l l i n g o f a dog who k i l l s , wounds, o r i n - j u r e s any l i v e s t o c k n o t belonging t o t h e d o g ' s master. I n Granier v. Chagnon (1949), 1 2 2 Mont. 327, 203 P.2d 982, t h i s Court h e l d t h a t t h e d e f i n i t i o n o f l i v e s t o c k under t h i s s t a t - u t e i n e f f e c t a t t h a t t i m e does n o t include fowl. P l a i n t i f f argues t h a t S 81-7-402, MCA, i s t h e appl-icable s t a t u t e which s u b j e c t s t h e owner o f a p r e d a t o r dog t o L i a b i l - i t y f o r damages only. That s t a t u t e r e a d s i n r e l e v a n t p a r t : (1) The owner o f l i v e s t o c k o r p o u l t r y i n j u r e d o r k i l l e d by any dog may recover a s l i q u i d a t e d damages from t h e owner of t h e dog t h e a c t u a l v a l u e o f t h e animals k i l l e d o r t h e v a l u e o f t h e damages s u s t a i n e d by reason o f t h e i n j u r i e s a s t h e c a s e may be. Because neither this statute or 5 81-7-401, MCA, authorize the killing of a dog who destroys fowl, the plaintiff argues that the common law rule has been abrogated and defendant's only remedy is that of damages under S 81-7-402, MCA. We disagree. At common law, an owner of domestic fowl has a right to l r i l l a dog attacking or menacing their safety if such is necessary for their protection, and that common law right "is not abrogated by a statute which creates a right in a nonowner of certain enumerated animals, not including fowls, to kill a dog attacking such animals." 3A C.J.S. Animals, S 292. These statutes do not limit, either expressly or im- pliedly, the poultry owner's right at common law to kill an attacking dog when such a l c i l ! . i n g is reasonably justified. Rather, the statutes provide additional relief after the fact and address specific si.tuations not covered by the common law. We hold that the defendant's common law ri.ght to kill plaintiff ' s dog was not abrogated by Montana's stat.utes on the subject. Did the District Court err in its refusal to receive proposed findings of fact or conclusions of law and to waive counsel's request for oral argument? At the closing of the case, plaintiff's counsel offered to submit proposed findings of fact and conclusions of law which were refused by the court. Instead, the court offered five minutes to each party in which to be heard. Neither party took advantage of that time. We therefore conclude that no basi.s exists upon which to al.leae error as to the issue of oral. argument.. Furthermore, there is no mandatory requirement that the Dj-strict Court accept proposed Findings of fact or conclusions of law. Rule 52, M.R.Civ.P., provides that: The court may require any party to submit proposed findings of fact and conclusions of law for the court's consideration and the court may adopt any such proposed findings or conclusions as long as they are supported by the evidence and law of the case. (Emphasis added.) Here, the District Court properly exercised its discretion in declining tc accept proposed findings or conclusions. Affirmed. | May 2, 1989 |
49f7c984-0786-4a9c-897f-45514cf9aa10 | MARRIAGE OF MORAZAN KENDALL | N/A | 88-530 | Montana | Montana Supreme Court | 1\70. 88-530 IN THE SIJPREME COURT OF THE STATE OF MOKTANA 1989 IN RE THE MARRIAGE OF FPAMCISCO IVAN MORAZAN, Petitioner and Respondent, and VICKI LYNN KENDALTJ , Respondent and Appellant. APPEAL FROM: District Court of the Eighth Judicial. District, In and for the County of Cascade, The Honorable John M. McCarvel, Judge presiding. COUNSEL CF RECORD: For Appellant: Cannon & Sheehy; Edmund F. Sheehy, Jr., Helena, Montana For Respondent: Miller & Cook; Joan E. Cook, Great Falls, Montana Submitted on Briefs: March 31, 1989 i- LY_ m : - - I Decided: 5 1 1989 c_ 1 u 3 ~< -J C3 - U Filed: , , v I , - - - --- 1 c , L d -. - r) % , , i Clerk Mr. Justice 1. C. Gulbrandson deli~reredl the Opinion of the Court. Appellant Vicki Lynn Kendall (Kendall) appeals the July 13, 1988, order of the Eighth Judicial District Court, Cascade County, modifying a divorce decree entered on January 28, 1984. The modification order removed Kendall's children, M.M. and F.M., from her sole custody and granted joint custody of the children to Kendall and the children's natural father Francisco Ivan Morazan (Morazan), the respondent, with primary physical custody in Morazan. We affirm the modification order of the District Court. Kendall and Morazan were married in October 1980. At that time Kendall had three children, two sons and one daughter, R. B . These children lived with Kendall and Morazan. Two children were born during the marriage, M.M. in 1981 and F.M. in 1983. In 1983, Kendall made allegations of sexual abuse of R.B. against R.B. 's natural father. These allegations arose in the midst of a custody battle between Kendall and E.B.'s natural father. Investigations by child welfare workers disclosed that R.R. may have been sexually abused by both her natural father and Morazan. The District Court modified custody of R.B., shifting custody from Kendall to R.B.'s natural father. Kendall was permitted reasonable visitation privileges, provided R.B. had no contact with Morazan. Kendall filed for and was granted a dissolution of her marriage to Morazan. Morazan did not contest the dissolution proceedings, the award of sole custody of their two children to Kendall, or the child support payments of $125 per month per child. The order of dissolutjon granted Mora7an reasonable vi si tation right^ . Subsequent to the dissolution in January 1984, Kendall began living with one Doug Owens. She later married Owens and moved with him to Lolo, Montana. Morazan exercised his visitation rights and paid the required child support. In September of 1986, after Owens physically abused Kendall, she contactefi Porazan requesting he move her and her children back to Great Falls. Morazan did so, at his own expense, relocating Rendall and the children across the street from his residence. Approximately one month later, Owens moved back in with Xendall-, staying approximately six months. Kendall then divorced Owens. She had begun seeinq another man, Dale Reeves. After divorcing Owens, Kendal? moved with Reeves to Canyon Ferry, Pontana, and then to East Helena, Montana. In February 1988, Kendall had problems with the principal at her daughter's school and with Dale Reeves and called Morazan to help her and her children move back to Great Falls. She felt she needed a "cooling-off period" in her relationship with F-eeves. Morazan moved them back to Great Falls to his house where they stayed for a month before Fendall and the children moved to another locatjon in Great Falls. Morazan testified at the modi-fication hearing that Kendall had confided in him that Reeves' thirteen-year-old son had been physically abusing her. She also told Morazan that her two older boys had been having inappropriate sexual contact with M.M. and that Reeves' son told her sons that he had this type of contact with his sister. Morazan filed a combination affidavit and petition for modification of custody on May 17, 1988. He also obtained a temporary restraining order to prevent Kendall from removing their chjl-dren from the jurisdiction of the court.. On May 23, 1988, Kendall removed M.M. from the kindergarten she was attending in Great Falls and moved both children to East Helena where they moved back in with Reeves. At the time of the June 7, 1988, hearinq, which Kendall attended without counsel, she was living with Reeves and five children in a two bedroom apartment. The District Court found cause to hold a hearing regarding Morazan's petition for modification of custody and set a hearing date for June 16, 1988. Between the date of the June 7, 1.988, hearing and the June 16, 1988, hearing, M.M. reportedly confided to Kendall that Morazan had sexually abused her. Kendall reported this to Lewis and Clark County authoriti-es, who determined not to file any charges before the modification hearing. At the hearing, both parties testified and presented additional witnesses. The judge also interviewed M.M. in his chambers at the end of the hearing. The court issued its findings of fact, conclusions of law, and order on July 13, 1988. The court concluded that the children's existing environment constituted serious endangerment to their mental, moral, and emotional health; that the harm likely to result from a change in their environment was outweighed by the advantages of the change; and that modification of the custody order contained in the divorce decree was in the best interests of the children. The court then modified the custody order, granting joint custody, placing primary physical custody with Morazan, and ordering no child support. It is from this order of the court that Kendall presents the following issues on appeal: 1. Did the District Court err in issuing the temporary restraining order and holding the show cause hearing on the petition to modify custody? 2. Does substantial. credible evidence exist to support the District Court's order modifying custody? The first issue Kendall raises is that the District Court erred in issuing a temporary restraining order restricting her from removing the children from the jurisdiction of the court. Kendall contends there was no reason for the court to believe she intended to remove the children from the state. The court issued the temporary restraining ord.er based upon the duly sworn affidavit of Morazan. This affidavit stated that the temporary restraining order was necessary to prevent Kendall from removing the children from the jurisdiction of the court. The affidavit further alleged that Kendall had threatened to remove the children from the court's jurisdiction should Morazan ever seek modification of the custody order. We find that such a sworn statement was sufficient grounds for issuing a temporary restraining order, in light of the circumstances surrounding such proceedinqs and t.he minimal inconvenience such an order placed. upon Kendall. See S 40-4-220(1), MCA. Kendall also contends the petition for modification and supporting affidavit failed to provide adequate cause for hearing the motion under S 40-4-220 ! I ) , MCA. Kendall claims the reasons presented in Morazan's affidavit were that Kendall had changed her residence on numerous occasions and was on welfare. While these grounds alone would. be insufficient to establish adequate cause for a hearing, they were not the only cause contained in the affidavit. The affidavit also stated that Kendall had previously exposed. the children to an abusive relationship while married to Owens, a relationship to which she had returned. Further, the affidavit stated that Kendall was currently involved in another relationship which exposed the children to a sexually abusive situation. We conclude these statements constituted adequate cause to order a hearing on the custody status of M.M. and F.M. Kendall's second issue is whether the evidence introduced at the hearing was sufficient to warrant a modification of the custody arrangement. Initially, we note that the primary responsibility for child custody decisions lies with the District Court. We will presume the District Court's decision is correct and not disturb it unless "there is a mistake of law or a finding of fact not supported by credible evidence." In re Marriage of Robbins (1985), 319 Mont. 130, 134-35, 711 P.3d 1347, 1350, citing Solie v. Solie (1977), 172 Mont. 133, 137, 561 P.2d 443, 446; see also Rule 52(a), M.R.Civ.P. (which provides that a finding must be clearly erroneous before it may be overturned). A district court must make certain determinations before modifying a prior child custody decision. Section 40-4-219, MCA. First, the court must find, based upon facts arising since the prior decree or unknown to the court at the entry of the prior decree, that a change has occurred in the circumstances of the child or custodial parent which necessitates a modification to serve the best interests of the child. Section 40-4-219 (1) , MCA. Further, the court must find that the child's present environment seriously endangers the child's physical, mental, moral, or emotional health and that the harm likely to be caused by a change in environment is outweighed by the advantages to the child from such a change. Section 40-4-219 (1) (c) , MCA. The record shows that the court had adequate reason to find that circumstances had changed since the dissolution decree issued. Kendall's lifestyle indicated an inability to maintain a stable environment for her children. At the time of the modification hearinq, she was livincj with another adult and five children in a two bedroom apartment. Further, Kendall has shown little concern for M.M.'s education. Her removal of M.M. from kindergarten in Great Falls two weeks before the end of the term shows a lack of regard for the necessity and value of her child's education. These facts, as well as the allegations that M.M.'s stepbrothers sexually abused her, indicate changed circumstances. These changed circumstances are sufficient to show that the physical, mental, moral, and emotional health of M.M. and F.M. would be seriously endangerd if they remained with Kendall. See $ $ 40-4-219(1)(c), MCA. We therefore agree with the District Court as to the dangers posed by the environment in which Kendall has placed her children. The advantages to the children under Morazan's custody, on the other hand, clearly outweigh any harm which would accompany a change in their environment. Morazan currently lives alone in a two bedroom house with a backyard in which the children may play. He has a stable job with the U.S. Post Office, and he is attending the College of Great Falls in hopes of bettering his life. He has exhibited concern For the children's educational opportunities and the need for testing M.M. for possible learning disabilities. His work and schooling will require baby-sitters to care for his children, but he has made arrangements to secure qualified people to do so. This Court has some reservations regarding Morazan's fitness as the custodial parent because of allegations that he sexually abused M.M. Proof of the validity of these allegations would clearly result in Morazan being unsuitable to take unsupervised custody of the children. Morazan, however, has denied these a1 legations. The n i strict Court, questioned because of the timing of the charges as well as Vorazan's denial, whether the charges were valid. The court noted that Kendall has been involved in two cases concerning t h e custody of h e r c h i l d r e n , and i n both she h a s a l l e g e d sexual. abuse on t h e p a r t o f t h e n a t u r a l f a t h e r . The D i s t r i c t Court was i n t h e b e s t p o s i t i o n t o q u e s t i o n and observe Kendall and M . , and we t h e r e f o r e yield. t o i t s e v a l u a t i o n of t h e v a l i d i t y of the s e x u a l abuse charges. The modification o r d e r o f t h e D i s t r i c t Court is affirmed. 1 W e concur: k , ~ v r . J u s t i c e 7ohn C . Sheehy d i d not. p a r t i c i p a t e i n t h i s opinion. | May 5, 1989 |
b68ed5b4-ab3a-45dc-9d4c-baf947143de8 | STATE v THOMPSON | N/A | 88-445 | Montana | Montana Supreme Court | NO. 88-445 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 STATE OF MONTANA, plaintiff and Respondent, -vs- WALLIS J. THOMPSON, Defendant and Appellant. APPEAL FROM: District Court of the ~hirteenth ~udicial ~istrict, In and for the County of Stillwater, The Honorable Diane G. Barz, Judge presiding. COUNSEL OF RECORD: For Appellant: Moses Law Firm; Charles F. Moses, ~illings, Montana For Respondent: Marc Racicot, Attorney General, Helena, Montana Clay R. Smith, Asst. Atty. General, Helena C. Ed Laws, Stillwater County Attorney, Columbus, Montana -- - - Submitted on Briefs: March 31, 1989 Decided: May 17, 1989 Mr. Justice John Conway Harrison delivered the Opinion of the Court. This case comes to us on appeal from a jurv verdict in the Thirteenth Judicial District, Stillwater County, the Honorable Diane G. Rarz presiding, finding the appellant, Wallis J. Thompson, guilty of the offense of Driving Under the Influence of Alcohol, a violation of § 61-8-401, MCA. We affirm. On January 7, 1987, Deputy Clifford Rr0ph.y arrested appell-ant for the offense of driving under the influence of alcohol. After his arrest., Off i.cer Brophy drove appellant to the sheriff's office in Columbus, Montana. At trial, the parties stipulated that during the drive to Columbus, Officer Brophy informed appellant of his rights under Miranda v. Arizona (1966), 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694. Once at the sheriff's office, Officer Brophy advised appellant of his rights under Montana's Implied Consent Law, pursuant to S 61-8-402, MCA. Appellant refused to take a. blood, breath or urine test. Next, appellant performed a series of field sobriety tests, including reciting the alphabet, walking a straight line and holding his foot six inches off the floor for approximately thirty seconds. Upon completion of the sobriety tests, Officer Rrophy again advised appellant of his Miranda rights. Appellant signed a waiver of his Miranda guarantees. Thereafter, Officer Brophy questioned appellant in d-etail regarding the incident. An audio-video tape recorded appellant's comments and actions while in the sheriff's office, including those made during the sobriety tests, the reading of Miranda warnings, his waiver of rights, and questioning by Officer Brophy. On March 4, 1987, appellant was found guilty of Driving Under the Influence of Alcohol by a justice court jury. Appellant appealed to the District Court. On April 21, 1988, a District Court jury also found appellant guilty of the offense of Driving Under the Influence of Alcohol. The District Court sentenced appellant to 60 days in jail with all but one suspended, issued a $300 fine, required attendance in an Assessment Course and Treatment School (ACT) and ordered payment of court costs totaling $421.57. Appellant raises the following issues on appeal. 1. Did the District Court err when it allowed the audio-video tape into evidence? 2. Did the District Court err when it limited the evidentiary purpose of appel-lant's Exhibits A and B? The Fifth Amendment to the United States Constitution and Art. TI, sec. 25 of the Montana Constitution, provides that no person be compelled to testify against himself in a crimjnaI proceeding. However, we distinguish compellins "communications" or "testimony" from real or oh jective evidence taken from the accused. Schmerber v. Califor~ia (19661, 384 U.S. 7'57, 86 S.Ct. 1826, 16 L.Ed.2d 908; State v. Jackson (1983), 306 Yont. 338, 672 P.2d 255; State 17. A r r n f i e 1 . d (1984), 214 Mont. 239, 693 P.2d 1226. In these instances, we have consistent!_y stated that the privi leae against self-incrimination does not extend to real or o b ! e c + i v e evidence. State v. Finley 11977), 173 Mont. 163, 566 P.2d 1119. Appellant contends the video tape should have been excluded as a denial of his constitutional rights, arguincr that the actions and verbal comments made during the field sobriety tests were testimonial in nature. Further, because he was in the custody of the police, appellant argues his comments made during the taping were a result of custodial interrogation and therefore, required Miranda warnings. The crucial inquiry in this case--whether the audio-video tape of the comments and actions of the appellant ronstitute6 constitut.ionally prohibited testimonia! compulsion or merely real, physical, or objective evidence--is similar to the inquiry presented in Finley. In that case, we held that the video tape was objective evidence and, therefore, outside the protection of the Fifth Amendment to the United States Constitution and Art. 11, sec. 25 of the Montana Constitution. Finley, 566 P.2d at 1121. The video tape demonstrated defendant ' s performance of sobriety tests and his manner of speaking: [TI he audio-video tape was introduced into evidence not for the incriminating content of the words uttered by defendant, but as evidence helpful to the jury in understanding the testimony of the police officers and employees who observed defendant's unsteady walk and slurred speech in the police station. Finley, 566 P.2d at 1121. See also, State v. Johnson (Mont. 1986), 719 P.2d 1248, 43 St.Rep. 913; Armfield. We conclude the audio-video tape in the present case is objective evidence and not entitled to Fifth Amendment protection. Appellant attempts to distinguish Finley by stating that Finley was advised of his Miranda rights prior to the taping and appellant Thompson was not so advised. While we find. appellant ' s assertion questionable in light of the stipulation entered into between the parties before trial, our earlier holding eliminates the need for discussion of this issue. Because we hold the audio-video tape of defendant in the police station was objective evidence, unprotected by defendant's constitutionaL privilege against self-incrimination, the holding in Miranda is inapplicable to the fact-s of this case. Finley, 566 P.2d at 1122. Therefore, we do not determine whether the Miranda warning, stipulated by the parties as given +o appellant in the police car, woul-ci have sufficed to sustain any incriminating testimoni.al statements. Further, we reject appellant's charge of custodial interrogation. Officer Rrophy merely requested appellant perform a series of sobriety tests. At trial, Judge Barz viewed the audio-video tape and concluded that defendant's spoken words did not include any testimonial information. We agree. Our reading of the transcribed audio-video tape reveals that the officer did not interrogate appellant prior to advising him of his Miranda rights, nor question appellant while he performed the sobriety tests. Though appellant chose to make voluntary comments during the tests, these comments were not the result of interrogation. Voluntary statements are not entitled to constitutional protection under Miranda. Miranda, 384 IJ.S. at 478, 86 S.Gt. at 1630, 16 J~.Ed.2d at 726. The second issue raised on appeal is whether the District Court erred in limiting the purpose for which appellant's Exhibits A and R were admitted into evidence. Exhihits A and 3 are pamphlets published by the Montana Highway Traffic Safety Division of the Department of Justice containing information regarding alcohol consumption. The District Court admitted the pamphlets for the limited purpose that they were publications of the Department of Justice of the State of Montana, and admonished the jury that the pamphlets were not admitted for their truth or accuracy. Appellant argues that under Rule 902(5), M.R.Evid., the pamphlets are authentic and an exception to hearsay prohibitions under the public records or reports exception, Rule 803(8), M.R.Evid. While we agree that the pamphlets are self-authenticating, they do not fall ~7i.t.hin the public records exception. Rule 803(8), M.R.Evid., provides in part: The following are not excluded by the hearsay rule, even though the declarant is available as a witness: (8) Public records and reports. To the extent not otherwise provided in this paragraph, records, reports, statements, or data compilations in any form of a public office or agency setting forth its regularly conducted and regularly recorded activities, or matters observed pursuant to duty imposed by law and as to which there was a duty to report, or factual findings resulting from an investigation made pursuant to authority granted by law. The following are not within this exception to the hearsay rule: (i) investigative reports by police and other law enforcement personnel; (ii) investigative reports prepared by or for a government, a public office, or an agency when offered by it in a . case in which it is a party; (iii) factual findings offered by the government in criminal cases; (iv) factual findings resul-ting from special investigation of a particular complaint, case, or incident; and (v) any matter as to which the sources of information or other circumstances indicate lack of trustworthiness. Appellant's argument relies upon a federal decision addressing the public records exception. Ye note, however, that the commission rejected the Federal Rule, and instead adopted the Uniform Rule because "[ilt was clearer than the Federal Rule and because it expressed better policy with certain reports in requiring the official to testify rather than admitting his report as a hearsay exception." Rule 8 0 3 ( 8 ) , M.R.Evid., Commission Comment, reprinted in 3 MCA Annotations at 354 ( 1 9 8 8 ) . Appellant's reliance is therefore inappropriate. To meet this exception, appellant must demonstrate the pamphlets were either derived from the public office or aaency's regularly conducted and recorded activities, published as a result 01 a duty imposed by law upon the public office or agency, or resulted from an investigation made pursuant to authoritv granted by law. Rule 803 ( 8 ) , M.R.Evid. Appellant failed to lay a proper foundation to demonstrate that the informat!onal pamphlets fit within one of these three categories. We find the DTstrict Court properly admitted the exhibits for the limited purpose that they are publications of the Department of Justice of the State of Montana. Af f i rmed . We concur: Mr. Justice ~ i l l i a m E. Hunt, Sr., dissenting: I dissent. The statements made by Thompson during the videotaping are not objective evidence. Therefore, the statements are protected under the ~ i f t h Amendment. | May 17, 1989 |
59df02eb-f666-4a32-8044-3dc57254ce1e | ESTATE OF CLARK | N/A | 88-380 | Montana | Montana Supreme Court | No. 88-380 IN THE SUPREME COURT OF THE STATE OF MONTANA LJ cC c - . c- d ' < - - z IN THE MATTER OF THE ESTATES OF: - . , - I ;f~ ANNA MARGARET CLARK, and - -7 7% , - ' 7 * C ' 3 - WALIVACE BRADLEY CLARK, SR., 3 7 " - , t ' - - Protected Persons. - ' r \ - ' i -\ - \-' , - - * - - I c' L i U ' C - 4 - -l APPEAL FR.OM: ~istrict Court of the Twelfth ~udicial ~istrict, In and for the County of Chouteau, The Honorable Chan ~ttien, Judge presiding. COUNSEL OF RECORD: For Appellant: Don A. Labar and Margaret M. Joyce Johnson, Church, Harris, Johnson and ~illiams; Great Falls, Montana For Respondent: ~ l l i n H. Cheetham, Fort Benton, Montana Gary W. jella and, Great Falls, Montana Submitted on Briefs: December 16, 1988 ~ ~ ~ i d ~ d : April 26, 1989 - - " Clerk M r . ;rustice ~ i l - l j - a m F. Hunt, S r . d e l i v e r ~ d t-he Opinion of t h e Court. Appellants, George Clark, Bertha ~ o v e l l i and Marian Molnar, t h r e e of t h e f i v e a d u l t c h i l d r e n o f Anna Marqaret and Wallace Bradley Clark, S r . ( ~ e n i o r s ) , appeal from a decree o f t h e D i s t r i c t Court o f t h e Twelfth J u d i c i a l D i s t r i c t , Chouteau County, which, w i t h e x c e p t i o n s , approved! t h e accounting o f t h e c o n s e r v a t o r of t h e i r p a r e n t s ' e s t a t e s . W e r e v e r s e a n d remand f o r f u r t h e r proceedings. The i s s u e s r a i s e d a r e a s follows: 1. id t.he D i s t r i c t Court err j.n s u b s t a n t i a l l y approving t h e c o n s e r v a t o r ' s f i r s t annual accounting? 2 . Did t h e ~ i s t r i c t Court p r o p e r l y s c r u t i n i - z e t h e c o n s e r v a t o r ' s t.ransactions with t h e p r o t e c t e d persons? 3 . Did t h e ~ i s t r i c t Court. err i n determining t h a t t h e p r o t e c t e d persons were mentally competent? I n t h e 1970 ' s , Wallace Bradley Clark, Jr. (Brad) , t h e youngest son of t h e S e n i o r s , moved from Alaska t o Montana t o o p e r a t e hi.s p a r e n t s ' 1,760-acre farm l o c a t e d near Geraldine. I n 1977, t h e s e n i o r s e n t e r e d i n t o a c o n t r a c t f o r deed w i t h Brad whereby Brad agreed t o purchase 8 0 0 a c r e s o f t h e farm f o r $160,000 a t 6 p e r c e n t i n t e r e s t . The c o n t r a c t providecl f o r annual payments t o be made from t h e n e t proceeds of one-third o f t h e g r a i n grown on t h e land. A t about t h e same t i m e , Brad and t h e Seniors e n t e r e d i n t o a ten-year l e a s e f o r t h e remaining 96G a c r e s of t h e farm. The c o n t r a c t provided f o r t h e annual payment of a one-fourth s h a r e o f a1.l c r o p producecl on t h e acreage under l e a s e . None of t h e o t h e r Clark chi.1-dren r e s i d e d near t h e S e n i o r s . The 01-dest son, George, had farmed i n t h e Geraldine area until 1981, when he retired and moved to West Yellowstone. The remaining children, Bertha Novelli, Marian Molnar and ~osephine Wilson, all resided in Alaska. Although the daughters an3 George did not live in the vicinity of the Seniors, the record indicates that they each v?sited their parents yearly. During his visits, George became concerned that his parents were no longer capable of managing their financial affairs. In 1984, he discovered that his mother had overdrawn her checking account by writing checks to the grandchildren. In 1985, his Father told him that he had signed some papers but didn't know what they were. Upon investigation, George found that the seniors had deeg~d one-half of the 960 acres of farmland to the five children. Further investigation revealed that the Seniors had given Brad full power of attorney over their affairs. On April 25, 1985, George petitioned the District Court for the appointment of a conservator for the seniors, both in their early 90s at the time. Concerned that Brad might be exercising undue influence over his parents, George nominated one L.C. Siebenaler, a disinterested party, as conservator. A hearing was held on the matter, during which the District Court interviewed the elderly couple. The court found that due to their advanced age and occasional forgetfulness, both parties were unable to manage their property and affairs effectively without assistance. Over George's objection, the court appointed Rrad as conservator, finding that it would be in the best interest of the Seniors if a family member held the position rather than someone they did not know. On June 11, 1985, Rrad posted two bonds in the amount of $25,000 each. Letters of conservatorship issued. On September 18, 1985, Brad filed an inventory and appraisement of the fair market value of the assets of the Seniors as of Ju1.y 8, 1985. He failed to file his first annual accounting, however, until January 8, 1987. Shortly after filing the accounting, B r a c 7 filed an amended inventory and appra isement of assets. The amended inventory reflected a decrease of approximately $30,600 of the balance receivable from the 1377 contract for deed between Brad and the Seniors. Brad later testified that the original inventory showed both the principal and interest due and owing on the contract for deed; the amended version reflected only the principal. No reference to the $30,600 in interest Brad admittedly owed on the contract as of July 8, 1985, can be found on the amended inventory. A hearing on the accounting was held on January 19, 1987, during which George filed written objections. Shortly thereafter, George filed additional exceptions, seeking to void certain transactions made by Brad, as we]-!_ as a more detailed accounting, an audit of the estates and the removal of Brad as conservator. A hearing to consider the objections was held on March 2, 1987. The court took testimony at that time but. also granted Brad's motion for a continuance to ~ p r i l 6 , 1987, to all-ow Josephine Wilson, one of the Clark daughters, to appear and testify. After the hearing, the District Court issued an order that accepted and approved the first annual accounting. George, Rertha and Marian moved the court- to re-open the hearing on the accounting and to remove Brad as conservator. The District Court granted the motion and trial was held on August 17 and 19, 1987. ~uring the trial, Brad testified that in 1985 and 1986 he exchanged a series of checks with the seniors, resulting in the forai veness of approximately $70,566 in indebtedness Brad had accumulated under the contract for deed, including $30,600 in interest. In its orcler issued after the t r i - a ! , the District Court voided these transactions, finding that t.hey were of such magnitude as to endanger the Seniors' welfare and that they violated S 72-20-203, MCA, the statute prohibiting a fiduciary from dealing with trust property for his own benefit. Appellants do not appeal from this part of the District Court order. Erad also testified that his father had given him other gifts that were not reflected on the accounting, including $720 for grasshopper poison and the Seniors' share of the 1985 crop, which amounted to approximztely 700 bushels of winter wheat and 375 bushels of barley. Rrad stated that his father had given him the Seniors' share of the crop every year since 1981. ~ccording to Brad, his father intended to give him the farm. The contract for deed was executed only to avoid gift taxes. Therefore, Rrad contended, when farminq became less I-ucrative, his father no longer required him to pay under the contract. Erad also test-ified that he had taken out a $3,900 loan on the 1985 crop, putting all of the proceeds in his personal account and none in the Seniors, even though the seniors owned a share of the crop under the contract and lease. with the exception of the avoidance of the $70,566 in forgiven indebtedness mentioned above, the ~istrict Court once again approveci the first annual accounting. The court found that the Seniors' promised to give Brad the -Farm and gave him their share of the crop and other gifts in honor of that promise. The court also found that the seniors were mentally competent and capable of handling their own affairs, though they had difficulty remembering their actions afterward. The court refused to remove Brad as conservator, continuing the question to the hearing on the second annual accounting, which Brad had not yet filed. On April 18, 1988, George, Bertha and Marian filed a motion asking the District Court to either withdraw or amend its findings and conclusions. The movants sought a new trial in the alternative. The District Court failed to rule on t.he motion withi-n 45 days. Hence, under Rule 59 (d) , M.R..Civ.P, the motion was deemed denied.. On June 24, 1988, George, Bertha and Yarian appealed to this Court, seeking, among other things, the removal of Brad as conservator. This question was rendered moot. when, on October 17, 1988, Brad resigned his position. Gary W. ~jel.I.and, the conservator appointed in Brad's stead, has joined as amicus curiae in the appeal of George, Sertha and Marian wi+.h respect to the remaining issues. A conservatorship may be warranted when, due to advanced age, a person is unable to effectively manage his affairs and he owns property that is in danger of being wasted or dissipated unless proper management is provided. Section 72-5-409 ( 2 ) , MCA. The institution of a conservatorship grants the district court broad powers. The court may exercise all powers over the estate that a protected person could exercise if he were not under a disability, except the power to make a will. At all times, however, the court's handling of the property must be for the benefit of the protected person. section 72-5-421(3), MCA. The court may exercise these powers directly or through a conservator. Section 72-5-427., MCA. If a conservator is appointed, he must administer the estate as v r o u 7 . d the court i f administering it directly, that i.s, for the benefit of the protected person. The conservator is required to account to the District Court on. an annual basis. Section 72-5-438, MCA. The District Court must carefully scrutinize the accounting, keeping in mind t.hat it is the conservator, as trustee of the estate, who bears the burden of proving the proper disposition of the property under his control. Local Union No. 400 of the Internat'l Union of Operating Eng'rs v. Bosh (1986), 220 Mont. 304, 312, 715 P.2d 36, 41. The conservator must therefore keep meticulous accounts of his administration of the estate, accounting for "the source of every item of income and the purpose of every item of expense." In re Allard 11914), 49 Mont. 219, 229, 141 P. 661, 665. The record demonstrates that +he first annual accounting filed by Brad Clark, the conservator in this case, was less than adequate. Other than a ledger listing drafts written on his father's checking account, Brad failed to introduce any evidence to verify the accounting. He failed to submit bank statements reflecting opening and closing balances, deposits and withdrawals. Re failed to produce receipts for purchases made on his personal credit card allegedly for the benefit of the Seniors. Fe failed to introduce gift and income tax returns filed by the Seniors. Furthermore, Brad's accounting was inaccurate an? incomplete. He failed to account for grain held in storage at the opening of the conservatorship but sold subsequently. He failed to account for his gift from the Seniors' of their share of the qrain under the contract for deed and lease. He failed to account for interest due under the contract for deed. He failed to indicate either in the original inventory, the amended inventory or the accounting that the Seniors' interest in the land under the 1977 contract for dee6 had been subordinated in 1983 to a Federal Land Rank mortgage that secured a $230,000 loan. The purpose of the statutorily required annual accounting is to inform the court of the financial- condition of the estste and to ensure that the conservator is managing the property for the benefit of the protected persons. In order to fulfill these purposes, the accounting must be accurate, complete and verifiable. The accounting filed by the conservator in this case is none of these. The ~istrict Court erred in accepting and approving it. When the accounting proferred by the conservator is inadequate, the District: Court may require the conservator to suhmit to a physical check of the estate. The physical check may be made in any manner specified by the court. Section 72-5-438 (3), MCA. In this case, the appellants have requested an audit of the estate. I?nder the circumstances, an audit may be the best method by which to determine the estate's financial condition. We therefore remand this case for an audit and rehearing. The conservator acts as a fiduciary. As such, he is required to observe the stringent standards applicable to trustees. Section 72-5-423, MCA. Appellants argue that the ~istrict Court failed to measure Brad's actions against these rigorous standards. Instead, the court excused Brad's actions because he "was told he should handle his folks' affairs just as he had prior to the institution of the conservatorship, and which he did without any advice to the contrary from his attorney." The purpose of a conservatorship is to preserve the property of the protected person. A conservator who profits to the detriment of his wards cannot be excused because he acted out of ignorance or because he acted in t.he same self-serving manner as he had prior to the institution of the trust. On remand, the Df-strict Court must more carefully scrutinize Brad's administration of the estate. Any transactions in which Rrad obtained an advantage must be presumed to be entered into by the Seniors without sufficient consideration and under un$ue influence. Section 72-20-208, MCA . Rrad has the burden of proving that the any transactions in which he obtained an advantage were for the benefit of the Seniors and that the Seniors freely entered into the transactions with full knowledge of the facts. Appellants argue that the District Court improperly ruled that the Seniors were mentally competent from 1981. through the period of the first accounting. We agree. Jn order to prove that any transactions in which Brad obtained an advantage were entered into by the Seniors freely and with full knowledge of the facts, Brad must also prove that the Seniors were mentally competent. He failed to do so. The institution of a conservatorship is not an adjudication of competency and has no effect on the protected person's capacity. Section 7 2 - 5 - 4 2 1 ( 5 ) , MCA. The protected person is therefore presumed to have the capacity to contract with third parties. When the protected person transacts with the conservator, however, the presumption shifts. Because the conservator is held to the utmost standard of good faith and fair dealing, he bears the burden of proving that the protected persons were at all times capable of understanding the nature of any transaction in which the conservator obtained a benefit. In the instant case, the only evidence in favor of a finding that the Seniors were mentally competent comes from the testimony of the conservator himself. his t-estimony is refuted by at least two of the other children. Under the circumstances, we cannot say that the conservator met his burden of proof. We reverse and remand for further proceedings in accordance with this opinion. We concur: 1 . . CORRECTION Date EDITORIAL DEPARTMENT West Publishing Co., P.O. Box 3526, St. Paul, MN 55165 Please make the following correction in the opinion in the case of: first 3 r t M ~ l i n e - be#em. + J P should read 4 %d ? % ' a 7 u l - b ' ~ A C D h d 0 c . 0 Signed 4q The expense of making changes is such that we cannot undertake it for items of merely typographical style. West Publishing Co. N 182C | April 26, 1989 |
386994ed-8788-4b89-8d52-0ea9412348ef | CITY OF WHITEFISH v HANSEN | N/A | 87-496 | Montana | Montana Supreme Court | No. 87-496 88-478 IN THE SUPREME COURT OF THE STATE OF MONTANA THE CITY OF WHITEFISH, Plaintiff and Respondent, -vs- GARRICK L. HANSEN, Defendant and Appellant. APPEALS FROM: The District Court of the Eleventh Judicial District, In and for the County of Flathead, The Honorable Michael Keedv, Judqe presiding. COUNSEL OF RECORD: For Appellant: Garrick L. Hansen, pro se, Whitefish, Montana For Respondent : Hon. Marc Racicot, Attorney General, Helena, Montana Robert F.W. Smith, Asst. Attv. General, Helena Thomas S. Muri, City Attorney, Whitefish, Montana Submitted on Briefs: Feb. 3, 1989 Decided: April 19, 1989 61 Mr. Justice John C. Sheehy del.ivered the Opinion of the Court. The appellant, Garrick L. Hansen appeals from a judgment of the Eleventh Judicial District, Flathead County, f indi ng him guilty of failing to have a valid driver's license, failing to carry motor vehicles insurance coverage, and failing to renew his motor vehicle registration. We affirm. The issues raised on appeal by Hansen are: 1) whether the District Court violated appellant's constitutional riqhts; and 2) whether the "issuing" court had jurisdiction to try appellant for the violations aforementioned. The case arises out of the following circumstances. On Thanksgiving Day 1988, appellant drove to a grocery store in Whitefish, Montana. Whitefish police officers approached Hansen in the parking lot of the shopping mall where the grocery store was located. The officers informed Hansen that his tail lights did not illuminate and asked for his driver's license, vehicle registration and proof of insurance. Appellant told the officers that he was not a person required to carry such documents. The officers placed appellant under arrest. We accepted this appeal based on public policy that pro se appellants should not be barred from access to the court. Courts of appeal should make all allowances possible in favor of persons appealing in propria persona. Wimberly v. Rogers (9th Cir. Mont. 1977), 557 F.2d 671. Hansen's first contention is that the District Court violated his constitutional rights. The arguments he offers to buttress his vague claims are indistinct, confused and incomprensible. They show a disrespect for this Court whose function it is to decide serious questions of constitutional deprivation. We cannot dignify the contentions with anything beyond a curt reply. This Court has previously addressed the issue concerning alleged violation of constitutional rights by requiring vehicle operators to carry a motor vehicle license, a driver's license and proof of vehicle insurance. In City of Billings v. Skurdal (Mont. 1986), 730 P.2d 371, 43 St-Rep. 2036, we listed considerable authority on the issue: The United States Supreme Court in 1837 recognized that state and local governments possess an inherent power to enact reasonable legislation for the health, safety, welfare, or morals of the public. Charles River Bridge v. Warren Bridge Co. (1837), 36 U.S. (11 Pet.) 4 2 r ~ . ~ d . 773. his Court has also recognized that such a police power exists even though the regulation may frequently be an infringement of individual rights. State v. Rathbone (1940), 110 Mont.. 225, 241, 100 P.2d 86, 92. See also, State v. Penny (1910), 42 Mont. 118, 111 P. 727. ~ e ~ u l a t i z s that are formulated within the state's police power will be presumed reasonable absent a clear showing to the contrary. Bettey v. City of Sidney (1927), 79 Mont. 314, 319, 257 P. 1007, 1009 . . . . We have previously recognized the power of the State to regulate licensing of drivers in the interests of public safety. Sedlacek v. Ahrens (1974), 165 Mont. 479, 483, 530 P.2d 4 2 4 , 426. State v. Deitchler (1982), 201 Mont. 70, 72-73, 651 P. 2d 10207021-22. Art. VII, 1 of the Constitution of the State of Montana vests the judicial power of the state in "one supreme court, district courts, justice courts, and such other courts as may be provided by law." City Courts are provided for by S S 3-11-102, -303, MCA. Penalties are established for the misdemeanors committed by Hansen under § 61-3-301(4), 61--3-601, 61-5-30? and 61.-6-304, MCA. City Courts have initial jurisdiction over these matters, § S 3-11-102(1), 3-10-303(1), MCA; and appeals of these matters are heard de novo in district court. Sections 3-5-303 and 46-17-311, MCA. Each of the proced.ural steps mandated in those stat.utes was adhered to in Hansen's arrest and conviction. The statutes are regulatory in nature and no person in the state is exempt from them. It is our conclusion that the issues appealed by appellant are frivolous, unreasonable and groundless and afford no basis for appellate relief from the District Court 9 decree. The appeal here is dismissed and the District Court affj.rmed. | April 19, 1989 |
ddef44a0-9ae0-4bfb-a49b-d36e7890904e | MONTANA BANK OF RED LODGE - N A v | N/A | 88-377 | Montana | Montana Supreme Court | NO. 88-3-77 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 MONTANA BANK OF RED LODGE, N.A., Plaintiff and Appellant, -vs- AILEEN LIGHTFIELD, a/k/a MARY AILEEN LIGHTFIELD, Defendant and Respondent. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Carbon, The Honorable Diane G. Barz, Judge presiding. COUNSEL OF RECORD: For Appellant: Bruce E. Lee, Billings, Montana For Respondent: W. Corbin Howard, Billings, Montana Submitted on Briefs: Nov. 17, 1988 Decided: April 6 , 1989 Mr. Justice William E. Hunt, Sr. delivered the Opinion of the Court. The Montana Bank of Red Lodge, the plaintiff, appeals the decision by the District Court of the Thirteenth Judicial District, Carbon County, denying its two motions for judgment nothwithstanding the verdict, one regarding whether a part- nership existed between defendant Aileen Lightfield and her son, Lee J. Lightfield, and the other regarding whether defendant Aileen Lightfield j . s liable for up to $40,000 of Lee J. Lightfield's debt because of her signature on a written guaranty form. The Bank also appeals the District Court's decision to order a new trial. The defendant cross-appeals the decision by the District Court, denying her motion for judgment notwithstanding the verdict regarding whether she is liable for up to $40,000 of Lee J. Lightfield's debt as a result of her signature on a written guaranty form. We affirm the District Court. The issues raised by the plaintiff on appeal are: (1) whether the District Court erred in denying plain- tiff's motion for judgment notwithstanding the verdict upon plaintiff's assertion that as a matter of law a partnership existed between defendant Aileen Lightfield and her son, Lee J. Lightfield, and therefore defendant is liable for debts incurred bv Lee J. Lightfield, totalling $86,126.91 plus interest; (2) whether the District Court erred in denying plaintiff's motion for judgment notwithstanding the verdict upon plaintiff's assertion that as a matter of law the defen- dant is liable for up to $40,000 as a result of her signature on a written guaranty form; ( 3 ) whether the District Court erred in granting a new trial upon the motion of the defendant. The issue raised on cross-appeal by the defendant is: (1) whether the District Court erred in denying defen- dant's motion for judqment notwithstanding the verdict upon defendant's assertion that she is not liable for up to $40,000 as a result of her signature on a written guaranty form . On March 25, 1982, Lee J. Lightfield established a line of credit for $40,000 with the Montana Bank of Red Lodge (Bank) to finance used automobiles for the purpose of resell- ing the automobiles at a car lot in Billings. Before allow- ing Lee to establish this line of credit, the Bank required that Lee's parents, Aileen and Gilbert Lightfield, pledge a $10,000 certificate of deposit by assignment and sign a guaranty form for up to $40,000 plus interest. Both Aileen and Gilbert Liqhtfield pledged the $10,000 certificate of deposit and signed the guaranty form. On April 23, 1982, after Lee pledged a $20,000 certificate of deposit, the Bank increased Lee's line of credit to $80,000. On September 28, 1982 the Bank increased Lee's line of credit to $130,000. In neither case did the Rank inform Aileen Lightfield of the increase in Lee's line of credit. Gilbert Lightfield was seriously ill throughout this time and subsequently died on May 9, 1983. Shortly after Gilbert Lightfield's death, Lee persuaded his mother, Aileen Lightfield, to enter the used car business. Aileen testified that she did not necessarily want to get into the car business, but she also did not want to be alone on the ranch. She testified that her son promised that he would get her an apartment near him in Billings, teach her to how to buy cars, and have her keep the books. Aileen consented to enter the car business and went with Lee to the Bank on May 16, 1983, to see whether the Bank would give her a line of credit for the purpose of buying used automobiles. The Bank subsequently allowed Aileen to establish a line of credit in the amount of $150,000 for the purpose of buying used automobiles. Aileen mortgaged her ranch land, located in the Lambert area, as collateral. In July, 1983, Aileen Lightfield realized that her son was not fulfilling his promise of teaching her about the car business and informed her son to sell all of her cars because she was getting out of the business. She informed the Bank of her decision on August 26, 1983. She arranged a November 10, 1983 meeting with the Bank. Aileen testified that at this meeting, as well as on the phone approximately a week earlier, she demanded from the Bank all of the documents that she had ever signed. After this demand, the Bank simply gave her a satisfaction of her mortgage on her ranch land at the November 10 meeting. In November, 1983, the Bank became concerned when an inventory of the car lot in Billings showed a few cars of Lee Lightfield's missing. The Bank met with Lee on January 7, 1984 and eventually discovered that Lee was defrauding the Bank. Lee subsequently pled guilty to eighteen counts of theft. In January, 1984, the Bank called Aileen Lightfield and asked her to come to the Rank to see if she could help Lee with his financial problems. When Aileen arrived at the Bank on January 16, 1984, the Bank asked her to sign a note promising to pay Lee's debt of $150,000. Aileen refused to sign the note. The Bank filed a complaint on April 25, 1984, naming Lee J. Lightfield, Lee s wife (Sandy Lightfield) , and Aileen Lightfield as defendants. Lee and Sandy Lightfield were subsequently dismissed as defendants in this action when they filed for bankruptcy by way of a joint petition in the United States Bankruptcy Court, leaving Aileen Lightfield as the sole defendant. The case was brought to trial on September 21, 1987. Both the plaintiff Bank and defendant Aileen Lightfield filed motions for directed verdicts asking the court to determine if a partnership existed between defendant Lightfield and her son. The court granted Lightfield's motion, finding that as a matter of law no partnership existed between her and her son. Both the Bank and Lightfield also brought motions for directed verdict regarding defendant Lightfield's liability as a result of the written guaranty form. The District Court denied both of these motions and allowed the question to go to the jury. On September 24, 1987, the jury, by special verdict, found defendant Lightfield liable to the Bank by reason of the guaranty, but only awarded the Rank $1.00 in compensatory damages. The jury also found that the Bank breached a duty of good faith and fair dealing toward Aileen Lightfield, but found that the breach did not cause her injury or damage. The jury then found that the Rank did not commit actual or constructive fraud by reason of its conduct toward defendant Lightfield. The jury awarded Lightfield $1,500 in compensatory damages. The jury found that the Rank had not acted with fraud, malice or oppression in its relationship with Lightfield and therefore did not reach the question of whether to assess the Bank with punitive damages. The District Court denied the Bank's motion for judgment notwithstanding the verdict regarding the existence of a partnership and denied both the Rank's and Lightfield's motions for judgment notwithstanding the verdict regarding Lightfield's liability as a result of the written guaranty form. On March 25, 1988, the District Court granted Lightfield's motion for a new trial, finding that under 9 25-11-102, MCA, the jury's findings were inconsistent. The first issue raised on appeal is whether the District Court erred in denying the Rank's motion for judgment not- withstanding the verdict upon the Bank's assertion that as a matter of law a partnership existed between Aileen Liqhtfield and her son, Lee J. Lightfield, and therefore Aileen Lightfield is liable for debts incurred by Lee J. Liqhtfield, totalling $86,126.91 plus interest. Section 35-10-201, MCA, defines a partnership as "an association of two or more persons to carry on as co-owners a business for profit." This Court has consistently held that in determining whether a partnership exists, it is necessar~ that the parties clearly manifest their intent to associate themselves in a partnership relationship; that each partner contributes something that promotes the enterprise; that each partner has a right of mutual control over the subject matter of the enterprise; and that the partners have agreed to share profits. Bender v. Bender (1965), 144 Mont. 470, 480, 39' P.2d 957, 962. When ascertaining the intent of the parties absent a written agreement, all the surrounding facts, circumstances, and conduct of the parties must be considered. Bender, 144 Mont. at 480, 397 P.2d at 962. Section 35-10-202, MCA, also lists rules that are important in determining whether a partnership exists. The Rank argues that the agreement between Lee and Aileen was to share profits and that under 5 35-10-202 (4) , MCA, the sharing of business profits is prima facie evidence that a person is a partner in the business. However, 6 35-10-202(4), MCA, also states that no such inference shal-l be drawn if such profits were received in payment as wages for an emplovee or as a debt by installments. Section 35-10-202 (4) (a) and (h) , MCA. The facts in this case are uncontroverted. The understanding between Aileen and Lee provided for an unequal splitting of the profits between Lee and Aileen from Aileen's line of automobiles only. Neither profits nor losses were shared between Lee and Aileen from Lee's line of automobiles. The understanding also provided that Lee would absorb all the losses. The understanding, however, also included that Lee would teach Aileen the art of buying used automobiles, get her an apartment in Billings, and have her keep the books. Lee never fulfilled this part of the agreement and therefore after less than two months, Aileen made her intentions known to Lee that she was gettins out of the used car business. In light of all the surrounding facts and circumstances, this understandinq between Lee and Aileen is more consistent with Ail-een paying Lee to instruct her in the business of buying used automo- biles rather than an agreement among partners to share profits. The evidence also clearly establishes that Aileen had no control over the subject matter of the supposed partnership. Lee took total control of the buying and selling of the automobiles financed on Aileen's line of credit. Aileen had no control over her automobiles nor over automobiles financed from Lee's line of credit. Lee also never allowed Aileen to keep the books. No written partnership agreement existed between Lee and Aileen Lightfield and neither Lee nor Aileen intended to be partners nor did the Rank consider them or treat them as partners until the deficiency arose. A1 l parties, including the Bank, understood Lee's and Aileen's lines of credit. to be separate and the lines in fact were kept separate. The record also establishes that the insurance policy for both Lee's and Aileen's automobiles was in the sole name of Lee J. Lightfield; that Lee and Aileen, as well as other third parties, operated under the name of a car lot, Central Auto, which was owned by a third partv; that both Lee and Aileen operated under the same business license and bond; and, that the two shared one bank account for all their business transactions. As stated previously, however, the entire surrounding facts, circumstances, and conduct of the parties must be considered when determining whether the requisite intent exists to create a partnership in the absence of an express agreement. This Court has never held--contrary to what the Bank argues--that intent is not required in the formation of a partnership. To the contrary, intent is a major factor. Truck Ins. Exchange v. Industrial Indemnity Co. (1984), 212 Mont. 297, 300, 688 P.2d 1243, 1244; Bender, 144 Mont. at 480, 397 P.2d at 962. The burden of proving the existence of a partnership is on the party seeking to establish its existence. Bender, 144 Mont. at 480, 397 P.2d at 962. In light of all of the evidence, we hold that the Bank failed to establish the requisite factors necesary to prove the existence of a partnership and therefore hold that the District Court properly found that no partnership existed between Aileen and Lee as a matter of law. The second issue raised on appeal and the issue raised on cross-appeal is whether the District Court erred in deny- ing the Bank's and Lightfield's motions for judgment notwith- standing the verdict regarding whether Lightfield is liable for up to $40,000 as a result of her signature on a written guaranty form. The Bank argues that the guaranty should be enforced on its face and that none of the affirmative defenses set forth by Lightfield should have gone to the jury. Lightfield argues that as a matter of law she should be exonerated because the Bank failed to inform her of facts substantially increasing her risk of loss and because her obligation under the guaranty was procured by either fraud or constructive fraud. We hold that the District Court did not err by allowing the issues to go to the jury and in denying the Bank's motions for directed verdict regarding Lightfield's affirmative defenses. The Bank argues that Lightfield's allegation of fraud fails because an essential element--the aggrieved party's reliance upon the other party's representation--is not present. Conversely, Lightfield argues that the evidence indicates that all the elements constituting fraud were satisfied and therefore the District Court erred in not granting her motion for judgment notwithstanding the verdict. We disagree with both the Bank's and Lightfield's assertions. Typically, a person who fails to take the opportunity to examine a written form before executing it cannot claim fraud. Jenkins v. Hillard (1982), 199 Mont. 1, 6, 647 P.2d 354, 357; Hjermstad v. Barkuloo (1954), 128 Mont. 88, 98, 270 P.2d 1112, 1117. As noted by the Rank, however, a person may claim fraud to a document he signs "where he is prevented from reading it or having it read to him by some fraud, trick, artifice, or devise by the other party." 17 Am.Jur.2d Contracts S 152 (1964). Actual fraud is always a question of fact. Jenkins, 199 Mont. at 5, 647 P.2d at 357. This Court is not in a position to weigh the facts. This Court's function is to determine whether the District Court erred when denying the Bank's motion for directed verdict. Motions for directed verdict or for judgments notwithstanding the verdict are proper only when no evidence exists to warrant submission to the jury. McGregor v. Momrner (Mont. 1986), 714 P.2d 536, 540, 43 St.Rep. 206, 210; Wilkerson v. School Dist. No. 15 (Mont. 19851, 700 P.2d 617, 622, 42 St.Rep. 745, 750-51. F 7 e therefore hold that the District Court properly denied the Bank's motion for directed verdict on the basis of either fraud or constructive fraud. Likewise, we uphold the court's order denying Lightfield's motion for judgment notwithstanding the verdict on these issues. The Bank also argues that under the written guarantv form they were not required to give Lightfield advance notice that they were increasing Lee J. Lightfield's line of credit. In Bails v. Gar (1976), 171 Mont. 342, 558 P.2d 458, we held that " [f] raud vitiates every transaction and all contracts. " Bails, 171 Mont. at 347, 558 P.2d at 461 (quoting 37 Am.Jur.2d Fraud and Deceit S 8 (1968)). A person who perpetuates fraud by inducing another to enter a contract may not then immunize himself by relying upon the provisions within the contract. Jenkins, 199 Mont. at 6, 647 P.2d at 357. In light of the above discussion addressing fraud, we cannot determine as a matter of law whether Lightfield had notice of the specifications under the written guaranty form and whether the Bank needed to inform her of facts which substantially increased her risk of loss. These are questions for the jury to decide. As previously noted, motions for directed verdict or for judgment notwithstanding the verdict are proper only when no evidence exists to warrant submission to the jury. McGregor, 714 P.2d at 540, 43 St.Rep. at 210; Wilkerson, 700 P.2d at 622, 42 St.Rep. at 750-51. We therefore hold that the District Court properly denied the Bank's motion for directed verdict. and Lightfield's motion for judgment notwithstanding the verdict on this issue. The third issue raised on appeal is whether the District Court erred in granting a new trial upon the motion of the Rank. The District Court granted Lightfield's motion for a new trial on March 25, 1988. The court found that the verdict form was straightforward and understandable, but after reviewing the jury's responses, the court was left with the inescapable impression that the jury was "either hopelessly confused or disregarded the court's instructions." We agree that the jury was confused but further determine that the form itself was terribly confusing and should not be used again. The requirements for requesting and ordering a new trial are set forth in Rule 59, M.R.Ci7r.P. A verdict may be vacated and a new trial granted on the application of an aggrieved party if the District Court finds that insufficient evidence exists to justify the verdict or that it is against the law. Section 25-11-102(6), MCA. In ordering the new trial, the District Court found that the jury had determined that Lightfield was liable to the Bank on the guaranty she had signed. The court noted that the guaranty was for up to $40,000, yet the jury awarded the Rank compensatory damages of only $1.00. The court also found that the jury had determined that the Bank had breached its duty of good faith and fair dealing in its actions toward Lightfield, but then found that Lightfield had not been injured or damaged as a result. The court noted, however, that the jury nonetheless awarded Lightfield $1,500 in compensatory damages. The court also noted that despite its instructions, the jury failed to account for Lightfield's $10,000 certificate of deposit which the Bank retained. The court concluded that the jury findings were inconsistent and that it was too difficult to speculate as to how the jury arrived at its conclusions. The court therefore ordered a new trial pursuant to S 25-11--102 ( 6 ) , MCA. The District Court possesses the discretion to either grant or deny a motion for a new trial. This Court will not overturn a decision by the District Court absent a showing of manifest abuse of that discretion. Walter v. Evans Products Co. (1983), 207 Mont. 26, 30-31, 672 P.2d 613, 616. In light of the above, we hold that the District Court did not abuse its discretion by granting Lightfield's motion for a new trial. We therefore affirm the District Court on this issue. Affirmed. We Concur: A Chief Justice LJ- Justices Mr. Justice Fred J. Weber specially conc.urs as follows: I concur in the granting of a new trial. However, I dissent to the portion of the majority opinion which affirms the District Court's granting of a directed verdict on the partnership issue. Both parties in this action moved for a directed ver- dict, asking the court to determine as a matter of law wheth- er a partnership existed. The lower court granted Ms. Lightfield's motion, determining as a matter of law, that no partnership existed. This Court has examined the facts and affirmed this holding. The standard for granting a directed verdict is well-settled and was recently reiterated in Britton v. Farm- ers Ins. Group (1986), 721 P.2d 303, 317, 43 St.Rep. 641, 656, as follows: A motion for directed verdict is properly granted only in the complete absence of any evi- dence to warrant submission to the jury, and a l . 1 inferences of fact must be considered in the light most favorable to the opposing party. Jacques v. Montana National Guard (1982), 199 Mont. 493, 649 P.2d 1319; if the evidence viewed in a light most favorable to plaintiff indicates reasonable men could differ as to the conclusions drawn from the evidence a directed verdict is not proper. Weber v. Blue Cross of Montana (1982), 196 Mont. 454, 643 P.2d 198. In the present case the majority opinion states facts sufficient to demonstrate that reasonable men might differ as to whether a partnership existed. This was properly a jury issue. The District Court analyzed and weighed the evidence. This is inappropriate on a, motion for a directed verdict, even when both parties have requested a directed verdict. Borgmann v. Diehl (1970), 155 Mont. 458, 462-63, 473 P.2d 529, 531. The majority opinion, in affirming the directed verdict, has also engaged in weighing the evidence. While it is possible that a jury would conclude that no partnership existed, it is not our function to make that determination where reasonable men could reach a different conclusion. An inappropriate standard has been used both by the District Court, and by this Court on appeal. I would vacate the directed verdict and remand for a jury trial on the partner- ship issue also. | April 6, 1989 |
af13c15f-a0b3-4f0a-8807-7d2a68e84844 | BROERS v MONTANA DEPARTMENT OF REV | N/A | 88-490 | Montana | Montana Supreme Court | No. 88-490 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 JOHN A. BROERS, Petitioner and Appellant, -vs- MONTANA DEPARTMENT OF REVENUE and its LIQUOR DIVISION, Respondent. APPEAL FROM: District Court of the Eleventh ~udicial District, In and for the County of Flathead, The Honorable ~ichael H.Keedy, Judge presiding. COUNSEL OF RECORD: For Appellant: Hash, OtBrien & Bartlett; James C. Bartlett argued, Kalispell, Montana For Respondent: Eric J. ~ehlig argued, Dept. of Revenue, Legal affairs, I-.. Helena, Montana Submitted: M a ~ c h 30, 1989 Decided: May 11, 1989 Mr. ~ustice John Conway Harrison delivered the Opinion of the Court. The Department of Revenue denied renewal of appellant's all-beverages liquor license. Appellant challenges the sufficiency of the evidence and the constitutionality of the statutes upon which the renewal was denied. We affirm. John Broers (Broers) was the owner of Stanton Creek Lodge & Outfitters, near Essex, Montana. In June, 1986, Broers applied with the Department of Revenue (Department) for a renewal of the all-beverages liquor license. On September 19, 1986, the Department denied the renewal because Broers had not demonstrated he was likely to operate his establishment in compliance with applicable state and local laws. Broers sought administrative review before the Department, and judicial review before the ~istrict Court of the Eleventh ~udicial ~istrict, Flathead County, Montana. At each stage, the denial was affirmed. Broers raises the following issues for review: 1. Are the statutory provisions upon which the license was denied unconstitutionally vague and overbroad? 2. Must the Department limit its examination to violations of the Montana Alcoholic Beverage Code, zoning and nuisance laws when considering applications for liquor licenses? 3. Was there sufficient evidence to deny Broers' application for a license renewal? Broers was granted an all-beverages liquor license for his Stanton Creek Lodge each year since 1975. The five years which preceded the denial of the liquor license were punctuated by instances of criminal conduct by Broers. These instances, all of which resulted in misdemeanor convictions, included DUI, outfitting without a federal license, disorderly conduct, reckless driving, criminal mischief, and assault. Of greatest importance to this case were two incidents which directly involved the liquor establishment. In August, 1985, Herb Strong, his wife and three children stopped at Broers' Lodge because his two boys had to use the restroom. Soon after the boys entered the Lodge, they emerged very upset because Broers had confronted them about making a purchase in order to use his restroom. As Mr. Strong had his children get back into their vehicle, Broers called for Mr. Strong to come to him. Strong retorted using a two-word expletive, climbed into his vehicle and began to drive away. As Stongs' vehicle left the Lodge parking lot, Mrs. Strong saw Broers pointing a rifle at them from the doorway of the Lodge. Mrs. Strong had her children duck from view as Mr. Strong drove them from the area. Broers followed the Strongs in his pickup and confronted them a short distance away where the Strongs were stopping to tie down gear on their fishing boat. Broers asked Mr. Strong whether the boys owed him something for using the restroom. Strong stated that they did not, backed up his vehicle and proceeded down the road. Again Broers followed. Although it is not exactly clear what happened next, the two vehicles collided when Broers was passing the Strong vehicle. Neither vehicle stopped. Broers drove ahead to a farmhouse to call the sheriff. Strong notified the sheriff in Kalispell. Broers was convicted on four counts of misdemeanor assault. In another incident at the Lodge, on January 1, 1986, Broers plowed the snow from the Lodge parking lot onto U.S. Highway 2 during a heavy snowfall. The resulting large snow berm caused a two car collision and Broers was convicted of misdemeanor criminal mischief. The Department informed Broers by letter dated September 19, 1986 that his application for renewal was denied. Broers requested administrative review and on December 17, 1986 and January 23, 1987, a hearing was held before an examiner from Agency Legal Services Bureau. The hearings examiner concluded Broers had failed to demonstrate he would operate his establishment in accordance with Montana law. Exceptions and legal arguments were made to the Director of the Department of Revenue. The Director adopted the findings of the hearings examiner and ordered the denial be the final decision of the Department. The matter was appealed to the ~istrict Court. The Department's decision was affirmed by District Judge Michael Keedy . Issue No. 1 Are the statutory provisions upon which the license was denied unconstitutionally vague and overbroad? We begin by noting that under the Twenty-first Amendment to the united States Constitution, states are granted extensive regulatory power of the liquor industry. ~alifornia v. LaRue (1972), 409 U.S. 109, 115, 93 S.Ct. 390, 395, 34 L.Ed.2d 342, 350. The Montana ~lcoholic Beverage Code is an exercise of our State's police power and as such should be interpreted to further its declared policy: to protect the welfare, health, peace, morals and safety of the people of Montana. section 16-1-101(3), MCA. The statute at issue here, 5 16-4-401, MCA, formed the basis upon which the Department denied Broers' renewal of his liquor license. That statute reads in part: (2) Except as provided in subsection (6), in the case of a license that permits on-premises consumption, the department must find in every case in which it makes an order for issuance of a new license [or renewal of a license, 42.12.121(2), ARM]. . . : (a) in the case of an individual applicant: (iv) the applicant's past record and present status as a purveyor of alcoholic beverages and as a businessman and citizen demonstrate that he is likely to operate his establishment in compliance with all applicable laws of the state and local governments; . . . It is Broers ' contention this section is unconstitutionally vague because it does not describe prohibited conduct sufficiently to give a person of ordinary intelligence fair notice. Additionally, Broers claims the statute impermissibly gives unbridled discretion to the Department to grant or deny licenses upon any facts it wishes to accept. We disagree. VAGUENESS Broers argues the statute is unconstitutionally vague because it does not specifically declare what past record and present status is to be considered by the Department. Similarly, Broers argues the statute does not inform an applicant or licensee that violations of Montana's criminal code can result in a denial. The United States Supreme Court has held that noncriminal statutes are unconstitutionally vague if persons of common intelligence must necessarily guess at their meaning. Broadrick v. Oklahoma (1973), 413 U.S. 601, 607, 93 S.Ct. 2908, 2913, 37 L.Ed.2d 830, 837; ~eyishian v. Board of Regents (1967), 385 U.S. 589, 604, 87 S.Ct. 675, 684, 17 L.Ed.2d 629, 641. However, an unreasonable interpretation and dissection of a statute will not render it void for vagueness. It is the duty of the courts to uphold the constitutionality of a statute if such can be accomplished by reasonable construction. North Central services, Inc. v. Hafdahl (Mont. 1981), 625 P.2d 56, 58, 38 St.Rep. 372, 374. Undoubtedly the legislature has granted substantial discretion to the Department of Revenue to investigate applicants and grant or deny licenses. still, the statute is not without standards. As the District Court of Appeals of Florida noted in a challenge to statutes which limit the issuance of a beverage license to "persons of good moral character": ". . . We doubt that the leaislature could in its infinite wisdom detail each salient standard for good moral character. What constitutes good moral character is a matter to be developed by facts, evaluated by the agency, with a judicial review of same ever available. The subject statute is constitutional I1 . . . Zemour, Inc. v. State ~ivision of Beverage (~la.~pp. 1977!, 347 So.2d 1102, 1103, citing white v. Beary (Fla.App. 19701, 237 S0.2d 263, 265-66. The discretion granted to the Department is not without limit. The "past record and present status" is clearly limited and defined within the remainder of the statute. The scope of the Department's investigation is limited to a person's past record and present status "as a purveyor of alcoholic beverages" and as a businessman and citizen which demonstrates likely operation of the liquor establishment in compliance with all applicable laws of the state and local governments. A person's past record or present status as an income tax protestor, or, as argued at bar, a trespasser at Malmstrom ~ i r Force Base bears no rela.tion to the operation of a liquor establishment. A denial on those grounds would constitute an abuse of the Department's discretion and would not survive judicial review. Additionally, Broers argues the phrase "all applicable laws of the state and local governments" is vague because it does not adequately inform a person which laws he or she may disobey before a liquor license will be denied. We disagree. The statue is capable of reasonable interpretation and construction. As stated in 1 Am.Jur.2d1 Administrative Law while the words of a statute are the basic data from which to draw its meaning, not every problem of statutory construction should be solved simply by a literal reading of the language. Particular language may and should be construed in the light of the purposes of the legislation, especially a declared purpose and policy. The meaning of a particular word may be determined by the purposes of the legislation; for a word may take color from its surroundings and derive meaning from the context of the statute, which must be read in the light of the mischief to be corrected and the end to be attained. There is no question but that Montana's ~lcoholic Beverage Code has a definite and substantial public policy goal. That public policy is clearly stated in 9 16-1-101(3), MCA : his code is an exercise of the police power of the state, in and for the protection of the welfare, health, peace, morals, and safety of the people of the state, and its - - provisions shall - be construed for the accomplishment -- of such purposes. (Emphasis added.) The meaning of the statute ' s "all applicable laws" language is obvious. All applicable laws are those which are designed to protect the welfare, health, peace, morals, and safety of the citizens of this State as they relate to the manufacture, sale, and distribution of alcoholic beverages within the State of Montana. Neither income tax protestation nor advocation of nuclear disarmament bear any relation to the manufacture, sale, or distribution of alcoholic beverages. However, assault with a firearm upon a family who innocently stops to use a restroom in a liquor establishment licensed by the State d.efinitely falls within the logical nexus of laws designed to protect our citizens where the sale and distribution of alcoholic beverages are concerned. The statute is set out in terms the ordinary person exercising ordinary common sense can understand and comply with, and therefore, is not unconstitutionally vague. OVERBREADTH Broers contends the statute is unconstitutionally overbroad because a liquor license could be denied to one who "is not popular with the general public" and could curtail the right of free speech and association. Broers ' overbreadth argument spills over to his contention that the statute is vague. Therefore, in light of our conclusion regarding the vagueness challenge, we will only briefly examine this issue. Recently, the United States Supreme Court has held that statutes should be construed narrowly, where possible, to bring them in line with constitutional requirements of due process. It has long been a tenet of First Amendment law that in determining a facial challenge to a statute, If it be "readily susceptible" to a narrowing construction that would make it constitutional, it will be upheld. ~rznoznik v. City of ~acksonville, 422 U.S. 205, 95 S.Ct. 2268, 45 L.Ed.2d 125 (1975); roadr rick v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973) . virginia v. ~merican Booksellers Assn., Inc. (1988), 484 U.S. Additionally, the Supreme Court stated in city of Houston v. Hill (1987), 482 U.S. 451, 458, 107 S.Ct. 2502, 2508, 96 Only a statute that is substantially overbroad may be invalidated on its face. New York v. Ferber (1982), 458 U.S. 747, 769, 102 S.Ct. 3348, 73 L.Ed.2d 1113; Broadrick v. Oklahoma, supra. "We have never held that a statute should be held invalid on its face merely because it is possible to conceive of a single impermissible application . . . ' I Id., at 630, 93 S.Ct. 2908, 37 L.Ed.2d 830. See also, Members of City Council of City of Los Angeles v. Taxpayers for Vincent (1984), 466 U.S. 789, 104 S.Ct. 2118, 80 L.Ed.2d 772. We conclude our interpretation and construction of 5 16-4-401 (2) (a) (iv) adequately protects First Amendment rights. Broers' overbreadth and vagueness challenges must fail. Issue No. 2 Must the Department limit its examination to violations of the Montana Alcoholic Beverage Code, zoning and nuisance laws when considering applications for liquor licenses? Broers erroneously believes the phrase "all applicable laws of the state and local governments" does not extend beyond the specific provisions of the Alcoholic Beverage Code and the zoning and nuisance laws. Laws under the Alcoholic Beverage Code include prohibitions against the sale of alcohol to intoxicated person and persons under the age of 21, and the sale of alcohol not purchased from the State liquor store. However, a renewal of a liquor license is granted under the same criteria as a new license. Under Broers ' int.erpretation, such limitation would have no practical application to first-time applicants since the Department would have no prior history on which to base its decision. More importantly, this narrow reading of the statute would unreasonably limit the Department's investigative ability and restrict its power to grant licenses to qualified applicants. The very purpose of the Code, to secure the welfare, health, peace, morals and safety of the people of Montana would be lost. Issue No. 3 Was there sufficient evidence to deny Broers' application for a license renewal? The standard of review of agency decisions is whether the findings of fact are clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record. Section 2-4-704 (2) , MCA. We conclude the findings of the hearings examiner are not clearly erroneous and are based upon reliable, probative and substantial evidence on the whole record. The Department did consider Broers' criminal acts which did not have a direct connection with the operation of the Stanton Creek Lodge. These acts included misdemeanor convictions for DUI, reckless driving, barroom brawling, and discharging a firearm in the direction of a passing motorist. These incidents alone may not have been sufficient to deny the license renewal. However, viewed as a whole, Broers' actions indicated to the Department that he had a disregard for the safety of others, a violent temperament and a tendency toward alcohol abuse. When viewed in connection with the Strong family and snowplowing incidents, there was ample evidence to support the Department's conclusion that Broers' license renewal must be denied. As noted earlier, a license renewal is granted under the same criteria as any new license. Broers' license was not revoked or suspended. Section 16-4-401(1), MCA, clearly states that a "license under this code is a privilege which the state may grant to an applicant and is not a right to which any applicant is entitled." The ~lcoholic Beverage Code also provides grounds upon which a license may be denied. Under § 16-4-405(3), MCA, a license may not "be issued if the department finds from the evidence . . . that the purposes of this code will not be carried out by the issuance of such license." After its investigation, the Department concluded the purposes of the Code, to protect the welfare, health, peace, morals and safety of Montana's citizens, would not be carried out by a renewal of Broers' liquor license. The judgment of the ~istrict Court is affirmed. A We concur: lef Justlce Justices ' / Mr. Justice William E. Hunt, Sr., dissenting: I dissent. The statute is overbroad and I believe the legislature has gone too far in delegating its responsibility and authority to the Department of Revenue. The purpose of the Department of Revenue is to raise revenues and not to establish or enforce the moral standards of businessmen or anyone else. I concur in the foregoing dissent of Justice Hunt. | May 11, 1989 |
c209ce93-7532-4b89-9047-b6b6a1c9d2d5 | CITY OF GREAT FALLS v PRICE | N/A | 89-041 | Montana | Montana Supreme Court | No. 89-041 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 CITY OF GREAT FALLS, MONTANA, Plaintiff & Respondent -vs- ALICE PRICE, Defendant & Appellant ALICE PRICE, ~ross/Plaintiff & Appellant -VS- CITY OF GREAT FALLS, MT, a municipal corporation; RICHARD D. STEVENS; JOHN DOE AUSTIN; WILLIAM B. REID; AUSTIN-REID DEMOLITION, a business association, Cross/Defendants & Respondent APPEAL FROM: District Court of the Eighth Judicial District, In and for the County of Cascade, The Honorable Joel G. Roth, Judge presiding. COUNSEL OF RECORD: For Appellant: La Rue Smith, Great Falls, MT For Respondent : J. David Slovak, City Attorney, Great Falls, MT Mark J. Higgins, Ugrin, Alexander, Zadick and Slovak; Great Falls, MT Submitted on Briefs: June 1, 1989 D,ecided: July 6, 1989 Filed: M r . J u s t i c e Fred J. Weber delivered t h e Opinion of t h e Court. Alice P r i c e appeals from an order o f t h e D i s t r i c t Court f o r t h e Eighth J u d i c i a l D i s t r i c t , Cascade County, dismissing with prejudice h e r cause of a c t i o n a g a i n s t t h e City of Great F a l l s and Richard D. Stevens, h e r e i n a f t e r r e f e r r e d t o a s "defendants." W e affirm. M s . P r i c e r a i s e s seven i s s u e s f o r our review, none of which d i r e c t l y address t h e p r o p r i e t y of t h e D i s t r i c t C o u r t ' s d i s m i s s a l of t h i s a c t i o n . W e t h e r e f o r e r e s t a t e t h e i s s u e on appeal a s whether t h e D i s t r i c t Court properly granted defen- d a n t s ' motion t o dismiss pursuant t o Rule 1 2 (b) , M.R.Civ.P. on t h e b a s i s t h a t defendants were immune from s u i t ? Since we conclude t h a t d i s m i s s a l was proper, we w i l l not d i s c u s s t h e remaining i s s u e s r a i s e d by M s . Price. O n October 30, 1987, Alice P r i c e was c i t e d f o r v i o l a t i o n of Great F a l l s C i t y Ordinance 8.48.080 f o r knowingly and purposely allowing waste paper, c l o t h i n g , boxes, discarded f u r n i t u r e , appliances, and other rubbish t o accumulate on her property. The n o t i c e t o appear and complaint was signed by Richard D. Stevens, a Zoning Technician f o r t h e City of Great F a l l s , who i s a named defendant i n t h i s a c t i o n . A t a non-jury t r i a l i n City Court, M s . P r i c e was found g u i l t y of c r e a t i n g a nuisance on her property a t 620 6th Avenue South. The c o u r t ordered M s . P r i c e t o completely a b a t e t h e nuisance within seven days, and f u r t h e r ordered t h a t i f t h e nuisance was n o t completely abated by March 2 , 1988, t h e C i t y of Great F a l l s s h a l l do s o and charge t h e c o s t of t h e procedure t o M s . Price. When she d i d not c l e a n up her property by t h e ordered d a t e , Richard Stevens, pursuant t o t h e c o u r t ' s o r d e r , contracted o u t t h e clean-up p r o j e c t and b i l l e d M s . P r i c e f o r t h e c o s t , which was $495. 5 ' P - . a . I * e a M s . P r i c e appealed h e r c o n v i c t i o n t o t h e D i s t r i c t Court, and i n subsequent p l e a d i n g s , sought compensatory damages f o r p e r s o n a l p r o p e r t y which was a l l e g e d l y wrongfully removed, and f o r mental d i s t r e s s and s u f f e r i n g , a s w e l l a s p u n i t i v e damag- es and a t t o r n e y f e e s . These damages w e r e a s s e r t e d a g a i n s t defendants Richard Stevens and t h e C i t y o f Great F a l l s , a s w e l l a s t h e two i n d i v i d u a l s h i r e d t o complete t h e clean-up of M s . P r i c e ' s property. The C i t y o f Great F a l l s and Richard Stevens f i l e d a motion t o dismiss M s . p r i c e ' s claims f o r r e l i e f pursuant t o Rule 1 2 , M. R.Civ.P., based on procedural e r r o r s , i n c l u d i n g t h e t r a n s f o r m a t i o n o f a c r i m i n a l m a t t e r t o a c i v i l a c t i o n under a r u l e providing f o r a p p e a l s o f c i v i l c a s e s t o d i s t r i c t c o u r t . Defendants a l s o argued t h a t they w e r e immune from s u i t . The D i s t r i c t Court g r a n t e d defendants' motion, concluding t h a t both t h e C i t y o f Great F a l l s and Richard Stevens were immune from s u i t f o r damages under t h e f a c t s o f t h i s case. I t i s from t h i s o r d e r t h a t M s . P r i c e appeals. The a c t i o n s complained o f i n t h i s c a s e r e l a t e t o Richard Stevens' a c t i v i t i e s i n c a r r y i n g o u t , on behalf of t h e C i t y o f Great F a l l s , t h e sentence l e g a l l y imposed by t h e C i t y Court Judge. The D i s t r i c t Court determined t h a t i n s o doing, M r . Stevens was immune from s u i t under S 2-9-112, MCA, a s i n t e r - p r e t e d i n Knutson v. S t a t e (1984), 2 1 1 Mont. 126, 683 P.2d 488. S e c t i o n 2-9-112, MCA, provides: Immunity from s u i t f o r j u d i c i a l a c t s and omissions. (1) The s t a t e and o t h e r governmental u n i t s a r e immune from s u i t f o r a c t s o r omissions of t h e j u d i c i a r y . I n regard t o t h a t s e c t i o n t h i s Court first s t a t e d : . . . The immunity s t a t u t e a p p l i e s t o j u d i c i a l a c t s with no s t a t e d l i m i t a t i o n . I t a p p l i e s t o p r o t e c t t h e s t a t e and governmental agencies whenever t h e j u d i c i a l power of t h e s t a t e i s put t o use i n a j u d i c i a l action. . . . I n t h a t case M s . Knutson argued t h a t the immunity s t a t - u t e d i d not apply t o t h e Department of I n s t i t u t i o n s which she contended had miscomputed t h e good time allowance. The Court concluded t h a t t h e Department of I n s t i t u t i o n s was protected under t h e immunity s e c t i o n , s t a t i n g : . . . Sentences a r e pronounced by courts, not by t h e Department of I n s t i t u t i o n s . Knutson's sentenc- ing was t h e r e s u l t of a j u d i c i a l a c t . Further, - t h e immunity s t a t u t e p r o t e c t s any governmental agency involved - i n - t h e j u d i c i a l - a c t - of sentencing. (Emphasis supplied. ) The i s s u e i n t h e present case is whether o r not t h e City a s well a s M r . Stevens a r e protected by t h e immunity s t a t u t e . Under t h e a n a l y s i s of Knutson, we conclude t h a t they a r e . I n carrying o u t t h e express provisions of t h e sentence, M r . Stevens was d i r e c t l y involved i n an a c t of t h e judiciary and is therefore afforded immunity. Since he was a c t i n g a s an agent of h i s employer, t h e immunity s t a t u t e a l s o p r o t e c t s t h e City of Great F a l l s . W e hold t h a t S 2-9-112, MCA, provided immunity f o r both t h e defendants City of Great F a l l s and i t s agent, Richard Stevens. W e affirm t h e order of the D i s t r i c t Court dismissing t h e p l a i n t i f f ' s case with prejudice. W e Concur: | July 6, 1989 |
4b36664c-1197-47c4-9fb2-098ea655648d | REITER v REITER | N/A | 88-565 | Montana | Montana Supreme Court | No. 88-565 IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 ANNA G. REITER, Plaintiff and Respondent, -vs- EDWARD L. REITER, STANLEY W. YURIAN, BARBARA LEA YURIAN, et al., Defendants and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Russell Fillner, Judge presiding. COUNSEL OF RECORD: For Appellant: Edward L. Reiter, pro se, Huntley, Montana For Respondent : F h d .__ E. Work, Jr.; Work Law Firm, ~illings, Montana m I > N ~ , , cl, . . c-> rn : .'j L : ) . . Submitted on Briefs: Feb. 23, 1 9 8 9 Decided: April 27, 1989 Mr. Justice William E. Hunt, Sr., delivered the Opinion of the Court. Edward L. Reiter appeals from an order of the District Court of the Thirteenth Judicial District, Yellowstone County, granting summary judgment to plaintiff Anna G. Reiter. We affirm. Edward raises a myriad of rather unique issues which can be boiled down to one general question: Does a "general lien" based upon breach of alleged contracts to provide equity in land and to convey land upon the death of the owner constitute a valid, enforceable encumbrance against property? For a number of years, Edward L. Reiter dwelt with his parents, Alex and Anna Reiter, on the family farm located in Yellowstone County. In 1965, Alex Reiter died, leaving Anna as the sole record owner of the land. Apparently, in the mid-1980ts, trouble broke out between Anna and Edward. Anna moved off the farm. Edward remained. On November 7, 1986, Edward filed a lien against the farm in the amount of $50,000, claiming that from January 1, 1967, through November 1, 1986, he "did 4 years of farm work unpaid for guaranteed use of 80 acres of farmland, thereafter." He took no action to foreclose the lien. In 1987, Anna leased the land to Stanley and Barbara Yurian. On February 17, 1988, Anna filed a quiet title action against Edward in which she sought to extinguish the 1986 lien. In the complaint, Anna reaffirmed the Yurians' farm lease. On September 9, 1988, the District Court granted Anna's motion for summary judgment. Thereafter, the court entered judgment quieting title in Anna and extinguishing Edward's lien. Edward appealed to this Court. In granting suInmary judgment to Anna, the District Court treated the lien filed by Edward as a farm laborer's lien. The court concluded that the lien was in violation of S 71-3-401, MCA, as it was not filed within 30 days after the services alleged in the lien were fully performed. The court found, in addition, that the lien was invalid because Edward did not foreclose upon it within the 90-day limitation period provided under 5 71-3-405, MCA. From what we can gather from his briefs, Edward argues that the lien was not a farm laborer's lien but was instead a "general lien" based on two alleged contracts he had entered into with his mother. One agreement, purportedly created in 1969, granted Edward $10,000 worth of equity in the farm for each year he worked on the land without receiving wages. The other agreement, allegedly entered into in 1972, guaranteed the farm to Edward upon Anna's death. Edward claims that he is unable to produce the written agreements for the court because the copies have disappeared from his home and he has been denied access to the originals. Summary judgment is appropriate when a case presents no genuine issues of material fact and the issues raised can be decided as a matter of law. Rule 56(c), M.R.civ.P. The action at hand presents such a situation. Even assuming, arguendo, that the alleged contracts between Edward and his mother do exist, Edward's lien must fail as a matter of law. Edward asserts that he filed a general lien pursuant to 5 71-3-101(2), MCA, which provides: A "general lien" is one which the holder thereof is entitled to enforce as a security for the performance of all the obligations or all of a particular class of obligations which exist in his favor aga-inst the owner of the property. In the absence of an express agreement to give a lien, a general lien "can be claimed only as arising from dealings in particular trades or businesses in which the existence of a general lien has been recognized by judicial decisions or where a custom to that effect can be established by evidence." ~eitchman v. Korach (Ill. App. Ct. 1947), 71 N.E.2d 367, 369. General liens are looked upon with disfavor. Courts are reluctant to expand them beyond the commercial setting. We have never recognized a general lien for breach of contract to provide equity in land or to convey land upon the owner's death. We refuse to do so now. Faced with the rather unusual lien filed by Edward, the District Court chose to interpret the encumbrance as a farm laborer's lien. The court correctly concluded that as a farm laborer's lien the encumbrance was invalid and unenforceable because of Edward's failure to take action upon it within 90 days after filing as provided by 5 71-3-405, MCA. Whether Edward's lien was a general lien or a farm laborer's lien, his claim against Anna's property is invalid and unenforceable as a matter of law. The District Court's award of summary judgment to Anna ~eiter was proper. | April 27, 1989 |
3e41dc26-b773-4b0f-8a39-0d2fd4c71a85 | NORTHERN BORDER PIPELINE CO v STA | N/A | 88-386 | Montana | Montana Supreme Court | T F THE SUPREME COURT OF THE STATE OF MONTANA NORTHERN BORDER PIPELINE COMPANY, a Partnership, Plaintiff and Appellant, -vs- THE STATE OF MONTANA, DEPARTMENT OF REVENUE, OF THE STATE OF MONTANA, et al. Defendants and Respondents. APPEAL FROM: District Court of the Seventeenth Judicial District, In and for the County of Valley, The Honorable T,eonard Lanqen, 7udqe presidina. COUNSEL OF RECORD: For Appellant: Michael E. Webster argued and. Ronald 1,odders; Crowle~7 Law Firm, Billings, Montana For Respondent : Hon. Marc Racicot, Attorney General, Helena, Montana Clay Smith argued, Asst. Atty. General, Helena David W. Woodgerd, Dept. of Revenue, Helena, Montana David L. Nielsen, County Attornev, Glasgow, Montana James A. McCann, County Attorney, Wolf Point, Montana For Amicus Curiae: Reid Peyton Chambers; Sonosky, Chambers & Sachse, Fashington, DC and Ray F. Koby; Swanberg, Koby and C O A 3 "Fwanberg, Great Falls, Montana (Assiniboine and Sioux Y ;!Tribes) i . 1 , : Submitted: February 10, 1989 Decided: April 20, 1989 where a portion of it crosses "trust lands'' (lands held by the Federal. Government in trust for members of the Indian tribes) within the Fort Peck Indian Reservation. In order to build the line on trust Lands, Northern Border was required to obtain a right-of-way grant from the United States Department of the Interior through the Bureau of Indian Affairs. Prior written consent was also required from the Assiniboine and Sioux Tribes (Tribes) with respect to tribal trust lands, and from individual tribal members with respect to lands held in trust for them. The portion of the pipeline running through reservation trust lands is located in Valley County (12.92 miles), and in Roosevelt County (20.88 miles) . From the time of its construction, the pipeline has been subject to a property tax centrally assessed by the State. The assessed tax is levied and collected by the Counties. Northern Border has paid this tax without protest, except for a disagreement in 1986 as to the proper valuation of the line. In 1987, the Tribes instituted a "utility tax," which is basically a property tax levied on utilities. The amount of the tribal tax related to the pipeline running beneath trust lands was $1,112,396.56 in 1987. The 1987 property tax assessed by the State resulted in Valley County collecting a total of $2,305,346.05 ($370,794.56 of which related to trust lands), and Roosevelt County collecting $2,??1,875.37 (5535,243.85 of which related to trust lands). Northern Border filed its Application for Temporarl7 Restraining Order and Complaint for Injunctive Relief on November 23, 1987, requesting that the District Court prevent- the State from assessing, levying or collecting propertv taxes on the portion of the line running beneath trust lands. The amount of Northern Rorder's 1987 property tax therebv challenqed was $906,038.41. The District Court. issued a Mr. Justice R. C. McDonough delivered the Opinion of the Court. This appeal involves a dispute over property taxes assessed and levied against a natural gas pipeline owned by Northern Border Pipeline Company (Northern Border). Northern Border appeals from the summary judgment of the District Court of the Seventeenth Judicial District, Valley County, upholding the power of the State of Montana to impose the disputed tax. We affirm. Northern Border frames six issues on appeal: 1. Does the factual record before the District Court show that Northern Border was entitled to summary judgment? 2. Did the District Court err in failing to find that the challenged taxes have been preempted by federal law? 3. Did the District Court commit error in failing to find that the challenged taxes are illegal because thev interfere to an impermissible extent with the Tribes' sovereign rights of self-government? 4. Did the District Court err in determining that the State has a sufficient nexus with the trust-sited property interests of Northern Border to support imposition of the taxes here challenged? 5. Do the challenged taxes constitute an unreasonable burden on interstate commerce? 6. Do the acts of the State in attempting to assess, levy and collect the challenged taxes conflict with the Enabling Act of the State of Montana and the Constitution of the State? The pipeline in question carries natural gas from Alaska to the lower 48 states. Northern Border owns the line between the Sasketchewan/Montana border and Chicago. Approximately 181 miles of the line is located in Montana, temporary restraining order enjoining collection of the challenged tax, and later granted a preliminary injunction. The parties then filed cross-motions for summary judgment with supporting affidavits. The District Court granted the State's motion and denied Northern Border's. At the outset, we note two important features of this case that have shaped our approach to reviewing the District Court's decision. First, the basis for this suit is a state tax levied against property located on an Indian reservation, but owned by non-Indians. The arguments involved are complex and sometimes confusing, due to the legal principles involved and the attempts of counsel to emphasize particular aspects of those principles. Second, this case was decided below on a motion for summary judgment. The judge sat without a jury, no testimony was taken and the facts are relatively uncontested. The scope of our review is therefore much broader than in other appeals. We are able to make our own examination of the entire case and make a determination in accordance with our findings . Johnson v. Division of Motor Vehicles (Mont. 1985), 711 P.2d 815, 42 St.Rep. 2045. Given the complexity of the arguments and the resulting risk of confusion, we have taken an approach to this case that differs from that proposed by Northern Border. Northern Border's challenge to the taxes imposed by the State rests on three basic grounds: (1) preemption by federal law, ( 2 ) violation of the United States Constitution and (3) violation of the Montana Constitution. While the issues framed by Northern Border have relevance, they are component questions of these three main issues. I. Federal Preemption Northern Border arques that the pipeline running through reservation trust lands is subiect to federal laws and regulations, with which the challenged state property tax will interfere to an impermissible extent. Both sides agree that the test to be applied in this case was set forth bv the United States Supreme Court in White Mountain Apache Tribe v. Bracker (1980), 448 U.S. 136, 100 S.Ct. 2578, 65 L.Ed.2d 665. The White Mountain opinion outlines the relationship amonq the Indian tribes, the Federal Government and the several. states. Indian reservations are a creation of federal law. Indian activities and property on a reservation generallv come within the sphere of federal authority, except in matters where an Indian tribe has retained its tribal sovereignty and is self-governing. A state's laws are therefore generallv inapplicable where the conduct of Indians on the reservation is concerned. White Mountain, 448 U.S. at 143-44. Where a state seeks to have its laws apply to the activities or property of non-Indians on a reservation, the separation of authority is less clear. In White Mountain, the State of Arizona sought to impose fuel use and motor carrier license taxes on trucks owned and operated by a non-Indian company, but used in furtherance of a contract with a tribal enterprise engaged in logging operations on a reservation. The company and the tribe challenged the portion of Arizona's tax that applied to logging and hauling activities carried out exclusively on the reservation, using tribal and federal roads. The Supreme Court set out essentially a two-pronged test for preemption, because it found that two "independent but related barriers" could preclude a state from asserting its authority on a reservation. First, the exercise of state authority could be preempted by directly applicable federal statutes or regulations. Second, the state could unlawfully infringe on the riqht of Indians to make their own laws and be governed by them. White Mountain, 448 U.S. at 142 (citing Warren Trading Post Co. v. Arizona Tax Cornm'n (1965), 380 U.S. 685, 85 S.Ct 1242, 14 L.Ed.2d 165; and Williams v. Lee (1959), 358 U.S. 217, 79 S.Ct. 269, 3 L.~d.?d 251, respectively) . The Supreme Court noted that these two barriers are independent, because either standing alone could he a sufficient basis for finding a state law inapplicable. Thev are also related, because the right of tribal self-government is ultimately subject to the power of Conqress, and thus is effectively a creature of federal law iust as are statutes and regulations. We will therefore treat these two separate questions as elements of the same federal preemption analysis. Because the interaction of the various governmental interests in each case will vary, the White Mountain test calls for a "particularized inquir:~ into the nature of the state, federal and tribal interests at stake," which are then balanced to determine whether the state law is preempted. White Mountain, 448 U.S. at 145. A. Federal Statutes and Regulations Northern Border asserts that the challenged state tax in this case is preempted by two directly applicable bodies of federal law. The first of these is comprised of statutes enunciating the Federal Government's goal of promoting tribal self-sufficiency and economic development, specifically, the Indian Financing Act of 1974, 25 U.S.C. §§ 1451 et seq.; the Indian Self-Determination and Education Assistance Act of 1975, 25 U.S.C. §§ 450 et seq.; and the Indian Reorganization Act of 1934, 25 U.S.C. §§ 461 et seq. For example: The Congress hereby recognizes the obligation of the United States to respond to the strong expression of the Indian people for self-determination ... through the establishment of a meaningful Indian self-determination policy which will permit an orderly transition from Federal domination of programs for and services to Indians to effective and meaningful participation by the Indian people in the planning, conduct, and administration of those programs and services. 25 U.S.C. § 450a. It is hereby declared to be the policy of Congress to provide capital on a reimbursable basis to help develop and utilize Indian resources, both physical and human, to a point where the Indians will fully exercise responsibility for the utilization and management of their own resources and where they will- enjoy a standard of living from their own productive efforts comparable to that enioyed by non-Indians in neighboring communities. 25 U.S.C. 5 1451. The second body of law is the scheme of regulations governing the granting of rights-of-way over Indian lands found at 25 C.F.R. S§ 169.1, et seq. The purpose of these regulations is stated in 25 C.F.R. § 169.2 as prescribing the "procedures, terms and conditions" under which rights-of-way can be granted across tribal land. Two of the seminal cases in this area, relied upon by both parties in this case, are White Mountain and Washington v. Confederated Tribes of the C o l v i l ! . e Reservation (19801, 447 U.S. 134, 100 S.Ct. 2069, 65 L.Ed.2d 10. The result in each case was different, which allows for an examination of the interests that will cause the balance to tip one way or the other. An overview of these cases shows that the federal/tribal interest will be strongest, and the state interest correspondingly weakest, where the activitv or property at issue involves only Indians and is located solely within the reservation. The reverse is true when the activity or property involves non-Tndians and has effects that are felt off the reservation. See White Mountain, 448 U.S. at 144; Colville, 447 U.S. at 154-57. In White Mountain, the logging operation at issue was conducted exclusively on reservation lands, using roads built or maintained by the White Mountain Tribe and the Federal Government. The Supreme Court noted the general policy goals contained in the statutes cited above, and examined the extensive federal laws and regulations directly applicable to the logging operation. The regulations dictated, among other things, the amount of timber that could be sold, methods of cutting trees, advertising, mode of bidding, roads to be used, hauling equipment to be used, speed at which equipment could travel, and dimensions of the loads to be hauled. The Supreme Court found Arizona ' s justification for its taxes insufficient to counterbalance their interference with the applicable federal regulatory scheme. Arizona did not assert a public regulatory purpose; i.e., the challenged taxes were not used to address off-reservation effects of the logging operation. The revenue raised by the taxes was used for "partially compensating the state for the use of its highwavs. " White Mountain, 448 U.S. at 139-40. Arizona's interest in imposing the taxes was held to be slight due to the lack of a public regulatory purpose and the fact that Arizona was not providing any on-reservation services with the revenue from the challenqed taxes. The logginq trucks involved did not use state roads or highways. By contrast, the Arizona taxes added a cost component to the logging operation that interfered with three facets of the federal statutory and regulatory scheme: (1) the "overriding federal ob-jective of guaranteeing Indians that they will 'receive ... the benefit of whatever profit [the forest] is capable of vielding; ' ' I (2) the Federal- Government's ability to set fees and rates required to carry out logging operations and timber sales; and (3) the tribe's ability to sustain the costs involved in following the federally-mandated sustained yield policy. The Supreme Court found that "no room remains for state laws imposing additional burdens" on the l.ogging operation. White Mountain, 448 U.S. at 149-52. In Colville, the tribes involved enacted ordinances authorizing the taxation of on-reservation cigarette sales. The tribes refused to collect Washington cigarette or sales taxes on the transactions. This made the price of cigarettes purchased on the reservation lower than those purchased elsewhere, and non-Indian people traveled to the reservation for the specific purpose of buying cigarettes. The Supreme Court found this case to be in contrast to a situation (such as that in White Mountain) where the challenged tax affected value generated on the reservation by activities in which the tribes had a strong interest. "What the smokeshops offer these customers ... is solely an exemption from state taxation." Colville, 447 U.S. at 155 (contrasting Moe v. Salish and Kootenai Tribes (1976), 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96; and McClanahan v. Arizona State Tax Comrn'n (1973), 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129). The Colville tribes had argued that Washington's taxes were preempted by the policy of Indian self-sufficiency set out in the statutes quoted above. The Supreme Court held that the general policy of self-sufficiency was insufficient to outweigh Washington's interest in raising revenue through its sales and cigarette taxes. The statutes were held to be evidence of "congressional concern with fostering tribal self-government and economic development, but none [went] so far as to grant tribal enterprises selling goods to nonmembers an artificial competitive advantage over all other businesses in the State." Col-ville, 447 U.S. at 155. In the present case, both parties have examined precedent such as White Mountain and ColvilZe closely in seeking to add weight to their respective interests. For example, in its briefs to the District Court and to this Court, Northern Border quotes an opinion of the Tenth Circuit Court of Appeals for the proposition that a state's interest in assessing a tax is "particularly minimal when it seeks to raise revenue by taking advantage of activities that are wholly created and consumed within tribal lands and over which it has no control." Indian Country U.S.A., Inc. v. State ex rel. Oklahoma Tax Comm'n (10th Cir. 1988), 829 F.2d 967, 987. Northern Border then argues that because the portion of the pipeline in question is on trust lands "over which the State has no jurisdiction," Montana's interest in raising revenue is likewise particularly minimal. This argument ignores the fact that Northern Border's pipeline--part of a system stretching from Alaska to Illinois--can hardly be characterized as "wholly created and consumed within tribal lands." It also presupposes the result of the White Mountain test, which will determine whether the State has a sufficient interest to assert jurisdiction to tax Northern Rorder's trust land-sited pipeline. The State has also engaged in overstatement. For example, the State seeks to derive a rule from holdings such as Colville and White Mountain that direct interference with a particular federal regulatory scheme is necessary before preemption can be found. However, the Supreme.Court in White Mountain stated that the balancing of federal, tribal and state interests was to include consideration of the broad policies that underlie relevant federal laws. White Mountain, 448 U.S. at 144-45. While Colville held broad federal policy insufficient to preempt the state law at issue, it was nonetheless considered as the main component of the tribes' argument. Colville, 447 U.S. at 155. A specific federal regulatory scheme would yield a federal/tribal interest that weighed more heavily in the White Mountain test, but it is not a prerequisite for federal preemption. Unlike the decisions in White Mountain and Colville, the balance of federal, tribal and state statutory and regulatory interests in this case has a narrow focus. This is not a case where an extensive set of directly applicable federal statutes or regulations leaves no room for the exercise of state authority challenged here. Nor is it a case where the Tribes are attempting to gain a commercial advantage by marketing an exemption from state taxation. As to the federal/tribal interests, one basis for Northern Border's argument merits much more weight than the other. The weaker basis is the scheme of federal regulations concerning right-of-way grants across reservation lands. The State and the District Court agree that this regulatory system is fairly extensive, but Northern Border makes only bald statements that the State's tax is preempted by the regulations, without showing any actual relationship between the two. The activity being regulated is the granting of rights-of-way. The State does not seek to tax the right-of-way itself or any facet of the granting process. The State's tax is on the pipeline; the property of Northern Border that was not put in place until after the right-of-way grant was obtained. While it is conceivable that some decision made regarding a future right-of-way grant might be somehow affected by the tax, Northern Border has advanced no argument as to what that effect might be. The regulations are at best tangentially related to a property tax on a pipeline sitting in an existing right-of-way. The federal/tribal interests represented by the right-of-way regulations are slight, and can be accorded little weight. Northern Border's stronger argument is based on the federal policy of encouraging tribal self-sufficiency set out in the statutes quoted above. In its initial brief to the District Court, Northern Border argued that the Tribes' utility tax ordinance, by providing revenue for the Tribes to use in providing services on the reservation, was effectively furthering this federal policy. Northern Border argues that the State's tax makes it more expensive for utilities to locate property on trust lands than it is elsewhere. According to Northern Border, this gives the State the power to control a major factor in any decision to locate business property on the reservation. This would interfere with the federal self-sufficiency policy by inhibiting the Tribes' ability to manage their own resources (see New Mexico v. Mescalero Apache Tribe (1983), 462 U.S. 324, 103 S.Ct. 2378, 76 L.Ed.2d 611), and by reducing the revenue available for providing reservation services. However, as the State is quick to point out, no present injury to tribal revenues resulting from the State's tax has been shown. Northern Border presents factual support for its position in the form of affidavits from utility company executives who state that the double tax burden present on trust lands would affect any decision by their companies regarding location of facilities there. The State attacks these affidavits as speculative and irrelevant. While there is some merit to the State's attack, the prospective nature of Northern Border's argument does not render it inconsequential. The law recognizes that one need not wait for a threatened iniury to manifest itself before seeking injunctive or declaratory relief. Crow Tribe v. State of Montana (9th Cir. 1987), 819 F.2d 895, 903. The State's interest in assessing the challenged tax is similar to the Tribes'. The State argues that substantiallv all of the revenues derived from the tax stay in Roosevelt and Valley Counties, with a full 71% being used to fund school districts servicing tribal members living on the reservation. The State also notes that the Counties maintain some of the roads on the reservation, and that the State has law enforcement responsibilities for some crimes committed by non-Indians on the reservation, including acts of vandalism against Northern Border's property., The balance of the competing interests here as they apply to preemption by federal laws thus narrows to the question of providing services. Although both sides have advanced viable interests to be weighed in the White Mountain test, the State's interest in funding the school districts involved here and providing local services outweighs the federal/tribal interests asserted by Northern Border. The possible future injury posed by Northern Border has less impact than what would occur were we to hold the State's tax to be preempted. For example, any failure by the State to provide educational opportunity for reservation children would violate both federal and state law. See, e. g. , Equal Educational Opportunities Act of 1974, 20 U.S.C. 55 1701, et seq.; Sec. 1, Art. X I Mont.Const.; 55 20-5-103 and 20-5-108, MCA . The deciding factor is thus the greater present interest the State has in providing services to reservation residents. We therefore hold that the challenged tax is not preempted by federal statutes or regulations. B. Tribal Self-Government Northern Border also argues that the State's tax interferes to an impermissible extent with the Tribes' sovereign rights of self-government. According to Northern Border, the interference with prospective tribal tax revenues wrought bv the State's tax requires a finding of preemption under the second prong of the White Mountain test, because taxation is chief among the powers of sovereignty exercised by an Indian tribe. The District Court's order noted that the Tribes, and not Northern Border, are the more appropriate parties to determine whether their interests will be harmed in the future by the challenged tax. On appeal, the State amplifies this point, and argues that Northern Border lacks standing to raise a self-government claim. The State points to Olson v. Department of Revenue (Mont. 1986), 726 P.2d 1162, 1166, 43 St.Rep. 1916, 1920, where this Court adopted federal principles of standing for suits of all kinds, especially court challenges based on alleged constitutional or statutory violation. In Olson, we recognized two bases on which standing rests. One of these is "judicial self-restraint imposed for reasons of policy." Olson, 726 P.2d at 1166. The policy at issue here is the general reluctance of courts to determine the rights of persons who are not parties to the suit: "... the avoidance of the adiudication of rights which those not before the Court may not wish to assert, and the assurance that the most effective advocate of the rights at issue is present to champion them." Duke Power Co. v. Carolina Environmental Studv Group., Inc. (1978), 438 U.S. 59, 80, 98 S.Ct. 2620, 2634, 57 L.Ed.2d 595, 616. Northern Border argues that it has standing to bring the claims advanced in this suit by virtue of its taxpayer status and the direct economic injurv it suffers from the double taxation. Northern Border further argues that this Court has previously addressed self-government issues in cases where no Indian tribes were parties (citing Burlington Northern Railroad v. Department of Public Services Regulation (Mont. 1986), 720 P.2d 267, 43 St.Rep. 1005; and ~ilbank ~utual Insurance Co. v. Eagleman (Mont. 19851, 705 P.2d 1117, 42 St.Rep. 1393). Our reading of these cases shows Northern Border's argument to be incorrect. Our decision in Burlington Northern was based on applicable federal regulations, and did not address self-government. The plaintiff in Eagleman, while technically not an "Indian tribe," was an individual who was "an enrolled member of the Fort Peck Sioux and Assiniboine Tribes." Eagleman, 705 P.2d at 1118. Northern Border also cites two recent state court decisions, one from Arizona and one from New Mexico, for the proposition that consideration of a federal preemption claim necessarily includes consideration of self-government, thereby affording standing for a non-Indian to assert a self-government claim. We disagree with these holdings, and decline to apply them. Northern Border has standing by virtue of its taxpayer status to challenge the property tax imposed on it by the State. However, it does not have standing to assert the Tribes' sovereign right of self-government in doing so. As we noted in Olson, the principle of standing requires that the plaintiff allege "'such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues . . . . ' " Olson, 726 P.2d at 1166 (quoting Raker v. Carr (1962), 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663, 678). Northern Border cannot allege a sufficient "personal" stake in the self-government interests of the Tribes to gain standing on this claim. Having so found, we will not address the claim's merits. 11. Violation of United States Constitution Northern Border asserted in its Application for Temporary Restraining Order and Complaint for Injunctive Relief that the challenged tax violates three provisions of the United States Constitution: the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and the Indian Commerce Clause. Bevond these initial all-egations, we find nothing in the various briefs submitted by Northern Border that purports to be an equal protection argument. Because our review of the facts shows no objectionable cl-assification on which to base such a claim, we will not address it further. The Due Process Clause claim appears to be based on the alleged lack of nexus between the State and that portion of the pipeline crossing trust lands. The State characterizes this argument as specious, owing to the fact that the trust lands are located within the boundaries of Montana. Without passing on whether Northern Border has advanced a specious argument, we decline to hold that the challenged tax violates constitutional due process guarantees. A leading U.S. Supreme Court decision on state taxation, Container Corp. v. Franchise Tax Board (1983), 463 U.S. 159, 165-66, 103 S.Ct. 2933, 2940, 77 L.Ed.2d 545, 553-54, defines nexus as a "minimum connection" between the State's income from the tax and the instate value of the enterprise being taxed. The tax here at issue is assessed based on the value of the pipeline found within the State. The revenue obtained is used to provide government services to Northern Border and tribal members, among others. This is sufficient nexus to withstand the due process challenge advanced by Northern Border. Northern Border next argues that the State's tax is violative of the Indian Commerce Clause under the four-part test established in Complete Auto Transit, Inc. v. Brady (1977), 430 U.S. 274, 97 S.Ct. 1076, 51 L.Ed.2d 326. First, the test in Complete Auto applies to the Interstate Commerce Clause (Art. I, Sec. 8, c1.2, U.S.Const.), not the ~ndian Commerce Clause (Art. I, Sec. 8, cl. 3, U.S.Const.). Second, as the Supreme Court stated in Colville, "It can no longer be seriously argued that the Indian Commerce Clause, of its own force, automatically bars all state taxation of matters significantly touching the political and economic interests of the Tribes." It would, however, have a role in "preventing undue discrimination against, or burdens on, Indian commerce." Colville, 447 U.S. at 157. Northern Border's allegations of future injury to tribal revenues do not rise to the level of undue discrimination or burden on Indian commerce. Moreover, the Colville court found Washington's tax acceptable under this analysis because it was imposed without discrimination on all transactions within the state. The tax at issue here is alleged by Northern Border to be improper for that very reason. It is assessed against the pipeline based on its value without regard to where the line is located. within the State. We find no Indian Commerce Clause violation present in this case. 111. Violation of the Montana Constitution Northern Border's claim under the Montana Constitution is confined to the incorporation of Montana's Enabling Act in Article I: All provisions of the enabling act of Congress (approved February 22, 1889, 25 Stat. 676), as amended and of Ordinance No. 1, appended to the Constitution of the state of Montana and approved February 22, 1889, including the agreement and declaration that all lands owned or held by any Indian or Indian tribes shall remain under the absolute jurisdiction and control of the congress of the United States, continue in full force and effect until revoked by the consent of the United States and the people of Montana. The delegates to the 1972 Constitutional Convention stated their intent during debate that this provision should be included to show that the Enabling Act, the "contract" between Montana and the Federal Government, was still in force under the 1972 Constitution. VII Mont. Leg. Council, Montana Constitutional Convention, 1971-1972, 2567 (1981). The U.S. Supreme Court has held that through enabling acts, the states surrendered their proprietary interests in tribal lands, but not necessarily their governmental or regulatory authority. See Colville, 447 U.S. at 156; Draper v. United States (1896), 164 U.S. 240. As we held above, the White Mountain test establishes Montana's jurisdiction to assess the tax here challenged. That jurisdiction is not defeated by Art. I, Mont.Const. After reviewing the record and the briefs to this Court, we find that Northern Border has not asserted federal/tribal interests sufficient to outweigh the State's interest in raising revenue for required government services encompassing reservation residents, and lacks standing to assert the Tribes' interests in self-government. We conclude that the challenged tax is not preempted by federal law. We also have been unable to find constitutional barriers to the challenged tax, and conclude that it is therefore constitutional. Given these conclusions, we hold that there is no issue as to any fact material to the State's entitlement to summary judgment. We affirm the decision of the District Court. We Concur: Justices Mr. Justice Fred J. Weber specially concurs as follows: I commend the majority for a well analyzed and well. written opinion. Based on previous case law, the majority has properly struck a balance. Unfortunately, we have been unable to address the fundamental issue of fairness in the present case. Here we have double taxation. After the completion of the pipeline, the State levied its property tax of approxi- mately $33,000 for each mile of pipeline on the reservation. Essentially the State levied the same tax as would have been levied if the pipeline were located off the reservation in the State of Montana. Northern Border did not protest such a tax as it apparently concluded that a single tax of that nature was appropriate. After several years, the Tribes became aware of an opportunity to levy a similar property tax for their own direct use and benefit. Such a Tribal tax was appropriate because the pipeline was located on the reserva- tion land. The Tribes then imposed their own property tax of approximately $33,000 per mile for each mile of pipeline on the reservation, resulting in an additional annual tax to Northern Border of approximately $1 million each year. Had Northern Border constructed its pipeline south of the reser- vation, there would only have been a single tax. Now North- ern Border is trapped with a double tax resulting from the taxing ingenuity of two independent taxing entities. North- ern Border properly feels it should have a judicial forum where this unfairness can be reviewed. Unfortunately our state judicial system is unable to address that issue of fairness. Our jurisdiction does not extend to any control over the Tribal lands nor of the Tribe's annual tax of approximately $1 million. We therefore cannot consider the tax of both the State and t . h e Tribes. We can only state that the Montana tax is appropriate. Where does that leave Northern Border? As a result of this opinion, Northern Border cannot obtain consideration of the issue in our State judicial system. Can Northern Border next go to the federal court system? Clearly the answer again is, "No." If Northern Border proceeds in federal court, that court system would undoubtedly agree that kt has the authority to consider the tax h 1 7 the Tribes only, hut that it cannot consider the tax imposed by the State of Montana. The result again would he that the double tax could not be considered. Clearly this i - s unfair to the taxpayer. Northern Border argues that the double tax will adverse- ly effect the economic de~~elopment of the reservation. The State argues that the issue cannot be presented by Northern Border as a taxpayer because this is a matter which can be presented only by the Tribes who are not parties to the action. It appears that the majority is correct in not addressing the issue as to the adverse effect on the economic development of the reservation. Again there is an element of unfairness. Without question there will be an impact on the reserva- tions of Montana in the future. Economic development on the Indian reservations will he reduced. Non-Indians, whether corporate or individ-ual, will - not construct taxable property on an Indian reservation if it is possible to place that property outside a reservation boundary. The message to the business community is to avoid transactions on the reserva- tions which may be subject to such a double tax. Tragicallv the result will be a greater separation of the Tndian reser- vations from the remainder of the State of Montana. Montana lacks the power to address all aspects of this d i lemma. It becomes one more unfortunate aspect of the Indian problem which remains to be addressed by the Congress of the United States. I concur in the majority opinion. Yet I also conclude that iustice has been denied. | April 20, 1989 |
a7f65620-0108-409e-affe-6983aadaa614 | ROADARMEL v ACME CONCRETE COMPANY | N/A | 88-482 | Montana | Montana Supreme Court | NO. 88-482 TN THE SUPREME COURT OF THE STATY OF MONTANA 1989 EARL W . ROADARMEL , Claimant and Respondent, ACME CONCRZTE COPIPANY, Employer, -vs- ROYAL INSURANCE COMPANY, Defendant and Appellant. APPEAL FROM: The Workers' Compensation Court, The Honorable Timothy Reardon, Judge Presidinq. COUNSEL OF RECORD: For Appellant: James G. Edmiston, Ill; Billings, Montana For Respondent: Donald E. White; Bozeman, Montana W. Lee Stokes; Bozeman, Montana -- - Submitted on Briefs: February 16, 1989 Decided: April 25, 1989 Mr. Justice John C. Sheehy delivered the Opinion of the Court. Royal Insurance Company appeals from a judgment entered against it and in favor of claimant Earl W. Roadarmel in the Workers' Compensation Court of the state of Montana, in and for the area of Butte. The court held that Roadarmel sustained a compensable injury under $ 5 39-71-119, MCA, on September 18, 1986 and was entitled to temporary total disability benefits and medical benefits through December, 198?. Future entitlement to benefits after that date was not determined by the court. The court also awarded Roadarmel reasonable costs and attorney fees pursuant. to S 39-71-611, MCA. The insurer appeals from the judgment. We affirm. Appellant Royal Insurance Company presents the following issues for review: (1) Whether claimant proved, by a preponderance of the probative credible medical evidence (all of which was submitted by deposition) that his cardiac arrythmia (irregular heartbeats) were caused by an on-the-job exposure to the chemical- Toluene. (2) Whether claimant proved by a preponderance of the probative credible medical evidence (all of which was submitted by deposition) that he was totally disabled as a result of exposure to the chemical Toluene from September 18, 1986 through December, 1987. (3) Whether the Workers ' Compensation Court erred by admitting into evidence over Defendant's objection articles from medical journals and treatises as exhibits. (4) Whether the Workers ' Compensation Court erred. in determining that claimant's witness, Samuel J. Rogers, Ph.D. qualified as an expert witness over defendant's ohiection. Roadarmel disagrees with Royal's statement of issues (1) and ( 2 ) and frames those issues as follows: ( 1 ) Whether the claimant proved by a preponderance of the evidence that he sustained an injury as a result of his employment with Acme Concrete Company. ( 2 ) Whether the claimant proved by a preponderance of the evidence that he was totally disabled as a result of an injury suffered during the course of his employment with Acme Concrete Company. Acme is enrolled in Compensation Plan I1 of the Montana Workers' Compensation Act and is insured by Royal 1nsura.nce Company, the appellant. The facts from which this claim arose are as follows: Earl Roadarmel was employed by Acme as a heavy equipment operator. He had worked on highway construction steadily since 1954. At the time of this injury he was 5F! years old and in good health. Roadarmel was assigned the job of operating the curing bridge that sprayed a curing agent onto the newly-laid concrete highway. The machine bridged the entire width of the highway ( 4 0 to 50 feet) and was equipped with a hundred or more spray nozzles that sprayed the curing agent, a wax/resin, onto the cement. The nozzles plugged continuously because the curing agent was not liquid as it was supposed to he, but had solidified into a gel. To remedy the persistent plugging, Roadarmel had to get out of the cab, reach under the machine, unscrew the plugs, and unplug them by placing them in Toluene, a toxic chemical solvent. He would then wash off the nozzles and replace them and spray the cement until the nozzles needed to be unplugged again. At night, he removed each nozzle, washed it in Toluene and then replaced it the following morning. When he used the Toluene, it was not in its original barrel, but in a bucket. which was refilled by a mechanic whenever Roadarmel needed more of it. Roadarmel was unaware that he was exposing himself to a vl-rulent, toxic chemical. He did see the empty Toluene barrels in a heap with other barrels, but he did not see a warning on the barrels as to its toxicity. No one at Acme informed him of the danger he was being exposed to nor did anyone suggest that he wear protective clothing or a respirator to protect from inhaling the solvent. There was a Material Safety Data Sheet concerning the Toluene provided to Acme by Exxon, the manufacturer, hut not disclosed to Roadarmel. It contained the following language: A. Identification and Emergency Information . . . Product Appearance and Odor Clear water-white liquid. Aromatic hydrocarbon odor. B. Components and Hazard Information . . . Exposure limit for total product 1 0 0 ppm (378 mg/m3) for an 8-hour workday. . . . Approximate Concentration 1 0 0 % C. Emergency and First Aid Procedures Eye Contact If splashed into the eyes, flush with clear water for 15 minutes or until irritation subsides. If irritation persists, call a physician. Skin Contact In case of skin contact, remove any contaminated clothing and wash skin thorough1.y with soap and water. Inhalation If overcome by vapor, remove from exposure and call a physician immediately. If breathing i s irregular or has stopped, start resuscitation, administer oxycren, if available. E. Health and Hazard Information Variability Among Individuals. Health Studies have shown that many petroleum hydrocarbons and synthetic lubricants pose potential human health risks which may vary from person to person. As a precaution, exposure to liquids, vapors, mists or fumes should be minimized. Effects of Overexposure (signs and symptoms of exposure) High vapor concentrations (greater than approximately 1 0 0 0 ppm) are irritating to the eyes and the respiratory tract, may cause headaches and dizziness, are anesthetic and may have other central nervous system effects. Nature of Hazard Prolonged or repeated skin contact with this product tends to remove skin oils possibly leading to irritation and dermatitis. Product contacting the eyes may cause eye irritation. No one gave Roadarmel a n 1 7 c?j.rections or warnings about the Toluene. Each day for seventeen days, a total of 17' hours, Roadarmel breathed the chemical. His sweatshirt and clothes were soaked with it by the end of the day. On one occasion, he placed the rag on which he wiped his hands into his hack pocket. About half an hour later he felt the rag "burning back there." He had a sense at that time that it was "powerful. " His work-toughened hands, accustomed to strenuous construction work, were no longer sensitive enough to feel the burning, but his sensitive buttocks area felt the burning sensation. After that realization, Roadarmel tried to keep his hands washed. This was almost impossible to do because there was seldom water on the site and the wax/resin covered everything. The curing bridge, which Roadarmel operated, worked just behind the finish crew. If Roadarmel got up close to that crew, they would tell him to get back because "it was too stinky for them." However Roadarmel, who was in the smell all the time, really did not notice the smell and the fumes. Another Acme employee, Glen Ling j erde t.estif ied that he worked on the Butte project and in Superior. He worked with the Toluene for about four weeks. Roadarmel took over Lingjerde's job when he quit because of the effect the Toluene was having on him. 1,ingjerde also received no warnings and was not instructed to take precautionary measures with the solvent. He testified by deposition that prior to working on the curing bridge he had been in the best shape he'd ever been in, lifting weights several times a week and running several miles. He lost his appetite and went from 195 to 165 pounds. He suffered severe headaches, was sick to his stomach, experienced dizziness and light headedness when he worked with the Toluene. It became apparent to him, from the pattern of his headaches and dizziness, that his time spent on the curing bridge brought on these symptoms. On one particular day, Lingjerde had been much exposed to Toluene. On the drive home he spit out the car window. The spittle hit the side of his new Burgundy car. Later, when he wiped it off, the paint had been removed by the spittle. Lingjerde additionally testified that he had seen a Toluene barrel at Superior on which there was a warning that if the solvent came into contact with the skin, it must be flushed immediately. But, he said, there was no way to do this because "you get covered with the stuff" and there was no water on the site to wash with. Lingjerde then quit. Pis weight returned to normal and his headaches eventually stopped. He spit up for quite awhile afterward and could taste the Toluene. About the last week o f : the curing job, September 18, 1986, Roadarmel became dizzy and light-headed. At night when he went to bed, "it seemed like [b.is] whole body was jumping" and often he could not sleep. About two weeks after the job was finished he went to the doctor in Whitehall because he did not feel well and his wife, who is an emergency medical technician, was unable to find his pulse. The doctor prescribed a medication, but the next day his heartbeat was even more rapid. The Whitehall doctor was out of town so Roadarmel went to the emergency room of a Bozeman hospital. The doctor there cardioverted respondent's heart with electric shock to return it to a normal heartbeat. Since that time, Roadarmel has been on various medications and has undergone additional cardioversion. Royal Insurance's contention is that Roadarmel's symptoms are not a result of his exposure to Toluene but are psychosomatic and a result of "cardiac neurosis" caused by "non-conventional" physicians. Royal claims that the "non-conventional" physicians whom Roadarmel consulted were the only doctors who testified that Roadarmel's irregular heartbeat was caused by chemical exposure resulting in total disability. Section 39-71-119, MCA (19851, defines "injury" or "injured" as (1) a tangible happening of a traumatic nature from an unexpected cause or unusual strain resulting in either external or internal physical harm and such physical condition as a result therefrom and excluding disease not traceable to injury, except as provided in subsection (2) of this section; ( 2 ) . . . Nothing herein shall be construed to exclude any other working person who suffers a cardiovascular, pulmonary, or respiratory disease while in the course and scope of his employment. (Emphasis added.) The medical evidence is that Roadarmel has become "sensitized" and will have a reaction whenever he encounters hydrocarbons, which could be while pumping gas, inhaling exhaust fumes, or simply encountering hydrocarbons which are profuse in the environment. It is possible that the arrythmias he experiences upon exposure could be fatal. He would not be able to work in the construction business again unless he wears a portable respirator. The standard of review for decisions of the Workers' Compensation Court is whether there was substantial credible evidence to support the decision of the court. Shupert v. Anaconda Aluminum Co. (1985), 215 Mont. 182, 697 P.2d 436. However, where critical medical evidence is entered by deposition, this Court, although sitting in review, is in as good a position as the Workers' Compensation Court to judge the weight. of the testimony, as distinguished from oral testimony, where the trial court actually observes the character and demeanor of the witness on the stand. Brown v. State Compensation Ins. Fund (Mont. 1988) , 752 P. 2d 171, 45 St.Rep. 508; Shupert v. Anaconda Aluminum Co. (1985), 1 1 5 Mont. 182, 188, 696 P.2d 436, 439; Hert v. J. J. Newherry Co. (1978), 178 Mont. 355, 360, 584 P.2d 656, 659. A close scrutiny hy this Court of the medical experts' testimony contained in various depositions sustains the Workers' Compensation Court's decision that respondent's exposure to Toluene rendered respondent chemical-sensitive. Roadarmel experienced dizziness, rapid heart rate, fainting and lightheadedness. He was treated by Whitehall and Bozeman physicians who were unable to control the cardiac arrythmias. He then saw medical doctors in Dallas, Denver, and Seattle. Each parties' counsel has been able to cull from those experts' depositions phrases which support their relative stances. However, the preponderance of the evidence shows that there is a magnitude of medical research and clinical research that demonstrates that Toluene causes the symptoms Roadarmel is experiencing. Much of the clinical data referred to by the experts concerns glue sniffers who suffer all of respondent's symptoms in addition to memory loss. Glue contains Toluene. Curt Kurtz, M.D., a 1962 graduate of Stritch Medical School in Chicago testified that it would be dangerous for Roadarmel to return to his occupation as a heavy equipment operator or to expose himself further to Toluene or similar solvents. Samuel J. Rogers, Ph.D., an associate professor of chemistry at Montana State University, who teaches courses in biochemistry and toxicology explained the Poison Index Substance Information offered into evidence by Kenneth Kulig, M.D. Rogers said that Toluene invades an organ and disrupts the tissue structure . . . in this case, probably the nervous system of the heart, and at that point, the tissue becomes more susceptible and sensitized to chemicals such as Toluene, solvents or adrenaline. The tissue j . s no longer able to withstand certain kinds of solvents and becomes sensitized. It reacts in an improper fashion to a normal cardiac stimulant like adrenaline. William J. Daniell, M.D. testified that ventricular arrythmias are of particular concern because of risk of sudden death. Atrial arrythmias are of less potential, far less potential, for causing such death; but can be associated with transient reduction and profusion of blood output and can produce symptoms of lightheadedness, chest discomfort, weakness and shortness of breath. Dr. Daniell said that the frequency of the episodes of arrythmia should decide whether or not Roadarmel could return to work. If Roadarmel were havSnq arrythmias which reduce blood flow sufficientl~~ to impair brain function or which impair his ability to perform, then he should not he operating heavy equipment where he could harm himself or other people. Dr. Daniel1 thought it very likely that Roadarmel had this arrythmic disorder prior to the onset of symptoms in September, 1986. This expert opinion does not relieve Royal of liability. The rule that the employer takes the employee as he finds him is well established. The fact that an employee was suffering from a pre-existing disease or disability does not preclude compensation if the disease or disability was aggravated or accelerated bv an industrial injury which arose out of and in the course of employment. Gaffney v. Industrial Accident Board of Montana (1955), 129 Mont. 394, 287 P.2d 256. Tim Adams, M.D. of Bozeman, advised the Workers' Compensation Division on November 20, 1986 that the arrythmia was work related. Kenneth Kulig, M.D. of the Rockv Mountain Poison Center in Denver, Colorado, is a physician and toxicologist who examined Roadarmel. He testified that one cannot predict which patients exposed to Toluene will develop arrythmias, and that not all deliberate abusers !glue and spray paint sniffers) of Toluene develop arrythmias. Because of this fact, he said, one can conclude that some patients are more sensitive to the cardiac effects of Toluene than others. He testified further that if he were Roadarmel's employer he would be reluctant to re-expose him to Toluene to see if he develops another arrythmia. Dr. Kulig told of patients who were found unconscious or dead after Toluene abuse and said that it has to be assumed that the cause of death was cardiac arrythmia. Dr. Kulig helieves that there is no medical reason why Roadarmel cannot go back to work; but, he believes that Roadarmel has a psychological reason for not going back to work. Roadarmel believes he may have a dizzy spell while he's operating heavy equipment. Rut Dr. Kulig expressed the opinion that it does not really matter if the dizzy spell he fears has a physical cause or not. The result is the same--dizziness and possible fainting could occur. James K. Vincent, M.D., a specialist in cardiovascular medicine in Billings, said that not only should Roadarmel. avoid further exposure to ToLuene but that from the information about the chemical everyone should avoid it. As a consequence of our review of each physician's deposition and after a thorough reading of all evidence submitted, we agree with the Workers' Compensation Court that claimant Roadarmel has met his burden of proof by a preponderance of the evidence that there was a causal connection between his exposure to Toluene while operating the curing bridge and his subsequent cardiac arrythmias, dizziness, lightheadedness and fainting. This injury was a result of his employment with Acme Concrete Company. As to whether or not Roadarmel is permanently totally disabled, the medical evidence and testimony presented b 1 7 Roadarmel demonstrate that although the data sheet cautioned that the maximum time per day that a person should be exposed to Toluene was 8 hours, Roadarmel was exposed for 12 to 14 and sometimes 16 hours per day. As a result, he has become sensitized to Toluene. Dr. Daniel1 stated that Roadarmel must avoid exposure to degreastng agents, cleaning agents, paint, paint strippers, glues, adhesives, some plastics i n the manufacturing phase, fiberglass construction and anv other solvent. Some of the medical experts advise that he not operate heavy equipment because his physical symptoms may recur at anytime. His history of sudden onset of these symptoms could he fatal to him and those around him. For the foregoing reasons, all g l eaned from the record, we reach the same conclusion that the Workers' Compensation Court reached. Roadarmel is entitled to temporary total disability. The final issue before this Court is whether the Workers' Compensation Court erred in determining that claimant's witness, Samuel J. Rogers, Ph.D. qualified as an expert witness over defendant's objection. The statutory provision in effect at the time of Roadarmel's injury was S 39-71-2903, MCA, as follows: . . . the workers' compensation judge is not hound b > 7 common law and statutory rules of evidence. Appellants arguments based on statutes governing the rules of evidence are not applicable to this cause. The Workers' Compensation Court could hear even hearsay testimony. Krause v. Sears Roebuck & Co. (1982), 1.97 Mont. 102, 641 P.2d 458. The judqment of the Workers' Compensation Court is a ?firmed. Justj ce We Concur: | April 25, 1989 |
54026307-3fa2-4976-961c-0541b836438d | MARRIAGE OF ALLEN | N/A | 88-556 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA IN RE THE MARRIAGE OF GWYN ANN ALLEN, Petitioner and Appellant, and DONALD GARY ALLEN, Respondent and Respondent. APPEAL FROM: District Court of the Seventeenth Judicial District, In and for the County of Valley, The Honorable M. James Sorte, Judge presiding. COUNSEL OF RECORD: For Appellant: David Allen Dick, Wolf Point, Montana Denise Peterson; Jackson, Murdo, Grant & Larsen, P.C., Helena, Montana Por Respondent: Robert Hurly, Glasgow, Montana Submitted on Briefs: February 16, 1989 Decided: April 12, 1989 F i l e d : I Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. Petitioner Gwen Allen (hereinafter referred to as the Wife) appeals from an award of joint custody of the parties' three minor children. In April, 1988, the District Court granted physical custody of the two older children to respondent Donald (hereinafter referred to as the Husband) until August, 1988, at which time the court would re-examine physical custody. At the later hearing, the District Court made another temporary determination of physical custody until August, 1989, at which time a hearing is set to re-examine and determine physical custody for the following year. We affirm the award of joint custody and find under these circumstances it was not an abuse of discretion to maintain jurisdiction to determine physical custody. This appeal arises from a particularly acrimonious custody battle. The parties were unfriendly and uncooperative throughout the proceeding, especially regarding custody and visitation. Much of the testimony involved the Wife's allegations that the Husband had an indiscreet relationship with his live-in girl friend. At the conclusion of the original hearing on January 26, 1988, Judge Langen concluded the parties would have joint custody. I find that . . . the presumption prevails and that I must award joint custody. I base that on the fact that when I consider the factors set forth in 40-4-212, I find that in my finding, after listening to the testimony here for these many hours, that there is no testimony which would come within the provisions of 1 through 6, which would allow me to find other than that the presumption prevails. J,udge Langen found ample evidence the Wife had obstructed the Husband's attempts to visit the children, however, he requested the parties to work out a visitation schedule whereby the Wife would be the primary custodian during the ten school months and the Husband would have the two older children for two months in the summer, plus other liberal visitation on weekends and holidays. ,?udqe Lanqen concluded: However, if she [Wife] continues to hamper visitation on the part of the father, or tends to interfere with his right to have prolonged visitation or custody, I'll change the decree, and I'll give him the custody, and you can be the non custodial parent tryi-ng to get visitation rights. On February 1, 1988, the Husband moved the District Court for a new trial, to amend findings of fact, or to reopen the case for presentation of f.urther evidence. The motion alleged that the Flife was continuing to hamper the Husband's visitation with the children and was not making a cooperative effort to set a visitation schedule. The motion requested an immediate order granting physical custody of the two older children to the Husband. On February 5, 1988, Judge Langen heard testimony from both parties regarding what transpired following the initial hearing. He then ordered the parties to remove to a conference room and attempt to reach an agreement. The parties evidently reached some agreement but the Wife refused at the last moment to commit to its terms. Judge Langen then stated that he would settle the dispute since the parties could not. Before the close of the hearing, the Wife's attorney advised the Judge that under Montana law, joint custody does not require equal physical custody. On April 1, 1988, Judge Langen entered his findings of fact, conclusions of law, and decree and judgment. The marriage was ordered dissolved, the marital property was divided, child support was determined, and the parties were awarded joint custody of the children. The court determined that the Husband should have the two older children for the months of April, May, July and August, 1988. An August 19, 1988, hearing was scheduled in the findings, at which time the Judge was to determine custody for the ensuing months. The Judge strongly recommended the parties prepare a written plan of physical custody and visitation which would obviate the need for the August hearing. Prior to the August hearing, the Wife moved for the recusal of Judge Langen on the allegation that he participated in the negotiations between the parties durinq the February 5, 1988, hearing. Judge Langen complied with the motion, but noted tnat his recollection of the facts differed considerably from those alleged in the motion. Judge Sorte then accepted jurisdiction of the case. The August hearing was vacated and rescheduled for September 9, 1988. During the September hearing, the Wife realleged facts of the Husband's unfitness as a parent which were made during the first hearing. The Wife also made numerous additional allegations, not mentioned during the first hearing, which ranged from marital rape to bad driving habits. Judge Sorte was not sure how this testimony related to a determination of future phvsical custody, but he allowed the Wife to so testify. After hearing the testimony and consideri ns post-hearing briefs from both parties, Judge Sorte entered his findings of fact, conclusions of law and supplemental judgment and decree regarding custody on September 26, 1988. The corlrt concluded that cuctody of the two older children should remain with the Husband through the 1988-89 school year. The Judge scheduled an August 15, 1989, hearinq to determine custody of the children for the ensuing school year, but gave the parties an opportunity to make their own custody arrangements. This appeal followed. The Wife raises the fol.lowing issues for our review: 1. Was it an abuse of discretion to order a custodv arrangement different from that which was established in the temporary custody order without making a specific finding of changed circumstances? 2. Did the District Court ignore all "best interest" factors except visitation? 3. Did the District Court order equal physical custody because it erroneously concluded the law required such an award? 4. Is this appeal limited to the issues of the supplemental order of September 23, 1988, or mav we consider issues determined by the order of April 1, 1988? 5. Was it error for either District Court Judge to make custody arrangements without establishing a final physical custody plan? Issue No. 1. Was it an abuse of discretion to order a custody arrangement different from that which was established in the temporary custody order without making a specific finding of changed circumstances? The Wife filed her petition for dissolution in September, 1985. She was granted temporary custody upon her ex parte motion on the same day. At a subsequent hearing, the parties stipulated that the Wife would have temporary custody but the Husband would be allowed certain visitation rights. Since this case was not heard until February, 1988, the Wife had temporary custody for nearly two and one-half years from the date she filed her petition for dissolution. The Wife argues the grant of physical custody of the two older children to the Husband was error because there was no finding of changed circumstances to support the "modification" from the temporary custody order. The Wife reads the recent case of In re the Custody of Andre (Mont. 1988), 761 P.2d 809, 45 St.Rep. 1745, as requiring a court to make a finding of changed circumstances before any final custody order can be made which alters the temporary custody order. We disagree with that interpretation. The facts in Andre were substantially different from those of this case. The parties there were not acting under a temporary custody order, but had agreed to a custody arrangement between themselves, without judicial supervision. The de facto custody arrangement had continued for nine years. Here, the children were initially awarded to the Wife upon her ex parte motion. At a later hearinq, through stipulation by both parties, the Wife was temporarily awarded custody pending resolution of the action. While the temporary order did not specifically state that the rights of the non-custodial parent would not be prejudiced, as in In re Marriage of Beitz (1984), 211 Mont. 111, 683 P.2d 485, we conclude that, under these facts, the temporary order did not require a showing of changed circumstances before the final custody order could alter the terms of the temporarv custody order. As expressed in 5 40-4-213, MCA, the best interest test is the standard used by the court to award temporary custodv. However, the court, upon motion for temporary custody, is only determining the best interest of the child with regard to temporary custodv pending resolution o f the action. Temporarv child custody is merely an initial determination made to ascertain which of [the! parents will keep children until such time as f u l . 1 . hearing on custody can be made. 27C C.J.S. Divorce, S 642, footnote 30. While district courts must consider the stability of the child's home when it determines custody, it would nevertheless be inherently unfair to require the temporary non-custodial. parent to make a higher threshold showing of changed circumstances before a custody order may deviate from the temporary order. According to the Wife's reasoning, temporary custody would require a non-custodial parent who seeks final custody to bear a heavier burden to show changed circumstances under 5 40-4-219, MCA. This interpretation goes against the policy of this temporary custody statute. The commissioner's note to 5 40-4-213, MCA, states: [This action] encourages trial co.urts to issue temporary custody orders without formal hearing whenever possible. Since the hearing itself may be a traumatic event for both parents (and therefore for their children, indirectly), the trial court is authorized to make temporary orders on the basis of affidavits alone unless one of the parties files formal objection to that procedure. In most cases, it is expected that trial judges will award temporary custody to the existing custodian so as to minimize disruption for the child. If the Wife's interpretation were correct, parents would be forced to vigorously litiqate temporary custody in an attempt to avoid the changed circumstances burden. Such a result would be contrary to the purpose of the temporary custody statute. We conclude that under the facts of this case, the District Coart was not required to make a finding of changed circumstances before granting physicial custody of the two older children to the Husband. Issue No. 2. Did the District Court ignore all "best interest" factors except visitation? The Wife argues that both J.udge Langen and Judge Sorte abused their discretion by not looking to the best interest of the children in awarding the parties joint custody. l i l e disagree. There is no evidence that either Judge ignored the best interest factors. In fact, the transcript illustrates Judge Langen examined the facts under the statutory standards, and he specifically examined SS 40-4-212, -222, and -223, MCA. Judge J . , a n g e n spoke directly to the alleqation of physical ab.use of the Wife, the wishes of the parents, the wishes of the children, and the interaction and interrelationship of the parents with the children. Judge Sorte also heard all of this evidence, and much more. He too agreed that the statutorv presumption prevailed. There is no evidence that the best interest factors were ignored. The Wife has shown no clear ahuse of discretion by either District Judge. Issue No. 3. Did the District Court order equal physical. custody because it erroneously concluded the law required such an award? This issue has no merit. There is no evidence that Judge Langen concluded that joint custody requires equal. physical custody. In fact, Judge Langen's first choice was to award an unequal division of physical custody. During the February 26, 1988 hearing, Judge Langen originally requested the parties to work out an arrangement whereby the Wife would have the children for ten months during the school year and the Husband would have the two 01-der children for two months in the summer. Additionally, counsel for the Wife specifically advised Judge Langen at the close of the February 5, 1988 hearing, prior to the entry of the judgment and decree, that joint custody does not require equal physical custody. We find no abuse of discretion. Issue No. 4. Is this appeal limited to the issues of the supplemental order of September 23, 1988, or may we consider issues determined by the order of April 1, 1988? The Wife argues that since the original order called for an Aug.ust hearing to re-examine the custody arrangements, she could not timely appeal the original judgment and decree before Judge Sorte could hear the issues, and therefore, she should be able to challenge the discretion of Judge Langen with respect to the original order. Because we have decided to address the Wife's issues with respect to the original order above, we need not discuss this issue further. Issue No. 5. Was it error for either District Court Judge to make custody arrangements without establishing a final physical custody plan? Section 40-4-104(1), MCA, provides in part: (1) The district court shall enter a decree of dissolution of marriage if: (d) to the extent it has jurisdiction to do so, the court has considered, approved, or made provision for child custody, the support of any child entitled to support, the maintenance of either spouse, and the disposition of property. Prior to amendment of this section in 1985, t.he word "property" was followed by the phrase "or provide for a separate, later hearing to complete these matters." Recently, in In re Marriage of Ensign (Mont. 1987), 739 P.2d 47'9, 44 St.Rep. 1146, we held that the deletion of this language was an attempt by the legislature to prevent prolonged custody, support and maintenance battles. On this reasoning, the Wife argues it was error for the District Court to set later hearing dates to re-examine and determine physical custody for the future periods of time. We disagree. Judge Langen determined in his April 1, 1988 iudgment and decree that the parties would have -joint custody. He also established support and divided the marital property. It was his decision to determine future physical custody after examining how the custody arrangement developed through the summer months. Judge Langen also wanted the parties to "take advantage of the experiences of the physical custody arrangements imposed by the Court in this Decree" and reach their own agreement regarding physical custody. We find the court did not err when it retained jurisdiction to re-examine the physical custody arrangements when it was faced with such a bitter and hostile custody battle. But even if the Wife's assertions on this issue were correct, we do not understand how this position could further her case. She now has an opportunity to reach a custody agreement with her former husband which would better serve the best interest of the children. As we stated in Andre, 761 P.2d at 812: Although the end of a relationship is a time of great trauma, parents generally love their children and have the greatest interest in determining which of them can best care and provide for the child . . . In addition, parents are in a much better position to determine custody arrangements . . . It would be unrealistic to assume that the welfare of a child can better be determined by a court after a short period of self-interested testimony. Wife has shown no clear abuse of discretion by either District Court Judge. The judgment and decree and the supplemental judgment and decree are affirmed. We concur: - Justices | April 12, 1989 |
014b3a1c-819e-4e8c-9967-d78db5160290 | ESTATE OF ALLEN | N/A | 88-560 | Montana | Montana Supreme Court | No. 88-560 IN THE SUPREME COURT OF THE STATF OF MONTAbTA 1989 IN THE MATTER OF THE ESTATE OF J ! A C K R. ALLEN, Deceased. APPEAL FROM: District Court of the Ninth Judicial. District, In and for the County of Toole, The Honorable R.D. McPhill-ips, Judge presiding. COTTNSEL OF RECORD: For Appellant: Selden S. Frisbee, Cut Rank, Montana For Respondent : Marc Buyske; Anderson, Reattv & RuysFe, Shelhv, Montana 5 L- 3 Submitted on Briefs: March 23, . , ' 2 . - 0 8 LLI Decided: April 19, 1989 Mr. Justice F . . C. McDonough delivered the Opinion of the Court. This appeal from the Ninth Judicial District Court, Toole County, concerns the exercise of a power of appointment granted Lillian E. Allen by the 1-ast will and testament of her husband, Mack R. Allen. Both Lillian and Mack were domiciled in Minnesota at the time of their deaths. The present proceeding concerns the exercise of the power in regard to property situated in Toole County, Montana. The only issue is whether the District Court correctly concluded that Lillian failed to exercise the power. We affirm. Mack's will created a marital deduction trust and a residuary trust for the benefit of Lillian. The will directed that 50% of the assets OF Mack's adjusted gross estate be used to fund the marital deduction trust, and that the rest of such estate be used to fund the residuary trust. The will also provided that on the death of Lillian, the remainder of the residuary trust be distributed to Robert S. Allen and Marjorie W. Allen. The remainder of the marital deduction trust under the terms of Mack's will was also to pass to Robert S. Allen and Marjorie W. Allen unless Lillian exercised the power of appointment in her will. This dispute arose after the death of both Mack and Lillian. At the time of his death, Mack owned a royalty interest in minerals in Toole County, Montana. No mention of the royalties was made in the probate of either Mack's or Lillian's estates. Following Lillian's death, the royalties were discovered and this proceeding was initiated. Respondents argued that the royalties should pass entirely to Robert S. Allen and Marjorie W. Al-len as part of the residuary trust. Appellants contended that half of the royalties should be considered to be part of the marital deduction trust and thus pass to the heirs of TJillian as directed by the general residuary clause of her will. The District Court held that. the royalties were part of the residuary trust, and thus they passed to Robert S. Allen and Marjorie W. Allen upon termination of the trusts. We affirm for a different reason. It makes no difference which trust contained the royalties if Lillian failed to exercise the power of appointment in the language of her will. We find that- und.er Montana law, T.,illian failed to exercise the power. Appellants argue that Montana law does not control the issue because the Minnesota Probate Court decreed that the will. exercised the power, and Montana courts are hound h : 7 this determination. This argument ignores the rule that the intention of the testator in devising an interest in land is controlled by the law of the situs. 16 Am. Jur. 2d, Conflict of Laws § 72 at 114 (2d ed. 1979). Lillian's will does not specifically exercise the power granted under her husband's will. Her will does provide a residuary clause reading: All of the rest, residue and remainder of my estate of every kind and nature, wheresoever situated and whether now owned by me or hereafter acquired by me, I give, devise and bequeath unto THE FIRST NATIONAL RANK OF MINNEAPOLIS . . . as Trustees . . . In many jurisdictions, a will with a general residuary clause does manifest an intent to exercise a power. See Comment, Uniform Probate Code, S 2-610. However, Montana has adopted 5 2-610 from the Uniform Probate Code as S 72-2-518, MCA, which provides the contrary rule: N o implied e x e r c i s e o f power o f appointment. A g e n e r a l r e s i d u a r y c l a u s e i n a w i l l o r a w i l l making g e n e r a l d i s p o s i t i o n of a l l o f t h e t e s t a t o r ' s p r o p e r t y does n o t e x e r c i s e a power o f appointment h e l d by t h e t e s t a t o r u n l e s s s p e c i f i c r e f e r e n c e i s made t o t h e power o r t h e r e i s some o t h e r i n d i c a t i o n o f i n t e n t i o n t o i n c l u d e t h e p r o p e r t y s u b j e c t t o t h e power. The reason f o r r e q u i r i n g a s p e c i f i c e x e r c i s e o f a power i s s t a t e d i n t h e Comment t o 3 2-610, Uniform Probate Code: Although a s u b s t a n t i a l number o f s t a t e s have l e g i s l a t i o n t o t h e e f f e c t t h a t a w i l l w i t h a g e n e r a l r e s i d u a r y c l a u s e does m a n i f e s t an i n t e n t t o e x e r c i s e a power, t h e c o n t r a r y r u l e i s s t a t e d i n t h e p r e s e n t s e c t i o n f o r two reasons: (1) t h i s i s s t i l l t h e m a j o r i t y r u l e i n t h e United S t a t e s , and 2 ) most powers o f appointment a r e c r e a t e d i n m a r i t a l deduction t r u s t s and t h e donor would p r e f e r t o have t h e p r o p e r t y p a s s under h i s t r u s t instrument u n l e s s t h e donee a f f i r m a t i v e l v m a n i f e s t s an i n t e n t t o e x e r c i s e t.he power. The p u b l i c p o l i c y o f t h i s S t a t e t h e r e f o r e r e s o l v e s t h e i s s u e i n f a v o r o f f i n d i n g t h a t T,illian E . Allen d i d n o t e x e r c i s e t h e power o f appointment granted by h e r husband's w i l l . Thus, w e aFfirm. / J u s t i c e s | April 19, 1989 |
71171832-406a-464f-8856-266cb994c611 | KNIGHT v JOHNSON | N/A | 88-612 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA E.H. KNIGHT, Plaintiff and Appellant, -vs-- JAMES H. JOHNSON, JR.; The Office of YELLOWSTONE COUNTY SHERIFF; MIKE SHAFER, Sheriff, and YELLOWSTONE COUNTY, Defendants and Respondents. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable G. Todd Baugh, Judge presiding. COUNSEL OF RECORD: For Appellant: Cate Law Firm; Jerome J. Cate, Billings, Montana For Respondent: Crowley, Haughey, Hanson, Toole & Dietrich; Jon T. Dyre, Billings, ilontana Submitted: March 16, 1989 P l r . Justice Fred J.Weber delivered the Opinion of the Court. This appeal arises from a negligence suit brought by Mr. E.H. Knight against Dr. James H. Johnson. The District Court of the Thirteenth Judicial District granted summary judgment in favor of defendant, an6 plaintiff appeals. We affirm. The issue presented for our review is whether a treating physician has a duty to appear and testify at the trial of a patient, when the treating physician was not served with a subpoena. The plaintiff in this case was injured in a fight at the Seventeen Bar in Billings, Montana. He was treated for injuries by Dr. James H. Johnson. PlaintifS subsequently filed suit against Seventeen Ear and the person who alleged]-y assaulted him. The plaintiff anticipated that Dr. Johnson would testify at that trial regarding plaintiff's injuries. However, Dr. Zohnson was not served with a subpoena and did not appear at the trial. The plaintiff file6 suit against Dr. Johnson on April 13, 1988, alleging that Dr. Zohnson negligently breached a duty to testify on his patient's behalf. Dr. Johnson moved for summary judgment, asserting that a physician has no legal duty to appear at a patient's trial. The District Court granted the motion for summary judgment. The facts which give rise to the suit against Dr. John- son are stated by affidavits from witnesses, and are summa- rizec? as follows. Plaintiff's trial against Seventeen Bar and the defendant involved in plaint-iff's assault charge was set 5or February 17, 1.988. In preparation for trial, Dr. Johnson was deposed by attorneys for the Seventeen Bar on January 30, 1988. Counsel for pl-aintiff was present at that deposition. There was no further contact between plaintiff's counsel and Dr. Johnson until plaintiff's counsel sent a letter dated February 1 0 , 3988 to Dr. Johnson, reminding him of the trial date and of the necessity of his testimony there. The letter stated that Dr. Johnson was scheduled to testify on February 18 at 9:30 a.m. In the letter plain- tiff's counsel also stated that he would subpoena Dr. Johnson because without Dr. Johnson's testimony the case could be dismissed. This letter arrived at Dr. Johnson's office on February 12, 1988. When Dr. Johnson's secretary received the letter from plaintiff's counsel she called his office and left a message that Dr. Johnson was out of town and would not return until February 17. The day before the letter arrived, on February 11, a process server from Yellowstone County came to Dr. Johnson's office with a subpoena. The office was not informed of the purpose 05 the subpoena. Dr. Johnson's secretary informed the server that the doctor was with a patient and would not be available for an hour. The process server then left the office without serving Dr. Johnson. The process server returned on February 12, but was informed that Dr. Johnson had left for a seminar in New Orleans and would not return until the late afternoon of February 17, 1988. Thus Dr. Johnson was never served with the subpoena. The subpoena was not returned to plaintiff's counsel and the Yellowstone County Sheriff's Office did not notify plaintiff's counsel of the failure of service. On the morning of February 18, when Dr. Johnson's testi- mony was scheduled, plaintiff's attorney called Dr. Johnson's office to see if he had left for the trial. He was told at that time that Dr. Johnson was performing myelograms and would not be available to testify. Plaintiff's counsel was also informed at that time that Dr. Johnson had not been serve$ with the subpoena. Plaintiff's counsel testified that "the woman on the phone advised me that Dr. James H. Johnson, Jr. was not going to appear for trial, and that even if he was served with a subpoena, he would not appear and testify on behalf of E.H. Knight." This statement is disputed by defendant. Plaintiff alleges that because Cr. Johnson failed to appear at trial, he was forced to accept a settlement of the case for less than the case deserved. The plaintiff urges that the doctor/patient relationship established a duty on the part of Dr. Johnson to testify at his trial, that Dr. Johnson breached this duty, and that plaintiff was damaged by this breach. On appeal, we are asked to determine whether a physician has a duty to appear and testify at a patient's trial, even thcugh the doctor was never subpoenaed. While Montana has not previously recognized such a duty, Mr. Knight asks this Court to create this fiuty. In considering whether a duty should be created, the i-nitial inquiry is whether there is a need for such duty. As stated by one authority: The statement that there is or is not a duty begs the essential question--whether the plain- tiff 's interests are entitled to legal protection against the defendant's conduct. W. Page Keaton, Prosser and Keaton on Torts, S 53, at p. 357 (5th Ed. 1984). The plaintiff's interest in the present case is the need for a process whereby one may compel favorable witness testi- mony. This need is fulfilled statutorily in Montana through the subpoena process. Compelled attendance and testimony is established pursuant to S 26-2-301, MCA, as follows, A witness served with a subpoena must attend at the time appointed, with any papers under his control required by the subpoena, and answer all pertinent and legal questions and, unless sooner discharged, must remain until the testimony is closed. Additionally, Rule 45 (a) , M. R.Civ.P., provides for compelled attendance and testimony of a witness through the issuance of a subpoena. Rule 45(c) states that service of a subpoena "must be made so as to allow the witness a reason- able time for preparation and t-ravel to the place of atten- dance." The remedy for failure to testify when served with a subpoena is damages through a private cause of action. See, $j 26-2-105, MCA. The subpoena procedure for obtaining witnesses is effi- cient, orderly, and gives consistent and reliable results. Because the need for compelled testimony already has adequate protection, we conclude that there is no persuasive reason to create a duty which would also satisfy this need. Plaintiff cites to Spaulding v. Hussain ( N . J . Super 1988), 551 A.2d 1022, and Green v. Ot-enasek fMd. 1372), 296 A . 2 2 597, in support of his position. However, these cases do not establish the asserted duty and are not dispositive. Research has discLosed no authority supporting plaintiff's position. We prefer to Follow the general. rule that "a condition precedent to an action against a witness for breaching his duty to testify is the issuance of a subpoena." Fletcher v. Bolz (Ohio App. 1987), 520 N.E.2d 22, 25; 81 Am. Jur.2d, Witnesses S 28.5 (1976). We decline to create the duty which plaintiff urges. The District Court correctly held that no duty exists for a physician to testify at the trial of a patient, absent com- pulsory process. We affirm the summary judgment granted by the District Court. We Cmcur: | April 27, 1989 |
e2117967-84ee-4e5f-965c-a51e9f617a09 | MARRIAGE OF DALLEY | N/A | 89-003 | Montana | Montana Supreme Court | No. 89-03 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 IN RE THE MARRIAGE OF CAROL C. DALLEY, Petitioner and Appellant, and MARK F. DALLEY, Respondent and Respondent. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable G. Todd Baugh, Judge presiding. COUNSEL OF RECORD: For Appellant: avids son & Poppler; ori is M. Poppler, ~illings, Montana For Respondent : Cavan, Smith, Grubbs & Cavan; John J. Cavan, ~illings, Montana i ' J , r : i , . Submitted on Briefs: March 31, 1989 r - i . r - ( . I Decided: May 4, 1989 f l c-. t : * - -4 - - - 8 ~ i g d : - CT , * - I , - k- -. >-. - - C ; : . I f 7 Clerk Mr. Justice William E. Hunt, Sr. delivered the Opinion of the Court. Carol Dalley, petitioner, appeals from the denial of her motion to compel satisfaction of judgment by the District Court of the Thirteenth Judicial District, Yellowstone County. We affirm in part and reverse and remand for further proceedings. The following issues are raised on appeal: 1. Whether the District Court erred in finding that respondent did not accept appellant's offer to satisfy the judgment by transferring stock instead of cash. 2. Whether appellant's delivery of stock and cash to respondent tolls the interest on the judgment pending appeal. Parties' marriage was dissolved in April of 1987. On November 10, 1987, the trial court apportioned the marital estate between the parties and ordered appellant, Carol Dalley (wife), to pay respondent, Mark Dalley (husband), a sum of money necessary to pay husband 30% of certain assets within 30 days of judgment. The total amount to be paid to husband was $129,607.40. Wife appealed to this Court and husband cross-appealed under In Re Marriage of Dalley (Mont. 1988), 756 P.2d 1131, 45 St.Rep. 1017. We affirmed the District Court's judgment and denied husband's petition for a rehearing on July 5, 1988. The following facts were derived from the record and the various affidavits of the parties. On July 25, 1988, wife's attorney sent husband's attorney a letter offering stock and a personal check to husband in satisfaction of the judgment. Husband's attorney was out of town when the letter was received by his firm. He returned on August 2, 1988. On that day, husband, with permission of his attorney, spoke with wife's attorney by telephone who asked him if he was aware of the July 25, 1988, letter. He said that he was and that the proposal appeared all right but that he wanted to consult his attorney before agreeing to the proposal. On August 3, 1988, the attorneys discussed the conversation wife's attorney had with husband. On the morning of August 4, 1988, wife signed over 1,668 shares of Amoco stock, with a value of $124,266.00, and executed a personal check for the excess due in the amount of $5,341.40 to husband. Early that afternoon, wife's attorney called husband to confirm the stock substitution. Husband stated that he could not accept the stock offered in satisfaction of the judgment because of the tax consequences associated with it. wife's attorney then delivered the stock to husband's attorney's office late that afternoon despite her earlier conversation with husband. Husband's attorney was not present when delivery was made. After a discovery deposition was heid on August 10, 1988, parties' attorneys discussed the substitution of stock in lieu of cash. Thereafter, husband's attorney consulted a tax attorney on the matter. On August 23, 1988, wife's attorney called husband's attorney and inquired into the status of the property settlement. Husband's attorney stated once again that because of the tax burden accompanying the stock, it would not be accepted in satisfaction of the judgment. Wife's attorney then filed a motion to compel satisfaction of the judgment. The motion was denied on October 26, 1988. The first issue raised on appeal is whether the ~istrict Court erred in finding that respondent did not accept appellant's offer to satisfy the judgment by transferring stock instead of cash. In the ~istrict Court decree of November 10, 1987, it ordered that wife pay: a - - sum of money necessary to pay to husband 30% of the value of [certain] assets . . . the sum of $129,607.40. Deeds, titles, checks and such other documents as may be necessary to accomplish this shall be executed and delivered within thirty days of this order. (Emphasis added.) Wife wished to substitute stock for the money judgment. The actual issue at bar is whether an oral contract existed between husband and wife which authorized the substitution. Under § 28-2-102, MCA, the essential elements of a contract are : (1) identifiable parties capable of contracting; (2) their consent; (3) a lawful objective; (4) sufficient cause or consideration. Here, only element two, consent, is contested. "There can be no binding contract without mutual consent of the parties. " christenson v. ~illings Livestock Com'm Co. (1982), 201 Mont. 207, 210, 653 P.2d 492, 494. Consent must be free, mutual and communicated. Interstate production Credit Ass'n v. Abbott (Mont. 1986), 726 P.2d 824, 826, 43 St.Rep. 1829, 1832. Further, consent is established when there has been an offer and an acceptance of that offer. Modern Machinery v. Flathead County (1982), 202 Mont. 140, 144, 656 P.2d 206, 209. In the instant case, the court ordered wife to pay the sum due, $129,607.40, in money. She offered, instead, to transfer to husband 1,668 shares of Arnoco stock valued at $74.5 per share, totaling $124,266.00, coupled with a $5,341.40 personal check to make up the excess due. On July 25, 1988, wife's attorney sent husband's attorney the following letter: On behalf of Carol Dalley, we will deliver to you on August 5, 1988, 1,668 Amoco shares valued at 74.5 per the valuation fixed in the decree. In addition we will submit a check for the difference in the amount of $5,341.40 payable to your firm and Mark Dalley. Wife argued that the letter effectuated a valid offer. Husband disagreed contending that the letter was not an offer but merely a notification of something wife intended to do in the future. We disagree. An offer is: The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. Restatement (Second) of Contracts, 5 24 (1979). wife's attorney's letter of July 25, 1988, clearly constitutes an offer. Wife communicated her proposal and husband understood it as evidenced by his statement on August 2, 1988, that the offer appeared all right but that he needed to consult his attorney first. However, the offer must be accepted before a contract is formed. In ~uchinski v. Security Gen. Ins. Co. (19631, 141 Mont. 515, 519, 380 P.2d 889, 891, we stated that in order to effectuate a contract, there must not only be a valid offer by one party but also an unconditional acceptance, according to its terms, by the other. -- See also, Beale v. ~ingquist (1932), 92 Mont. 480, 488, 15 P.2d 927, 930. Wife claims that husband telephoned wife's attorney on August 2, 1988, and unequivocally accepted the offer on the condition that the $5,341.40 check be paid to him alone and not his attorney. She states that this conditional acceptance was confirmed the next day with husband's attorney. Wife argues that she not only met the condition but then relied on it as an acceptance and transferred the stock certificates into husband's name the morning of August 4, 1988. She further claims that it was not until August 23, 1988, that husband rejected the stock and that the rejection came too late since the oral contract was formed on August 2, 1988. Section 28-2-503(2), MCA, provides: A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it, so far as the facts are known or ought to be known to the person accepting. (~mphasis added.) Here, husband asserts that his August 2, 1988, telephone conversation with wife's attorney was not an acceptance because he clearly stated that although the offer appeared all right, he would first have to consult with his attorney on the matter. Husband did so consult his attorney. At that point, it is clear that husband was merely considering the offer and made no acceptance. In Chadwick v. ~iberson (1980), 190 Mont. 88, 92, 618 P.2d 1213, 1215, we held that, "It is a well-established rule that there must be mutual assent or a meeting of the minds on all essential elements or terms to form a binding contract." Here, husband did not intend to accept the offer on August 2, 1988, because he conditioned the acceptance pending consultation with his attorney. Thus, the contract of August 2, 1988 lacked mutual assent. Prior to delivery of the stock, husband was informed that although there would be no tax liability associated with the transfer of stock from wife to husband, there would be a serious tax liability should husband then sell the stock. The tax burden made the purported value of the stock much lower than he originally expected. On the morning of August 4, 1988, wife's attorney telephoned husband and he told her that he absolutely could not accept the stock that was offered in satisfaction of the judgment because of the tax burden. Further, although wife's letter stated that the stock would be delivered on August 5, 1988, she delivered it in the late afternoon of August 4, 1988, despite her earlier conversation with husband. The stocks were received by a partner of husband's attorney as he was not in the office at that time. On August 10, 1988, husband's attorney participated in a discovery deposition at which wife's attorney was a witness. Afterwards, parties' attorneys once again discussed whether stock would be sufficient to satisfy the judgment. Shortly thereafter, husband's attorney consulted a tax attorney who warned him of the liability problems upon transfer. On August 23, 1988, wife's attorney telephoned husband's attorney regarding the status of the property distribution. She was again told that the stocks would not be accepted to satisfy the money judgment. There is substantial evidence to support the District Court's finding that there was no meeting of the minds on August 2, 1988, or any other date, and thus, no oral agreement by husband to accept stocks in satisfaction of the judgment. See, Diede v. Davis (1983), 203 Mont. 205, 212, 661 P.2d 838, 841. Where the existence of an oral contract is contested and the evidence is conflicting, the existence of the contract is a question for the trier of fact. Como v. Rhines (1982), 198 Mont. 279, 284, 645 ~ . 2 d 948, 950-51. -- See also, Keil v. lacier Park, Inc. (19801, 188 Mont. 455, 460, 614 P.2d 502, 505. The District Court properly considered the evidence and found that no contract existed. The second issue raised on appeal is whether wife's delivery of stock and cash to respondent on August 4, 1988, tolls the interest on the judgment pending appeal. The ~istrict Court's order of October 26, 1988, reads: Since Mr. Dalley did have some culpability in the transaction, Mrs. Dalley might be entitled to a cancellation of interest on the judgment from the date the stock was tendered through the date of this order. Wife argues that since husband is still in possession of the stock that he should not be able to collect any post-judgment interest after August of 1988. However, wife delivered the stock, never demanded it back, and never made any attempt to recover it. Husband has received no dividends or other benefits from holding the stock. We find no merit in this contention as husband was not culpable. The parties were granted a stay of execution of judgment pending appeal. The stay does not affect interest due. In Knudson v. Knudson (Mont. 1981), 622 P.2d 1025, 1026-27, 38 St.Rep. 154, 156-57, where the husband, in a dissolution action, moved the court for a stay of execution, we held that interest was to be awarded from the date of judgment in the divorce action despite the existence of the stay of execution. Hence, the stay of execution has no effect on interest due in the present case. Further, Rule 31, M.R.App.P., provides in part: If a judgment for money in a civil case is affirmed, whatever interest is allowed by law shall be payable from the date the judgment was rendered or made in the district court. In Re Marriage of ~ibson (1983), 206 Mont. 460, 671 P.2d 629, states that interest accrues at the statutory rate from the date on which payment is due--in the present case, the date of judgment--until the date on which payment is made. Under 5 25-9-205(1), MCA, the statutory interest rate is 10% per annum payable on judgments recovered in Montana. The rate must not be compounded. Therefore, wife is to pay husband $124,266.00, the amount due and owing, in money or a manner acceptable to husband. Interest on that amount is to be calculated from November 10, 1987, the date of judgment, to the date wife pays the sum owed. Interest is to be paid in accordance with § 25-9-205 ( I ) , MCA. Affirmed in part and reversed apd remanded for further proceedings in accordance with thi We Concur: . , I N THE SUPREME COURT OF THE STATE OF MONTANA c;rj ?% C- No. 89-003 0, 9 AT; 3 2 * 0 : -v- g 'c, . I N RE T H E MARRIAGE OF U - - < J CAROL C . DALLEY, ~4 - P / P e t i t i o n e r and Appellant, rr 1 ; , . "c 4 '.- . and 1 , , 3, O R D E R c;_ MARK F. DALLEY, Respondent. The opinion i n t h i s cause was f i l e d w i t h t h e Clerk o f t h i s Court on May 4 , 1989. It h a s come t o t h e C o u r t ' s a t t e n - t i o n t h a t c e r t a i n e r r o r s appear i n t h e f i r s t f u l l paragraph on page 9, t h e l a s t page o f t h e s l i p opinion. I T IS ORDERED: 1. That t h e f i r s t f u l l paragraph on page 9 of t h e s l i p opinion i s s u e d May 4 , 1989, i s r e v i s e d t o r e a d a s follows: Therefore, wife i s t o pay husband $129,607.40, t h e amount due and owing. I n t e r e s t on t h a t amount is t o be c a l c u l a t e d from November 10, 1987, t h e d a t e o f judgment, t o t h e d a t e o f t h i s o r d e r . I n t e r e s t i s t o be p a i d i n accordance w i t h 5 25-9-205 ( I ) , MCA. 2. That t h e Clerk s h a l l provide c o p i e s o f t h i s o r d e r t o counsel f o r t h e p a r t i e s , t h e D i s t r i c t Court o f t h e T h i r t e e n t h J u d i c i a l District, t h e S t a t e Reporter, and West Publishing Company. m DATED t h i s @/day of May, 1989. | May 4, 1989 |
75e73ae2-d1e3-4c83-ae55-d001e3a16d67 | STATE v RANDALL | N/A | 88-480 | Montana | Montana Supreme Court | NO. 8 8 - 4 8 0 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 STATE OF MONTANA, p l a i n t i f f and R e s p o n d e n t , -vs- BLAKE ALFRED RANDALL, D e f e n d a n t and A p p e l l a n t . APPEAL FROM: D i s t r i c t C o u r t of t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of M i n e r a l , T h e H o n o r a b l e Jack L. G r e e n , Judge presiding. COUNSEL O F RECORD: For A p p e l l a n t : J. D i r k B e c c a r i , p u b l i c D e f e n d e r , is sou la, M o n t a n a For R e s p o n d e n t : H o n . M a r c ~ a c i c o t , A t t o r n e y G e n e r a l , H e l e n a , M o n t a n a R o b e r t F.W. S m i t h , A s s t . A t t y . G e n e r a l , H e l e n a M. Shaun D o n o v a n , C o u n t y A t t o r n e y , superior, M o n t a n a S u b m i t t e d on B r i e f s : M a r c h 1 6 , 1 9 8 9 ~ e c i d e d : M a y 4 , 1 9 8 9 Mr. Justice William E. Hunt, Sr. delivered the opinion of the Court. A jury empaneled in the District Court of the Fourth Judicial District, Mineral County, found Blake A. Randall, the defendant, guilty under § 45-5-401 and § 45-2-302, MCA, for the offense of accountability for robbery. ind ding no legal cause why judgment should not be pronounced against the defendant, the District Court sentenced him to the Montana State Prison for a term of 15 years with three suspended. Defendant appeals. We affirm. The issue raised on appeal is whether the District Court erred in admitting evidence of other acts by the defendant. On September 17, 1987, the defendant, Blake Randall, and his three companions, Robert ~avis, ~ntonio Alvernaz, and Megan Carder, were traveling in defendant's vehicle from the vicinity of Seattle, Washington, en route to Missoula, Montana. At approximately 3:00 p.m. on that date they arrived in Alberton, Montana, pulled into the River's Edge Motel, and the driver of the vehicle proceeded to pump approximately $25 worth of gasoline into the vehicle. The driver was joined by a second man who accompanied him into the motel-gas station office. These two men were later identified as Davis and Alvernaz. One of the men had a gun and forced Steven Stahl, the. motel owner, to lie on the office floor. The two men took approximately $200 from the cash register and Stahl's wallet, several quarts of motor oil, and a portable radio-cassette tape player. Davis and Alvernaz returned to the vehicle. Defendant then drove the vehicle through Alberton to the Nine Mile House, a local bar, restaurant, and grocery, where Alvernaz purchased approximately $35 worth of beer and cigarettes. After Alvernaz returned to the vehicle with the items, defendant continued to drive east toward Missoula. Approximately 10 miles outside of Missoula, the four were apprehended by the Missoula County Sheriff's Department for the robbery of the River's Edge Motel. A subsequent search of the vehicle revealed a gun, Stahl's credit cards and driver's license, oil bottles and a radio-cassette player. On October 7, 1987, an information was filed charging defendant with the offense of accountability for robbery in violation of § 45-5-401 and S 45-2-302, MCA. On February 10, 1988, the State filed notice of intent to introduce evidence of other acts. Specifically, the State sought to introduce evidence of the robberies of Popular Food and Gas in Snohomish, washington, on September 14, 1987, and of Y-E-Z Market in penshastin, ~ashington, on September 15, 1987. On February 22, 1988, the District Court held a hearing on the other acts evidence in which it ruled that evidence of the September 14, 1987, ~nohomish robbery was excluded because it did not qualify under State v. Just (1979), 184 Mont. 262, 602 P.2d 957, and that the evidence concerning the September 15, 1987, ~enshastin robbery was admissible because defendant admitted involvement in the offense. A jury trial held in February, 1988, ended in a mistrial. A second trial was held on March 22, 1988, and the jury returned a verdict of guilty to the offense of accountability to robbery on March 23, 1988. The defendant was sentenced to the Montana State prison for 15 years with three suspended. Defendant appeals. The issue raised on appeal is whether the District Court erred in admitting evidence of other acts by the defendant. The State sought to introduce defendant's other acts in order to support its proof on the issue of defendant's intent, state of mind, and to prove that defendant's acts were consistent with a common scheme, plan or system. Defendant contends that admission of a prior act, the September 15, 1987, Penshastin robbery, was in violation of the protections afforded to him by Rule 404(b), M.R.~vid., and that the prior act failed to meet the requirements for admission set forth in Just, 602 P.2d at 961. Rule 404 (b) , M. R.~vid. provides: Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident. The rule must be strictly enforced, except where clearly justified, and exceptions to the rule must be carefully limited. Just, 602 P.2d at 962, citing State v. ~iedemann (1961), 139 Mont. 237, 242-43, 362 P.2d 529, 531. Circumstances constituting admission of prior acts lies in the discretion of the trial judge, providing that "the probative value outweighs the prejudicial." State v. Matson (Mont. 1987), 736 P.2d 971, 976, 44 St.Rep. 874, 880. Evidence is strictly inadmissible for the purpose of showing the commission of that particular offense. Just, 602 P.2d at 960, citing State v. Taylor (1973), 163 Mont. 106, 120, 515 P.2d 695, 704. Just, 602 P.2d at 961, provided a four element test which determined the admissibility of other acts when a common scheme, plan or system was demonstrated. The test, based on State v. Jensen (1969), 153 Mont. 233, 455 P.2d 631, and Rule 403, M.R.Evid., is set forth as follows: 1. The similarity of crimes or acts; 2. nearness in time; and 3. tendency to establish a common scheme, plan or system; and 4. the probative value of the evidence is not substantially outweighed by the prejudice to the defendant. ~pplying these elements to the facts of the case at bar, we hold that the evidence of defendant's actions in the Penshastin robbery were properly admitted. Defendant argues that because insufficient similarities existed between the Alberton robbery and the Penshastin robbery, the acts are inadmissible evidence. We disagree. Both incidents occurred within three days of one another; the identical participants were involved; defendant's vehicle was utilized; and both incidents involved robbing store clerks at gunpoint. The incidents need not be identical in order to introduce the prior incident as a similar act as long as there is "sufficient similarity" to sustain the admission of the prior act. State v. Tecca (1986), 220 Mont. 168, 172, 714 P.2d 136, 138. As noted in State v. Hansen (1980), 187 Mont. 91, 95, 608 P.2d 1083, 1085, when "applying the exception each case must rest upon its own circumstances." Here, the circumstances were sufficiently similar to warrant admission of the other act. Defendant further argued that since he was not charged with the Penshastin robbery, the District Court abused its discretion when it admitted evidence of the incident. However, on September 23, 1987, defendant was interviewed by the Mineral County Sheriff's Department concerning the Alberton robbery and he admitted helping ~ a v i s and Alvernaz commit the robbery in Penshastin, washington, by driving the getaway car. Throughout the interview he described the similarities in the robberies as well. In Just, 602 P.2d at 963, we held that the burden of proof as to the other acts need not rise to the level required in a criminal prosecution for similar acts. It must be noted that the State contends that by the time of the second trial, authorities in Chelan County (Penshastin), Washington, had filed charges against defendant for aiding and abetting robbery in the first degree. The evidence of defendant's participation in the Penshastin robbery is similar and is admissible whether or not defendant was actually charged with the offense. While we continue to decline to establish an arbitrary time limit for admitting prior acts evidence as provided in Tecca, 714 P.2d at 139, the element of nearness in time in this case was satisfied since the robbery of the Penshastin convenience store occurred three days prior to the Alberton robbery. In State v. Hall (Mont. 1988), 761 P.2d 1283, 45 St.Rep. 1726, we held that six months was sufficient to satisfy the element and in State v. ~ e i n e (1976), 169 Mont. 25, 544 P.2d 1212, we held that three years was sufficient. Third, in order for the similar act to be admissible, a common scheme, plan or system had to be established. In Just, 602 P.2d at 961, we provided that prior acts are those that have a similarity of inherent probability and a plan to carry out a scheme evidenced by defendant's course of conduct. In this case, defendant and his companions began a three-state trip with little or no money. They robbed a convenience store in Penshastin, Washington, to fund the excursion and, when the cash ran out, robbed the River's Edge Motel in Alberton, Montana. In both instances, a black male threatened a store clerk with a gun and a white male, accompanied him. In both instances, defendant admittedly drove the getaway car. Each participant, had a specific duty to perform during both robberies. • his establishes a modus operandi. The evidence of the former robbery was properly admitted because it was consistent with the proposition of a common scheme or plan by defendant and his companions to fund their travels by committing robberies. Last, the probative value of the Penshastin robbery must not be outweighed by prejudice to defendant. This is the most difficult of the Just elements to apply. Evidence of other acts invariably will result in prejudice to the defendant to a certain degree and, thus, the probative value must substantially outweigh the prejudice. Just, 602 P.2d at 961. But, "the probative value of the evidence is determined from the remaining Just, factors." State v. Keefe (Mont. 1988), 759 P.2d 128, 135, 45 St.Rep. 1034, 1042. In the instant case, there was little direct evidence to contradict defendant's story that he was an unwilling and unknowing participant who was awakened after the robbery and told to drive the vehicle. Other acts evidence was crucial as it tended to show that defendant actively and knowingly participated in the Alberton robbery. The State effectively established the first three elements, therefore, establishing the probative value element. The four Just elements must be considered as a whole, State v. T.W. (1986), 220 Mont. 280, 284, 715 P.2d 428, 430, and failure of any one factor will not necessarily negate admission of the evidence. Hall, 761 P.2d at 1285. See also, State v. Clausen (Mont. 1987), 740 P.2d 679, 44 St.Rep. 1308. The rationale behind Rule 404(b), M.R.Evid., is that proof of other offenses would subject defendant to surprise and to a defense of collateral or unrelated matters. Just, 601 P.2d at 960, citing Jensen, 455 P.2d at 633-34. Hence, if the State is going to introduce evidence of other acts under Just, defendant is afforded three procedural protections. In State v. Doll (1985), 214 Mont. 390, 395, 692 P.2d 473, 475-76, three procedural guidelines were set forth: (1) notice to the defendant prior to trial that evidence of other crimes, wrongs or acts will be introduced; (2) an admonition by the judge to the jury when the evidence is introduced that it is admitted solely for one or more of the accepted purposes stated in Rule 404(b); and ( 3 ) a cautionary jury instruction to the same effect, providing in unequivocal terms that the evidence is admitted for the purpose earlier stated and not to try and convict the defendant for prior wrongful conduct. Citing Just, 602 P.2d at 963-64. -- See also, - Hall, 761 P.2d at 1284-85. In this case, the State, on February 10, 1988, properly filed notice of intent to introduce evidence of the Penshastin robbery in accordance with guideline number one. The District Court properly admonished the jury in accordance with guideline number two by stating: NOW, ladies and gentlemen, the State has just offered evidence that the defendant at another time engaged in other crimes, wrongs, or acts. That evidence was not admitted to prove the character of the defendant in order to show he acted in conformity therewith. The only purpose of admitting that evidence was to show plan, knowledge, or absence of mistake or accident. You may not use that evidence for any other purpose. A similar jury instruction satisfied the third guideline. In applying its discretion, the ~istrict Court is obligated to carefully balance the relative probative value of the Penshastin robbery against the prejudice inherent in the evidence and the actual need to introduce the evidence. Just, 602 P.2d at 960-61. citing State v. skinner (19731, 163 Mont. 58, 64, 515 P.2d 81, 84; State v. Frates (1972), 160 Mont. 4 3 1 , 4 3 7 , 5 0 3 P.2d 4 7 , 5 0 . W e hold that the District Court properly used its discretion. We hold that no abuse of discretion by the District Court has occurred. The penshastin robbery was properly admitted as an exception under Rule 404 (b) , M.R.Ev~~. , since the Just elements were established. Defendant was properly afforded the three procedural safeguards as required. Affirmed. We Concur: | May 4, 1989 |
503589de-081d-424a-8334-a9b3d028c5a3 | NEW CLUB CARLIN INC v CITY OF B | N/A | 88-269 | Montana | Montana Supreme Court | NO. 88-269 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 THE NEW CLUB CARLIN, INC., d/b/a BIG DADDY'S, JOHN C. ALGUIRE, and TERRY L. MC KAY, individually and as partners transacting business under the name and style of BIG DADDY'S, a Montana partnership, Plaintiffs and Appellants, THE CITY OF BILLINGS, a Municipal Corporation organized and existing pursuant to the laws of the State of M o n t a n a , : . A ALLAN TANDY, its Administrator, EUGENE KISER, its Chief y C? ti3 of Police, THE CITY OF BILLINGS POLICE DEPARTMENT, and T H E ; , , , nr, CITY PROSECUTOR'S OFFICE, an administrative subdivision oe:.-: -;I . - Z' the Municipal Corporation, r , w 'ri 0 --3 7 Defendants and Respondents. .- 0 --. APPEAL FROM: District Court of the Thirteenth Judicial ~i@;ice In and for the County of Yellowstone, -7- -" -4 The Honorable G. Todd Baugh, Judge presiding. COUNSEL OF RECORD: For Appellant: Robert I , . Stephens, Jr., Stephens Law ~ i r m ; ~ill.ings, MT For Respondent: David M. Rusoff, City Attorney, Billings, MT Filed: Submitted: November 15, 1988 0 Decided: April 27, 1989 Mr. Justice John C. Sheehy delivered the opinion of the Court. In November and December, 1987, employees of Big Daddy's bar were arrested for criminal violation of Billings city ordinance prohibiting nude dancing in establishments selling alcoholic beverages. The owners of the bar filed a complaint in January, 1988 requesting a preliminary injunction, declaratory judgment and damages. A hearing was conducted in the ~istrict Court, Thirteenth Judicial District, Yellowstone County on January 26, 1988. The District Court issued an order denying the injunction on February 26, 1988. ~ i g Daddy's filed a motion for reconsideration which was denied. his appeal followed. This Court set the cause for oral argument and heard the case on November 15, 1988. We affirm. The issue is whether the District Court erred when it denied the appellant's request for a preliminary injunction. On November 6, 1987, Billings police officers arrested a barmaid and a male dancer for exposing their anal clefts in violation of ~illings City Code § 3-304. A female dancer was also arrested for failure to remain on the platform while performing in violation of ~illings City Code S 3-301. The assistant manager was also arrested for allowing the dancers and the barmaid to appear with their anal clefts exposed in violation of S 3-304(d). On December 4, 1987 a female dancer was arrested for exposing her anal cleft and the acting manager was arrested for allowing the exposure. On December 17, 1987 the defendants in the city court actions filed a motion to dismiss based on the ordinance's unconstitutionality. The City Prosecutor and defense counsel stipulated to the facts. A briefing schedule was established by the city court. Upon failure to submit a brief, the defendants' motion was denied and they were found guilty on the stipulated facts. The New Club Carlin, Inc. d/b/a ~ i g Daddy's filed a complaint against the City of Billings requesting a preliminary injunction. The defendants in the city court action, rimh held Corley Knowles, Paul Dey, Robin Dey, Heidi Sue Sanderson, Melissa Keller and Jimmy Lee Laedeke, are not parties to the present case at bar. Did the District Court err when it denied the appellant's request for preliminary injunction? Montana law governing the issuance of a preliminary injunction is found at S 27-19-101, et. seq. M.C.A. Two sections of this law are particularly applicable to this case. The first, S 27-19-103(4), MCA, states: An injunction cannot be granted to prevent the execution of a public statute by officers of the law for the public benefit. This seems to resolve the situation. However, 5 27-19-201 (2) and (3), MCA, states: An injunction order may be granted (2) when it shall appear that the commission or continuance of some act during the litigation would produce a great or irreparable injury to the applicant; (3) when it shall appear during the litigation that the adverse party is doing or threatens or is about to do or is procuring or suffering to be done some act in violation of the applicant's rights. . . . To overcome the Montana statute S 27-19-103(4), MCA, and well-settled case l a r ~ that an injunction cannot be granted to prevent the execution of a public statute for the public benefit, Big Daddy's must show irreparable injury or a violation of constitutional rights. State ex rel. Freebourn v. ~istrict Court (1929), 85 Mont 439, 279 P. 234; 2 AmJur.2nd ~njunctions S 243. Big Daddy's asserts that the Billings ordinance is a violation of the ~ i r s t Amendment of the U.S. constitution and ~rticle 11, Sec. 7 of the Montana constitution both providing the right to free speech. Big Daddy's also claims irreparable damage in that it suffered business losses as a result of the enforcement of the ordinance against its employees. The ~istrict Court held that money damages are not considered to be irreparable harm because recovery of money damages is available in an action at law without resort to equity, citing Boyer v. ~aragacin (1978), 178 Mont. 26, 31, 582 P.2d 1173, 1177; State ex rel. Keast v. ~ r i e g (1965), 145 Mont. 521, 402 P.2d 405. We agree. Whether or not the ordinance is a violation of constitutional rights is not properly before this Court. It was not Big Daddy's, the corporation, which was directly effected by the enforcement of the ordinance. Those persons actually arrested and prosecuted for violation of the ordinance are the real parties in interest, Rule 1.7(a), M.R.Civ.P. Rule 17 (a), the real party in interest rule, mandates that "Every action shall be prosecuted in the name of the real party in interest." Big Daddy's interest in the enforcement of ordinances against its employees is monetary, not constitutional. It is the employees who were criminally prosecuted here and they are not parties to this action for injunction. The proper procedure for review on constitutional grounds of the city court action against the employees of Big Daddy's would have been a review of the city court's judgments of guilty in the ~istrict Court followed by an appeal to this Court. This was not done and those employees have let their right to appeal lapse. The judgments against them have become final. Affirmed. Justice We Concur: | April 27, 1989 |
14415ea9-7ca1-43d2-aa8c-8bec021285a5 | HOLMAN v HANSEN | N/A | 88-287 | Montana | Montana Supreme Court | IN THE SIJPREME COURT OF THE STATE OF MONTANA RALPH M. HOLMAN, Plaintiff and Appellant., -vs- GEORGE G. HANSEN, MARGARET E. HAP?SEN, RITA M. TURIJEY, GEORGIA L. HANSEN, CHRIS M. HANSEN, T 7 I C G. HANSEN and MICHAEL J. HANSEN, Defend-ants, Respondents and Cross-- Appellants. APPEAL FROM: District Court of the Sixth Judicial District, In and for the County of Sweet Grass, The Honorable Byron I,. Robh, Judge presiding. COUNSEL OF RECORD: For Appellant: Richard F. Cebull; Anderson, Brown, Gerbase, Cebull, Fulton, Harman & Ross, Billings, Montana For Respondent: John T. Jones; Moulton, Rellingham, Jmngo & Mather, L-Billjngs , Montana . - 8 ii3 . c ,=> 1 - r-, 1 3 I ----- - " I - * - t .- . . 1 : r : i - Submitted on Briefs: April 6, 1989 - - " - --- - L L I j . Decided: April 27, 1989 C .. .'Z* -$ 0 Filed: 1; w :- "> i r Mr. Justice R. C. McDo~ough delivered the opinion of the Court. This appeal involves a contract for deed to ranch property located near Big Timber, Montana. Plaintiff Ralph M. Holman (Holman), the buyer under the contract, appeals from the order of the District Court of the Sixth Judicial ~istrict, Sweet Grass County, granting summary judgment i n favor of the sellers, George G. Fansen, et al. (Hansens!. The order held Holman's claims to be barred, and granted one of the two alternative remedies sought bv Hansens. The court ordered that Holman would forfeit all payments made un2er the contract, and Hansens w o u I . c l retake possession of the premises, less a 40-acre tract described below. The court denied Iqansens' request for payment in full of t h e halance of the contract price. We affirm. Holman presents two issues on appeal: 1. Whether the District Court improperly usurped Holman's right to a jury trial by resolving questions of fact in its grant of summary judgment to Hansens? 2. Did the District Court err in granting Hansens' motion for summary judgment on the grounds that Folman's claim is barred by the applicable statute of limitations, waiver, estoppel and contract terms? Hansens present one additional issue on cross-appeal: Whether the trial court erred in ruling that Hansens could not elect the remedy of specific performance and obtain a judgment for the accelerated balance of the contract for deed, and that Hansens' sole remedy was repossession of +he ranch property and retention of the payments made by Holman. The contract for deed at issue is dated January 1, 1982. The subject of the contract is approximately 2,800 acres of deeded land and assignment of a leasehold interest in another 1,120 acres. The purchase price is $950,000.00, paid with a $200,000.00 down payment and 20 annual installments of $88,132.76. The contract also provides that upon payment of $500,000.00 in principal and interest, Holman receives title to a 40-acre parcel within the ranch where a house and other improvements are to be built for Holman. After execution of the contract, Holman took possession of the property, which he still retains. After the 19PO installment was made, more than $500,000.00 in principal an? interest had been paid on the contract, and Holman received the deed to the 40-acre parcel. Holman failed to pay the 1987 installment. Pursuant to contract terms, Hansens sent Holman a ~otice of Default, which gave him 40 days to pay the 1987 j-nstallment in full. Holman did not make the payment. Hansens +hen elected under the contract to accelerate the entire balance due, and sent a ~ o t i c e of Acceleration to Ho lman . The notice gave Holman 90 days to pay all outstanding principal and interest under the contract. Holman did not do this, and filed suit against FTansens on January 30, 1987. Holman's complaint alleged fraud, breach of warranty, breach of the implied covenant of good faith and fair dealing, failure of consideration and breach of four separate contracts to make improvements on the property. Holman sought rescission, or in the alternative, reformation of the contract for deed, general an6 punitive damag~s for fraud, contract damages, costs and attorney's fees. Holman's claims of fraud stem from his alleged intention to use the ranch property to pursue an outfitting business. While Holman's primary profession was the operation of an iron and steel business, he had been licensed as an outfitter i n Montana since IPS7. Accnrdjnq to Holman, he was contemplating the sale of his business in order to "retire" to the ranch to work full-time as an outfitter. George Hansen was Holman's main contact with the sellers. It Was George Hansen who showed the ranch to Holman. According to the Complaint, George Eansen made misrepresentations to Holman by claiming that, among other things, an abundance of game and fish inhabited the property, only one smal-1 patch of noxious weeds was to be found on the entire ranch, 250 to 300 cow/calf pairs could he grazed on the land in season, and Hansen himself had paid ~600,000.00 for the property approximately ten years earlier. According to Bolman, these statements were false, Hansen knew they were false, an2 Holman relied on them in deciding to purchase the property. Jn their answer, Hansens asserted a counter-claim alleging two counts: (I) Holman was in default on the contract for deed, which entitled Hansens to judgment for the entire balance of the purchase price, or in the alternative awarding forfeiture of all payments made and repossession of the property; and (2) the location of Folman's 40-acre parcel rendere?. much of the ranch unusable by inhibiting access to it, therefore Holman's warranty deed to the 40 acres should be declared void and quiet title granted to Hansens. Hansens later moved for summary judgment. By its order of February 29, 1988, the ~istrict Court granted summary judgment, but permitted Holman to retain the 40-acre parcel together with an easement for access over existing roads. The court requested briefs detailing Hansens' claim to the balance of the purchase price as opposed to forfeiture anc' repossession as provided for in the contract.. By its Order of April 6, 1988, the court denied Hansens' request for the contract balance and instead awarded forfeiture and repossession. This appeal followed. I. Holman's Appeal Holman's arguments on appeal center on the District Court's holding that his fraud-based claims are barred by the applicable statute of limitations. The statute of limitations for fraud is found at § 27-2-203, MCA: The period prescribed for the commencement of an action for relief on the ground of fraud or mistake is within 2 years, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake. ~ccording to Holman, he did not discover the facts constituting George Hansen' s fraud until 1985, 1-ess than two years before the complaint was ' i l e d . The party asserting fraud is put on inquiry notice of the other part.yls misdeeds, and must exercise ordinary d-iligence to di-scover the facts constituting the fraud. Yellowst.one Conference of United ~ethodist Church v. D.A. Davidson (Knnt.. ?987), 741 P.2d 794, 44 St.Rep. 1528; Gregory v. city of Forsyth (1980), 187 Mont. 132, 609 P.2d 248. Mere ignorance of the facts will not suffice to toll the statute of limitations. "He must show that the acts of fraud were committed under such circumstances that he would not be presumed to have knowledge of them, it being the rule that if he has 'notice or information of circumstances which would put him on inquiry which if followed would lead to knowledge, or that the facts were presurnptj.vel y within his knowledge, he will be fleemed to have actual knowledge of the facts. ' " Mobley v. Hall (1983), 202 Mont. 237, 232, 657 P.2d 604, 607 (quoting Kerrigan v. O'Meara (1924), 71 Mont. 1,8, 237 P. 819, 8321. As stated in Holman's brief to t - . h i s Court, "The gravamen of Mr. Holman's compl-aint is that Hansen engaged in a continuing fraudulent concealment of facts that disallowed Mr. Holman from truly ascertaining the extent of the fraud. " Holman thus relies on the doctrine of fraudulent concealment to toll the statute until 1985. Holman cites our definition of fraudulent concealment from E.W. v. D.C.H. (Mont. 1988), 754 P.2d 817, 821, 45 St.Rep. 778, 783: "Fraudulent concealment has been described as the employment of artifice, planned to prevent inquiry or escape investigation, and mislead or hinder acquisition of information disclosing a right of action. " (quoting Monroe v. Harper (1974), 164 Mont. 23, 28, 518 P.2d 788, 790). We have previously held that in the context of non-malpractice negligence actions, invoking fraudulent concealment requires a showing of affirmative conduct by the defendant calculated to obscure the existence of the cause of action. Yellowstone, 741 P.2d at 798. Given our previous discussions of fraud, this rule applies with equal force to the case at hand. Holman first contends that the District Court "usurped" his right to a jury trial by resolving questions of fact in order to grant summary judgment. According to Hol-man , numerous issues of material fact existed as to when he knew, or should have known, that Hansen defrauded him. He cites 5 28-2-404, MCA; and Jenkins v. Hillard (1382), 199 Mont. 1, 647 P.2d 354, for the proposition that actual fraud is always a question of fact. While this is a correct statement of the law which would apply to the merits of this case, it sidesteps the threshold barrier of the statute of limitations. Under 5 27-2-203, MCA, whether there has been a "discovery" of facts sufficient to start the running of the statute of 1imi.tat.j.ons i,s a question of law. Mobley, 657 P.2d at 607. Holman's fraud! claims were held to be barred under the statute of limitations because he discovered, or should have discovered by the use of his senses, the facts constituting the alleged Fraud more than two years prior to the filing of this suit. This was a question of law. The court did not "usurp" Holman's right to a jury trial. Holman's second argument asserts that Hansens are estopped from raising the statute of limitations as a defense hecause of George Hansen' s acts of fraudulent concealment. He relies on Reneco v. Cantrell (1977), 174 Mont. 130, 568 P.?d 1225, which he asserts is factually similar to this case. In Keneco, the plaintiff and the defendant were president and vice president., respectively, of a small corporation. The two men held all of the corporation's stock. The plaintiff had been responsible for labor management and day-to-day operations, while the defendant had been responsible for bookkeeping an6 "business phases" of the corporation. A disagreement arose as to the distribution of several issuances of corporate stock. The plaintiff confronted the defendant with his belief that he was not receiving his fair share of the stock. The defendant replied by assuring the plaintiff that it was a bookkeeping matter, the defendant knew what he was doing and things would be straightened out; i.e., the defendant would "make things right." We concluded that the defendant's assurances had lulled the plaintiff into a false sense of security, which had led to his failure to initiate suit before the statute of limitations had run. We held that the plainti f f had established the necessary elements of estoppel to prevent the defendant from raising the statute of limitations as a defense. The plaintiff relied on the defendant's assurances (and presumably his superior bookkeeping knowledge? to his detriment. Holman argues that he was likewise assured by George Hansen that the problems he comp1-ained of cfould be made right. Holman argues that Hansen concealed defects in the premises through these assurances, and lulled Holman into an equally false sense of security. However, necessary elements of estoppel we found present in Keneco are not present in this case. In Keneco, we held that there had been conduct amounting to representation or concealment of material facts, and that the truth concerning these facts was unknown to the party claiming the henefit of the estoppel. In this case, Folman either knew or should have known the truth about the defects at issue here. In fact, the alleged assurances made by Hansen came in response to Holman's complaints about the defects. Holman's deposition testimony shows that by 1 9 8 4 , he had uncovered "a whole barrelful of problems just about any place you looked." He had sufficient information about any alleged misrepresentations made by George Hansen during their negotiations to have stated to Hansen in 1 9 8 4 that the ranch did not have "10 percent of the assets you claimed it had. " Holman testified, and his counsel now argues, that George Hansen's fraud was not "fully ascertainable" until the spring of 1 9 8 5 . While this argument places Holman's fraud claims neatly within the statute of 1-imitations, it does not mesh with the law set out above. Holman admitted that the alleged misrepresentations were "in part ascertainable" prior to 1 9 8 5 . His deposition indicates that some were apparent as early as 1 9 8 3 . Holman has been licensed in Montana as an outfitter since 1957, and has owned other property in the Big Timber area for a number of years. His testimony shows his skill- and experience in matters such as discerning the presence of game, the growth of noxious weeds and the average price of local real estate. Under the rules from the Yellowstone and Moblev cases, Holman was on inquiry notice, and was required h to exercise ordinary diligence to discover the facts constituting the fraud alleged here. Hal-man noticed problems before 1985 and did in fact investigate them. He is therefore "deemed to have actual knowledge of the facts" under Mobley, and is unable to establish the elements of estoppel. Furthermore, Holman has failed to establish fraudulent concealment. There has not been a showing of conduct by George Hansen "calculated to obscure the existence of the cause of action" as required under Yellowstone. The defects being complained of were apparent to IIolman. George Hansen may have attempted to placate Hol-man with assurances that all would. he made right, but he did not obscure Holman's cause of action. Holman's fraud-based claims are barred by the statute of Limitations. Lastly, Holman argues that the ~istrict Court was in error when it determined that his claims of misrepresentation were barred by the independent investigation clause found in the contract. We need not address this argument, having held that these claims are barred by the statute of limitations. We affirm the decision of the ~istrict Court on Holman's appeal.. 11. Hansens' Cross-Appeal The ~istrict Court relied mainly on the terms of the contract for deed in deciding Hansens' counterclaim. Hansens were unable to convince the court that their alleged entitlement to the balance of the contract price overcame the contract's forfeiture clause, which reads in relevant part: IT IS FURTHER MUTUALLY UNDERSTOOD AND AGREEC b : 7 and between the parties hereto that said forty ( 4 0 ) c l a y s a ~ d ninety ( P O ) days is a reasonable and sufficient notice to be given to the said Party of the Second Part in case of his failure to perform any of the covenants on his part hereby made and entered into, and shall be sufficient to cancel all obligations hereunder on the part of the said parties of the First Part and fully reinvest them with all risht, title and interest hereby aqreed to < . - - be conveyed, and in case of such cancellation, the Party of the Second Part shall forfeit all 7- - made & - - - him on this contract, and all his right, 7- title and! - - - interest i n bbuildlngs - or other improvements whatsoever, -- and such payments shall be retaixzc? -A-i-.-- bv t - r t i e s of the First Part in 7 f u 1 . 1 satisfaction --- and i n i d a t l o n -- 0 x 1 damages - them sustained . . . (Emphasis added.) Hansens' claim for the contract balance rested on this Court's decision in Glacier Campground v. Wild Rivers, Inc. (197E), 184 Mont. 543, 597 P.2d 689. In Glacier, we held that a seller under a contract for deed could pursue a remedy other than forfeiture and repossession as long as the contract did not preclude the remedy sought or provide that forfeiture and repossession was the exclusj-ve remedy for breach. On cross-appeal, Hansens again assert their enti tlement to seek specific performance (payment of the balance of the contract price) under the rule in Glacier. In response, Holman raises two arguments, one based on parol evidence and one based on the doctrine of election of remedies. We need not address the election of remedies issue, because parol evidence admissibl-e on this claim establishes the intent of the parties to this contract that specific performance would not be available to the Hansens. In Glacier, we allowed the seller to seek a remedy outside the contract in part because the forfeiture clause in that case was "on its face, ambiguous and uncertain" requiring recourse to rules of construction and extrinsic evidence to give it meaning. Glacier, 597 P.?d at 692. Hansens point out that the forfeiture clause in this case is very similar to that construed in Glacier, which by analogy should allow them to go outside the contract and seek specific performance. We noted in Glacier that a primary rule of contract construction is to give effect to the mutual intent of the parties. Glacier, 597 P.2d at 692; see S 28-3-301, MCA. Hansens placed the imperfections in the forfeiture clause in issue by seeking an alternative remedy based on Glacier. We are therefore able to look to extrinsic evidence in order to discover the mutual intent of Holman and the Hansens. Section 28-2-905, MCA. Holman placed two affidavits before the District Court, his own and that of the attorney representing him when the contract was negotiated, pointing out that George Kansen had requested a clause giving Hansens the right to seek specific performance. ~ccording to the affidavits, Holman rejected such a provision, and none was included in the contract. As the District Court stated in the explanatory comment to its order of April 6, 1988, these affidavits were not contradicted by Hansens. T+ is thus apparent that the mutual intent of these parties was that specific performance would not be a possible remedy under this contract. Hansens were precluded from pursuing that remedy. We affirm the decision of the District Court. d We Co cur I P $ 4 7 Justice /' Mr. Justice John C. Sheehy did not participate. | April 27, 1989 |
5565a6d0-8b46-4c60-ae0d-4a2174e1a52e | RUEGSEGGER v WELBORN | N/A | 88-541 | Montana | Montana Supreme Court | N o . 88-541 J N THF SUPREME C O U R T O F T H E STATE OF M O N T A N A 1989 R. J O H N RUEGSEGGRR and DEINA RUEGSFGGER, P l a i n t i f f s and Respondents, -vs- JEROME D. WELBORN and SANDRA WEI,BORN, Defendants a.nd A p p e l l a n t s . APPEAJ, F R O M : D i s t r i c t Court o f t h e F i f t h J u d i c i a l District, I n and f o r t h e County o f Beaverhead, The Honorable Frank n a v i s , Judge p r e s i d i n g . COUNSET, O F RECORD: For Appellant: Leonard J. Baxhy, R u t t e , Montana For Respondent: C h e s t e r T,!ovd Jones; \Tones & Ho-Ffman, ~ i l r g i n i a c i t y , Montana Submitted on B r i e f s : March 31, 1989 Decided: )jay 9 , 1989 F i l e d : , , . F : rr, C Z i ' - 4 -- C,') -- LL M r . J u s t i c e John Conway Harrison delivered t h e Opinion o f t h e Court. This appeal comes from a judgment entered i n t h e F i f t h J u d i c i a l D i s t r i c t , Beaverhead County, Montana. The p a r t i e s signed an agreement a t t h e conclusion of an e a r l i e r foreclosure a c t i o n whereby the foreclosed purchasers were allowed t o l e a s e t h e property f o r an a d d i t i o n a l two and one-half months. The l e s s e e s remained on t h e property beyond t h e agreed l e a s e period and t h e l e s s o r s commenced t h i s a c t i o n . W e affirm. I n 1979, Jerome and Sandra Welborn (Welborns) contracted t o purchase approximately 800 a c r e s of a g r i c u l t u r a l property from R. John and Delma Ruegsegger (Ruegseggers) . I n 1985 t h e y e a r l y payments became delinquent. The p a r t i e s amended t h e c o n t r a c t t o a l t e r t h e time of t h e payments i n order t o accommodate t h e Welborns' f i n a n c i a l d i f f i c u l t i e s . However, when f u r t h e r payments remained unpaid, Ruegseggers f i l e d a foreclosure a c t i o n i n 1986. Judgment was entered a g a i n s t t h e Welborns on January 9 , 1987. The judgment foreclosed a l l of t h e Welborns' i n t e r e s t i n t h e property and quieted t i t l e t o t h e property i n t h e Ruegseggers. Incorporated by reference i n t h e judgment was an "Agreement and Release" signed by t h e p a r t i e s . The agreement s t a t e d i n p a r t t h a t t h e Welborns would l e a s e t h e property until. March 15, 1987, " t o bring about an o r d e r l y t r a n s f e r of possession of such r e a l property. . ." The agreement reserved t o t h e Ruegseggers and t h e i r agents t h e r i g h t t o e n t e r t h e property t o p l a n t crops and maintain i r r i g a t i o n f a c i l i t i e s and fences. The agreement f u r t h e r provided : [N]o further notice to quit shall be necessary at the end of the lease term and in case the Welborns shall hold over beyond the end of the lease term provided for herein, rent shall be deemed due from Welborns at the rate of $75.00 per day. In the event either party is required to retain the services of an attorney to enforce any of the conditions contained herein, then the prevailing party shall be entitled to the recovery of reasonable attorney' s fees, costs and reasonable expenses incurred in connection therewith. During the period of the lease agreement, the parties attempted to reach agreement for lease of the property for an additional year. Just prior to March 15, 1987, Mr. Welborn informed Ruegseggers that unless a lease agreement was reached, he woul-d file bankruptcy in order to keep the property. No lease agreement was reached, and on March 16, 1987, Welborns filed a Chapter 12 Rankruptcy petition. The bankruptcy action automatically stayed any other proceed.i.ng against the Welborns. Ruegseggers filed a motion for summary judgment and sought relief from the stay in the bankruptcy court. On July 7, 1987, the United States Rankruptcy Court granted Ruegseggers' motion for summar!? judgment and concluded Welborns' interest in the property had been terminated by the state court decree and the terms of the agreement and release. Ruegseggers filed this action on August 19, 1987. Welborns counterclaimed for restitution. Welborns argued Ruegseggers would be unjustly enriched unless they paid for the costs Welborns incurred in planting, irrigating, fertilizing and harvesting crops on the property during the holdover period. After a bench trial on August 11, 1988, the District Court entered findings of fact, conclusions of law and judgment. Ruegseggers were awarded $9,150 in holdover rent; return of a grain sweep, motor and generator removed from the property by the Welborns, or $300 in lieu thereof; and attorney's fees and costs in the amount of $8,599.10, much of which was incurred in the bankruptcy action. This appeal followed. Welborns raise these issues for our review: 1. Did the holdover rent clause of $75 per day constitute illegal liquidated damages and penalty? 2. Were Welborns entitled to planting and harvesting costs under a theory of unjust enrichment? 3 . Did the District Court err in awarding attorney's fees incurred during the bankruptcy proceedings? Issue No. ? Did the holdover rent clause of 575 per day constitute illegal liquidated damages and penalty? As mentioned above, the parties entered into a written agreement which in part provided for the lease of the property by the Welborns until March 15, 1987, and for rent at the rate of $75 per day "in case the Welborns shall hold over beyond the end of the lease term." Welborns now argue that $75 per day for the farmstead alone is unreasonable, and thus amounted to a penalty and illegal liquidated damages under 5 28-2-721, MCA. They contend that since they were not entitled to harvest and profit from crops planted on the land, they were only obligated for the holdover rent on the house and outbuildings, which they estimated to be worth about $8 or $9 per day. We disagree with this conclusion. As stated in the District Court's Memorandum: The $75 per day agreement, even if it were contrary to the statute of liquidation damages, (which it wasn' t) was considered by everyone as a reasonable rental. WELAORNS made this concession twice - - at the time of the agreement and later hy . . . [their attorney's] letter . . . WET,RORWS now argue that the figure is reasonable only when applied t . o a ho3.d over of 365 days. This is not persuasive. Surel-y, the parties never contemplated a 365-day "hold over". The agreement clearly contemplates more than mere use of the "farmstead" during the lease period. Although excluded from the lease agreement was a "second dwelling" which had been used by the Welborns' employees, the agreement clearly stated: It is further understood and agree6 that the Welborns' possession of such premises during this lease term is for the purpose of residence, storage and sale of the personal property, crops and livestock, the feeding and pasturing of livestock owned by the Welborns and not that of another and is under no circumstances to be considered a lease for general agricultural purposes. The lease agreement anticipated more than mere residential usage. Additionally, Welborns' argument that the rent was excessive has no basis in fact. Nr. Welborn testified that Ruegseggers offered to lease him the property for $37,500 per year, and that Welborn tentatively counteroffered to lease for $35,000. Both parties agreed that the holdover rent of $75 per day amounts to approximately $28,000 per year, substantially less than the worth of the property on a yearly basis. Welborns have not shown the holdover rent provision to be excessive, unreasonable or illegal. The judgment for holdover rent is affirmed. Tssue No, 2 - Were Welborns entitled to planting and harvesting costs under a theory of unjust enrichment? Welborns claim they were entitled to restitution for their costs, incurred during the holdover period, for the planting and harvesting of crops which they lost when the Ruegseggers re-entered the property. This is an equitable claim under the theory of unjust enrichment and quasi-contract. We have held that equitable issues are a matter of discretion resting with the District Court and will be sustained unless an abuse of discretion is shown. Tope v. Taylor (Mont. 1988), 768 P.2d 845, 848, 45 St.Rep. 2242, 2246; Madison Fork Ranch v. L & B Lodge Pole Timber Products (1980), 189 Mont. 292, 302, 615 P.2d 900, 906. Welborns were holdover tenants during the period for which they seek restitution. They had no right to remain on the property. Any ownership rights Welborns may have had in the property were extinguished in the foreclosure and quiet title action. As stated by the United States Bankruptcy Judge in his order of July 7, 1987: I conclude that by the date of the Chapter 12 bankruptcy petition the Debtors held no valid property right or interest in the land and property sold under Contract For Deed of December 14, 1979, and such interest had fully terminated by the agreement of the parties. Welborns argue, however, that they acted under a mistake of law when they filed their bankruptcy petition, and thus should be entitled to restitution. We disagree. Section 53 of Restatement of the Law of Restitution states in part t ( 2 ) A person who, because of mistake of Law, reasonably but erroneously believing that he, or a third person, on whose account he acts is the owner: (a) causes improvements to be made upon the land of another, is entitled to restitution for the value of the labor and materials used therein to the extent that the land j s increased! in value if the mistake is reasonable, as a condition to recovery by the owner of the land in equitable proceedings or in an action of trespass or other action for the mesne profits . . . (Emphasis added.) Additionally, S 43 of Restatement of the Law of Restitution states in part: (I) Except to the extent that the rule is changed-by statute, a person who, in the mistaken belief that he or a third person on whose account he acts is the owner, has caused improvements to be made upon the land of another, is not thereby entitled to restitution from the owner for the value of such. imnrovements: but A . if his mistake was reasonable, the owner is entitled to obtain judgment in an equitable proceeding or in an action of trespass or other action for the mesne profits only on condition that he makes restitution . . . (Emphasis added. ) Jn Montana, a defendant in a quiet title action is entitled to recover the value of improvements if he was "holding under color of title adverseLy to the claim of the plaintiff, in good faith . . ." Section 70-28-110, MCA. Welborns, however, were not holding under "color of title," but were merely holdover tenants. Additionally, it is apparent from Mr. Welborn's testimony that the holdover and the bankruptcy petition were not "in good faith." The Distrj-ct Court concluded that the Welborns' act in holding over was wrongful and that their claims were "a flagrant violation of the [lease] agreement. . ." The District Court carefully considered the issues of this case and concluded that the Welborns did not "come into this Court with clean hands." As the court stated in its Memorandum: This Court ordinarily v~ould, and has, stretched the law to the limit in an effort to provide equitable relief to a distressed rancher/farmer caught up in the depressed agricultural economy of the times. To do so, however, there must be some peg to hang the equitable hat. None exists in this case. If it ever existed, it was extinguished on December 30, 1986, by the "AGREEMENT & RELEASE" incorporated into a judgment of this Court. The equities now lie with the RUEGSEGGERS and primarily because of the desperate but wrongful acts of the WELBORNS . The District Court followed the maxim "He who seeks equity must do equity" and properly denied the claim for restitution. Welborns have failed to show any abuse of discretion. Issue No. - 3 Did the District Court err in awarding attorney's fees incurred during the bankruptcy proceedings? Welborns argue that attorney's fees incurred during the bankruptcy proceedings should not have been awarded by the District Court because they were not awarded by the bankruptcy judge and thus the issue is "res judicata." We conclude this argument completely misses the mark. The District Court awarded attorney's fees to Ruegseggers, some of which were incurred during the adversary action in the bankruptcy court, because the "Agreement and Release" specifically provided that either party could rec0~7er attorney's fees incurred in connection with enforcing the agreement. Ruegseggers were dragged into bankruptcy court and were stayed from enforcing the agreement in state court. After the Ruegseggers were successful in having the automatic stay lifted, they removed the Welborns from the property through a writ of execution and proceeded to enforce the agreement in state court. The bankruptcy court was not asked to enforce the agreement. Nor did the bankruptcy court make any ruling on attorney's fees; none were requested by the Ruegseggers. The issue was not res judicata and Ruegseggers were not precluded from recovering attorney's fees as provided for by the agreement. The 3v8ament o" the District Court is affirmed. | May 9, 1989 |
e9b15a14-3832-4130-a2e1-d5687c152d0a | NILES v BIG SKY EYEWEAR | N/A | 88-428 | Montana | Montana Supreme Court | No. 88-428 IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 JANICE A. NILES, Plaintiff and Appellant, -vs- BIG SKY EYEWEAR, a/k/a PROFESSIONAL EYECARE, LEONARD E. VAINIO, an individual, and DAVID G. VAINIO, an individual, Defendants and Respondents. APPEAL FROM: District Court of the Second Judicial District, In and for the County of Silver BOW, The Honorable Mark Sullivan, Judge presiding. COUNSEL OF RECORD: For Appellant: Monte D. Beck argued, Bozeman, Montana Joe Bottomly argued; Rottomly Law Offices, Great Falls, Montana For Respondent: Moore, OIConnell, Refling & Moon; Christopher JJ. Manos argued, Bozeman, Montana - Submitted: March 7 , 1 9 8 9 Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Defendants appeal a $470,000 jury verdict for their former employee Janice A. Niles on her claims of defamation, negligent infliction of emotional distress, wrongful termination, and breach of the covenant of good faith. Plaintiff cross-appeals the District Court's denial of punitive damages and its dismissal of defendant David G. Vainio in his individual capacity. We affirm the judgment in all respects. The issues are: 1 . Did the District Court err in dismissing David Vainio, a partner of Professional Eyecare, from the suit in his individual capacity? 2. Did the court err in striking the plaintiff's claim for punitive damages? 3. Did the court err in denying defendants1 motions for a directed verdict and a new trial on defamation? 4. Did the court err in denying defendants' motions for a directed verdict and a new trial on wrongful termination? 5 . Did the court err in allowing expert testimony on good faith and fair dealing and in not giving jury instructions on defendants' actions in good faith? 6. Did the court err in denying a new trial after refusing to allow defendants to present evidence of comparable employment? 7. Did the court err in giving a jury instruction on legal cause rather than proximate cause? 8. Did the court err in denying a new trial after refusing to allow certain cross-examination of plaintiff's expert on emotional distress? 9. Did the court err in denying defendants' motions for directed verdict and a new trial on negligent infliction of emotional distress? Defendants own a chain of optical stores. Dr. Leonard Vainio was responsible for the Bozeman store where, beginning in November 1984, plaintiff Janice A. Niles worked. By April 1986, Niles had received several wage increases and was acting as manager of the store. In April 1986, Leonard Vainio told his accountant Gerry Baker that another employee had seen Niles taking money from the till at the Bozeman store. Vainio and Baker went to the police. On May 1, 1986, two police officers made an attempted wsting,ll purchasing a pair of sunglasses from Niles with marked bills. They saw her put the money into the till, but noted that she did not record the sale on the "day sheet," an omission which Leonard Vainio had led them to believe was important. Based on what they had seen and what they had been told, the officers felt they had probable cause to make an arrest. At 4:30 that afternoon, Niles was arrested as she was leaving work. She was questioned at the police station for about two hours. The police did not find the marked bills in her possession, but Niles did have a large amount of cash. She explained that most of it was from cashing her husband's paycheck that day and that $60 of it was from the optical store because she was on her way to UPS to pick up a C.O. D. package for the store. Niles was charged with misdemeanor theft of the $12 from the sunglasses. This charge depended upon Leonard Vainiols statements that his records would show $12 missing. Niles did not return to work at the optical store. Leonard Vainio promoted his girlfriend to manager of the store. The criminal proceedings were eventually dropped when defendants failed to supply the records necessary to support prosecution. Niles was forced to go through the Department of Labor and then judicially- ordered "till-tapsw of the defendants1 business to get her final paycheck. At trial, Niles presented testimony by several former employees of Professional Eyecare that she was a good and respected employee and that defendants1 money-handling and record-keeping practices were shoddy and haphazard. The optical shop employee who Leonard Vainio claimed had reported seeing Niles take money from the till testified by deposition. She emphatically denied that she ever made such a report to Leonard Vainio. Niles presented evidence of her emotional and economic suffering as a result of this ordeal. In a general verdict, the jury awarded Niles $470,000 in damages. ISSUE I Did the court err in dismissing David Vainio, a partner of Professional Eyecare, from the suit in his individual capacity? At the close of Niles1 case-in-chief, the trial court granted directed verdicts for defendant David Vainio on the issue of his individual liability. Niles argues on appeal that this is error under partnership liability law in Montana. Under Montana law, a partnership is liable for any wrongful acts of its partners performed in the course of business activity. Section 35-10-305, MCA. Partners are jointly and severally liable for everything chargeable to the partnership under section 35-10- 305, MCA. Section 35-10-307, MCA. It was undisputed at trial that David and Leonard Vainio were doing business as a partnership. There was no evidence that David Vainio was personally involved with any of the wrongful acts claimed by plaintiff. This does not affect his liability as a partner. We hold that the court did not err. ISSUE I1 Did the court err in striking the plaintiff's claim for punitive damages? Niles argues that the evidence presented at trial would support submitting the issue of punitive damages to the jury based on the misrepresentations and false information Leonard Vainio gave to the police. She also contends that various other testimony could support a finding of the malice, oppression, and fraud neces- sary to support punitive damages. Section 27-1-221, MCA (1985), governs the award of punitive damages in this case. It provides at subsection (1) that punitive damages may be awarded in a noncontract action where the defendant has been guilty of oppression, fraud, or malice, actual or presumed. At subsection (2) it provides that "[tlhe jury may not award exemplary or punitive damages unless the plaintiff has proved all elements of the claim for exemplary or punitive damages by clear and convincing evidence. At subsection (4) , the statute provides that the plaintiff may not present to the jury evidence of defendant's financial affairs or net worth unless the judge rules that the plaintiff has presented a prima facie claim for punitive damages. The court made its ruling striking Niles's claim for punitive damages at the close of trial, just before jury instructions were settled. The court stated: Our major problem is punitive damages. I don't see a punitive damage case here. You've got a real question of fact to show that there has been actual damages. You have to convince the jury there is a discharge. She hadn't say [sic] she was fired. We didn't hear anybody else say that. See my point? The evidence I have heard here indicates there is some seri- ous question of fact for the jury has to re- solve as to what happened. Certainly, you are restricted to what happened up until the time of the firing. The evidence after that time has nothing to do with it. Do you agree with that? That is a point you can argue. I don't think it's a punitive damage case and I am granting the motion, punitive damages are out. In ruling on a motion for directed verdict, the trial court must view the evidence in the light most favorable to the nonmoving party. Mydlarz v. Palmer/Duncan Const. Co. (1984), 209 Mont. 325, 345, 682 P.2d 695, 705. After reviewing the evidence, we cannot say that the District Court erred in ruling that Niles had not presented a prima facie case including clear and convincing evidence of all elements of her claim, as required under the statute. We therefore hold that the court did not err in striking the claim for punitive damages. ISSUE I11 Did the court err in denying defendants1 motions for a directed verdict and a new trial on defamation? Defendants contend that Leonard Vainiols statements to the police which are claimed to be defamatory are qualifiedly privi- leged because they were made in good faith. They argue that the District Court erred in denying their motions for a directed verdict and a new trial on this issue. Citing the Restatement of Torts and case law from Alaska and Kansas, defendants assert that a qualified privilege exists for a statement made by an employer about an employee for the protection of a lawful business. However, the qualified privilege is waived if it is abused. Restatement (Second) of Torts, Section 599 (1977). Abuse of a qualified privilege is an issue of fact to be decided by the jury. Restatement (Second) of Torts, Section 619 (1977). Defendants did not offer a jury instruction on qualified privilege, instead using the defense that the statements made were true. This Court has held that an unsolicited complaint to the police is not privileged under section 27-1-804, MCA. Shors v. Branch (Mont. 1986)) 720 P.2d 239, 245, 43 St.Rep. 919, 925. Moreover, the record contains substantial evidence that Leonard Vainio waived any conditional privilege to which defendants were entitled by making his statements without good faith. We hold that there was no error on the issue of defamation. ISSUE IV Did the court err in denying defendants1 motion for a directed verdict and a new trial on wrongful termination? Defendants argue that there was no issue of fact regarding any actual termination of Niles and that reliance on a theory of constructive discharge is misplaced because the totality of the circumstances do not support such a claim. However, a doctrine of constructive discharge has been recognized in Montana. Snell v. Montana-Dakota Utilities Co. (1982), 198 Mont. 56, 643 P.2d 841. It is a question of fact whether by action or inaction an employer has rendered working conditions so oppressive that resignation is the only reasonable alternative. Snell, 643 P.2d at 846. The jury heard the testimony that Leonard Vainio and his accountant were the instigators of the criminal charge filed against Niles which led to her arrest at her place of work. No speculation is required for the jury to conclude that when an employer causes the arrest of his employee on a charge of theft from the employer that the employee has been constructively fired. It defies human experience to believe that Niles would reappear for work the next workday following her arrest. We hold that the record supports submitting to the jury the question of whether Niles was effectively discharged from employment. ISSUE V Did the court err in allowing expert testimony on good faith and fair dealing and in not giving jury instruc- tions on defendants1 actions in good faith? Defendants maintain that it was error to allow expert tes- timony on good faith and fair dealing. Their position is that this invaded the province of the jury. However, this Court has ex- plicitly approved of expert testimony on breach of the covenant of good faith and fair dealing. Crenshaw v. Bozeman Deaconess Hosp. (1984), 213 Mont. 488, 502, 693 P.2d 487, 494. "Fault arising from breach of implied covenant of good faith and fair dealing is not easily comprehensible to the average person." Crenshaw, 693 P.2d at 494. The defendants also argue that, when read in combination, the instructions given on good faith and fair dealing effectively rendered a directed verdict on the issue. They mention instruction no. 14, which sets forth the elements of proof of breach of the implied covenant of good faith and fair dealing, instruction no. 16, which states that a covenant of good faith and fair dealing existed between Niles and defendants, and instruction no. 26, which describes unjustifiably withholding wages from an employee as against public policy. We find no error. The court properly instructed the jury on the reciprocal duty of good faith and fair dealing between employer and employee. Finally, defendants argue that the court should have given instructions on whether they acted in good faith in discharging Niles. In instruction no. 21, the jury was properly instructed that: [alny employment may be terminated at anytime by an employer in the event of any willful breach of duty by the employee in the course of employment or if the employee habitually neglects or is incapable of performing the duties of the employment. However, an employ- er has a duty to act in good faith and deal fairly in discharging an employee. We find no error. ISSUE VI Did the court err in denying a new trial after refusing to allow defendants to present evidence of comparable employment? This issue refers to the courtls exclusion of evidence about defendants1 offer to re-employ Niles. The offer was made in February or March of 1987, before litigation had commenced but while the complaint was being drafted. The evidence was excluded pursuant to Niles's motion in limine. Defendants argue that because the offer was made prior to the filing of the lawsuit, it was not part of compromise negotiations. They claim that the trial court abused its discretion in prohibiting testimony on the offer of re-employment. Rule 408, M.R.Evid., provides that offers or acceptances in compromise of a disputed claim are not' admissible into evidence to prove liability for or invalidity of the claim or its amount. The rule does not clarify whether litigation must be in progress before it takes effect. In this case, at the time the job offer was made, both parties had hired attorneys and a draft of the complaint had been sent to defendants1 attorney. It was certainly clear at that time that Niles had a claim against defendants. We conclude that this offer in compromise was within the purview of Rule 408, M.R.Evid. Therefore, the court did not err in excluding evidence about it. ISSUE VII Did the court err in giving a jury instruction on legal cause rather than proximate cause? Instruction no. 11 to the jury stated that "[a] legal cause of the injury is a cause which is a substantial factor in bringing it about.It Defendants argue that the jury should have been instructed on the "but fort1 test instead of the Ilsubstantial factort1 test because only one defendant remained after David Vainio was dismissed as a defendant. It was defendantst position at trial that this was a joint tortfeasor situation involving both defendants and the police. They argued that Niles's damages were caused by her arrest. The ttsubstantial factor,I1 or legal cause, test is appropriate where the acts of each of several persons acting separately might have been sufficient to produce the result. Young v. Flathead County (Mont. 1988), 757 P.2d 772, 777, 45 St.Rep. 1047, 1053. We conclude that giving the instruction on legal cause was not error. ISSUE VIII Did the court err in denying a new trial after refusing to allow certain cross-examination of plaintiff's expert on emotional distress? Dr. Seitz, a clinical psychologist, examined Niles one month prior to trial. He testified on the issue of her emotional and mental distress resulting from defendantst actions. The court prohibited defendants from cross-examining Dr. Seitz on a portion of his notes which indicated that Niles had told him that the daughter of Baker, the accountant, had tried to get into Niles's house twice. Defendants argue that Dr. Seitz's notes on the subject of Baker's daughter go to the bases for his conclusion and to Niles's credibility. Determination of relevance of testimony, including expert testimony, is subject to the trial court's discretion. Cash v. Otis Elevator Co. (1984), 210 Mont. 319, 332, 684 P.2d 1041, 1048. In examining the record, we do not find that the District Court abused its discretion in prohibiting the question about the statement regarding Baker's daughter. Neither Baker's daughter nor Baker were defendants. The statements about attempted entries were not brought up in direct examination nor did defendants' counsel make an offer of proof of what the evidence would show. Defendants also argue that they should have been allowed to cross-examine Dr. Seitz on the effect on Niles if she had been re- employed by them. That matter is disposed of in the discussion under issue VI above. We hold that the lower court did not err in refusing to allow the desired cross-examination of Dr. Seitz. ISSUE IX Did the court err in denying defendants' motions for directed verdict and a new trial on negligent infliction of emotional distress? Defendants argue that emotional distress is not a distinct cause of action in this case and that the conduct of Leonard Vainio does not form an adequate basis for compensation for emotional distress. They maintain that the court should have allowed a directed verdict on this issue. They also argue that the tort of negligent infliction of emotional distress can only be claimed b y a plaintiff other than the victim. Defendants are mistaken in their understanding of the law of negligent infliction of emotional distress. Where there is evidence of substantial invasion of a legally protected interest which causes a significant impact upon the person of the plaintiff, emotional distress is cornpensable without showing of physical or mental injury. Johnson v. Supersave Markets, Inc. (1984), 211 Mont. 465, 473, 686 P.2d 209, 213. Niles presented evidence that she was depressed and withdrawn after this incident. Dr. Seitz testified that he diagnosed her as suffering from post-traumatic stress disorder. Niles's husband testified that her personality had changed and that their marriage had suffered as a result of defendants' actions. We conclude that the District Court did not err in denying defendants' motions on the cause of action for negligent infliction of emotional distress. We affirm the judgment on the verdict against Leonard E. Vainio as an individual and the partnership of Leonard E. Vainio and David G. Vainio under the name of Big Sky Eyewear, a/k/a We concur: ,/ - / Justices | March 30, 1989 |
365cf359-ef28-4f86-9b94-45705b3b1c84 | SPRINKLE v BURLINGTON NORTHERN RAI | N/A | 88-485 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 JONATHAN B. SPRINKLE, Plaintiff, -vs- BURLINGTON NORTHERN RAILROAD COMPANY, Defendant and Third Party-Plaintiff, -vs- THE TIRE GUYS, d/b/a TIRE-RAMA, Third-Party Defendant. ORIGINAL PROCEEDING: COUNSEL OF RECORD: For Plaintiff: Charles C. Dearden argued; Murphy, Robinson, Heckathorn & Phillips, Kalispell, Montana For Defendant: Gary M. Zadick argued; IJgrFn, Alexander, Zadick & Slovak, Great Falls, Montana For Amicus Curiae: Poore, Roth & Robinson; Rrendon J. Rohan argued for Glen Rehbein Excavating, Butte, Montana Gough, Shanahan, Johnson & Waterman; Ronald Waterman argued for Kraus Construction & Riverside Construction, & Helena, Montana 3- 2 r-4 ., a 3 - < : , a 1:: 4 : L I L I J ; . - E : L -J Submitted: February 7, 1989 Q till - LAJ , J - r- . + . Decided: March 7, 1989 LL . - ( - ; : v -1. ~iled:z ; < 2 E .-,." CJ-) - 0 (2 Z "-: *L Mr. Justice John C. Sheehy delivered the Opinion of the Court. Honorable Jack D. Shanstrom, United States Magistrate, United States District Court for the District of Montana has certified for our decision under Rule 44, Montana Rules of Appellate Procedure, a question of law as follows: Plaintiff commences a negligence action against defendant # 1. Defendant # I in turn joins defendant # 2 seeking contribution. Prior to trial, defendant # 1 settles with the plaintiff in return for a general release of all claims, including claims against defendant number 2. Can defendant # 1 continue its action for contribution against defendant # 2 under Montana law? In connection with the certified question, agreed facts, stipulated to by the parties and approved bv the Magistrate have been submitted. They are as follows: Plaintiff, Johnathan B. Sprinkle, was injured while in the course and scope of his employment with the defendant, Burlington Northern Railroad Company (BN). He commenced this action against BN pursuant to the Federal Employers' Liability Act (FELA) 45 U. S. C. 55 51, et seq., alleging negligence on the part of BN. RN subsequently joined Tire GUYS, d/b/a Tire-Rama, as a third party defendant alleging negligence and seeking contribution pursuant to 5 27-1-703, MCA. Before trial, BN settled with Sprinkle and received a general release of all claims, including claims, if any, against Tire Guys. BN is pursuing its claim for contribution against Tire Guys. Tire Guys has moved for summary judgment contending that BN no longer has a cause of action against it. We determine in this case that under Montana law as it existed and is pertinent to these facts, BN has no right of contribution against Tire Guys. The a.nswer to the certified question therefor is, "no." All parties agree, including amici curiae, that there was no right of contribution between joint tortfeasors at common law, and that in Montana, a right to contribution, if any exists, must be found in statutory law. Consolidated Freightways Corporation of Delaware v. Osier (1979) , 185 Mont. 439, 605 P.2d 1076. We are required then to examine the provisions of 5 27-1-703, MCA, as it existed at the time here pertinent to determine if statutory Law provj-des such right of contribution to BN: Section 27-1-703. Multiple defendants jointly and P - - severally liable--right of contribution. (1) Whenever the neqligence o f any party in any action is an issue, each party against - - whom recovery mav A - be allowed is jointly and severally liable for the amount that may be awarded to the claimant but has the right of contribution from any other person whose negligence may have contributed as a proximate cause t o the injury complained of. (2) On motion of any party against whom a claim is asserted for negligence resulting in death or injury to person or property, any other person whose negligence may have contributed as a proximate cause to the injury complained of may he joined as an additional party to the action. Whenever more than one person is found to have . . contributed as a proximate cause to the injury complained of, the trier of fact shall apportion the degree of fault among such persons. Contribution shall be roportional to the negligence -- of the partirs aginst whom recovery3 allowed. Nothing contained in this section shall m a l c e any party imdispensahle pursuant. to Rule 19, M.R.Civ.P. (3) If for any reason all or part of the contribution from a party liable for contribution cannot be obtained, each of the other parties against whom recovery is allowed is liable to contribute a proportional part of the unpaid portion of the noncontributing party's share and may obtain judgment in a pending or subsequent action for contribution from the noncontributi nq party. (Emphasis added. 1 The foregoing statute was interpreted by us in State ex rel. Deere and Company v. District Court (1986)~ - Mont . - , 730 P.2d 396. In Deere the plaintiff Robert Campbell was injured when a bulldozer manufactured by Deere unexpectedly moved backward and struck Campbell. At the time of the accident, the Deere tractor was being operated by Jim Lott, an employee of Wade's Backhoe Service. Campbell initially sued both Deere and Wade's Backhoe. Before Campbell's complaint was served upon Wade's Backhoe, Deere settled with Campbell for $25,000. Campbell signed a release of all claims against Deere and agreed in the release to indemnify Deere for any amount it might thereafter be required to pay as a joint tortfeasor. Campbell reserved in the release his right to pursue an action against. blade's Backhoe. Campbell then proceeded forward with his negligence action against Wade's Backhoe. Wade's Backhoe filed a third party complaint against Deere seeking indemnity and contribution. Subsequently Deere filed a motion for summary judgment relying on the release signed by Campbell. The District Court denied Deere's motion for summary judgment. Deere then sought and was qranted a writ of supervisory control before this Court. In resolving the contribution issue in favor of Deere we explained as follows: In Montana, there is but one statute on the subject, the amended § 27-1-703, MCA, and from it we determine that a joint tortfeasor who settles with a claimant before judgment on the claim is entered in a district court is not subject to claims for contribution or indemnity from the nonsettling joint tortfeasors against whom judgment may be rendered. Even though the amended section does give a sued joint tortfeasor the right to bring in other joint tortfeasors as defendants in order to insure contribution, and even though the section states that the trier o f f a c t is to determine the degree of negligence amonu each of the joint tortfeasors, the right of contribution under the amended statuteis "proportional - - to the negligence -- of the parties against whom recovery is allowed." Clearly that statutory language excludes a party against whom recovery is not allowed, e.?., a tortfeasor who has previously settled. Consequently, under amended § 27-1-703, there is no right of contribution under Montana law in favor of a joint tortfeasor or tortfeasors against whom judgment for the plaintiff is entered from other joint tortfeasors who have settled with the plaintiff prior to judgment. (Emphasis added. 1 In Deere, the nonsettling joint tortfeasor, against whom the tort action remained, sought contribution from a settling tortfeasor before entry of judgment. (Tn using the term "joint tortfeasor" we intend to include the term "concurrent tortfeasor"). In this case the settling tortfeasor has taken a full release from the plaintiff which completely settles plaintiff's claim against all tortfeasors, but seeks contribution for the settlement before judgment from the nonsettling tortfeasor. Regardless of the change in positions here as between the joint tortfeasors, the principle announced in Deere remains the same. The plaintiff's case has ended and the nonsettling tortfeasor is not one "against whom recovery is allowed." As we said in Deere, supra, that statutory language excludes from any duty of contribution a party against whom recovery is not allowed. We have been consistent in following the principle set out in Deere. In North v. Bunday (19871, - -- Mont. - , 735 P.2d 270, we held that our comparative negligence statute applies only to "those defendants who remain in the lawsuit, and not other possible tortfeasors who may have settled with the plaintiff before judgment was entered in the lawsuit." 735 P.2?. at 275. In Kuhnke v. Fisher (1987), Mont . I - 740 P.2d 625 relying on Deere, we said that under the contribution statute "[tlhe general rule is that a settling party does not fall under 'parties against whom recovery is allowed,' as once a party settles with a plaintiff, he is no longer required to contribute." 710 P.2d at 629. ~n Sevalstad v. Glaus (19g7), - Mont. , 737 P.2d - 1147; we said: In Deere, we held that "a joint tortfeasor who settles with a claimant before judgment on the claim is entered in a district. court is not subject to claims for contribution or indemnity from the nonsettling joint tortfeasors against whom judgment may be rendered. (Citations omitted.) Deere is controlling, not withstanding 5 27-1-703, MCA, which gives a joint tortfeasor the right to bring in other tortfeasors in order to insure contribution. Accordingly, Glaus has no right of contribution against Neifert, since Neifert was dismissed with prejudice from the action brought by Sevalstad. BN contends that the legislature, in adopting § 27-1-703, MCA, intended to provide a right of contribution that would be consonant with the Uniform Contribution Among Tortfeasors Act (UCATA) , although Montana has never adopt-ed that act. The provisions of UCATA are not helpful however to RN . For one thing S 2(a) of UCATA provides that the "relative degrees of fau1.t cannot be considered.." In other words, under UCATA, the fault of the respective defendants is not compared, but the right of contribution is based upon per capita rather than pro rata fault. UCATA was first proposed before the general adoption by the several states of comparative negligence law in tort cases. As a result those states that adopted UCATA have had to amend their statutes to account for the problems that arise out of comparative negligence. The usual result is that the states have abandoned UCATA as having no effect when comparative negligence is the rule. See, e.g., Bartlett v. New Mexico Welding Supply Inc. (N.M.Ct.App.1982), 98 N.M. 152, 646 P.2d 579; cert.den. 98 N.W. 336, 648 P.2d 794 (1982). For that reason, BN's reliance upon Coniaris v. Vail Associates, Inc. (Colo. 1978), 586 P.2d 224 is not instructive because it is based on Colorado's UCATA. Kennedy v. City of Sawyer (Kan. 1980), 618 P.2d 788 is also not pertinent, because it relates to an action for implied indemnity. Unlike contribution the rights to indemnity in Montana are set out in our statutes. Section 28-11-301 et seq. MCA. We therefore hold that since, under the facts submitted, a recoverv by the plaintiff against Tire Guys is not possible, a right of contribution for BN under S 27-1-703, MCA, does not exist.. We therefore answer the certifie3. question "No." / 7 Justice | March 7, 1989 |
47a63c2d-7514-48d5-8d45-db6ae0d9699d | COLE v FLATHEAD COUNTY | N/A | 88-407 | Montana | Montana Supreme Court | No. 88-407 IN THE SUPREME COURT OF THE STATE OF MONTANA RUTH M. COLE, and the COLE RANCH, > , 0 -+ .. . Plaintiffs and Appellants, --i % r ; ! (2 . . > - <I? VS. <. - , I _ . FLATHEAD COUNTY, a political subdivision of the State o f ; , , , Montana, et al., I . r,i 1 - 1 . . -, 1 0 ; ; Defendants and Respondents. c . 3 CI APPEAL FROM: The District Court of the Eleventh Judicial District, In and for the County of Flathead, The Honorable Michael H. Keedy, Judge presiding. COUNSEIt OF RECORD: For Appellant: Patrick M. Springer, Kalispell, Montana For Respondent: Ted 0 . Lympus, Flathead Countv Attorney, Kalispell, Montana Jonathan B. Smith, Deputy County Attorney, Kalispell, Montana Samuel M. Warren; Worden, Thane & Haines, P.C., Missoula, Montana Submitted on Briefs: December 9, 1 9 8 8 Decided: March 13, 1989 Mr. Justice John C. Sheehy delivered the Opinion of the Court. Ruth M. Cole and the Cole Ranch appeal from an order of the District Court, Eleventh Judicial District, Flathead County, granting summarv judgment against them on their claim against the county. The judgment was granted in part because the Coles had failed to file an answer brief opposing the motion within the time provided by Rule 2, Montana Uniform District Court Rules. After the order for summary judgment was granted, Ruth M. Cole and the Cole Ranch (Coles) moved the District Court to reconsider its order and requested oral argument. The District Court denied the motion for reconsideration, relying in part on its local rule, which in effect denies oral argument on motions unless oral argument is specificallv applied for with sufficient points to show the District Court that briefs alone are insufficient to advise it fully of the parties' contentions. This opinion treats of the interplay between Rule 56, M.R.Civ.P., Rule 2, Montana Uniform District Court Rules, and the local rule regarding oral argument. The issues for review are: 1. Whether the time provisions of Rule 2, Montana Uniform District Court Rules (MUDCR) are applicable to a motion for summary judgment under the provisions of Rule 56, M.R.Civ.P.; 2. Whether a party is entitled to rely upon the setting of a hearing for oral argument upon a motion for summary judgment; and, 3. Whether there is confl-ict between the Montana Uniform District Court R u ! - e s , the Montana Rules of Civil Procedure and the local Policies and Procedures of the Eleventh Judicial District Court, which relate to grant.inq oral argument on motions before the District Court. The facts of this appeal are primari.1~ procedural and deal with the filing dates of the pleadings and the application by the District Court of the Uniform District. Court Rules, its local policy and the Montana Rules of Civi!. Procedure. The case arises from the alleged tortious conduct by agents of Flathead County in connection with the criminal prosecution of the plaintiff, Ruth Cole, which resulted in a mistrial in the Flathead County Justice Court. The Flathead County Attorney chose not to retry the matter, and the charges were dismissed. Motions for summary judgment were filed by the defendants on February 8, February 11, and February 29, 1988. These motions were granted on April 28, 1988, by the court, on the grounds that the plaintiffs had not filed a responsive hrief to the motions within the ten days prescribed by Rule 2, MUDCR. On May 9, 1988, the plaintiffs filed a motion to set aside the order granting summary judgment to the defendants and requested oral argument. On June 6, 1988, the District Court denied the plaint-iff s ' motion. Thereupon, this appeal followed. I. Are the time provisions of Rule 2, MUDCR, applicable to motions for summary judgment pursuant to Rule 56, M.R.Civ.P.? The MUDCR became effective June 1, 1,987. Rule 2, at issl~e in this case, is as follows: Rule 2. Motions. (a) Upon filinq a motion or within five days &ereafter; the moving party shall file a brief. The brief may be accompanied by appropriate supporting documents. Within ten davs thereafter - A the adverse p a r t shall file an answer - - brief which also may be accompanied a a~pronriate su~~ortina documents. Within * & & 4 . J ten davs thereafter, movant may file a i - - - reply brief or other appropriate responsive documents. (b) Failure to file briefs. Failure - to file briefs may subject, the motion to summary ruling. Failure to file a brief within five days a the moving party - shall be deemed an admission that the - - motionis - without Grit. Failure -- to file an answer brief bv the adverse ~ a r t ~ - - within ten a s shall - be deemeh - an admission -- that the motion is well taken. -- Reply briefs by movant are optional, and failure to file will not subject a motion to summary ruling. (c) Oral argument. The court may order oral argument sua sponte or upon application of a party. (d) When motion deemed submitted. Unless oral argument is ordered or unless the time is enlarged by the court, the motion is deemed submitted at the expiration of any of the applicable time limits set forth above without supporting briefs having been filed. If oral argument is ordered, the motion will be deemed submitted at the close of argument unless the court orders additional briefs, in which case the motion will be deemed submitted as of the date designated at the time for filing the final brief. (e) - In - the event of conflict, the Montana Rules of c i v i l procedure s h m - -- control. Time computation shall be governed by Rule 6 (a), M.R.Civ.P. (Emphasis added.) In this case, the defendants moved the court for summary judgment in their favor, pursuant to Rule 56 (c) , M.R.Civ.P. That rule is in accord with its federal counterpart, and with respect to subsequent procedures provides : Rule 56(c). Motion and proceedings thereon. The motion shall be served at least 10 days before the time fixed for -- the hearing. The adverse party prior to the day of hearing serve opposing a f f i d a v i t s . The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. A summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages. (Emphasis added. ) The purpose and effect in Montana of Rule 56, M.R.Civ.P. are well-settled. Its purpose is to dispose promptly of actions in which there is no genuine issue of fact. Silloway v. Jorgenson (19651, 146 Mont. 307, 406 P.2d 167. The formal issues presented b j 7 the pleadings are not controlling and the District Court must consider the evidentiary materials listed in Rule 56(c), and any other evidentiary matter to determine whether there exists a genuine issue of material fact. Hager v. Tandy (1965), 146 Mont. 531, 410 P.2d 447. Oral testimony at the hearing may properly be considered on motions for summary judgment. Citizens State Bank v. Duus (1.969), 154 Mont. 18, 459 P.2d 696; Daniels v. Paddock (1965), 145 Mont. 207, 399 ~ . 2 d 740. If genuine issues of fact exist, an order deciding the fact issues on a motion for summary judgment is improper. Hull v. D. Irvin Transport (1984), 213 Mont. 75, 690 P.2d 414. We have held that a district court did not err by allowing defendants later to submit briefs and argue plaintiffs' summary judgment motion when defendant's counsel originally overlooked the motion. Todd v. Berner (1984), 214 Mont. 263, 693 P.2d 506. Since the purpose of summary judgment is to encourage judicial economy by eliminating unnecessary trials, a grant of summary judgment is proper only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The movant has the burden of showing a complete absence of any genuine issue as to all facts considered material in light of the substantive principles that entitle the movant to a judgment as a matter of law, and all reasonable inferences that may he drawn from the offer of proof are to be drawn in favor of the opposinq party. Cereck v. Alhertsons, Inc. (1981), 195 Mont. 409, 637 P.2d 509. Of course, when the record, as made by the movant, discloses no genuine issue as to any material fact, the burden then shifts to the party opposing the summary judgment motion to present evidence of a material and substantial nature raising a genuine issue of fact. Mayer Bros. v. Daniel Richard Jewelers, Inc. (Mont. 1986), 726 P.2d 815, 43 St.Rep. 1821. When all is said and done, the essential question for the District Court in deciding a motion for summary judgment either for the plaintiff or for the defendant is whether there exists a genuine issue of material fact. That inquiry does not admit of decision merely on a technical point, such as whether briefs have been filed on time. We had a similar question before this Court, before the adoption of the MTJDCF., in Krusemark 7 7 . Hansen (19801, 186 Mont. 174, 606 P.2d 1082. In that case, a local district court rule provided that if a reply brief had not been filed within a ten-day period, the motion was deemed well taken. Relying on the local rule, the District Court had granted summary judgment. On appeal, this Court said: Rule 56 (c) contemplates that the adverse party can file opposing materials up to the day of the hearing. Since Rule 3 would deny this right to an adverse party who has not filed a timely brief, it cannot be applied to Rule 56 motions. Rule 3 is also inconsistent with the basic function of the trial court in reviewing motions for summary judgment. Rule 56 places the burden of proof on the moving party to establish the absence of any genuine issue of material fact. [Citing authority.] The court has a duty under Rule 56 to deny a motion for summary judgment when there is any doubt whether a factual question exists. [Citing authority.] Rule 3 undermines the court's function to the extent that it deflects the court's attention from considering whether factual disputes exist and directs it solely to the question of whether a reply brief has been filed within the ten day period permitted by Rule 3. Krusemark, 606 P.2d at 1084. The defendants in this case contend that Krusemark is not applicable because that case preceded the adoption of the MUDCR. However, the local rule considered in Krusemark is substantially the same as Rule 2, MUDCR, and the effect of application of Rule 2 is the same as the application of the local rule in Krusemark. Under Rule 2(e), MUDCR, in the event of conflict, the Montana Rules of Civil Procedure control. We hold therefore that the procedure to he followed on motions for summary judgment must conform to the provisions of Rule 56, M.R.Civ.P. We combine our discussion of the second and third issues raised by the plaintiffs, since both issues relate to oral argument and the necessity of a hearing in connection with a motion for summary judgment. Rule 56(c) provides that when either a plaintiff or a defendant moves for summary judgment, "the motion shall be served at least ten days before the time fixed for the hearing." Since, in this case, the last of the defendants' motions for summary judgment was filed on February 29, 1988, and the District Court did not rule on the motions until April 28, 1988, it is obvious that any party could have applied to the District Court for a hearing, althouqh ordinarily the movant would undertake that responsibility. The parties, however, may have been deterred by the provisions of Policies and Procedures dated January 11, 1988, adopted by the presiding district judge. With respect to oral argument, that Policy stated: 2. Oral argument. Although these rules (and our customs) have long permitted oral arguments, you will probably find it quite possible, and even surprisingly easy, to submit your arguments comprehensively and as persuasively as you can be through a brief, without the need to supplement the same in person, or to say again in open court what has been said well enough in your brief. Therefore, unless I am satisfied that oral argument would be beneficial (in which case I may call for it, - sua sponte), my practice will be to discourage this occasionally wasteful use of the Court's (and your) time, and to require full-fledged compliance with Rule 2 (c) and ( d ) , Uniform Rules. By "full-fledged," I mean your application for leave to present oral argument must be couched in specific terms, to show me that briefs alone are insufficient to advise me fully of your client's contentions and all relevant points of law. The objective of Rule 2 of the foregoing local policy of the Distrj-ct Court is not unworthy. With respect to ordinary motions not involving Rule 56, the local policy undoubtedly serves to save the ti-me of the court and to expedite decisions on motions. However, under Rule 56(c), a hearing is contemplated from which the district court will consider not so much legal arguments, but rather whether there exists genuine issues of material fact. Moreover, it is permissible under Rule 56 for the District Court to receive affidavits on the day of the hearing and to take oral evidence, as has been indicated above. In connection with oral argument on a Rule 56 motion under the federal counterpart, the Court of Appeals for the Ninth Circuit held in Dredge Corp. v. Penny (9th Cir. 1964), 338 F.2d 456, 461-462, as follows: Rule [s] 56 (c) , 78 and 83, read together, authorize district courts to provide by a rule that a party desiring oral argument on a motion for summary judgment must apply therefore, in the absence of which oral argument will be deemed to have been waived. Such a local rule was involved, and upheld, in Bagby v. United States [(8th Cir. 19521, 199 F.2d 2331. In view of the language of Rule 56(c), and having in mind that the granting of such a motion disposes of the action on the merits, with prejudice, a district court may not, by rule or otherwise, preclude a party from requesting oral argument, nor deny such a request when made by a party opposing the motion unless the motion for summarv judgment is denied. Even when a party is entitled to oral argument, as a general proposition there will be general circumstances when a court may properly terminate oral argument or even dispense with it and deem the right waived. 6 Moore's Federal Practice, 56.145 [I], at 56-193 (1988). We hold, therefore, that unless the right to a hearing on a Rule 56 motion is specifically waived by all parties (and not waived simply by the failure to file briefs) either the movant or the adverse parties are entitled to a hearing under Rule 56 in the ordinary case. There may be an occasion when under the law and the facts adduced, the movant would be so clearly entitled as a matter of 1-aw to a summary judgment that a district court might by order dispense with the necessity of a hearing. That, however, is not the kind of order presented to us here. In this case, the District Court made findings of fact in connection with its decision on summary judgment in which it "reviewed the record and the applicable law in a light most favorable to the plaintiffs (in the absence of their objection) . . .. " The District Court did conclude that bv failing to file responsive briefs, the plaintiffs had admitted the defendants' motions were well taken. Nowhere in the findings of fact or conclusions of law is there a statement that there is no genuine issue of material fact. Findings of fact and conclusions of law are unnecessary in decisions with respect to motions made under Rule 12, Rule 56 or any other motion except as provided in Rule 41(b), M.R.Civ.P. Eisemann v. Hagel (1971), 157 Mont. 295, 485 P.2d 703. A district court is required under Rule 5?(a), M.R.Civ.P. in granting a motion under Rules 12 or 56 to specify the grounds therefore with sufficient particularity as to apprise the parties and the appellate court of the rationale underlying the ruling. This may be done in the body of the order or in an attached opinion. In that light, the findings here are insufficient. Accordingly, the order granting summary judgment in favor of the defendants in this case is reversed and the cause is remanded for further " 4 Justice We Concur: L ' Justices Mr. Justice L. C. Gulbrandson, dissenting. Although I agree with most of the statements in the majority opinion regarding the use of Rule 56(c), M.R.Civ.P., I do not concur with the holding that, unless the right to a hearing on a Rule 56 motion has been specifically waived, either the movant or the adverse parties are entitled to a hearing. In view of the long history of conforming the Montana Rules of Civil Procedure to the Federal Rules, both in enactment and in interpretation, I would look to the Federal practice and authorities for guidance in interpreting the interplay between Rule 2, M.U.D.C.R. and Rule 56(c), M.R.Civ.P. Rule 2, M.U.D.C.R., for all practical purposes, has the same procedural effect as Rule 220-1 of the Rules of Procedure for the District of Montana. Rule 220-1 has been construed by the Federal Judges for the District of Montana as not being inconsistent with Rule 56 (c) , F.R.Civ.P., and I would construe Rule 2, M.U.D.C.R., in the same manner. Rule 2, M.U.D.C.R., does not distinguish between the types of motions to which it applies, does not conflict with the provisions for the filing of affidavits, but does set a briefing schedule applicable to all motions and refers to time enlargement by the court. In addressing concern whether a hearing is automatically triggered by the filing of a motion for summary judgment, the Ninth Circuit Court of Appeals in Dredge Corp. v. Penny, supra, held that "a district court may not, by rule or otherwise, preclude a party from requesting oral argument, nor deny such a request when made by a party opposing the motion unless the motion for summary judgment is denied" and further held that district courts may provide by rule that a party desiring oral argument must request the same or be deemed to have waived it. Although the Ninth circuit Court prefers that oral argument be afforded on non-frivolous motions for summary judgment, Demarest v. United States (9th Cir. 1983), 718 F.2d 964, a Federal District Court's failure to grant such hearing does not constitute error in the absence of prejudice. Fernhoff v. Tahoe Reqional Planning Agency (9th Cir. 19861, 803 F.2d 979. In my view, the presiding District Judge properly recognized that under Rule 56, the opposing party is not required to file an affidavit in opposition, or other material, and is still entitled to a denial of the motion for summary judgment where the materials on file are insufficient on their face or said materials demonstrate the existence of a genuine issue as to any material fact. Hamilton v. Keystone Tankship Corp. (9th Cir. 19761, 539 F.2d 6 8 4 . In my view, the District Judge did not apply Rule 2, M.U.D.C.R., and his local rule regarding oral argument, in a manner inconsistent with Rule 56, M.R.Civ.P. The order appealed from states: This matter is before the Court on motions for summary judgment by several Defendants. The Defendants have all submitted briefs and supporting affidavits : Plaintiffs have wholly failed to respond or to request an extension of time in which to answer. Thus, pursuant to Rule 2, M.U.D.C.R., Plaintiffs are deemed to have admitted that the motions are well taken. The Court, having reviewed the record and the applicable law in a light most favorable to Plaintiffs (in the absence of their objection), now makes the following: and thereafter is set forth detailed findings, perhaps not usual in summary judgment proceedings, but indicative of the thoroughness with which the District Judge considered all the material on file. The findings as to defendants Omis Short and Tami Welch include the following: 12. The Plaintiffs have raised no questions of material fact concerning their allegations against these Defendants. In addition, the District Judge, in ruling on plaintiff's motion to set aside Findings, Conclusions, and Order, stated: Aside from Plaintiff's tacit admission that the motions were well taken, the file, depositions, and Defendants' motions for summary judgment failed to disclose any issues of material fact by which Plaintiff could sustain her cause of action. In view of the fact that plaintiff's counsel made no response, for a period of two months, to the motion for summary judgment, I would affirm. ust tip | March 13, 1989 |
a871735b-ef47-4bca-ab53-e28805d9258e | PETERSON v GREAT FALLS SCHOOL DIST | N/A | 88-493 | Montana | Montana Supreme Court | No. 88-493 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 VICKI PETERSON, Plaintiff and Appellant, -vs- GREAT FALLS SCHOOL DISTRICT NO. 1 and A, CASCADE COUNTY, MONTANA, Defendant and Respondent. APPEAL FROM: District Court of the Eighth Judicial District, In and for the County of Cascade, The Honorable John McCarvel, Judge presiding. COUNSEL OF RECORD: For Appellant: Cameron Ferguson; Hartelius, Ferguson & Baker, Great Falls, Montana For Respondent : J. David Slovak; Ugrin, Alexander, Zadick & Slovak, Great Falls, Montana p . l Filed: c- a- Submitted on Briefs: Feb. 9, 1989 Decided: MaY 12, 1 9 8 9 Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Vicki Peterson appeals the July 20, 1988 order of the Eighth Judicial District, Cascade County, granting the defendant-respondent's motion for summary judgment. The District Court found Peterson's cause of action against the school district is barred by 5 2-9-111, MCA, and recent decisions interpreting that statute. We affirm the order of the District Court. Peterson was terminated from her employment as a custodian with the Great Falls School District Number 1 and A (District) in May of 1984. According to the complaint, the basis for the termination was Peterson's alleged refusal, for safety reasons, to empty 55 gallon trash drums into a dumpster. Prior to her termination, Peterson alleges she attempted to have the District change her duties so she would not be required to lift and empty these containers. The answer indicates the District declined to change her duties, allegedly directing her to obtain assistance in emptying the containers. When Peterson later refused to empty the 55 gallon drums, her employment was terminated. The termination was carried out by an administrative assistant employed by the District. Peterson then brought this action for wrongful discharge alleging the District's requirement that she empty the 55 gallon containers created an unsafe work place and violated a Great Falls city ordinance prohibiting the use of 55 gallon drums for garbage purposes. In an amended answer, the District raised legislative immunity as an affirmative defense, citing § 2-9-111, MCA. Section 2-9-111, MCA, provides : Immunity from suit for legislative acts and omission. (1) As used in this section: (a) the term "governmental entity" includes the state, counties, municipalities, and school districts; (b) the term "legislative body" includes the legislature vested with legislative power by Article V of the Constitution of the State of Montana and any local governmental entity given legislative powers by statute, including school boards. (2) A governmental entity is immune from suit for an act or omission of its legislative body or a member, officer, or agent thereof. (3) A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the legislative body. (4) The immunity provided for in this section does not extend to any tort committed by the use of a motor vehicle, aircraft, or other means of transportation. The District then moved for summary judgment based upon legislative immunity. The District Court granted the motion for summary judgment. On appeal of that order the appellant presents the following two issues: 1. Does § 2-9-111, MCA, provide Great Falls School District Number 1 and A immunity for the act of its administrative assistant in terminating Vicki Peterson? 2. Does 5 2-9-111, MCA, violate Vicki Peterson's right to full legal redress guaranteed by Article 11, sec. 16, of the Montana Constitution? In her first issue, Peterson contends that the act of terminating her was an administrative action, not a legislative action and therefore the immunity granted in 5 2-9-111, MCA, is not applicable to this case. However, we find the question of what immunity is provided may be answered by simply examining the plain meaning of the words used in 5 2-9-111, MCA. W. D. Construction, Inc. v. Board of County Commissioners of Gallatin County (1985), 218 Mont. 348, 707 P.2d 1111. While the title of the statute infers that the immunity granted is for legislative acts or omissions, the actual language employed in defining and granting the immunity is much broader. Subsection (2) (the primary enabling subsection) grants immunity to a governmental entity for an act or omission of its legislative body. Further, this immunity applies to the acts or omissions of members, officers, or agents of those legislative bodies. Section 2-9-11 (2) , MCA. Subsection (1) (a) expressly includes school districts in the definition of governmental entities, and subsection (1) (b) includes school boards under the term legislative body. Subsection (3) provides that such immunity to the aforementioned members, officers, or agents of a legislative body is for their "lawful discharge of an official duty associated with the introduction or consideration of legislation - or action - by the legislative body. " - - (Emphasis added. ) Section 2-9-11 3 , MCA. The only specific limitation on this governmental immunity is found in subsection (4) which provides that this immunity "does not extend to any tort committed by the use of a motor vehicle, aircraft, or other means of transportation." Section 2-9-111(4), MCA. Based upon the plain language of the statute and case law interpreting the statute, the court found that the action of the legislative body need not be legislative in nature to afford immunity. Citing W . D. Construction v. Board of County Commissioners of Gallatin County, supra; Barnes v. Koepke (Mont. 1987), 736 P.2d 132, 44 St.Rep. 810; and Bieber v. Broadwater County (Mont. 1988), 759 P.2d 145, 45 St.Rep. 1218. Recently in the Bieber case we upheld the granting of summary judgment in a wrongful discharge case involving § 2-9-111, MCA. There a county commissioner terminated a county road worker for damaging county equipment. The other county commissioners later ratified this termination. On appeal, we held that § 2-9-111, MCA, provides immunity to the county commissioners and the individual commissioner who lawfully discharges an official duty of that legislative body. Comparing the Bieber case with the facts in this case, we find the only differences are that the governmental entity in this case is a school board, rather than the county commissioners, and that the party performing the act is an agent/employee of the legislative body, rather than a member. The statute clearly extends immunity coverage to school districts, to the school boards governing those school districts and to agents of those school boards. Further, school districts have the authority and duty to hire, retain or dismiss custodians pursuant to § 20-3-324(2), MCA. The administrative assistant, as an agent of and on behalf of the school board, legitimately exercised this authority when he discharged Peterson. The discharge was ratified by the school board at its next regularly scheduled meeting. Where an agent performs an act which is later ratified by their principal, that act is considered an action of the principal. Restatement of Agency 2d, § 218. The District Court properly interpreted § 2-9-111, MCA, as providing immunity from suit for the Great Falls School District 1 and A, for the action of its agent in executing an official duty of the School District in discharging Peterson. Since there were no material issues of fact and the defendant was immune from suit for the alleged cause of action as a matter of law, the court correctly granted the defendant's motion for summary judgment. Evans v. Montana National Guard (Mont. 1986), 726 P.2d 1160, 1161, 43 St.Rep. 1930, 1932. Peterson also argues that the granting of immunity under S 2-9-111, MCA, violates her fundamental right to full legal redress contained in Article 11, sec. 16, of the 1972 Montana Constitution. She contends the State must show a compelling state interest in order to restrict, limit or modify her right to full legal redress. Pfost v. State (Mont. 1985), 713 P.2d 495, 42 St.Rep. 1957. (The Pfost case dealt with limitations upon the State's liability for personal injury actions imposed by $ $ 2-9-107, MCA.) This Court, however, has found the right involved in this type of action is that of access to the courts under Article 11, sec. 16, of the 1972 Montana Constitution. In the Bieber case, in construing 5 2-9-111, MCA, we found Article 11, sec. 16, of the 1972 Montana Constitution guarantees access to the courts, but that that access to the courts is not a fundamental right. Bieber, 759 P.2d at 148, citing Linder v. Smith (Mont. 1981), 629 P.2d 1187, 1190, 38 St-Rep. 912, 915. As a fundamental right is not involved, the constitutionality of the statute is presumed and the State need only show a rational relationship to a legitimate State interest. Small v. McRae (1982), 200 Mont. 497, 524, 651 P.2d 982, 996, citing New Orleans v. Dukes (1976), 427 U.S. 297, 96 S.Ct. 2513, 49 L.Ed.2d 511. This Court has identified that rational relationship to a legitimate State interest which justifies § 2-9-111, MCA, as follows: The oft articulated rationale for retaining government imrnuni ty (specifically in this case legislative immunity) is to insulate a decision or law making body from suit in order to prevent its decision or law making processes from being hampered or influenced by frivolous lawsuits. Bieber, 7 5 9 P.2d at 1 4 8 . The statute has previously passed this rational relationship test and we find Peterson's argument of unconstitutionality must fail. The District Court's order granting summary judgment based upon S. 2-9-111, MCA, is affirmed. We concur: Justices Mr. Justice John C. Sheehy, dissenting: The decision of the majority in this case has carried immunity of the school district beyond the orbit of legislative action and into the sphere of administrative immunity. That decision is an incorrect reading of the statute. As the majority opinion pointed out, the title of act which became S 2-9-111, MCA, is "immunity from suit for legislative acts and omissions." While the title is no part of the act, and we have in other cases held that the entitlement of an act does not control the meaning of the act itself, there is at least an indication here that the intent of the legislature was to grant immunity for legislative action by a legislative body, and no more. That this was the intent of the legislature can be gleaned from a parsing of the difference between subsection ( 2 ) and subsection (3) of the act. They follow: (2) A governmental entity is immune from suit for an act or omission of its legislative body or a member, officer, or agent thereof. ( 3 ) A member, officer, or agent of a legislative body is immune from suit for damages arising from the lawful discharge of an official duty associated with the introduction or consideration of legislation or action by the leqislative body. (Emphasis supplied. ) By ordinary rules of English, it will be seen that subsection (2) grants complete immunity to the governmental entity for acts or omissions of its legislative body. Subsection (3) limits immunity to persons for the "lawful discharge of official duty associated with the introduction or consideration of legislation or action & the legislative body." The entity has complete immunity. The persons have immunity only for actions by the legislative body. One of the great positions taken by the Constitutional Convention in 1971 was to eliminate state immunity from suit. The purpose evinced by the constitutional framers was to place governmental entities and their agents on the same footing as agents of private entities, including municipal corporations, where tortious acts were concerned. The legislature, through various acts, and goaded by fearful bureaucrats, has nibbled away at the idea of state immunity, and S 2-9-111, MCA, passed in 1977 is an example. There is no doubt that the Act is poorly phrased and nebulous in meaning, but the whole tenor of the act indicates the intention of the legislation to confine the withdrawal of immunity only to legislative acts performed by governmental units. Under the Court's interpretation of S 2-9-111, MCA, as now espoused by the majority, no governmental unit except the state itself will have any liability for the tortious acts of its agents, because all actions or omissions can be construed to be those of agents either of the school board, the city council, or the county commissioners. Thus administrators, foremen, and janitors are covered under legislative immunity. That I submit is a bad result, and is a bad interpretation of 5 2-9-111, MCA. The purpose of a grant of legislative immunity is to allow a legislative body to exercise its legislative duties without hampering its discretion. A body acts legislatively when it sets policy, or adopts regulations for the enforcement of its policies. Beyond that, the entity or its agents are acting administratively and should not come within the ambit of legislative immunity. Our cases construing 5 2-9-111, MCA, leading up to this decision gave no hint that this Court would interpret S 2-9-111, MCA, as a complete grant of immunity to every substate governmental entity, employee and agent. In W. D. Construction v. Board of County Commissioners alla at in County (19851, 707 P.2d 111, the county commissioners were acting quasi-legislatively in applying zoning regulations. his Court properly allowed immunity under 5 2-9-111, MCA. In Barnes v. Koepke (1987), 736 P.2d 132, this Court held that the decision of the county commissioners not to renew a lease of a hospital and nursing home was a legislative action and so within the legislative immunity. In ~ieber v. Broadwater County (Mont. 1988), 759 P.2d 145, the Court, in upholding immunity for a county commissioner who fired an employee for abusing county equipment, this Court said: It is clear that the Broadwater County Commissioners are a legislative body of the governmental entity of Broadwater County under the language of the statute. The decision to fire ~ieber, although initially made by only one Commissioner, Duede, was later ratified by the rest of the Commission. It was an act of a member of a legislative body and is covered by the express language of the statutes . . ." The decision in this case takes the grant of immunity far beyond the members of the Commission themselves, and grants immunity both to the entity and to the employee or agent where no legislative act is involved. Thus are the citizens of our State unprotected from the insolence of off ice. Because I would hold that legislative immunity does not apply in this case, there would be no need as far as I am concerned to discuss the effect of Article 11, Section 16 of the Montana Constitution on 5 2-9-111, MCA. When Bieber was decided, I was not a member of the panel to which the case had been assigned. Unfortunately that decision was made without oral argument by less than a full Court. Ordinarily this Court does not decide constitutional questions unless the full Court is represented. I have a profound disagreement with the majority members of this Court that Article 11, Section 16 does not provide as a fundamental right both a ready access to the courts and a full legal remedy. I will wait for another case to discuss this issue. It is enough to say here that in my view S 2-9-111, MCA, carried to the extent decided by the majority in this case, violates ~rticle 11, Section 16 in every particular. I would reverse the ~istrict Court. Mr. Justice ~illiam E. Hunt, Sr., dissenting: I dissent. The case of Bieber v. Broadwater County (Mont. 1988), 759 P.2d 145, 45 St.Rep. 1218, simply stands for the proposition that, when a county commissioner or other legislative body appoints one of its members to fill a vacant managerial position, the appointed commissioner acts under the delegated authority of the legislative body. The commissioner's actions while performing the official duties of the managerial position may be ratified by the commission, thus entitling the commissioner to governmental immunity. Bieber does not grant this same immunity to a member of the government who is not also engaged in legislative functions. The case does not stand for the proposition that governmental immunity in the State of Montana has been stricken. | May 12, 1989 |
51afa611-7ae8-49bb-a889-1ef9f5c9a839 | MATTER OF HENRICHS | N/A | 88-512 | Montana | Montana Supreme Court | NO. 88-512 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 IN RE THE MATTER OF GARY HENRLCHS, Petitioner and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Robert W. Holmstrom, Judge presiding. COUNSEL OF RECORD: For Appellant: Terry L. Seiffert, Bill.ings, Montana For Respondent: Marc Racicot, Attorney General, Helena, Montana Clay Smith, Asst. ~ttorney General-, Helena, Montana Harold F. Hanser, Yellowstone County Attorney, Billings, Montana Curtis L. Reldoven, Deputy Yellovrstone County Attorney, ~n i l l i n g s , Montana 2 - L - J \ c - a c z . . . . . -. r l - L . , r;TZ ' ! : *. Filed: . ; , ? -- - " . . . _ ( 7 . J C', . - . . - Submitted on Briefs: March 9, 1989 Decided: April 12, 1989 Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Petitioner appeals the denial of his writ of habeas corpus. The Thirteenth Judicial District Court, Yellowstone County, held that the misspelling of petitioner's name on the complaint and arrest warrant issued in Idaho did not render the extradition proceedings in Montana defective. Consequently, the court denied Gary Henrichs' petition for release. We affirm. Henrichs presents the following issue upon appeal: Did the District Court err in holding that the petitioner Gary Henrichs had the burden of proving beyond a reasonable doubt that he was not the individual named "Gary Hendricks" in the charging documents accompanying the Governor of Idaho's request for extradition? On February 12, 1988, the Governor of Idaho requested the Governor of Montana to extradite "Gary Clark Henrichs a/k/a Gary Henrichs." This extradition request was accompanied by a requisition application, filed by the prosecuting attorney of Canyon County, Idaho, requesting the apprehension and rendition of Gary Henrichs for his crime of grand theft in Idaho. A copy of the criminal complaint charging "Gary Hendricks" with grand theft, together with a copy of the arrest warrant issued under the same name and describing the suspect as a 5 ' 11" tall, 220 pound male, born June 14, 1941, also accompanied the extradition request. In response, the Governor of Montana on February 25, 1988 issued a warrant for the arrest of "Gary Clark Henrichs a/k/a Gary Henrichs." On March 8, 1988, Henrichs filed a petition for writ of habeas corpus. He alleged that his arrest and detention in Montana was unlawful because the charging documents accompanying the extradition request named "Gary Hendricks" rather than "Gary Henrichs." Henrichs contended the State of Montana failed to meet its burden of proof which required the State to show that he was the same man as the "Hendricks" charged. On August 16, 1988, the District Court denied Henrichs' writ. The court held that the complaint and arrest warrant had inadvertently misspelled Henrichs' name as "Hendricks." Such a technical error did not affect the presumption, arising upon issuance of the Montana Governor's warrant, that the accused and the wanted fugitive were the same. Because of this pres.umption, petitioner had the burden of establishing beyond a reasonable doubt that he was not the "Gary Hendricks" charged in the criminal complaint issued in Idaho which gave rise to the extradition request. The court held that Henrichs failed to meet this burden, and thus it denied his petition for release. Henrichs appealed this denial of his petition. This Court has previously held that when a foreign state requests the extradition of a fugitive, the Governor of the asylum state has the duty of determining whether the person demanded has been substantially charged with a crime and whether the person is indeed a fugitive. State ex rel. Hart v. District Court (1971), 157 Mont. 287, 291, 485 P.2d 698, 701, citing from Bruzaud v. Matthews (D.C. Cir. 1953), 207 F.2d 25; see also S 46-30-211(2), MCA. A determination of whether the person demanded has been substantially charged with a crime only requires inquiry into: . . . a whether the extradition documents on their face are in order; (b) whether the petitioner has been charged with a crime in the demanding state; [and] (c) whether the petitioner is the person named in the request for extradition . . . Michigan v. Doran 11978), 439 U.S. 282, 289, 99 S.Ct. 530, 535, 58 L.Ed.2d 521, 527; see also In re Petition of Blackburn (1985), 215 Mont. 440, 701 P.2d 715. Petitioner does not dispute that he is the person named in the Idaho Governor ' s extradition request. Henrichs does contend, however, that he was not charged with a crime in Idaho. He argues that the extradition documents, accompanied by the complaint and arrest warrant charging a "Gary Hendricks" with grand theft, were not in order on their face. Petitioner's contentions are without merit. This Court has previously held that a person may not be released on a writ of habeas corpus because of a technical defect if the defect does not substantially affect his rights. Petition of Eldiwitw (1969), 153 Mont. 468, 471, 457 P.2d 909, 910. The issuance of the criminal complaint and arrest warrant for "Gary Hendricks," rather than for "Gary Henrichs," appears to be just such a technical defect. The arrest warrant which accompanied the extradition request described Gary Hendricks as a 5'11" tall, 220 pound male, born June 14, 1941. This description matches the description on the driver's license of Gary Henrichs. The correct description of Henrichs in the arrest warrant indicates the petitioner was substantially charged with a crime in Idaho. The doctrine of idem sonans further supports the District Court's determination that the petitioner was substantially charged with a crime in Idaho. According to this doctrine, two names spelled differently will be regarded as the same if they "sound alike in their pronunciation." Dilworth v. Leach (Colo. 1973), 515 P.2d 1130, 1131. In Dilworth, the petitioner, O'Dell Dilworth, was named as "Ode11 Dillworth" in documents (other than the charging documents) accompanying the demanding governor's extradition request. The Colorado court held that omission of the apostrophe and addition of an "1" in the surname was not sufficient to mislead the petitioner. - Id. The facts in the present case differ slightly from those in Dilworth. The extradition request by Idaho correctly named "Henrichs," while the accompanying charging documents named "Hendricks." The applicability of the doctrine, however, does not hinge on where the misspelling occurred. Rather, it depends on the extent of the misspelling. See, e.g., Edmonds v. Andrews (Colo. 1985), 696 P.2d 325 (upholding the extradition of Wayne Edmonds, Jr. even though the extradition papers requested "Wayne Edmunds"); see generally State v. Davila (F1a.Dist.Ct.A~~. 1985) , 481 So. 2d 486 (upholding the extradition of Enrique Davila even though the extradition papers requested "Enrique Davila Torres a/k/a 'Kiki,'" this extradition request was accompanied by a photograph of the requested fugitive). Courts will not apply the doctrine when the extradition papers cite an entirely different name than that name charged without any proof that the two named persons are in fact the same individual. See, e.g., People v. Cheek (111. 1982), 442 N.E.2d 877 (holding the extradition of Michael Asbell was invalid because no proof was offered to show that he and the charged "Frederick 1,eroy Cheek, Jr." were the same individual); Lee Gim Bor 77. Ferrari (1st Cir. 1932), 55 F.?d 86 (invalidating the extradition of Lee Gim Ror because no proof was offered to show that he and the indicted "John Doe" were one and the same). We hold as did the Colorado court in Dilworth, that the extent of the discrepancy between the named Idaho fugitive and the accused petitioner are minimal. The charging documents simply added a "d" and substituted a "k" for an "h". The District Court thus did not abuse its discretion when it applied the doctrine of idem sonans, determined under this doctrine that petitioner had been substantially charged with a crime in Idaho, and upheld the validity of the Montana Governor's warrant. Once the Governor of Montana has issued a warrant for the arrest and extradition of an accused, a presumption arises that the accused is the demanded fugitive. This presumption is "sufficient to justify his arrest, detention and delivery to the demanding state." State ex rel. Hart, 485 P.2d at 702, citing Soloman v. Warden (Md. 1969), 260 A.2d 68. The burden of proof then shifts to the accused to prove beyond a reasonable doubt that he is not the fugitive charged in the demanding state. Henrichs failed to introduce any evidence showing he was not the "Hendricks" charged in Idaho with grand theft. We therefore hold that the District Court was correct in denying Henrichs' writ of habeas corpus. Affirmed. /' , ' / We concur: . | April 12, 1989 |
748f47dd-9bb1-4955-a729-12869d34ca43 | ORLANDO v PREWETT | N/A | 88-419 | Montana | Montana Supreme Court | No. 88-419 IN THE SCJPREME COURT OF THE STATE OF MONTANA 1989 GEORGE ORLANDO, as Personal Representative of the Estate of Frank A. Donnes, Deceased, Plaintiff and Respondent, -vs- LEE PREWETT and BARBARA PREWETT, Husband and Wife, and L.R. BRETZ, Defendants and Appellants. L.R. BRETZ, Plaintiff and Appellant, -17s- GEORGE ORLANDO, as Personal Representative of the Estate of Frank A. Donnes, Deceased, Defendant and Respondent. APPEAL FROM: District Court of the Sixteenth Judicial District, In and for the County of Treasure The Honorable Alfred B. Coate, Judge presiding. COUNSEL OF RECORD: For Appellant: R. J. Carstensen, Billings, Montana For Respondent : R. Russell Plath; Kelly & Halverson, P.C., Sheehy, Finn and Plath, Billings, Montana FILED Submitted on Briefs: Jan. 12, 1989 Decided: March 30, 1989 Filed: cdsm;fL CLERK OF SUPREMECOURT STATE OF FulClr iAialA { I . . . & ;.-j Mr. Justice Wil-liam E. Hunt, Sr., delivered the Opinion of the Court. L. R. Rretz appeals from an order of the District Court of the Sixteenth Judicial District, Treasure County, grantinq summary judgment to George Orlando, Personal Representative of the estate of Frank A. Donnes (Donnes Estate), and denying Bretz's motion to vacate and set aside a partial summary judgment previously awarded to the Donnes Estate. We affirm. The following issues are raised on appeal: 1. Does the doctrine of res judicata render a mechanic's lien null and void when the lien was filed against real property that was the subject of a prior quiet title action against the same parties who filed the lien? 2. May a district court grant summary iudgment when the non-moving partv has failed to file a brief? Frank A. Donnes was murdered in the fall of 1982. On November 16, 1982, George Orlando filed the Last Will and Testament of the deceased and a petition for probate with the Treasure County Clerk of Court. The will named Donnes' two sisters, Helen Carbone and Mabel Orlando, as the sole devisees of the entire estate, which included a 5,000-acre ranch in Treasure County. On Januarv 8, 1983, Donnes' niece and her husband, Barbara and Lee Prewett, filed two creditors' claims against the Estate. The first claim alleged that the Prewetts had entered into an oral agreement with Donnes, in which Donnes agreed to create a will or establish a grantor trust giving the Prewetts one-half of his ranch and the option to purchase the other half from his estate. The second creditors' claim alleged that Donnes had orally agreed to sell livestock and other personal property to the Prewetts for $12,000 but that title to the property had not passed because the Prewetts owed a remaining balance of $10,515. On January 19, 1983, the District Court formally admitted the will into probate and appointed George Orlando as Personal Representative of the Donnes Estate. The Personal Representative filed notice of disallowance of the creditors' claims. He then filed a complaint against the Prewetts, seeking a judgment that the Donnes Estate was entitled to quiet and peaceful possession of the Frank Donnes Ranch and the personal property upon the ranch and a permanent injunction preventing the Prewetts from asserting any adverse claim against the Estate's title and ownership of Donnes' real and personal property. In response, the Prewetts counterclaimed, requesting specific performance of the two oral contracts alleged in the creditors' claims. Later, the Personal Representative amended the complaint to include an additional cause of action against the Prewetts for an accounting. Prior to trial, the District Court bifurcated the causes of action. On November 7, 1983, a bench trial proceeded only upon the Estate's quiet title actions and the Prewetts' counterclaims for specific performance of the oral agreements. On June 4, 1984, the District Court ruled that the Donnes Estate should take nothing under the quiet title actions, and that the Prewetts were entitled to specific performance of both oral agreements. The Estate appealed the decision to this Court. In Orlando v. Prewett (1985), 218 Mont. 5, 705 P.2d 593 (Orlando - I), we reversed the District Court, holding that the oral agreement for the transfer of the Donnes Ranch was an unenforceable contract to make a will and that the Donnes Estate was entitled to a judgment quieting title in the ranch. We subsequently issued an order directing the Personal Representative to take immediate possession of the entire Donnes Estate. On January 6, 1986, after we issued Orlando - I, the Prewetts filed a mechanic's lien against the Donnes Ranch, claiming that they had provided labor from 1981 through 1984 that enhanced the ranch's value by $376,474.22. On February 6, 1986, the Prewetts assigned their rights under the mechanic's lien to L. R. Bretz for $1,000. On July 15, 1986, Bretz filed a complaint against the Donnes Estate, seeking foreclosure of the mechanic's lien. The Estate's answer to the complaint alleged several affirmative defenses, including res judicata. On July 16, 1986, the District Court granted the Personal Representative's motion to amend the complaint filed against the Prewetts in January, 1983, adding L. R. Bretz as a named defendant and seeking a judgment that the mechanic's lien was null and void. The Personal Representative also sought an order quieting title in the ranch to the Donnes Estate and enjoining the Prewetts and Bretz from asserting any adverse claim against the real and personal property in the estate. On November 28, 1986, the Donnes Estate filed a motion for summary judgment on the mechanic's lien, asking for a judgment that the mechanic's lien was null and void. At the same time, the Estate filed a brief in support of summary judgment and a notice of hearing on the motion, which set a hearing date of January 2, 1987. On December 31, 1986, two days before the hearing, Richard J. Carstensen filed a notice of attorney of record for defendant Bretz and a motion for additional time to respond to the summary judgment. The hearing was held as planned on January 2, 1987, with neither Bretz nor Carstensen appearing. At the hearing, the Donnes Estate objected to Bretz's motion for additional time and requested that summary judgment be entered. On Januarv 8, 1987, the District Court granted the Estate's motion for summary judgment, denied Bretz's motion for additional time, and issued judgment quieting title. On January 27, 1987, Bretz filed a motion to vacate the summary judgment. On the same date, the Estate filed a motion for summary judgment on the complaint filed by Bretz. The District Court consolidated the two actions and held a hearing on the motions on March 6, 1987. Thereafter, the District Court issued findings of fact, conclusions of law, and an order granting the Estate's motion for summary judgment and denying Bretz's motion to vacate the previous summary judgment. From this order, Bretz appeals. The District Court concluded that res judicata barred the enforcement of the mechanic's lien. Bretz contests this conclusion, arguing that the previous litigation between the Prewetts and the Donnes Estate as well as our subsequent decision in Orlando -- I adjudicated only the question of enforceability of the oral agreements entered into between Frank Donnes and the Prewetts. Bretz contends that the mechanic's lien cannot possibly be barred by res judicata because the lien itself was never considered by the District Court at trial or reviewed by the Supreme Court in Orlando L. The doctrine of res judicata is grounded in the idea that litigation must at some point come to an end. Thus, a matter fully adjudicated is said to be res judicata and cannot be relitigated by a party who has already had the opportunity to present and plead his case. First Bank v. District Court (Mont. 1987), 737 P.2d 1132, 1134, 44 St.Rep. 861, 864. A judgment is "binding and conclusive between all the parties to the suit and their privies and successors in interest, as to all matters adjudicated therein and as to all issues which could have been properly raised irrespective of whether the particular matter was in fact litigated." Kramer v. Deer Lodge Farms Co. (1944), 116 Mont. 152, 156, 151 P.2d 483, 484. In January, 1983, the Donnes Estate instituted a quiet title action in which it claimed that the Prewetts and their successors had "no right, title, estate, lien or interest" in the real or personal property of Frank Donnes. The Estate's pleadings put directly in issue all adverse claims the Prewetts had against the Donnes Ranch. The Prewetts were therefore required by Rule 13(a), M.R.Civ.P., governing compulsory counterclaims, to assert all claims they may have had against the Donnes property. Any counterclaims that were omitted from the action are barred by res iudicata from being raised in subsequent litigation. Taggart v. Rutledge (D.Mont. 1-987), 657 F.Supp. 1420, 1431. The mechanic's lien in question is a claim against the Donnes Ranch and is therefore precisely the type of counterclaim the Prewetts were required to raise in the previous adjudication. By failing to pursue the mechanic ' s lien prior to the conclusion of the quiet title action, the Prewetts forever lost the opportunity to litigate its merits; res judicata precludes them from raising it now. Bretz argues that because the District Court bifurcated the issues and proceeded to trial only on the quiet title actions of the Estate and the specific performance claims of the Prewetts, the action remains open to further litigation on the mechanic's lien.. This is not so. The Prewetts had the opportunity to litigate all claims against the Donnes Ranch in the trial held on the quiet title and specific performance actions. They are not entitled to another chance to litigate issues that should have been put before the District Court previously merely because a wholly independent action for an accounting is still pending. Res judicata applies to both final judgments and orders that are intended to be final in nature. Lien v. Murphy Corp. (1982), 201 Mont. 488, 493, 565 P.2d 804, 806. Because our opinion in Orlando - I finally decided the quiet title action, any additional claims the Prewetts or their successors may have against the Frank Donnes Ranch are barred by res judicata. Therefore, the mechanic's lien filed after Orlando - I is null and void. Bretz, as the assignee of the claim, is precluded by res judicata from foreclosing upon it. Next, Bretz argues that a summary judgment cannot be granted for a party's failure to file a brief. We need not consider this question, however, as any error the District Court may have committed in granting the Donnes Estate's motion for summary judgment on January 8, 1987, for the reason that Bretz had failed to file a brief was rectified when, on March 6, 1987, the court considered both Bretz's motion to vacate the summary judgment and the Estate's motion for summary judgment on Rretz's complaint. The March 6, 1987, hearing gave Bretz an opportunity to present any genuine issues of material fact. He failed to do so. Summary judgment was proper. We affirm the District Court. , | March 30, 1989 |
1ce33ff7-52ea-4699-af23-f1e3ae588ef2 | STATE v SCHWICTENBERG | N/A | 88-563 | Montana | Montana Supreme Court | No. 88-563 IN THE SUPREME COURT OF THE STATE OF MONTANA STATE OF MONTANA, P l a i n t . i f f and Appel-lant , -17s- JOEL SCHWICTENRERG, Defendant and Respondent. APPEAL FRON: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable James El. Whee!i.s, Judae presiding. COUNSEL OF RECORD: For Appellant: Pon. Marc R-acicot, Attorney General, Helena, Montana Clay Smith, Asst. Atty. General, Helena Robert L. Deschamps, 1x1, County Attorney; Craig Friedenauer, Deputy County Atty., Missoul.a, Manta-na For Respondent: Ronald MacDonald; Datsopoulos, Macnonald and Zind, Nissoula, Montana Submitted on Briefs: March 23, 1989 Decided: April 2 7 1 1989 Y w , Filed: I ? 6 . i3) ~lr- > ' O 0 f - ? ; 4 I.' I, - , \ I *.I ,.-- . - , . .- - f"' -- 1 > ' ! , , ! - ) _ - I , - _. L. - . J .:: . i ; . -- .A - , s:, : . \ .i C > , : - 1 \- . d - , ..- : ' 1 C3 . F i . . ) - - Mr. Justice Fred J. Weber delivered the Opinion of the C o n r t . The State of Montana appeals the dismissal of a criminal proceeding against. the defendant, Joel Schwictenburg, in the District Court for the Fourth Judicial District, Missou1.a County. We reverse. The defendant was charged in justice court with fai.lure to stop at the scene of an accident, in violation of 5 61-7-104, MCA, and driving under the infl.uence of drugs or alcohol in violation of 61-8-401, MCA. At trial, the defendant was found guilty of failing to stop at the scene of an accident, but not guilty of driving under the influence of drugs or alcohol. The defendant then appealed his conviction to the District Court. At a combined arraignment and omnibus hearing, the defendant pled not guilty and was released on his own recog- nizance. TJater, he agreed to plead guil-ty to a violation of 61-7-104, MCA, or failure to s t ~ p at the scene of an acci-, dent, in exchange for certain recommendations by the prosecu- tion. A plea bargain agreement was entered into between the defendant, his counsel, and the Deputy County Attorney Craig Friedenauer. At the change of plea hearing, Mr. Friedenauer and a legal intern, Robert Long, appeared on behalf of the State. It was at that hearing that the District Court judge dismissed the proceeding against the defendant after the following exchanges : THE COURT: Stat-e versus 7 n e l Schwictenhurg You are Mr. Schwictenherq3 MR. SCHkIICTENRERG: Correct. MR. FRIEDENAUP: This is Robert Long, ar intern in our office. THE C0UF.T: NR. SCHWICTENRERG: THE COURT: MR. SCHWICTENRERG: THE COURT:. KR. SCHWICTENBERG: THE COURT: MR. SCHWICTENBERG: TI-IE C0IJF.T : MR. SCHWICTENRERG: THE C0UR.T: MR. SCH\A~ICTENRERG : THE C0TJF.T: MR. SCHWICTENBERG: THE COURT: L o n g , go g e t a jacket. T h e calendar says you are going t o change your plea n o w ; i s t h a t t r u e ? C o r r e c t . Is t h i s leaving t h e scene of t h e a c c i d e n t ? Y e s . How do you w j - s h t o plead t o t h a t ? G u i l t y . Is t h i s i n accordance w i t h a plea b a r g a i n l n thi.s c a s e ? Y e s . What's t h e plea bargain? H a s anything pressured you i n t o e n t e r i n g a plea, other t h a n t h e plea bargain? J u s t s t r i c t l y t h e plea bargain. I n exchange f o r t h i s , you are going t o e n t e r a p l e a , c o r r e c t ? C o r r e c t . H a v e any other p r o m i s e s or threats heen m a d e t o YOU? No. Is it t r u e t h a t on o r about t h e 15th of A p r i l , 1 9 8 8 , you w e r e d r i v i n g a D o d g e p i c k u p - - w a i t a m i n u t e . I 'm t r y i n g t o f i n d s o m e w h e r e w h e r e it te1l.s w h a t you w e r e charged w i t h i n practical t e r m s . D o you w a n t a copy of t h e C o m p l a i n t ? THE COURT: There is a Complaint in here that charges him with DUI. This is nuts. The case is dismissed. The Minutes and Note of Ruling for that date further stat.e: Deputy County Attorney Craig Friedenauer and the Defendant with his counsel, Rebecca Summervi1!.e, came into Court. Defendant's motion to change his plea was heard and granted. Thereupon by permissi-on of the Court and consent of the County Attorney the Cefendant with- drew his plea of "Not Guilty" and entered his plea of "Guilty as charged in the Complaint." The Court was advised that a Plea Bargain Agreement had been entered into and is on file herei-n. Upon questioning, the Court was unable to find the appropriate documents in the Court fLle and there- fore dismissed the case with prejudice. Following the State's appeal of the dismissal, the judge issued an order stating that he had instructed the student intern to remove himself from the courtroom until he was appropriately attired and that he had spent considerable time searching through the court file for the appropriate charge but failed to lccate it. The judge offered the following reasons for the dismissal: 1. The Nissoula County Attorney's Office is responsible for insuring compliance with the Stu- dent Practice Rule particularly when students are appearing in District Court proceedings in criminal cases. The Court expects that this supervision will be real and not perfunctory. 2. The appearance of the student, in clear violation of the District Court Rules, indicates to this Court the supervisi-ng responsibility is not being held to sufficient standards. 3. The Court not being able to proceed in an orderly fashion with the acceptance of a plea as a result of the violation of the District Court Rules by the County Attorney's Office wec disruptive and delayed the Court's proceeclings. No supervisorl~ attorney presente6. hinself to the Court with any familiarity which would have allowed proceeding excepting an offer to get the Court a copy of the Complaint. 4. The Court Fj-nds that in order to communi- cate to the County Attorney's Office that this Court is dissatisfiei? with the degree of prepara- tion and compliance with the Student Practice Rule providing responsible supervisory participation that it is necessary to dismiss the misdemeanor Complaint. The issue now before this Court is whether the District Court abused its discretion by dismissinq the proceeding, aqainst the defensant with prejudice. Section 46-13-201(1), MCA, provides that: The court may, either on its own motion or upon the application of the attorney prose cut in^ and in furtherance of justice, order a complaint, information, or indictment to he dismissed; howev- er, the court may not order a dismissal of a com- plaint, informaticn, or indictment, or a count contained therein, charging a felony, unless good cause for fiismissal is shown and the reasons for the dismissal are set f0rt.h in an order entered upon the minutes. The clismissed charge in this case was a misdemeanor, which could arguably be said not to be subject to the "goo6 cause for dismissal" required for felonies under the statute. As the State points out, that clause addressing felony charq- es was added to 46-13-201(1), MCA, in 1985. Prior to that time, no distinction was made between misdemeanor and felony charges and either could be dismissed at the court's discre- tion if in furtherance of justice. "In furtherance of ius- tice" remains the standard under the first phrase cS 9 46-13-203.(I), MCA, which we hold to be applicable in this case. That standard has been interpreted in pre-1385 case law as meanjnq t h a t the authority of the court to d.ismiss a proceeding is not unbridled, and must he exercised in view of the const?-tutional rights of the defendant and the interests of s0ciet.y. State v. Roll (19&3), 206 Mont. 259, 261-62, 670 P.2d 566, 568. See also State v. Cole (1977), 174 Mont. 380, 571 P.2d 87. Prior to addressing whether the court's dismissal Wac "in furtherance of justice," the defendant raises several procedural points which he contends render the State's appeal Ineffective. First, defendant contends that at the time of the appeal, no final order or iudqment existed as a basis for that appeal since the District Court did not issue its order until after the filing of the State" appeal. The District Court's written order of November 7 did not alter the substantive effect of its September 30 oral dis-- missal at the change-of-plea hearing. The criminal proceed- ing against Mr. Schwictenburg was effectively dismissed upon the court's oral declaration of September 30, which was further reinforced by the entry contained in the minutes for that date. Section 46-20-103 (2) (a), MCA, authorizes the State to appeal in a criminal proceeding "from any court order or judgment the substantive effect of which results in . . . dismissing a case." (Emphasis supplied.) This section does not require that the order be in writing. Section 46-13-201(1), MCA, directs only that the reasons for felony dismissals be set forth in an order entered upon the minutes. We recognize the purpose behind the requirement that reasons for clismissal be set forth, which is to provide this Court wlth a basis to review whether the trial judge exercised his discretion to dismiss within the "in furtherance of justice" standard. State v. Cole, 5 7 1 P.2d at 87. In this case, however, ample basis appears from the District Court's oral dismissal of September 30, which is accompanied by the tran-- script o f the proceeding and the Minutes and Note of Ruling, to serve as a basis for review. We hold that the State could properly appeal from the court's order of September 30 dis- missing the case against Mr. Schwictenburg, and that the accompanying minutes provide an adequate basis for our review of the matter. Turning now to the substantive issue of this case, the State argues that the District Court abused its discretion in dismissing the proceeding against the defendant even if the order of November 7 is considered. The defendant argues that the District Court was justified in its action because of the court's frustration in not heing able to locate a particular document which wa-s admittedly in the court File, the appear-- ance of the student intern in violation of the District Court Rules, the failure of the deputy county attorney Craig Friedenaur to identify himself as the supervising attorney, and P l r . Friedenaur's failure to present himself to the court as being familiar with the case. The latter two contentions are not supported by the record, which reflects that Mr. Friedenaur was involved in the case From Its inception and that the District Court acknowledged his participation. The first sentence of the minutes from the hearing states that, "Deputy County Attorney Craig Friedenauer and the Defendant with his counsel, Rebecca Summerville, came into Court." Mr. Friedenauer's name ap- pears on the plea agreement and it is signed by him. Fur- thermore, it was Mr. Friedenauer who introduced the legal intern to the court at the change of plea hearing. We con- clude that these justifications do not find support in the record. and do not form a basis for the Cistrict Court's dism4 ssal. The defendant argues that it was within the court's discretion tc dismiss because of its frustration in not being a b l ~ to locate a document together with the failure cf a student intern to azhere to the rules of decorum. We recog- nize the broad discretion allowed to the District Court in enforcing its own rules, that discretion must be balanced with the interests of society as outlined in State v. Roll, ----- 670 P.2d at 560. In balancing the absence of a court docu- ment and the failure in court 6ecorum against the interests of society in proceeding with a case in which a plea bargain had been arranged, we conclude that the balance comes out in favor of the interests of society. We hold that t-he dismiss-. a1 of this case was not "in furtherance of justice" and was an abuse of discretion. We hold that the dismissal is set aside with the result that the prosecution may proceed to trial on the charge of ~~iolation of 5 61-7-104, WCA, or failure to stop at the scene of an accident. We Concur: | April 27, 1989 |
27edaf46-3dd5-4567-91bc-473773fc4045 | GUENTHER v FINLEY | N/A | 88-433 | Montana | Montana Supreme Court | No. 88-433 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 DALE E. GUENTHER and DORIS H. GIJENTHER , Plaintiffs and Appellants, -vs- DONALD L. FINLEY and PAULINE E. FINLEY, Defendants and Respondents. APPEAL FROM: District Court of the Eleventh Judicial District, In and for the County of Flathead, The Honorable Leif B. Erickson, Judge presiding. COUNSEL OF RECORD: For Appellant: Hedman, Hileman & Lacosta; Donald E. Hedman, Whitefish, Montana For Respondent: Gary R. Christiansen, Kalispell, Montana F j . led. t Submitted on Briefs: Feb. 9, 1989 Decided: March 1 4 , 1989 B " Clerk Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. The decision of the District Court of the Eleventh Judicial District was appealed by the plaintiffs Guenther from the jury verdict in favor of the defendants Finley denying the plaintiffs' claim for trespass and damages. The Guenthers claim that the defendants' dam caused water to back onto the property of the plaintiffs for a number of years, causing extensive damage to the land and destroying the habitability of plaintiffs' home. The issue is whether substantial credible evidence exists to support the jury verdict rendered in this case. Plaintiffs bought .75 acre in 1962. Defendants pur- chased their property south of the plaintiffs' property in July 1980. The two properties are adjacent to each other and divided by Elk Park Road, a Flathead County Road. Mooring Creek runs north to south through both properties. The county maintains a culvert which runs under the county road. Baltrusch, an owner prior to the defendants Finley, constructed a dam on the property now owned by the defen- dants. The dam causes the water from Mooring Creek to back up onto defendants' property. Plaintiffs allege that the dam has caused the water to back onto their property upstream, causing a trespass. According to Guenthers, prior to the time that the dam was built on the Finleys' property, the land owned by the Guenthers was appraised at $40,000 to $50,000 and was "the prettiest little place I ever saw." Subsequently, though, the dam has caused flooding of the appellants' land, creating swamp-like conditions and making the land and house complete- ly uninhabitable. Some of the problems allegedly caused by the flooding are cattails that are out of control, problems with spiders and worms and mosquitoes, damage to the house from the proximity of the water, and a sewer-like smell. Appellants contend that flooding occurred on their property in 1979, 1980, 1984, 1985, and 1986. In 1979 when the flooding occurred, Guenthers called the county complain- ing that the culvert was plugged with shale rock. The county cleaned out the culvert. In 1980, Guenther alleged that he called the owner of the property now owned by defendants, Raltrusch, to complain and the water problem thereafter disappeared. Appellants assumed that Baltrusch took some remedial action but did not follow up on their complaint and so do not really know. In three of the next six years, appellants claim there was a flooding problem; however, they never went to the Finleys to speak with them. In 1985, the renter of the Guenther property had a problem with flooding and called the county to have the problem remedied. Not until April 8, 1986, did the Guenthers go directly to the Finleys, believing that the dam which had been in existence since 1980 could have been the cause of the flooding. At that time, Dale Guenther did not go to see defendants to discuss the issue but was found on the Finleys' property by Donald Finley looking at the area near Elk Park Road. Upon confronting Guenther and his attorney, defendant was asked if the Finleys would buy the Guenthers' property. Prior to this there had been no indication that the spring flooding of Guenthers' property was caused by the dam on the property owned by Finleys. The dam, which was constructed in 1980, was not altered after the initial construction by Baltrusch. Nor were any changes or additions made by the Finleys. The issue with which this Court is faced is whether there was substantial credible evidence from which the jury could make a proper determination in this case. We hold that there was such substantial credible evidence. There is some dispute as to what role the culvert played in the flooding of appellants' property. The culvert is built off the ground. Respondents' expert testified that the height of water on appellants' land would have to reach a depth of 1.25 feet before it reached the bottom of the cul- vert allowing the water to drain. The culvert is eighteen inches in diameter. During the winter and spring the culvert easily dams with mud, muck, ice, gravel, shale, and silt. When the expert for the respondents observed the culvert, it was plugged to ten inches of the eighteen. In this respect, according to respondents, the culvert itself acts as a dam. Any water on the Guenthers' property would have to reach the height of over 1.25 feet before it would drain from the property downstream to the Finleys' property. Furthermore, the water level on the appellants' property was .11 feet higher than on the respondents' property when measurements were taken in 1986, making flooding of appellants' property from respondents' dam unlikely. Appellants, on the other hand, contend that there is a difference of 2.45 feet between the top of the dam's spillway and the bottom of the culvert. Naturally, therefore, any time that the water reaches the spillway, water will flood the appellants' land by way of the culvert. In past years water has reached the spillway. Also, because the law of physics demands that "water seeks its own level," the level of water on the Finleys' property and the level of the water on the Guenthers' property must he the same height. There- fore, any time that the water is dammed on the Finley proper- ty, raising the natural water level, the water is the same height on the Guenther property and the water is trapped on the Guenther property, creating a trespass. The facts set forth by appellants, in their view, clearly show evidence of a trespass and damages. Restatement (Second) of Torts, S 158, properly sets out the elements of the tort of intentional trespass to real property: One is subject to liability to another for trespass, irrespective of whether he thereby causes harm to any legally protected interest of the other, if he intentionally (a) enters land in the possession of the other, or causes a thing or a third person to do so, or (b) remains on the land, or ((1) fails to remove from the land a thing which he is under a duty to remove. We adopted Restatement S 158 in Branstetter v. Beaumont Supper Club, Inc. (Mont. 1986), 727 P.2d 933, 43 St.Rep. 1981, relying also on the Restatement's definition of "in- tent" "to denote that the actor desires to cause the conse- quences of his act, or that he believes that the consequences are substantially certain to result from it." Branstetter, 727 P.2d at 935, 43 St.Rep. at 1983-1984, quotinq Restatement (Second) of Torts, S 8A. Because the dam was built before the Finleys purchased their property, it is clear that they did not intentionally cause any water to enter Guenthers' land. Furthermore, the jury found that after reviewing the conflicting evidence, the Finleys were not liable for intentional trespass. Assuming arguendo that respondents caused the flooding of appellants' land, there is still no showing that they recklessly or negligently caused. the consequences which resulted in the flooding. Restatement (Second) of Torts, 5 165, states: One who recklessly or negligently, or as a result of an abnormally dangerous activity, enters land in the possession of another or causes a thing or third person so to enter is subject to liability to the possessor if, but only if, his presence or the presence of the thing or the third person upon the land causes harm to the land, to the posses- sor, or to a thing or a third person in whose security the possessor has a legally protected interest. The jury instruction adopted by the District Court was as follows: You are instructed that a person may be subject to liability for trespass if he enters land in the possession of the other, or causes a thing, such as water, to do so or fails to remove from the land a thing, such as water, which he is under a duty to remove. If you find that Defendants' trespassed on Plaintiffs' land then you must deter- mine what damages, if any, have been sustained and award them an amount which will reasonably compensate them in accordance with these instructions. The foregoing instructions clearly discussed the Re- statement application of reckless or negligent trespass. After reviewing the evidence presented before them, the jury found that there had been no trespass by the respondents and that consequently there were no damages. Upon motion by the appellants for a judgment NOV, the District Court denied the motion, relying on the findings of the jury. While there may be some question whether the flooding of appellants' land was caused by respondents, it is within the province of the jury to decide in whose favor the evi- dence lies. In the order of the District Court denying the motion for judgment NOV, Judge Erickson stated that the court was satisfied that the dam on the respondents' property had the potential for flooding the appellants' property if filled to the level. of the spillway. However, the factfinder found that there was no trespass here. Moreover, there was evi- dence that the prior flooding of appellants' property may have occurred from the existence of blockage in the culvert. The jury decided that from the evidence offered they were not convinced that the existence of respondents' dam caused any damage to appellants. In reviewing the judgment of the trier of fact, the standard of review is: where a fact issue or issues are pre- sented before either a court sitting alone, or with a jury, and there is substantial evidence to support the findings of the court or the jury ver- dict, such findings or verdict are conclusive on appeal. Johnson v. St. Patrick's Hospital (1968), 152 Mont. 300, 307, 448 P.2d 729, 732-733; Matter of Estate of Holm (19791, 179 Mont. 375, 588 P.2d 531; Big Sky Livestock, Inc. v. Herzog (1976), 171 Mont. 409, 558 P.2d 1107. There is substantial evidence here to support the jury verdict. We concur: | March 14, 1989 |
5dcaa228-4f4b-462d-9ade-45d28546d958 | HAUG v BURLINGTON NORTHERN RAILROA | N/A | 88-470 | Montana | Montana Supreme Court | N o . 8 8 - 4 3 8 8 8 - 4 7 0 I N THE SUPREME COURT OF THE STATE OF MONTANA No. 8 8 - 4 3 8 DAVID HAUG, z c P l a i n t i f f a n d R e s p o n d e n t , o z -vs- 3 . l z c3 BURLINGTON NORTHERN RAILROAD COMPANY, + : : D e f e n d a n t a n d A p p e l l a n t . cn 5- N o . 8 8 - 4 7 0 HERBERT LAY, P l a i n t i f f and R e s p o n d e n t , -VS- RURTAINGTOM NORTHERN RAILROAD COMPANY, D e f e n d a n t and A p p e l l a n t . APPEALS FROM: D i s t r i c t C o u r t of t h e E i g h t h J u d i c i a l D i s t r i c t , I n and for t h e C o u n t y of C a s c a d e , T h e H o n o r a b l e T h o m a s M c K i t t r i c k ( 8 8 - 4 3 8 ) and H o n o r a b l e John M. M c C a r v e l ( 8 8 - 4 7 0 ) , Judges p r e s i d i n g . COUNSEL O F RECORD: For A p p e l l a n t : J. M i c h a e l Y o u n g ; J a r d i n e , Stephenson, B l e w e t t & B l e w e t t , G r e a t F a l l s , M o n t a n a ( 8 8 - 4 3 6 ) H e r b e r t L. Pierce, 111, C r o w l e y , H a u g h e y , H a n s o n , T o o l e and D i e t r i c h , B i l l i n g s , M o n t a n a ( 8 8 - 4 7 0 ) For R e s p o n d e n t : A l e x a n d e r B l e w e t t , 111; H o y t & B l e w e t t , G r e a t F a l l s , M o n t a n a ( 8 8 - 4 3 8 and 8 8 - 4 7 0 ) Kurt fl. J a c k s o n , Hoyt C , Blewett, ( 3 8 - 4 3 3 6 8 8 - 4 7 0 ) For A m i c u s C u r i a e : John b7. L a r s o n , N i s s o u l a , M o n t a n a ( 8 8 - 4 3 8 & 8 8 - 4 7 0 ) S u b m i t t e d on B r i e f s : D e c . 9 , 1 9 8 8 D e o i d e d : M a r c h 7 , 1 9 8 9 Mr. Justice Fred L T . Weber delivered the Opinion of the Court. The two cases of Haug v. Rurlington Northern and Lay v. Burlington Northern have been consolidated for our consider- ation since the identical issues are raised in each case. In both cases, Burlington Northern appeals the decision of the District Court for the Eighth Judicial District, Cascade County, denying its motion for a change of venue. We affirm the District Court's denial of that motion. We rephrase the issues presented as follows: 1. What is the proper county in which to bring a tort action against a nonresident defendant, and does that rule apply in FELA actions? 2. Is the court empowered to change the place of trial of FELA actions based on the doctrine of forum non conveniens or the Montana venue statues? The pl-aintif f s brought separate actions against Rurlington Northern (BN) to recover damages under the Federal Employers Liability Act (FELA), 4 5 U.S.C. 5 1 et seq. (1982). Mr. Haug's suit is based on an injury which occurred in the BN shop in Park County, Montana. Mr. Lay's suit is based on an injury which occurred in the course of his em- ployment with BN in Lewis and Clark County, Montana. Both defendants brought claims in state court in Cascade County, which has no connection to either suit. BN filed motions for a change of venue, contending that in each case, the proper county was the county in which the tort occurred. Since the plaintiffs did not choose those counties, BN argued that it was entitled to a change of venue in both cases. The District Court denied BN's motions and BN appeals. Some changes were enacted in our venue statutes by the 1 9 8 5 Session Laws. In those enactments, the legislative history indicates that the legislature was not attempting to change the past venue practices in Montana. The significant sections for the issues in the present cases are set forth as follows: 25-2-111. Scope of part. The proper place of trial (venue) of a civil action is in the county or counties designated in this part. 25-2-112. Designation of proper place o f trial not jurisdictional. The designation of a county in this part as a proper place of trial is not juris- dictional and does not prohibit the trial of any cause in any court of this state having jurisdiction. 25-2-113. Power of court to change place of trial. The desisnation i n this part of a properplace of trial does not affect the power of a court to change the place of a trial for the reasons stated in 25-2-201(2) or ( 3 ) , or pursuant to an agreement of the parties as provided in 25-2-202. 25-2-114. Right of defendant to move for change of --- - place o f trial. If an action is brought in a county not designated as the proper place of trial, a defendant may move for a change of place of trial. to a designated county. 25-2-115. Multiple proper counties. If this part desisnates more than one county as a proper place d of trial for any action, an action brought in any such county is brought in a proper county and no motion may be granted to change the place of trial upon the ground that the action is not brought in a proper county under 2 5 - 2 - 2 0 1 ( 1 ) . If an action is brought in a county not designated as a proper place of trial, a defendant may move for a change of place of trial to any of the designated counties. 25-2-118. Residence of defendant. Unless other- wise specified in thispart: ( 1 ) except as provided in subsection (3) , the proper place 0-f trial for all civil actions is the county in which the defendants or any of them may reside at the commencement of the action; (2) if none of the defendants reside in the state, the proper place of trial is any county the plaintiff designates in the compl-aint; 25-2-122. Torts. The proper place of trial for a tort action is: (1) the county in which the defendants, or any of them, reside at the commencement of the action; or (2) the county where the tort was committed. . . . 25-2-201. When change of venue required. The court or judge must, on moFion, change the place of trial in the following cases: (1) when the county designated in the corn-- plaint is not the proper county; (2) when there is reason to believe that an impartial trial cannot be had therein; (3) when the convenience of witnesses and the ends of justice would be promoted by the change. We do point out that 5 s 25-2-111 - 115, MCA, all were enacted as a part of the 1985 statutes. What is the proper county in which to bring a tort action against a nonresident defendant, and does that rule apply in FELA actions? From the case history in Montana, we conclude that a plaintiff is entitled to bring a tort action against a non- resident defendant in either the county where the tort oc- curred or in any county of this State. This Court has consistently held that a foreign corporation has no county of residence for venue purposes and can be sued in any county selected by the plaintiff. Hanlon v. Great Northern Railway Co. (1928), 83 Mont. 15, 268 P. 547; Truck Insurance ~xchange v. N.F.U. Property and Casualty Co. (19671, 149 Mont. 387, 42? P.2d 50; Foley v. General Motors Corp. (19?2), 159 Mont. 469, 499 P.?d 774. The holdinqs of these cases are consistent with the provisions of S 25-2-118(2), MCA, which in substance states that any county designated by the plain- tiff is the proper place of trial if no defendants reside in Montana. If a plaintiff does not designate a proper county in the complaint, S 25-2-201, MCA, requires that the court must, on motion, change the place of trial. Since, under S 25-2-118(2), MCA, any county which the plaintiff selects is a proper county for venue purposes, a nonresident defendant is not entitled to a change of venue for the reason that the plaintiff has chosen an improper county. Morgen and Oswood v. U.S.F. Ec G. (1975), 167 Mont. 64, 535 P.2d 170. In Morqen, this Court reached that conclusion even where alter- native venues were authorized by statute, as in contract or tort actions. Thus, even though a tort cause of action may be brought in the county where the tort occurred, the "any county" option of 5 25-2-118(2), MCA, remains a proper county for venue purposes where none of the defendants reside in Montana. See Tassie v. Continental Oil Co. (D-Mont. 1964), 228 F.Supp. 807. Our statutory provisions are consistent with the holdings in the above cases. Section 25-2-115, MCA, provides that where two or more counties are designated as proper counties, the defendant is not entitled to a change of venue if the plaintiff chose one of those counties. As previously mentioned, S 25-2-118 (2) , MCA, allows the plaintiff to choose any county if none of the defendants reside in Montana. Section 25-2-122, MCA, pro- vides that the proper place of trial for a tort action is the county where the tort was committed. As a result, under these code sections, in a tort action against a nonresident defendant, the plaintiff may choose either the county where the tort was committed or any county in the State of Montana, and the defendant is not entitled to a change of venue under 5 25-2-115, MCA. BN's only argument against this statutory interpretation centers on our holding in the case of McAlear v. Kasak (Mont. 1987), 731 P.2d 908, 44 St.Rep. 81, which interpreted the venue statutes following their amendment in 1985. BN argues that the language preceding 5 25-2-118, MCA, limits its applicability so that the plaintiffs in these cases are not entitled to choose the "any county" option of $ 25-2-118(2), MCA. The language at the beginning of 5 25-2-118, MCA, does state, "Unless otherwise specified in this part." In McAlear, this Court held that because venue is otherwise specified in the tort exception of 5 25-2-122, MCA, the only proper county the the tort. We recognize that the holding in McAlear appears to he a logical conclusion based alone on the wording in 5 s 25-2-118 and 112, MCA. However, that holding is not consistent with the previousl-y cited decisions in Montana. As a result, as set forth in the following discussion, we conclude that It is necessary to overrule McAlear. We recognize that the venue statutes were amended in 1985 and that the language, "Unless otherwise specified in this part" was added to replace the phrase "in all other cases. " However, case law has never interpreted either phrase to be limiting or determinative of whether a plaintiff has an option in choosing a proper county. A review of the case law set forth earlier in this opinion reveals a liberal interpretation of our statutes regarding a plaintiff's choice of forum between the general rule of venue (now set forth in S 25-2-118, MCA) and the exceptions to that general rule. Furthermore, it is clear from the following stated objectives presented to the legislature by the Supreme Court Commission that the intent was to codify the previous venue decisions of this Court: The new statutes proposed. in this draft have three objectives: (1) to include in the Montana Code Annotated those rules which have been declared and are settled by the Montana Supreme Court but are not now stated in the Code; ( 2 ) to change the language, without changing the meaning, of the sections that have caused the most litigation (primarily by substituting the desiqna- tion "proper place of trial" for the ambiguous command that cases "shall," " may," or "must," be tried in particular counties); (3) to settle the few matters where there is still- a seeming ambiguity, following the qeneral princi- ples along the lines that the Court seems to feel would be best derived from what the Court has held in other situations. "Recommendations for Revisions in Venue Statutes Prepared by the Montana Supreme Court Commission on the Rules of Evi- dence;" Exhibit 1 to Senate Judiciary Committee Minutes of January 22, 1985. In view of the clear intent not to change the previous venue decisions of this Court, we conclude that the words "unless otherwise specified in this part" in S 25-2-118, MCA, are not limiting words so far as paragraph (2) of that sec- tion is concerned. Therefore, if none of the defendants reside in Montana, a plaintiff may choose any county in the state as the place of trial of a tort action, notwithstanding the alternate choice of venue under 5 25-2-122, MCA. This conclusion is required under the prior decisions of this Court. We hold that McAlear is overruled. Whether this conclusion should apply in FELA cases has not been specifically addressed by this Court. The federal s t a t u t e a u t h o r i z e s an i n j u r e d p l a i n t i f f t o f i l e s u i t i n e i t h e r f e d e r a l o r s t a t e c o u r t . Actions f i l e d i n federal. c o u r t have t h r e e p o s s i b l e p l a c e s which a r e proper f o r venue purposes: (1) t h e county where t h e defendant r e s i d e s ; ( 2 ) t h e county where t h e cause o f a c t i o n a r o s e ; o r (3) t h e county where t h e defendant does business. 45 U.S.C. 5 56. I n FELA a c t i o n s brought i n s t a t e c o u r t , t h e United S t a t e s Supreme Court has i n d i c a t e d t h a t venue i s p r o p e r l y l e f t t o t h e p r a c t i c e o f t h e forum. M i l e s v. I l l i n o i s C e n t r a l Railroad (1942), 315 U.S. 698, 703, 62 S.Ct. 827, 830, 86 L.Ed 1129, 1134. While it can be s a i d t h a t our s t a t e venue s t a t u t e s d i c t a t e t h e " p r a c t i c e " of our forum, we a r e a l s o concerned w i t h c e r t a i n p o l i c i e s set f o r t h i n previous FELA c a s e s i n determining our forum p r a c t i c e . S p e c i f i c a l l y , t h i s Court has s t a t e d t h a t t h e FELA i s t o be given a l i b e r a l c o n s t r u c t i o n i n f a v o r o f i n j u r e d r a i l r o a d employees s o t h a t it may accomplish humanitarian and remedial purposes, follow- i n g t h e p o l i c y set f o r t h by t h e United S t a t e s Supreme Court i n Urie v. Thompson (1949), 337 U.S. 163, 69 S.Ct. 1018, 93 L.Ed. 1282. See S t a t e ex rel. Burlington Northern Railroad Co. v. D i s t r i c t Court (Mont. 1987), 746 P.2d 1077, 4 4 St.Rep. 2003; Bevacqua v. Burlington Northern, Inc. (1979), 183 Mont. 237, 598 P.2d 1124; and LaBella v. Burlinqton Northern, Inc. (1979), 182 Mont. 202, 595 P.2d 1184. The open door p o l i c y expressed i n t h o s e c a s e s i s f o l - lowed i n t h i s opinion. W e hold t h a t t h e p l a i n t i f f s i n t h i s c a s e were e n t i t l e d t o b r i n g t h e i r FELA a c t i o n s i n e i t h e r t h e county where t h e i n j u r y occurred, o r i n any county i n t h i s S t a t e . Since t h e y have c o r r e c t l y done s o , t h e defendant RN i s n o t e n t i t l e d t o a change of venue under S 25-2-201(1), MCA . I1 Is the court empowered to change the place of trial of FELA actions in light of the doctrine of forum non conveniens and the Montana venue statutes? The common law doctrine of forum non conveniens allows a court to "resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute." Gulf Oil Corp. T J . Gilbert (1947), 330 U.S. 501, 507, 67 S.Ct. 839, 842, 91 L.Ed. 1055, 1062. Under the doctrine, a court may decline to exercise its jurisdiction when it believes that the action may be more appropriate1.y and justly tried elsewhere. This doctrine is codified in Montana at 5 25-2-201, MCA, which states in relevant part: The court or judge must, on motion, change the place of trial in the following cases: . . . (2) when there is reason to believe that an impar- tial trial cannot be had therein; (3) when the convenience of witnesses and the ends of justice would be promoted by the change. In the context of FELA cases, this Court has discussed the applicability of the common law doctrine of forum non conveniens without reference to our statutorv venue scheme or the codification of that doctrine. These cases are the same as those set forth above in reflecting the "open court poli- cy" and "liberal construction" of the FELA. State ex rel. BN v. District Court, supra; Bevacqua 7 7 . BN, supra; LaBella v. BN, supra; see also State ex rel. Great Northern Railway Co. - v. District Court (1961), 139 Mont. 453, 365 P.2d 512; Rracy v. Great Northern Railway Co. (1959), 136 Mont. 65, 343 P.2d 848. Recognizing the open court policy stated in our Montana Constitution and the FELA policy favoring the injured railway worker's choice of forum, this Court has held the doctrine of forum non conveniens inapplicable to FELA actions brought in Montana's district courts. We would point out that Montana's position in this regard is not taken in the federal courts following the enactment of 28 U.S.C. S 1404(a) in 1948. That statute provides : For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought. This statute was held to apply to FELA actions brought in Federal District Court in ex parte Collett (1949), 337 U.S. 55, 69 S.Ct. 944, 93 L.Ed. 1207. Collett was also followed by the United States Supreme Court in deciding whether a state court has the power to dismiss a FELA action on the ground of forum non conveniens. Southern Ry. Co. v. Mayfield (1950), 340 U.S. 1, 71 S.Ct. 1, 95 L.Ed. 3. In that case, the Court said that a state was not compelled to entertain FELA cases brought in its courts but could, "According to its own notions of procedural policy . . . reject, as it may accept, the doctrine for all causes of action begun in its courts." 340 U.S. at 3. Montana first rejected the applicability of the doctrine in LaBella, stating that: We fully recognize that the state is not constrained by federal law to reject the doctrine of forum non conveniens in FELA actions. However, we find the policy favoring the injured railroad worker's choice of forum to be highly persuasive. This, in addition to the state's "open court poli- cy" compels this Court to hold the doctrine of forum non conveniens inapplicable to FELA suits filed in Montana District Courts. We repeat the warning set forth in State ex rel. Great Northern Ry., supra 139 Mont. at 457, 365 P.2d 514. "[Ilf a substantial increase in this type of litiqation is called to our attention in the future we will reexamine the situation in light of what we have herein stated." Our decision is a narrow one. We have not been confronted by the application of forum non conveniens in non-FELA cases and our holding today does not purport to deny or recognize the existence of the doctrine in cases where there is no strong policy favoring plaintiff's selection of forum. The holding in LaBella has been followed in subsequent cases. In addition, in no FEZA action has there been suffi- cient proof of a substantial increase in this type of litiga- tion sufficient in quantity to require any limitation on the plaintiff's choice of forum. The foregoing case analysis under the doctrine of forum non conveniens applies equally to the provisions allowing a court to change the place of trial in S 25-2-201, MCA. We therefore hold that in FELA cases neither the doctrine of forum non conveniens, nor the right to change of place of trial contained in S 25-2-?01, MCA, is available. We affirm the denial of BN's motion for a change of venue. We Concur: | March 7, 1989 |
4f1d9735-8509-4f77-86d8-c650ba5fbfa4 | MONTANA BANK OF CIRCLE N A v RA | N/A | 88-326 | Montana | Montana Supreme Court | No. 88-326 IN THE SUPREME COURT OF THE STATE OF MONTANA MONTANA RANK OF CIRCLE, N.A., a corporation, Plaintiff and Counterdefendant and Respondent, VS. RALPH MEYERS & SON, INC., a corporation, and KEITH MEYERS, Defendants, Counterplaintiffs and Third-Party PI-aintiffs, and Appellants. APPEAL FROM: The District Court of the Seventh Judicial District, In and for the County of McCone, The Honorab1.e Dale Cox, Judge presiding. COIJNSEL OF RECORD : For Appellant: Zames A Patten; Patten Law Firm, Billings, Montana For Respondent: Kyle A Gray; Holland & Hart, Billings, Montana James M. Ragain; Holland & Hart, Billings, Montana 3- 3 0 I< L'l LA' --I ;": c 1 LtJ m r(- 3- : Submitted: February 3, 1989 Decided : February 23, 1989 Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. This lawsuit is a debt collection and foreclosure action against the principal Ralph Meyers and Sons (Corpora- tion) and its surety and guarantor, Keith Meyers (Meyers) individually, with additional counts by plaintiff Montana Bank of Circle (Bank) alleging fraud, wrongful conversion and controlling stockholder individual liability (piercing the corporate veil). Defendants counterclaimed against the Bank and filed a third-party suit against the bank holding compa- ny, Montana Banksystem, Inc. (MBI), for breach of the implied covenant of good faith and fair dealing. The District Court, Seventh Judicial District, McCone County, sitting without a jurv, granted summary judgment in favor of the plaintiff Bank on Counts I (default), XI (fore- closure of security interest), and VIX (individual liability) of its complaint, establishing both defendants' liability on the underlying note and dismissing all other claims. The summary judgment dismissed the counterclaim and third-party action as well. The District Court based its summary judgment on the surety and guaranty documents which were signed by Meyers and which the court ruled were in effect at the time the corpora- tion defaulted on its note. Defendants appeal. The issue on appeal is whether there is any genuine issue of material fact precluding summary judgment on Meyers' contentions that he is not personally liable for the default of his corporation and that the Rank acted in bad faith toward him individually. We affirm. I. THE SURETY AND GTJARANTY AGREEMENTS Corporation borrowed $293,000 from the Bank on Septem- her 30, 1986, and signed a promissory note and security agreement evidencing the debt. Prior to this occasion, the course of dealing between the parties is outlined below: 7-25-83 Loan with $200,000 Guaranty 6-11-84 Loan with Securitv & $500,000 Surety Agreements 10-30-84 $100,000 Surety Agreement 11-20-84 $150,000 Surety Agreement 6-06-85 $120,000 Loan with Surety Agreement 10-07-85 $300,000 Loan with Security Agreement 9-30-86 $293,000 Loan in Question All of the above loans were repaid prior to the Septem- ber 1986 loan in question. The October 7, 1985, loan was repaid in September 1986 with proceeds from the loan in question. No surety or guar- anty documents were executed contemporaneously with the October 1985 loan or the September 1986 loan. Bank argues that none were necessary because the surety documents that had previously been executed between the parties all express- ly stated that they were "open and continuing" in nature, covering all indebtedness of the principal whenever or howev- er incurred. Meyers contends that each surety was attached to a specific note and should be exonerated as a matter of law when each note was repaid; since no surety agreement was executed at the time of the September 1986 loan, he argues that he is not personally liable for the corporate default. Thus, the legal question becomes, what exonerates a surety under this contract? The specific language relied on by Rank is as follows: SURETY AGREEMENTS For a valuable consideration, Borrower [the corporation] and surety [Keith Meyers'J iointly, severally, and-uncondi- tionally are bound - to paqr to the Bank, --- its successors or assigns, on demand, in lawful money of the United States of America, any and all indebtedness of the - -- - - - Borrower to Bank, as follows: -- 3. Nature of Surety's Undertaking. - The liability - of Surety shall be open and - - - - continuous for so long as this surety - - - - - - - - agreement - - is in force. Surety intends to be responsible at all times for the performance of all obligations of Bor-- rower to Rank within the limits of Section 1. Thus, no payments made upon Borrower's indebtedness will discharge or diminish the liabilitv of Suretv for - ' - - - any and allremaining -and - - succeeding indebtedness of Borrower to Rank. The -- liability of Surety will be enforceable against both the separate and community property of Suretv whether now owned or hereafter acquired. 5. Duration of Suretv Aareement. This surety agreement wilf tLke effect when received by Bank, without the necessity of anv acce~tanke bv Bank. and will contike - - in L f u l l forGe until -- such time as Surety notifies Bank in writing, a t . - - - the branch or office of Rank to which this surety agreement is delivered in the first. instance, - of Surety's - election to terminate the same. - - - [Emphasis added. 1 GUARANTY . . . The undersigned hereby absolutely and unconditionally guarantees prompt - payment when due and at all times there- after of any and all existing and future indebtedness and-liahi-lity of every - kind, nature and character (includinq all renewals, extensions and modifica- tions thereof) from the Borrower to the -- -- Bank, howsoever and whensoever created, or arising, or evidenced, or acquired; - and the underxgned waives nFtice of the acceptance of this Guaranty and of a n ! 7 and all such indebtedness and liability. This Guaranty is made and shall continue as to anv and all such indebtedness and --L--- - - liability of the Borrower to the Bank incurred - or arising prior - to receipt - by the Bank of written notice of the termi- --- nation hereof from the undersisned . . . [Emphasis added.] Meyers relies on 5 28-11-413, MCA, which reads: Effect of performance or offer - of per- formanceon surety's liability. Perfor- mance of the principal obligation or an offer of such performance, duly made as provided in this code, exonerates a surety. Meyers argues that "performance of the principal obli- gation" means payment of each note. Thus, he argues that each surety obligation was exonerated as he repaid each outstanding loan, contrary to the express lanquage in the contract. Bank argues that when the contract is silent as to termination, the statute will apply to terminate the surety- ship for the debts of the principal which have been repaid. Howe~rer, the statute would not supply the date - or method of termination when the unambiguous written contract expresses that termination may only be effected by written notice. We affirm the lower court's finding that the sureties were not exonerated by operation of law under S 28-11-413, MCA . Meyers raises exoneration as defined under 28-11-413, MCA, as his third affirmative defense in his amended answer and counterclaim dated February 18, 1988. However, the contracts which he signed expressly waive his right to exon- eration in that manner: Paragraph #3 ". . . Thus, - no payments made upon Borrower's indebtedness will discharge surety's obligation . . . " (Emphasis added.) We conclude that this is a valid waiver of rights. Because it is not a constitutional right, nor a waiver in violation of public policy, Meyers was entirely free to contract away his right to the statutory exoneration of his suretyship, which he did. See, Kelly v. Lovejoy (19771, 172 Mont. 516, 565 P.2d 321 (waiver may he proved by a course of acts or conduct so as to induce the belief that the intention and purpose was to waive); and Thiel v. Johnson (Mont. 1985), 711 P . 2 c ? 129, 42 St.Rep. 2010 (waiver may be express or implied). A similar waiver under a guaranty contract occurred in Riverside Nat. Bank v. Manolakis (Okla. 1980), 613 P.2d 438. We find the analysis in Manolakis persuasive. In that case, the guarantor argued that his obligations were satisfied by operation of law because the creditor bank had failed to seek a deficiency judgment against the principal within ninety days as per Oklahoma statutory law. Such failure released the principal. However, the court concluded that the quaran- tor bras still liable, saying: What defenses remain available to a quarantor under [the statute1 . . . must be determined by the terms of the guar- anty contract, i. e. , by the breadth of the guarantor's promise. In the case before us, the guarantor, by the clear provisions of his promise, expressly waived all of the available [statutory] defenses. Manolakis, 613 P.2d at 439. Meyers likewise waived his statutory defenses available to him as a surety and no exoneration is effected in t . h j . s case under § 28-11-413, MCA. However, this Court finds the central question here is not merely one of exoneration, but more realistically, what was the nature of the relationship between the parties. Meyers, Corporation and Bank began a course of dealing, based on a series of written contracts, to establish a Line of credit for the benefit of Corporation. As is st-andard bank- ing practice in Montana, Bank would not loan such large amounts of money to a closely-held family corporation without a personal guaranty or surety from the major individual stockholder. The intent of the parties to aid corporation by lending money but to protect Rank with personal guaranties is entirely clear from the written documents which establish thj s relationship. Based on this relationship, we find no alternative but to affirm the lower court's findings that the surety agree- ments are in effect and Meyers is in fact personally liable for the default of Corporation. We affirm that the sureties dated Octoher 30, 1984 for $100,000; November 20, 1984 for $150,000; and June 6, 1985 for $120,000 were in effect and cumulatively cover the $293,000 default. However, the surety dated June 11, 1984, for $500,000 fails as a matter of law because Meyers d i d not sign it in his individual capacity on the line designated for the surety. It was not duly executed. Thus, that contract fails. As noted above, Paragraph 3 of the agreement outlining the nature of surety's undertaking states, "The liability of surety shall be oPen and continuous for so long as this -- agreement is in force . . . Thus, no payments upon Borrower's indebtedness will discharge the liability of surety for any and all remaining and succeeding indebtedness of Borrower to - - - Bank." This express language must be given effect. until terminated. Paragraph # 5 states termination is only effected when surety notifies Bank in writing. Additionally telling is the fact that in triple size, bold face, capital letters directly above Meyers' signature it reads, "EFFECTIVE UNTIL TERMINATED IN THE MANNER SET FORTH . . . ABOVE," negating any possibility that the termination clause was merely adhe- sive language. Meyers admits he gave no such written termi- nation to Bank. To have Meyers be individually liable for the line of credit established by Corporation and evidenced by the guaranty and four sureties is the obvious and ex- pressed intent of the parties. Meyers sought to introduce parol evidence as to his contrary intent to have each surety agreement be "note spe- cific," i.e., for the suretyship to be released and start anew as each debt was repaid. Although his counsel admitted a t . the hearing on sum mar:^ judgment that each document is clear and unambiguous on its own, he argued that when taken as a series of transactions, they create an ambiguity as to Meyers' intent regarding the continuing nature of his liabil- ity. Thus, he argues that ambiguity should either be re- solved against the Bank as makers of the documents, or by allowing him to introduce parol evidence. The lower court found no ambiguity in the documents, the same was ad-mitted by both counsel., and refused all parol. evidence of contrary intent. We agree. The rule has long been that where no ambiguity exists in the written documents, no par01 evidence may be taken, Nordlund v. School District (Mont. 1987), 738 P.2d 1299, 44 St.Rep. 1183, and the duty of the court is simply to apply the language as written. The lower court also enforced the express language of the guaranty which held Meyers individually liable to the extent of $200,000. We agree. The operative language is substantially the same as the sureties discussed above. A guarantor differs from a surety in that a surety holds primary liability equal with that of the original borrower. However, a guarantor does not become liable until an intervening act occurs, such as a default of the original borrower. Compare §§ 28-11-401 and 28-11-101, MCA; see also, Stensvad v. Miners & Merchants Bank of Roundup (1979), 183 Mont. 160, 598 P.2d 1083. In the instant case, Bank exhausted its remedies against Corporation and the collateral. Thus, it was ripe to proceed against Meyers as both a surety and a guarantor. We note here that had the above-mentioned surety docu- ments failed legally as per Meyers' argument that they were exonerated, their language still would have effected a guar- anty against Meyers individually under the facts of this case. Because Montana has no comparable exoneration statute for guaranties as it does for sureties, and because Bank had already sought recovery against the Corporation, and the collateral after a default, at the very least Meyers would be a guarantor under all of the duly-executed documents. In its broadest sense, every suretyship includes a guaranty. Sure- tyship, Simpson (1977) . Thus, the operative language in these surety agreements also effectuated a guaranty. The District Court is affirmed on that issue. 11. BAD FAITH The District Court summarily dismissed defendants' bad faith claims against both the Rank and MBI. We affirm. Defendants' contentions fail both as a matter of factu- al proof and as a matter of law. Meyers named certain live- stock and equipment as collateral for his loans in the security agreements he executed. However, immediately after procuring the loan in question, Meyers sold the collateral to pay off a debt to Saul Stone, a new York stockbroker, for losses he incurred in the futures market. Additionally, Meyers applied the proceeds from the corporate loan to the same debt. It is undisputed that Meyers took these actions without advising the Bank of his intent to do so and, in fact, did not advise the Bank of his actions until the Corpo- ration was about to default. In his deposition, Mevers testified that the facts amounting to the Bank's had faith (and MBL as being "inextri- cably intertwined" to the Bank) were (1) failing to renegoti- ate the defaulted note with the Corporation, (2) publishing slanderous statements about Meyers in the District Court complaint, and (3) spreading rumors about Meyers' financial inability in order to "shut him down" in his ranching/business community. This Court has never held that a Montana bank is under a duty to renegotiate a defaulted loan and Meyers is unable to point to case law anywhere which so holds. That argument is without merit. Because there is no evidence that a duty exists, Rank is entitled to summary judgment. First Trust Co. of Montana v. McKenna (1980), 188 Mont. 534, 614 P.2d 1027. See also, Central Bank of Montana v. Eystad (Mont. 1385), 710 P.2d 710, 42 St.Rep. 1850 (the bank has no duty to renew or extend the note indefinitely); S 20-1-211, MCA (bank need only act in a commercially reasonable manner) ; First Nat'l Montana Bank of Missoula v. McGuiness (Mont. 1985), 705 P.2d 579, 42 St.Rep. 1288 (the exercise of good business sense does not constitute bad faith). Likewise, Meyers' second argument pertaining to the "bad faith filing of fictitious and slanderous claims" print- ed by Bank in its complaint is also without merit. It has long been held that statements made in a iudicial proceedinq are absolutely immune and a cause of action for defamation cannot be predicated thereon. Section 27-1-804 (2), MCA; see Bollinger v. ~Tarrett (1965), 146 Mont. 355, 406 P.2d 834 ("[Tlhere is no libel because any publication made in a judicial proceeding is privileged" ) . Rank and MRI were entitled to summary judgment on that issue. Lastly, is the question of certain rumors which Meyers alleges that Bank instigated against him in order to put him out of business. This allegation fails both factually and legally. Because of the long and involved facts, we choose to discuss the legal aspects of this issue instead. The relationship between the parties was defined by their underlying commercial contracts. Based on those under- lying contracts, two crucial facts come to light: (1) Bank did not breach the contracts; (2) Mevers breached the contracts. It can be said fairly that the underlying contracts subsumed the entirety of the relationship between Rank and Meyers. They had no course of dealing or external relation- ship, absent their commercial contract. Thus, Montana l a b 7 requires an initial finding that Bank breached that contract to have liability for bad faith conduct attach. Since the Rank had not breached the underlying contract (promissory note and security agreement), it cannot be said that Rank acted unreasonably and in bad faith. Nordlund v. School Dist. No. 14 (Mont. 1987), 738 P.2d 1299, 44 St.Rep. 1183, and Maxwell v. Sisters of Charity of Providence (D. Mont. 1986), 645 F.Supp. 937. Additionally, "it. is a well-settled rule of contract law that a party who commits the initial breach cannot com- plain of a subsequent breach." Malloy v. Judge's Foster Home (Mont. 1987), 746 P.2d 1073, 44 St.Rep. 1996. Meyers commit- ted the initial breach when he secretly sold the Bank's collateral and is barred from subsequently claiming the Bank treated him unfairly and in bad faith on their contract. Based on the conduct of the parties with regard to the underlying contracts, no liability can attach for bad faith. Summary judgment in favor of the Bank was proper. Meyers' attempt to hold MBI, the bank holding company, liable for bad faith is baseless. He admitted at hearing that he and his corporation had no independent relationship with MBI into which the covenant could be implied. But, he argued that the Bank owed. him a duty of good faith as its customer and that MBI was likewise bound by this duty because it is "inextricably intertwined" with the Bank. Meyers was unable to put forth any Montana law to support his contention that an affiliation between two par- ties may transfer one party's duty of good faith onto another party. Likewise, Meyers brought forth no evidence by way of affidavit or deposition testimony, or otherwise, to prove a relationship between MBI, the Bank and himself. MBI argues that summary judgment for them was proper on this count because of Meyers' failure of proof. The summary iudqment hearing was the time for Meyers to put forth the evidence of these relationships, if any existed. We agree. Meyers and his corporation had a bank-customer rela- tjonship with Bank. However, no evidence was presented which suggested this was a special. or fiduciary relationship onto which the covenant is applied under Tribby v. Northwestern Bank of Great Falls (Mont. 1985), ?04 P.2d 409, 42 St.Rep. 1133. There was no evidence that Bank encouraged the loans, advised Meyers or acted as his confidant. To the contrary, Meyers admitted he deliberately did not tell the Bank of his corporate conduct until it was over. MBI cannot be held liable for had faith under these facts. Summary judgment was proper. The appellate standard of review of a summary judgment is the same as that used hy the trial court. In order for summary judgment to issue, the movant must show that there is no genuine issue as to all material facts. Rindrim v. Uni- versity of Montana (Mont. 1988), P.2d , 45 St.Rep. 2316. Based on the foregoing credible evidence, Rank and MFT have met their burden. We conclude that no genuine issues of material fact exist. Judqment af fi-rmed . We concur: V Justices | February 23, 1989 |
83199153-f3ea-4da4-9229-edcccbd54aad | PAPP v ROCKY MOUNTAIN OIL MINER | N/A | 88-087 | Montana | Montana Supreme Court | NO. 88-87 IN THE SIJPREME COURT OF THE STATF OF MONTANA 1 9 8 9 NANCY PAPP, Individually and as Personal Representative of the Estate of ALEX PAPP, Plaintiff and Appell-ant, ROCKY MOUNTAIN OIL AND MINERALS, INC.; PETRO-LEWIS CORP. , and PETRO-LEWIS FlJNDS , INC., and PARTNERSHIP PROPERTIES CO.; BUCKEYE ENERGY CORP., and RALCROTJ OIL COMPANY, Defendants and Respondents. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable G. Todd Raugh, Judge presiding. COUNSEL OF RECORD: For Appellant: TJgrin, Alexander, Zadick & Slovak; John D. Alexander and Neil E. Ugrin argued, Great Falls, Montana For Respondent: Moses Law Firm; Charles F. Moses, Billings, Montana Dorsey and Whitney; James L. Jones argued for Rocky Mountain Oil, Billings, Montana :$TcNamer and Thompson, Mark S. Werner argued for Petro- Ln . - - i Lewis, Billings, Montana >keefer, Roybal, Hanson, Stacey & Jarussi; Neil S. 7 - 1 1 1 , i ~:'jKeefer araued for Buckeye & Ralcron, Billings, Montana Submitted: January 121 1989 Decided: March 2, 1989 Mr. Chief Justice J. A. Turnage delivered the Opini-on of the Court. This is an appeal from an order of the Thirteenth Judicial District, Yellowstone County, granting summarv judgment to respondents, Rocky Mountain Oil, Petro-Lewis Corporation, and Buckeye Energy Corporation. Appellant, Nancy Papp, brought suit in strict liability in tort and negligence for the wrongful death of her husband. Alex Papp died of lethal inhalation of hydrogen sulphide (H2S) gas while working for Balcron Oil Company. Appellant claims the facility in which Papp was working and its components were defective and unreasonably dangerous. The court aranted summary judgment in favor of defendants. We affirm. The issues here are: (1) Whether the District Court properly found that respondents were entitled to summarv judgment as a matter OF law on the grounds that the claim for strict liability does not fulfill the requirements of Restatement (Second) of Torts, section 402A. (2) Whether the negligence issue must be dismissed on the qrounds that the builders of the separator facility are too remote. (3) Whether Buckeye Energy Corporation and Balcron Oil are joint venturers in the State B lease, thus immunizinc! Buckeye from appellant's negligence claim. FACTS In 1951, the State of Montana, State Board of Land Commissioners, entered into an oil and gas lease agreement with Phillips Petroleum Company and Ada Oil Company for property located southwest of Conrad, Montana. Known as the "State R " lease, it was assigned to Rocky Mountain Oil and Minerals, Tnc. (Rocky Mountain) in Auuust 1971. On September 1, 1978, Rocky Mountain sold its interest to the Petro-Lewis Corporation, Petro-Lewis Funds, Inc., and Partnership Proper- ties Co. (Petro-Lewis), reserving a 50 percent interest in the leasehold estate. On October 4, 1981, Petro-Lewis sold bv way of assignment, bill of sale, and conveyance, oil and gas leases in Pondera County, including the State B lease, to Buckeye Energy Corp. (Buckeye), who, in the same meeting, sold two-thirds interest in its Pondera Countv oil and qas leases to Balcron Oil Co. (Ralcron). In 1979, Alex Papp was hired by Ralcron as an oil and gas pumper and worked for Balcron from 1979 until the date of his death, June 6, 1985. He spent up to 90 percent of his time in the gas fields and 10 percent working in the o i l fields. On the State R lease southwest of Conrad was an oil "treater" or "separator" facility. The facility's purpose was to separate water and qas from the crude oil being pumped out of the ground. There are two tanks in the separator facility, the water knock-out tank and the gun barrel tank. An incoming flow line enters the facility from an underground pipe depositing oil into the knock-out tank. The tank sepa- rates salt water from the oil and allows hydrogen sulphide gas (HZS) to separate from the crude oil and vent into the atmosphere. Once the initial impurities are separated and siphoned out, the oil is transqerred to the gun barrel tank where it is heated to remove any remaining impurities. The treated oil is then put into storage. Prior to the State R lease acquisition by Rocky Moun- tain, the treater facility had become worn from use. After the acquisition by Rocky Mountain, Rocky Mountain dismantled and rebuilt the facility and its components, completely enclosing it. After Ralcron took over the lease in 1985, it began replaci-ng the flow pipes entering the facility . Ralcron replaced PVC pipe, which was unflexible and brittle, with a more flexible poly pipe. Alex Papp and Larry Rannelr were assigned to complete an auxiliary flow line in the facility. On June 6, 1985, shortly after lunch, Papp and Ranney went to finish the flow line. Later that afternoon, Jerry Griggs, another employee of Balcron, went to the facility and found both men overcome by H S inhalation. 2 Hydrogen sulphide is a deadly gas, exposure to which can quickly cause death. The building which houses the separator facility had at the time of Papp's death only one door for ingress and egress and no ventilation. There were no signs warning against the H S gas. Both decedents were 2 aware of the presence of H2S gas in the oil and at least some of its dangers. However, employees of Balcron were given no formal- training concerning the dangers of H S gas. 2 When Griggs arrived at the treater facility, Papp was found sitting against the east wall with his feet under the steel flow line. Larry Ranney was found twelve feet from Alex Papp against the inside west wall, with a wrench in his hand. Griggs realized that there was the presence of H2S gas in the air. Despite the presence of the gas, he went inside and pulled Alex Papp out. Another employee arrived and pulled out Larry Ranney. Oil was steadily flowing out of the pipes into the facility and both Papp and Ranney were covered with dirt and oil which had apparently sprayed from a cracked PVC pipe. After the deaths, employees of Balcron were given formal H S training. Furthermore, changes in the treater 2 facility were made. These included constructing an addition- al entrance for cross-ventilation, erecting warning signs of H S gas, and finishing the replacement of the PVC pipe. 2 The Occupational Safety and Health Administration (OSHA) issued to Ralcron Oil citations for ~riolations of the Occupational Safety and Health Act. Specifically, Balcron was cited for inadequate warning of H2S gas and for not providing respirators for the employees. Decedent's wife, Nancy Papp, received workers' compen- sation benefits from the death of her husband, paid out by Balcron Oil. She later filed a complaint on behalf of her- self and on behalf of the estate of Alex Papp, against Rocky Mountain, Petro-Lewis, Buckeye, and Balcron, alleging strict liability, negligence, and negligent failure to warn on the basis that the separator facility and its components were defective and unreasonably dangerous. After the defendant^ answered the complaint, plaintiff took the depositions of three of Papp's fellow employees and filed sets of interroq- atories. In February, March, and April, 1987, defendants filed motions for summary judgment. Plaintiff thereafter moved to compel discovery, and filed briefs in opposition to the motions for summary judgment. On December 10, 1987, the District Court granted the motion for summary judgment on the grounds that no dispute as to material facts existed and that the defendants were entitled to summary judgment as a matter of law. DISCUSSION The first issue is whether the District Court properly granted summary judgment on the grounds that appellant fail-ed to show that the treater facility was within the Restatement (Second) of Torts, S 402A definition of "product." "PRODUCT" DEFINITION The standard of review for granting or denying a motion for summary judgment is the same as that used by the trial court--that is, the moving party is entitled to judqment at law i.f there Is no genuine issue of material. fact and the moving party is entitled to judgment as a matter of law. Rule 56 (c) , M.R.Civ.P. ; Frigon v. Morrison-~aierle, Inc. (Mont. 1988), 760 P.2d 57, 45 St.Rep. 1344; Sevalstad v. Glaus (Mont. 1988), 737 P.2d 1147, 44 St. Rep 930; Kronen 7 7 . Richter (1984), 211 Mont. 288, 683 P.2d 1315; Reagan v. Union Oil Company of California (1984), 208 Mont. 1, 675 P.2d 953. Appellant alleges that there are material facts in dispute--namely, whether the design and manufacture of the facility and its component parts were defective or whether i t . was negligent use or misuse of the equipment by Papp himself which caused his death. The reason for the death, according to appellant, was that the treater facility was defective and unreasonably dangerous. The facility lacked ventilation, there was insufficient ingress and egress, and there were no signs warning of the dangers of H2S. Moreover, Papp had received no formal training regarding the dangers of the gas. To prove that the respondents are liable under strict liability, appellant must demonstrate that the treater facil- ity was a "product" within the $ $ 402A definition, that this product was built and maintained by the respondents, and that the product was in a defective condition unreasonably danger- ous. If the appellant is unable to show that the separator facility was a product, then S 402A is inapplicable to this case, and the summary judgment order will be affirmed. Respondents allege that the appellant has not met the re- quirements of the 5 402A strict liability claim. To find strict liability of the seller of the facility, the facility and its component parts must be a "product" for S 402A purposes. Restatement (Second) of Torts, 5 402A states in perti- nent part: (1) One who sells any product in a de f ec t.j ~7e condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of selling such a prod- uct . . . From the time that the second Restatement was published in 1965, courts have struggled to find an all-inclusive defini- tion for the term "product." The Restatement writers them- selves began the list in the official comments following S 402A. The list included the sale of food for human con- sumption, or other products for intimate bodily use. The authors of the Restatement also embraced any product which reached the consumer or ultimate user in substantially the same condition in which it was intended, such as an automo- bile, an airplane, a grinding wheel, a water heater, a gas stove, a power tool, a riveting machine, a chair, or an insecticide. It also included any product which harmed the consumer's chattels or land. Since 1965, the list has expanded tremendously and courts have adopted policy reasons for defining a product, rejecting a strict dictionary definition of the word "prod- uct. " The social policy justifications for determining whether a "product" is found have been discussed by this Court in Brandenburger v. Toyota Motor Sales, U.S.A., Inc. (1973), 162 Mont. 506, 514-515, 513 P.2d 268, 273. The policy considerations applicable to the case at har include: (3) It is in the public interest to discourage the marketing of defective products ; (4) It is in the public interest to place responsibility for injury upon the manufacturer who was responsible for its reaching the market; (5) That this responsibility should also he placed upon the retailer and whole- saler of the defective product in order that they may act as the conduit through which liability may flow to reach the manufacturer, where ultimate responsi- bility lies; (7) That the consumer does not have the ability to investigate for himself the soundness of the product; (8) That this consumer's vigilance has been lulled by advertising, marketing devices and trademarks. See also: Lecherga, Inc. v. Montgomery (Ariz.App. 1970), 467 P.2d 256; Nalbandian v. Byron Jackson Pumps, Inc. (19651, 97 Ariz. 280, 399 P.2d 681; Greenman v. Yuba Power Products, Inc. (1962), 27 Cal.Rptr. 697, 377 P.2d 897; Escola v. Coca Cola Bottling Co. of Fresno (1944), 24 Cal.2d 453, 150 ~ . 2 d 436; "Products Liability Symposium: What is or is not a Product within the Meaning of Section 402A," 57 Marq. L. Rev. 623 (1974). Therefore, courts analyzing a cause of injurv to see if the injury-causing thing is a "product" within the confines of a strict liability definition for S 402A purposes, t.est the injury-causing thing against these preceding policy justifications. If it passes muster, it is then deemed to be a product. In applying the policy justifications, most courts have refused to adopt the contention that a building is a "prod- uct." In Lowrie v. City of Evanston (Il1.App. 1977), 365 N.E.2d 923, decedent died from a fall in a parking garage. The Tll.inois AppeLI-ate Court held that neither the parking ramp nor the parking space was a "product" within the product liability definition. In Trent v. Brasch Manufacturing Co., Inc. (I11.App. 1 Dist. 1985), 477 N.E.2d 1312, the plaintiff was injured while "checking a thermostat" of the heating, ventilation, and air-conditioning system (HVAC) in a build- ing. Defendants claimed that the HVAC was a component and indivisible part of the building. The court disagreed, reasoning that the HVAC was attached to real estate. The court applied the social policy considerations, ultimately sending the issue back to the trial court. See also: Imrnergluck v. Ridgeview House, Inc. (I11 .App. 1977) , 368 N.E.2d 803 (in wrhich a sheltered-care facility was held not to be a product); and Heller v. Cadral Corp. (Ll1.App. 19801, 406 N.E.2d 88. Other jurisdi.ctions have also held that huildinqs are outside the scope of the "product" definition area. In Messier v. Association of Apartment Owners (Hawaii App. 1987), 735 P.2d 939, plaintiff was injured during a storm b l r an allegedly defective metal panel which dislodged from the roof of his condominium. The Hawaii court held that the condominium was not a product. The Washington Appellate Court in Charlton v. Day Island Marina, Inc. (Wash.App. 1987), 732 P.2d 1008, held that a boathouse builder was not liable for the deaths of plaintiffs' decedents who died from carbon monoxide poisonins after being overcome by exhaust fumes caused by the boat's running engine within the boathouse. The plaintiffs claimed that there was inadequate ventilation in the boathouse. The court found that the plaintiffs failed to show that the boathouse was a product given its similarities with other buildings. For more cases which regard buildings to be outside the purview of "products" for strict liability in tort, see: McClanahan v. America Gilsonite Co. (D.C. Colo. 1980), 494 F.Supp. 1334; and K-Mart Corp. v. Midcon Realty Group of Connecticut, Ltd. (D.C. Conn. 1980), 489 F.Supp. 813. A case which is nearly identical in terms of facts to the case at bar is Cox v. Shaffer (Pa.Super. 1973), 302 A.2d 457. In - Cox, the decedent died by asphyxiation while working in a silo. The Pennsylvania court held that a silo con- structed in place on an employer's land is not a product. Some states have alternatively held that a building is a product within the scope of strict liability in tort, but o n l : 7 under limited circumstances. In 1965, the New Jersev Supreme Court was the first court to extend strict liability to home development in Schipper v. Levitt & Sons, Inc. (N. J. 1965), 207 A.2d 314. In Schipper, a child of plaintiffs was scalded by hot tap water and plaintiffs sued the builder-vendor for failure to install a mixing valve to reduce the water temperature after the water left the heating boiler. In holding the builder-vendor strict1.y liable, the court stated: When a vendee buys a development house from an advertised model, as in a Levitt or in a comparable project, he clearly relies on the skill of the developer and on its implied representations that the house will be erected in reasonably workmanlike manner and will be reason- ably fit for habitation. He has no architect or other professional adviser of his own, he has no real competency to inspect on his own, his actual examina- tion is, in the nature of things, large- ly superficial . . . Schipper, 207 A.2d at 325. The court continued, saying that if injuries are the result of defective const.ructi.on, the builder should hear the cost. In 1969, California followed New Jersey in adopting strict liability for mass production and sale of tract homes in Kreigler v. Eichler Homes, Inc. (1969), 269 Cal.App.2d 224, 74 Cal.Rptr. 749. Defendant had constructed over 4000 homes in which steel tube radient systems had been installed in the concrete floor. Kreigler was injured when the floor collapsed from corrosion of the steel tubing. The California court, in holding defendant strictly liable, analogized mass-production of homes and mass-production of cars, stating that the buyer is not in a position to protect himself and that the policy reasons for "product" status were the same. In Kanecko v. Hilo Coast Processing (Hawaii 19821, 654 P.2d 343, the Hawaii Supreme Court also held in favor of strict liability in cases of construction of prefabricated buildings. See also: Lantis v. Artec Industries, Inc. (7th Cir. 1981), 648 F.2d 1118. An alternative view in a few states is that the home itself is not a "product1' but that the component parts or additions to the building are "products" within the § 403A definition. In Philadelphia National Bank v. Dow Chemical Co. (E.D.Pa. 1985), 605 F.Supp 60, one of Dow's products, Sarahond, was a chemical in the mortar used in erecting plaintiff's bank building. The Sarabond corroded metals embedded in the mortar and brick panels of the building, causing structural damage. Defendants alleged that the mortar had become incorporated in the structure and indivisi- ble from the building. The court rejected this argument holding that the Sarabond was a product and not part of the real property or a fixture thereto. In S.L Rowland Construc- tion Co. v. St. Paul Fire and Marine Ins. Co. (Wash. 19671, 434 P.2d 725, the court held that in cases where an insurance policv limited liability in case of fire, the house itself was not a product, but the component parts therein were products. Another dimension of "product1' definition was added by the Nevada Supreme Court in Elley v. Stephens (Nev. 1 9 8 8 1 , 760 P.2d 768. There, the Supreme Court of Nevada held: . . . even if we assumed, arguendo, that a prefab house is a product subject to the law of strict products liability, a strict liability theory is not applica- ble to an occasional seller of a prod- uct, who does not, in the regular course of his business, sell such a product. [Emphasis added. 1 Elley, 760 P.2d at 771. The foregoing discussion sets out the development of case law considering buildings in terms of "product" defini- tion. In summary, a "product" is defined by policy consider- ations. Where a building is the alleged product, most. jurisdictions do not subject defendants to strict liability7 scrutiny unless the homes are prefabricated and mass-produced and the defendants are in the business of constructing or selling these types of homes, thus eliminating the unique status of most buildings. PRODUCT LIABLLITY IN MONTANA Strict liability is not new to Montana. Section 402A was first adopted in Brandenburger, in which we discussed the policy reasons for applying strict liability in tort. There are two decisions in Montana which are pertinent here. The first is Thompson v. Nebraska Mobile Home Corp. (1982), 198 Mont. 461, 647 P.2d 334; the second, McJunkin v. Kaufman (Mont. 1987) 748 P.2d 910, 44 St.Rep. 2111. In Thompson, the plaintiff complained of defects in her 1972 Magnolia Futurama Mobile Home, including loose shingles on the roof and poor seals in the corners of the home. We held that strict liabilty was expanded to those instances where there is damage onlv to the defective product. Personal injury is not required. In McJunkin, a K & B Mobile Home had numerous alleged defects shortly after the home was purchased. It was held that the plaintiff failed to show that the product was defec- tive. We also held that the phrase "defective conditior. unreasonably dangerous" in S 4 0 2 A is an indivisible require- ment to he proved by the plaintiff. Defendants contender? that the plaintiffs were required to prove that the mobile home was both in a defective condition - and unreasonably dangerous. Montana, however, has not addressed the initial ques- tion of whether the injury-causing thing is a product. We did not consider whether the mobile homes were "products" in Thompson or McJunkin, although, in the case of prefabricated homes and mobile homes which are mass-produced and sold in the stream of commerce, they may qualify as "products." We hold that the summary judgment decision that the treater facility was not a "product" by the District Court must he upheld because: (1) The respondents were not in the husiness of selling separator facilities as required hv the Restatement; ( 2 ) The alleged product did not reach the stream of commerce nor was the decedent a consumer as defj-ned by the policy considerations in Brandenburger; and (3) The treater facility, a building, is not a product. Section 4 0 2 A refers specifically to "one who sells a product in a defective condition," where the seller is en- gaged in the business of selling the product. The respon- dents here are not sellers of treater facilities. They engage in the business of extracting oil and gas for refinement. They are, therefore, not sellers within the 5 4 0 2 A definition. This provision was incorporated in our statutes in 1987. See 5 27-1-719, MCA. In testing the alleged cause of death for "product" status, it is necessary to test the alleged product aqainst the list of policy considerations. According to the policy consj-derations in Brandenburger, whether the product is in the stream of commerce is relevant. See also: Immergluck v. Ridgeview House, Inc. (111.App. 1977), 368 N.E.2d 803; Roddie v. Litton Unit Handling Systems (111.App. 1 Dist. 19831, 455 N.E.2d 142; Moorman Manufacturing Co. v. National Tank Co. (I1l.App. 1980), 414 N.E.2d 1302, rev'd in part, aff'd in part (1982), 435 N.E.2d 443. This is apparent in three specific policy considerations, i .e., the public interest in discouraqFng the marketing of defective products, the limita- tions and solicitations of the manufacturers to the purchaser of the product, and the ability of the consumer to inspect the product. The separator facility did not enter the stream cf commerce. It was part of the property passed from one lessee to another. The facility was not a product which was in the stream of commerce. Because Papp was not a "consumer," usin? the treater facility after it had reached the stream of commerce, there was no issue of disparity in bargaining power or a manufacturer's use of persuasive advertising or market- ing devices to cause the consumer to buy the product. More- over, no issue has arisen as to whether the decedent was able to inspect the facility. The treater facility is not a product under the widely used policy considerations. A "product" is narrowly defined in the area of build- ings, and the treater facility and the building which houses it do not fit within the definition prescribed by the Re- statement. Leadinq cases have held that a building is not a "product, ' A n l e s s the b u j . 1 dins i s mass-produced or prefabricated. The separator facility is not mass-produced but is unique in nature. Considering that the structure which houses the separator facility is a building, the facil- ity is not a "product" within a strict liability definition. Other jurisdictions have held that components within a building are "products." However, even though the cracked P T T C pipe is a component and is known to be brittle and of poorer quality than the poly pipe, it is not that component alone which caused the death here. The H2S gas leaking from the pipe was deadly because it was not allowed to evaporate into the atmosphere, but was confined within the housing struc- ture. The building and its component parts are indivisible in this case. We hold that the building is not a "product" within the definition of § 402A of the Restatement. NEGLIGENCE The second issue is whether the claim of negligence must be dismissed on the ground that the builders of the separator facility cannot be liable for negligence once they have sold the facility and released all control of it. Appellant alleges that the respondents were negligent in their construction of the building and in their failure to warn decedent. Each of the defendants--Rocky Mountain, Petro-Lewis, Buckeye, and Balcron--denied liability, declar- ing instead that the decedent was negligent in misusing the components of the facilitv, specifically, putting too much strain on the PVC pipe while replacing it, causing the crack. Also, once the pipe had cracked, the decedents took improper steps in preventing the H2S gas from filling the facility and did not use caution to save themselves. Rocky Mountain and Petro-Lewis also blamed subsequent lessees for not properly inspectinq and preventing any hazards. Restatement (Second) of Torts, S S 352 and 353, propose that liability of builders is terminated once they have relinquished ownership and control of the property. The California Supreme Court has addressed the issue of a former owner's liability in a negligence claim. In Isaacs v. Hunt- ington Memorial Hospital (1985), 38 Cal.3d 112, 134, 695 P.2d 653, 664, the court stated that: [a] defendant cannot he held liable for the defective or dangerous condition of property which it did not own, possess, or control. Where the absence of owner- ship, possession, or control has been unequivocably established, summary judgment is proper. Furthermore, in Preston v. Goldman (1986), 42 Cal.3d 108, 720 P.2d 476, in a case where a previous owner was sued for injuries to a child who fell in a pond built by the former owner, the court held that a former owner is not subject to liability for injuries sustained on the property long after he had relinquished ownership and control. We apply the same reasoning here and hold that Rocky Mountain and Petro-Lewis are not liable to the appellant for decedent's death. They do not own, nor are they in posses- sion of, the treater facility. Even as builders, the respon- dents should not be held responsible for reasons similar to the accepted "work rule doctrine." Once the builders fin- ished the work on the facility and relinquished control of it to the subsequent owners, the subsequent owners accepted the property as finished. Therefore, the builders of the facili- ty are not liable. Harrington v. LaBelle's of Colorado, Inc. (1988), 765 P.2d 732, 45 St.Rep. 2176. JOINT VENTURE The third issue is whether Buckeye is immune from negligence liability as a joint venturer with Balcron Oil. Appellant was awarded workers' compensation benefits from Balcron. Pursuant to $ 39-71-411, MCA (1985), if a claimant is awarded workers' compensation benefits, workers' compensation is the exclusive remedy, and employers are immune from further liability. If Buckeye and Balcron are joint venturers, Buckeye is an employer and is immune from negligence liability. Appellant claims that there is no joint venture and Buckeye is a separate owner and liable to appellant. Buckeve and Balcron must meet the four elements of a joint venture, to qualify as joint venturers. They are as follows: 1) an express or implied agreement or contract creating the joint venture; 2) a common purpose among the parties; 3) community of interest; and 4) an equal right of control of the venture. Bender v. Bender (1965), 144 Mont. 470, 480, 397 P.2d 957, 962. On October 26, 1984, Petro-Lewis sold its interest to Buckeye who sold two-thirds of its interest to Balcron Oil on the same day. The parties arranged an agreement which de- clared that Buckeye held a one-third investment interest and Balcron held a two-thirds operations interest. Information income tax returns are filed as a joint venture and their respective income taxes are calculated thereon. Buckeye reimbursed Balcron for one-third of the wages and workers' compensation insurance premiums. We hold that the four elements have been met here. From the agreement between the parties, it can be discerned that they have entered into an agreement which created a joint venture. Co-ownership is not sufficient by itself to establish a joint venture, however. Sunbird Aviation, Inc. v. Anderson (1982), 200 Mont. 438, 651 P.2d 622. The two companies have a common purpose, that being the financing and operation of oil fields. The operation of the State R lease also shows the community of interest between Buckeye and Balcron. Appellant contends that the fourth element has not been met because Buckeye's two-thirds interest is not an equal share and they are not actively involved in the business affairs of the alleged venture. However, we have established that the parties can choose to delegate management duties to one venturer and still establish equal right of control. Murphy v. Redland, (1978), 178 Mont. 296, 583 P.2d 1049. Buckeye has sufficiently established that a joint venture is present. Therefore, as a joint venturer with Balcron, Buckeye is an employer of the employees working in the State B lease oil and gas fields and is immune from negligence liability pursu- ant to S 39-71-411, MCA. CONCLUSION The District Court found that because the S 402A re- quirements were not met and there were no material facts at issue, summary judgment would be granted in favor of respon- dents. We affirm the summary judgment decision. The treater facility is not a "product" and, therefore, strict liability is not applicable as a matter of law. Fl~rthermore, Rocky Mountain and Petro-Lewis were not negligent at the time of decedent's death, and Buckeye, as an employer, is immune from negligence claims. The appellant has failed to show that the treater facility was a product and concomitantly has failed to show any genuine issue of material fact. If the movant has met the initial burden of showing no genuine issue of material fact, "it then shifts to the non-moving party to demonstra.te a genuine issue of material fact. " Gamble Robinson Co. v. Carousel Properties (1984), 212 Mont. 305, 312, 688 P.2d 283, 287; Frigon v. Morrison-Maierle, Inc. (Mont. 1988), 760 P.2d 57, 45 St.Rep. 1344. Appellant has failed to show a genuine issue of material fact regarding respondents Petro-Lewis and Rocky Mountain. Moreover, appellant has failed to show any genuine issue of material fact that any of the respondents are liable in negligence. The District Court was correct in ordering summary judgment. Afftrmed. We concur: Chief Justice f L F < | March 2, 1989 |
34fb641c-a701-4814-beb9-3fbf8b8bf27a | DOWNING v GROVER | N/A | 88-319 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA WILLIAM GEORGE DOWNING and NARQUERITE M. DOWNING, Plaintiffs and Respondents, and Cross-Appellants, -VS- C. JOSEPH GROVER, GEORGE J. GROVER, and HAZEL M. GROVER, Defendants and Appellants. APPEAL FROM: District Court of the Fourth Judicial. District, In and for the County of Missoula, The Honorable Jack Green, Judge presiding. COUNSEL OF RECORD: For Appellant: Garlington, Lohn & Robinson; Tarry E. ~ i l e y , iss sou la, Montana For Respondent : Recht & Greef; John D. Greef, Hamilton, Montana Submitted on Briefs: April 3, 1989 Decided: April 26, 1989 0 Filed: Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. plaintiffs (~ownings) brought suit in the Fourth Judi- cial District, ~avalli County, seeking to establish a public road across defendants' (Grovers) property allowing easy access to Downings' property, or, in the alternative, a public or private prescriptive easement. The District Court, sitting without a jury, found that no public road existed, no public easement existed, but that a prescriptive easement had been established by Downingsl predecessors in interest prior to 1 9 6 1 . Both parties appeal the ~istrict Court judgment. The Downings still maintain that one or all of the roads in question are public roads or that the public has established prescriptive easements by adverse use. The Grovers argue that the record does not support a finding of any easement, public or private, across their property. Thus, the issues on appeal are whether the District Court erred when it found that no public roads existed and when it concluded instead that a private easement had beer, established. We affirm in part and reverse in part. The land in question is just west of Hamilton, Montana, generally described as T5N R21W Lots 3, 4 and 9. The Grovers obtained their 800-acre tract of land in 1 9 6 1 . At that time, they put a gate across the road entering their property. They locked the gate, although they allowed access to those who asked. Next to the gate they erected a large wooden sign which read, "PRIVATE PROPERTY, NO TRESPASSING, PRIVATE ROAD." They did not hear any protest on this conduct for twenty-six years until they were contacted in 1 9 8 7 by the Downings regarding the possible existence of an easement. It is not disputed that access has been permissive since 1961; thus any easement must be established by Downingsl predecessors in interest prior to 1 9 6 1 . The Downings obtained their 40-acre tract of land in 1965. The land is undeveloped and does not have any habited buildings on the premises. The ~ownings bought this property for $2,000 from Trudy Schatzer in 1965. They now wish to sell it for $90,000 conditioned on obtaining access. The road which enters Grovers' property is a dirt road which, right after crossing the Grovers' property line, splits into two separate roads. One branch goes to the southside of Sawtooth Creek and the other crosses Sawtooth Creek on a one-lane wooden bridge and proceeds on the northside of Sawtooth Creek up to the Grovers' house. Beyond the house, the road is presently indiscernible, although the trial testimony established that previously it had been traveled (prior to 1961) to proceed in a southwesterly direc- tion to or near the old Welch cabin site, (long since burned down) which is now Downings' property. To add to the confu- sion of establishing this road, directly to the north is another road now called Owings Lane Road. The testimony by all at trial generally conceded that all three of these roads are commonly referred to as Sawtooth Road or Sawtooth Creek Road. Because of this great confusion, the District Court declined to find that a public road existed. The ~istrict Court is affirmed on that finding. Any finding of a public road based on this record would have been pure speculation. The documents from Ravalli County introduced in support of finding a public road were so ambiguous that they could have referred to any of these three roads, or all of them, because all roads bore the same name and roughly the same descrip- tion. Likewise, the testimony of the residents was that all three roads had the same name. Such evidence is not suffi- cient to put a property owner on notice that his rights may he jeopardized unless he acts. As we stated in Parker v. Elder (Mont. 1988), 758 P.2d 292, 45 St.Rep. 1305, absent use by the public over "the exact route claimed" for ten years, there is no public roadway. For the same reason, the court declined to find that the public had established a prescriptive easement. The testimony of those who traveled the Sawtooth road revealed that they did not know which of the three roads was actually "Sawtooth Road." Many of them traveled just the north branch but not the south branch. Many did not travel as far as the old Welch cabin site. Based on this record, the District Court is likewise affirmed in its denial of a public easement. The court in Finding XXVI found that there was "credi- ble evidence of open, notorious, exclusive, adverse, continu- ous and uninterrupted use of the northside branch of the road for fifty years prior to 1961." From that finding, it con- cluded that a private easement by prescription had been established. That finding is not supported by the record and is reversed. I. Prescriptive Easements in Montana A. ELEMENTS The burden at trial on the party seeking to establish the prescriptive easement is to show 1) open 2) notorious 3) exclusive 4) adverse 5) continuous, and 6 ) uninterrupted use of the easement claimed for the full statutory period. Clemens v. Martin (Mont. 1986), 719 P.2d 787, 43 St.Rep. 994. The statutory period is five years. section 70-19-401, MCA. All elements of prescriptive easement must be proved by a preponderance of the evidence or the claim will fail. ~rimsley v. Estate of Spencer (1983), 206 Mont. 184, 670 P.2d 85. All elements must be proved in a case such as this because "one who has legal title should not be forced to give up what is rightfully his without the opportunity to know that his title is in jeopardy and that he can fight for it." Grimsley, 670 P.2d at 92-93. "Open and notorious" is defined as "a distinct and positive assertion of a right hostile to the rights of the owner and must be brought to the attention of the owner." Poepping v. Neil (1972), 159 Mont. 488, 499 P.2d 319, 321. "Continuous" means "it is necessary to have use made often enough to constitute notice of the claim to the potential servient owner." Powell & Rohan, Powell - - on Real Property, Vol. 3, S 413, pp. 34/124-34/126 (1987). "Uninterrupted" means "use not interrupted by the act of the owner of the land or by voluntary abandonment by the party claiming the right." Scott v. ~einheimer (1962), 140 Mont. 554, 374 P.2d 91. The plaintiff offered evidence regarding the use of the northside road from roughly 1918 through 1961. However, this Court concludes that it is unnecessary to discuss the ele- ments and possible establishment of a private prescriptive easement. The record is replete with examples of ~ownings' conduct and the conduct of Schatzer, his immediate predeces- sor in interest, which is wholly inconsistent. with the exis- tence of a private easement. R . INCONSISTENT ACTS Section 70-17-111, MCA, provides: . . . (3) A servitude is extinguished: by the performance of any act upon either tenement by the owner of the servitude or with his assent which is incompatible with its nature or exercise. That statute was construed in orriso on v. ~igbee (1983), 204 Mont. 515, 668 P.2d 1025, where this Court stated, "even if ~ e w i s Hughes' testimony could be construed to indicate that his predecessors obtained a prescriptive easement, Hughes' subsequent actions of asking permission to use the ditch and of signing the license agreement are incompatible with the nature of a prescriptive easement." his Court went on to reverse the District Court finding in that case that a pre- scriptive easement existed. In the instant case, Schatzer acted inconsistently by establishing permissive use after Grover locked the gate. Plaintiff Downing acted inconsistently in at least three ways: (1) by telling others that he had no easement, (2) by continuing the permissive use established by Schatzer, and (3) and by withdrawing the claim at the close of the trial. In his deposition plaintiff W. Downing stated that he has admitted to others that he has no easement. When he retreated from that position at trial, he was impeached by attorney Riley: Q. Okay. So the fact of the matter is that you told people you didn't have an easement. A. Yes. Q. So from the time you purchased the property in 1965 until 1986 when you had a chance to sell it to Mr. Montgomery, no attorneys had told you you had an easement, the person you bought the property from didn't tell you you had an easement, and you were telling people you didn't have an easement, right? A. Yes. owning further testified that he sought Grover's permission to use the road, as Schatzer had done. Grover granted permission to use the road as far as the Grover house, but not beyond. owning never used the road until 1987 when he drove up there in connection with this lawsuit. In plaintiffs' proposed findings of fact and conclu- sions of law dated November 3, 1987 (pretrial), they claimed a private easement by prescription. After the trial, both parties submitted revised find- ings and briefs in support thereof. In their December 4, 1987 (post-trial) revised findings, plaintiffs dropped their claim of private prescriptive easement stating "insufficient evidence" as the reason. The brief in support of ~ownings' findings, also dated December 4, 1987, admitted their posi- tion on private easement stating: 4. HAVE THE PLAINTIFFS OR THEIR PREDE- CESSORS IN INTEREST ESTABLISHED AN EASEMENT BY PRESCRIPTION FOR THE USE AND BENEFIT OF PLAINTIFFS' PROPERTY? There was insufficient evidence that the plaintiffs established a private ease- ment by precription [sic]. Assuming, arguendo, that a private easement had been established prior to 1961, any such easement has been extin- guished, contrary to the District Court finding. It has been extinguished by many inconsistent acts--(l) Schatzer's asking permission to use the road; (2) Downings asking permission to use the road; (3) Downings' admissions of having no easement; (4) Downings' withdrawal of the claim of a private prescrip- tive easement and (5) Grovers erecting and locking the gate in 1961. Grovers established statutory extinguishment by inconsistent acts, and Montana law supports that conclusion. Section 70-17-111(3), MCA; Higbee, supra. 11. Standard of Review The standard of review for a judge sitting without a jury, pursuant to Rule 52(1), M.R.Civ.P., is that the court's findings shall not be set aside unless clearly erroneous. Thus, when the District Court's findings are based on sub- stantial credible evidence, they are not clearly erroneous. Parker, supra. This record lacks substantial credible evi- dence to support a finding that ~ownings have a private prescriptive easement which is currently effective. On the contrary, Grovers have proven statutory extinguishment by inconsistent acts. The District Court is reversed on that issue. The conclusion of law of the District Court that no public road was established or existed on the property of the defendants is affirmed. The judgment of the ~istrict Court that plaintiffs have a private prescriptive easement across defendants' property is reversed. We concur: 4. Justices | April 26, 1989 |
304f480a-710c-40fd-b9e3-6f8683589c1b | JOHNSON v BD OF TRUSTEES BEAVER | N/A | 88-352 | Montana | Montana Supreme Court | N o . 8 8 - 3 5 2 IN THE SUPREME COURT OF THE STATE O F MONTANA 1 9 8 9 J. DARRELL JOHNSON, P e t i t i o n e r and A p p e l l a n t , -vs- BOARD O F TRUSTEES, BEAVERHEAD COUNTY HIGH SCHOOL D I S T R I C T , R e s p o n d e n t and R e s p o n d e n t . APPEAL FROM: D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t , I n and for t h e C o u n t y of L e w i s & C l a r k , T h e H o n o r a b l e H e n r y L o h l e , Judge p r e s i d i n g . COUNSEL O F RECORD: For A p p e l l a n t : C h a r l e s A . G r a v e l e y , H e l e n a , M o n t a n a For R e s p o n d e n t : W.G. ' D u k e ' G i l b e r t , 111, D i l l o n , M o n t a n a Poore, R o t h & R o b i n s o n ; D o n a l d R o b i n s o n , B u t t e , S u b m i t t e d on B r i e f s : Feb. 3 , 1 9 8 9 D e c i d e d : A p r i l 6 , 1 9 8 9 II Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. J. Darrell Johnson (Johnson) appeals the decision of the First Judicial District Court, Lewis and Clark County, affirming the County Superintendent's decision to dismiss him from his employment as a teacher with the Beaverhead County High School in Dillon, Montana. We affirm. Appellant presents the following issues upon appeal: 1. Was the dismissal of appellant without good cause and therefore a wrongful violation of his rights as a tenured teacher? 2. Was appellant wrongfully deprived of his right to a de novo trial before the County Superintendent? Appellant Johnson worked as an arts teacher with the Beaverhead County High School in Dillon from 1970 until August of 1984. In August of 1984, he was suspended pending a hearing before the Beaverhead County School Board (Board) regarding charges of sexual contact with two female students during the 1983-84 school year. The Board subsequently dismissed Johnson on March 21, 1985 for immorality and unfitness after a full hearing on the charges. Johnson appealed this dismissal to the County Superintendent, pursuant to 8s 20-4-207 (5) and 20-4-205 (2), MCA. A full evidentiary hearing on the charges was conducted before the Acting County Superintendent, Wallace Vinnedge, on April 11 and 12 of 1985. Both parties agreed that the sole issue on appeal was whether the Board dismissed Johnson without good cause. Before rendering a decision, the County Superintendent considered all the evidence introduced at this hearing, the transcripts from the school board hearing, and the earlier videotaped testimony given by the two girls with whom Johnson allegedly engaged in sexual acts. The County Superintendent then concluded the Board had good cause to dismiss Johnson and affirmed the Board's dismissal. Johnson appealed this decision first to the State Superintendent of Public Instruction and then to the District Court. The County Superintendent's decision was affirmed in both of these reviewing forums. Johnson then filed this appeal. A teacher in Montana who holds a valid employment contract may be dismissed prior to the expiration of the contract for "immorality, unfitness, incompetence, or violation of the adopted policies of such trustees." Section 20-4-207, MCA. In the present case, Johnson was dismissed for that immorality and unfitness apparent from his alleged sexual activity with two minor female students during the 1983-84 school year. If these factual findings of sexual activities are supported by the evidence, then the dismissal was indeed for good cause and not a violation of Johnson's rights as a tenured teacher under contract. F l e therefore turn to an examination of the facts upon which the County Superintendent based his conclusions of immorality and unfitness. We note at the outset that the County Superintendent is the trier of fact in an appeal from a trustee decision dismissing a teacher under contract. Section 20-3-210(2), MCA; Yanzick v. School Dist. No. 23 (1982), 196 Mont. 375, 641 P.2d 431. The County Superintendent, as the trier of fact, had the ability to judge the credibility of each witness. Consequently, this Court has recently held that "neither the State Superintendent of Public Instruction nor the District Court may substitute its judgment for that of the County Superintendent on issues of fact." Trustees of Lincoln County School Dist. No. 13 v. Holden (Mont. 1988), 754 P.2d 506, 509, 45 St.Rep. 786, 789. A court upon review of a dismissal action will reverse the factual findings of the County Superintendent only if they are clearly erroneous. Carruthers v. Board of Horse Racing (1985) , 216 Mont. 184, 188, 700 P.2d 179, 181. As stated in 5 2-4-704(2), MCA: (2) The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings . . . are: (e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record . . . Having reviewed the entire record in the present case, we hold that the findings of fact issued by the County Superintendent are not clearly erroneous. Specifically, we hold that the following findings, which support a charge of immorality and unfitness sufficient to warrant a dismissal, are supported by reliable, probative and substantial evidence : FINDINGS OF FACT 3. That the Petitioner had admitted that he gave back rubs and placed his hands upon female students in a locked storage room during the 1983-84 school year. That such conduct is inappropriate and improper for a teacher. 4. That the Petitioner had, during the 1983-84 school year, engaged in acts of sexual contact with a Student under the age of sixteen years at various places within Beaverhead County High School, during class periods, and at other times, which sexual contact amounted to sexual intercourse or attempted sexual intercourse. 5. That the teacher engaged in acts of sexual contact with an additional student . . . during school hours and on school premises during the 1983-84 school year, which contact consisted of fondling and kissing the students' breasts. That such conduct is improper for a teacher. In regards to Finding No. 3, Johnson testified before the County Superintendent that he had rubbed the neck and shoulders of several female students who came to his art storage room to discuss personal problems. Moreover, Johnson plead guilty in May of 1985 to misdemeanor assault charges; he admitted that when a female student came to him for counseling toward the end of May, 1984, he "rubbed her back and held her in my arms, in what I felt was a consoling manner, but apparently to her it was an insulting nature." The two students with whom Johnson allegedly had sexual contact also testified that Johnson routinely gave them "back massages." The principal and assistant principal both testified that rubbing the neck and shoulders of a young female student in a locked room on school premises during school hours constituted improper teacher conduct. Finding No. 4 involves the sexual contact and attempted sexual intercourse upon a 14-year-old freshman student (hereinafter K.B. ) during the year preceding Johnson's dismissal. K.B. testified in great detail as to the progression of sexual activity occurring from November of 1983 until June of 1984. She stated that her initial physical contact with Johnson occurred in the art storage room at BCHS a few days before Halloween. She massaged his back after he complained about back aches. Two weeks later in the same room, he rubbed her shoulders and back. She testified that a week or so later, he expanded his massage to include her chest, armpits and breast area. K.R. stated that shortly thereafter, he began slipping his hand inside her brassiere and cupping her breasts. She alleged this activity continued more or less on a daily basis during the week for the rest of the 1983-84 school. year, generally during her fifth period Driver's Education class and occasionally at noon or after school. The three or four days each week when not driving or being tested, K.B. and two other girls (J.N. and A.P.) would obtain a pass from Johnson and then go down to the art room for the period. The testimony of K.B. is supported by the statement of A.P. that during fifth period, K.B. and Johnson often would leave the classroom for at least ten to fifteen minutes at a time. If A.P. or J.N. then needed assistance while Johnson was gone, they could usually find him and K.B. in the art storage room. Another student, in the fifth period art class that year, similarly testified that K.B. and Johnson would leave class together three to four days each week and that Johnson was usually gone from the classroom fifty percent of the period. The sexual activity with K.B. allegedly escalated in late March or early April of 1984 to include frequent acts of sexual intercourse in the art storage room. K.B. further alleged that Johnson attempted sexual intercourse with her on a piece of plywood and cloth located in the basement underneath the girls gym in late April. K.B. testified that on the last day of May of 1984, Johnson again attempted sexual intercourse with her on a canvas tarp spread on the floor of the camera room above the auditorium. K.B. testified that her last sexual contact with Johnson occurred on June 18, 1984 in the art storage room. Several types of circumstantial evidence exist which indicate that K.B. did in fact become involved in those sexual activities alleged. Deputy Sheriff Keith Reeder investigated the area under the gym in late summer and sent the red cloth and red coveralls found under the gym to the Missoula Crime Lab. An analysis of the hairs on the coveralls revealed several with characteristics similar to K.B.'s hair. The Deputy also collected a canvas from the camera room and sent hairs found on it to the Crime Lab. An analysis of the hairs from the canvas revealed one with characteristics similar to Johnson's hair and several with characteristics similar to K.B.'s hair. Additionally, respondent introduced three letters written bv K.B. to her girlfriend T.B. (who lived in Idaho). These letters detailed her alleged sexual activities with Johnson. Moreover, Dr. Myers, a psychologist who met with K.B. nineteen or twenty times for individual therapy during the summer of 1984 in regards to this reported incident, stated his opinion that those incidents of sexual activity with Johnson detailed in K.D.'s letters were not fantasy. Finding No. 5 involves the sexual contact in 1983-84 with a 16-year-old student (hereinafter J.N. ) . J.N. testified that her physical contact with Johnson occurred two to three weeks after she enrolled in BCHS in Dillon. While working in the ceramics room after school, Johnson came up and massaged her neck and shoulders. A few weeks later when she was in the art storage room during the class period, he requested her to massage his back and she did so. Shortly thereafter, she stated he began placing his hands inside her brassiere and massaging her breasts. She testified this activity escalated from one to three days per week to a nearly daily weekday activity. This sexual contact allegedly occurred in the art storage room generally after school or during her ceramics or painting class period; J.N. testified they would be absent from the classroom for 30 to 45 minutes of the class period. J.N. testified that the last sexual contact with Johnson occurred three to four weeks before the end of the 1983-84 school year. She testified that she told him in letters and verbally that such activity was wrong and that she thereafter avoided him. She subsequently wrote a letter to another teacher, Russell Fisk, stating that Johnson had rubbed her neck and back and "one day went farther." Teacher Fisk confirmed his receipt of such a letter which he admitted contained "sexual implications." This letter was later passed on to school counselor Gwen Brott. Brott testified that she destroyed this letter. The misdemeanor assault charge, to which Johnson pled guilty, further indicates some physical contact occurred between Johnson and J.N. In his plea, Johnson admitted that in May of 1984 he had rubbed her back and held her in his arms to console her. Appellant Johnson introduced a substantial amount of testimony by students and teachers alike in regards to his excellent teaching abilities, his caring nature, and as to the amount of time he was absent from classes each day. However, this Court is not charged with re-weighing the evidence to determine whether the dismissal was in fact made with good cause. Rather,we may only review the entire record to determine whether reliable, probative and substantial evidence existed to support the County Superintendent's decision dismissing Johnson. All the above-cited evidence is sufficient to meet this standard and to support the allegations of sexual activity. Such sexual activity by a 41-year-old married teacher with two of his minor female students indeed supports the conclusion of his immorality and unfitness. Further, a teacher is charged by statute with providing "moral and civic instruction" to students and with "endeavoring to impress the pupils with the principles of morality, truth, justice, and patriotism." Section 20-4-301 (1) (f) , MCA. The evidence of Johnson's sexual activity with students indicates he failed to discharge these duties with which he was charged. We therefore hold good cause existed supporting Johnson's dismissal for immorality, unfitness and his failure to fulfill his duties as a teacher. The District Court did not abuse its discretion when it affirmed the County Superintendent's dismissal of Johnson. Appellant's second argument is that he was wrongfully deprived of his right to a de novo hearing because the County Superintendent considered the transcripts and the videotaped testimony of K.B. and J.N. taken during the School Board hearing. Appellant contends a de novo hearing mandates a decision based only on those facts adduced at the hearing before the County Superintendent. We disagree. Section 20-3-210 (2) , MCA requires a county superintendent to base a dismissal decision upon those facts established at the hearing conducted before him or her. This Court has interpreted this section as requiring a de novo hearing before a county superintendent. Yanzick, 641 P.2d at 437. When conducting this hearing, a county superintendent is governed by the rules set forth in § 2-4-612, MCA. Section 2-4-612(2) expressly allows a county superintendent to receive any part of the evidence in written form if the "hearing will be expedited and the interests of the parties will not be prejudiced substantially" by admission of such evidence. The transcripts from the School Board hearing, as written evidence, were properly admissible under § 2-4-612(2), MCA because they did not substantially prejudice appellant and they did expedite a determination of the issue. The Board transcripts are largely duplica-tive of that testimony given before the County Superintendent. They do not introduce any substantially new evidence. Additionally, the appellant had every opportunity to cross-examine those witnesses whose testimony was transcribed. Consequently, appellant may not claim substantial prejudice. Admission of the transcripts, which included the testimony of K.B. and J.N., also helped expedite the hearing before the County Superintendent. The testimony of K.B. and J.N. was essential to a determination of the appeal. Yet, K.B. and J.N. were both unavailable to testify at the time of the second hearing. See 8 0 4 (a) ( 5 ) , M.R.Evid. This unavailability was not due to any wrongdoing by the respondent. Both girls had moved outside the State of Montana with their respective families after the 1983-84 school year. Respondent went through the formality of issuing subpoenas to the last known address of each girl within Montana to prove that service of process upon them was not possible within the State and to indicate respondent's inability to procure their attendance through process. Admission of the two girls' transcribed testimony prevented a delay of the hearing until the two girls could be present. No statutory provision expressly provides for the admission of videotaped testimony in a de novo hearing such as that hearing conducted before the County Superintendent. Further, even if the videotape was properly admissible, it was not taken in compliance with the requirements found in Rule 3 0 (h) , M.R.Civ.P. , a section providing those procedures mandated for videotaped depositions. However, we need not determine the issue of whether the admission of the videotape in this case was proper. Admission of the videotaped testimony did not substantially prejudice the appellant. The audio testimony of the two girls recorded on the videotape is duplicated in the Board transcripts, which we have just held were properly admissible. The videotape does not introduce any new evidence without giving appellant an opportunity to cross-examine the witnesses. As previously noted in this opinion, appellant had the opportunity to fully cross-examine the two girls during the Board hearing. We therefore hold that neither admission of the videotaped testimony nor admission of the Board transcripts acted to deprive appellant of his right to a de novo hearing before the County Superintendent. Having found that substantial, reliable and probative evidence indicated Johnson was dismissed for good cause and that appellant was properly afforded his right to a de novo trial, we affirm the judgment of the District Court upholding the decision by the County Superintendent to dismiss appellant. | April 6, 1989 |
b6e8064f-daff-4036-8cee-068bab45e545 | HANDO v PPG INDUSTRIES INC | N/A | 88-539 | Montana | Montana Supreme Court | No. 88-539 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 EMMA JEAN "E.J." HANDO, Plaintiff and Appellant, -VS- PPG INDUSTRIES, INC., SPRING CREEK COAL COMPANY, and NERCO, INC., jointly and severally, Defendants, Respondents and Cross-Appellants. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Russell Fillner, Judge presiding. COUNSEL OF RECORD: For Appellant: Nye & Meyer; Jerrold L. Nye, Billings, Montana For Respondents: (cross-appellants) Moulton Law Firm; W. Anderson Forsythe, Billings, Montana Anderson, Brown, Law Firm; Steven H. Harman, Billings, Montana Pamela L. Jacklin; Stoel, Rives, Boley, Jones & Grey, Portland, Oregon t - L L L n - I r> 1 - r , \d <-, I Submitted on Briefs: Feb. 3, 1989 m 1 ~ 1 ' ' Decided: March 30, 1989 E T : c ; n c - a Fi%dk, - ; L C'2 L), , r y - , L -- " c-. - , t : '- J 4 - C Y ) c 2 * -. C 3 - I* Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Emma Jean Hando appeals the grant of summary judgment to NERCO, Inc. (NERCO) by the the Thirteenth Judicial District Court, Yellowstone County. The court granted summary judgment after holding that NERCO, as the parent/grandparent corporation of Spring Creek Coal Company (SCCC) , had no duty to provide a safe work place for Hando and the other SCCC employees. The court also held that the statute of limitations applicable to this action was tolled until a medical diagnosis confirmed the causal connection between appellant's recurrent ailments and her exposure to the paint used b : 7 SCCC. The court therefore denied the motions for summary judgment by PPG Industries, Inc. (PPG) and NERCO and held that the three-year statute of limitations had not run beEore Hando filed her complaint in this action. NERCO and PPG each filed a cross-appeal from this denial of their motions for summary judgment. We affirm the District Court's grant of the first motion and denial of the second. Appellant presented the following issues upon appeal: 1. Did NERCO, as the parent or grandparent corporation of the wholly-owned SCCC subsidiary, breach its duty to provide a safe work place? 2. Does workers' compensation insurance obtained by the wholly-owned SCCC subsidiary extend to and protect NERCO, the parent or grandparent corporation, from claims arising from a work-related injury? NERCO and PPG raised the following issue upon cross-appeal: 1 . Are appellant's claims barred by the running of the statute of limitations? The parties generally agree to the truth of the following facts for purposes of a discussion of the issues decided by the District Court's summary judgments. Emma Jean Hando (Hando) was employed by SCCC from March 3, 1980 until May of 1984. SCCC, a Montana corporation, was a wholly-owned subsidiary of NERCO, an Oregon Corporation, during this period. SCCC was formed for the purpose of owning and operating a strip coal mine in southwestern Montana. NERCO generally engaged in the business of developing, mining and selling coal through its ownership of various subsidiary corporations, such as SCCC, which controlled and supervised daily mining operations in the individual coal mines. In 1981, Hando was assigned the duty of painting various surfaces within the coal processing plant at the Spring Creek Mine (Mine). She believed that the paint used, which was manufactured by PPG, caused her and others to suffer some adverse physical reactions. Hando was exposed to this paint again in April of 1982 when her supervisor at SCCC assigned her the job of painting within the control room at the Mine. The area in which she painted was poorly ventilated, and she briefly lost consciousness while painting. Recognizing that she had suffered an adverse reaction to the paint fumes, an SCCC supervisor contacted the poison control center in Denver, Colorado and arranged for her to have a medical examination in her hometown of Sheridan, Wyoming. Between 1982 and 1984, Hando saw numerous physicians to determine the cause of numerous emotional, mental and physical problems (including nauseousness, dizziness, diarrhea, fatigue, depression, and recurrent infections). She believed her exposure to the paint caused these problems. Moreover, Hando and SCCC signed a workers' compensation claim in May of 1982 which stated her problems arose after she was "poisoned" by exposure to "paint vapors." Physicians at the Mayo Clinic also tested and evaluated her in late 1983 pursuant to arrangements made by SCCC after Hando complained to her employer in February of 1983 that she was unable to work around various chemicals. All these physicians who examined her prior to 1984 denied any causal connection between her continuing ailments and her paint exposure. Following an examination of Hando in early 1984, Dr. Anderson of Billings, Montana stated his belief that her problems may have been caused by her toxic exposure to paint at the Mine. Dr. Anderson referred her to Dr. Randolph in Chicago, Illinois for further tests. Tests conducted in Chicago confirmed that her ailments were due to her sensitivity to petrochemicals and that her exposure to the PPG paint while employed by SCCC most likely triggered this sensitivity. Hando informed SCCC that she was unable to work, even at a receptionist position with the company, due to her chemical hypersensitivity. Consequently, her employment with SCCC ended on May 30, 1984. On October 25, 1985, Hando filed a complaint against PPG, NERCO and SCCC. She amended this complaint on May 21, 1986 to include a products liability claim against PPG (Count I) and a claim for failure to provide a safe work place against NERCO (Count 11). The additional claims against SCCC have since been settled and no issue remains to be tried against SCCC. NERCO filed its motion for summary judgment on March 21, 1988, contending that it owed no duty as a matter of law to provide SCCC employees with a safe work place. After hearing the motion on May 18, 1988, the District Court granted summary judgment holding that NERCO owed no duty to provide Hando with a safe work place. PPG also filed a motion for summary judgment, contending that Hando's claim was barred because the three-year statute of limitations applicable to this action had run prior to the filing of her complaint. On May 12, 1988, PPG asked the court to reconsider its denial of this motion in light of recent case law. NERCO filed a supplemental motion for summary judgment, thereby joining with PPG to argue the statute of limitations had run. The District Court denied these motions for summary judgment holding that the statute of limitations had been tolled until April of 1984 when a physician diagnosed the causal connection between Hando's ailments and her exposure to the PPG paint. Consequently, the three-year statute of limitations had not expired when Hando filed her complaint in October of 1985. On October 24, 1988, the District Court entered its final amended judgment, pursuant to Rule 54 (b) , M.R.Civ.P., on those issues decided by its summary judgment rulings. Hando appealed from the court's grant of summary judgment on the issue of the lack of duty to provide a safe work place owed by NERCO. PPG and NERCO filed a cross-appeal from the court's denial of their motions for summary judgment on the issue of the running of the statute of limitations. The first issue presented for review involves the duty owed by NERCO to provide a safe work place for SCCC employees. Appellant Hando contends that material issues of fact exist about whether NERCO was directly involved in the activities of its wholly-owned SCCC subsidiary and therefore liable, under either an agency or alter ego theory, for employment injuries suffered by SCCC employees due to an unsafe work place. Consequently, Hando argues the District Court erred in granting NERCOts motion for summary judgment on the issue of a duty owed by NERCO. The general rule is that summary judgment is proper only if no genuine issue exists as to any material fact and if the moving party is entitled at law to a judgment. Rule 56 (c) , M.R.Civ.P. Once the moving party has shown that no material issue of fact exists and that she is entitled to judgment as a matter of law, the burden shifts. The opposing party then must come forward with substantial evidence sufficient to raise a factual issue, or the court may grant summary judgment on the matter before the court. DIAgostino v. Schaap (Mont. 1988), 748 P.2d 466, 468, 45 St.Rep. 14, 16. NERCO, as the moving party in the present case, had the burden of showing that no factual issues existed which were material to a determination of whether it had a duty to provide a safe work place to SCCC employees. NERCO also had the burden of proving that it was entitled to summary judgment as a matter of law because the SCCC subsidiary was not its agent or alter ego, and that NERCO was therefore a separate corporation entity with no legal duty to provide a safe work place to employees of SCCC. We hold that NERCO met both these burdens. Employees have a statutory duty to provide a safe work place for employees. See 50-71-201, -202, MCA. This Court previously has held that this duty generally is owed only by the immediate corporation employer. See, e.g., Shannon v. Howard S. Wright Constr. Co. (1979), 181 Mont. 269, 593 P.2d 438. This limitation upon the duty serves to foster the growth of corporations by protecting the corporate owners, whether shareholders or a parent corporation, from liability for those "obligations incurred in the management of the business of the corporation." See Barnes v. Smith (1913), 48 Mont. 309, 316, 137 P. 541, 543. On occasion, however, courts may extend the obligations and resulting liabilities of a subsidiary corporation to a parent or grandparent corporation. This extension of liability is achieved by disregarding the separate corporate entity and treating the subsidiary and parent as one corporation, a process otherwise known as "piercing the corporate veil." See, e.g., Flemrner v. Ming (Mont. 1980), 621 P.2d 1038, 1042, 37 St.Rep. 1916, 1919. Piercing the corporate veil is an equitable remedy used to curb injustices resulting from the improper use of a corporate entity. Because the remedy is equitable, no concrete formula exists under which a court will disregard the separate identity of the corporate entity. Use of this remedy depends entirely upon the circumstances of each case. See Comment, Piercing The Corporate Veil in Montana, 44 Mont.L.Rev. 91, 92-93 (1983). However, this Court has previously required two general factors to be present before a court will disregard the separate and distinct identity of a corporation: (1) The corporation must be a mere agent or alter ego of the parent company; and (2) the corporate cloak must have been used to defeat public convenience, justify wrong, perpetrate fraud, or to defend crime. State ex rel. Monarch Fire Ins. Co. v. Holmes (1942), 113 Mont. 303, 307-08, 124 P.2d 994, 996. A subsidiary corporation may be the mere agent of a parent company for a particular transaction if the parent company exercises control over the conduct and activities of the subsidiary so that in effect the subsidiary is merely acting on behalf of the parent. State v. Holdren (1963), 143 Mont. 103, 110-11, 387 P.2d 446, 450. On the other hand, a subsidiary is the alter ego'of the parent corporation if the corporate affairs of both are so intertwined that, in effect, each no longer has a separate identity. Holmes, 124 P.2d at 996. Many factors are considered to determine whether a subsidiary is merely the alter ego of a parent corporation. The full ownership of a subsidiary, use of the same people as directors and officers in both corporations, and engagement in the same general business enterprise may all be insufficient to indicate the subsidiary is merely an alter ego. Flemmer, 621 P.2d at 1042. Courts also look at such factors as the same type of day-to-day business activities of each corporation, sharing of the same address or name, the commingling of funds, undercapitalization of the subsidiary and failure to maintain separate business records. See, e.g., Thornock v. Pack River Management Co. (Mont. 1987), 740 P.2d 1119, 44 St.Rep. 1284; Flemmer, 621 P . 2 d c 1038; Holdren, 387 P.2d 446; Shaffer v. Buxbaum (1960), 137 Mont. 397, 352 P.2d 83; Wilson v. Milner Motels, Inc. (1944), 116 Mont. 424, 154 P.2d 265; Scott v. Prescott (1924), 69 Mont. 540, 223 P. 490. The facts asserted by Hando fail to raise a question of fact about whether NERCO controlled the painting activities of SCCC. The District Court did not err in holding that SCCC did not act as the agent of NERCO in regards to this particular transaction. NERCO admitted that it chose the general color scheme for the Mine and that its approval was necessary if SCCC wanted to purchase supplies in an amount over $50,000. Yet, the SCCC plant superintendent had the primary responsibility for making daily work assignments in the plant, including painting assignments, and the SCCC warehouse superintendent was responsible for recommending the paint that would be used. Further, Hando conceded in her deposition that SCCC provided her with the paint, dictated the method used to apply the paint, and chose the places to be painted. Hando also failed to set forth facts sufficient to raise a question of fact about whether the business activities of SCCC were so intertwined with those of NERCO that SCCC was a mere alter ego of NERCO. The evidence shows that SCCC was a wholly-owned subsidiary of NERCO and that many of the same people served as officers and directors for both corporations. However, both did not share the same name, nor were they located in the same state; NERCO maintained corporate headquarters in Oregon while SCCC was located in Montana. Additionally, although both were engaged in the same general business, that being the mining and sale of coal, NERCO managed the overall operation and development of many coal mining activities in Montana, Wyoming, Indiana and Alabama, while SCCC was engaged in the day-to-day operations of the Spring Creek Mine in Decker, Montana. Further, Hando introduced no evidence indicating that the funds or the records of each corporation were commingled, or that SCCC was undercapitalized and thus incapable of operating as a separate corporate entity. As a matter of law, we hold that NERCO had no duty to provide a safe work place for SCCC employees; the alleged facts failed to show that SCCC acted as an agent of NERCO in regards to the daily painting and upkeep activities of the Mine or that SCCC was merely an alter ego of NERCO. Moreo~rer, Hando failed to assert any facts indicating SCCC was incorporated to "defeat public convenience, justify wrong, protect fraud, or defend crime." Holdren, 387 P.2d at 451. We also hold that no genuine material issue of fact exists in relation to the issue of whether an agency or alter ego in fact existed. Hando's argument that NERCO was actively involved in subsidiary activities is merely a conclusory statement without the support of any new facts, other than those generally discussed above. Hando also failed to allege any facts showing that NERCO had an independent duty, because her employment was directly related to the physical operations of NERCO, to provide Hando with a safe work place. Hando was injured on the SCCC, and not the NERCO, iob site while engaged in a job related to the daily upkeep of the SCCC Mine and while using paint purchased and owned by SCCC. - Cf. Reynolds v. Burlington Northern, Inc. (1980), 621 P.2d 1028, 37 St.Rep. 1883 (holding that a parent corporation owed a duty to provide a safe work place to that subsidiary employee injured by equipment owned by the parent railroad corporation and while working on a job site belonging to the railroad). Consequently, we hold the District Court did not abuse its discretion when it granted summary judgment and held that NERCO did not have a duty to provide Hando with a safe place to work. The second issue presented upon appeal questions whether workers' compensation insurance owned by SCCC would protect NERCO from liability for claims arising because of an unsafe SCCC work place. We need not discuss this issue having held that NERCO had no duty to provide Hando with a safe work place and thus may not be held liable for any injuries arising from the unsafe work place of its subsidiary. The third issue, raised upon cross-appeal, challenges the District Court's holding that the statute of limitations was tolled until a medical diagnosis causally connected Hando's exposure to toxic paint fumes with her various continuing ailments. PPG and NERCO assert that the statute of limitations began to run in April of 1982 after her last on-the-job exposure to the paint which she believed caused her injuries. By statute, Hando had three-years from the date of this last injury to file a claim against NERCO and PPG. This three-year period expired in April of 1985, yet Hando did not file her claim until October of 1985. PPG and NERCO therefore assert that Hando's claims against them are barred. A three-year statute of limitations does indeed apply to tort claims or products liability claims. Section 27-2-204, MCA. The law sets such statutes of limitations as an equitable measure intended to prevent the litigation of stale claims by requiring that a party file a claim within a reasonable period of time while the evidence supporting the claim is still fresh. E.W. v. D.C.H. (Mont. 1988), 754 P.2d 817, 819, 45 St.Rep. 778, 780. The statute of limitations in any given case generally begins to run upon the occurrence of the last wrongful act relevant to the cause of action. The statute of limitations is not tolled until a plaintiff discovers her legal right to bring an action for known injuries. The statute also is not tolled until a plaintiff learns the facts out of which a known cause of action arose. Bennett v. Dow Chemical Co. (Mont. 1986), 713 P.2d 992, 994, 43 St.Rep. 221, 224. This Court has, however, tolled the statute of limitations until a plaintiff discovers the injury, or until he should have discovered the injury with the use of due diligence, if the injury is self-concealing. Johnson v. St. Patrick's Hosp. (1966), 148 Mont. 125, 417 P.2d 469. A statute of limitations has even been tolled until the legal cause of an injury is determined, although the injury itself is apparent, if equity so demands. Hornung v. Richardson-Merrill, Inc. (D.Mont. 1970), 317 F.Supp. 183. In Hornung, the Federal District Court Judge in Billings tolled the statute of limitations until the plaintiff discovered that the drug MER/29 may have caused his cataracts. - Id at 185. The facts in the present case indicate that although Hando was very much aware of those continuing physical, emotional and mental ailments she suffered after her exposure to the paint, she did not know the cause of those injuries until May of 1984. Prior to that time, she and SCCC suspected that her ongoing ailments stemmed from her exposure to the paint manufactured by PPG. She even filed a workers' compensation claim in May of 1982 based upon this belief. However, the veracity of her belief was not known until May of 1984. Medical tests done in Chicago at that time provided Hando with a medical diagnosis that her continuing problems were due to a "sensitivity to petrochemicals," a sensitivity most likely triggered by her exposure to the PPG paint while working for SCCC in 1981-82. Hando's failure to learn the cause of her ongoing injuries was not due to a lack of diligence on her part. Between 1982 and 1984, Hando saw numerous physicians, including physicians at the renowned Mayo Clinic in Minnesota, to determine the cause of her ongoing problems. No physician who examined Hando during this period attributed her continuing ailments to her exposure to the PPG paint. The facts in this case therefore are dissimilar to those in the E.W. case. In E.W., the plaintiff knew that the sexual molestation by her stepfather was tortious, she knew she suffered from psychological problems as a result of the tortious conduct by her stepfather, yet she failed to file a complaint until thirteen years after she reached the age of majority. See, E.W., 754 P.2d at 818. In contrast, Hando did not know that her exposure to the PPG paint caused her continuing medical problems, nor was her exposure to the paint obviously tortious. Further, she continued to seek a medical diagnosis for her ongoing problems. Consequently, we hold that the facts in the present case are comparable to those in Hornung, and not to those in E .W. , and we likewise hold that the three-year statute of limitations did not begin to run until a medical opinion was rendered in April-May of 1984 linking her injuries to her exposure to the PPG paint. Hando filed her claims against PPG and NERCO in October of 1985, well within the three-year statute of limitations. PPG and NERCO therefore are not entitled to summary judgment on this issue and the District Court did not abuse its discretion when it denied the cross-appellants' motions for summary judgment. Affirmed. We concur: < ef 'Justice - Justices | March 30, 1989 |
6ad98f84-65b1-4729-9cd6-6fdabeef7ae8 | CITY OF MISSOULA v MOUNTAIN WATER | N/A | 88-148 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA THE CITY OF MISSOULA, a Montana Municipal Corporation, Plaintiff and Appellant, -VS- MOUNTAIN WATER CO, a Montana Corporation, Defendant and Respondent, WARREN A. BACHE, LaMARR BALDWIN, JACQUELINE D. BECK,LINDA D. DUNW, DENNIS L. FALK, SHARON R. FRASER, GARY L. FREY, GEORGETTE GERLACK, SHIRLEY S. GUY, BRADTJEY E. HAFAR, DIANE R. HAMILTON, ARVID M. HILLER, M. SUSAN HUNT, JERRY E. KIRKPATRICK, GERALD L. LUKASIK, LOUIS F. McCONAUGHEY, EDMOND L. MAGONE, GARY M. MITCHELL, RAY W. MITCHELL, RICHARD A. MORSE, MICHAEL L. OGLE, SUSAN L. ORI, TIMOTHY J. SCHWENK, JULIE K. STANLEY, ROBERT B. WARD and BONITA L. WILDER, Intervenors and Respondents. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable Douglas G. Harkin, Judge presiding. COUNSEL OF RECORD: For Appellant: Dexter Delaney, MULRONEY, DELANEY & SCOTT; Missoula, MT Jim Nugent, City Attorney, Missoula, MT For p,espondent: m 7) C ' William Evan Jones and Sherman V. Lohn, GARLINGTON, LOHN ., i . & ROBINSON; Missoula, MT; Defendant/Respondent rr i ~1 William H. Coldiron, Helena, MT; Intervenors/Respondents . . - C- ,- , , , Dan Caderherg, Missoula, MT; Amicus Curiae Q U , - . '" ? . . . a , , : 3 i 1 1 - , : i . < " - . - .-: Submitted on Briefs: Sept. 23, 1 9 8 8 r - i - L..I ! : * - 1 . 7 ) (-3 Decided: March 23, 1989 ( ~3 U Filed: ? ( $ c 1 , ; * & i JV3#& f * b ~ -t. &/ 1 Clerk Mr. Justice John C. Sheehy delivered the Opinion of the Court. The City of Flissoula appeals from a iudgment entered January 19, 1988, against the City in which the District Court, Fourth Judicial District, Missoula County, determined that the City had failed to meet its burden of proving by the preponderance of the evidence that it is necessary that the City operate the water system now owned by Mountain Water Company, and that "it is more necessary that the City take over" the Mountain Water Companv operation. We affirm the District Court. The underlying action is an eminent domain proceeding commenced by the City of Missoula to acquire by condemnation the water distribution business conducted in the Missoula area by Mountain Water Company. This same cause was before us on appeal in City of Missoula v. Mountain Water Co. (Mont. 1987), 743 P.2d 590, 44 St.Rep. 1633, where the City was also the appellant. In that cause we affirmed in part, reversed in part, and remanded the cause to the District Court for reconsideration of certain pertinent factors. Following the remand, the District Court determined that to comply with the order of remand, in further hearings, it would take up the following specific issues and no others: 1. Non-economic factors involved in whether public ownership as compared to private ownership, is necessary and, as a corollary, is more necessary. 2. What consideration must be given to out of state ownership of Mountain Water as opposed to local ownership. 3. The vote of the people and council of Missoula and related questions raised thereby. Specific sub questions: A. The exact question which was submitted to the voters. R. How many of the people who voted are users of Mountain Water. C. Conversely, how many people who voted were not users of Mountain Water. D. Whether water users outside of Missoula support the City or Mountain Water. 4. Whether ownership by City of Rattlesnake water rights is necessary for future water use and to protect the use of such rights. Following the foregoing determination of specific issues by the District Court, the City of Missoula petitioned this Court for a writ of supervisory control, objecting to the limitations. This Court denied the issuance of such a writ. Thereafter, the matter came on for trial before the District Court on December 9, 1987. At the December 9, 1987 hearing, the District Court received evidence from both parties and denied evidence offered by the City which the City preserved by means of: offers of proof. On January 19, 1988, the District Court entered its "additional findings of fact, conclusions of law and judgment, after remand" and entered a judgment thereon. From that judgment the City has appealed. The findings and conclusions of January 19, 1988, include matters taken in evidence at the December 9, 1987 hearing, and also from the first trial of this cause in the District Court. A resume of the facts from the first trial are found in the first Opinion of this Court, 743 P.2d at 591-592. For the purposes of the reader here, it is enough to say that Mountain Water Company is a Montana corporation operating a water distribution system serving 11,720 customers within the Missoula city limits and 4,481 outside of the city limits. Mountain Water Company acquired the Missoula water system from Montana Power Company in 1979. On August 6, 1979, the City passed a resolution declaring its intent to acquire the water system. Five years later, in !984, the City adopted a further resolution affirming its 1979 resolution and its interest in acquiring the water system. In late 1984, the City brought this condemnation proceeding against Mountain Water. In September, 1985, the question of co-ownership of the water system was approved by the citizens of Missoula as a ballot initiative. We will state other facts where necessary in connection with the issues discussed hereafter. DID THE DISTRICT COURT ERR AS TO THE RELEVANCE AND ADMISSIBILITY OF EVIDENCE ON REMAND? When, as in this case, this Court on appeal affirms in part the judgment of the District Court, and remands for reconsideration other parts of the appeal, those parts of the judgment which are affirmed become the law of the case and are binding upon the trial court and the parties in subsequent proceedings on remand. In Re Stoian's Estate (1960), 138 Mont. 384, 357 P.2d 41; Ivins v. Hardy (1950), 123 Mont. 513, 217 P.2d 204; Lake v. Emigh (1948), 121 Mont. 87, 190 P.2d 550. In our first Opinion in this cause, this Court found that certain findings were supported by the evidence and included "findings on public savings, on rates and charges, on cooperation between Mountain Water and the City, and on the effect of having Mountain Water's home office in Missoula." 743 P.2d at 596. Pith respect to the Mountain Water employees, this Court said: . . . The undisputed record shows that the City would make reductj-ons in the number of personnel and also reductions in the pay scale of the remaining employees in order that the employees would be paid salaries comparable to other City employees. We do not agree with the District Court conclusion that the "City's calloused plan for Mountain Water's twenty-six employees, standing alone, is enough to defeat a finding of public necessity." We hold that the effect on Mountain Water employees is one factor to be considered in determining whether the acquisition is necessary, hut that factor alone is not dispositive. 743 P.2d at 595. On remand, the District Court denied the City's offer of resolution no. 4737, from the city council of Missoula, which stated "it is desirous of retaining the current Mountain Water Company employees living in Missoula County and employed in Missoula as city employees at their current wage or salary compensation with equivalent fringe benefits as established pursuant to Montana state law." (Emphasis added. ) The offered resolution represents a change in direction of 180 degrees from the evidence offered in the trial preceding our Opinion as to the effect on the Mountain Water Company employees. In that trial, part of the savings claimed by the City, if it were allowed to condemn the water company, came from specified cuts in the wages of each position held at the Mountain Water Company. The City contended that the City could reduce the pay of 20 people employed by Mountain Water by $1-17,656.00, and replace six Mountain Water employees at a savings of $162,983.00. It was this evidence that this Court held was "undisputed" as to reductions in the number of personnel and reductions in the pay scale. The directive of this Court on remand was that the District Court should consider the effect on Mountain Water employees as one factor to be considered. The District Court was correct in denying the admission of the offered resolution, for its admission would change in part the 1-aw of the case established in the Opinion of this Court where we found that the evidence supported the findings on public savings on rates and charges and recognized the effect of having Mountain Water's home office in Missoula. On remand, the District Court did, in fact, as directed by us, weigh the effect on employees as one factor in determining public interests. The court found: City claims there will be substantial savings to the City resulting in the reduction in the employees' salaries and the termination of certain other employees. The Court finds City has made assumptions in arriving at these alleged savings which are unrealistic. Nor has the City proved that there will be any savings of any consequence to the City by the proposed reduction in the number of employees and the salaries of the employees remaining at Mountain Water. On the other hand, these proposals would work substantial and severe hardships upon the employees for no real gains. The employees are loyal to Mountain Water and their morale is high. They provide water to the consumers in an exemplary and economical fashion. Rather 'than being overpaid, the salaries that the employees now receive provide them with a reasonable standard of living. The public interest would not be served by such a detrimental impact upon these employees. The City of Missoula does not attack the foregoing finding of fact on this appeal from the judgment on remand. Findings of fact may not be set aside by us unless clearly erroneous. Rule 5 2 ( a ) , M.R.Civ.P. The City, however, points to two other paragraphs in this Court's Opinion before remand. on which the City relies to open, in effect, the remand to a full blown new trial: We also do not agree with the conclusion of the District Court that the "prejudicial issues" of profit and out-of-state ownership "demeans the whole process." We do not find any legal basis for excluding these facts from consideration on the issue of necessity. We conclude these issues are pertinent to the determination of whether the public interest requires the taking under § 70-30-111, MCA, as it has been broadly drafted and defined. In the absence of a declared policy by the Legislature giving greater or lesser weight to public ownership as compared to private ownership of a water system, these issues must be considered and weighed by the trial court on remand. We reverse the judgment of the District Court and remand for reconsideration of all relevant factors, including the vote by the people and the City's resolution and ordinance. Purporting to act in accordance with the foregoing paragraphs, the City of Missoula offered to prove, and the District Court denied, on remand, that Mountain Water had recei~red a rate increase from the Public Service Commission following the first trial; that Mountain Water was engaged in litigation with the Public Service Commission for further rate increases; that under City ownership 91,737,951.00 in rate increases by Mountain Water would have been avoided; that under City ownership the City would have realized $1,896,621.00 in surplus over a six year study without Mountain Water's increases; that if Mountain Water prevails in its pending Lewis and Clark County litigation, the cost to Missoula ratepayers would be an additional $350,000.00 per year; and, that testimony from its experts Howell and Young that the District Court in the first trial "incorrectly and erroneously misunderstood the City's economic proof" in certain particulars. At an oral hearing before the Court's order determining the specific issues, the City also proposed to have its witness testify as to the effect of the 1986 Federal Tax Reform Act on the ratepayers in the system. Once again the proposed offers of proof from the City would expand the hearing on remand to a new trial and ignore the law of the case as announced in the Opinion of this Court where we sustained the Court's findings on public savings, on rates and charges, and like material. 743 P.2d at 596. We uphold the court's decisions on the admissibility of these tvpes of evidence. DID THE DISTRICT COURT ERR IN ITS APPRECIATION OF THE NATURE OF A CONDEMNATION PROCEEDING AT THE NECESSITY STAGE? City of Missoula contends under this caption that the District Court did not appreciate that this cause involved an "evolving economic factual. situation" which must he viewed in light of all circumstances which transpired from the original economic analysis of the City which culminated in their expert's report of October, 1985, and facts which occurred up to the time of remand. It is on this basis that the City contends that it had the right to prove the elements of evidence to which we have already averred. The argument, however, does not take into account what we have already stated in this matter: those findings of the District Court from the original trial which we found to be supported by the evidence have become the law of the case and need only be considered as factors in connection with the other factors which this Court outlined in its 1 9 8 7 Opinion. The question is novel, and we find no direct authority; hut we are guided by the statutory language involving eminent domain proceedings. If the Court in this case had found that the public interest had required the taking of the interest of Mountain Water and its real property, then a preliminary condemnation order, that the condemnation may proceed, would be proper. Section 70-30-206, MCA. For the purposes of assessing just compensation thereafter, the right of the City to take the property would be deemed to have accrued at the date of the service of the summons, and its current fair market value as of that date is the measure of compensation for all property to be actually taken and the basis for depreciation in the current fair market value of property not actually taken but injuriously affected. Section 70-30-302, MCA. Thus, if a condemnation order had issued in this case, Mountain Water would not be allowed to utilize its rate increases subsequent to the date of the service of summons in computing its market value. The factors, therefore, that affect the issue of necessity should, in fairness, be determined as of the same date. Principally, however, we hold here that the effort of the City to reopen the cause ignores the law of the case as established by the prior Opinion of this Court, and was properly denied. In another instance the City offered evidence that the City claims demonstrated a lack of cooperation between the City and Mountain Water. That, too, was properly denied by the District Court because the first Opinion of this Court found the evidence supported cooperation between Mountain Water and the City. 743 P.2d at 596. THE DISTRICT COURT OBEYED THE MANDATE OF THIS COURT IN CONSIDERING OTHER FACTORS RELATING TO THE NECESSITY OF THE ACQUISITION We have already set forth above the weighing by the District Court of the effect on the employees of M.ountain Water. The District Court considered that effect as one of the factors, but not as the sole dispositive fact. Another factor that this Court remanded for reconsideration by the District Court was the effect of the adoption of the resolution by the Missoula City Council, and the vote of the electorate in connection with the condemnation. This Court said: . . . However, we hold that upon remand the public interest as expressed in these votes must be considered and weighed with the other factors in determining whether City acquisition of the water system is necessary. In considering the weight to be given to the votes, the court properly may consider that users outside the City could not vote or express their opinion, if those are the facts. The court may also compare the number and identity of voters with the numher and identity of the water users. On remand, the District Court made extensive findings respecting the actions of the city council and of the ballot issue. In tracing the history of the condemnation, the Court found that when the Montana Power Company, in 1979, decided to dispose of its water system, a power company representative and a representative of the holding company of Mountain Water, and the Mayor of Missoula, and members of his staff, met. The purpose was to determine if the City was interested in purchasing the company. The Court found that the City then did not express any interest in purchasing the system and eventually the other buyer acquired the system. On August 6, 1979, the City passed a resolution declaring its intent to acquire the system. No further official action was taken on the resolution until October, 1984. The evidence clearly showed knowledge by the city commission of the acquisition of the water system by Mountain Water. During the period to 1984, Mountain Water engaged in long deferred maintenance of the system. In 1981, the city council reaffirmed by resolution its intention to acquire the system and commence condemnation proceedings. In September, 1985, a ballot initiative to stop the condemnation proceedj-ngs was put to a public vote. The question presented on the ballot was whether the City voters would prohibit the City from purchasing Mountain Water. The District Court, on remand, found that the ballot was not accurate because it stated the wrong owner of the water system. Only 42 percent of all the persons registered to vote voted at the election. A total of 4,006 voted to support the City and 3,474 voted against the City. In 23 precincts within the City of Missoula which exclusively used Mountain Water, 3,339 supported the City and 2,744 voted against the City's efforts. In the 9 precincts within the City only partially served by Mountain Water, 626 supported the City and 704 supported Mountain Water. Considerable funds were spent on each sj-de respecting the ballot issue. The District Court concluded that a turnout of 42 percent of eligible voters demonstrated that the ownership hy the public was not an important issue in the minds of most city residents. The District Court further found that it could not determine the positions of persons outside the City with certainty. It did point to a loss of substantial tax revenue to the county and the school districts as a result of the condemnation. It pointed to evidence at the first trial of a concern that the City would use the water to force annexation of areas outside the city. Another factor which this Court directed the District Court to consider on remand was the importance of the City obtaining ownership of water rights itself, in order that the City may insure its inhabitants of long-range access to water. The District Court, in its findings on remand, found that the water from the Rattlesnake is not necessary to the system and that a more than adequate supply of water is available from existing wells. The District Court pointed to an incident in 1949 when the whole city of Missoula was without water for 11 days because the entire water system was frozen. The cause of the freezing was that the surface water from Rattlesnake Creek, which entered the water system at temperatures as low as 31 degrees fahrenheit, had the effect of freezing the entire system. Whereas, well water, pumped from a greater depth, has a higher temperature and is more desirable because it poses less danger of freezing the whole system. With respect to public versus private ownership of the system, the District Court found that Mountain Water would spend $1.5 million on capital improvements to the system over the next five years. The City maintained that it could operate the system with less than $0.5 million each year in capital improvements. The District Court found that projection unrealistic. If the City limited itself to $0.5 million, the result would be a steadily declining water system with problems occurring more and more frequently. The Court also found that the profit realized by Mountain Water was regulated by Montana Public Service Commission which assures that utilities will not make excessive profits at the expense of the service provided to the consumer. The profit incentive is one of the reasons for the continuing efficiency of the system of Mountain Water, its annual improvements, and the overall exemplary services provided to the consumers. As to the City's contention that it would act in the best interests of Missoula consumers, which would not be true of an out-of-state owner of the system, the District Court pointed out that there was no evidence that Mountain Water service is less than that rendered by any other water company or that the City could give better service and that Mountain Water's quick response to the giardia infestation demonstrates a concern for the health of the citizens of Missoula who use this water. As to whether a privately-owned company should own the water supply for the City of Missoula and whether those rights should be controlled by the citizens themselves and their elective government, the Court found no evidence which showed that the citizens' long-range access to supplies of water would be endangered by the continued ownership by Mountain Water. The District Court pointed to the history of the ownership after Mountain Water took over from the Montana Power Company. It rebuilt and re-equipped the water system to infuse capital into the Missoula economy. The District Court catalogued this history for the years 1979 through 1985. The Court found that the citizens long-range access to water was assured through the continued ownership by Mountain Water and that there was no substantial proof to the contrary. None of the foregoing findings is attacked by the City as being unsupported by evidence, or clearly erroneous under Rule 52(a) , M. R . Civ. P. The findings are, therefore, binding upon us. THE CITY'S AIJTHORITY TO CONDEMN IS THE SOVEREIGN'S RIGHT OF EMINENT DOMAIN The City raises two additional issues of law respecting the City's authority to condemn and the right of the sovereign to eminent domain. The issues are precluded, however, because they were determined by this Court in its first Opinion. In stating the effect of the Montana statutes relating to eminent domain, this Court said: The District Court must determine, under part (2) , whether it is "necessary" that the water system be taken by the City. This Court has defined "necessary" under this statute as reasonable, requisite, and proper means to accomplish the improvement. (Citing authority.) We recognize that two questions are involved: 1) Is it necessary that the City have its own water system? and, 2) Must the City take Mountain Water's property in order to have its own system? Unlike the typical case involving condemnation of land for a highway, the first question here is not whether it is necessary to have the improvement, but whether it is necessary to have the improvement operated by the City instead of by private industry. Under part (3), the District Court must determine whether the proposed use is "more necessary" than the present use. That the water already has been appropriated to a public use cannot be disputed given the broad interpretation of "appropriation to a public use" in the eminent domain statutes. See 70-30-102 and 203, MCA. (Citing authority.) . . . On remand, the District Court followed our mandate, and based on its findings, concluded: 1. Section 7-13-4404, M.C.A., provides: Before property can he taken, City must show by a preponderance of evidence that the public interest requires the taking based on the following findings : (1) that the use to which it is to be applied is a use authorized by law; (2) that the taking is necessary to such use; ( 3 ) if already appropriated to some public use, that the public use to which it is to be applied is a more necessary public use. Considering relevant factors set out in the original findings, and these findings, including the City resolution and the public vote, the Court concludes that the City has failed to meet its burden of proving by a preponderance of the evidence that it is necessary that the City operate the Mountain Water system. Since this property is already a public utility, and hence to some degree dedicated already to a public use, it is not more necessary the City take over its operation. The public interest will be best s e r y r e c ? hy the City not being permitted to condemn Mountain Water. 2. Having failed to carry its burden of proof, the Court now denies the City relief in this proceeding. The decision of this Court on a former appeal, whether right or wrong, is binding alike on parties and courts in the same action. Little v. Little (1953), 127 Mont. 152, 259 P.2d 343; State ex rel. Great Northern Railway Company v. State Board of Equalization (1952), 126 Mont. 187, 246 P.2d 220; Apple v. Edwards (1949), 123 Mont. 135, 211 P.2d 138. We hold, therefore, that the District Court properly considered the issues referred to on remand by this Court and considered those factors in determining that the City of Missoula had not established a right to condemnation of the property of Mountaj-n Water Company. We, therefore, affirm the judgment of the District Cour A-. I-. > ~ L B , * Justice We Concur: Justices Mr. Justice William E. Hunt, Sr., did not participate. | March 23, 1989 |
80ba4bc3-33cf-46f5-8ead-579cea6f15ec | HOBBS v PACIFIC HIDE AND FUR DEPOT | N/A | 84-437 | Montana | Montana Supreme Court | NO. 84-437 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 F. CLIFFORD HOBBS, Plaintiff and Appellant, -vs- PACIFIC HIDE AND FUR DEPOT, a Montana corporation, Defendant and Respondent. APPEAL FROM: District Court of the Eighth Judicial District, In and for the County of Cascade, The Honorable Joel G. Roth, Judge presiding. COUNSEL OF RECORD: For - : Charles R. Johnson; Marra, Wenz, Johnson & Hopkins, Great Falls, Montana J. Marquis Eastwood, Stephen D. Bell; Dorsey & Whitney, Minneapolis, Minnesota a l u For Hesponnent: %f Tom L. Lewis; Regnier, Lewis & Roland, Great Falls, Montana Kenneth R. Olson; Rai-z & Olson, Great Falls, Montana I - - -7 -13 ,. ' - . . 3 ; " - .-- { i ! 1-1 . . . .- - . , - : ! {- ! LC- . . , , i Submitted.: May 12, 1988 Decided: March 31, 1989 e Mr. Justice John C. Sheehy delivered the Opinion of the Court. F. Clifford Hohbs sued Pacific Hide and Fur Depot for his claimed wrongful discharge from employment in the District Court, Eighth Judicial District, Cascade County. His theories of recovery, which were submitted to the jury, included actual fraud, constructive fraud, hreach of the implied covenant of good faith and fair dealing, and negligent misrepresentation. The jury verdict found against Hobbs on all of the theories of recovery, and, judgment having been rendered thereon in favor of the defendant, Hobhs appealed from the judgment to this Court. We reverse and remand for new trial as to the claim for breach of an implied covenant of good faith and fair dealing, and affirm as to all other claims for relief. The reasons follow. Pacific Hide and Fur Depot is a Montana corporation that recycles scrap iron, copper, brass and aluminum, buys and sells cattle and game hides, fur, and sells steel, farm products and hardware. It has corporate offices in Great Falls, Montana, and 32 operating branches in the states of Montana, Wyoming, Idaho, Washington and Oregon. Its president at the time of the discharge of Hobbs was Joe Thiebes, Jr., who died on May 1, 1982, two years before trial. Pacific had 450 employees in 1981. In 1983, Pacific reduced its work force to 350 employees. Clifford Hobbs began his employment with Pacific in December, 1978. At that time, he had been employed in the retail steel industry for approximately 15 years. He had met Roqer Palmer, Pacific's Billings branch manager and apparently came in the fall of 1978 to Great Falls for an employment interview. Hobbs claims that Palmer represented to him that he would have a bright future and job securitv with Pacific as long as he competently performed his job. He claims he was promised substantial salary, stock in the company, annual bonuses, and opportunity for advancement. He claims that these promises induced him to leave his employment with Wisconsin Steel, to move his family from Denver to Great Falls and to accept the position of director of corporate purchasing for Pacific. Hobbs maintains that Palmer made other promises which need not be enumerated here except to say that Hobbs claims he was painted a glowing future. After Hobbs went to work for Pacific, substantial friction developed between Palmer and Hobbs. Nonetheless, on August 14, 1980, he was promoted and given additional responsibility as manager of Branch 1 Steel in Great Falls. Although he was now holding two management jobs, as director of corporate purchasing, and as manager of Branch 1 Steel, Hobbs contended that his compensation was substantially below other branch managers. He also contends he never received a promised substantial increase in his bonus. Under his employment, Hobbs was required to report to Palmer, although other employees at the same management level reported directly to the president or vice president of Pacific. Palmer continued to be disruptive, and on one occasion, increased the price of a contract by two percent over a firm price that Hohbs had negotiated. This action resulted in the discipline of Palmer, and his removal as superior of Hobbs, after which Roger Palmer told Cliff Hobbs that Palmer was "going to get him." A few months later, however, the executive vice president placed Roger Palmer back over the purchasing department and required Hobbs to report directly to Palmer. By April 15, 1981, the executive vice president and Palmer determined that Hobbs would handle only purchasing, and he would again report to Roger Palmer. Other managers reported having trouble with Palmer. Hobbs was terminated from his employment on September 15, 1981, without prior notice. The decision to terminate Hobbs was made after a meeting between Thiebes, Vosburg, the executive vice president, and Palmer on September 15, 1981. At the same time, Thiebes circulated a letter to the other managers stating that Hobbs had not worked out as manager of Branch 1, although he had done an excellent job in purchasing. The letter stated it was a "subject lesson" to all managers, and went on to state that the conflicts between Palmer and Hobbs "should now be resolved." Hobbs maintains that during the trial it was demonstrated that the problems at Branch 1, a drop in sales, low margin on sales, and a write-off of bad debts were not Hobbs ' fault. No other management level official was terminated. Hobbs also claims that other managers, before and after his termination, had worse records, but were not fired. Roger Pal-mer was terminated from the company in May, 1982, apparently because of unresolved intra-company conflicts with other managers. Other pertinent facts will appear under the issues to which they pertain. I Hobbs' first attack is upon instructions given to the jury relating to the theory of breach of the implied covenant of good faith and fair dealing. Hobbs contends that the given instructions were inadequate, placed an improper burden of proof upon the plaintiff, and amounted to a directed verdict in favor of the defendant upon the issue. From our examination, we find the instructions inadequate, confusing and misleading, and therefore requiring reversal. First, a resume of pertinent cases from this Court is in order. In Gates v. Life of Montana Insurance Company (1982), 196 Mont. 178, 638 P.2d 1063 (Gates I), we had an employee - who was hired under an oral contract of indefinite duration. After she was employed, the employer issued a handbook, which assured employees that they would be given a hearing before termination. Gates was fired without a hearing. The employer claimed the right to discharge Gates without a hearing because she was an at-will employee. This Court reversed a summary judgment in favor of the employer, say;-ng: . . . The circumstances of this case are that the employee entered into an employment contract terminable at the will of either party at any time. The employer later promulgated a handbook of personnel policies establishing certain procedures with regard to terminations. The employer need not have done so, hut presumably sought to secure an orderly, cooperative and loyal work force by establishing uniform policies. The employee, having faith that she would be treated fairly, then developed the peace of mind associated with job security. If the employer has failed to follow its own policies, the peace of mind of its employees is shattered and an injustice is done. We hold that a covenant of good faith and fair dealing was implied in the employment contract of the appellant . . . Gates, 638 P.2d at 1067. On remand to the District Court, Gates' case was tried before a jury, which resulted in a verdict in her favor for both compensatory and punitive damages. In Gates v. Life of Montana Insurance Company (1983), 205 Mont. 304, 668 P.2d 213 (Gates - 11), we sustained the punitive damage award on the grounds that a breach of an implied covenant for good faith and fair dealing in employment constituted a tort. Dare v. Montana Petroleum Marketing Company was decided by this Court in 1984. 212 Mont. 274, 687 P.2d 1-015. The District Court had granted summary judgment against Dare because no handbook existed, such as in Gates. This Court stated: . . . We conclude that the District Court construed Gates too narrowly. -- Whether a covenant of good faith and fair dealing is implied in the particular case depend.s upon objective manifestations the employer giving - rise to the employees' reasonable belief that he or she has job security and will be treated fairly. Gates, 638 at 1067, 39 St.Rep. at 20. The presence of such facts indicates that the term of employment has gone beyond the indefinite period contemplated in the at will employment statute, section 39-2-503, MCA, and is founded upon some more secure and objective basis. In such cases, the implied covenant protects the investment of the employee who in good faith accepts and maintains employment reasonably believing their job is secure so long as they perform their duties satisfactorily. Such an employee is protected from bad faith or unfair treatment by the employer to which the employee may be subject due to the inherent inequality of bargaining power present in many employment relationships. The implied covenant seeks to strike a balance between the interests of the employer in controlling the work force and the interests of the employee in job security. Gates, 638 P.2d at 1066-67, 39 St.Rep. at 20. We hold that an employment handbook as promulgated by the employer in Gates is not essential t o a cause of action for breach of the implied covenant of good faith and fair dealing. Implication of the covenant depends upon existence of objective manifestations w the employer giving-rise to the employees reasonable belief that he or she has job security and will be treated fairly. (Emphasis supplied. ) Dare, 687 P.2d at 1020. In Crenshaw v. Rozeman Deaconess Hospital (19841, 213 Mont. 488, 693 P.2d 487, this Court held that a probationary employee was owed the duty of good faith under Gates - I, and that the duty coexisted with the right to terminate an at-will employee. This Court said: . . . This requirement of good faith and fair dealing does not conflict with section 39-2-503, MCA, [the at-will employment statute1 but merely supplements it. Employers can still terminate untenured employees at-will and without notice. They simply may not do so in bad faith or unfairly without becoming liable for damages. Crenshaw, 693 P.2d at 492. See also, Nye v. Montana Livestock Department (1982), 196 Mont. 222, 639 P.2d 498. The nature of an implied covenant of good faith and fair dealing in a contract was described by this Court in Nicholson v. United Pacific Insurance Company (Mont. 1985) , 710 P.2d 1342, 42 St.Rep. 1822. There we said part: . . . but whether performing or breaching, each party has a justifiable expectation that the other will act as a reasonable person. (Citing a case.) The nature and extent of an implied covenant of good faith and fair dealing is measured - in - a particular contract -- by the justifiable expectations of the parties. Where one party acts arbitrarily, caprici~usly, or unreasonably, that conduct exceeds the justifiable expectations of the second party. The second party then should be compensated for damages resulting from the other's culpable conduct. (Emphasis supplied.) The District Court in this case before us gave two instructions that related to the issue of the implied covenant and good faith and fair dealing: COURT'S INSTRUCTION NO. 17 -- Mr. Hobbs has made claims concerning his dismissal from employment with Pacific Hide and Fur. You should understand that generally an employment contract for an indefinite term or period may be terminated at any time by either party, provided that party gives notice to the other. However, no prior notice is required, so that an employer or emplovee may tell the other that the employment contract is terminated on the same day notice is given. If you find that Mr. Hobbs and Pacific had an employment contract with no specified term, then Pacific had the right to terminate Mr. Hobbs's employment at any time and for any reason. That is the general rule. I will now instruct you on the causes of action for breach of the implied covenant of good faith and fair dealing. If you find that Mr. Hobbs has proven by a preponderance of the evidence that the defendant breached the implied covenant of good faith and fair dealing, then you may find for Mr. Hobbs. But if not, then you must apply the general rule that an employment contract can be terminated for any reason or no reason at all. Good cause need not be shown for the termination. An employer is entitled to be motivated by and to serve its own legitimate business interests; an employer must have wide latitude in deciding whom it will employ in the face of the uncertainties of the business world; and an employer needs flexibility in the face of changing circumstances. COURT'S INSTRUCTION NO. 19 -- You are instructed that the defendant Pacific Hide and Fur Depot owed plaintiff Clifford Hobbs an implied-in-law duty of good faith and fair dealing arising out of the emplover/employee relationship that existed between the parties. In considering whether the defendant acted in bad faith in the manner in which plaintiff Clifford Hobbs was treated during the employment relationship and at the time the plaintiff was discharged, you should consider all the evidence which tends to establish either good faith or bad faith. If you find that the defendant has violated this obligation imposed by law, the plaintiff is entitled to be compensated for all detriment or injury proximately caused thereby whether that detriment or injury could have been anticipated or not. Taken together, the court's instructions failed to tell the jury the nature and extent of the implied covenant of good faith and fair dealing. The instructions informed the jury that as a matter of law Pacific owed Hobbs an implied in law duty of good faith and fair dealing, but did not tell the jury that the implied covenant is measured in a particular contract by the justifiable expectations of the parties. Nicholson, supra. We therefore hold that the cause must be reversed for the failure to give proper instructions on this issue. A party has a right to have instructions given which are adaptable to his theory of the case. Northwestern Union Trust Company v. Worm (1983), 204 Mont. 184, 663 P.2d 325. Without binding either counsel or the District Court on retrial, we suggest that instructions to the jury might properly include the following: Montana statutory law provides that an employment relationship having no specific duration may be terminated at the will of either party on notice to the other. This is referred to as the at-will employment doctrine. However, if there are objective manifestations by the employer giving rise to a reasonable belief on the part of the employee that he has job security and will be treated fairly, the right of the employer to terminate the employee at will is limited by a covenant of good faith and fair dealing which the law implies into the employment relationship. An employer may still terminate an employee at will and without prior notice; however, the implied covenant of good faith and fair dealing requires the employer to have a fair and honest reason for termination, and not to act arbitrarily, capriciously or unreasonably. In this case the covenant of good faith and fair dealing is implied into the employment relationship, and you are instructed that a breach of this covenant would render the employer liable to the employee for damages. In determining whether the defendant violated the duty of good faith and fair dealing, you must balance the interests of the defendant in controlling its work force with the interest of the plaintiff in job security. An employer such as Pacific is entitled to be motivated by and to serve its own legitimate business interest, and must be given discretion in determining who it will employ and retain in employment. Thus, if the employer is motivated to discharge the employee for reasons unfair or not honest, the employee is entitled to recover damages proximately caused by the breach. On the other hand, if the employer was motivated by honest business reasons in discharging the employee, the employer had the right to terminate the employment on the same day as notice is given for the discharge. Hobbs maintains that the District Court committed reversible error hy the manner in which it controlled the discovery and pretrial proceedings in this case. There are two items of pretrial discovery that ought to Se made available to Hobbs before any subsequent retrial.. Prior to the trial in the District Court, Hobbs requested of the defendant corporation that it produce two copies of all federal and state income tax records of the defendant corporation for the years 1979 through 1982. Inasmuch as Thiebes' letter terminating Hobbs represented that one of the reasons for the termination was difficult economic times adversely affecting his financial standing in the corporation, the income tax records of the corporation were relevant to the reasons stated. Rule 26 (b) (1) , M.R.Civ.P. It appears that Hobbs was entitled to production of these documents for his pretrial preparation, and for use at the trial as evidence. Also prior to the trial in the District Court, Hobhs requested of the defendant corporation information as to the salary and annual bonuses paid to all of the branch managers of the corporation during 1979, 1980 and 1981. The court granted, after objection, the motion as to the salary and annual bonuses paid to the branch managers of Branches 1, 2 and 40, and as to the other five branch managers of branches that sold steel in 1979, 1980 and 1981, those who received the highest salary and annual bonuses in said years. During the trial, counsel for Pacific, in cross-examining Mr. Carestia, Hobbs' financial expert, used information relating to the salaries and bonuses of branch managers for the additional years of 1982 and 1983. An argument ensued between counsel before the court in chambers as to whether the information relating to the years 1982 and 1983 had improperly been withheld from Hobbs' counsel so that it was impossible to advise Carestia, prior to the trial, of such information in the preparation of his testimony. The record is not clear to us as to which counsel was correct with respect to whether the information had been requested or supplied in time. In any future retrial of this cause, we direct that upon a proper request for discovery, information that may be used by either party in direct or cross-examination of witnesses must be supplied in accordance with the request for production. In this case, the District Court permitted the corporation's counsel to cross-examine Carestia on information which had not been supplied to the expert. The court felt that the jury was aware of the fact that the witness did not have the information that he was being questioned about and that on redirect examination by Hobbs' counsel, the jury would be made well aware of it. On that basis, the District Court permitted the cross-examination over objection. It is probable that the District Court was unable, as we are unable, to determine which of the parties was right as to the extent of the request for the production of documents. In any event, this issue can be obviated on retrial if, on proper request for production, information is exchanged as to documents that will be used either for direct or cross-examination of either parties' witnesses on retrial. The objective of the District Court in controlling and regulating discovery is to insure a fair trial to a11 concerned, neither according one party an unfair advantage nor placing the other at a disadvantage. Massaro v. Dunham (1979), 184 Mont. 400, 603 P.2d 249; Lindberg v. Leatham Rros., Inc. (1985), 215 Mont. 11, 693 P.2d 1234. We find no merit in other issues raised hy Hobbs as to discovery as regulated by the District Court, and it is unnecessary to set them forth here. 111 At the time of the trial in this cause in the District Court, the corporation president involved in terminating Hobbs had died. In the course of the trial, through several witnesses, statements made by the deceased Thiebes to those witnesses were permitted into evidence. Hobbs raises a general objection to this kind of evidence, claiming hearsay. At issue in this case, as indicated in the proposed instructions foregoing, is whether the employer was motivated to discharge the employee for reasons unfair or not honest, as a breach of the implied covenant of good faith and fair dealing. Therefore, the facts relating to the method used by the deceased Thiehes in deciding to terminate Hobbs were relevant to those issues. Thus, it may be that statements made by Thiebes to others relating to the discharge of Hobbs would he indicative of the facts considered by him in making the discharge, as to whether he was acting fairly and honestly. V7hether a witness is available or not, under Rule 803(3), M.R.Evid., statements are not excluded by the hearsay rule if those statements indicate the then existing mental, emotional or physical condition of the declarant. When a declarant is unavaj-lable as a witness, as for reason of death, Rule 804(a) (4), his statements are not excluded by the hearsay rule if there are comparable circumstantial guarantees of trustworthiness. Rule 804 (a) (b) (5) , M.R.Evid. Whether there are circumstantial guarantees of trustworthiness is a matter for determination by the District Court in the first instance which will be upheld in this Court absent an abuse of discretion. In any retrial of this case, those rules should guide the District Court in considering whether to admit such statements. IV Hobbs objects to an instruction given by the District Court on the subject of constructive fraud on the ground that it was repetitious and misleading. The District Court submitted the issue of constructive fraud to the jury in a special interrogatory and the jury responded that the defendant had not committed constructive fraud which was the proximate cause of the damages to Hobbs. We do not comment on the instruction given by the District Court in this case for the reason that we find plaintiff's theory or basis for constructive fraud is not proper1.y conceived in this case. Statements were made by Palmer to Hobhs before his employment that Pacific was a "gold mine," that Palmer was offering to Hobbs the "opportunity of a lifetime," and that Hobbs would be reporting directly to the president or executive vice president of the company and not to Palmer. Such statements are not the source of plaintiff's problems in this case nor are they demonstrahl-y false. The statements may arguably have given rise to justifiable expectations in Hobbs about his employment, but they do not constitute a basis for constructive fraud. It is true that defendant's fraudulent intent is not a necessary element in an action against it for constructive fraud, 5 28-2-406 (I), MCA, nor must there exist a fiduciary or confidential relationship between the pl-aintiff and the defendant, Mends v. Dykstra (1981), 195 Mont. 440, 449-50, 637 P.2d 502, 507-08. Here, however, given the statements made, their nature, and the circumstances existing between the parties at the time the statements were made, Hobbs can show no duty imposed on Pal-mer or any other officer of Pacific "to speak out on the circumstances," indicating that the statements were false or misleading and should not be relied on. Palmer seems only to have expressed his opinion, belief or judgment on the matters stated and not necessarily statements of positive fact. See Restatement (Second) of Torts 5 53821 Comments a-g (1977). These statements do not have in them the elements of concealment or falsity that characterize the statements or representations which led to the contract in McGregor I T . Momrner (Mont. 1986), 714 P.2d 536, 43 St.Rep. 206, upon which case Hobbs relies on appeal. v Accordingly, the judgment of the District Court in this case is reversed, and the cause remanded for retrial in accordance with this Opinion. Cosfs to plaintiff. , . . / \ \ , , - , I j h b \ , ,&k~t-A.~- / / Justice ( We Concur: A Chief Justice Justices M r . J u s t i c e Fred J. Weber d i s s e n t s : The m a j o r i t y concludes t h a t r e v e r s a l i s r e q u i r e d i n t h i s c a s e because t h e i n s t r u c t i o n s d i d n o t t e l l t h e jury t h a t t h e implied covenant i s measured by t h e j u s t i f i a b l e e x p e c t a t i o n s of t h e p a r t i e s . This conclusion i s based upon Nicholson v. United P a c i f i c Insurance Company (Mont. 1 9 8 5 ) , 710 P.2d 1342, 4 2 St.Rep. 1822. I t seems i n a p p r o p r i a t e t o apply a l e g a l t h e o r y which had n o t y e t been s t a t e d by t h i s Court. I n t h e p r e s e n t c a s e , t h e jury i n s t r u c t i o n s w e r e given on May 1, 1984, n e a r l y one y e a r p r i o r t o t h e 1985 Nicholson d e c i s i o n . I conclude t h e r e i s no r e v e r s i b l e e r r o r , and I would a f f i r m t h e jury v e r d i c t and judgment f o r t h e defendant. The f a c t s s t a t e d i n t h e m a j o r i t y opinion p r e s e n t a very f a v o r a b l e p i c t u r e o f t h e p l a i n t i f f ' s claim. N o f a c t s a r e p r e s e n t e d which suggest a b a s i s f o r t h e j u r v v e r d i c t f o r t h e defendant. However, t h e record demonstrates t h e r e w e r e approximately 30 w i t n e s s e s who t e s t i f i e d i n behalf o f t h e defendant during a month long t r i a l . I b e l i e v e it appropri- a t e t o set f o r t h some o f t h e f a c t s which support t h e i u r y ' s v e r d i c t . When p l a i n t i f f f i r s t went t o work f o r P a c i f i c Hide and Fur Depot ( P a c i f i c ) , M r . Palmer t e s t i f i e d t h a t M r . Thiebes a u t h o r i z e d him t o o f f e r p l a i n t i f f a 532,000 p e r y e a r s a l a r y p l u s an unknown bonus. There i s no testimony from P a c i f i c t h a t anyone r e p r e s e n t e d t o p l a i n t i f f t h a t he would r e c e i v e any h i g h e r s a l a r y . Furthermore, p l a i n t i f f himself t e s t i f i e d t h a t he r e a l i z e d any bonus he might r e c e i v e would be d i s c r e - t i o n a r y w i t h M r . Thiebes and would have t o be approved by M r . Thiebes p r i o r t o r e c e i p t . M r . Palmer a l s o t e s t i f i e d t h a t p l a i n t i f f s a i d he was anxious t o l e a v e Colorado and move t o Yontana. This testimony i s r e l e v a n t i n c o n s i d e r i n g t h e argument t h a t t h e p l a i n t i f f was e n t i c e d t o move h i s family from Denver to Great Falls based upon Pacific's representa- tions of a "glowing future." Several Pacific employees testified as to the dissension between plaintiff and Mr. Palmer and the disruptive effect it had on the purchasing department under plaintiff's supervi- sion. The Vice-president of Pacific testified that plaintiff had an obsession with Mr. Palmer's interference with the purchasing department. An agent within the department testi- fied to the effect that plaintiff was very candid about his dislike of Mr. Palmer and his disapproval of Mr. Palmer's ideas and the way he did things. Another purchasing agent testified that employees within the department found plain- tiff to be harsh and abusive, and that under his supervision, the department had experienced a considerable loss of morale. The agent testified that he had considered resigning due to the pressure of having to work for plaintiff and had ex- pressed that inclination to Mr. Thiebes. Plaintiff agreed that the problems he had with Mr. Palmer created confusion within the corporation and that the confusion spilled over into other corporate branches. Witnesses testified that the plaintiff frequently com- plained about his immediate supervisor to individuals outside the company. These complaints were expressed to one individ- ual who testified that because of plaintiff's statements, he formed a negative opinion of Mr. Palmer, and he believed that plaintiff's statements were destructive to the interests of Pacific. Another individual unrelated to the company testi- fied that plaintiff's preoccupation with Mr. Palmer and his constant talk about the inner workings of Pacific demonstrat- ed a lack of professionalism. At one point, plaintiff told this individual about an "ultimatum" which he had given Mr. Thiebes a few months prior to his termination, indicating that "the situation was unworkable" and that "it will either he Roger or him, and that was the way he wanted to resolve it." The record contains substantial evidence that the plain- tiff had been advised of the need to cooperate with Mr. Palmer, his superior, and that if his performance did not improve, the plaintiff could be terminated. The evidence further demonstrated that shortly thereafter, the plaintiff contacted another steel company concerning alternative em- ployment, and this contact was made prior to his termination by Pacific. Mr. Thiebes ultimately made the decision to terminate the plaintiff. Because Mr. Thiebes died prior to trial, we are not able to ascertain all of his reasons for the termina- tion. The record does establish that Mr. Thiebes was well aware of the prohl-ems between the plaintiff and Mr. Palmer. He had also been told that the purchasing department was experiencing morale problems and that an employee was consid- ering resignation. Supervisory employees of Pacific had indicated to Mr. Thiebes that if Pacific had to choose be- tween the plaintiff and Mr. Palmer, it would be wise to terminate the plaintiff and retain Mr. Palmer. Mr. Palmer was described by several other Pacific empl.oyees as being more knowledgeable of the steel business and more dedicated to that business than was the plaintiff. Other key employees testified that the plaintiff experi- enced a lack of effort when he was managing branch I of the steel business as well corporate purchasing. Mr. Thiebes' letter of termination stated that the economic times and the plaintiff's inability to manage branch I along with his purchasing duties were the primarv causes for his termination. Such evidence supports the contention of the defendant that its decision to terminate the plaintiff was a sound business decision. The jury accepted that idea, as d-emon- strated by the following question presented to it: Do you find that defendant Pacific Hide and Fur breached an implied covenant of qood faith and fair dealing to thi plaintiff, which was a proximate cause of damages to plaintiff Clifford Hobbs? To that question the jury answered, "No." There is clearly substantial evidence to support the conclusion of the jury. I do not find a factual basis for trial reversal. In order- ing a retrial, I note that almost 8 years have passed since the date of termination and 5 years since the trial. We are posing a difficult trial problem for all parties by the present reversal. The basic reason for reversal stated in part I of the majority opinion is that the instructions were inadequate. The problem instructions were 17 and 19. Instruction 19 stated: You are instructed that the defendant Pacific Hide and Fur Depot owed plaintiff Clifford Hobbs an implied-in-law duty of good faith and fair dealing arising out of the employer/employee relationship that existed between the parties. In considering whether the defendant acted in bad faith in the manner in which plaintiff Clifford Hobbs was treat- ed during the employment relationship and at the time the plaintiff was discharged, you should consider all the evidence which tends to establish either good faith or bad faith. If you find that the defendant has violated this obligation imposed by law, the plaintiff is entitl-ed to be compensated For all detriment or injury proximately caused thereby whether that detriment or injury could have been anticipated or not. The instruction stated that the District Court concluded that the duty of good faith and fair dealing did arise in the present contract. As a result there was no need to require the iury to weigh any circumstances to determine if such a covenant was appropriate. The majority refers to Gates I, pointing to the circumstances under which a covenant of good faith and fair dealing may be implied. That does not appear relevant where the District Court already concluded that the covenant did arise in the present contract. In a similar manner, the majority refers to Dare with emphasis upon the objective manifestations by an employer from which the cove- nant may be implied. Again, that does not appear relevant where the trial court had already reached that conclusion. As previously mentioned, that "measurement" of the justifiable expectations of the parties had not been enunci- ated by this Court at the time of trial. While the Nicholson wording was not used in the present case, it seems to me that instruction 19 contains a good explanation of the duty. That instruction stated that in considering whether the defendant acted in bad faith, the jury may consider the manner in which the plaintiff was treated during the employment relationship and ---- at the time the plaintiff was discharged. The instruc- tion further emphasizes that the iurv should consider -- all the evidence which tends to establish either good or bad faith. It ends with the statement that if the jury finds the defen- dant has violated this obligation, the plaintiff is entitled to compensation for all injury proximately caused by that violation. I conclude this is a fair statement of the law as it existed and was available to the trial judge and attorneys during the 1984 trial. The jury was also instructed on the nature of the at-will employment contract and how the cause of action for breach of the implied covenant interplays with that relation- ship in instruction 17 which states in part that: If you find that Mr. Hobbs has proven by a prepon- derance of the evidence that the defendant breached the implied covenant of good faith and fair dealing, then you must find for Mr. Hobbs. But if not, then you must apply the general rule that an employment contract can be terminated for any reason or no reason at all. I conclude there is no basis for reversal because of the wording of jury instructions 17 and 19. I would affirm the verdict of the jury and the judgment of the District Court. Mr. Justice L. C. Gulbra the foregoing dissent. | March 31, 1989 |
8b51a024-bc6c-44c6-a83f-9171b7e18b8a | CITY OF BILLINGS v LINDELL | N/A | 88-391 | Montana | Montana Supreme Court | No. 88-391 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 CITY OF BILLINGS, Plaintiff and Respondent, -vs- LESLIE LINDELL, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable Russell Fillner, Judge presiding. COUNSEL OF RECORD: For Appellant: Robert L. Stephens, Jr., Billings, Montana For Respondent: C z : r . Filed: Hon. Marc Racicot, Attorney General, Helena, Montana Dgrothy McCarter, Asst. Atty. General, Helena %ssell Fagg, City Attorney, Billings, Montana 0 "C c > rz I:! LIJ . -. - _ / I Submitted on Briefs: Feb. 23, 1989 Decided: March 31, 1989 _ . - I..) - : : : ' $ ? Clerk . Mr. Justice John Conway Harrison delivered the Opinion of the Court. This case comes on appeal from a judgment in the Thirteenth Judicial District, Yellowstone County, the Honorable Russell Fillner presiding. The lower court found the appellant, Leslie Lindell, guilty of the offense of Speeding and Driving While License Suspended. We affirm. On May 21, 1987, Billings police officers stopped appellant's vehicle for exceeding the posted speed limit. Officer John Carpani requested that appellant produce his driver's license. Appellant could not do so, but assured the officer he indeed possessed a license. Officer Carpani radioed for a license check through the State bureau. However, because the system was not operating correctly, Officer Carpani received a "negative" response. Appellant was issued a speeding citation and released. Later, the dispatcher reported that appellant's license was suspended. The officers proceeded to appellant's residence where they issued a second citation for driving while license suspended. At trial, the City of Billings offered into evidence a certified abstract of driving history and a certified copy of a letter notifying appellant that his driver's license suspension had been extended through September 4, 1987. The extended suspension was due to a January 6, 1987 conviction for Driving While License Suspended. Appellant challenged the exhibits' admissibility, contending the documents violated hearsav prohibitions and the best evidence rule. The trial judge admitted the evidence over appellant's objections, and took the case under advisement pending receipt of briefs. Thereafter, appellant failed to file a brief in support of his arguments. On May 31, 1988, deeming the matter submitted pursuant to the evidence, the District Court found Leslie Lindell guilty of the offenses of Speeding and Driving While License Suspended. Appellant presents two issues for our review: 1. Were the certified abstract of driving history and the certified copy of the suspension notification letter properly admitted as evidence? 2. Was the evidence presented sufficient to sustain a conviction? The Division of Motor Vehicles has the duty of maintaining records of license convictions. Section 61-11-102 (2) , MCA; Lancaster v. Department of Justice (Mont . 1985), 706 P.2d 126, 42 St.Rep. 1425. However, we recognize the inherent difficulty in requiring the custodian to be present in court each time the records become necessary in a trial. To meet practical concerns, the Legislature developed a number of instances in which authenticity is taken as established for purposes of admissibility without extrinsic evidence. Section 61-11-102 (6) , MCA, is one such instance: A reproduction of the information placed on a computer storage devise is an original of the record for all purposes and is admissible - in evidence without further foundation in all courts or administrative asencies when the following certification by a custodian of the record appears on each page: The individual named below, being a duly designated custodian of the driver records of the department of justice, motor vehicle division, certifies this document as a true reproduction, in accordance with 61-11-102 (6) , of the information contained in a computer storage device of the department of justice, motor vehicle division. Signed : (Print Full Name) (Emphasis added) The statute is abundantly clear; once properly certified, the exhibit is admissible without additional foundation. In the instant case, the abstract of driving was certified by a duly appointed custodian of the records. We need not examine this point any further. The copy of the suspension notification letter, dated February 18, 1987, likewise included a certificate from the custodian of the files and records of the motor vehicle division, certifying that the information was a true and correct copy of the original. As a public document kept in accordance with the statutory mandate, the letter falls within the class of self-authenticating documents. Rule 902 (4) , M.R.Evid. In addition, contents of an official document authorized to be filed may be proven by a copy " [clertified as correct in accordance with Rule 902 . . ." and meet the requirements of the best evidence rule. Rule 1005, M.R.Evid. Finally, the exhibit falls within Rule 803(8), the public document exception to the hearsay rule. We find the letter was properly admitted by the District Court. Appellant asserts that he did not receive the letter extending his suspension period and in fact, believed his driving privileges had been fully restored. However, we presume that "[a] letter duly directed and mailed was received in the regular course of the mail." Section 26-1-602 (24) , MCA. Nor does positive testimony by the addressee of nonreceipt nullify the presumption. General Mills, Inc. v. Zerbe Bros., Inc. (1983), 207 Mont. 19, 672 P.2d 1109. Instead, the determination of nonreceipt is left to the factfinder to give weight to the presumption he believes it is entitled. In the instant case, appellant presented no additional evidence, apart from his own testimony, to prove the letter was not received. On the other hand, the letter contained a certificate of mailing, dated and signed by an officer of the department, and sent to appellant's home address, the same address testified to as correct during the trial. Finally, appellant contends the evidence was insufficient to sustain the conviction. His argument, in large part, relies upon contentions already disposed of earlier in our opinion. Our review of the record, in the light most favorable to the City, indicates there exists substantial evidence upon which a reasonable mind could find appellant guilty. State v. Wilson (Mont. 1981), 631 P.2d 1273, 38 St.Rep. 1040. Specifically, the abstract of driving history, letter of suspension, and Officer Carpani's testimony collectively constitute substantial evidence on which to base the verdict. Affirmed. We concur: A Justices | March 31, 1989 |
cd8b9548-8160-4fc6-8122-2a33e3f8c72e | KELLY v WIDNER | N/A | 88-324 | Montana | Montana Supreme Court | No. 88-324 IN THE SIJPREME COIJRT OF THE STATE OF MONTANA 1989 ELEANOR KELLY, Plaintiff and Appellant, -vs- DON WIDNER and HARLEY HUNTLEY, Defendants and Respondents. APPEAL FROM: District Court of the Twentieth Judicial District, In and for the County of Sanders, The Honorable C.B. McNeil, Judge presiding. COUNSEL OF RECORD: For Appellant: Joan Jonkel argued; Jonkel Law Offices, Missoula, Montana Richard Simonton; Simonton, Howe & Jackson, Glendive, Montana For Respondent: Robert A. Terrazas argued; Worden, Thane & ~aines, Missoula, Montana Submitted: February 10, 1989 ,- . . . . . . . ; , , . , " . t , . ? ..: - . *-- - : . I . .J !: . v . .- - - - o P Clerk "5 -- Mr. J.ustice Fred J. Weber delivered the Opinion of the Court. This appeal arises from a suit for personal injuries brought by Eleanor Kelly against Mr. Widner and Mr. Huntley. Ms. Kelly signed a release with Farmers Insurance Company in exchange for $8,900. She later filed a personal injury action against the insureds, Mr. Widner and Mr. Huntley, alleging negligence. In their answer, defendants plead the affirmative defense of release. The District Court granted summary judgment in favor of the defendants and Ms. Kelly appeals from that judgment. We reverse the summary judgment of the District Court and remand. The issues are: 1. Did the District Court err in granting summary judgment by finding that no genuine issues of material fact existed? 2. Did the District Court err in imposing technical pleading requirements in its summary judgment motion? 3. Did the District Court err in granting defendants' request for a protective order? Ms. Kelly was injured in an auto accident on November 18, 1979. Mr. Widner was the driver of the automobile which was owned by Mr. Huntley. Ms. Kelly was a passenger in the automobile. The accident fractured Ms. Kelly's left leg in several places and caused other minor in juries. Doctors inserted a rod and bolts in her leg to hold the bone together and placed the leg in a cast. Ms. Kelly was hospitalized for 23 days, and was in a cast for 10 months. At the time of the accident Ms. Kelly was 45, divorced, and lived alone. She had a ninth grade education. She rented a log cabin with no phone, and her car did not run. She had previously worked as a waitress, earning $2.75 an hour. Had she not been injured, she claims she would have begun a new job at $3.50 an hour. With her leg in a cast she was unable to work at all. During the months of December 1979 and January 1980, she had only $10 and food stamps to live on. In January 1980 Mr. Huntley's insurance agents contacted Ms. Kelly. Mr. Widner brought her to his home so she could receive a call from the insurance agents. They questioned her over the phone about the accident and her injuries. The next day, on thirty minutes notice, the agents came to her home. They asked about her medical bills, lost wages, and income. The agents made out a check for $5,325, which Ms. Kelly endorsed to the hospital, and a check to Ms. Kelly for $3,634. From the $3,634, Ms. Kelly paid $1,542 in doctor bills; $1,460 was attributable to lost wages. The agents were at her home approximately thirty minutes. Ms. Kelly was not represented by an attorney. In exchange for the checks Ms. Kelly signed a release dated ~Tanuary 24, 1980. She also endorsed the two checks. Each check contained release language above the signature line. Thus Ms. Kelly actually signed three releases. In September of 1980 Ms. Kelly's doctors determined that her bone had not healed. They removed the cast and performed another leg surgery. However, pain and instability have prevented Ms. Kelly from holding any job which requires standing and walking. Ms. Kelly has incurred additional medical bills, and claims she has been unable to work during the 8 years since the accident. Before discussing the issues involved, we feel it is appropriate to mention the obvious time delay in Ms. Kelly's suit. While this is not a complicated case, it has stretched over a period of nearly 9 years to date. Ms. Kelly filed her initial suit on November 25, 1980. Defendants answered on March 5, 1981, asserting the release as an affirmative de- fense. In February of 1982, Ms. Kelly served her first set of interrogatories; however, defendants objected, calling them stock interrogatories. The case then lay dormant for fo.ur years, and from 1986 to present minimal discovery has been accomplished. No explanation is given for this delay. It is apparent that plaintiff's co.unse1 have not been dili- gent in pursuing this claim. The record also demonstrates that the defendants were not interested in bringing the matter to dispostion. Neither party has handled this case in a timely manner. Did the District Court err in granting summary judgment by finding that no genuine issues of material fact existed? The appropriate standard in granting summary judgment was stated in Kronen v. Richter (1984), 211 Mont. 208, 683 Summary judgment is never to be .used as a substit.ute for trial if a factual controversy exists. Reaves v. Reinbold (Mont. 1980), 615 P.2d 896, 37 St.Rep. 1500. S.umrnary judgment is only proper if the pleadings, depositions, answers to interrogatories and admissions on file show there is no gen-uine issue of material fact. Anderson v. Applebury (1977), 173 Mont. 411, 567 P.2d 951. The standard that an appellate court applies in review- ing a grant or denial of a motion for summary judgment is the same as that utilized by the trial co,urt initially ,under Rule 56, M.R.Civ.P.--a summa- ry j,udgment is proper when it appears "that there is no gen.uine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 10 Wright, Miller and Kane, Federal Practice and Procedure, section 2716, p. 643. F,urther, the defendant correctly recognizes the burden of proof which is required in a summary adjudication. Ini- tial.1~ the b.urden of proof must be carried by the moving party seeking summary judgment, in this case, Mr. Widner and Mr. Huntley. However, where the record discloses no genuine issue of material fact, the b.urden of proof shifts to the party opposing the motion, in this case Ms. Kelly, who must come forward with substantial evidence raising an issue of fact. Once the burden has shifted in this fashion, the party opposing the motion is held. to a standard of proof abo.ut eq.ual to that initially imposed upon the moving party under Rule 56 (c) , M.R.C~V.P. Harl-and 1 7 . Anderson (19761 , 169 Monte 447, 548 P.2d 613, 615; Kronen, 683 P.2d at 1318. In light of the above standard and burden of proof, we concl.ude that Ms. Kelly raised a genuine issue of material. fact in this case. Therefore, summary judgment was not appropriate. A release is governed by contract law, and may be re- scinded for the same reasons which allow rescission of a contract. Westfall v. Motors Insurance Corporation (1962) , 140 Mont. 564, 374 P.2d 96, 98-99. The validity of a release may be challenged therefore on the basis of unconscionability. In determining .unconscionability we have previously applied the UCC standard. In All-States Leasing v. Top Hat Lounge (1982), 198 Mont. 1, 649 P.2d 1250, a case involving a lease transaction, we looked to S 30-2-302, MCA, which is modeled after the same provision in the Uniform Commercial Code, and provides: (1) If the court as a matter of law finds the contract or any clause of the contract to have been .unconscionable at the time it was made the court may ref.use to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any .unconscionable cla,use as to avoid any unconscionable result. (2) When it is claimed or appears to the court that the contract or any cl.a,use thereof may be unconscionable the parties shall be afforded a reasonable opport.unity to present evidence as to its commercial setting, p.urpose and effect to aid the court in making the determination. The official comment to this section of the UCC states the basic test for unconscionability: [Wlhether, in light of the general commercial background and the commercial needs of the particu- lar trade or case, the clauses involved are so one-sided as to be .unconscionable under the circum- stances existing at the time of the making of the contract . . . The principle is one of the preven- tion of oppression and .unfair surprise. In Westlake v. Osborne (1986), 713 P.2d 548, 551, 43 St.Rep. 200, 204, we applied this test in a contract case. While this statute applies to sales transactions .under the UCC, courts have .used this definition by analogy, to apply in non-sales cases. Restatement (Second) of Contracts S 208 (1979). See also Howard D. Hunter, Modern Law of Contracts S 12.06 (1986). We reaffirm the use of this standard. Unconscionability is an equitable doctrine, without a s.uccinct or precise definition. While no single factor is determinative, elements which may be indicators of unconcionability include unequal bargaining power, lack of meaningful choice, oppression, and exploitation of the weaker party's vulnerability or lack of sophistication. See gener- ally, J. Calamari and J. Perillo, The Law of Contracts § 56 (1970). Inadequacy of consideration does not by itself invalidate a bargain, but may be a factor in determining conscionability. Restatement {Second) of Contracts 228 (1979). The und-erlying principle of conscionability is that of doing justice under the circ.umstances of each case. We approve of this standard, framed by the Illinois S.upreme Court, i n Scherer v. Ravenswood Hosp. Med. C t r . (Ill. 1979), 388 N.E.2d 1 2 6 8 , 1271, when it s t a t e d : The modern t r e n d i s t o s e t a s i d e r e l e a s e s of per- sonal i n j u r y claims i n s i t . u a t i o n s where t h e f a c t s , when f i n a l l y known, present an .unconscionable r e s u l t because of t h e e q u i t a b l e p r i n c i p l e of doing j u s t i c e under t h e circumstances of each case. The present case includes t h r e e circumstances which a r e r e l e v a n t t o a determination of .unconscionability. F i r s t , M s . Kelly1 s d i r e f i n a n c i a l s i t u a t i o n , her lack o f ed,ucation and lack of l e g a l advice, and her i s o l a t e d l i v i n g arrangements c r e a t e d a v u l n e r a b i l i t y susceptible t o e x p l o i t a t i o n . Second, a t t h e time of settlement t h e r e was s u b s t a n t i a l uncertainty a s t o t h e e x t e n t of i n j u r y t o M s . K e l l y ' s l e g , and t h e f u t u r e prognosis. The s.urgery on M s . KeI..ly1s l e g had required i n s e r t i o n of a s t e e l rod. When M s . Kelly executed t h e re- l e a s e , it had only been two months s i n c e t h e accident. Her l e g was s t i l l i n a c a s t and would remain i n a c a s t f o r anoth- e r 8 months. I t was 0bvio.u~ t h a t M s . Kelly1 s l e g wo,uld not be healed f o r some time. I t was a l s o c l e a r t h a t M s . Kelly would be .unable t o resume work i n t h e near f u t u r e . M s . K e l l y ' s physical condition suggests t h a t t h i s was not an appropriate t i m e f o r execution of a complete r e l e a s e . Third, t h e insurance adj.ustors p r o m r e d a very h a s t y settlement i n t h i s case, spending only h a l f an hour i n t h e t o t a l disc.us- sion. When they l e f t , M s . Kelly had released a l l claims, y e t received barely eno,ugh money t o pay her medical expenses through t h e d a t e of settlement. There is an iss.ue of f a c t whether t h e checks issued t o M s . Kelly were adequate ,under t h e circ.umstances known by t h e p a r t i e s a t t h a t time. The appropriateness of having M s . Kelly exec.ute a complete re- l e a s e i n her p a r t i c . u l a r s i t , u a t i o n , and procured i n t h a t manner, i s s u b j e c t t o question. W e conclude t h a t t h e combination of these three circumstances raises an issue of fact whether under all the circumstances, justice was done. Furthermore, facts subsequent to a settlement may be considered in determining unconscionability. Newborn v. Hood (Ill.App.3d 1980), 408 N.E.2d 474, 476. The Illinois Supreme Court in Scherer and Hood considered the large disparity between the settlement amount and the actual monetary loss which the injured party eventually incurred. In the present case that disparity may be similarly large. Ms. Kelly claims she has been unable to work for the 8 years since the acci- dent, and this disability may continue. She claims her leg needs further medical attention, including surgery. She is entitled to a factual determination on the issue of whether the settlement amount indicates an unconscionable bargain. We conclude that Ms. Kelly has raised a sufficient issue of material fact to preclude summary iudgment. We reverse the summary judgment by the District Court and remand. I1 Did the District Court err in imposing technical plead- ing requirements in its summary judgment ruling? Ms. Kelly alleges that the District Court imposed tech- nical pleading requirements in making its summary judgment ruling, and we conclude that the court may have done so. We therefore discuss this issue although it does not appear that Ms. Kelly was prejudiced. In Ms. Kelly's complaint she alleged only negligence. Defendants ' answer raised the affirmative defense of release. Ms. Kelly challenged the validity of the release in answers to interrogatories and in her brief in opposition to summary j udgment. She never amended her complaint, nor made a responsive pleading to defendants' answer. In the Order and Memorandum which grant- ed summary judgment, the District Court stated, "The P l a i n t i f f has n o t , i n any of her pleadings o r r e p l y s t o Defendant's pleadings, questioned t h e v a l i d i t y of t h e Jan.uary 2 4 , 1980 Release." The opinion a l s o mentioned twice t h a t p l a i n t i f f had not plead with p a r t i c . u l a r i t y nor argued duress, menace, fra.ud, nor .und.ue influence. The co.urt s t a t e d t h a t it t h e r e f o r e ~70,uld not address any of those defenses which M s . Kelly had a s s e r t e d . Because we have concl.uded t h a t an i s s u e of f a c t e x i s t s a s t o .unconscionability, it i.s unnecessary t o consider whether an i s s u e of f a c t e x i s t s r e l a t i v e t o t h e s e o t h e r t h e o r i e s . W e nevertheless d i s c u s s t h e pleading re- quirements f o r c l a r i f i c a t i o n . Pleading requirements begin with Rule 7 ( a ) M. R.Civ.P., which provides: There s h a l l be a complaint and an answer; and t h e r e s h a l l be a r e p l y t o a co,unt.erclaim denomi- nated a s s.uch; and an answer t o a cross-claim; a t h i r d - p a r t y complaint, i f a person who was not an o r i g i n a l p a r t y i s summoned ,under Rule 1 4 ; and t h e r e s h a l l be a third-party answer, i f a t h i r d - p a r t y complaint i s served. N o o t h e r pleading s h a l l be allowed, except t h a t t h e co,urt may order a r e p l y t o an answer o r a third-party answer. This r u l e n e i t h e r r e q u i r e s nor allows a responsive pleading t o an answer. Th.us M s . Kelly was not required t o r e p l y t o defendant I s answer. F.urther, t h e a f f i r m a t i v e defense of r e l e a s e was deemed denied p.urs,uant t o Rule 8 (d) , M.R.Civ.P., which provides: Averments i n a pleading t o which a responsive pleading i s req.uired, o t h e r than those a s t o t h e amount of damage, a r e admitted when not denied i n t h e responsive pleading. Averments i n a pleading t o which no responsive pleading i s required o r permitted s h a l l be taken a s denied o r avoided. In Wheat v. Safeway S t o r e s , Incorporated (1965), 146 Mont. 105, 404 P.2d 317, t h e defendants r a i s e d t h e affirmative defense of release in the answer, and later moved for judgment on the pleadings based on the gro.und that plain- tiff failed to reply to the answer. The motion was granted, b.ut we concl.uded that the District Co.urt had erred, stating: From this a.uthority, it is clear that the plaintiff had no duty to reply unless ordered to do so by the court. No s.uch order was made in this case. The defendant's contention that a reply was mandatory to an affirmative defense of a release set forth in defendant's answer is, under the above a.uthority and Rule 7 (a) , without merit. 404 P.2d at 319. The intent of Rule 7 (a) was explained in E. Mason, The Montana Rules of Civil Procedure, 23 Mont.L.Rev. 3, 19, (1961), as follows: Under the Rules pleadings are fewer and termi- nate earlier than under code practice. Code prac- tice contemplates a three stage system of pleadings, consisting of a complaint, an answer, and a reply whenever new matter is alleged in the answer. The Rules allow only two stages, unless the co,urt in its discretion otherwise orders. Under Rule 7(a) a reply is mandatory only when the answer contains a co,unterclaim denominated. as s.uch As stated in Wheat, Ms. Kelly was not req.uired to file a reply or otherwise plead to the issue of release. The ab- sence of a responsive pleading sho.uld not have been consid- ered by the District Co,urt in a s.ummary j,udgment mot.?'.on. We sense the presence of fr.ustration on the part of the District Co.urt because of the extreme delay in this case, and we have the same sense of fr.ustration. Nevertheless, procedural- law must still be applied to Ms. Kelly's case. Did the District Court err in granting defendant's request for a protective order? I n December of 1986, defendant moved f o r summary judg- ment on whether t h e r e l e a s e barred M s . K e l l y ' s claim. M s . Kelly requested a continuance pursuant t o Rule 5 6 ( f ) , M.R.Civ.P., which was granted. Thereafter, i n interrogate- r i e s and req.uests f o r production, she req,uested information abo,ut t h e t r a i n i n g of t h e insurance agents, t h e process by which they evaluate claims, and t h e i r job d e s c r i p t i o n s . Defendants sought a p r o t e c t i v e order, s t a t i n g t h a t t h i s information was not r e l e v a n t t o t h e adequacy of t h e r e l e a s e . The co.urt granted t h e p r o t e c t i v e order. I n view of o.ur concl.usions i n P a r t I it i s not necessary t o disc.uss t h i s i s s u e i n d e t a i l . M s . Kelly may now proceed under Rule 2 6 , M.R.Civ.P., and t h i s type of information w i l l be obtainable. W e reverse and remand t o t h e D i s t r i c t Court. W e Concur: A M r . J u s t i c e R. C. McDonough d i d not take p a r t i n t h i s decision. | April 6, 1989 |
559551fd-0f1b-4c4a-ab3c-d729a8bd6c12 | BEE BROADCASTING ASSOCIATES v REIE | N/A | 88-488 | Montana | Montana Supreme Court | No. 88-488 IN THE SUPREME COURT OF THE STATE OF MONTANA BEE BROADCASTING ASSOCIATES, a Montana limited partnership, by and through ROSE COMMUNICATIONS, INC., a Montana corporation and the limited partnership's sole general partner, Plaintiff and Respondent, VS. WILLIAM REIER, KAREN L. REIER and DOES I through X I inclusive, Defendants and Appellants. APPEAL FROM: The District Court of the Eighteenth Judicial Di.strict, In and for the County of Gallatin, The Honorable Thomas Olson, ,Tudge presidincf. COUNSEL OF RECORD: For Appellant: William L. Madden; Goetz, Madden & Dunn, Rozeman, Montana For Respondent: E. Eugene Atherton; E Eugene Atherton, P.C., Kalispell, Montana Submitted on Briefs: January 1 2 , 1 9 8 9 Decided: February 27, 1 9 8 9 b Mr. Justice John Conway Harrison delivered the Opinion of the Court. This case comes to us on appeal after a dismissal of pl-aintiff's complaint in the Eighteenth Judicial District, Gal-latin County, the Honorable Thomas A. Olson presiding. Appellants appeal the lower court's denial of Rule 11, M.R.Civ.P., sanctions. We affirm. Brieflv, the facts are as follows: On March 23, 1983, respondent, Bee Broadcasting, obtained a permit from the Federal Communications Commission (hereinafter FCC) to construct television station KCTZ, Channel 7, in Rozeman, Montana. However, respondent failed to begin construction within the time permitted and requested an extension. On August 7, 1984, the FCC denied the extension and cancelled the permit. Respondent petitioned for reconsideration. On September 27, 1984, appellant, Karen Reier, filed an opposition to respondent's Motion for Reconsideration, supporting the FCC's initial denial of a time extension and expressing an interest in applying for the station assignment once it again became available for public application. Thereafter, the parties filed numerous pleadings and counterpleadings before the FCC. On June 15, 1987, appellant William Reier appeared before the Bozeman City Commission to protest the issuance of a conditional use permit for construction of microwave and satellite antennas on a building used in connection with the television studio and offices. The offices were to be used by KCTZ. The commission granted the permit on June 22, 1987. On July 28, 1987, respondent filed an action in the District Court against appellants alleging tortious interference with prospective business relations. In response, appellants filed a comprehensive motion to dismiss, for summary judgment and for sanctions. Appellants asserted that their conduct before the FCC and the Bozeman City Commission was protected by an absolute privilege of free speech under Art. 11, sec. 6, Mont. Const. (1972) and 27-1-804, MCA. In turn, respondent urged the court to adopt a "sham exception" to the general rule resembling that accepted in federal antitrust cases. See, Eastern ailr road Conference v. Noerr Motors (1961), 365 U.S. 1-27, 81 S.Ct. 523, 5 L.Ed.2d 464 (protected free speech unless the acti~ritv "is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor . . . " Noerr Motors, 365 U.S. at 144). After extensive briefing and oral argument, the lower court dismissed the complaint for failure to establish a prima facie case, concluding that appellants' actions were protected free speech. While the court acknowledged the case law supporting a "sham exception" to free speech rights, i . t rejected an appl-ication in the instant case absent legislative action. The request for sanctions was denied. Appellants appeal from this denial, asserting the complaint was frivolous and the case law absolutely inappropriate to the circumstances. Rule 11, M.R.Civ.P., provides in pertinent part: Every pleading, motion, or other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated . . . The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation . . . If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction . . . More stringent than the original good faith formula, Rule 11. imposes an "objective reasonableness" standard designed to prevent needless litigation and avoid waste. Fec3.R.Civ.P. 11 advisory committee note. Accordingly, an attorney must make a reasonable inquiry into the facts and law which serve as the basis for his complaint. A party need not be correct in his view of the law. Rather, " [tlhe pleader, at a minimum, must have a 'good faith argument' for his or her view of what the law is, or should be. " Zal.divar v. City of TJOS Anqeles (9th Cir. 1986), 780 F.2d 823, 831. The respondent asserted a "sham exception" to the free speech rights claimed by appellants. Though readily applied in antitrust cases, the lower court denied its application 5 . n the instant case, finding that "without I.egislative action, the court is reluctant to limit or punish free speech.'" Contrarv to appellants' assertions, the lower court did not. reject respondent's claim "out o+ hand," nor find the assertion so inappropriate as to constitute a Frivolous or unreasonable claim. Rather, the court requested briefing and argument to further educate on the merits of the issue. Only after inquirv did the District Court reject respondent's claim and dismiss the complaint. The granting of a motion to dismiss is not djspositive on the issue of sanctions. The decision to order sanctions in a given case rests within the sound discretion of the district court. State ex rel. Sorenson v. Roske (Mont. 1987), 745 P.2d 365, 44 St.Rep. 1854; Schmidt v. Colonial Terrace Associates (Mont. 1986), 723 P.2d 954, 43 St.Rep. 1489. The record reveals no abuse of discretion. Affirmed. We concur: - | February 27, 1989 |
c7378c45-d74c-4ec5-8dbc-3ef14f3dabdc | DEPARTMENT OF REVENUE v ESTATE OF | N/A | 88-373 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA DEPARTMENT OF REVENUE, STATE OF MONTANA, Appellant, -vs- ESTATE OF MICHAEL D. DWYER, Respondent. 0 : ; 0 I - ' C CO 2 4 APPEAL FROM: The District Court of the Second Judicial District, In and for the County of Silver BOW, The Honorable Arnold Olsen, Judge presiding. COUNSEL OF RECORD: For Appellant: R. Bruce McGinnis, DOR, Helena, Montana For Respondent : Robert T. OILeary, Butte, Montana Submitted: February 9, 1989 Decided: March 13, 1989 Filed: Mr. Justice John C. Sheehy delivered the Opinion of the Court. We decide in this case that when the owner of real or personal property in Montana creates a joint tenancy in such property between himself and another or others, more than three years before his death, the tax levied by our state on the transfer of his joint tenancy interest upon his death is measured by his interest in the joint tenancy, one-half or other proper fraction under the written instrument creating the same. Section 72-16-303 (2), MCA. Thus, in this appeal, we affirm a like holding of the District Court of the Second Judicial District, Silver Bow County. The facts are agreed to by the parties. Michael D. Dwyer was a resident of Butte, Montana, at the time of his death on February 5, 1985. His death terminated certain joint tenancies in real and personal property with David F. Cunningham, who is the deceased's nephew, and of course, not a surviving spouse nor issue of the deceased. The deceased was the sole owner of real property which he conveyed into joint tenancy with Cunningham and himself by a grant deed on November 25, 1981, which was recorded December 29, 1981. The deed created a joint tenancy between the deceased and Cunningham with the right of survivorship. Cunningham neither paid consideration in monies nor money's worth for his interest in the property, nor made any contribution toward the acquisition of the property. On October 30, 1979, out of funds completely and solely owned by the deceased, two joint bank accounts with the right of survivorship were created at Prudential Savings and Loan Association of Butte, Montana. The deceased and Cunningham were both authorized signators on the accounts. Cunningham did not deposit or withdraw any of the funds in the accounts prior to the time of Mr. Dwyer's death. Out of funds completely and solely owned by the deceased, on October 31, 1979, two joint bank accounts with right of survivorship were created at the Miner's Bank of Montana, Butte, Montana. The deceased and Cunningham were both signators on the accounts. Cunningham did not deposit or withdraw any funds on the accounts prior to the time of Mr. Dwyer's death. David Cunningham, as personal representative of the Dwyer estate, filed a request for determination of state inheritance tax on September 16, 1985. The application showed a tax due in the amount of $1,917.20. The amount was calculated upon 50% of the value of the joint tenancy estate. The Department of Revenue issued a certificate showing a tax due in the amount of $6,458.04 based on the whole value of the estate. The personal representative paid the tax to prevent the accrual of interest, and to receive the 5% discount. Cunningham sued in the District Court, Second Judicial District, Silver Bow County, for a proper determination of the inheritance tax due and payable upon the joint tenancy estate. The District Court ordered the Department of Revenue to recompute the amount of inheritance tax due from the surviving joint tenant, David F. Cunningham, based upon one-half of the value of the property passing on the deceased's death. The Department appealed to this Court. On appeal, the Department contends that the District Court erred as a matter of law in holding that 5 72-16-303, MCA, does not provide for the taxation of the total value of the property passing to the surviving joint tenant when the joint tenancy property was not originally owned by the surviving joint tenant. The legislature amended § 72-16-303, MCA, in 1977, and in 1979. The Department contends that prior to 1977, the inheritance tax on a joint tenancy interest passing to a surviving joint owner was one-half or other proper fraction of the joint property, unless the surviving joint tenant could show contribution. However, in 1977, the legislature limited the contribution rule to the circumstance when a surviving ioint tenant was the spouse of a deceased, and in 1979, when the joint tenancy included issue of the decedent. Because the legislature added the fol.lowing language to S 72-16-303, the Department contends the legislature changed the tax treatment for non-spouses and non-issue of the deceased from being taxed on one-half of the property to being taxed on the full value of the property unless it can be shown that the surviving joint tenant originally owned the property: . . . In all other cases, the full value of the property shall be taxable, except the portion thereof that originally belonged to the survivor and as to which the decedent had made no contrihution; if the decedent had made a contrihution to the ownership of such property, the amount of the contribution shall be taxable. The Department contends that the statute, as written, is unambiguous, but if ambiguous, under the rule of executive interpretation of statutory provisions, any doubt as to the construction of the statute is to be resolved in favor of the Department because its regulations relating to this statute adopted after 1977 require a tax levied on the full value of joint tenancy property where the survivor made no contribution to the value of the joint tenancy property when it was created. A.R.M. 42.35.232-42.35.234. The Department relies on cases holding that the contemporaneous construction placed on a statute by the officers chargeable with the duty of administering it is entitled to great weight. State v. King Colony Ranch (1960), 137 Mont. 145, 350 P.2d 841; State Ex Rel. Ehel v. Schye (19561, 130 Mont. 537, 305 P.2d 350; State Ex Rel. Erwin v. Warren (1950), 124 Mont. 378, 224 ~ . 2 d 142; In Re Wilson's Estate (1936), 102 Mont. 178, 56 ~ . 2 d 733, 105 A.L.R. 367. We set out in full the pertinent portions of 5 72-16-301, MCA, as to the levy of the tax: 72-16-301. Taxable transfers generally --contemplation of death. A tax shall be and is hereby imposed upon any transfer of property . . . except as hereinafter provided: (3) when the transfer is of property made by a resident or by a nonresident when such nonresident's property is within the state or within its jurisdiction by deed, grant, bargain, sale or gift made in contemplation of the death of grantor, vendor, or donor, or intended to take effect in possession or enjoyment at or after such death. Every transfer by deed, grant, bargain, sale or gift made within 3 years prior to the death of the grantor, vendor, or donor of a material part of his estate or in the nature of a final disposition or distribution thereof and without a fair consideration and money or monev's worth shall, unless shown to the contrary, be deemed to have been made in contemplation of death within the meaning of this section, but no such transfer by deed, grant, bargain, sale or gift made before such 3-year period shall be treated as having been made in contemplation of death . . . The following is the present language of S 72-16-303, with the 1977 amendment enclosed in parentheses and the 1979 amendment enclosed in brackets: Section 72-16-303, MCA. Joint estates--transfer right o f survivorship taxable. (1) Whenever any property, however acquired, real or personal, tangible or intangible, including government bonds of the United States, is inscribed in co-ownership form, held by two or more persons in joint tenancy or as tenants by the entirety, or is deposited in any bank or other depository in the joint names of two or more persons and payable to the survivor or survivors of them upon the death of one of them, the right of the survivor or survivors to the immediate possession or ownership is a taxable transfer. ( 2 ) The tax is upon the transfer of decedent's - - - - interest, one-half or other proper fraction, as . - - - 7 - evidenced bv the written instrument creatina the A - A - same, as though the property to which the transfer relates belonged to the joint tenants, tenants by the entirety, joint depositors, holders in co-ownership form, or persons, as tenants in common had been, for inheritance tax purposes, bequeathed or devised to the survivor or survivors by will, except such part thereof as may be shown to have originally belonged to the survivor and never to have belonged to the decedent when (the surviving joint tenant is a spouse) [or issue] of the decedent. In all other cases, the full value of the property shall be taxable, except the portion thereof that originally belonged to the survivor and as to which the decedent had made no contribution; if the decedent had made a contribution to the ownership of the property, the amount of the contribution shall be taxable. (3) This section shall not be construed to repeal or modify the provisions of 72-16-301(3). (Emphasis added.) In discussing the issues here, we ask the reader to assume that the discussion involves situations where the joint tenancies were created more than three years prior to the death of one of the joint tenants; that the decedent was the sole owner of the property at the time of the creation of each joint tenancy; and that no contribution to the property of the joint tenancy has been made by the surviving joint tenant. The position of the Department and the effect of its regulations are that the full value of the property in the joint tenancies so created is taxable, irrespective of the language in 5 72-16-301(3), MCA, that no such transfer made before such three year period shall be treated as having been made in contemplation of d.eath. We cannot agree that such is the effect of the statutes involved, or was the intent of the legislature in making the amendments alluded to by the Department. When a joint tenancy is created, whether in real or personal property or both, the joint interest is owned by the several persons in equal shares. Section 70-1-307, MCA. In the case of bank deposits held by joint tenants, however, the deposit, or any part thereof, may be paid by the bank to any of the persons named as joint tenants, without regard to equality of shares, and whether the other or others be living or not. Section 32-1-442, MCA. The bank is discharged by the receipt or acquittance of the person so paid. When, during his lifetime, and at his death, the decedent and another or others, hold any esstate property as joint tenants with the right of survivorship, §§ 70-20-105, -310, MCA, the interest of the decedents at the moment of his death passes to the survivor or survivors of the joint tenancy. The incidents of joint tenancy property at common law were a single estate in the property owned by two or more persons under one instrument or act of the parties, an equal right in all to share in the enjoyment of the property during their lives, and on the death of a joint tenant, descent of the property to the survivor or survivors. Hennigh v. Hennigh (19571, 131 Mont. 372, 309 P.2d 1022. The effect of our statutes which permits the creation of joint tenancies is to include all incidents of a joint tenancy estate at common law. First Westside National Bank of Great Falls v. Llera (1978), 176 Mont. 481, 580 P.2d 100. On the death of a joint tenant, ownership of the joint tenancy property vests immediately in the survivor, so that the estate of a decedent does not include the joint tenancy property, nor is it subject to creditor's claims for debts of a decedent. Montana's tax statutes recognize this feature by providing especially for the determination of taxes on the termination of a joint tenancy by death where there i . s no other estate. Section 72-16-502, MCA, provides for a special procedure for tax purposes when a joint tenant dies leaving no property which requires the appointment of a personal representative. Under Montana's statutory law, a tax is imposed, subject always to exemptions and exceptions, upon the transfer by death of the person of any state propertv from a decedent to another by will or intestate laws. Section 72-16-301(1), ( 2 ) , MCA. Without any argument, the transfer of the right to possession of the decedent's property owned by him at his death is a taxable event. If, however, in his lifetime, the decedent within three years of his death has transferred ownership of his property in contemplation of his death, the full value of the property transferred is also taxable upon his death. Section 72-16-301 (3), MCA. A transfer of ownership within three years of his death is deemed to be in contemplation of death, and thus the value thereof is fully taxable. In the case before us, the joint tenancies were established by the decedent more than three years prior to his death. "No such transfer of ownership made before such three year period shall be treated as havinq been made in contemplation of death." Section ?2-16-301 131, MCA. Since there is a specific statutory direction in S 72-16-303(3), MCA, that the section shall not be construed to repeal or modify the provisions of 5 72-16-301(3), the latter section must he given force and effect. The position of the Department robs that latter section of any force and effect. We hold it is our plain duty when interpreting statutes relating to the same subject to give effect to all, if possible, consonant with the intent of the legislature. Section 1-2-101, MCA. Montana' s statutes do not provide a gift tax upon transfers of property made by a person during his lifetime except such gifts as are made in contemplation of death. The effect of the Department's interpretation of the statutes is to impose a tax upon such transfers although not levied until the grantor's or donor's death, whether or not made in contemplation of death. We do not agree with the Department that under 5 72-16-303(2), MCA, only wives and issue of the decedent may take advantage of the provisions of 5 72-16-301 (3) , MCA, which excludes from taxation transfers not made in contemplation of death, or made more than three years before the death of the grantor. We hold in this case that one-half of the values of the joint tenancy estate only is taxable. The regulations of the Department which would require a contrary conclusion are inconsistent with statutory law, and thus have no effect. Section 2-4-305(6) (a), MCA. Accordingly, we affirm the C Justice //- | March 13, 1989 |
97878a49-41ba-492d-aead-843676418fb1 | SCHAUB v VITA RICH DAIRY | N/A | 88-462 | Montana | Montana Supreme Court | No. 88-462 TM THE SUPREME COURT OF THE STATE OF MONTANA 1989 DENNIS SCHAUB, Claimant and Appel-lant, -vs- VITA RICH DAIRY, Employer, and STATE COMPENSATION LNSURANCE FUND, Defendant and Respondent. APPEAL FROM: The Workers' Compensation Court, The Honorable Timothy Reardon, Judge presiding. COUNSEL OF RECORD: For Appellant: John B. Whiston; Rosshach & Whiston, Missoula, Montana For Respondent : R. Scott Currey, Aqency Leqal Services Bureau, Helena, Montana Submitted on Briefs: Feh. 9, 1989 Decided: March 9, 1989 € - # . ' : . .'. w .I"-, 4 , . . - ~cDle@? . / i # a r?i . .- . ,!.I ? ,.-; , T / " . ! f 2 $ 2.;. .. TS 2 cn : . 6 . iV,l t,, >,*/ :? ; e 2 , LL ; ; 4 -, , , , h i . ' ~ - ~ 7 ~ ~ , j . ~ A-- v ; a: , y : : . + $ J cs: ,:3 di l.J-I\- e - r - 0 Clerk crrr Q-'3 - 2 Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal from an order of the Workers' Compensation Court, adopting the findings and conclusions of Hearing Examiner Robert Campbell. We reverse. The claimant, Dennis Schaub, was employed by Vita-Rich Dairy in Havre, Montana. On October 15, 1984, claimant suffered an injury when a bag of flour fell from the stack he was unloading, pulling his arm and causing a burning sensation. Claimant immediately reported the accident to his shift supervisor, who indicated he would complete the necessary paperwork for filing a compensation claim. Despite numerous reminders from the claimant and the supervisor's corresponding assurances, the claim for compensation was not filed. The same day of the injury, claimant sought medical attention from Dr. J. E. Elliot. In turn, Dr. Elliot referred him to Mr. R. Don Tigny for physical therapy. Mr. Tigny noted claimant's related "onset of pain in the neck and lower back area when lifting sacks of Fl-our." Claimant testified that as a result of the physical therapy, he experienced only minor pain and soreness for the next four months. However, claimant's condition deteriorated after a few months, and he began to experience problems with his shoulder, neck and severe headaches. In May, 1985, less than eight months after the injury, Mrs. Schaub contacted Ardele Kulbeck, the owner of Vita-Rich Dairy, to inquire whether the medical bills and prescriptions would be paid by workers' compensation. Mrs. Kulbeck replied that the injury was not compensable. In November, 1985, Mrs. Kulbeck received a letter from the Division of Workers' Compensation, advising her that the Division had received notice of a possible injury to claimant dated October 15, 1984, and requesting she file an Employer's First Report of Injury. The letter resulted from the filing of a medical bill by a health care provider. In response, Mrs. Kulbeck stated that the injury was not job related. On April 21, 1986, claimant filed a claim for compensation. The Division rejected a requested waiver of the twelve month statute of limitations and denied compensation. At trial, Hearing Examiner Robert Campbell found the claimant barred from benefits by his failure to file a claim for compensation within twelve months of his injury. In addition, claimant did not meet the requirements of equitable estoppel necessary to waive the twelve month filing requirement. On August 2, 1988, the Workers' Compensation Court adopted the Hearing Examiner's findings and conclusions and entered judgment. The sole issue on appeal is whether the doctrine of equitable estoppel should be applied to estop the defendant from asserting a statute of limitations defense. We believe the doctrine is applicable in the instant case. Initially, we note the standard of review applied in workers' compensation matters. As to questions of fact, we limit our examination to the record to determine if substantial credible evidence exists to support the court's findings. Wassberg v. Anaconda Copper Co. (1985), 215 Mont. 309, 697 P.2d 909; Weigand v. Anderson-Meyer Drilling Co. (Mont. 1988), 758 P.2d 260, 45 St.Rep. 1138. However, if the issue is one of law, we are not so restricted in our review. "In such a case, the appropriate standard of review is simply whether the lower court's interpretation of the law is correct. We are not bound by the lower court's conclusion and remain free to reach our own. " Wassberq, 697 P.2d at 912. The instant case deals with an issue of law. We accept the following relevant findings of fact made by the I-ower court: 11. Claimant, with the aid of his employers, had previously filed four workers' compensation claims between 1977 and 1984. (Depo. of claimant at 20-26.1 12. The procedure at Vita Rich Dairy directed the claimant to report any in jury to his foreman (Dan Schaub) , and then to the plant supervisor (Rich Semans) . Mr. Semans would go to the office and have the paperwork (Form 37 Employer's First Report--Form 54 Claim for Compensation) prepared and brought to the claimant for his signature. (Depn. of claimant at 24.) 13. The morning of the October 15, 1984 injury, the claimant testified that he notified his foreman (Dan Schaub) of the injury and was told to report it to plant superintendent (Rich Semans) also. (Depo. of claimant at 27.) 14. Claimant reported the injury to Mr. Semans in the lunchroom that morning and was told, "OK, I'll take care of it." (1a. - Fellow employee (Kevin Christiansen) was in the lunchroom at the time and testified at the trial that he did hear the claimant tell Mr. Semans about the injury he had received that shift. (Trans. at 33, 36.) Mr. Christiansen denied telling Rich Semans earlier that he had no recollection of claimant's statement to Mr. Semans. (Trans. at 36, 74.) 15. Within three weeks, the claimant asked Mr. Semans three times if "it has been taken care of" and his responses went from "1'11 take care of it," to a sarcastic, "No, but I'll do it. I ' 1 . I . take care of it." (Id. - at 28.) 16. Rich Semans testified by deposition and at trial that he had no recollection of a lunchroom conversation or reminders from the claimant to complete a claim for his injury in October, 1984. (Depo. of R.L. Semans at 22; Trans. at 77-78.) We disagree with the lower court's application of the facts to the law. From our review, these facts speak of estoppel. Section 39-71-601, MCA (1985), provides in pertinent part : Statute of limitations on presentment of claim-waiver. (1) In case of personal injury or death, all claims shall be forever barred unless presented in writing to the employer, the insurer, or the division, as the case may be, within 12 months from the date of the happening of the accident, either by the claimant or someone legally authorized to act for him in his behalf . . . While the provision is mandatory, it is not without exception. Through the years, this Court developed and continues to recognize an estoppel exception. See, 1,indblom v. Employers' Liability Assurance Corp. (1930), 88 Mont. 488, 295 P. 1007; Levo v. ~eneral-~hea-Morrison (1955) , 128 Mont. 570, 280 P.2d 1086; Frost v. Anaconda Co. (1982), 198 Mont. 216, 645 P.2d 419. While certainly not a novel theory, Dean Larson explained its application in his oft-quoted treatise: A familiar defense to assertion of the bar of late claim is the plea that the lateness was the result of the employer's assurances, misrepresenta- tions, negligence or even deliberate deceptions. . . The commonest type of case is that in which a claimant . . . contends that he was lulled into a sense of security by statements of employer or carrier representatives that "he will be taken care of" or that his claim has been filed for him or that a claim will not be necessary because he would be paid compensation benefits in any event. 3A Larson, Workmen's Compensation Law, S 78.45. This Court has seen fit to apply the doctrine only when the employer has taken some positive, affirmative action which either prevents the claimant from making a claim or leads him to reasonably believe he need not file such a claim. Ricks v. Teslow Consolidated (1973), 162 Mont. 469, 481, 512 P.2d 1304, 1311. In Lindblom, we set forth the elements necessary to find an estoppel: 1. There must be conduct-acts, language, or silence -amounting to a representation or a concealment of material facts. 2. These facts must be known to the party estopped at the time of his said 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 when it was acted upon by him. 4. The conduct must be done with the intention, or at least with the expectation, that it will be acted upon by the other party, or under such circumstances that it is both natural and probable that it will be so acted upon . . . 5. The conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it. 6. He must in fact act upon it in such a manner as to change his position for the worse; in other words, he must so act that he would suffer a loss if he were compelled to surrender or forego or alter what he has done by reason of the first party being permitted to repudiate his conduct and to assert rights inconsistent with it. Lindblom, 295 P. at 1009. Relying on the employer's own policy, claimant gave proper notice to the supervisor. With the supervisor's repeated assurances, claimant reasonably thought his claim would be promptly filed. This belief is aptly supported by the fact that on each of the four prior industrial accidents, the employer filed all the necessary papers to the Workers' Compensation Division, including the Employer's First Report of I n j u r y and claimant's Claim for Compensation. This fact remained undisputed throughout the testimony. Clearly, elements one, two and three of the Lindblom test were satisfied. Because the procedure was well established among both employees and management, it appears more than probable that the claimant would rely to his detriment upon his supervisor's repeated assurances. Indeed, the claimant did not file a claim and was thereafter denied compensation. The final three criteria are met. The order of the Workers' Compensation Court adopting the findings and conclusions of Hearing Examiner Robert Campbell is hereby reversed and remanded for further proceedings consistent with this opinion. We concur: _ICj C 'ef Justice / | March 9, 1989 |
9e3ac9b8-70c8-4947-b0e7-e15d0bbb72bb | MABERRY v GUETHS | N/A | 89-019 | Montana | Montana Supreme Court | NO. 89-19 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 LILLIAN H. YABERRY; WILLIAM K. McBURNEY and ETHEL E. McBURNEY, husband and wife; and JOHN W. McBURNEY and SALLY D. McBURNEY, husband and wife, Plaintiffs and Appellants, -vs- GARY W. GUETHS and EVA E. GUETHS, husband and wife, Defendants and Respondents. APPEAL FROM: District Court of the Tenth Judicial ~istrict, In and for the County of Fergus, The Honorable Peter Rapkoch, Judge presiding. COUNSEL OF RECORD: For Appellant: J. H. Morrow; Morrow, Sedivy & Bennett, P.C., Bozeman, Montana For Respondent: Torger Oaas, ~ewistown, Montana ,-Sherman V. Lohn, (of counsel), Eissoula, Montana -*- submitted on Briefs: June 8, 1989 ~ecided: July 25, 1989 Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Appellants sought a District Court order declaring void deeds by which respondents the Gueths claimed title to por- tions of certain abandoned railway lines. The District Court for the Tenth Judicial District, Fergus County, ruled that the Gueths held fee simple title to the property. We affirm. The issues are: 1. Did the trial court err in finding that the railroad held fee title to the land, and not. only a right-of-way easement? 2. Did the trial court err in not finding that the Gueths were collaterally estopped from claiming fee title to the land in question? 3. Did the trial court err in failing to grant appel- lants' motions to amend findings, for new trial, and to alter the judgment? The appellants own land in Fergus County, Montana, across which a railroad line has existed since about the year 1912. In 1978, the Chicago, Milwaukee, St. Paul and Pacific Railroad Company (railroad company) filed for bankruptcy and was authorized to abandon all railroad lines west of Miles City, Montana, including this line. The railroad tracks, ties, and other improvements were removed. The Gueths, through the bankruptcy court, obtained a deed to the abandoned property from the railroad company. Appellants filed a complaint in District Court, alleging that the railroad company held the lands in question as an easement for railroad purposes and that the abandonment of the lands for railroad purposes resulted in a reversion to them, the adjoining landowners. The Gueths' position was that the railroad held a fee simple estate in the land and that the use or non-use of the property for railroad purposes had no bearing on the railroad's interest in the land. Basing its decision on the language of the deeds by which the railroad claimed title, the court ruled in favor of the Gueths. I. Did the trial court err in finding that the railroad held fee title to the land, and not only a right-of-way easement? The appellants cite Chicago, M. & St. P. Ry. Co. v. Portland (1918), 54 Mont. 497, 172 P. 541, as authority. In that case, this Court held that a strip of land owned by the railroad company in Lewistown was a mere easement. Appellants argue that the railroad company should not be allowed to have claimed in that case that its interest was a mere easement and to claim in this case that its interest is a title in fee. However, the appellants have not shown that the instrument of conveyance in Chicago was any of the three deeds involved here. Also, Chicago involved a portion of a railroad line which crossed a public street, not privately-owned land. That aspect was one reason given for the result reached by the Court. The appellants also cite a number of cases from other states which have held that once a railroad abandons a strip of land for railroad purposes, title to the strip reverts to the owners of the adjacent land. But there is a split of authority on this question, depending in many cases upon the particular language of the conveyance involved. As discussed at Annot., 6 A.L.R.3d. 973, 976-77 (1966): Most cases dealing with conveyances to railroad companies fall into two general categories: (1) Those that grant "land" and those that grant a "right." I n t h e former group a r e t h o s e which c o n t a i n language by which t h e g r a n t o r g r a n t s and conveys a s t r i p , p i e c e , par- c e l , o r b e l t of land. I n t h e l a t t e r group a r e t h o s e i n which t h e language p u r p o r t s t o convey a r i g h t of way, o r o t h e r r i g h t o r p r i v i l e g e w i t h r e s p e c t t o using t h e p r o p e r t y . . . . The c o u r t s have found l i t t l e d i f f i - c u l t y w i t h t h o s e conveyances whereby a g r a n t o r , by a p p r o p r i a t e words o f convey- ance, u n q u a l i f i e d l y conveyed a s t r i p of land t o a r a i l r o a d i n t h e u s u a l form of conveyance, nor have they g e n e r a l l y found d i f f i c u l t y w i t h t h o s e where a p r o p e r l y d e s c r i b e d r i g h t o f way o r easement over a designated t r a c t o f land was granted i n t h e instrument of conveyance. . . . There appears t o b e c o n s i d e r a b l e c o n f l i c t i n t h e c a s e s a s t o t h e construc- t i o n o f deeds p u r p o r t i n g t o convey l a n d , where t h e r e i s a l s o a r e f e r e n c e t o a r i g h t o f way. Some o f t h e c o n f l i c t may a r i s e by v i r t u e of t h e twofold meaning of t h e t e r m " r i g h t of way," a s r e f e r r i n g both t o land and t o a r i g h t o f passage. I n some c a s e s , p a r t i c u l a r l y where t h e r e f e r e n c e t o r i g h t o f way i s i n t h e g r a n t i n g c l a u s e , o r where t h e r e a r e o t h e r r e l e v a n t f a c t o r s , t h e c o u r t s have held t h a t an easement only was intended. I n o t h e r c a s e s , t h e deed i s held t o convey a f e e simple e s t a t e i n t h e land, t h e c o u r t s g e n e r a l l y basing t h e i r holdings on t h e ground t h a t t h e g r a n t i n g c l a u s e governs o t h e r c l a u s e s i n t h e deed, t h a t t h e r e f e r e n c e t o r i g h t o f way d i d n o t make t h e deed ambiguous ( t h e r e f o r e b a r r i n g e x t r i n s i c evidence from c o n s i d e r a t i o n ) , o r t h a t t h e r e f e r e n c e t o r i g h t of way was t o land and d i d n o t r e l a t e t o t h e q u a l i t y of t h e e s t a t e conveyed. Other c a s e s p u r p o r t i n g t o g r a n t land c o n t a i n language r e l a t i n g t o t h e purpose f o r which t h e land conveyed i s t o be used. Some c a s e s hold t h a t such language is merely descriptive of the use to which the land is to be put and has no effect to limit or restrict the estate conveyed; in others, the position is taken that such language indicates an intention to convey an easement only and not a fee. Many cases appear to turn upon the nature of the reference to purpose, the location of the reference in the deed, and the presence of other factors and provisions bearing on the question of intent. The appellants point out that the subject deeds refer, in their legal descriptions of the strip of property, to the strip as one hundred feet wide and "50 feet of such width on each side of the centerline of the railway." The legal descriptions also refer to the strip as "the above described Right of Way." However, there are several aspects of the deeds which lead us to conclude that they conveyed land, not easements. The granting and habendum clauses refer to land, not a right. The trial court quoted the granting clause of one of the deeds, which read: . . . has granted bargained, sold, and conveyed, and by these presents does grant, bargain, sell, and convey unto the said party of the second part, its suc- cessors and assigns forever, all that certain strip, belt, or piece of land lying and being in Fergus County, Montana, particularly described as fol- lows, to-wit: The trial court stated, and the record confirms, that the other two deeds contain granting clauses identical to the one quoted in all material respects. The court noted that none of the granting clauses contain language limiting the title conveyed to anything other than an estate in fee. The trial court concluded that the deeds were general form warranty deeds of the type used in the unrestricted transfer of real property in Montana. The court also quoted the habendum clause of one of the three deeds, which it stated is identical in all material respects to the habendum clauses of the other two deeds. The record supports that statement. The quoted clause was: Together with all and singular tenements, hereditaments and appurtenances, there- unto belonging or in anywise appertain- ing. TO HAVE AND TO HOLD, all and singular, the said premises, together with the appurtenances unto said second party, and to its successors and assigns FOREVER. The court stated that under Montana law, use of language like that used in the habendum clause is evidence of an intent to convey a fee simple estate. The language relating to use as a railroad right of way is merely descriptive as to use and not as a limitation on the grant. We conclude that the references upon which appellants rely do not overcome the clear intent of the granting clauses and the habendum clauses that the railroad receive title in fee. We hold that the District Court did not err in concluding that the railroad company held fee title to the land. Did the trial court err in not finding that the Gueths were collaterally estopped from claiming fee title to the land in question? Appellants base this argument on the Chicago case. They assert that Chicago represents a final judgment on the issue in dispute here, and that the Gueths are in privity with the railway company involved in that case. But as discussed above under Issue I, the Chicago case has not been shown to have involved the same deeds as those involved here and, unlike this case, it involved a portion of a railroad line crossing a public street. We hold that the trial court did not err in holding the Gueths were not collaterally estopped from claiming fee title to the property. Did the trial court err in failing to grant appellants' motions to amend findings, for new trial, and to alter the judgment? Following the District Court's entry of judgment in this case, appellants filed and served their combined motions to amend findings, for new trial, and to alter the judgment. The Gueths did not file a response to the motions within the ten days allowed under Rule 59(c), M.R.Civ.P. Appellants moved the court that the motions be deemed admitted and well-taken as allowed under Rule 2(b) of the Uniform District Court Rules. In response to a notice of hearing on the motions, the Gueths filed a brief and it was agreed that the matter would be submitted to the court without oral argument. The court then denied the motions. Appellants argue that this denial was error under the rules. Rule 2(b), Uniform District Court Rules, provides: Failure to File Briefs. Failure to file Briefs may subject the motion to summary ruling. Failure to file a Brief within five days by the moving party shall be deemed an admission that khe motion is without merit. Failure to file an Answer Brief by the adverse party within ten days shall be deemed an admission that the motion is well taken. Reply Briefs by movant are optional and failure to file will not subject a motion to summary ruling. While the Gueths' failure to file a brief in the time allowed them is, under Rule 2(b), to be viewed as an admission by them that the motions are well-taken, the rule does not require the District Court to grant the unanswered motions. The rule states that failure to file a brief "may" subject such a motion to summary ruling. We hold that the rule does not remove the discretion of the District Court to grant or deny unanswered motions as it sees fit. Affirmed. We Concur: Chief Justice f 1 ~@I&L%&/L,& Justices | July 25, 1989 |
bc986f54-7740-4cf1-9935-b2cec812f2dd | ENGRAV v CRAGUN | N/A | 88-282 | Montana | Montana Supreme Court | IN T H E SUPREME C O U R T OF THE STATE O F M O N T A N A 1989 BARRY ENGRAV, P l a i n t i f f and Appell-ant, -vs- MOREY CRAGTJN, G r a n i t e County S h e r i f f , Defendant and Respondent. APPEAL FROM: D i s t r i c t Court of t h e Third J u d i c i a l D i s t r i c t , I n and f o r t h e County o f G r a n i t e , The Honorable Ted L. Mizner, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Rarry Engrav, p r o s e , Missoula, Montana For Respondent : Hon. Marc Racicot, Attorney General, Helena, Montana Paul D. Johnson, A s s t . Atty. General, Helena J. Allen Bradshaw, G r a n i t e County Attorney, p h i l i p s - I- burg, Montana C?" n a- Llll : . , - 1 - - 1 - r- - - C I ? L" ;;+ - P a 1 a e t - F i l e d : 2- w "" !Y Submitted: Dec. 9, 1989 Decided: February 2 7 , 1989 0 Clerk Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Barry Engrav, proceeding pro se, appeals the order of the District Court of the Third Judicial District, Granite County, denying his request for records of the Granite County Sheriff's Department. Appellant requested records of the daily log of phone calls, case files of criminal investigations, pre-employment investigations, and lists of arrested persons. The sheriff's office denied the request, and the District Court. upheld the sheriff's denial, finding that the right of privacy of those people on the requested lists and investigation reports held a riqht of privacv which outweighed the public right to know. The issue on appeal is: Whether the District Court properlv denied the plain- tiff access to the requested information on the grounds that the right of privacy of the individuals outweighed the public right to know? Appellant is a University of Montana student and a lifetime resident of Granite County who is interested in researching and reporting on various aspects of Granite County law enforcement. He requested information concerninq records in the Granite County Sheriff's office. These were: (1) daily log of telephone calls, (2) case files of criminal investigations, (3) pre-employment investigation reports, and ( 4 ) a list of persons arrested since January 1, 1987. Appellant alleged that the phone log and list of radio calls were important to determine the rate of crime reported by the public, the response of the sheriff's department to those reported crimes, and the seriousness of the reported crimes. He alleged that the case files for criminal investi- gations were important because: Without access to case files of criminal investigations, Plaintiff is unable to assess the quality of the Defendant's investigative procedures and the rate of solved crimes. Appellant requested pre-employment investigation mate- rials because without them he would not be able to determine the adequacy of the defendant's hiring policies or the quali- ty of personnel hired by the defendant. He wanted to see j.5 the policies were up to the standards that taxpaying citizens were entitled to. Lastly, appellant wanted the list of persons arrested since January 1, 1987, to investigate the quality of care given to incarcerated inmates. Respondent, Granite County Sheriff, denied these re- quests by Engrav. The issue is whether the District Court properly denied the requests for the daily telephone logs, all criminal investigatory files, active and inactive pre-employment investigatory files, and arrest records, declaring that the right of privacy outweighed the public right to know. The Constitution of the State of Montana states two confl-icting rights. Article 11, Section 9, states: No person shall be deprived of the right to examine documents or to observe the deliberations of all public bodies or agencies of state government and its subdivisions, except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure. Article 11, Section 10, reasserts an individual's right to The right of individual privacy is essential to the well-being of a free society and shall not be infringed without the showing of a compellinq state interest. When reading the transcript from the Constitutional Convention for the 1972 Montana Constitution, it is clear that the framers, in wording Article 11, Section 9, took painstaking care to consider both the public right to know and an individual's right of privacy. Volume VII, Mont. Const. Conv. at 2483-2498. The primarv concern of the dele- gates to the convention was in enacting an article which gave the public the power to request information from government agencies and public bodies. The convention delegates specif- ically inserted the words "except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure." The committee intends by this provision that the right to know - not be absolute. The right of individual privacy is to be fully respected in any statutory embel- lishment of the provision as well as in the court decisions that will interpret it. To the extent that a violation of individual privacy outweighs the public right to know, the right to know does not apply. . . . Volume 11, Mont. Const. Conv. at 632. Delegates to the convention carefully discussed the introduction of a specific section for the right of privacy, and subsequently created Article 11, Section 10. They took into consideration the fact that neither the United States Constitution nor the original Montana Constitution expressly stated a right to privacy in the bill of rights. According to the delegates, since adopting the original Montana Consti- tution, the right had clearly developed and should be enumer- ated in the Constitution. One of the reasons that the delegates believed the right should be explicit]-y enumerated was that modern tech-- nology is used today to invade individual privacy, including wire taps, bugging devices, photo surveillance and computer- ized data banks. Appellant declares that § 2-6-102, MCA, is the standard for the public right to know. It states that "every citizen has a right to inspect and take a copy of any public writings of this state." Respondent argues that the governing stat- utes are within the Montana Criminal Justice Information Act of 1979, S S 44-5-101 through 44-5-415, MCA, whose purpose is, in part, to establish effective protection of individual privacy in confidential and nonconfidential criminal justice information collection, storage, and dissemination. In considering the possible conflict between the Arti- cles of the Constitution and among the Montana statutes, it is important to remember that in all of the relevant laws the right of privacy for the individual is expressly regarded. We adopted. a two-part test in Montana Human Rights Division v. City of Billings (1982), 199 Mont. 434, 649 P.2d 1283, which determines whether a person has constitution all^^ protected privacy interest. The first part of the test is whether the person involved had a subjective or actual expec- tation of privacy. The second is whether society is willing to recognize that expectation as reasonable. In applying the test in Montana Human Rights Division, we held that there was an individual privacy interest concerning personnel records and employment applications. In that case, the Human Rights Commission requested employment information as part of an investigation of a discrimination case. Defendant City of Billings refused to relinquish the information. We held that the Human Rights Commission could require an employer to submit certain evidence concerning employee records hut that the Commission had to prevent invasion into the privacy of those people whose names appeared on the employment informa- tion. The Human Riqhts Commission was not to divul.ae any of the information to outside sources. The only instance in which the Commission could do so was if it decided that a public hearing was necessary, and only then if it altered the information sufficiently to guarantee anonymity of the per- sons involved. The test was also applied in Missoulian v. Board of Regents of Higher Education (1984), 207 Mont. 513, 675 P.2d 962, where the Missoulian requested information concerning job performance evaluations of the six Montana university presidents. The Board of Regents refused to submit the information, declaring that the information was within the actual expectation of the individuals' privacy rights and that the expectation was reasonable. This Court agreed with the Board. The evaluations were self-evaluations and evalua- tions by Board members. It was clear that if these evalua- tions were open to public scrutiny, none of the evaluators would be as candid as when evaluations are confidential. Moreover, the evaluations could be used as a vindictive mechanism against university employees or presidents h ! : those who dislike the individuals. In applving the two-part test to the case at bar, we must first decide whether the persons involved have a suhjec- tive or actual expectation of privacy. It is clear from the expectations of the individuals involved, that there i . s an actual expectation of privacy. It is obvious that when individuals call the police station, they have an actual expectation of privacy for the information they give. For those citizens who are willing to report crimes that they witness but wish to remain anonymous, the expectation is actual. Public exposure of law enforcement files relating to ongoing criminal investigations would also have a disastrous effect upon law enforcement agencj-es in the performance of their duty to protect the lives, safety and property OF persons within their jurisdictions. If criminals and their allies could daily track the progress of investigations into their criminal activities, Montana would become a worldwide mecca for criminal entrepreneurs. The public policy of this state cannot permit this to occur. There is an actual privacy interest where criminal investigations are concerned because investigations are conducted concerning people under scrutiny but are later dismissed from suspicion. Those persons do not expect to have their names publicized for something with which they have no actual involvement. Moreover, names of informants involved in criminal investigations, or undercover police officers, if made public, would put the lives of these people and the investigation in jeopardy. The holding in Montana Human Rights Division estab- lished that there is an actual privacy expectation for those who apply for employment positions. They are required. to disseminate information about themselves which they expect to remain private. The expectation here is actual and not subjective. The second part of the test is whether society is willing to recognize the privacy expectation as reasonah1.e. We hold that society does recognize the expectation. In the case of both phone logs and criminal investiga- tions, situations arise where the information is of a highly personal nature. These instances include cases of sexual crimes and domestic crimes where both the victims and their families should be protected from public exposure. Associa- tion with these investigations is accidental and innocent, and the privacy interests of these victims and families must he protected from further traumati-c injury. The appellant also requested pre-employment information. The sheriff properly denied the information requested. We have stated that where employment records are concerned, . . . Calthough] we are aware that much of the information contained in employ- ment files and records is harmless or is already a matter of general knowledge, we are not persuaded that the records are entirely free of damaging informa- tion which the individua1.s involved would not wish and in fact did not expect to be disclosed. Montana Human Rights Division v. City of Billings, 649 P.2d at 1287. In Missoulian, we emphasized some of the areas which would be on pre-employment and employment files. These include family and health problems, employers1 criticisms, employees1 criticisms of the employer, interpersonal rela- tionships, and subjective view of employers. These must all be protected under constitutional privacy interests. More- over, if the investigations are confidential, more candidness is guaranteed the sheriff's department prior to hiring new employees. This is beneficial to the public. Section 44-5-103, MCA, specifically declares what information can be publicly disseminated. Included in "public criminal justice information" are arrest records. Section 44-5-103 (12) (e) (ii) , MCA. Initial arrest records are not excluded from review by the public when reviewed in cooperation with the agency which holds the information during normal business hours of the agency. Section 44-5-301 (2), MCA. Section 44-5-301 (I), MCA, states that all information is public with the exception of records or index- es which are "compiled by name or universal identifier from a manual or automated system . . ." In these cases, only information about convictions, deferred prosecutions, or deferred sentences is available to the public. There appears to be a distinct conflict between S S 44-5-103 and 44-5-301, MCA. Section 44-5-103(12) clearly states that arrest records are "public criminal justice information." Arrest records are included in a list of public information which includes information, (a) made public by law; (b) of court records and court proceedings; (c) of convictions, deferred sentences, and deferred prosecutions; (dl of post-conviction proceedings and status; (e) originated by a criminal justice agency, including (i) initial offense reports, (ii) initial arrest records, (iii) hail records, and (iv) daily jail occupancy rosters; (f) information considered necessary by a criminal justice agency to secure public assistance in the apprehension of a suspect; or ( g ) statistical. information. Section 44-5-103 (14) , MCA, specifically states that statistical information which is disseminated in the public domain is: . . . data derived from records in which individuals are not identified or identi- fication is deleted and from which nei- ther individual identity nor any other unique characteristic that could identify an individual is ascertainable. Although 5 44-5-103 specifically regards initial arrest records as public criminal justice information, S 44-5-301 (1) (a) declares: (1) There are no restrictions on the dissemination of public criminal justice information except for the following: (a) Whenever a record or index is com- piled by name or universal identifier from a manual or automated system, only information about convictions, deferred prosecutions, or deferred sentences is avai.lable to the public. It is obvious that any initial arrest record is going to be compiled by name of those arrested or by another universal identifier, such as a social security number. Therefore, under S 44-5-301, the same initial arrest records which are allegedly available to the public are also restricted from public review because they enter the area of private records of individuals. There is debate whether the information sought concern- ing arrest records is more beneficial subject to public scrutiny, or whether it should not be available as public criminal justice information. Individuals arrested under suspicion of committing a crime and who are subsequently released without charges or incarceration must he protected from public persecution. On the other hand, law enforcement must be under the view of the public to deter false arrests or possible discriminatory action. In construing statutes where general terms and specific terms are in conflict, specific intent will be given priority over the general term. City of Billings v. Smith (1971), 158 Mont. 197, 490 P.2d 221; Wymont Tractor and Equipment Co. v. Unemployment Compensation Commission of Mont. (1955) , 128 Mont. 501, 278 P.2d 208. The definitional statute, § 44-5-103, specifically states that arrest records are public information. Section 44-5-301 relates to any record or index which is compiled by name or universal identifier. As to initial arrest records, 5 44-5-103 takes precedent. We hold that the initial arrest records are public. It is important to keep the right of privacy of indi- viduals in mind here. To prevent unnecessary dissemination of private information, appellant will be allowed to view and record the information pursuant to S44-5-103 (14) , MCA. Section 44-5-103(14) specifically states: "Statistical information" means data derived from records in which individu- als are not identified or identification is deleted and from which neither indi- vidual identity nor any other unique characteristic that could identify an individual is ascertainable. The purpose of the information sought by appellant can be accomplished without dissemination of the names of those individuals listed on the initial arrest records. He can review and disseminate the information without including the names of arrested individuals. Privacy rights of individuals in Montana are more substantial than the rights guaranteed in the United States Constitution. Montana Human Rights Division, 649 P.2d at 1286. Before this Court will invade the individual privacy of the persons involved, a compelling state interest to do so must be found. There is no compelling state interest here which allows the dissemination of the requested information. Appellant wishes to do a study for a school research project; this is not a sufficient state interest. Section 44-5-303, MCA, states that dissemination of confidential criminal justice information is restricted to criminal justice agencies or to those authorized by law to receive it. Appellant is neither part of a criminal justice agency nor authorized to receive the information. Section 44-5-304, MCA, allows individuals to have access to criminal history record information for the express purpose of developing statistical information pursuant to an agreement with a criminal justice agency. The information may be disseminated according to (a) specific authorization of the information; (b) limitation on the use of the informa- tion, to research, evaluative, or statistical purposes; (c) assurance of confidentiality and security of the information; and (d) sanctions for violations of the agreement. Further- more, pursuant to § 44-5-304(2), MCA, the agreements, re- search, studies and statistical information gathered from the criminal history records is subject to the review and approv- al by the Department of Justice. The requested arrest records are subject to the provisions of § 44-5-304. We affirm the finding of the District Court and hold that the requested information is beyond the reach of the public sector. The information is protected under the Mon- tana Constitution and the Criminal Justice Information Act of 1979. A € f irmed. | February 27, 1989 |
e3280200-7bd1-403e-928d-dbf7591b947c | HAUG v BURLINGTON NORTHERN RAILROA | N/A | 88-470 | Montana | Montana Supreme Court | N o . 8 8 - 4 3 8 8 8 - 4 7 0 I N THE SUPREME COURT OF THE STATE OF MONTANA No. 8 8 - 4 3 8 DAVID HAUG, z c P l a i n t i f f a n d R e s p o n d e n t , o z -vs- 3 . l z c3 BURLINGTON NORTHERN RAILROAD COMPANY, + : : D e f e n d a n t a n d A p p e l l a n t . cn 5- N o . 8 8 - 4 7 0 HERBERT LAY, P l a i n t i f f and R e s p o n d e n t , -VS- RURTAINGTOM NORTHERN RAILROAD COMPANY, D e f e n d a n t and A p p e l l a n t . APPEALS FROM: D i s t r i c t C o u r t of t h e E i g h t h J u d i c i a l D i s t r i c t , I n and for t h e C o u n t y of C a s c a d e , T h e H o n o r a b l e T h o m a s M c K i t t r i c k ( 8 8 - 4 3 8 ) and H o n o r a b l e John M. M c C a r v e l ( 8 8 - 4 7 0 ) , Judges p r e s i d i n g . COUNSEL O F RECORD: For A p p e l l a n t : J. M i c h a e l Y o u n g ; J a r d i n e , Stephenson, B l e w e t t & B l e w e t t , G r e a t F a l l s , M o n t a n a ( 8 8 - 4 3 6 ) H e r b e r t L. Pierce, 111, C r o w l e y , H a u g h e y , H a n s o n , T o o l e and D i e t r i c h , B i l l i n g s , M o n t a n a ( 8 8 - 4 7 0 ) For R e s p o n d e n t : A l e x a n d e r B l e w e t t , 111; H o y t & B l e w e t t , G r e a t F a l l s , M o n t a n a ( 8 8 - 4 3 8 and 8 8 - 4 7 0 ) Kurt fl. J a c k s o n , Hoyt C , Blewett, ( 3 8 - 4 3 3 6 8 8 - 4 7 0 ) For A m i c u s C u r i a e : John b7. L a r s o n , N i s s o u l a , M o n t a n a ( 8 8 - 4 3 8 & 8 8 - 4 7 0 ) S u b m i t t e d on B r i e f s : D e c . 9 , 1 9 8 8 D e o i d e d : M a r c h 7 , 1 9 8 9 Mr. Justice Fred L T . Weber delivered the Opinion of the Court. The two cases of Haug v. Rurlington Northern and Lay v. Burlington Northern have been consolidated for our consider- ation since the identical issues are raised in each case. In both cases, Burlington Northern appeals the decision of the District Court for the Eighth Judicial District, Cascade County, denying its motion for a change of venue. We affirm the District Court's denial of that motion. We rephrase the issues presented as follows: 1. What is the proper county in which to bring a tort action against a nonresident defendant, and does that rule apply in FELA actions? 2. Is the court empowered to change the place of trial of FELA actions based on the doctrine of forum non conveniens or the Montana venue statues? The pl-aintif f s brought separate actions against Rurlington Northern (BN) to recover damages under the Federal Employers Liability Act (FELA), 4 5 U.S.C. 5 1 et seq. (1982). Mr. Haug's suit is based on an injury which occurred in the BN shop in Park County, Montana. Mr. Lay's suit is based on an injury which occurred in the course of his em- ployment with BN in Lewis and Clark County, Montana. Both defendants brought claims in state court in Cascade County, which has no connection to either suit. BN filed motions for a change of venue, contending that in each case, the proper county was the county in which the tort occurred. Since the plaintiffs did not choose those counties, BN argued that it was entitled to a change of venue in both cases. The District Court denied BN's motions and BN appeals. Some changes were enacted in our venue statutes by the 1 9 8 5 Session Laws. In those enactments, the legislative history indicates that the legislature was not attempting to change the past venue practices in Montana. The significant sections for the issues in the present cases are set forth as follows: 25-2-111. Scope of part. The proper place of trial (venue) of a civil action is in the county or counties designated in this part. 25-2-112. Designation of proper place o f trial not jurisdictional. The designation of a county in this part as a proper place of trial is not juris- dictional and does not prohibit the trial of any cause in any court of this state having jurisdiction. 25-2-113. Power of court to change place of trial. The desisnation i n this part of a properplace of trial does not affect the power of a court to change the place of a trial for the reasons stated in 25-2-201(2) or ( 3 ) , or pursuant to an agreement of the parties as provided in 25-2-202. 25-2-114. Right of defendant to move for change of --- - place o f trial. If an action is brought in a county not designated as the proper place of trial, a defendant may move for a change of place of trial. to a designated county. 25-2-115. Multiple proper counties. If this part desisnates more than one county as a proper place d of trial for any action, an action brought in any such county is brought in a proper county and no motion may be granted to change the place of trial upon the ground that the action is not brought in a proper county under 2 5 - 2 - 2 0 1 ( 1 ) . If an action is brought in a county not designated as a proper place of trial, a defendant may move for a change of place of trial to any of the designated counties. 25-2-118. Residence of defendant. Unless other- wise specified in thispart: ( 1 ) except as provided in subsection (3) , the proper place 0-f trial for all civil actions is the county in which the defendants or any of them may reside at the commencement of the action; (2) if none of the defendants reside in the state, the proper place of trial is any county the plaintiff designates in the compl-aint; 25-2-122. Torts. The proper place of trial for a tort action is: (1) the county in which the defendants, or any of them, reside at the commencement of the action; or (2) the county where the tort was committed. . . . 25-2-201. When change of venue required. The court or judge must, on moFion, change the place of trial in the following cases: (1) when the county designated in the corn-- plaint is not the proper county; (2) when there is reason to believe that an impartial trial cannot be had therein; (3) when the convenience of witnesses and the ends of justice would be promoted by the change. We do point out that 5 s 25-2-111 - 115, MCA, all were enacted as a part of the 1985 statutes. What is the proper county in which to bring a tort action against a nonresident defendant, and does that rule apply in FELA actions? From the case history in Montana, we conclude that a plaintiff is entitled to bring a tort action against a non- resident defendant in either the county where the tort oc- curred or in any county of this State. This Court has consistently held that a foreign corporation has no county of residence for venue purposes and can be sued in any county selected by the plaintiff. Hanlon v. Great Northern Railway Co. (1928), 83 Mont. 15, 268 P. 547; Truck Insurance ~xchange v. N.F.U. Property and Casualty Co. (19671, 149 Mont. 387, 42? P.2d 50; Foley v. General Motors Corp. (19?2), 159 Mont. 469, 499 P.?d 774. The holdinqs of these cases are consistent with the provisions of S 25-2-118(2), MCA, which in substance states that any county designated by the plain- tiff is the proper place of trial if no defendants reside in Montana. If a plaintiff does not designate a proper county in the complaint, S 25-2-201, MCA, requires that the court must, on motion, change the place of trial. Since, under S 25-2-118(2), MCA, any county which the plaintiff selects is a proper county for venue purposes, a nonresident defendant is not entitled to a change of venue for the reason that the plaintiff has chosen an improper county. Morgen and Oswood v. U.S.F. Ec G. (1975), 167 Mont. 64, 535 P.2d 170. In Morqen, this Court reached that conclusion even where alter- native venues were authorized by statute, as in contract or tort actions. Thus, even though a tort cause of action may be brought in the county where the tort occurred, the "any county" option of 5 25-2-118(2), MCA, remains a proper county for venue purposes where none of the defendants reside in Montana. See Tassie v. Continental Oil Co. (D-Mont. 1964), 228 F.Supp. 807. Our statutory provisions are consistent with the holdings in the above cases. Section 25-2-115, MCA, provides that where two or more counties are designated as proper counties, the defendant is not entitled to a change of venue if the plaintiff chose one of those counties. As previously mentioned, S 25-2-118 (2) , MCA, allows the plaintiff to choose any county if none of the defendants reside in Montana. Section 25-2-122, MCA, pro- vides that the proper place of trial for a tort action is the county where the tort was committed. As a result, under these code sections, in a tort action against a nonresident defendant, the plaintiff may choose either the county where the tort was committed or any county in the State of Montana, and the defendant is not entitled to a change of venue under 5 25-2-115, MCA. BN's only argument against this statutory interpretation centers on our holding in the case of McAlear v. Kasak (Mont. 1987), 731 P.2d 908, 44 St.Rep. 81, which interpreted the venue statutes following their amendment in 1985. BN argues that the language preceding 5 25-2-118, MCA, limits its applicability so that the plaintiffs in these cases are not entitled to choose the "any county" option of $ 25-2-118(2), MCA. The language at the beginning of 5 25-2-118, MCA, does state, "Unless otherwise specified in this part." In McAlear, this Court held that because venue is otherwise specified in the tort exception of 5 25-2-122, MCA, the only proper county the the tort. We recognize that the holding in McAlear appears to he a logical conclusion based alone on the wording in 5 s 25-2-118 and 112, MCA. However, that holding is not consistent with the previousl-y cited decisions in Montana. As a result, as set forth in the following discussion, we conclude that It is necessary to overrule McAlear. We recognize that the venue statutes were amended in 1985 and that the language, "Unless otherwise specified in this part" was added to replace the phrase "in all other cases. " However, case law has never interpreted either phrase to be limiting or determinative of whether a plaintiff has an option in choosing a proper county. A review of the case law set forth earlier in this opinion reveals a liberal interpretation of our statutes regarding a plaintiff's choice of forum between the general rule of venue (now set forth in S 25-2-118, MCA) and the exceptions to that general rule. Furthermore, it is clear from the following stated objectives presented to the legislature by the Supreme Court Commission that the intent was to codify the previous venue decisions of this Court: The new statutes proposed. in this draft have three objectives: (1) to include in the Montana Code Annotated those rules which have been declared and are settled by the Montana Supreme Court but are not now stated in the Code; ( 2 ) to change the language, without changing the meaning, of the sections that have caused the most litigation (primarily by substituting the desiqna- tion "proper place of trial" for the ambiguous command that cases "shall," " may," or "must," be tried in particular counties); (3) to settle the few matters where there is still- a seeming ambiguity, following the qeneral princi- ples along the lines that the Court seems to feel would be best derived from what the Court has held in other situations. "Recommendations for Revisions in Venue Statutes Prepared by the Montana Supreme Court Commission on the Rules of Evi- dence;" Exhibit 1 to Senate Judiciary Committee Minutes of January 22, 1985. In view of the clear intent not to change the previous venue decisions of this Court, we conclude that the words "unless otherwise specified in this part" in S 25-2-118, MCA, are not limiting words so far as paragraph (2) of that sec- tion is concerned. Therefore, if none of the defendants reside in Montana, a plaintiff may choose any county in the state as the place of trial of a tort action, notwithstanding the alternate choice of venue under 5 25-2-122, MCA. This conclusion is required under the prior decisions of this Court. We hold that McAlear is overruled. Whether this conclusion should apply in FELA cases has not been specifically addressed by this Court. The federal s t a t u t e a u t h o r i z e s an i n j u r e d p l a i n t i f f t o f i l e s u i t i n e i t h e r f e d e r a l o r s t a t e c o u r t . Actions f i l e d i n federal. c o u r t have t h r e e p o s s i b l e p l a c e s which a r e proper f o r venue purposes: (1) t h e county where t h e defendant r e s i d e s ; ( 2 ) t h e county where t h e cause o f a c t i o n a r o s e ; o r (3) t h e county where t h e defendant does business. 45 U.S.C. 5 56. I n FELA a c t i o n s brought i n s t a t e c o u r t , t h e United S t a t e s Supreme Court has i n d i c a t e d t h a t venue i s p r o p e r l y l e f t t o t h e p r a c t i c e o f t h e forum. M i l e s v. I l l i n o i s C e n t r a l Railroad (1942), 315 U.S. 698, 703, 62 S.Ct. 827, 830, 86 L.Ed 1129, 1134. While it can be s a i d t h a t our s t a t e venue s t a t u t e s d i c t a t e t h e " p r a c t i c e " of our forum, we a r e a l s o concerned w i t h c e r t a i n p o l i c i e s set f o r t h i n previous FELA c a s e s i n determining our forum p r a c t i c e . S p e c i f i c a l l y , t h i s Court has s t a t e d t h a t t h e FELA i s t o be given a l i b e r a l c o n s t r u c t i o n i n f a v o r o f i n j u r e d r a i l r o a d employees s o t h a t it may accomplish humanitarian and remedial purposes, follow- i n g t h e p o l i c y set f o r t h by t h e United S t a t e s Supreme Court i n Urie v. Thompson (1949), 337 U.S. 163, 69 S.Ct. 1018, 93 L.Ed. 1282. See S t a t e ex rel. Burlington Northern Railroad Co. v. D i s t r i c t Court (Mont. 1987), 746 P.2d 1077, 4 4 St.Rep. 2003; Bevacqua v. Burlington Northern, Inc. (1979), 183 Mont. 237, 598 P.2d 1124; and LaBella v. Burlinqton Northern, Inc. (1979), 182 Mont. 202, 595 P.2d 1184. The open door p o l i c y expressed i n t h o s e c a s e s i s f o l - lowed i n t h i s opinion. W e hold t h a t t h e p l a i n t i f f s i n t h i s c a s e were e n t i t l e d t o b r i n g t h e i r FELA a c t i o n s i n e i t h e r t h e county where t h e i n j u r y occurred, o r i n any county i n t h i s S t a t e . Since t h e y have c o r r e c t l y done s o , t h e defendant RN i s n o t e n t i t l e d t o a change of venue under S 25-2-201(1), MCA . I1 Is the court empowered to change the place of trial of FELA actions in light of the doctrine of forum non conveniens and the Montana venue statutes? The common law doctrine of forum non conveniens allows a court to "resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute." Gulf Oil Corp. T J . Gilbert (1947), 330 U.S. 501, 507, 67 S.Ct. 839, 842, 91 L.Ed. 1055, 1062. Under the doctrine, a court may decline to exercise its jurisdiction when it believes that the action may be more appropriate1.y and justly tried elsewhere. This doctrine is codified in Montana at 5 25-2-201, MCA, which states in relevant part: The court or judge must, on motion, change the place of trial in the following cases: . . . (2) when there is reason to believe that an impar- tial trial cannot be had therein; (3) when the convenience of witnesses and the ends of justice would be promoted by the change. In the context of FELA cases, this Court has discussed the applicability of the common law doctrine of forum non conveniens without reference to our statutorv venue scheme or the codification of that doctrine. These cases are the same as those set forth above in reflecting the "open court poli- cy" and "liberal construction" of the FELA. State ex rel. BN v. District Court, supra; Bevacqua 7 7 . BN, supra; LaBella v. BN, supra; see also State ex rel. Great Northern Railway Co. - v. District Court (1961), 139 Mont. 453, 365 P.2d 512; Rracy v. Great Northern Railway Co. (1959), 136 Mont. 65, 343 P.2d 848. Recognizing the open court policy stated in our Montana Constitution and the FELA policy favoring the injured railway worker's choice of forum, this Court has held the doctrine of forum non conveniens inapplicable to FELA actions brought in Montana's district courts. We would point out that Montana's position in this regard is not taken in the federal courts following the enactment of 28 U.S.C. S 1404(a) in 1948. That statute provides : For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought. This statute was held to apply to FELA actions brought in Federal District Court in ex parte Collett (1949), 337 U.S. 55, 69 S.Ct. 944, 93 L.Ed. 1207. Collett was also followed by the United States Supreme Court in deciding whether a state court has the power to dismiss a FELA action on the ground of forum non conveniens. Southern Ry. Co. v. Mayfield (1950), 340 U.S. 1, 71 S.Ct. 1, 95 L.Ed. 3. In that case, the Court said that a state was not compelled to entertain FELA cases brought in its courts but could, "According to its own notions of procedural policy . . . reject, as it may accept, the doctrine for all causes of action begun in its courts." 340 U.S. at 3. Montana first rejected the applicability of the doctrine in LaBella, stating that: We fully recognize that the state is not constrained by federal law to reject the doctrine of forum non conveniens in FELA actions. However, we find the policy favoring the injured railroad worker's choice of forum to be highly persuasive. This, in addition to the state's "open court poli- cy" compels this Court to hold the doctrine of forum non conveniens inapplicable to FELA suits filed in Montana District Courts. We repeat the warning set forth in State ex rel. Great Northern Ry., supra 139 Mont. at 457, 365 P.2d 514. "[Ilf a substantial increase in this type of litiqation is called to our attention in the future we will reexamine the situation in light of what we have herein stated." Our decision is a narrow one. We have not been confronted by the application of forum non conveniens in non-FELA cases and our holding today does not purport to deny or recognize the existence of the doctrine in cases where there is no strong policy favoring plaintiff's selection of forum. The holding in LaBella has been followed in subsequent cases. In addition, in no FEZA action has there been suffi- cient proof of a substantial increase in this type of litiga- tion sufficient in quantity to require any limitation on the plaintiff's choice of forum. The foregoing case analysis under the doctrine of forum non conveniens applies equally to the provisions allowing a court to change the place of trial in S 25-2-201, MCA. We therefore hold that in FELA cases neither the doctrine of forum non conveniens, nor the right to change of place of trial contained in S 25-2-?01, MCA, is available. We affirm the denial of BN's motion for a change of venue. We Concur: | March 7, 1989 |
66eb25ee-ca0f-46ad-9c32-2a6a7d39cffa | CITY OF WHIEFISH v HANSEN | N/A | 88-478 | Montana | Montana Supreme Court | No. 87-496 88-478 IN THE SUPREME COURT OF THE STATE OF MONTANA THE CITY OF WHITEFISH, Plaintiff and Respondent, -vs- GARRICK L. HANSEN, Defendant and Appellant. APPEALS FROM: The District Court of the Eleventh Judicial District, In and for the County of Flathead, The Honorable Michael Keedv, Judqe presiding. COUNSEL OF RECORD: For Appellant: Garrick L. Hansen, pro se, Whitefish, Montana For Respondent : Hon. Marc Racicot, Attorney General, Helena, Montana Robert F.W. Smith, Asst. Attv. General, Helena Thomas S. Muri, City Attorney, Whitefish, Montana Submitted on Briefs: Feb. 3, 1989 Decided: April 19, 1989 61 Mr. Justice John C. Sheehy del.ivered the Opinion of the Court. The appellant, Garrick L. Hansen appeals from a judgment of the Eleventh Judicial District, Flathead County, f indi ng him guilty of failing to have a valid driver's license, failing to carry motor vehicles insurance coverage, and failing to renew his motor vehicle registration. We affirm. The issues raised on appeal by Hansen are: 1) whether the District Court violated appellant's constitutional riqhts; and 2) whether the "issuing" court had jurisdiction to try appellant for the violations aforementioned. The case arises out of the following circumstances. On Thanksgiving Day 1988, appellant drove to a grocery store in Whitefish, Montana. Whitefish police officers approached Hansen in the parking lot of the shopping mall where the grocery store was located. The officers informed Hansen that his tail lights did not illuminate and asked for his driver's license, vehicle registration and proof of insurance. Appellant told the officers that he was not a person required to carry such documents. The officers placed appellant under arrest. We accepted this appeal based on public policy that pro se appellants should not be barred from access to the court. Courts of appeal should make all allowances possible in favor of persons appealing in propria persona. Wimberly v. Rogers (9th Cir. Mont. 1977), 557 F.2d 671. Hansen's first contention is that the District Court violated his constitutional rights. The arguments he offers to buttress his vague claims are indistinct, confused and incomprensible. They show a disrespect for this Court whose function it is to decide serious questions of constitutional deprivation. We cannot dignify the contentions with anything beyond a curt reply. This Court has previously addressed the issue concerning alleged violation of constitutional rights by requiring vehicle operators to carry a motor vehicle license, a driver's license and proof of vehicle insurance. In City of Billings v. Skurdal (Mont. 1986), 730 P.2d 371, 43 St-Rep. 2036, we listed considerable authority on the issue: The United States Supreme Court in 1837 recognized that state and local governments possess an inherent power to enact reasonable legislation for the health, safety, welfare, or morals of the public. Charles River Bridge v. Warren Bridge Co. (1837), 36 U.S. (11 Pet.) 4 2 r ~ . ~ d . 773. his Court has also recognized that such a police power exists even though the regulation may frequently be an infringement of individual rights. State v. Rathbone (1940), 110 Mont.. 225, 241, 100 P.2d 86, 92. See also, State v. Penny (1910), 42 Mont. 118, 111 P. 727. ~ e ~ u l a t i z s that are formulated within the state's police power will be presumed reasonable absent a clear showing to the contrary. Bettey v. City of Sidney (1927), 79 Mont. 314, 319, 257 P. 1007, 1009 . . . . We have previously recognized the power of the State to regulate licensing of drivers in the interests of public safety. Sedlacek v. Ahrens (1974), 165 Mont. 479, 483, 530 P.2d 4 2 4 , 426. State v. Deitchler (1982), 201 Mont. 70, 72-73, 651 P. 2d 10207021-22. Art. VII, 1 of the Constitution of the State of Montana vests the judicial power of the state in "one supreme court, district courts, justice courts, and such other courts as may be provided by law." City Courts are provided for by S S 3-11-102, -303, MCA. Penalties are established for the misdemeanors committed by Hansen under § 61-3-301(4), 61--3-601, 61-5-30? and 61.-6-304, MCA. City Courts have initial jurisdiction over these matters, § S 3-11-102(1), 3-10-303(1), MCA; and appeals of these matters are heard de novo in district court. Sections 3-5-303 and 46-17-311, MCA. Each of the proced.ural steps mandated in those stat.utes was adhered to in Hansen's arrest and conviction. The statutes are regulatory in nature and no person in the state is exempt from them. It is our conclusion that the issues appealed by appellant are frivolous, unreasonable and groundless and afford no basis for appellate relief from the District Court 9 decree. The appeal here is dismissed and the District Court affj.rmed. | April 19, 1989 |
8cfeeb47-bf8c-4664-8aaf-b49b56080050 | WARD v VIBRASONIC LABORATORIES I | N/A | 88-337 | Montana | Montana Supreme Court | No. 88-337 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 SIDNEY E. WARD, Plaintiff and Respondent, -vs- VIBRASONIC LABORATORIES, INC., a corporation, Defendant and Appellant. APPEAL FROM: District Court of the Fifth Judicial District, In and for the County of Jefferson, The Honorable Frank Davis, Judge presiding. COUNSEL OF RECORD: For Appellant: Roger Tippy, Helena, Montana For Respondent : Jardine & Grauman; John J. Jardine, Whitehall, Montana = ! CCI LL C'4 Filed: , , W Submitted on Briefs: Dec. 9, 1988 . . ~ ~ ~ i d ~ d : February 28, 1989 * J 9 * <. ) . ' I - t " llJ + - - "C. 0 . r ...- Mr. Justice John C. Sheehy delivered the Opinion of the Court. Vibrasonic Labs. Inc., appeals from a judgment of the District Court for the Fifth Judicial District, Jefferson County. Trial was held April 6, 1988, without a jury. The District Court entered judgment for the plaintiff, Ward and awarded $2,500.00 punitive damages. This Court affirms the judgment of the District Court but remands the cause for specific findings with regard to punitive damages pursuant to § 27-1-221, MCA. There are three issues for review: 1) whether the District Court erred by allowing the plaintiff to amend his complaint to conform to the evidence presented at trial; 2) whether the District Court erred by denying defendant's motion to vacate the trial setting; and, 3) whether the District Court erred by not presenting findings pursuant to 5 27-1-221, MCA, regarding punitive damages. The plaintiff, Sidney E. Ward, entered into an purchase/lease agreement with Vibrasonic Laboratories, Inc. for the purchase of a hearing aid on July 31, 1986. The cost of the hearing aid was $499.00 plus $100.00 fitting fee for a total of $599.00. Ward made a downpayment of $180.00 leaving a balance of $419.00 to be paid in monthly installments of $20 over 36 months. As the District Court noted in its findings of fact, the agreement failed to comply with several provisions of the Montana Retail Installment Act. The agreement fails to give notice of the buyer's right to payoff in advance the full amount and obtain a partial refund of the finance charqe as required by 31-1-231 ( 2 ) , MCA. The agreement is required to state, if a separate amount for insurance is paid, the specific types of coverage and benefits, 31-1-231 (5) (d) , MCA. It fails to state the amount of the finance charge as required by S 31-1-231(5)(g); and it fails to state the total amount of the time balance required by 5 31-1-231(5) (h), MCA. Finally, Vibrasonic itself violated S 31-1-233, MCA, by writing an insurance policy which it was not authorized to do by the state of Montana. Ward purchased this insurance from Vibrasonic's agent. Vibrasonic called the insurance a "the Ultimate Hearing Aid Protection Plan." The plan provided for loss against physical damage to the hearing aid caused by "external sources such as theft, fire, accidental hreakage, water, auto accident," plus loss by mysterious disappearance. This plan specifically states it is "separate and distinct from the factory warranty and -- does not cover repair service normallv covered by the factory warranty." The District Court found that "the Ultimate Hearing Aid Protection Plan" to be "insurance" within the meaning of the insurance code of the state of Montana because of terms used in the plan such as "insured's name, policies, coverage, and premiums." The District Court found that this was an attempt to write an insurance policy by an unlicensed insurer; that a premium of $20 was collected and constituted a fraudulent, deceptive and illegal act on the part of Vihrasonic. Ward became dissatisfied with the hearing aid despite attempts by Vihrasonic to make adjustments. Ward tried to rescind the contract but Vibrasonic would not return payments already made under the contract. Nonetheless, Ward returned the hearing aid in the summer of 1987 and stopped making payments. During this time, Ward was diagnosed as having terminal cancer in the facial area and brain. Ward ' s physician, Dr. Sacry, wrote a letter pursuant to paragraph three of the agreement between Vibrasonic and Ward which should have allowed Ward to rescind the contract. Paragraph three reads as follows: You may cancel this agreement if in one year after the delivery date you consult a licensed physician, or a non-competitive certified audiologist, that has no connections with a hearing aid dispenser, and such person advises you against the purchase or use of a hearing aid and specifies in writing the medical or audiological reasons for such advice. Vibrasonic denied Ward's right to rescind under this clause of the contract. It was upon this basis that the District Court found that Vibrasonic breached the contract and ordered that Ward be refunded $440.00, the amount which he had paid. Ward filed a complaint on October 6 , 1987. The complaint contained four counts upon which Ward based his claims for relief. Count I alleged the basis for recission; Count 11 was an alternative to Count I; Count I11 alleged usurious interest rates on the contract, this Count was later dropped; and Count IV alleged fraudulent misrepresentation in the sale of the insurance policy covering the hearing aid. Count IV reads as follows: That plaintiff was required to purchase "insurance" as set forth in said agreement, but plaintiff is unaware of the nature or extent of any such insurance coverage, nor was he ever furnished with a policy or other memorandum of insurance, nor was plaintiff advised that he may either accept or decline said insurance, and that the additional charge of $20.00 for "insurance" is unwarranted and unlawful and was obtained by false and fraudulent misrepresentations by defendants, and should be returned to plaintiff. That the actions of the defendants in requiring said "insurance" or in charging the plaintiff for the same, were false and fraudulent and oppressive and defendants should be assessed punitive damages in the amount of $10,000.00, or such amount as may be determined upon trial of this cause, by reason of said actions. Trial was set on February 17, 1988, for April 6, 1988, giving Vibrasonic seven week's notice to prepare for trial. On March 23, 1988, two weeks before trial, Vibrasonic moved for a continuance and asked to present argument on its motion for summary judgment on the trial date rather than try the case. On April 6, 1988 the plaintiff and his counsel appeared and were ready for trial; the defendant appeared only through counsel. Vibrasonic's motions for continuance and summary judgment were denied and the trial was held. The plaintiff presented the testimony of Ward. The defendant did not put on a case-in-chief. The District Court entered its findings on April 18, 1988 and judgment was entered April 27, 1988 in favor of Ward. Vibrasonic moved for a new trial on the grounds of irregularities in the proceedings of the District Court and surprise. This motion was denied and the d-efendant, Vibrasonic, appeals to this Court. I Did the District Court err by allowing the plaintiff to amend his complaint to conform to the evidence presented at trial? First, the appellate procedural doctrine that matters not raised at trial will not be considered on appeal. applies here. It has long been the rule of this Court that on appeal we will not put a District Court in error for a ruling or procedure in which the appellant acquiesced, participated, or to which appellant made no objection. Green v. Green (1978), 176 Mont. 532, 536, 579 P.2d 1235, 1237. When plaintiff's counsel made the motion to amend, defendant's counsel made no objection. Second, the rule with regard to amendments to the pleadings is well-settled. As early as 1905, the position of this Court has been: . . . the court has discretionary power to permit the amendment under such terms as it deemed just and proper. This it did. Dorais v. Doll (1905), 33 Mont. 314, 316-17, 83 P. 884, 885. The policy of the law is to permit amendments to the pleadings in order that litigants may have their causes submitted upon every meritorious consideration that may be open to them; therefore it is the rule to allow amendments and the - - - exceptionto - d ' i e n y _ them. (Emphasis added. ) Union Interchange, Inc. v. Parker (19601, 138 Mont. 348, 353-54, 357 P.2d 339, 342. In addition to settled case law, Rule 15(b), M.R.Civ.P. provides: When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.. . . the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby . . . (Emphasis added. ) The purpose of Rule 15(b) allowing amendment of a complaint to conform to the evidence presented is to "put an end to wasteful and needless litigation and have trial on the merits of the case." Reilly v. Maw (1965), 146 Mont. 145, 156, 405 P.2d 440, 447. Vibrasonic contends that to allow the amendment of the complaint on the insurance issue raises a new theory of recovery. This Court disagrees. Count IV of the complaint clearly contemplates the claim of tortious misrepresentation by Vibrasonic to Ward by requiring insurance on the hearing aid. The policy purchased by Ward was an insurance policy as defined by Montana law and not a guaranty or warranty as purported by Vibrasonic. The Montana Insurance Code, 5 33-1-210, MCA, defines property insurance as: Property insurance is insurance on real or personal property of every kind and every interest therein, whether on land, water, or in the air, against loss or damage from any and all hazard or cause, and against loss consequential upon such loss or damage, other than noncontractual legal liability for any such loss or damage. (Emphasis added.) The contract presented to Ward was indeed insurance under this definition. Vibrasonic claims this policy was simply a warranty. We disagree: A warranty promises indemnity against defects in an article sold, while insurance indemnifies against loss or damage resulting from perils outside of and unrelated to defects in the article itself. State ex rel. Duffy v. Western Auto Supply Co. (0hio 1938), 16 N.E.2d 256, 259. The contract refers to a standard factory warranty which lasts for one year. The insurance was sold separately by the Vibrasonic agent approximately three weeks after the contract was signed, and as set out above, protected against loss or damage, not defects in the hearing aid itself. This Court concludes that the District Court did not err by allowing the plaintiff to amend his complaint. to conform to the evidence presented. Did the District Court err by denying defendant's motion to vacate the trial setting? The thrust of Vibrasonic's argument with regard to this issue is that it was prejudiced and surprised because of the amendment to the plaintiff's complaint and because no continuance was granted to allow the defendant to prepare a defense. Count IV of the complaint, as set out above, contains many references to insurance. It expressly refers to the issuance of insurance, the unlawful collection of a premium, that it was obtained by false and fraudulent misrepresentations by Vibrasonic, and that punitive damages should he assessed. This pleading standing alone is enough to cover the unlawful activities of Vibrasonic in the insurance business. There was no surprise, there was no change in theory, there was no prejudice to Vibrasonic. Vibrasonic employees or agents did not appear at trial, after seven weeks notice of a trial date and over a year's notice of Count IV. It appears such motions were filed simply for delay. Ward died soon after trial and a continuance at the time would have been fatal to Ward's case. This Court concludes that the District Court did not err by denying Vibrasonic's motion to continue. Did the District Court err by not presenting findings pursuant to 5 27-1-221, MCA, regarding punitive damages? This Court agrees with both the plaintiff and defendant on the point that punitive damages were awarded without making all the required findings pursuant to S 27-1-221 (7) (b) (i-ix) , MCA: When an award of punitive damages is made by the judge, he shall clearly state his reasons for making the award in findings of fact and conclusions of law, demonstrating consideration of each of the following matters: (i) the nature and reprehensibility of the defendant's wrongdoing; (ii) the extent of the defendant's wrongdoing; (iii) the intent of the defendant in committing the wronq ; (iv) the profitability of the defendant's wrongdoing, if applicable; (77) the amount of actual damaqes awarded by the jury; (vi) the defendant's net worth; (vii) previous awards of punitive or exemplary damages against the defendant based upon the same wrongful act; (viii) potential or prior criminal sanctions against the defendant based upon the same wrongful act; and (ix) any other circumstances which may operate to increase or reduce, without wholly defeating, punitive damages. Although the District Court did not specifically state in its findings with regard to punitive damages that the findings were being made pursuant to the above statute, the court did make partial findings in accordance with the statute. Findings of fact no. 9 and no. 10 state the District Court's findings as related to Count IV and the sale of insurance by Vibrasonic. The findings are set out as follows: 9. That at the time of delivery of said hearing aid, the agent, Richards, sold Plaintiff an insurance policy thereon (which was provided for by written addition in the agreement) being called "The Ultimate Hearing Aid Protection Plan" (Plaintiff's Exhibit 3) . The policy provided for loss against physical damage to the aid caused by ". . . external sources such as theft, fire, accidental breakage, water, auto accident, plus many others." It also covers loss by mysterious disappearance. The "policy" also provides for a $75 deductible for the replacement of the hearing aid "in case of loss." The Court finds that "The Ultimate Hearing Aid Protection Plan" is "insurance" within the meaning of the insurance code of the state of Montana, there being many terms used that are indicative of insurance policies such as the application containing the "Insured' s Name, I ' the terms "policies, coverage, premiums, uninsured shipping, protection," among others, all of which clearly spell out an attempt to write an insurance policy in the state of Montana by an unlicensed insurer; that a premium of $ 2 0 was collected and constituted an illegal act on the part of Defendant, and which was fraudulent and deceptive. 1 0 . That Richards, acting on behalf of the Defendant VIBRASONICS, falsely and fraudulently sold insurance to the Plaintiff and collected a premium therefor. This act was done with the knowledge that neither he nor Defendant were authorized to sell insurance in the state of Montana. This was a wrongful, tortious act, which justifies the imposition of punitive damages by way of example in an amount hereinafter fixed. These findings address (i) through (iv) of the statutory requirements. Section (v) relates to amount of actual damages awarded by the jury; although this was not a jury trial; actual damages in the amount of $ 4 4 0 were awarded by the judge. It was subdivisions (vi) through (ix) that were not addressed. In order to consider these statutory requirements, evidence must be presented for the court to consider. This Court remands on this issue so that evidence may be presented to the District Court for consideration and so that findings and conclusions may be made in accordance with S 27-1-221 ( 7 ) (b) (i-ix) , MCA. With respect to subdivision (vi) , as to the defendant's net worth, either party may present such evidence at trial. The plaintiff may want to introduce evidence of this kind in an effort to obtain a greater damage award and the defendant may want to present evidence of its wealth in an effort to mitigate the damage award. The purpose of punitive damages is to punish and deter the party found liable, but not to hit so hard as to bring about financial ruin. In the usual case "a defendant which presents no evidence of financial worth cannot complain that the jury did not have such evidence." Hicks v. Lilly Enterprises (0r.App. 1980), 608 P.2d 186, 189. Finally, the defendant argues that if indeed the sale of the insurance is a violation of the Montana Insurance Code, the State Auditor's office is the agency which should proceed against the defendant, not the plaintiff. This Court disagrees. The plaintiff has a common-law tort action against the defendant for fraud and misrepresentation. The State Auditor's office may also proceed against the defendant under its penalty provisions for violation of the insurance code. The award of compensatory damages is affirmed and the punitive damages judgment is reversed and remanded for proceedings in accordance with this Opinion. Costs of appeal to plaintiff. - i - - A- ~ A L -2 , 2 J q / u u / / L A L- " - Justice f We Concur: h n @ a # - / ' Justices 4 / Mr. Justice John C. Sheehy, in special concurrence: This case demonstrates how silly the results can be when the legislature, in the guise of "tort reform" interjects itself in matters that are properly in the province of the courts. In my opinion, the District Court was measurably conservative in assessing punitive damages against a company that took advantage of the ill and the elderly, and violated our state's insurance laws. It is safe to predict that punitive damages awards will be larger in the future because of the rites of passage now required by the legislature to be followed. The notion that torts can be handled in the legislative halls instead of in courts at law is prevalent now, and unfortunately it will keep muddying the legal waters. Justice | February 28, 1989 |
51060cca-6f24-4a25-9cb4-6b9864d269bc | HERNANDEZ v JENSEN | N/A | 88-484 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA R. GAIL HERNANDEZ, Claimant and Appellant, -vs- LELAND JENSEM, d/b/a ACME PRESS, Employer, and STATE COMPENSATION INSURANCE FUND, Defendant and Respondent. APPEAL FROM: The Workers' Compensation Court, The Honorabl-e ~imothy Reardon, Judge presiding. COUNSEL OF RECORD: For Appellant: James Park Taylor; Geiszler, Taylor, Newcomer & Mc~lain, Missoula, Montana For Respondent: Oliver H. Goe, Helena, Montana Filed: Submitted on Briefs: Jan. 5 , 1 9 8 9 Decided: February 22, 1989 J Clerk Mr. Justice R. C. McDonough delivered the Opinion of the Court. This appeal from the Montana Workers' Compensation Court concerns the court's denial of a request to lump sum benefits. Claimant, R. Gail Hernandez, petitioned to lump sum the majority of her entitlement alleging that financial hardship had created a pressing need for more household income. By placing the lump sum of benefits in various types of mutual funds and one real estate limited partnership, Hernandez hoped to increase her income by drawing a monthly rate of return from the investments. She also proposed that a portion of the lump sum benefits be used to establish funds generating a rate of return for her children's post secondary education, emergencies, protection from inflation, and a down payment for the purchase of a house. The increase in income from her various investments would in part be used to make house payments. The lower court held that the proposal failed to overcome the presumption in the Montana Workers' Compensation Act against lump summing benefits. We affirm. Hernandez's monthly income from bi-weekly payments totals $579.00. Hernandez also receives food stamps and lives in federally subsidized housing. Her food stamp entitlement fluctuates between $150.00 and $190.00 per month, and monthly rent for her four bedroom apartment totals $104. Hernandez does not qualify for Aid to Families with Dependent Children or Social Security Disability benefits. Her attorney will begin collecting a portion of her benefits each month to pay her agreed attorney fees. Hernandez's husband lives in Peru and contributes little to the family income. Hernandez attempts to support five children and her sister-in-law using her benefits. The family income places the household well below the federal poverty line. The Fund also contends Hernandez exaggerated her budget needs for medical expenses, and failed to pursue available programs for help in meeting her medical needs. The Fund also argues that the decision of the lower court may he justified by the negative impacts of Hernandez's plan. Hernandez's rent subsidy and food stamps would likely decrease with an increase in income. The Fund further asserts that an award of a lump sum to provide for educational expenses for Hernandez's children fails to overcome the presumption favoring periodic benefit payments. There exists a high probability that in inflationary times the rate of return from investments purchased with a discounted lump sum of benefits will exceed the income generated by bi-weekly payments. 3 A. Larsen, The Law of Workmen's Compensation S 82.72 (d) (1988) . However, Montana law requires more than a showing of increased income through a feasible investment plan. LaVe v. School District No. 2 (1986), 713 P.2d 546, 548, 43 St.Rep. 165, 168. Otherwise, bi-weekly benefits would become the exception and lump sums the rule. LaVe, 713 P.2d at 548. In passing on any lump sum proposal, the lower court must consider the best interests of the claimant, the claimant's family, and the public. Komeotis v. Williamson Fencing (Mont. 1988), 756 P. 1153, 1155-56, 45 St.Rep. 1098, 1101. In weighing these interests, the presumption favors bi-weekly payments. Komeotis, 756 P.2d at 1156. This Court affords the lower court with wide discretion in reviewing lump sum decisions because the lower court occupies the best position to familiarize itself with the needs of the claimant and the results which would probably follow granting or denying the petition for a lump sum. Komeotis, 756 F.7d at 1156. Evidence in the record established that lack of funds adversely affects Hernandez and her family. Hernandez must borrow money to provide for adequate medical care. Her eldest son works to provide money to attend college part-time. Hernandez testified she could not afford to provide high school graduation expenses for her eldest daughter. Hernandez also testified to housing problems due to low income. Her third story apartment is too small and makes coming and going difficult because she suffers from a bad back. Hernandez believes that some of her neighbors exert a bad influence on her children. She has investigated the feasibility of obtaining better housing using the proposed fund for making a down payment on a home. However, she revealed no definite plan for obtaining the financing needed to complete a home purchase. Hernandez contends on appeal that she demonstrated that a lump sum entitlement satisfied a pressing need and served her best interest. Thus, according to Hernandez, the lower court erred in denying her request. Hernandez also contends that the lower court's decision is not supported b ! 7 substantial evidence, and that the lower court denied her equal protection of the laws through its erroneous reasoning. The State Compensation Insurance Fund (Fund) responds that Hernandez failed to make a showing sufficient to overcome the presumption favoring bi-weekly payments. For example, the Fund contends that evidence in the record demonstrates Hernandez exaggerated her financial problems. The Fund points out that Hernandez pays $20.00 per month for cable T.V., spends another $50.00 per month renting video tapes, and has already received lump sums to provide for medical debts and future medical expenses. In this case, an investment plan accompanies a strong showing of financial need. However, the increase in income would probably be accompanied by loss of subsidies. The proposed investment plan has an element of risk. The house purchase plan necessitates a large debt which will further increase the claimant's expenses. The lower court considered the advantages and disadvantages of the plan and decided the presumption against lump summing controlled. Under these circumstances, we hold that the lower court acted within its discretion and that substantial evidence supports its decision. Claimant's equal protection argument also fails. Hernandez contends that the lower court's decision rests on the classification of individuals. According to Hernandez, under the lower court's reasoning, individuals with business acumen may receive lump sum benefits, and individuals without business acumen may not. Hernandez argues that this classification improperly infringes on the "fundamental" right to receive workers' compensation benefits. First, a review of the decision of the Workers' Compensation Court reveals that the decision rested on the particular facts of this case. Most importantly, the 1.ower court considered the interests of Hernandez, her familv, and. the public. The lower court concluded that in light of the particular facts of this case, the legal presumption favorinq bi-weekly benefits controlled. Thus, there exists no issue here on whether or not a classification based on possession of business acumen may survive equal protection analysis. AFFIRMED. We Concur: @PBP~ Justice u Justices Mr. Justice Fred J. Weber did not participate in this matter. Mr. Justice John C. Sheehy, dissenting: Under this incredible Opinion, it is the decision of the Court that it is better to keep this woman on public assistance and food stamps than to invest the monies to which - she is entitled to give her an adequate living income. -- Dear reader, look at the background of exploitation and carelessness that we sanction in the Workers' Compensation system. On September 21, 1984, R. Gail Hernandez suffered an injury arising out of her employment with Acme Press in Missoula County. The Fund, as the insurer, accepted liability for her injury and has paid her weekly disability benefits from April 22, 1985 through the present. In her employment with Acme, she was receiving on-the- job training but in the ten months she worked there, her pay never increased from $5.00 an hour for a 40 hour week. She learned no skill while on the job, her employment having confined her to menial tasks in the printing shop. Following her injury, her condition gradually deterioriated so that she was unable to continue her work with Acme. She reached maximum healing in the fall of 1986. The Compensation Fund refused to acknowledge that she was permanently totally disabled. She requested a determination of her permanent disability from the Workers' Compensation Court, as well as a lump sum distribution of a portion of her Workers' Compensation benefits. On September 22, 1987, a pretrial conference before the Workers' Compensation Court was held. There the Fund denied that she was permanently totally disabled and denied that it should pay any amount to the appellant in a lump sum. Three days before the trial., however, which took place on November 2, 1987, the Fund finally admitted that her disability was permanent and total. For the dispute as to her permanent disability, she has received no attorney fees as far as I can determine. Her monthly benefits of $579.00 per month are apparently now reduced by 25% because of her attorney fees to the sum of $434.25 per month. Why the Fund should not bear the attorney fees, I am unable to determine from the record. At the time of the hearing, Mrs. Hernandez was a 41 year old married female. She is a high school graduate and an honorably discharged veteran who served in the United States Navy. She is married, hut her husband lives in Peru, and does not send support on any regular basis. She has four children, ages 20, 18, 7 and 6, all of them live with her in federally-subsidized housing. She is their sole support and also the sole support for her sister-in-law and her sister-in-law's infant baby. The children have dental problems, and a daughter is having medical problems involving fainting and stomachaches, but all dental and health care must be postponed because she is unable to provide medical insurance for herself or her children nor can she afford the deductible for Medicaid. Her oldest son is 20 years old. He is presently attending the University of Montana on a part-time basis and is working part-time. All of the income which he earns goes toward his education and he cannot afford to go to school on a full-time basis. The oldest daughter is 18, and hopes to go either to a trade school or to college but she has no funds with which to pursue her education beyond high school. The position of the Fund is that she ought to go out and borrow the money. This family's income places it at 53% of the poverty level established for a family of that size. Janet L. Finn, a licensed social worker testified in detail about the problems that face low income families. Extended poverty leads to feelings of hopelessness and helplessness with little opportunity for future progress because the focus has to be on day-to-day survival. Such families experience a high drop-out rate in high school, are more likely to face educational difficulties in school and are also more likely to suffer from health problems. The apartment in which this family lives is a third floor apartment, with no elevator, in a neighborhood where frequent vandalism occurs. The Workers1 Compensation Court found that her lifetime benefits entitlement if she lived through her life expectancy is $246,050.99, less $23,651.82 which she has received in the past. Before the Workers1 Compensation Court, she requested a lump sum advance of $170,065.00, of which $123,065.00 would be used to fund a monthly income for her of $1,500.00. There were other proposals for a downpayment on a modest home, a reserve fund, a minimal education fund for the children and protection against inflation. Two expert witnesses testified that the money could be invested and provide such benefits if the request were granted by the court. Even deducting the amounts objected to by the Fund in this cause, her monthly budget approximates $600.00 per month, which obviously she is unable to meet with the income now provided her from her compensation benefits. Why did the Workers1 Compensation Court refuse her request which might give her at least an approach to the federal poverty income level? It said: The lump sum requested by the claimant not only seeks to ensure her of an income that she enjoyed prior to her injury, but in fact will increase her earnings by 50 percent and double her budget. The proposal of claimant here does not merely seek to allow her to sustain herself financially or return her to her asset situation as prior to her injury, but will completely alter her economic status above that which she was enjoying at the time of her injury. If this claimant had not been injured in the course of her employment, if that employment had not given her a degenerative disc condition at several levels, if she had not traded her lifetime working ability for the paltry benefits of the Workers' Compensation system, the foregoing statement of the Court might he tolerated. Her injury denied her every possibility of ever improving her situation and reduced her to grinding poverty. When she presents a plan that could offer some relief, she is denied because she might improve her income from a menial job and because of the policy of the Court and of the legislature respecting "passive income." As I dictate this dissent, three-month treasury bills backed by the United States Government are yielding 8.5% interest per year. Two-year notes are yielding approximately 9% per year. By simply taking $100,000.00 of her entitlements and placing it under supervised investment in government securities, her present income could easily be doubled, and the whole principal saved. In the guise of preserving the "best interests of the claimant", this Court, hemmed in by prior caselaw that cannot logically he supported is actually adverse to her best interests. Years ago, when much of the cash of the state was languishing around the country in no-interest bank accounts, it was decided to take advantage of investment of these monies through the Board of Investments. I suggest that section 39-71-2324, in cases such as this, allows funds to be transferred to the Board of Investments, supervised by that Board, and used to produce income from investments which would relieve the payments due from the fund. I see no legal reason why we could not order, in the best interests of this claimant, that the Fund itself invest these monies on behalf of this claimant to provide her a living income. Things have come to a pretty pass when this Court decides that it is better to keep a person on food stamps and public assistance than to relieve her situation through the proper use of her benefits. There is a hollow echo of Marie Antoinette in this Opinion: L e t A e m eat foodstamps. Mr. Justice William E. Hunt, Sr., specially concurring: I concur in the result reached by the majority here for the reasons that it has long been the policy (albeit a policy without a purpose) for the State of Montana to refuse its injured workers a lump sum that can be invested for their benefit. The proposals set forth in the dissent of Mr. Justice Sheehy are well worth consideration by the legislature. The plight of this claimant demonstrates that being an injured worker in Montana is no big financial deal. To those who assume that there is rocking chair money in Workers' Compensation benefits, I recommend reading the facts of this case. ' L ' Justice | February 22, 1989 |
1b744250-88b3-4b85-8176-9bf0f12d6c98 | BOYNE U S A INC v MALLAS | N/A | 88-322 | Montana | Montana Supreme Court | NO. 88-322 TN THE SUPREME COURT OF THE STATE OF MONTANA 1989 BOYNE, U.S.A., INC., Plaintiff and Respondent, -vs- NICHOLAS L. MALLAS, BRUCE FRANK and THE MONTANA TERRITORIAL LAND CO., a Montana corporation, Defendants and Appellants. NICHOLAS L. MALLAS and BRUCE FRANK, Plaintiffs and Appellants, -vs- BOYNE, U.S.A., INC., LONE PEAK, INC., BIG SKY,INC., and JOHN E. KIRCHER, Defendants and Respondents. APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Thoma Olson, Judge presiding. COUNSEL OF RECORD: For Appellant: Edmund P. Sedivy, Jr.; Morrow, Sedivy & Bennett, Bozeman, Montana For Respondent : t - Stephen M. Barrett; Kirwan & Barrett, Bozeman, Cd 3 b-2 Montana ' L CJ Submitted: Dec. 2, 1988 ~ ~ ~ i d ~ d : February 28, 1989 -- I Clerk Mr. Justice William E. Hunt, Sr. , delivered the opinion of the Court. The defendants, Nick Mallas, Bruce Frank, and the Montana Territorial Land Co., a Montana corporation, appeal the decision bv the District Court of the Eighteenth ~udicial District, Gallatin County, finding that the Jul17 18, 1986 agreement between Boyne U.S.A., Inc., the plaintiff, and the defendants is not enforceable hy the defendants. We affirm the District Court. The substantive issues raised on appeal are: (1) whether the District Court erred in finding that Mallas was acting in a fiduciary capacity, as Boyne's realtor, at the time of the July 18, 1986 agreement; and (2) whether an agreement between a principal and an agent is voidable by the principal when the agent fails to disclose information regarding the agreement. Boyne U.S.A., Inc. (Boyne) is a Michigan corporation authorized to do business in the state of Montana. The corporation is solely owned by the Kircher family, with Everett Kircher as president and his son, John Kircher, as vice-president. Among its holdj-ngs, Boyne owns the R i g Sky resort properties located south of Rozeman, Montana. John Kircher has served as general manager of Boyne's Big Sky resort properties since 1982. His duties as general manager of the Big Sky resort includes handling routine to complex real estate transactions. While John Kircher was required to clear important transactions with the home office, no consistent pattern of obtaining written corporate resolutions for such transactions was observed. At a special meeting of Boyne's Board. of Directors on February 1, 1985, John Kircher was given authority h : , 7 the Board to: investigate inquiries into the possible sale of Big Sky of Montana's properties and/or the Corporation's possible purchase of other ski areas. This would entail discussions with prospective buyers as to their actual interest and ability to make such purchases; and . . . John Kircher will present any such proposal(s) which appear to he valid to the Board for consideration and whatever action the Board deems appropriate. John Kircher subsequently signed a one year listing agreement on March 28, 1985 with the Montana Territorial Land Co., a closely held corporation engaged in the sale of real estate and owned by Nicholas Mallas and other family members. The listing agreement was accepted by Mallas, a licensed real estate agent, on behalf of the Montana Territorial Land, Co. Mallas then began a search for a buyer for the Big Sky resort properties. In September, 1985, Everett Kircher wrote to Mallas on behalf of the Boyne's Board of Directors, advising Mallas that John Kircher executed the March, 1985 listing agreement without their knowledge or authority. Everett Kircher advised Mallas that the Board deemed the contract null and void - ab initio because the agreement may result in the sale of a substantial portion of Boyne's assets not in the ordinary course of business which would require shareholder approval. Everett Kircher further wrote that the Board "simply require[s] that you deal directly with our corporate home office to negotiate an agreement which we can present to the Board of Directors for their approval." This issue was not resolved and the listing agreement was permitted to expire in March, 1986. While the listing agreement was in effect, no sale was consummated. The listing agreement, however, provided that Mallas would receive a commission for the sale of the property if it was sold within twelve months after the termination of the agreement to a prospect introduced by Mallas. In May and June, 1986, Mallas started negotiating with John Kircher regarding the sale of the Big Sky resort properties. Mallas apparently intended to be one of the ultimate purchasers of the resort, although conflicting evidence exists as to whether this was clearly disclosed to John Kircher. Mallas submitted two written offers to John Kircher, one for $15 million and one for $17 million, with different downpayments. John Kircher acknowledged receipt of these offers and then relayed the price, downpayment, interest rate, and the time over which the payments would he made to Boyne by telephone to Boyne through Everett Kircher. Boyne, however, rejected the two offers. Because of the rejection, the written offers were not forwarded to Boyne headquarters by John Kircher, and the Board of Directors in Michigan did not know of the specific terms contained in the two offers. On July 18, 1986, Mallas called John Kircher and advised him that he had a new offer to purchase the property. The offer was a $7 million downpayment and a $13 million note. John relayed this offer to Boyne by telephone and was then told that he could inform Mallas that the price was acceptable. No terms or conditions of the offer other than the price were discussed during the telephone call and no authority was given to sign a binding contract. When John Kircher indicated that the latest offer was acceptable, Mallas then arranged to have a proposed agreement typed. Mallas and John Kircher met on July 19, 1986 at a secluded lodge in Madison County. At that meeting, Mallas presented a written offer, dated July 18, 1986, that he exclusively prepared for the purchase of the property. John Kircher, his wife, Sara Kircher, and Mallas were present at the meeting. The July 18, 1986 written offer contained provisions increasing the purchase price to $21.2 million; providing for an $8.2 million downpayment; granting the Montana Territorial Land Co. a $1.2 million commission; subordinating Boynels note to "any bank financing required by the Buyer, working capital required by the company and any sale and leaseback of the machinery and equipment required bv the Buyer;" allowing Mallas and Frank a unilateral right to rescind the agreement without any obligation or reason while Boyne had no such option; and stating that sellers have the requisite authority, including Board of Directors' and shareholders' approval, to sell the Big Sky resort properties. After reading the July 18, 1986 document, John Kircher had reservations about the document. No telephone service was available at the secluded lodge, leaving John unable to talk to either the Boyne1s Board of Directors or an attorney employed by Boyne. John asked few, if any, questions. Nonetheless, he signed the document after Mallas convinced him that the document was not binding but merely a "letter of intent" which Mallas needed to show his financial backers in California to establish that Boyne was serious about selling its properties. On July 30, 1986, an attorney for Boyne wrote to Mallas claiming that the July 18, 1986 agreement was of no force and effect because the letter was only a nonbinding letter of intent; the offer was vague; Mallas failed to disclose in the agreement that he was acting as a principal and on behalf of the Montana Territorial Land Co.; Mallas1s unilateral right of recession was unconscionable and unenforceable; and the agreement had not been reviewed by an attorney, contrary to what the agreement stated. Boyne therefore brought action to void and rescind the July 18, 1986 aqreement. Nick Mallas and Bruce Frank, the defendants, brought action to specifically enforce the agreement. The actions were consolidated. The District Court, sitting without a jury, entered findings of fact and conclusions of law and submitted an order that the July 18, 1986 agreement between Boyne and Mallas and Frank is of no further force and effect. Mallas and Frank appeal. The first issue raised on appeal is whether the District Court erred in finding that Mallas was acting in a fiduciary capacity, as Royne's realtor, at the time of the July 18, 1986 agreement. The District Court found that up to and including the time when Mallas signed the July 18, 1986 agreement for the purchase of the Rig Skv resort, Mallas was acting as a real estate agent for Boyne and therefore was in a fiduciary relationship with Boyne. The court noted that the most important factor which it based this conclusion upon was the July 18, 1986 agreement, drafted by Mallas, which provided that Mallas's company, the Montana Territorial Land Co., was to receive a $1.2 million real estate commission. Mallas and Frank argue that substantial credible evidence does not support the court's finding that a fiduciary relationship existed. In attempting to explain the word "commission" in the July 18, 1986 agreement, Mallas and Frank argue that the "question of a 'real estate commission' was never a factual." They argue that John Kircher knew that the "stated 'commission' was not a true earned real estate commission" because Kircher knew that Mallas was not acting as Royne's realtor when he attempted to buy the property and that it was Frank who suggested that the contract should provide for a $1.2 mFllion commission. Mallas and Frank state that the commission would allow them additional capital to renovate the golf course and make other improvements. Mallas and Frank therefore argue that the significance the District Court places on the use of the word "commission" is not supported by the evidence. We disagree. When a district court determines that an extrinsic ambiguity exists in a contract, evidence may be used to determine the intent of the parties. Section 28-2-905(2), MCA; Monte Vista Co. v. Anaconda Co. (Mont. 1988), 755 P.2d 1358, 1362, 45 St.Rep. 809, 814; Martin v. Laurel Cable T.V., Inc. (Mont. 1985), 696 P.2d 454, 457, 42 St.Rep. 314, 317. The terms of a contract are considered ambiguous when different interpretations are possible. Monte Vista Co., 755 P.2d at 1362, 45 St.Rep. at 814. In the present case, the District Court did not note any ambiguity in the terms of the contract providing Montana Territorial Land Co. with a real estate commission of $1.2 million. The District Court therefore found that this most important provision contained within the July 18, 1986 agreement was one of the circumstances that allowed it to conclude that Mallas was acting as a real estate agent and therefore in a fiduciary relationship with Boyne. The District Court did not err in relying upon the unambiguious contract term "commission." This provision granting Mallas's Montana Territorial Land Co. a $1.2 million commission establishes that a fiduciary relationship existed between Mallas and Boyne. The term "commission" is defined by Webster's Dictionary as "a formal written warrant granting the power to perform various acts or duties." Webster's Ninth New Collegiate Dictionary 265 (9th ed. 1984). If the language of the contract is clear and explicit and does not involve an absurdity then the contract's language governs the interpretation of the contract. Section 28-3-401, MCA. The contract provides that Montana Territorial Land, Co. was to receive a $1.3 million commission. The terms of the contract implicitly grants Mallas, as the real estate agent, the power to perform various acts or duties in connection with the sale of the Big Sky resort properties. By granting Mallas a commission, the contract also establishes that a fiduciary relationship existed. The statute addressing when extrinsic evidence concerning a written agreement may be considered, S 28-2-905, MCA, precludes us from even considering Mallas's "argument" that everyone concerned knew that the commission was not really a commission. We therefore hold that substantial credible evidence supports the District Court's conclusion that a fiduciary relationship existed between Mallas and Boyne, as a result of Mallas acting as Boyne's realtor at the time the July 18, 1986 agreement was signed. The second issue raised on appeal is whether an agreement between a principal and an agent is voidable by the principal when the agent fails to disclose information regarding the agreement. Mallas and Frank argue that substantial credible evidence does not support the District Court's conclusions that Mall-as breached his duty as Royne's real estate agent by not disclosing critical information about the agreement. They further argue that substantial credible evidence does not support the District Court's conclusions that Boyne, as the principal, may elect to rescind the agreement. We disagree. A contract is voidable by a principal if the principal's agent, who was employed to sell the principal's property, purchases the property himself, either directly or indirectly through a third person. Crowley v. Rorvig (1921), 61 Mont. 245, 251-52, 203 P. 496, 496-97. The principal's right of remedy is not defeated by the amount of consideration, the absence of undue advantage, or other similar features. Only after the principal has confirmed that he has full knowledge of all the facts, b r i l l this right to avoid the contract no longer be available to the principal. Crowley, 61 Mont. at 252, 203 P. at 497. The reasoning behind this well established principal is to insure that an agent, when carrying out an entrusted duty as the agent, does not place his interests above the principal's interests. This Court recognizes that when an agent's and principal's interests are brought in conflict, the agent will not necessarily look upon the principal's interests as more important and entitled to more protection than his own. Therefore, the courts allow a principal to void a contract without even inquiring into whether the agent obtained an advantage or acted fraudulently. Crowlev, 61 Mont. at 252-53, 203 P. at 497. A principal may void the entire contract even though purchasers other than the agent are also involved in the transaction. Crowley, 61 Mont. at 261-62, 203 P. at 500. As noted above, Mallas was acting as Boyne's real estate agent at the time the July 18, 1986 agreement was signed and therefore a fiduciary relationship existed between Mallas and Boyne. Mallas and Frank note that John Kircher, as general manager, vice-president and director of Boyne, was also an agent of Boyne. Mallas and Frank therefore argue, citing S 28-10-604, MCA, that knowledge imparted to John Kircher by Mallas is imputed by law to Boyne. FJhile Mallas and Frank attempt to switch the focus from Mallas's duties as an agent for Boyne to John Kircher's duties as an agent for Boyne, we hold that the proper focus is whet.her Mallas breached his duty bv not disclosing all pertinent facts regarding his purchase of the Big Sky resort properties to Boyne and whether he acted in the utmost good faith. Mallas's and Frank's reliance on S 28-10-604, MCA, is therefore misplaced in light of the entire facts. Further, as we have noted pre~~iously, " f i l n the event of any litigation between [the agent] and his employer, the burden is upon [the agent] to prove both the permission and the exemplary manner in which he availed himself of it. . . . " First Trust Co. v. McKenna (1980), 188 Mont. 534, 539, 614 P.2d 1027, 1030 (quoting 12 Am.Jur.2d Brokers S 91 (1964)). As Boyne's agent, Mallas in his fiduciary capacity had the duty to act in the utmost good faith towards his client, which includes a duty to make full disclosure. When the agent is buying the property himself, this duty to disclose all pertinent facts becomes particularly important. McKenna, 188 Mont. at 539, 614 P.2d at 1030. The evidence supports the District Court's finding that Mallas knew or should have known that Boyne's Board of Directors did not know of the specific terms of the July 18, 1986 agreement and that John Kircher did not have the authority to sign an agreement to sell the Big Sky resort properties. Specifically, the evidence shows that Mallas exclusively prepared the July 18, 1986 agreement and that John Kircher first saw this agreement on July 19, 1986 at a secluded lodge in Madison County. No telephone was available for John Kircher to call and discuss the contract provisions with either the Boyne headquarters or an attorney employed by Boyne. Mallas himself did not discuss the provisions in the document with John Kircher, including the meaning and possible effects of the subordination clause, and then convinced John Kircher that the document was only a "letter of intent." In addition, Mallas allowed John Kircher to sign the agreement with the provision stating that the "[slellers represent that they have the requisite authority, includina Board of Directors' and Shareholders' approval, to sell the assets as described herein." The evidence shows that Mallas received a letter from Boyne's headquarters in September, 1985 stating that John Kircher dld not have the requisite authority to sign a listing agreement to sell the Big Sky resort properties without the Board of Directors1 approval of the specific terms. We fail to see how Mallas, in the exercise of utmost good faith, could therefore contend that approximately ten mont.hs later John Kircher nonetheless had the authority from the Board t-o sell the entire Big Sky resort properties when John Kircher himself had not seen the July 18, 1986 agreement until the July 19, 1986 meeting at the secluded lodge. In light of the circumstances, a secluded lodge with no telephone, Mallas knew that John Kircher was unable to convey to the Boyne headquarters any of the specific provisions of the contract. While Mallas and Frank attempt to argue that the District Court "forgot" evidence more favorable to them, we hold that the District Court properly considered all of the evidence and thus made findings of fact consistent with the evidence. The trier of facts, and not this Court, is in the best position to assess the credibility and weight of conflicting evidence. Mountain West Farm Bureau Mutual Ins. Co. v. Girton (Mont. 1985), 697 P.2d 1362, 1363, 42 St.Rep. 500, 501. We affirm the District Court's conclusion that the July 18, 1986 agreement between John Kircher and Nick MalLas and Bruce Frank is voidable by Boyne. Affirmed. / | February 28, 1989 |
e1ec34fc-5bdd-4c27-9d83-f04c228cf850 | FIRST BANK (N A ) - BILLINGS v CLA | N/A | 87-514 | Montana | Montana Supreme Court | NO. 87-514 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 FIRST BANK (N.A.)-BILLINGS, Plaintiff and Appellant, -vs- RUSSELL C. CLARK, Defendant, Respondent and Cross-Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the the County of Yellowstone, The Honorable Russell Fillner, Judge presiding. COUNSEL OF RECORD: For Appellant: Moulton, Bellingham, Longo & Mather; Brad H. Anderson argued and W.H. Bellingham argued, Billings, Montana For Respondent: Herndon, Harper & Munro; Rodney T. Hartman argued, I- ~~Rillings, Montana N 3 .*: C J - C 9 ,;:,, F - : 1 I , i r m L'L - . L~ . ! Submitted: December 29, 1988 r * : *-, , > Lr- C*J . , . Decided: February 21, 1989 - - : , ; r-3 - . Filed: LA- L ! J - j 5 & - < T: - - c J ( " , . u - 6 - t Clerk .' Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Plaintiff First Bank-Billings appeals from a jury verdict and subsequent judgment entered October 1, 1987 in the Thirteenth Judicial District Court, Yellowstone County, awarding defendant Clark $16,398.95 for costs and reasonable attorney's fees and $100,000 compensatory damages on his counterclaim for damages resulting from the Bank's breach of the covenant of good faith and fair dealing and commission of constructive fraud. The Bank does not appeal the jury's determination that defendant was not liable under a personal guaranty for the Parker-Montana Company debts remaining after its liquidation. This Court entered a decision on December 16, 1988. First Bank-Billings v. Clark (Mont. 1 9 8 8 ) , 45 St.Rep. 2294. The Rank filed a timely Petition for Rehearing, pursuant to Rule 34, M.R.App.P., following this decision. Having considered the briefs filed by the parties on the petition, we now with.draw the original opinion and issue this opinion in its place. Respondent raises the following issue on cross appeal: 1. Did the District Court err in refusing to submit Clark's actual fraud claim to the jury? Appellant raises the following issues on appeal: 1. Did the District Court erroneously allow attorneys Everson and Ragain to testify that an oral agreement between First Bank and Clark, releasing Clark from a guaranty agreement, had been reached and breached? 2. Did the District Court erroneously admit lay witness testimony as to the reason Clark signed a peaceful repossession document? 3. Did the District Court erroneously instruct the jury as to damages for lost income, damage to reputation, and emotional distress? 4. Did the District Court err in instructing the jury on the issue of a fiduciary duty owed? 5. Did substantial, credible evidence support the jury verdict: a . that First Bank breached the implied covenant of good faith and fair dealing; and b. that First Bank committed constructive fraud? Russell Clark (Clark) was the president and majoritv shareholder in the Parker-Montana Company (Company), a farm equipment wholesale business, from 1970 until the liquidation of the company in 1983. The Company maintained a goo? relationship with First Bank Rill-ings (Rank), the Company's chief bank affiliation, up until 1982 when the Company began experiencing severe financial difficulties. In late 1982, both parties agreed that the Company was in dire financial straits and that either a reorganization or dissolution of the Company was necessary. The Bank recommended liquidation and the parties commenced liquidation negotiations. Clark was primarily concerned during these negotiations with obtaining a release from a personal guaranty agreement that both he and his wife had executed on July 23, 1979 to secure Bank loans made to the Company. Dennis Hove, the Company Vice President, approached Clark in the first week of February of 1983 and stated his interest in purchasing the Companv. Hove subsequentlv submitted a written buy-out proposal to the Bank, for implementation upon the sale of Company assets for debts outstanding. In this proposal, Hove offered to purchase all Company assets and to assume all Company liabilities, and in turn, Clark would be released from his personal guaranty. This purchase proposal hinged upon an agreement between the Rank and Company on the details of the intended liquidation. Consequently, a meeting was held on February 24, 1983, at which time the Bank set forth its proposal for liquidation of the Company. The following people were present at this meeting: Russell Clark, James Ragain and Gary Everson (attorneys for the Company), Doug Aden (head of the Bank's commercial loan department), Bob Waller (Bank president and personal friend to Clark), Gerald Murphy (attorney for the Bank), and Jack Carpenter (Small Business Association representative). The Bank at that time proposed to release the Clarks from their personal guaranty if they would deed to the Bank all real property used by the business in Billings, but owned by the Clarks and the Clark Children's Trust, and if the Company would grant First Bank peaceful possession of all the Company's inventory and accounts receivable. Clark rejected this proposal because he felt the collateral to be turned over to the Bank exceeded the debts owed and because he did not want to convey real estate held in trust for the benefit of his children. Another meeting with Murphy, Waller, Ragain, and Clark was held on February 28, 1983. At this meeting, Waller stated that the Bank would take a trust indenture, rather than a deed, on all the above-mentioned property and in return release the Clarks from their personal guaranty. The parties differ as to whether Clark accepted this offer and reached an agreement with the Rank. Appellant contended that Clark did not accept this offer for the same reasons previously outlined. Appellant alternatively contended that if there was an agreement, that Clark breached it when he failed to convey trust indentures to - all the property; respondent did not give the Bank a trust indenture to lots 15, 16, 17 and 18. Respondent, on the other hand, contended that he accepted the modified offer, shook hands with Waller and "congratulated him on getting the job done." This agreement, however, was not reduced to writing. Yet, Hove testifiec? that he struck a final deal with the Rank to purchase the Company after he was notified that an agreement had been reached between Clark and the Rank. Respondent further alleged that he fulfilled this agreement by giving a trust indenture to all the required lots. He was not required to give the Bank a trust indenture to lots 15, 16, 1 7 and 18, since Hove had secured an option to purchase these lots and had arranged financing. Hove later decided against purchasinq these four lots, althouqh his company did purchase and give the Rank a trust indenture to lots 2, 3, 4, 5, 6, 19, 20, 21, 22 and 23. Both parties agree that the Rank decided to finance Hove's purchase of the Company's inventory and accounts receivable. The Rank arranqed an April 7, 1983 auction of this Company property, less $100,000 worth of inventory to which Rorg-Warner had a superior security interest. The auction followed Clark's execution of a peaceful repossession agreement in favor of the Bank on March 4, 1983. Hove bought all remaining inventory and accounts receivable at the auction with a high bulk bid of $1 million. Respondent alleged that this bid of $1 million was $100,000 less than that amount originally proposed and agreed upon by the Bank. An attorney for the respondent testified, however, that Doug Aden assured him over the phone just prior to the auction that the Rank would treat the actual bid as a $1.1 million bid for purposes of eliminating Clark's debt to the Bank. The Salvation Army subsequently purchased lots 7, 8, 9 and 10 from the Clarks in April of 1984. Pursuant to an agreement that Clark had with the Bank, Clark placed the net proceeds from this sale ($62,000) in an interest bearing account with the Bank. Clark later voluntarily awarded these funds to the involuntary bankruptcy trustee pursuant to a settlement agreement. (Borg-Warner and other creditors, not including the Bank, had filed an involuntary bankruptcy action against the Company on March 24, 1983.) On November 8, 1984, the Rank filed suit against Clark on his personal quarantjr i . n order to col-lect on the alleged Company debt of approximately $233,000 remaining after the auction. Clark was asked to resign from his position on the board of directors of First Interstate Bank in December of 1984. The decision to request Clark to resign was reached after discussion, continuing over several months, of the value of Clark's continued representation on the board given his Company's severe financial problems. Each year he had served as a director, Clark earned $5,000-$6,000. A jury trial was held July 6 through July 11, 1987. The jury determined that Clark was not obligated, under his personal guaranty, for any Company debts. The iury awarded Clark $100,000 on his counterclaim for damages due to the Bank's bad faith and constructive fraud. However, the court refused Clark's request to submit instructions on actual fraud to the jury, and consequently, the jury determined that Clark was not entitled to punitive damages. This appeal and cross appeal followed. I. JURY INSTRUCTION ON ACTUAL FRAUD For purposes of convenience, we have chosen to discuss the issue raised on cross appeal first. Respondent alleges by way of a cross appeal that the court erred in refusing to instruct the iury on the issue of actual fraud. Yet, a iury inst.ruction on actual fraud is warranted onlv if defendant raised a question of fact by presenting some evidence of each of the following nine elements of actual fraud: 1 . . A representation; 2. Falsity of the representation; 3. Materiality of the representation; 4. Speaker ' s knowledge of the falsity of the representation or ignorance of its truth; 5. Speaker's intent that it he relied upon ; 6. The hearer's ignorance of the falsity of the representation; 7. The hearer's reliance on the representation; 8. The hearer's right to rely on the representation; and 9. Consequent and proximate iniury caused by the reliance on the representation. McGregor v. Mommer (Mont. 1986), 714 P.2d 536, 540, 4 3 St.Rep. 206, 211, citing Van Ettinger v. Pappin (1978), 180 Mont. 1, 10, 588 P.2d 988, 994. The defendant failed to introduce any such evidence that the Bank made a false representation, which it knew to be false at the time, intending that Clark would rely on it to his detriment. Absent any evidence of the Bank's actual intent to defraud Clark during the meeting of February 28, 1983, we find that the court did not err in refusing to instruct the jury ahout actual fraud. 11. LAY WITNESS TESTIMONY OF AN AGREEMENT AND BREACH Appellant contends that the District Court erred in allowing attorneys Everson and Ragain to testify that the Bank and Clark had reached an agreement releasing Clark from his personal guaranty. However, respondent contends that the two attorneys' presence at the February 1983 negotiation meetings qualified them to testify to their personal perceptions as lay witnesses. Rule 701, M.R.Evid., permits a lay witness to offer such an opinion if it is "rationally based on the perception of the witness and . . . helpful to . . . the determination of a fact in issue." Further, a lay witness may even give an opinion on an ultimate factual issue if it complies with the foundational requirements in Rule 701, M.R.Evid., however, the opinion testimony must be "confined to matters of fact." In re the Estate of Smith (Mont. 1988), 749 P.2d 512, 517, 45 St.Rep. 93, 100, citing Olson v. Coats (Or. 1986), 717 P.2d 176, 178; Rule 704, M.R.Evid. The contested testimony offered by Everson and Ragain, that an agreement was reached and later breached, certainly involved a fact in issue. (Both parties correctly conceded this point in the pretrial order.) Moreover, this testimony certainly could prove helpful to a jury determination, if based upon personal observations, in light of all the conflicting evidence presented as to whether an agreement was in fact ever reached. However, Everson's testimony that the parties reached an agreement was - not based on his personal perceptions. Rather, he relied upon information gathered from conversations with others. A lay witness may not testify to such evidence gathered from interviews with other persons. State v. Clark (1984) , 209 Mont. 473, 485, 682 P.2d 1339, 1345-40. Thus, in Clark, this Court excluded an investigator's testimony that the defendant had a legitimate alibi, because the investigator's proposed testimony, determined by interviews with others, was not based on his own perceptions. The Court further concluded that evidence which is not based upon personal perceptions is not helpful to a jury. A jury is qualified to draw their own inferences and conclusions from those witnesses who do testify to their personal perceptions. Clark, 682 P.2d at 1346. Everson's testimony of an agreement, based upon his conversations with others, was similarly inadmissible. B\r his own admission, Everson was uncertain whether he attended the February 28, 1983 meeting during which the parties reached the alleged agreement: I do remember a meeting where it was all discussed, and I can't recall for positive, five years ago, if that was the meeting that it was agreed to, or it was discussed. . . Clark, however, clearly remembered who was present at the February 28, 1983 meeting, and he testified that Everson was not present. Everson's opinion that an agreement was reached thus could not be based on his own personal perception of the meeting. Everson and Ragain's lay witness testimony of a breach similarly was not based on personal perceptions. The District Court thus erred in admitting this lay witness testimony. 111. LAY WITNESS TESTIMONY REGARDING THE PEACEFUL REPOSSESSION DOCUMENT The District Court similarly erred in allowing Wayne Fitzgerald, a member of the Company's management team, to testify that Clark signed the peaceful repossession document in exchange for Clark's release from his personal guaranty. Fitzgerald based his opinion solely on hearsay statements made by Clark. Respondent contends that this hearsay testimony, however, was excepted from the hearsay rule and thus was properly admissible under Rule 803, M.R.Evid., as a statement of Clark's state of mind on February 28, 1983. Rule 803 (3) , M.R.Evid., states that the following are exceptions to the hearsay rule: A statement of the declarant's then-existins state of mind, emotion, sensation, o ; physical condition.. . , - but not includinu a statement of memorv or - L - belief to p ; o v ~ the fact remembered or -- - b e l i e v e d . (Emphasis added.) As stated in the Commission Comments, the hearsay rule would effectively be destroyed if statements indicating a state of mind were admissible to infer "the happening of the event which produced the state of mind." Consequently, such statements are expressly inadmissible as hearsay under Rule 803 (3) , M.R.Evid. Clark's later statement to Fitzgerald of his belief that he would be released from the guaranty if he signed the peaceful repossession document similarly may not be admitted to prove that the Bank did in fact release Clark from the guaranty. The testimony of Fitzgerald, as well as of Everson and Ragain, related to a central issue of the case, namely, whether the parties reached an agreement and subsequently breached it. We hold that the admission of this testimony was erroneous and highly prejudicial to the plaintiff's case. LV. JURY INSTRUCTIONS ABOUT DAMAGES Appellant contends that the evidence introduced at trial was insufficient to warrant a jury instruction on loss of income, damage to reputation, or emotional distress. Unquestionably, the jury has a right to hear and decide all questions of fact. Section 26-1.-202, MCA. However, the trial judge is the one who must initially decide if a question of fact exists which warrants a jury instruction. See Ru1.e 51, M.R.Civ.P. If an~7 evidence exists in the record to warrant an instruction, the district court must offer a jury instruction on the issue. E.g., State v. Grant (Mont. 1986), 717 P.2d 562, 569, 43 St.Rep. 685, 692, citing State v. Buckley (1976), 171 Mont. 238, 242, 557 P.2d 283, 285. A. LOST PROFITS AND REPTJTATION DAMAGES Generally, a court should instruct a jury about damages resulting from lost income only if the record reveals some evidence that a wrongful act of one party caused the lost income. 2 M. Minzer, Damages -- in Tort Actions 5 10.11 (1988); see generally Western Union Telegraph Co. v. Hall (1888), 124 U.S. 444, 8 S.Ct. 577, 31 1 J . E d . 479. In the present case, the defendant alleged that the Bank's filing of this lawsuit cost him his position as a board member of First Interstate Rank-Billings, a position netting Clark an income of $5,000- $6,000 per year. The defendant also alleged that his reputation was damaged by the filed lawsuit. Even assuming arguendo that the Bank's action in filing the instant suit led to Clark's lost income and damaged reputation, Clark still had to introduce some evidence indicating that the Bank ' s action was wrongful. Without such evidence, the defendant is not entitled to any recovery and the jury is not entitled to even consider the issue. No such evidence was introduced showing that the filing of the suit was wrongful. Utilization of the legal process to resolve a good faith controversy cannot constitute a basis for damages. Heine v. Seibert (Mont. 1985), 703 P.2d 865, 868, 42 St.Rep. 1152, 1156. Resort to the legal process for resolution of a controversy is wrongful only upon proof that prosecution of the action was malicious. A charge of malicious prosecution in turn requires some evidence of each of the following basic elements: 1. A judicial proceeding commenced against the partv alleging malicious prosecution; 2. the other party's responsibility for instigating the proceeding; 3. a want of probable cause for the other party's action; 4. the existence of malice as the motivator behind the other party's action; 5. the termination of the proceeding in favor of the alleqing party; and 6. damages suffered by the party alleging malicious prosecution. McGuire v. Armitage (1979), 184 Mont. 407, 410, 603 P.2d 253, 255. The fifth requirement of the termination of a judicial proceeding in favor of the party alleging mal.i.cious prosecution: [ N l ecessarily implies that an action for malicious prosecution may not be asserted by way of a cross complaint or counterclaim in the original proceeding. McGuire, 603 P.2d at 255, citing Baker v. Littman (Cal. 1956), 292 P.2d 595. Yet, the defendant attempted to do just that in this case. Defendant's assertion, that he was entitled to jury instructions and damages for the lost income and damaged reputation allegedly resulting from the Bank's filed lawsuit, necessarily charged the Bank with wrongful prosecution of this case. The defendant, however, failed to introduce any evidence of a prior judicial proceeding terminated in his favor. He erroneously asserted his claim to a jury instruction for such damages by way of a countercl-aim. Additionally, the defendant failed to introduce any evidence of malice or lack of probable cause. This lack of evidence of three of the kel~ elements for a prima facie case of malicious prosecution, and thus of any wrongful action bv the plaintiff in filing this action, undermined the defendant's assertion that he was entitled to a jury instruction on damages for lost income and a damaged reputation. Accordingly, we hold that the District Court erred in submitting an instruction on these damages to the jury. B. DAMAGES FOR EMOTIONAL DISTRESS By statute, an injured party may recover an amount in damages which will compensate him for all the detriment, including emotional distress, proximately caused by the other party's tortious conduct. Section 27-1-317, MCA; Gibson v. Western Fire Ins. Co. (1984), 210 Mont. 267, 291, 682 P.?d 725, 738. However, the injured party must introduce some evidence of the alleged damages from emotional distress before a jury is entitled to decide the issue of compensation for such damage. A jury instruction about damages for emotional distress is warranted, in the absence of any physical or mental injury, only if the defendant introduced some proof that plaintiff's tortious conduct resulted in "a substantial invasion of a legally protected interest and . . . [caused] a significant impact on the person. " Johnson v. Supersave Markets, Inc. (Mont. 1984), 686 P.2d 209, 213, 41 St.Rep. 1495, 1500; Noonan v. First Bank Butte (Mont. 1987), 740 P.2d 631, 635, 44 St.Rep. 1124, 1129. We note that the interest legally protected by this cause of action is the interest in freedom from emotional distress. See Restatement (Second) of Torts S 46 comment b ( 1 9 6 5 ) . However, because we do not live in "an 'eggshell society' in which every harm . . . gives rise to a right of action for mental distress," this Court has held that a cause of action arises only if the invasion of this interest is substantial and the impact significant. Johnson, 686 P.2d at 213. The requirement of a significant impact indicates that the emotional distress suffered by the victim must be severe. This interpretation is in accord with the following portion of the Restatement (Second) of Torts S 46 comment -j ( 1 9 6 5 ) , which we adopt and which states: Emotional distress passes under various names, such as mental suffering, mental anguish, mental or nervous shock, or the like. It includes all highly unpleasant mental reactions, such as fright, horror, grief, shame, humiliation, embarrassment, anger, chagrin, disappointment, worry, and nausea. It is only where it is extreme that the liability arises. Complete emotional tranquility is seldom attainable in this world, and some degree of transient and trivial emotional distress is a part of the price of living among people. The law intervenes only where the distress inflicted is so severe that no reasonable person could be expected to endure it. The intensity and the duration of the distress are factors to be considered in determining its severity . . . The distress must be reasonable and justified under the circumstances, and there is no liability where the plaintiff has suffered exaggerated and unreasonable emotional distress, unless it results from a peculiar susceptibility to such distress of which the actor has knowledge . . . It is for the court to determine whether on the evidence severe emotional distress can be found; it is for the jury to determine whether, on the evidence, it has in fact existed. See also Buckley v. Trenton Savings Fund (N.J. 1988), 544 A.2d 857 (holding that loss of sleep, aggravation, embarrassment, some headaches and nervous tension were insufficient to establish severe emotional distress); Bethards v. Shivvers, Inc. (Iowa 1984), 355 N.W.2d 39 (holding that lost sleep, anger, quivering when the contested subject arose, and worry over what other people would think did not rise to the level of severe emotional distress). A district court has the duty of determining the threshold question of whether any proof of such severe emotional distress exists sufficient to raise a question of fact for the jury. Absent any such proof, a jury instruction on damages for emotional distress is improper. E.9- I Richardson v. Fairbanks North Star Borough (Alaska 1985), 705 P.2d 454, 456; Shivvers, 355 N.W.2d at 44. A jury instruction on emotional distress damages was improper in this case as the evidence introduced during the District Court trial was insufficient to raise a question of fact about the existence of severe emotional distress. Defendant alleged only that he felt bad, lost sleep, and became withdrawn as a result of the Bank's failure to release him from his personal guaranty in violation of the alleged agreement between the parties. We therefore hold that the District Court erred in submitting the issue of emotional distress damages to the jury. Our endorsement of the severe emotional distress standard found in the Restatement (Second) of Torts does not amount to a sudden departure from prior law regarding emotional distress damages. Severe emotional distress is only a new interpretation of the existing "significant impact" requirement. We therefore need not remand the case for a new trial on the issue of emotional distress damaqes under this new interpretation. The fact a party may he taken by surprise by the ruling of a reviewing court does not justify a remand when the reviewing court's ruling, even if it is on an issue of first impression, does not constitute a sudden departure from the established rule of law. E.g., Brodie v. Hawaii Automotive Retail Gasoline Dealers Ass'n (Hawaii 1982), 655 P.2d 863, 864. Clark had a full and fair opportunity to introduce all evidence of emotional distress damages during the District Court trial. This Court has previously held that a failure of proof after a fair opportunity to introduce all evidence will be attributed to an inability to prove such, rather than to any neglect by counsel. State ex rel. La France Copper Co. v. District Court (1909), 40 Mont. 206, 208, 105 P. 721, 733; Harrington v. Montgomery Drug Co. (1941), 111 Mont. 564, 567, 111 P.2d 808, 810. We thus hold that Clark's failure to introduce facts indicating severe emotional distress was due to his inabilitv to do so, and a new trial on the issue thus would be futile, as well as contrary to the foregoing rule of law. V. JURY INSTRUCTION ON FIDIJCIARY RELATIONSHIP Appellant also contends that the court erred in submitting a jury instruction on fiduciary relationships as the evidence introduced at trial failed to warrant such an instruction. Generally, a court errs in offering a proposed instruction if the subject matter of the instruction is not supported by the evidence introduced at trial. See generally Associated Agency of Bozeman, Inc. v. Pasha (Mont. 1981), 625 P.2d 38, 42, 38 St.Rep. 344, 348 (holding that it was not error to refuse to offer a proposed instruction when the evidence failed to support it). Consequently, we will determine that the District Court erred in offering an instruction on fiduciary relationships only if the record indicates a lack of evidence of this type of a relationship. A fiduciary relationship exists between a bank and its creditor only if special circumstances indicate exclusive and repeated dealings with the Bank. Pulse v. North American Land Title Co. of Montana (Mont. 1985), 707 P.2d 1105, 42 St.Rep. 1578. This Court has recently interpreted the Pulse case as requiring a bank to act as a financial advisor in some capacity, other than that common in the usual arms-length debtor/creditor relationship, in addition to requiring a long history of dealings with the bank, to establish a fiduciary relationship. Simmons v. Jenkins (Mont. 1988), 750 P.2d 1067, 1070, 45 St.Rep. 328, 331. Evidence introduced at trial attested to the long standing business relationship between the Company and the Bank. However, no evidence was introduced indicating that the Bank had acted as a financial advisor to the Company in a manner other than that common in the usual arms-length dehtor/creditor relationship. Rather, the Company relied upon its own management team to make its financial decisions. An independent firm of attorneys routinely advised and represented the Company. Attorneys Ragain and/or Everson. were present during the final negotiation meetings with the Bank; evidence of the long-standing friendship between Clark and the Bank president was insufficient to show that the Company relied upon the Bank as a financial advisor in such a manner as mentioned above. We therefore hold that the defendant failed to introduce any evidence showing that the parties had other than the arms-length debtor/creditor relationship which generally exists between a bank and its creditor. See Deist v. Wachholz (1984), ? 0 8 Mont. 307, ?16, 678 P.2d 188, 193. Consequently, the court erred in submitting a fiduciary relationship instruction to the jurv. VI. SUFFICIENCY OF THE EVIDENCE TO SUPPORT THE VERDICT Appellant initially raised the issue of whether the court erred in instructing the jury about the implied covenant of good faith and fair dealing and constructive fraud. The discussion in appellant's brief, however, centered wholly on whether the evidence supported the jury verdict on these two issues. We need not rule on the issue of whether the evidence supported the jury's verdict of breach of the implied covenant of good faith and constructive fraud before dismissing this case. Even if these claims were deemed to have merit, Clark would only be entitled to nominal damages. We have held that Clark is not entitled to a recovery under any of the damage theories presented (which included damages for lost profits, damaged reputation and emotional distress), and a party may not raise new issues on retrial. This Court will not grant a new trial to permit a party to obtain only such an award of nominal damages. Bogovich v. Scandrett ( 1 9 4 5 ) , 1-17 Mont. 341, 350, 158 P.2d 637, 641. We therefore reverse the judgment of the District Court, in accordance with the foreg the court to dismiss this case. We concur: fs, The ~ o n o r a m e 'Frank T.- Haswell, r e t i r e d Chief ~ u s t i c e , s i t t i n g f o r M r . J u s t i c e ,Tohn C . Sheehy | February 21, 1989 |
e7590e51-ba8d-4c03-b069-6dbd31abaa3d | ANTONICK v JONES | N/A | 88-260 | Montana | Montana Supreme Court | NO. 88-260 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 ROBERT 11. ANTONICK, Plaintiff and Appellant, -vs- GORDON R. JONES, Defendant and Respondent. APP EAL FROM: District Court of the First Judicial District, In and for the County of Lewis & Clark, The Honorable Thomas Honzel, Judge presidinff. COUNSEL OF RECORD: For Appellant: Patrick F. Hooks; Hooks & Rudewitz, Townsend, Montana For Respondent: Cordell Johnson; Gough, Shanahan, Johnson & Waterman, Helena, Montana Submitted: Jan. 19, 1989 l-- Decided. February 28, 1989 c c 0 L-3 ~ i l e G yLz - -- 2 ; ; , . 4 . -1 : : < I : : ' 3 . r: - Clerk g! co : i b ,& CIJ 17 -1 L Mr. Justice Fred J. Weber delivered the Opinion of the Court. This is an appeal by plaintiff and appellant, Robert L. Antonick from a judgment in favor of defendant and respon- dent, Gordon R. Jones. The District Court for the First Judicial District, Lewis and Clark County, found that no partnership existed between Mr. Antonick and Mr. Jones. The court ruled in favor of Mr. Jones on his counterclaim alleg- ing that Mr. Antonick must repay certain amounts of money which he had drawn from the checking account, and also money which he accepted from patients after the relationship was terminated. The District Court also found that Mr. Antonick did not fraudulently issue four "paid in full" receipts to certain patients. From this judgment Mr. Antonick appeals, and Mr. Jones cross-appeals on the issue of fraud. We affirm. The issues are: 1. Did the District Court err in concluding that no partnership existed? 2. Did the District Court err in concluding that Mr. Jones is entitled to reimbursement by Mr. Antonick? 3. Did the District Court err in concluding that Mr. Antonick did not fraudulently issue paid in full receipts? Mr. Antonick and Mr. Jones are physical therapists who have known each other since high school. In 1959 Mr. Antonick began the physical therapy department at St. Peter's Hospital in Helena, Montana. Mr. Jones began his practice in Butte, Montana, at Butte Community Hospital. In the early 1960's Mr. Jones moved to Helena and the two men formed a partnership for a short time. Mr. Antonick operated the physical therapy department at St. Peter's Hospital and Mr. Jones operated the physical therapy depart- ment at St. John's Hospital. They paid. expenses, then split the profits. This partnership was amicably terminated after less than a year. Beginning in 1973 Mr. Jones operated the Shodair Hospi- tal Physical Therapy Department (Shodair) in Helena, Montana, on a contract basis. He received 65% of the total business billed out of that department. Shodair furnished the space, most of the equipment, and office personnel. Mr. Antonick had been operating St. Peter's physical therapy department. In 1973 he bought a ranch near Townsend, Montana, and moved to Townsend. He commuted to Helena and worked at St. Peter's until 1980, when he quit, intending to retire. However, in less than a year he began doing part- time physical therapy work in Townsend. In the spring of 1982, Mr. Antonick began working for P l r . Jones at Shodair on a contract basis. Initially, he worked for Mr. Jones three afternoons a week, but increased this to five afternoons a week while maintaining a morning physical therapy practice in Townsend. Mr. Antonick was paid a base amount calculated at six patients times the charge for a patient visit. The amount he received varied from $2860 to $3660 per month. In the fall of 1983, Shodair decided to change the operation of its physical therapy department so that it would no longer be a department of Shodair. Mr. Jones separated from Shodair and began merely leasing space and equipment from Shodair. Mr. Jones signed a lease with Shodair, and became responsible for billing his own patients. On November 1, 1983, the arrangement essentially became a private prac- tice. Mr. Antonick continued to work at this office under the new arrangement. Following the change on November 1, 1983, Mr. Jones opened a new checking account for the business. None of the funds from his former checking account were transferred to the new account. While opening the account, a bank employee, Linda Opie, filled out a signature card. The card was for "Physical Therapy and Rehabilitative Services," and the square for partnership was marked with an "X". Linda Opie testified that she normally fills out a card based on infor- mation given by the customer, but she did not remember what occurred in this case. Mr. Jones testified that he did not tell Linda Opie to mark the partnership square. Ms. Opie testified that in opening an account for a partnership, a partnership form would be filled out; however, none was found in the bank files. Four people were authorized to sign checks on this new account: Mr. Jones and his wife, and Mr. Antonick and his wife. Mr. Jones also established a line of credit with the bank up to $25,000, upon which $17,000 was actually drawn. Mr. Jones was personally liable on this loan. Mr. Jones dealt with the bank president, Dan Johnson, who testified that he dealt with Mr. ,Tones as an individual and that the bank regarded the transaction as one with a sole proprietor- ship. Mr. Johnson testified that a partnership financial statement and financial statements from each partner would be required to transact business with a partnership. The physical therapy practice was renamed "Physical Therapy and Rehabilitative Services" (PTRS) and all of the paperwork, including checks, forms, office stamps, and sta- tionary bore the title "Physical Therapy and Rehahilitati~re Services, Gordon B. Jones, L.P.T. - Robert J . Antonick, L.P.T." During the entire time that the two men worked together, from 1982 through February 1986, partnership income tax returns were never prepared nor filed. No partnership income was ever reported on a K-1 form. Mr. Antonick filed an indi~rfdual income tax return for these years, including a Schedule C, which is for a sole proprietor. Mr. Jones issued to Mr. Antonick a form 1099 for each of the years 1982, 1983, 1984, and 1985. Form 1099 is issued to an independent con- tractor, showing the amounts paid in compensation on a con- tract basis. Workers' compensation insurance carried on PTRS employ- ees listed both Mr. Jones and Mr. Antonick as insureds. In 1985 Mr. Antonick filled out a professional liability insur- ance policy. He listed himself as self-employed, and did not mark the space for partnership. When Mr. Jones filled out a similar application he described himself as a self-employed individual. He listed four physiotherapists as employees and one physiotherapist as an independent contractor. Mr. Jones testified that he orally agreed to pay Mr. Antonick $3000 per month under the new arrangement. Mr. Antonick drew a total of $40,000 from PTRS in 1984. For the year of 1985, Mr. Antonick's compensation was $59,350. Mr. Jones testified that at the beginning of 1985, when Mr. Antonick requested a raise to $60,000 per year, he simply agreed. Mr. Antonick denies this conversation. In each of the years 1984 and 1985, the amounts drawn from month to month varied. In August, 1985, Mr. Jones incorporated, becoming a professional corporation. At that point he offered Mr. Antonick an employment agreement. Later, he had a similar agreement prepared by an attorney. In regard to these offers Mr. Jones testified that he wanted Mr. Antonick to join the practice full-time. However, Mr. Antonick did not sign either of these agreements. In January 1986, Mr. Antonick wrote four checks to himself for a total amount of $21,259. He filled out the check stubs calling the payments "contract payment," "bonus," and "honus." One check stub was left blank. When Mr. Jones learned of these checks in early February, the parties termi- nated their relationship. I Did the District Court err in concluding that no part- nership existed? The standard of review on appeal is whether the district court findings are clearly erroneous. Rule 52(a), M.R.Civ.P. "If there is substantial credible evidence to support the findings, those findings are not clearly erroneous." Parker v. Elder (1988), 758 P.2d 292, 293, 45 St.Rep. 1305, 1307. We have examined the record and conclude that the determina- tions of the District Court are supported by substantial credible evidence. We therefore affirm each District Court ruling. A partnership is defined in S 35-10-201(1), MCA, as "an association of two or more persons to carry on as co-owners a business for profit." This Court previously stated the elements necessary to establish a partnership in Render T?. Render (1965), 144 Mont. 470, 480, 397 P.2d 957, 962: To establish joint venture or a partnership, it is necessary to determine the intent of the parties; such business relationships arise only when the parties intend to associate themselves as such. There must be some contribution by each co-adventurer or partner of something promotive of the enterprise. There must be a joint proprietary interest and a right of mutual control over the subject matter of the enterprise or over the prop- erty engaged therein, and there must be an agree- ment to share the profits. The intention of the parties has to be clearly manifested, and must be ascertained from all the facts and circumstances and the actions and conduct of the parties. (Cita- tions omitted.) These elements were recently reiterated in In the Matter of the Estate of Wilbur Edward Smith (1988), 749 P.2d 512, 515, 45 St.Rep. 93, 98. In that case we also stated: The burden of establishing a partnership is upon the person claiming a partnership exists. First National Bank of Twin Bridges v. Sant (1973), 161 Mont. 376, 386, 506 P.2d 835, 841. No person can become a partner without the consent of all partners. Section 35-10-401(7), MCA; Pulliam v. Pulliam (Mont. 1987), 733 P.2d 1299, 1300, 44 St.Rep. 483, 485. The existence of a partnership depends upon the intention of the parties. Intent must be ascertained from all the facts, circum- stances, actions and conduct of the parties. Gaspar v. Buckingham (1944), 116 Mont. 236, 246, 153 P.2d 892, 896. The initial test of whether a partnership exists is the intent of the parties. Bender, 397 P.2d at 962. This inher- ently implies a mutual agreement or meeting of the minds. In this case there was never a written partnership agreement, and there was conflicting testimony on whether there was ever an oral agreement to form a partnership. Mr. Antonick testi- fied that on or about November 1, 1983, they agreed to form a partnership wherein Mr. Antonick would be paid $36,000 a year and Mr. Jones would be paid $72,000 per year, and that after all expenses were paid, whatever profit remained would he split 50/50. The difference in salaries reflected the fact that Mr. Antonick worked half days. Mr. Jones acknowledges that Mr. Antonick made this proposal hut denies that he agreed to it. It is the task of the trial court to resolve any conflicts Fn testimony. Render, 397 P.2d at 962. In this case there is substantial credible evidence to support a finding that there was no mutual agreement to form a partnership. However, this does not end the inquiry since a court may find that a partnership was formed, although both parties deny that they intended such a relationship. In Truck Ins. Exchange v. Industrial Indemnity Co. (19841, 212 Mont. 297, 300, 688 P.2d 1243, 1244-45, this Court found that a partner- ship existed, stating: "[ilf the facts bring the arrangement within the definition of a partnership, the parties cannot escape liability incident to that relationship merely by saying that no such thing exists." Simons v. Northern Pac, Ry. Co. (1933), 94 Mont. 355, 369, 22 P.2d 609, 614. If the intended action of the parties creates a partnership in fact, what the parties call their arrangement or intend their arrangement to be is irrelevant. Thus we must examine the intended action of the parties to determine if the elements of the Bender test are fulfilled. Mr. Antonick contends that a partnership came into existence on November 1, 1983. He bases this contention on several changes which occurred at that time. A new bank account was opened on which Mr. Antonick was authorized to sign. The bank card designated the account as a partnership. The name of the business was changed to "Physical Therapy and Rehabilitative Services, Gordon R . Jones, L.P.T. - Robert L. Antonick, L.P.T. " All paperwork generated by the business bore this designation. Mr. Antonick contends that the element of mutual control was met, citing various instances in which he participated in hiring discussions and other business decisions. Mr. Antonick specifically calls attention to his participation in discussions involving a business records system, and his unilateral decision to purchase an office computer. He refers to his involvement in having a therapy pool modifj ed.. He points out that he helped Mr. Jones search for new office space when expansion was being considered. There is, however, conflicting evidence on the issue of joint proprietary interest and right of mutual control. The evidence demonstrated that Shodair dealt exclusively with Mr. Jones. Mr. Jones alone negotiated and signed the lease for the facility. Mr. Jones was purchasing equipment from Shodair. Additionally, First Bank dealt exclusively with Mr. Jones. The bank president, Dan Johnson, testified that he dealt with and loaned money to Mr. Jones as a sole proprie- tor. He testified that if he had considered the business a partnership he would have required a financial statement from each partner and from the partnership. Testimony from PTRS employees revealed that without exception they considered Mr. Jones to be the owner of the business. There was evidence presented indicating that Mr. Antonick did not have mutual control over hiring and firing decisions. While Mr. Antonick did participate in some discussions and decisions regarding the physical therapy practice, the District Court found that the evidence as a whole did not establish a mutual proprietary interest or a right of mutual. control. We conclude that. there is substantial. credible evidence to support this finding. Mr. Antonick also contends that while he did not make a monetary contribution to the partnership, he did contribute something "promotive of the enterprise" in that he contrib- uted his reputation and experience to the enterprise. While we note that a contribution to the enterprise need not he monetary, the District Court properly considered this factor and found that this element of the Render test was not satisfied. Mr. Antonick contends that the compensation he received is prima facie evidence that a partnership existed. He bases this contention on § 35-10-202(4), MCA: The receipt by a person of a share of the profits of a business is prima facie evidence that such person is a partner in the business, but no such inference shall be drawn if such profits were received in payment: (b) as wages of an employee or rent to a landlord; Mr. Antonick contends first, that there was a sharing of profits, and second, that unless these monies were paid as "wages of an employee," that it is prima facie evidence of a partnership. Mr. Antonick contends that payments made to an independent contractor cannot fall under this exception. Because of our following discussion on the significance of sharing of profits, we do not find it necessary to rule on this contention. The evidence is conflicting and close as to whether there actually was a sharing of profits. Mr. Jones testified that Mr. Antonick was entitled to a certain sum each month and that he had never agreed to split the profits with Mr. Antonick. However, Julie Curd, a Helena CPA, testified that in her opinion Mr. Antonick and Mr. Jones were sharing the profits of the business. Ms. Curd based this opinion on her study of the financial records of PTRS in which she summa- rized and compared Mr. Antonick's monthly draws and the monthly bank balances. She found that Mr. Antonick's draws were made in relation to the balance in the bank account. There was also testimony by Mr. Jones that the normal prac- tice at month's end was to pay all employees and part-time therapists before either Mr. Jones or Mr. Antonick took their draws. At the end of 1984, Mr. Antonick showed Mr. Jones the amounts each had drawn for the year and proposed settling their accounts according to the proposed salaries of $36,000 and $72,000, and a splitting of the remaining profits. Mr. Jones did not agree with Mr. Antonick's proposal or figures, but said he would get back to him. Mr. Jones testified that he did not get back to him. The amounts of each party's draws cannot be reconciled with either party's theory. In 1984 Mr. Antonick drew a total of $40,000 from the business account, and Mr. Jones took $98,648. In 1985 their total amounts drawn for the year were $59,350 and $156,643, respectively. The record indi- cates no attempt to pay Mr. Jones twice the amount paid to Mr. Antonick. There were irregular monthly payments to Mr. Antonick, not identical in amount, and a year-end total not consistent with the claimed agreement. However, Mr. Antonick's total annual draws for each year are not exactly the $36,000 or $60,000 which he should have received as an independent contractor. The monthly payments and year-end totals do not clearly reveal any definite compensation arrangement. The record also indicates that the way in which Mr. Antonick was compensated did not change after November 1, 1983. it is undisputed that Mr. Antonick was compensated as an independent contractor prior to November 1, 1983. That history is relevant to a determination of whether he was an independent contractor. The evidence on whether the parties were actually shar- ing profits is therefore conflicting, and the trial court did not make a specific finding on this issue. However, even if the parties were sharing profits, this j s not. conclusive evidence of a partnership relationship. Prima facie evidence only means that a party has met an initial burd.en; that evidence would not be dispositive of the partnership issue. Resolution of the present case required a review of all the facts and circumstances surrounding the disputed relation- ship. The District Court considered detailed and comprehen- sive evidence on all aspects of the business arrangement. The ultimate finding was that Mr. Antonick failed to estab- lish by a preponderance of the evidence that a partnership existed. We hold that there was substantial credible evidence to support the District Court's finding that no partnership was created. Mr. Antonick concedes that if this Court affirms the finding that no partnership existed, then he is not entitled to keep the money which he received from patients after the relationship was terminated. We affirm the Dis- trict Court on these two judgments. I1 Did the District Court err in concluding that Mr. Jones is entitled to reimbursement by Mr. Antonick? Mr. Antonick contends that the District Court erred in finding that Mr. Jones is entitled to reimbursement from Mr. Antonick in the sum of $16,259. Mr. Antonick wrote four checks to himself in January 1985, totaling $21,259. The court found that as an independent contractor, Mr. Antonick was entitled to keep $5000 of that sum for services rendered in January. Because we agree with the lower court's finding that no partnership existed, and because there is substantial credible evidence to support the finding that Mr. Antonick was to be paid $5000 per month, we affirm the District Court's judgment on this issue. 111 Did the District Court err in concluding that Mr. Antonick did not fraudulently issue paid in full receipts? In May, 1986, Mr. Antonick wrote "paid in full" on the billing statements of four patients whom he had treated while he was associated with Mr. Jones. Mr. Jones contends that Mr. Antonick did this fraudulently and d.eceitfully, citing VanEttinger v. Pappin (1978), 180 Mont. 1, 588 P.2d 988 and S 27-1-712, MCA. Both Mr. Jones and Mr. Antonick testified that at times each had done "pro bono" work for certain patients. Mr. Antonick testified that when he wrote "paid in full" on the statements, he received no money. He testified that he had a prior arrangement with one patient to accept insurance only in payment. He testified that the other patients were unable to pay their accounts and that it had always been his prac- tice to "absorb" bills which patients were unable to pay. The District Court found that the giving of these re- ceipts failed to fulfill the elements of fraud. Substantial evidence supports that finding. F J e hold that the District Court did not err in this determination. Affirmed. Chief Justice Qde. Justices | February 28, 1989 |
19220c80-fc36-4290-a660-228776f81df7 | BOTTRELL v AMERICAN BANK | N/A | 87-209 | Montana | Montana Supreme Court | NO. 87-209 IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 DONALD G. BOTTRELL, EDWARD T. REEVE, and NORTHERN LINE LAYERS, INC., Plaintiffs and Respondents, -vs- AMERICAN BANK, f / k / a WESTERN STATE BANK, a Montana banking corporation, JIM BEATON and MARTY DERRIG, Defendants and Appellants. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable William J. Speare, Judge presiding. COUNSEL OF RECORD: For Appellant: Anderson, Edwards & Molloy; Donald W. Molloy argued for American Bank, Billings, Montana L. Randall Bishop argued for American Bank; Jarussi & Bishop, Billings, Montana Anderson, Brown, Gerbase, Cebull, Fulton, Harmon & Ross; Richard Cebull argued for Beaton & Derrig, as cross-appellants, Billings, Montana For Respondent: C . . y ern don, Harper & Munro,Gregory S. Ilunro argued, Billinqs James Edmiston arqued for Northern Line, Rillinqs, --I - J ., J . * , , Montana 8 I - - - , -" i Submitted: February 3 , 1989 . " L , Dgcided: April 4, 1989 F i l e d ^ : - ' ; I ( Y 1 1 . - ., . . Mr. Justice John C. Sheehy delivered the Opinion of the Court. Northern Line Layers, Inc. was awarded a judgment of $500,000.00 compensatory damages and $100,000.00 punitive damages against American Bank, based on a jury verdict, in the District Court, Thirteenth Judicial District, Yellowstone County, on January 8, 1987, "together with costs incurred by plaintiffs to be determined." In the same cause, on the same dav, the District Court granted a separate judqment in favor of American Bank against Donald G. Bottrell, i . n the sum of $22,126.31, and provided that American Bank (Bank) should recover attorneys fees and costs which "shall be determined at a hearing to be set bv the court." In the same cause, on the same day, the District Court granted judgment in favor of American Bank, and against Northern Line Layers, Inc. (NLL) , in the sum of $239,629.43, with attorneys fees and costs, which "shall be determined at a hearing to be set by the court." On January 29, 1987, a further separate judgment was entered by the District Court, based unon its grant of a motion for directed verdict at the close of the plainti-ffs' evidence, in favor of the defendants, Jim Reaton and Marty Derrig, and dismissing the "plaintiff's [sic] complaint against" those defendants with prejudice. Further, during the course of the jury trial, the District Court granted a directed verdict which dismissed the claims of the individual plaintiffs, Don Rottrell and Ed Reeve, for damages against all of the defendants. American Rank appeals to this Court from the judgment entered aqainst it in favor of NLL. The latter, in turn, cross-appeals from the judgment entered against it in favor of American Bank. All of the plaintiffs cross-appeal from the judgment dismissing their claims against the individual bank officers, Jim Beaton and Marty Derrig. Donald G. Bottrell and Edward T. Reeve cross-appeal from the judgment dismissing their individual claims against American Bank. In sorting out this welter of judgments, dismissals, appeals and cross-appeals, we have come to the following conclusions: The judgment for plaintiff of $500,000.00 in compensatory damages is modified to $312,000.00 under the conditions hereafter described. The award of punitive damages of $100,000.00 is affirmed. Such judgments, however, are subject to a setoff in the total amount of $239,629.43. Costs incurred by NLL in the District Court and on this appeal shall be recoverable. American Bank is not entitled to costs or attorneys fees. Judgment interest is recoverable only by NLL, and only on the net amount after application of the setoff as aforesaid. The judgment in favor of American Bank and. against Donald G. Bottrell in the sum of $22,126.31 is affirmed. The judgment of dismi.ssa1 of the claims of Donald G. Bottrell and Edward T. Reeve against American Bank is affirmed. The judgment dismissing the individuals Jim Beaton and Marty Derrig is affirmed. We recite the facts from the viewpoint of the plaintiffs, since the jury determined in their favor. In reviewing a jurv verdict, our function is to determine whether the substantial credible evidence in the record supports the jury verdict. We must view the evidence in the light most favorable to the prevailing party below, and if the record presents conflicting evidence which has been resolved by the jury, this Court is precluded from disturbing the verdict. Anaconda Company v. Whittaker (1980), 188 Mont. 66, 610 P.2d 1177. When the evidence is in conflict, we can only review testimony for the purpose of determining whether there is any substantial evidence in the record to support the verdict of the jury, and we must accept evidence there found as true, unless the evidence is so inherently impossible or improbable as not to be entitled to belief. Strong v. Williams (1969), 154 Mont. 65, 460 P.2d 90. Weinberg v; Farmers State Rank (Mont. 1988), 752 P.2d 719, 45 St.Rep. 391. Donald G. Bottrell and Edward T. Reeve are stockholders and managing operators of NLL, a corporation resident in Billings which specialized in burying telephone lines through contracts with Mountain Bell and other utilities. The corporation began banking with American Bank on July 31, 1981. Bottrell and Reeve made operating loans from the Bank through its officers Jim Beaton and Marty Derrig. The first loan was for $16,000.00, to be repaid in 30 days upon collection of existing accounts receivable. Small loans were made available throughout 1981 for the purpose of paying operating expenses. In each instance, the Bank was told that repayment was coming from the collection of accounts receivable. In January, 1982, a larger loan was made in the amount of $50,000.00. The Bank memoranda indicated that "this firm will now be doing all of its banking business with us." On February 8, 1982, a $10,000.00 loan was made again to be paid from accounts receivable. In May, a larger loan of $70,000.00 was made for operating capital to be repaid within 60 days. On July 16, 1982, this $70,000.00 loan was extended by an increase and renewal. Loan comments in the Bank records of August 20, 1982 and September 8, 1982 stated the Bank's understand.ing that NLL's short term loans were being paid from the collection of accounts receivable and noted that the company continued "to perform as agreed. " In 1983, there were additional short-term operating loans. Note No. 14077 was signed on February 15, 1983 for the financing of certain heavy equipment. This note required that the corporation make monthly payments of $3,500.00. As of June 6, 1983, the balance due on note No. 14077 was $71,770.49. On April 18, 1983 new loan No. 14296 in the amount of $70,008.00 was made for operating capital. This loan was likewise to be repaid from the collection of accounts receivable. On June 6, 1983, however, new loan No. 14463 in the amount of $140,000.00 was taken out for the purpose of paying further operating expenses. At the time this loan was made, part of the proceeds paid off Toan No. 14296 in the amount of $70,008.00. As of June 6, 1983, NLL had six outstanding loans in American Bank, identified as follows: Origination Loan Number Amount Date In the years subsequent to July 31, 1981, NLL had over 25 loans in American Bank which had never been delinquent nor was any payment missed. Generally, the loans were for purchase of equipment or operating capital. Don Bottrell and Edward T. Reeve procured each of the loans by simply walking in and asking. They waited while the loans were processed, generally for a period of 20 minutes or half an hour, and received the proceeds the same day as requested. They provided whatever information the bankers required with respect to the loans as they were made. There was no requirement that NLL had to borrow exclusi~reLy or solely at American Rank. NLL had other sources of financing. They horrowed money for equipment purchases from Cen-Dak Leasing Company, GMAC Credit Corporation, Case Credit Corporation, and Norwest Bank. In addition, the company borrowed short-term or start-up money from one Lyle Tisor, an officer of Tri-State Equipment Company of Billings, Montana. Tisor had loaned Don Rottrell money to purchase real estate lots in 1980 and subsequently had made four other loans to NLL for operating capital on a short-term 30 to 90 day basis. N L J ; borrowed from Tisor for short-term money either for start-up jobs in the spring or to carry NLL over while waiting for checks to come in. The company used Tisor's help to avoid borrowing short-term money under their established line of credit at the Bank. NLL borrowed from Tisor by executing a promissory note and receiving a check from Tisor drawn on his account at Norwest Bank which NLL would then deposit in their main checking account at American Bank. They paid back Tisor with checks drawn on their American Bank account. NLL borrowed $45,000.00 from Tisor in 1982. The company paid back Tisor with checks drawn on its account at American Bank. One of the checks was for $30,000.00. In the beginning of the construction season of 1983, NLL horrowed $75,000.00 in short-term funds from Tisor. The company repaid Tisor with two American Bank checks, one for $55,000.00 and the second for $20,718.06. This latter check had the notation "for short-term loan" in the memo section of the check. The Rank produced daily, for its own use, a "Large Item" report. Nevertheless, Reaton testified that the Bank officers would not he aware j f a 9;55,000.00 check came through the Bank. On July 11, 1983, NLL borrowed $65,000.00 from Tisor and executed a promissory note therefor. Of those proceeds, $61,000.00 was deposited in NLL's main checking account at the Bank and the other $4,000.00 was put into its two smaller expense accounts at American Bank. Each of the deposit slips had written upon them "Tisor loan." The $61,000.00 deposit was made to the main checking account on July 11, 1983. Before the deposit was made, the account had a balance of $5,300.51. In mid-July, NLL decided to return part of the $65,000.00 to Tisor since all of it was not needed. NLL issued a check for Tisor in the amount of $26,000.00 on July 14, 1983. It is this check that the Bank claims caused it to take its action on July 20, 1983, which is the principal issue of this lawsuit. On July 18, 1983, Bottrell and Reeve went to the Bank to discuss note No. 14463, for $140,000.00, which originated on June 6, 1983. The note was not due until October 4, 1983. Rottrell and Reeve were concerned that they might have problems repaying the entire note when it came due and wanted to make the bankers aware of their concerns at an early date. Bottrell and Reeve had personally guaranteed the $140,000.00 note with the Bank. They met with Derrig on July 18, 1983. They discussed work coming up for bid, the company's chances for picking up some of that work and how they were going to handle the note. Beaton was out of town but Derrig said he would set up a meeting with Beaton when he returned. On that day, Derrig offered to loan the company an additional $30,000.00, but Reeve informed Derrig that they did not need the cash at that time, but wanted to discuss the notes due in the fall. Derrig concluded the meeting by stating that he would call M I A when Beaton returned and set up a meeting. The meeting between the officers of the Bank and Reeve and Bottrell was set for July 20, 1983 at the Bank at 9:15 a.m. On July 19, however, Derrig telephoned Evelyn Hodgdon, a clerical worker at NLL, and informed her that she should gather titles for titled vehi-cles, serial numbers for non-titled equipment, and descriptions, for submission to the Small Business Administration. Evelyn Hodgdon collected all that information which Derrig told her was necessary and delivered the material to Derrig. At the meeting of July 20, 1983, at the Bank, Reaton discussed the steps which the Bank would take to address the NLL concerns about the note due in October. He outlined the loans on a blackboard. He indicated that a $12,000.00 indebtedness would be renewed when it came due in September, 1983, and also indicated the Bank would rewrite loan No. 14077 on which there was a principal balance due of $64,323.93 at that time. This was the note on which NLL was paying $3,500.00 a month. Beaton indicated that the Bank would rewrite this note to reduce the interest rate by 1 percent. The bankers indicated that NLL's debt should be placed in long-term rather than short-term financing. As to the $140,000.00 note, Beaton said Derrig would be looking at a Small Business Administration package or some alternative. There was no discussion in this morning meetinq about NLL's performance at the Bank or that it was unsatisfactory in any manner nor was there any discussion about other debts owed by NLL to other entities. At the end of the meeting, the bankers had Bottrell and Reeve sign a completed UCC-1 financing statement listing all of the titles and descriptions which Evelyn Hodgdon had provided the day before. In addition, the bankers had Bottrell and Reeve execute a new note on loan No. 14077 for $65,930.53. The interest rate on their new note was reduced by 1 percent. Bottrell and Reeve also signed an instrument which contained seven pages of security agreements covering equipment that had been unencumbered on that loan. This instrument was collateral for loan No. 14077, the $65,930.53 note. NLL had not requested this note to be rewritten. The meeting was adjourned and Bottrell and Reeve were told to come back to the Bank at 3:15 p.m. that afternoon. There was no further contact between the Bank and NT,L during July 20, 1983, until Bottrell and Reeve returned at 3:15 p.m., with additional documents and serial numbers that Derrig had requested. At the Bank, they were approached by Derrig who said that Beaton wanted to talk to them. Bottrell and Reeve went into Beaton1s office. Derrig was present. Beaton said, "We have a problem." He told Reeve and Bottrell that the Bank had set off $66,000.00 from NLL1s checking and savings accounts against the $140,000.00 loan which was not due until October 4, 1983. The bankers said they felt insecure and that NLL would have to "shore up" its debts. Beaton demanded that NLL either provide additional collateral or pay down the debt before the Bank would release the setoff money. At the time of the setoff at the Bank, NLL had jobs in progress at Hailey, Idaho, and Sidney, Montana. The Bank froze checks coming to NLL by demanding of Mountain Bell that its name be placed on all checks payable to NLL. Derrig contacted banks in Hailey, Idaho, and Sidney, Montana, and instructed them not to cash any payroll checks of NLIJ1s employees. Employees quit immediately. The payroll checks bounced. Moreover, NLL was unable to pay suppliers to whom it owed legitimate debts and eventually NLL was sued 18 times by suppliers resulting in total iudgments of over $46,000.00. On July 22, 1983, the Bank refused the demand of a Lawyer for NLL to release the funds. A lawsuit was commenced soon thereafter. The Bank further reversed a federal tax deposit which Evelyn Hodgdon had deposited at American Bank on the morning of July 20, 1983 for $3,695.99. This deposit is required of employers who withhold income taxes and social security payments from employees. American Bank was the depository bank acting as trustee for the Internal Revenue Service where deposits for this item were made by NLL. The deposit was made by a check drawn on NLL's main checking account at American Bank. The check was paid by the Bank on July 20, 1983. On July 26, 1983, well after the "midnight deadline," the Rank reversed the check which had paid the federal tax deposit. The amount of the check, $3,695.99 was applied by the Bank to NLLts note No. 14463. Eventually, the Bank reversed this whole procedure when the Internal Revenue Service contacted the Bank. Reeve and Bottrell had to inject personal cash, and borrow other monies in order to meet payrolls, and complete contracts then existing. They could not bid on other jobs because they had lost their source of financing. We will refer to other facts where needed further in this Opinion. I The first and principal issue raised by the American Bank, is whether, when it exercises a right of setoff existing in the statute and in written agreements with its borrower, it is then subject to tort liability for so doing. American Bank contended at the trial that the $140,000.00 note of June 6, 1983, was a demand note, and that within the instrument there was language to the effect that the borrower waived demand for payment. The bank officers testified that because of the language in the note, they could declare the demand note immediately due without notice to the borrower, that the debt then matured, and that the Bank had a right to setoff against the matured indebtedness such deposits of NLL as it had in its possession at the time. No point is made by the Bank on appeal that the instrument is a demand note, but it contends it had the right of setoff by common law, and by statute, as well as under the language of instruments executed along with the note. NLL answers that the note was not in fact a demand note; that the right of setoff may only apply to matured debts; and that under the terms of the note, the entire amount of the unpaid principal and accrued interest could be declared immediately due and payable, without notice, only upon default of the borrower. The District Court instructed the jury that the $140,000.00 note was not a demand note. The court also instructed the jury that "when money is deposited in a bank, the bank may apply such funds to the satisfaction of any debt upon which payment is due from the depositor." A copy of the note is attached to this Opinion for the convenience of the reader. In summary, we hold that the note in question was not a demand note; that the Bank's right of setoff applies only to a mature debt or one that is due and payable; and that in this case, the Bank could accelerate payment or performance by the borrower under the note only if the borrower was in default, under the terms of the note. Let us first address the problem of whether the note for $140,000.00 was a demand note. It will be seen that under the column "due date" are inserted the figures "10-4-83" and that in the body of the note, after the square in which the double x has been inserted, appears the language, " [il f no demand is made, Borrower shall pay 120 days after the date of this note." Those terms take this note out of the category of a demand note. Section 30-3-108, MCA, provides: Payable on demand. Instruments payable on demand include those payable at sight or on presentation and those in which no time for payment is stated. Here, the instrument states a time for payment. The legal effect of a note which contains language as here, "upon demand, borrower promises to pay to bank or order . . . If no demand is made, Borrower shall pay 120 days after the date of this note," is that an actual demand is necessary to mature the promissory note prior to the date set. In Peterson v. Valley National Bank of Phoenix (Ariz. 1967), 432 P.2d 446, 451, the Arizona Supreme Court discussed demand notes: . . . As a general rule, notes payable on demand are due and payable immediately upon execution, and no further demand is necessary to mature them. But an exception to this rule applies when the terms of the instrument disclose an intention by the parties that the notes would not become due and payable immediately after the time of delivery. (Citing authority.) In such circumstances, an actual demand is necessary to mature the promissory notes. The terms of the notes in the present case provided one interest rate for the date of execution until maturity, and a higher interest rate after maturity. This discloses a clear intention by the parties that the notes not be due and payable immediately. To hold otherwise would be inconsistent with the express terms of the note, and render these provisions meaningless. In the note here before us, 15 percent per annum is the rate of interest if paid when due and 22 percent per annum for amounts paid after the due date. We turn now to the Rank's right of setoff. By statute, a bank has a general lien, dependent on possession, upon all property in its hands belonging to a customer, for the balance due to it from such customer in the course of business. Section 71-3-1502, MCA. The right of setoff does not arise simply from the banker1 s lien however. As pointed out in 10 Am.Jur.2d Banks 5 666, funds on general deposit in the bank are the property of the bank, for which the bank is a debtor, and the bank cannot have a lien on its own property. Rather, the right of a bank to set off general deposits is more accurately a right which rests upon and is co-extensive with the common law right to set off mutual demands between mutual debtors and creditors. 10 Arn.Jur.2d § 636, supra. In Security State Bank v. First National Bank (1927), 78 Mont. 389, 392, 254 P. 417, 418, this Court said: It is well settled that when money is deposited in a bank to the credit of one of its debtors, without an express agreement to the contrary or direction to apply to a specific purpose, the bank may apply the deposit to the satisfaction of a past - due indebtedness (citing authority), and this rule applies, although the deposit consists of proceeds from the sale of mortgaged property, if no direction is given as to the disposition to be made of the funds, and the bank has no knowledge of their origin or of another's claim thereto. (Citing authority.) (Emphasis added.) It will be observed that in Security State Bank, supra, the right of setoff was limited to the satisfaction of "past due indebtedness." It seems generally agreed that the indebtedness must be past due or due and payable in order for the right of setoff to apply. In Crocker-Citizens National Bank v. Control Metals Corp. (8th Cir. 1977), 566 F.2d 631, 637, the Court said: . . . However, a bank may only exercise this equitable right of setoff in response to and to the extent of a matured debt owed by a depositor to the bank. See 9 Cal.Jur.3dI Banking, §$ 125, 127. It is undisputed in this case that the Bank applied the setoff of $66,000.00 to the note for $140,000.00 before any demand for payment of the note was made upon NLL. In that situation, the note was not due and payable nor had the indebtedness matured. The Bank further contended on trial, however, that it applied the deposits as a setoff because it felt itself insecure on the probability that the note might not be paid when due. It claims the right to act in good faith under the provisions of 5 30-1-208, MCA: Option to accelerate at will. A term providing that one party or his successor in interest may accelerate performance or require collateral or additional collateral "at will" or "when he deems himself insecure" or in words of similar import shall be construed to mean that he shall have power to do so only if he in good faith believes that the prospect of payment or performance is impaired. The burden of establishing lack of good faith is on the party against whom the power has been exercised. This statute, however, is of no aid to American Rank. Under the specific terms of this note, the indebtedness may be accelerated by the Bank only "upon default." It is uncontradicted that in this case NLL had always paid their notes on time, had always performed according to their agreements with respect to payments, and that with respect to the $140,000.00 note, no default had occurred. NLL was not in default with respect to any other instrument or agreement with the Rank so as to trigger a default under the terms of the note. Much of the briefs of the parties in this case relate to whether the Bank exercised good faith after deeming itself insecure, but under the terms of the note in question, no acceleration was proper unless NLL was actually in default. There is another facet, however, to the Bank's claim of right of setoff. The note of June 6, 1983, for $140,000.00 was not secured by collateral nor by a security agreement which specifically applied to that note. American Bank insisted during trial and on appeal that a security agreement executed on February 15, 1983, in connection with a separate note for $71,770.49 was applicable to the $140,000.00 note and gave the Bank a right of setoff. The security agreement of February 15, 1983, provided that "indebtedness" meant all amounts then or thereafter owed by the borrower to the Bank whether evidenced by a promissory note or not. American Bank contends that the definition of indebtedness, which applies to amounts "hereafter" owed by the borrower to the Bank, makes that security agreement applicable to the $140,000.00 note. There are at least three reasons why the February 15, 1983 security agreement may not be construed to grant the right of setoff in this case: (1) In any event, the security agreement is limited in its effect to the collateral named in the security agreement. (2) Again, the $140,000.00 note had not matured at the time of the setoff. (3) The security agreement in any event cannot be construed to convert the $140,000.00 note payable at a time certain unless previous demand is made into a past due obligation. With regard to the February 15, 1983 security agreement, we examine its terms more fully. The collateral listed in the agreement is "all inventory, equipment, and accounts receivable now owned or hereafter acquired." The definition of collateral in the agreement extends the described collat.era1 to accessions, parts or additions thereto, replacements thereof and all proceeds from the sale or disposition of the collateral property. The definition of collateral does not include bank deposits of the borrower, unless the bank deposits represented proceeds from the sale or disposition of the collateral listed. The security agreement, in stating the rights of the Rank upon default provided that upon default, or if the Bank reasonably deemed itself insecure, it could exercise any one or more of several rights in addition to remedies available at law, in equity or otherwise. All of those rights, however, deal with the resort of the Bank to its collateral, as listed in the security agreement. Under the terms of the agreement of February 15, 1983, therefore, even if the definition of indebtedness covered the $140,000.00 note, and even if the Bank felt itself insecure with respect to the $140,000.00 note, its rights under the security agreement applied only to the collateral listed under the security agreement. This leads us to the second reason above stated why the security agreement does not grant a right of setoff for the reason that the $140,000.00 indebtedness had not matured. The security agreement provided that the rights of the Bank were cumulative and that the Bank could exercise any other rights or remedies of a secured creditor under the Uniform Commercial Code, at law, in equity or otherwise. Thus, the security agreement did not increase in any way the rights of the Bank beyond what the law already provided. It is clear that the right of setoff does not accrue unless the debt to the Bank had matured. The basis of the right of setoff must be clearly understood because it applies not only to the relations between a bank and its depositors, but to any relationship where two parties are mutually debtor and creditor to each other. When a bank accepts an unrestricted deposit of money, title to the money passes to the hank and the relationship between the bank and the depositor is that of debtor-creditor. If the depositor at the same time owes a debt to the bank which is due, the right of setoff arises, under the common law and under the law merchant, because of the mutuality of the debts. Both the bank and the depositor are mutually debtors and creditors toward each other. Such mutuality must exist for the right of setoff to apply. This was explained in Spratt v. Security Bank of Buffalo, Wyo. (Wyo. 1982), 654 P.2d 130, 135-136: We next reach appellant's claim that the hank's set-off should fail for lack of mutuality between appellee and Gail Fanning. Before going further, we need to discuss a bank's right to setoff against the general deposits in its possession. The bank's right of set-off to secure the payment of its depositor's indebtedness is a part of the law merchant and well established in commercial transactions. (Citing authority.) For a bank to establish a right to be setoff, three conditions must be met: "the fund to be set-off must be the property of the debtor, the fund must be deposited without restrictions, and the existing indebtedness must be due and owing. " (Citing authority. ) The bank's right to setoff does not arise until the time the depositor's indebtedness to the bank has matured. (Citing authority. ) Addressing appellant's point, for a set-off to be permissible, there must be mutuality of obligation between the debtor and his creditor, as well as between the debt and the fund on deposit. (Citing authority.) Debts to be used as set-offs must be due to and from the same persons in the same capacity. (Citing authority.) Under the evidence in this case, at no point did the Bank make demand for the full payment of the $140,000.00 note, before the setoff or afterward. At the afternoon meeting of July 20, 1983, the demand of the Bank was not for full payment of the $140,000.00 note, but for additional collateral, or to "shore up" the collateral. The third reason stated above why the security agreement does not aid the Bank in this case is that the security aqreement cannot amend the terms of the later note. The language in the security agreement, that the Bank, if it reasonably deemed "itself insecure" could exercise its rights under the security agreement may not be utilized to vary the terms of the note of the $140,000.00 note itself. It is on its face a promissory note payable at a time certain, unless a previous demand is made, and under the language of the note the Bank had no power to declare the entire unpaid principal and accrued interest believed due and payable without notice except "upon default." No default existed with respect to any of the notes due and payable to the Bank when it attempted its "setoff." The next issue raised by American Bank is that it should not have been subjected to tort liability for doing that which is permitted by law. As the foregoing discussion indicates, the premise of the issue is without basis, since the setoff in this case is not permitted by law. In any event, we now pass on to determine whether the issue of a breach of the implied covenant of good faith and fair dealing existed here. In Nicholson v. United Pacific Insurance Company (Mont. 1985), 710 P.2d 1342, 42 St.Rep. 1822, we set forth: The Montana cases discussed above focus on the action of the breaching party in the relationship to find a breach of the implied covenant, not just the existence of a breach of contract. . . . But whether performing or breaching, each party has a justifiable expectation that the other will act as a reasonable person. Neal v. Farmers Ins. Exchange (Cal. 1978), 582 P.2d 980. The nature and extent of an implied covenant of good faith and fair dealing is measured in a particular contract by the justifiable expectations of the parties. Where one party acts arbitrarily, capriciously or unreasonably, that conduct exceeds the justifiable expectations of the second party. The second party then should be compensated for damages resulting from the other's culpable conduct. American Bank makes no objection to the instructions given by the court to the jury in this case. The District Court adopted the theory that the promissory note and the security agreements allowed the Bank to declare the $140,000.00 note immediately due and payable without notice and that it had a right to setoff if the Bank reasonably believed it was insecure. The District Court obviously was relying upon the provisions of 5 30-1-208, MCA, supra. The other instructions to the jury fairly presented the implied covenant of good faith issue. The court instructed that the apparent danger to the prospect of payment or performance by NLL or the existence of good reason to believe such danger existed was sufficient to show that the Bank acted reasonably and in good faith; and that the nature and extent of an implied covenant of good faith and fair dealing was measured in a particular contract by the justifiable expectations of the parties; that the obligation of good faith and fair dealing was mutual so that if the defendant breached the implied covenant, the jury must also determine whether the plaintiff had breached the implied covenant of good faith in dealing with the Bank. In First National Bank In Libby v. Twombly (1984), 213 Mont. 66, 689 P.2d 1226, the bank accelerated the payment due on a promissory note without notice to the horrower and set off $2,865.00 in Twombly's checking account against the indebtedness. The issue of good faith for the set off was submitted to the jury under 5 30-1-208, MCA, as to whether the bank in good faith believed that the prospect of payment or performance by the borrower was impaired. This Court approved the decision of the jury that the obligation of good faith was breached and remanded the case for determination of the jury question whether the borrower was entitled to punitive damages. In Noonan v. First Rank Butte (Mont. 1987), 740 ~ . 2 d 631, 635, 44 St.Rep. 1124, we said (referring to McGregor v. Momrner (Mont. 1986), 714 P.2d 536, 43 St.Rep. 206): We held in McGregor that breach of the UCC standard of honesty in fact is not enough to constitute a tort. The minimal requirement for the tortious breach of the covenant of good faith and fair dealing is action by the defendant which was arbitrary, capricious or unreasonable, and exceeded plaintiffs' justifiable expectation. McGregor, 714 P.2d at 543. The instruction given in this case inadequately defined the tort. We hold, as in McGregor, that the giving of this instruction is reversible error. Here the court adequately instructed the jury on the implied covenant of good faith based on Noonan and McGregor, and on a theory of liability more favorable to the Bank than the law applying to setoff would allow. The jury found on the facts according to the instructions. The jury also found that the Bank in this case was guilty of negligent misrepresentation to its borrower. American Bank contends that there is no substantial evidence to support the charge of negligent misrepresentation. On this subject, the District Court instructed the jury as follows: Plaintiff claims that defendant negligently misrepresented certain facts. In order to establish this claim, plaintiff has the burden of proving: (1) that defendant supplied false information for the guidance of plaintiff in his business transaction; (2) that plaintiff justifiably relied upon such information; and (3) that defendant failed to exercise reasonable care or competence in obtaining or communicating such information. Reasonable care is that degree of care which a reasonable and prudent person in the position of defendant would ordinarily exercise in the circumstances. Plaintiff is not entitled to damages for any representation by defendant, however, unless it was the cause of damage to plaintiff. That instruction is drawn from our decision in Brown v. Merrill Lynch, Pierce, Fenner, Etc. (1982), 197 Mont. 1, 12, 640 P.2d 453, 458. The instruction is based on the Restatement (Second) of Torts S 552 (1977) as follows: One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by the justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information. Relying on language of Falls Sand and Gravel Co. v. Western Concrete, Inc. (D. Mont. 1967) 270 F-S~PP. 4951 502; and in Bushnell v. Cook (Mont. 1986), 718 P.2d 665, 668, 43 St.Rep. 825, 828, American Bank contends that in Montana an action for negligent misrepresentation is in fact an action for fraud. In this case, after the court decided that it would instruct the jury as above set forth, plaintiffs withdrew their instructions relating to constructive fraud. The jury found, in answer to a special interrogatory, that American Bank was not guilty of actual fraud. American Bank therefore contends that absent either constructive fraud or actual fraud, an action for negligent misrepresentation does not lie. This misconception arises from some apparent conflict in our statements in other cases. In Brown, supra, this Court correctly said that " [a] tort action in fraud may either be based on an intentional, fraudulent and deceitful misrepresentation or it may be based on a negligent misrepresentation." 640 P.2d at 458. In the federal case of Falls Sand and Gravel - Co., supra, the District Court concluded that an action for negligent misrepresentation would be recognized in Montana as an action for fraud. 207 F.Supp. at 502. In Bushnell v. Cook, supra, where the court did not instruct on negligent misrepresentation, hut did instruct on constructive fraud, this author stated that in Montana an action for negligent misrepresentation is an action for fraud and so the jury was adequately instructed. 718 P.2d at 668. By statute, constructive fraud consists of: (1) any breach of duty which, without an actually fraudulent intent, gains an advantage to the person at fault by misleading another to his prejudice; or, (2) any act or omission as the law especially declares to be fraudulent, without respect to actual fraud. Section 28-2-406, MCA. Thus, a negligent misrepresentation may constitute a breach of duty, without an actual fraudulent intent, if it gains an advantage to the person at fault by misleading another to his prejudice. Generally, an act or omission of a fiduciary or one in confidential relationship is necessary to constitute constructive fraud. Yet, in Roil Energy Corporation v. Drilcon, Inc. (Mont. 1988), 749 P.2d 1048, 45 St.Rep. 114, this Court held that a fiduciary relationship was not needed for a finding of constructive fraud under the special circumstances of that case. Thus, a negligent representation, depending on the circumstances, can give rise to a case of constructive fraud under 5 28-2-406. Yet, under Restatement (Second) of Torts S 552, supra, a negligent misrepresentation may be insufficient to constitute actual fraud or constructive fraud, but nevertheless give rise to negligence liability under 5 27-1-701, MCA, through the want of ordinary care of the defendant in managing his property or person. In the latter case, the test of liability is the exercise of reasonable care and is subject to comparative negligence. The late Justice Cardozo explained the basis of liability by posing the example: Think of the fields of liability for constructive fraud and for misrepresentation as concentric circles with a common center and differing radii, where the liability in each theory is based on misrepresented facts. The breach of a legal duty will create liability in constructive fraud; but a negligent misrepresentation may create liability even without a constructive fraud; the first, because the liability is imposed by law, whereas the liability For a negligent breach is based on lack of ordinary care and comparative negligence may be considered. See - Ultramares Corp. v . Touche (M.Y. 1931), 174 N.E. 441. Negligent misrepresentation is co-extensive with constructive fraud, based on the same misrepresentation, where there is a breach of legal duty; if there is no breach of legal duty, but the misrepresentation is negligence under Restatement (Second) of Torts 5 552, negligence is the basis of the liability. In this case, therefore, the District Court acted properly in instructing the jury on negligent misrepresentation, according to Brown v. Merrill Lynch, - supra. It was not necessary that the negligent misrepresentation constitute constructive fraud, nor actual fraud . There is sufficient evidence to support the jury finding of negligent misrepresentation by American Bank. Its officers represented that it would assist NLL in obtaining long-term financing for the $140,000.00 indebtedness in the form of an SBA loan. At the same time, the Bank took steps to procure from NLL additional security interests on its other loans while promising to assist NLL to obtain a SBA loan. It then accomplished the setoff without any notice to NLL . NLL relied upon the Bank's representation of assistance, and provided all of its inventory and equipment and accounts receivable as security for the other loans, which had the result of preventing NLL from seeking an alternate source of financing. A jury determined that the actions of the Bank were not actually fraudulent, but constituted negligent misrepresentation. IV American Bank attacks both the compensatory and punitive damage awards on the ground that the evidence was insufficient. American Bank's attack on the compensatory damages is that they were speculative and without foundation, relying on Agrilease, Inc. v. Gray (1977), 173 Mont. 151, 566 P.2d 1114; and Walton v. City of Bozeman (1978), 179 Mont. 351, 588 P.2d 518; as well as Stensvad v. Miners & Merchants Bank (1982), 196 Mont. 193, 640 P.2d 1303, cert. denied, 459 U.S. 831. American Bank's attack is based on its contention that there was no evidence of lost profits. NLL did not rely completely upon lost profits. As a result of American Bank's exercise of setoff, NLL was left without any operating cash or a line of credit. It lost all. of its employees, being unable even to pay its accountant to produce annual financial statements. As a result, the company was sued many times, resulting in judgments against NLL totaling $46,000.00. NLL had a net worth, if the company assets were sold at auction, of $194,429.00 at the time of the setoff. If the company assets were sold piece by piece, its value would increase by $117,000.00, to approximately $312,000.00. The goodwill of the company as an existing business was destroyed and the company, in order to exist, had to enter into joint venture agreements with general contractors, wherein they shared any profit, and the general contractor paid wages and salaries necessary. Testimony indicated that NLL's business and credit reputation were damaged substantially. NLL had been grossing over $1 million in gross income a year until the set off. Tort damages are allowable whether the damages "could have been anticipated" or not. Section 27-1-317, MCA. When the fact of damages is established in the evidence, reliance is given to the trier of fact to determine the amount of the damages. Crystal Springs Trout Co. v. First State :Bank (Mont. 1987), 732 P.2d 819, 44 St.Rep. 90. In Laas v. Montana Highwav Commission (1971), 157 Mont. 130, 483 P.2d 699, damages were allowed for lost profits even though the plaintiff could not prove with certainty which contracts he would have received and what amounts. When there is strong evidence of the fact of damage, a defendant is not allowed to escape liability because the amount of damages cannot be proved with precision. Jarussi v. Board of Trustees of School District No. 28 (1983), 204 Mont. 131, 664 P.2d 316; Johnson v. Murray (1982), 201 Mont. 495, 656 P.2d 170. This Court, however, finds considerable difficulty with respect to the compensatory damages. It is fairly certain from the evidence that after the Rank acted to cut off NLL from any further financing, the company was then forced to look to other sources in order to stay in business. The company undertook to perform construction jobs for Bonneville Construction Company of Las Vegas, Nevada, under an arrangement where Bonneville would pay NLL1s payroll, provide its payroll taxes, liability insurance, and money for its operating expenses. Thereafter, Bonneville computed the profit on the jobs performed by NLL, withheld a "retainage" and divided the profit from the jobs with NLL. Although it appears from the testimony of the president of Bonneville that NLL had received disbursements of $150,000.00 on one job, and the president was unable to state the amount of gross payment on another job, the record is incomplete as to the exact amount of profits lost by NLL because it was forced to undertake jobs financed by Bonneville. In like manner, NLL entered into joint ventures with Clyde and Dale Morris whereby the Morrises provided the financing, Dale worked for NLL and the profits on any job were split between them. Again, however, the record is hare of the amount of profits lost by NLL under this arrangement. We are faced with the situation where, although there is strong evidence of the fact of damage, in order to establish the amount of lost profits reasonable to be ascribed as damages, the court would have to resort to speculation. The positive figure that we can extract from the record is that the value of the company was lost by reason of the cutoff of its financing, and the figure most favorable to the plaintiffs is $312,000.00. Under the circumstances, based upon the record, it is necessary for us to require that the compensatory damages be reduced to the sum of $312,000.00. As so modified, the compensatory damages are affirmed, subject to the condition of remittitur hereafter set forth. With respect to punitive damages, the jury awarded $50,000.00 for breach of the implied covenant of good faith and fair deal-ing, and $50,000.00 for the negligent misrepresentation. There is no complaint here that the jury was not properly instructed either on the subject of compensatory damages or punitive damages. Punitive damages are especially within the province of the jury. Weinberg v. Farmers State Bank of Worden (Mont. 1988), 752 P.2d 719, 45 St.Rep. 391 states: . . . The jury was likewise instructed as to what it must find with respect to punitive damages. The Bank does not contend that those instructions were inadequate and indeed they seem to contain the necessary elements to properly instruct the jury on this item. The jury having been properly instructed, once again, we are left to the familiar appellate rules which are recited above respecting the sufficiency of the evidence. The jury found a breach of an implied covenant, and it found that the breach was oppressive, malicious and arbitrary. Once having made that determination, the jury determines the amount of damages. The actions of the Bank following the setoff are a sufficient basis to sustain punitive damages. The payroll checks of NLL were stopped when the Bank officer contacted banks in Hailey, Idaho, and Sidney, Montana, instructing them that payroll checks would not be honored at American Bank. The Bank attempted to get its name placed on any checks for payments coming to NLL from Mountain Bell. It improperly reversed the federal tax deposit which represented the income taxes and Social Security withheld from the incomes of the employees. Reeve and Bottrell were forced to inject personal cash, and borrow other monies in order to meet the payrolls and complete the contracts then existing. The effect of the setoff was to stop payment on the Tisor check in the sum of $26,000.00, which, but for the setoff, would properly have been paid by the Bank. The punitive damages are affirmed. v NLL and Donald G. Bottrell and Edward T. Reeve, as individuals, cross-appealed from the dismissal by the District Court of Jim Beaton and Marty Derrig, the Bank officers in this case. In their cross-appeal, the plaintiffs contend that the wrongful acts of the Bank in connection with the setoff and subsequent actions were those of Beaton and Derrig, the officers of the Bank, and as such they incurred a personal liability for their torts, in addition to or concurrent with the liability of American Bank. They rely on Little v. Grizzly Manufacturing (1981), 195 Mont. 419, 636 P.2d 839; Crystal Springs Trout Co. v. First State Bank (Mont. 1987), 732 P.2d 819, 44 St.Rep. 90; and Poulson v. Treasure State Industries (1981), - Mont . , 626 P.2d 822. The officers, Beaton and Derrig rely on our holding in Phillips v. Montana Education Association (1980) , 187 Mont. 419, 610 P.2d 154. On the evidence of this case, we determine that the actions of officers Beaton and Derrig were not on behalf of themselves as individuals or for their own pecuniary benefit, nor were their actions against the best interests of the corporation for which they were employed. They acted within the scope of their employment, and in furtherance of corporate interest. As such, thev are entitled to the protection of the corporate shield from personal liability. Where 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 liah1.e. (Citations omitted. ) Phillips, 187 Mont. at 425, 610 P.2d at 158. The tests prescribed in Phillips are not met here and, accordingly, we affirm the dismissal of the plaintiffs ' action against the officers of the Bank individually. VI NLL cross-appeals from the judgment entered against it in favor of American Bank in the sum of $239,629.43. It is not clear from the cross-appeal whether Donald G. Bottrell is also appealing from the separate judgment against him in the sum of $22,126.31 in favor of American Bank. Since, however, the same principles apply to each of those judgments, we will discuss them together. The basis of the cross-appeal is that the actions of American Bank in this cause made it impossible for NLL and Donald G. Bottrell to pay the Bank the amounts due on promissory notes executed by NLL, and separately by Donald G. Bottrell. The cross-appellants rely on 5 28-1-1302, MCA, to the effect that if the performance of an obligation is prevented by the creditor, the debtor is entitled to all the benefits which he would have obtained if it had been performed by both parties. The District Court entered a directed verdict in favor of the Bank on the unpaid notes, holding that 5 28-1-1302, did not apply. The position of the cross-appellants here is that the promise of NLL and Donald G. Bottrell to make payment on the notes was dependent upon the Bank's continuing good faith to follow the terms of the notes and not improperly to accelerate the payments or set off the bank accounts of MLL, thereby making it impossible for both NLL and Bottrell to perform. Under S 28-1-1301 (1) , MCA, performance is excused by one party when it is prevented or delayed by the act of the creditor. They cite Western National Bank of Love11 T ? . Moncur (Wvo. 1981), 624 P.2d 765. We determine that inability to pay promissory notes, even though argument could be made that the inability is caused by the obligees1 actions, is not in itself a sufficient defense here to the promissory notes. The District Court determined that inability to pay is the common problem of any maker of a promissory note who defaults and such inability to pay is not in itself a sufficient defense to the obligations due on the promissory note. We agree. The cross-appeal against the judgment in favor of American Bank in the sum of $239,629.43 is denied, and the amount affirmed. The same rule would apply to the judqment of $22,126.31 against Donald G. Bottrell. VII Donald G. Bottrell and Edward Reeve cross-appeal from the District Court's grant of a directed verdict to dismise their individual claims against American Bank. Bottrell and Reeve were officers and shareholders of NLL. The question involved is whether they may individually recover for their damages, including claims of emotional distress. Their claims are based upon the fact that they were required to sign personal guarantees of the corporate indebtedness, and for that reason, are subject to the same judgment as has been assessed against NLL, for the corporate notes issued to American Bank. Thts issue is controlled by our holding in Moats Trucking Co., Inc. v. Gallatin Dairies, Inc. (Mont. 1988) , ?53 P.2d 883, 45 St.Rep. 772. In that case, we said: In Malcolm v. Stondall Land Co. (1955), 129 Mont. 142, 145, 284 P.2d 258, 260, this Court stated the general rule regarding a stockholder's personal riqht to sue in the corporation's cause of action: ". . . As a general rule stockholders may not sue upon a cause of action belonging to their corporation whether they are in their own names or in the name of the corporation itself." In Malcolm, this Court addressed for the first time the issue of whether individual shareholders who control all the stock of the corporation may disregard the corporate entity and sue as individuals on the corporation's cause of action. We held that such individual shareholders do not have the right to pursue an action on their own behalf when the cause of action accrues to the corporation. Malcolm, 129 Mont. at 146, 284 P.2d at 260. Here the cause of action rightfully belongs to the corporation and not to its shareholders. Accordingly, we affirm the dismissal of the individual claims of Rottrell and Reeve against American Bank. VIII Having determined all of the issues in this cause, we now turn our attention to the forms of judgment that were entered in the case and the resulting difficulties that 'have ensued. As we noted, the District Court ordered a judgment in favor of NLL and against American Rank, in the sum of $500,000.00 compensatory damages and $100,000.00 punitive damages, based on a jury verdict. In a separate judgment, based on the corporate notes, the District Court granted judgment in favor of American Bank and against NLL in the sum of $239,629.43. In that case, the court delayed the determination of attorneys fees and costs for a later hearing to be set by the court. When these matters came to us on appeal, the District Court file included an order of the District Court staying execution on the judgment against American Bank because it had filed a supersedeas bond in the sum of $600,000.00. In the District Court, NLL also moved the court for a stay of proceedings of the judgment against it on the notes, asking that it be excused from posting a supersedeas bond. The District Court denied that motion. NLL then came to this Court, asking us to reverse the District Court's order regarding the supersedeas bond and for a stay of execution. On July 28, 1987, we denied plaintiffs' motion and eventually NLL filed a supersedeas bond. We determine that the grant of two separate j~zdgments arising out of the same general issue was an improper procedure in this case. A proper procedure is described as Stensvad v. Miners and Merchants Bank of Roundup (1982), 196 Mont. 193, 640 P.2d 1303. There, we said: Appeal is by Miners and Merchants Bank from a judgment rendered against it on Stensvad's complaint to the District Court, Fourteenth Judicial District, Musselshell County. The bank had counterclaimed against Stensvad on unpaid promissory notes. The District Court found that the bank had breached an agreement to finance Stensvad's corporations and after that breach had converted or appropriated his property, resulting in damages to Stensvad of $1,631,047, plus lost profits in the sum of $511,695. The court granted a set-off of $1,750,234, as of January 31, 1979, by reason of the indebtedness of the plaintiff to the bank. The court's net judgment of $392,508 against the bank was subsequently reduced nunc pro tunc by deducting $117,904 on June 23, 1980. The resulting judgment against the bank is $274,604. The same situation as occurred in Stensvad should have occurred here. NLL brought an action against the Rank alleging several torts. The Rank counterclaimed for notes due and owing from NLL against the Bank. In that situation, but one judgment shoul-d result. Where a setoff or counterclaim is pleaded, it becomes a part of a single controversy between the parties, requiring only one verdict and one judgment according to the facts. The general rule is that where an established setoff for counterclaim is less than plaintiff's demand, plaintiff has judgment for the residue only; if it equals plaintiff's claim, the judgment must be for defendant; in case it exceeds what is claimed and established by a plaintiff , defendant has judgment for the excess. But where a setoff or counterclaim is used defensively only, a judgment cannot be recovered against plaintiff for any excess over plaintiff's claim. 20 Arn.Jur.2d Counterclaim, Recoupment, Etc. 5 157. In Travelers Express, Inc. v. Acosta (Fl.App.3d 1981), 397 So.2d 733, it was held that if the main claim and a counterclaim are tried separately, the disposition of the claim which is earlier decided of the two remains interlocutory until the final disposition of the other claim. The final disposition of both the main claim and the counterclaim should be entered in a single judgment. In the case at bar, where directed verdict was granted in favor of the Bank on its notes, that action of the District Court was interlocutory, and should not have been entered in a separate judgment untFl a final disposition of both the main claim and the counterclaim in a single judgment. We recognized that rule in E.C.A. Environmental Management v. Toenyes (1984), 208 Mont. 336, 345, 679 P.2d 213, 217-18, where we said: No one factor should be considered in determining the prevailing party for the purpose of attorney fees. The party that is awarded a money judgment in a lawsuit is not necessarily the successful or prevailing party. However, this Court agrees with those jurisdictions that have found the award of money to be an important item to consider when deciding who, in fact, did prevail. (Citing authority.) Here, MMI brought suit to recover sums due it on a note usurious on its face. The usury penalty assessed MMI resulted not only in a denial of recovery, but an adverse award. The net judgment was in favor of defendants. The party that survives an action involving a counterclaim, setoff, refund or penalty, with a net judgment should be generally considered the successful or prevailing party. (Citing authority.) On the facts presented and viewing the action on the note in its entirety, the defendants were properly found to be the prevailing party. It was pointed out in E.C.A. Environmental Management, supra, 679 P.2d at 217, that the provisions of 5 28-3-704, MCA, make the contractual right to attorney fees reciprocal. There it is provided that in the event that the party having a contractual right to attorneys fees brings an action upon the contract or obligation, the other parties are deemed to have the same right for attorneys fees and "the prevailing party in any such action, whether by virtue of the express contractual right or by virtue of this section shall be entitled to recover attorneys fees from the losing party or parties. " In First National Rank of Libby v. Twombly, supra, 689 P.2d at 1230, we reversed an award of attorney fees because the bank was not the prevailing party. In that case, the jury had awarded compensatory damages in an amount in excess of the bank's claim for the balance due on the note, and accrued interest. That same situation obtains here. Accordingly, we order that the judgment for compensatory damages in favor of NLL and against American Bank be modified to the sum of $312,000.00. NLL is given 30 days from the date of this judgment in which to file in the District Court its written acceptance of the compensatory judgment as so modified. If the modification is not so accepted, the award of compensatory damages shall be deemed reversed for a new trial on the issue of compensatory damages. For the purpose of this remittitur, the time provisions of Rule 34, M.R.App.P., (Petitions For Rehearing) are postponed for 30 days as to any party. We further direct on remand that the Bank's judgment be set off against the plaintiffs' judgment for compensatory and punitive damages and the net amount be entered as the final judgment in this case. No award of attorneys fees shall be granted to either party but NLL shall recover its other costs. Interest shall be awarded only on the net judgment, since if judgment were properly entered in this case, the Bank's judgment would have been satisfied through set off against the judgment of NLL. Otherwise, we affirm the separate judgment in favor of American Bank against Donald G. Bottrell in the sum of $22,126.31. We further affirm the judgments dismissing from this cause the individual defendants, Jim Reaton and Marty Derrig, and the individual plaintiffs, Donald G. Bottrell an We Concur: A Chief Justice COMMERCIAL NOTE Single Advance Borrower: N o r t h e r n ~ i n e Layers, Inc. Bank: Western State Bank P.O. 30643 P.O. Box 50400 Billings, MT 59107 . . ,Collateral ' Code Officer Number Billings, klT 59105 CaIi Code € I Officer's Initials !a PlD - Upon demand, Borrower promises to pay to Bank, or order, m e h w d r e d 1 0 r t y thous- ------------------------------------------- DOLLARS ($ J 4 Q J X K M O O ), together with interest on the unpaid principalbdance outstanding from time to time at the rate set out below. Interest will accrue on the outstanding unpaid principal balance for each day that any amount is outstanding and will continue to accrue until this note is paid in full. Interest will be at the rate of: . - Principal Amount 140,000.00 . . percent per annum. Account Number A rate of - point(s) over the prime rate, adjusted , based upon the prime rate quoted by That prime rate currently is percent per annum, and the rate on ihis note currently is percent per annum. Disbursement Date 6-6-83 Loan Number 14463 -. - .. - .. - Borrower will pay interest: Monthly 0 Quarterly B At Maturity - - - ' Due Date 10-4-83 lIZd If no demand is made, Borrower shall pay120 days after the date o f this note. If no demand is made, Borrower will pay under the following schedule: The interest rate shall not exceed the maximum rate permitted by applicable law. If Borrower does not pay as agreed, or if Bor- rower or any guarantor of this note breaches any other agreement with the Bank, Bonower wiP be in default. Upon default. the Bank may declare the entire unpaid principal and accrued interest immediately due, without notice, and Borrower will then pay that amount. Upon default Bank also may increase the interest rate ---- points, and include any unpaid interest as o f the date o f acceleration or maturity as part of the sum due and subject to the higher rate. Any payment not paid when due shall bear interest at the rate of 22 percent per annum until paid. Borrower will pay Bank at the address named above, or such other place as Bank may designate in writing. The Bank may pay someone else to help collect this note if Borrower does not pay. Borrower a h will pay the Bank that amount. This includes the Bank's lawyers' fees whether or not there is a lawsuit, including any fees on appeal. Borrower also will pay any court costs. The Bank may delay enforcing any o f its rights under this note without losing them. If there is a lawsuit, Borrower agrees venue may be in the county in which Bank is located. Bonower waives presentment, demand for payment, protest, notice of dishonor, and notice of every other kind. The obligations of the Borrower are joint and several. Northern Line Layers, Inc. Date: June 6, 1983 B Y & - & x J . , Mr. Justice Fred J. Weber dissents as follows: I dissent because I conclude there was insufficient evidence to sustain the compensatory damage award. I also conclude that the Bank properly exercised its right of set-of f. A brief review of facts during the months of May, June and July, 1983 will help to demonstrate the financial prob- lems on the part of NIJTJ. Rank officers testified that it was their understanding that NLL was doing all of its business with the Bank. The Rank had no knowledge of the borrowings from Mr. Tisor. The evidence established that NIIL borrowed $75,000 from Mr. Tisor in May and another $65,000 on July 11, 1983. On June 6, 3983, the Rank ! . o a n e d NLL $140,000 as evidenced by the note discussed in the majority opinion. On June 7, NTAL used $55,000 of that loan to pay to Mr. Tisor. Bank officer Reeve testified that the Rank would not have made the Loan had it known that it would have been used to repay a debt. The understanding on the part of the Rank was that the $140,000 was to be used for the year's operatinq expenses. On July 18, 1983, Mr. Reeve and Mr. Rottrell of NLL came into the Rank to disclose their serious financial problems. The $140,000 note was due in October 1993. NT,L was concerned that they would not be able to pay that note when it came due. NLL was having significant problems in maintaining its business at a level comparable to earlier years. Rank presi- dent Beaton testified that the July 18 disclosures by Mr. Bottrell and Mr. Reeve caused a great deal of concern. His basic question was, what happened to the $140,000 which had been loaned to NI,IJ? This sum had. been expected to finance NJ,I, through 1983. Mr. Reaton's concern turned to alarm on Julv 20 when while reviewing the checks going through NLL he discovered a check to Mr. Tisor in the amount of $26,000, with a notation on the check that it was for a loan payment. It became apparent that NLL was borrowing from an unknown third party. This created a crisis which demanded immediate action on the part of Mr. Beaton as he had to either pay the Tisor check or refuse payment. The Bank could choose to allow a preferential payment to another creditor or to apply the money to its own indebtedness. At that point Mr. Beaton concluded that the Bank was insecure and exercised its right to a set-off. In the next two days NLL did not provide any satisfactory financial statements. In addition NI,L did not give any explanation of the Tisor loans. The evidence submitted at trial demonstrates that on July 20, 1983, NLL indeed was in serious financial straits. While the gross revenue figures for NLL showed the following: 1981 - $599,000, 1982 - $538,000, and 1983 - $1,288,000, the net income was limited to the following: 1981 - $7500, 1982 - $6475, and 1983 - a loss of over $18,000. Originally NLL had reported to the Bank a 1982 net income of $24,500. Although this figure was corrected to the $6475, the Bank was not given the corrected information. In addition, the compa- ny's own CPA and Mr. Howard, an accounting professor who analyzed NLL's financial. situation, testified that on July 20, 1983, NLL's asset to liability ratio indicated insolvency. The record contains substantial evidence demonstrating that NLL had significant problems in 1983 arising from its inability to obtain additional contracts, and that the like- lihood of making money from which the debts could be repaid was clearlv questionable. The overall picture reveals a company with serious financial problems which was attempting to maintain an appearance of "performing as agreed." Such picture also reveals that from the Bank's viewpoint, NLL was "borrowing from Peter (Rank) to pay Paul (Tisor) ." With this background information, let us now consider the compensatory damages award. The majority concluded that there was insufficient evidence to justify the judgment of $500,000 and reduced the same to $312,000. As I review the evidence, I conclude that the $312,000 award still clearly is speculative. Even if we assume that the Bank caused injury to NLL, NLL still failed to prove actual damages which re- sulted from the Rank's conduct. NLL did not even attempt to prove its lost profits. While it argued that its net worth had been reduced, it failed to prove the amount of such reduction in value. The record does not contain a basis to justify $312,000 of compensator~r damages. The compensatorv damage verdict was not broken down into its component parts so we do not know the elements which the jury included in that award. It appears that the basis for compensatory damages would he a reduction in the net value of the company, or the loss of profits. While there was testi- mony indicating that a liquidation value might be $312,000, no specific evidence was presented to demonstrate the extent of the reduction in net value as a result of the Bank's action. Damages may only be awarded for lost profits if NLL proved that there were lost profits and that such lost prof- its resulted from the Bank's action. The amount of lost profits must be established to a reasonable certainty using the best evidence available under the circumstances. In Stensvad v. Miners & Merchants Bank, Etc. (19821, 196 Mont. 193, 640 P.2d 1303, we stated: Damages f o r l o s s of p r o f i t s may be awarded i f not speculative. S i l f v a s t v. Asplund (1935) , 99 Mont. 152, 161, 4 2 P.2d 452, 456. The r u l e t h a t prohib- i t s speculative p r o f i t s does not apply t o uncer- t a i n t y a s t o t h e amount of such p r o f i t s but t o uncertainty o r speculation a s t o whether t h e l o s s of p r o f i t s i s t h e r e s u l t of t h e wrong and whether such p r o f i t would have been derived a t a l l . Tri-Tron I n t e r n . v. Velto (9th C i r . 1975), 525 F.2d 432, 437. Once l i a b i l i t y i s shown, t h a t i s t h e c e r t a i n t y t h a t t h e damages a r e caused by t h e breach, then l o s s of p r o f i t s on a reasonable b a s i s f o r computation and t h e b e s t evidence a v a i l a b l e under t h e circumstances w i l l support a reasonably c l o s e estimate of t h e l o s s by a D i s t r i c t Court. Smith v. Zepp (1977), 173 Mont. 358, 370, 567 P.2d 923, 930. B u t no damages a r e recoverable which a r e -- not c l e a r l y a s c e r t a i n a b l e -- both i n nature and o r i - -- gin, and only p r o f i t s which a r e reasonably c e r t a i n may - be awarded. Smith v. Fergus County (1934), 98 Mont. 377, 386, 39 P.2d 193, 195. (Emphasis supplied. ) While p r e c i s i o n i s not required i n calc.ulating damages, t h e evidence m u s t be s . u f f i c i e n t t o a f f o r d a reasonable b a s i s f o r determining t h e s p e c i f i c amo.unt awarded. Cremer v. Cremer Rodeo Land and Livestock Co. (1981), 181 Mont. 87, 627 P.2d 1199. In Cremer t h e l o s t p r o f i t award was sustained because s p e c i f i c evidence was presented. However, j.n Stensvad t h e award of l o s t p r o f i t s was spec.ulative s i n c e no p r o f i t record p r i o r t o t h e breach of c o n t r a c t was presented. This Court has r e c e n t l y vacated damage awards a s having no fo.undation i n t h e record. See Bolz v. Myers (1982), 200 Mont. 286, 651 P.2d 606. In Lenz Const. Co. v . Cameron (1984), 2 0 7 Mont. 506, 674 P.2d 1 1 0 1 , t h i s Court affirmed t h e d i s t r i c t c o . u r t f s d e n i a l of ,unproven damages. I n i t i a l l y , NLL m u s t show t h a t it was i n f a c t damaged by t h e Rank's a c t i o n s . There was testimony i n d i c a t i n g t h a t NLT, l o s t i t s competitive edge, and was unable t o bid on c e r t a i n Idaho p r o j e c t s a s a r e s u l t of losing i t s source of financing. NLL did establish that it was required to share profits under a joint venture-subcontract arrangement with Bonneville. While there is proof of the sharing of profits, there is no demonstration that this resulted in actual financial loss to NLL. Obviously the contract had been let to Bonneville and this was the means through which NLL participated in another company's project. The record would allow a conclusion that NLL would have been required to participate in such a joint venture arrangement even without regard to conduct on the part of the Bank. There was evidence presented indicating that other factors entered into the company's profitability in the years 1983 and following. Mr. Bottrell testified that the workload for 1983 prior to the set-off was lighter than usual. Addi- tionally, Mountain Bell had begun accepting bids from non-union bidders, making it difficult for NLL to bid compet- itively since it paid union wages. Mountain Bell had cut its RTIP contracts in half; thus there were less available pro- jects to bid on. In addition, all of the 1983 RTIP contracts had already been awarded by June of 1983. Even though we accept the evidence which demonstrates a breach of obligation on the part of the Bank, the amount of any damage arising from that breach was actually left to speculation. In addition to the Bonneville joint venture, there was testimony that NLL paid $130,500 to Morrises through the joint-venture arrangement, but there is nothinq to show how that was specifically related to the conduct of the Bank. Here NTJL had an accountant familiar with the books and records of the corporation who testified only as to years prior to the time in controversy. Had he been given the opportunity to do so, that accountant could have reviewed the books and records of NLL and submitted direct testimony of the net profits earned in 1983, 1984 and any other relevant year. Obviously NLL chose not to submit that kind of infor- mation. Instead it made loose references to gross profjt figures which were large in amount. Witnesses referred to the value of NI,L and argued for reimbursement for the damage done to NLI; which had been forced out of business. Clearl\r NLL chose not to offer specific evidence of lost profits and other actual losses. I can only assume that its choice arose from a prior conclusion that there were not sufficient losses to justify a substantial award. I therefore disagree with the $312,000 damage award. Such an award affirms the trial procedure used here. By focusing on the claimed outrageous conduct on the part of the Bank, NLL was successful in convincing the jury that a sig- nificant amount of compensatory damages was required. It seems likely that. something in the nature of a penalty or punitive aspect was included. Regardless of any sense of outrage on the part of the jury, the record fails to disclose adequate evidence of compensatory damage. I would vacate the compensatory damage award of $500,000 and remand for a new trial. I will now discuss the $140,000 demand note. The Dis- trict Court determined as a matter of law that the note was not a demand note, and the majority has reached the same conclusion. I do not agree. The language of the $140,000 note clearly states, "Upon demand, Borrower promises to pav to Bank." The instrument also states, "If no demand is made, Borrower shall pay 120 days after the date of this note." It also recites an actual due date of 10-4-83. These statements are consistent with each other. To state that payment is due in 120 days does not mean that the financial instit.ution co.uld not demand payment prior to the 120 days. The majority finds that the d.ue date takes this note out of the S 30-3-108, MCA, definition of a demand note. Howev- er, the statutory definition is not this narrow. In refer- ring to this same definition the Oregon Supreme Court in Seattle-First Nat. Rank. v. Schriber (0r.App. 19781, 580 P.2d 1012, 1013, stated, "The drafters obviouslv felt no need to state the obvious, that demand instruments also include instruments made expressly payable ' on demand' . " Initial!-v therefore the note in question meets the definition of a demand note. Courts have held as a matter of law that a note with similar language is a demand note. In Rogers v. Security Bank of Manchester (8th Cir. 1981), 658 F.2d 638, the borrow- er argued that a payment schedule contained in the note demonstrated an intent that the note was to be an installment obligation. The co.urt, however, ref.used to ignore the lan- guage of the note which stated "on demand and until demand be made." The co,urt conc1,uded that the payment sched,ule only clarified how the debt should be paid, assuminq no demand was made. Rogers, 658 F. 2d at 639. This is comparable to the present note which only requires palpent in 120 days assuming no demand has been previo.usly made. The Fifth Circ,uit also upheld a determination that a promissory note was a demand note in International City Bank and Trust Co. v. Morgan (5th Cir. 1982), 675 F.2d 666. In that case two notes contained 1ang.uage stating "payable on demand or two years after date." On each note a due date was typed in the margin. On a summary judgment motion, the District Co,urt ruled that the language, even coupled with the marginal d~le dates, was clear and unambiguous, constit,uting a demand note. The federal court upheld this determination, stating "the notes were payable on demand, and in the absence of a demand, two years after execution." Morgan, 675 F.2d at 668. Again this is directly comparable to the present note. Courts finding that inconsistent language brings a note out of demand status, often consider several factors which would tend to negate the demand nature. See Shaughnessy v. Mark Twain State Bank (Mo.App. 1986), 715 S.W.2d 944, (where a deed of trust securing the note listed eight events of default and a modification and extension of the note did not contain the word "demand") ; Reese v. First Missouri Bank & Trust Co. (Mo.App. 1984), 664 S.W.2d 530, (holding that a note which stated "upon demand", yet set out a specific repayment schedule, was not a demand note). At a minimum, the nature of the note was a jury issue. In Schriber, the Oregon Supreme Court remanded for a jury determination of whether the instrument was a demand note. In that case the note was payable "on demand, but no 1-ater than 180 days." As in the present case, a due date had been typed in. The court stated that this language "creates an ambiguity not susceptible to resolution as a matter of law." Schriber, 580 P.2d at 1013. The majority also calls attention to the language in the note which calls for an increase in the interest rate upon default. This however, does not take the note out of demand status, but may mean that an actual demand is necessary. Peterson, 432 P.2d at 451. See also Bank of Nevada v. United States (9th Cir. 1958), 251 F.2d 820, 827; 10 C.J.S. Rills and Notes 5 247 (1938). The majority goes on to state that no actual demand was made. I disagree with that conclusion. Initially, it should be emphasized that no demand is necessary to mature a demand note. "As a general r.ule, notes payable on demand are d.ue and payable immediately after execution, and no further demand is necessary to mature them." Peterson, 432 P.2d at 451. Further, the note signed by NLL specifically stated, "Borrower waives presentment, demand for payment, protest, notice of dishonor, and notice of every other kind." Thus under the wording of the note, demand was unnecessary. The majority disregards this express contractual provision. However, even if actual demand were necessary, the set-off itself constituted a demand. This was an affirmative action by the Bank sufficient to put NLL on notice that payment was due. It is difficult to conceive of a method which would more clearly convey to the borrower that payment of the indebtedness was being demanded. In Peterson, cited by the majority, a letter which called for complete 1iq.uida- tion of indebtedness was sufficient demand to put parties on notice that payment was due. In the present case, the Bank notified Mr. Bottrell and Mr. Reeves on July 20, 1 9 8 3 that its bank account in the amount of $66,900 had been set off against this note. In substance both Mr. Rottrell and Mr. Reeves were advised directly that their $66,000 had been taken by the Bank and applied on the note. This clearly conveyed a demand for payment to NLJJ. Both bankers testified that the note was due at that point. Mr. Reeves testified that had NLL been able to shore up the note with additional collateral, money, or a guarantor, the note would have been rewritten, b,ut in any event, note 14463 was due. I concl.ude that the set-of by the Bank was sufficient to const.it.ute a demand for payment. Even tho.ugh the majority does not accept my analysis of the demand nat.ure of the note or the making of a demand, I do not understan? how these become issues of law. At a minimum it appears that the q,uestions to be submitted to the jury sho.uld include whether or not this was a demand note and whether or not an act.ual demand had been made. The status of the note also governs the Bank's right of set-off. Since a demand note is a mat.ured obligation, the Bank can exercise its right of set-off at any time. Allied Sheet Metal Fab., Inc. v. Peoples National Bank ( w A . A ~ ~ . Furthermore, the majority states that even if the secu- rity agreement appl-ied to this note, the Rank must exhaust the collateral before exercising its right of set-off. While Montana has not addressed this issue, the majority rule was expressed in Allied Sheet Metal, as follows: Allied argues, however, that the foregoing general rule permitting a setoff in the case of a demand note does not apply .until after the bank exhausts its primary collateral security, and Peoples failed to do this. In this regard, Allied. relies primarily upon an early California case, McKean v. German-American Sav. Bank, 118 Cal. 334, 50 P. 656 (1897); however, McKean states a minority view, and we decline to follow it. The position adopted by the majority of modern jurisdictions is well expressed in Olsen v. Valley Nat'l Bank, 91 Ill.App.2d 365, 371, 234 N.E.2d 547, 550 (1968), as follows: A bank should not be deprived of its right of set-off simply because it has the foresight to obtain collateral in exchange for obligations owed to it. The majority rule, including Illinois, is founded on the rationale that a creditor is able to pursue any one of a number of remedies against a debtor until the debt is satisfied. The minority rule is based upon the rule or statute that there is but one action for the recoverv of a debt which is secured by collateral. 518 P.2d a t 739. Accordingly, I would conclude t h a t t h e Bank was not required t o exhaust t h e c o l l a t e r a l before setting-off t h e d e p o s i t . A s a demand instrument, t h e note was mature, and t h e borrowers waived a c t u a l demand. I would t h e r e f o r e con- clude t h a t t h e Bank properly and lawfully exercised i t s r i g h t of set-off a g a i n s t t h i s note. I would reverse t h e judgment and remand f o r new t r i a l . . M r . J , u s t i c e d i s s e n t . .son concurs fl t h e foregoing M r . Chief J u s t i c e J. A. Turnage concurs i n t h e foregoing d i s s e n t of M r . J u s t i c e Ideber. Mr. Justice John C. Sheehy, concurring specially: 26-1-201. Questions -- of law. Except as provided in Art. 11, section 7, [liable or slander] of the Montana Constitution, all questions of law, including the admissibility of testimony, the facts preliminarv to such admission, the construction of statutes and other writings,. and other rules of evidence, must be dezded by the court. (Emphasis added. ) 26-1-202. Questions of fact. - - Tf a trial is b 5 7 jury, all questions of fact other than those mentioned in-26-1-201 must be decided by the jury, and all evidence must be addressed to them, except as otherwise provided by law . . . There is a curious ambivalence in the dissent. The dissenters, dissatisfied with the finding of the majority that this case did not involve a demand note, now contend that whether it was a demand note is a question of fact for the jury. The "construction" or Legal effect of the writing as to a demand note here is a question of law, wholly to be determined by the court. The dissenters want a iury to decide this question of law. The recitation in the dissent of the alleged financial problems of NLL ignores the conflicting evidence, some of which is catalogued in the majority opinion, and particularly ignores the appellate rule that where there is conflictinq evidence in the record, the credibility and weight to be given the evidence is in the premise of the jury and not the Supreme Court, Anderson ~ 7 . Jacqueth (1983), 205 Mont. 493, 668 P.2d 1063, and that in examining the sufficiency of the evidence, the reviewer thereof will do so in a light most favorable to the prevailing party, presuming that the jury findings are correct. Gilmore v. Mulvihill 11940), 109 Mont. 601, 98 P.2d 335. The decision on questions of fact based on conflicting evidence is peculiarly within the province of the jury. The dissent wants questions of fact to be decided by the court. The very heart of NLL's case against the Bank is that the instrument in question was not a demand note. Recognizing this, the dissenters, giving no regard to the language of the note, the decisions of courts interpreting that exact language, and the provisions of the Uniform Commercial Code persist in calling the instrument here a demand note. It is clear that the instrument, a copy of which is affixed to the majority opinion, does not fit the definition of a demand instrument in S 30-3-108, MCA. It is equally clear that the instrument in question fits the definition of an instrument payable at a definite time: 30-3-109. Definite time. (1) An instrument is payable at a definite time if by its terms it is payable : (a) on or before a stated date or at a fixed - - period after a state-6: date; or (b) at a fixed period after sight; or (c) at a definite time subject to any - acceleration; or . . . (Emphasis added..) - The instrument at bar is clearly a note pavable at a definite time under the foregoing definition. It contains a stated date when it is due and that definite time is subject to an acceleration by the Bank, by making a demand. Typewritten into the note are the due date "10-4-83," and the figures "120," setting the days after the date of the note when it is payable if no demand is made. The dissenters claim that the note is ambiguous. Yet, if it were ambiguous, under the UCC, handwritten terms control typewritten and printed terms, and typewritten control printed. Section 30-3-118 (b) , MCA. The dissenters ignore the language contained in the note, "upon default, the bank may declare the entire unpaid principal and accrued interest immediately due, without notice, and borrower must then pay that amount." An acceleration clause is completely inconsistent with a demand instrument. Because this instrument provides that "if no demand is made, borrower shall pay - 120 days after the date of this note" by the very terms of the note, an actual demand is necessary to mature the promissory note. Peterson v. Valley National Bank of Phoenix (Ariz. 1967), 432 P.2d 446, 451. Additional authority construing such instruments as not to be demand notes may be found in Shaughnessy v. Mark Twain State Rank (Mo. App. 19861, 715 S.W.2d 944, 951-52. That case also cites Reese v. Fort Missouri Bank and Trust Company (Mo. App. 1983), 664 S.W.2d 530. The weakness of the dissenter's position as to the nature of this note is shown in its discussion of the language of the note which calls for an increase in interest upon default. Their cited cases indicate that such a provision means that an actual demand is necessary. It sounds paradoxical, but if an actual demand is necessary, the instrument is no longer a demand note. A cause of action against a maker of a demand instrument accrues upon its date, and no further demand is necessary. Section 30-3-122, MCA. I interpose this special concurrence because otherwise the assertions in the dissent might go unchallenged. .aiA~s ies!qde~6odAi Ala~alu 40 swal! 1 0 4 1 ! ayeilapun louue3 am leql qsns s! sa6ueqs 6ujyelu 40 asuadxa a q l / L W A m - I peal pinoqs 'T~oJ~ ---au!, lulunlos puosas J -L +m Ui L / L "ldtl .lo* 2 Y - J . h | April 4, 1989 |
4d2789df-ab77-4c36-8722-e19fb763122f | STATE v MCPHERSON | N/A | 88-450 | Montana | Montana Supreme Court | NO. 88-450 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 STATE OF MONTANA, Plaintiff and Respondent, -vs- JOHN WILLIAM McPHERSON, Defendant and Appellant. APPEA3 FROM: District Court of the Eighth Judicial District, In and for the County of Cascade, The Honorable Thomas McKittrick, Judge presiding. COUNSEL OF RECORD: For Appellant: Richard J. Carstensen, Billings, Montana For Respondent : Hon. Marc Racicot, Attorney General, Helena, Montana John Paulson, Asst. Atty. General, Helena Patrick L. Paul, County Attorney, Great Falls, Montana Tammy K. Pluhell, Deputy County Attorney, Great Falls Submitted on Briefs: Feb. 16, 1989 Decided: March 30, 1989 1 c 7 . z Ch5 C, . > . . 'Clerk Mr. Justice William E. Hunt, Sr., delivered the opinion of the Court. John PI. McPherson, the defendant, entered a plea of guilty under S 45-5-502(l), MCA, to four counts of sexual assault, pursuant to a plea agreement, in the District Court of the Eighth Judicial District, Cascade County. Finding no legal reason why judgment should not be pronounced against McPherson, the District Court sentenced him to the Montana State Prison for a term of 20 years, with five suspended, on each of the four counts, to be served concurrently. He was also designated a dangerous offender for the purposes of parole eligibility. McPherson appeals. We affirm. The following issues are raised on appeal: 1. Whether the District Court erred in denyinq McPherson's motion to continue the sentencing hearing. 2. Whether the District Court properlv designated McPherson as a dangerous offender. 3. Whether the sentence was predicated on substantially correct information. 4. Whether the District Court, in imposing sentence, properly considered two mental health evaluations which referred to the report of a lie detector test administered to McPherson. On February 5, 1988, defendant entered a plea of guilty to four counts of felony sexual assault, in violation of 5 45-5-502 (1) , MCA, pursuant to a plea agreement. Defendant admitted to subjecting his two adopted daughters, ages 7 and 8, and their two friends, ages 7 and 10, to various forms of sexual assault on or about April 22, 1987. Sentencing was originally set for March 11, 1988, hut defendant was granted a continuance on March ?, 1988, for the purpose of undergoing further assessment by Dr. Honeyman for the Yellowstone Treatment Center (hereinafter referred to as Yellowstone). Sentencing was reset for March 31, 1988, but again continued to April 21, 1988, due to conflicts in the court's calendar. On April 21, 1988, defendant made an oral motion to continue the sentencing hearing for two reasons: first, because the results of Dr. Honeyman's assessment, although completed on April 16, 1988, had not yet been for- warded to Yellowstone which was considering him as a candi- date for its program; and second, because the probation officer who prepared the presentence report was absent from the sentencing hearing. The motion was denied and the District Court sentenced defendant to the Montana State Prison for a term of 20 years, with five suspended, on each of the four counts, to be served concurrently. Defendant was designated a dangerous offender. The District Court based the sentence and the dangerous offender designation on the presentence report which the court had ordered, and on three evaluations submitted bv defendant in support of his recommendation for sentencing. Two of the evaluations referred to a polygraph examination. The first issue raised on appeal is whether the District Court erred in denying defendant's motion to continue the sentencing hearing. Section 46-13-202(3), MCA, provides in part: (3) All motions for continuance are addressed to the discretion of the trial court and shall be considered in the light of the diligence shown on the part of the movant. As noted, the granting of a continuance is not a matter of right but is addressed to the sound discretion of the court. State v. Harris (1984), 209 Mont. 511, 682 P.2d 159; State T ~ . Kirkland (1979), 184 Mont. 229, 602 P.2d 586. As we have previously held, the District Court cannot be overturned on appeal unless an abuse of discretion, which prejudices the movant, is demonstrated. Harris, 682 P.2d at 161; State v. Hankins (1984), 209 Mont. 365, 680 P.2d 958. In accordance with State v. Van Natta (19821, 200 Mont. 312, 651 P.2d 57, the trial court shall consider the diligence shown on the part of the movant when ruling on a continuance. In this case, defendant moved for a continuance in the sentencing proceeding on two grounds. First, because the probation officer who prepared the presentence report was absent from the proceeding and second, because defendant's assessment by Dr. Honeyman had not yet been forwarded to Yellowstone which was considering him as a candidate for its treatment program. Defendant did not show any effort to obtain the presence of the probation officer, nor, offer any evidence as to what information could be obtained from her, nor did he give any account of what value her testimony would have been to his case. We previously held in State v. Walker (~ont. 1987'1, 733 P.2d 352, 44 St.Rep. 363, citing Harris, 682 P.2d at 161, that : First, he [the defendant] needed to show that he reasonably searched for his witness. Second, he needed to show that his witness's testimony could have helped his defense. Defendant's lack of diligence is evidenced by the fact that the record shows no such testimony nor evidence which would satisfy this requirement. Defendant argues that under State v. Lopez (1980), 185 Mont. 187, 605 P.2d 178, the sentencing hearing is only proper when defendant is allowed to examine the author of the presentence report. However, the Court in Lopez provided that the sentencing hearing is based upon numerous considerations but did not specifically hold that the absence of any one factor would render the hearing improper. In this case, defendant had copies of the presentence report and the three psychological evaluations. He stated that he did not wish to call any witnesses at the sentencing hearing, nor does the record show evidence of an effort by defendant to procure the presence of the probation officer. The facts demonstrate that defendant had ample time to produce evaluations and witnesses in support of his sentenc- ing recommendation. The presentence report was prepared by the probation officer on February 26, 1988, and filed March 1, 1988. In addition, sentencing was originally set for March 11, 1988, but defendant was granted a continuance on March 7, 1988, in order to undergo further evaluation by Yellowstone. Sentencing was again reset for April 21, 1988. In the meantime, the Yellowstone report had been completed by Dr. Honeyman on April 16, 1988, although not yet forwarded to Yellowstone. Furthermore, the case had been set for sentenc- ing on two previous dates and the presentence report had been completed and filed on March 1, 1988. Lack of diligence on defendant's part is demonstrated by the fact that he waited until the day of the hearing to move for the continuance. In State v. Kleman (Mont. 1981), 634 P.2d 632, 38 St.Rep. 1627, where the trial had also been set on two previous dates, the Court held that, "Waiting until- the day of trial to make such a motion [continuance] does not show diligence on the part of the defendant." Also, defendant moved for the continuance in order to allow time for the results of Dr. Honeyman's evaluation to be forwarded to Yellowstone for assessment. The evaluation had been completed five days before the sentencing hearing. Defendant had nearly six additional weeks from the date of the original hearing to undergo assessments and produce evaluations and witnesses. The District Court did not abuse its discretion in denying the motion nor is there anything in the record to indicate that defendant was prejudiced by the denial. For the foregoing reasons, the District Court properly denied defendant's motion for a continuance. Defendant was designated a dangerous offender in accordance with 5 46-18-404, MCA. He contends that the District Court erred in the designation because it failed to articulate the reason for its findings. Section 46-18-404, MCA, permits the District Court judge to use his discretion to designate a criminal as dangerous for the purpose of parol. However, we held in State v. Miller (Mont. 1988), 757 P.2d 1275, 45 St.Rep. 790, that the statute dictates two prerequisites to a nondangerous classification: (1) lack of a felony conviction within the preceding five years; - and, (2) a finding that the defendant does not present a substantial danger to society. Hence, although defendant had not committed a felony in the last five years, the District Court must also find that he was not a substantial danger to society before nondangerous classifi- cation becomes mandatory. This Court previously held in In re McFadden (1980), 185 Mont. 220, 605 P.2d 599, that the sentencing court must articulate its reasons for the determination, and that the mere recitation of the statutory language was insufficient. Also, in State v. Camitsch (Mont. 1981), 626 P.2d 1250, 38 St.Rep. 563, we provided that the court must present its reasons in order to support the conclusion because without such findings the court could not determine whether there had been an abuse of discretion. Defendant argues that the District Court designated him a dangerous offender "for the purposes of eligibility for parole" thus, merely reciting the statute. However, in State v. Bell (Mont. 1987), 731 P.2d at 336, 344, 44 St.Rep 56, 66, the District Court set forth a list of its findings in the sentence and we held that this was adequate to meet the articulated reasons requirement. In defendant's case the District Court also set forth a similar type of list of its findings in the first portion of the sentence as follows: 1. The seriousness of the offenses and the harm to the victims. 2. The Defendant has been diagnosed "psychosexual disorder--pedophilia and a dependent personality disorder." 3. The Defendant is reported by the Helena, Mon- tana Sexual Assault Treatment Program to be a danger and a risk to the community. 4. That the Defendant's sado-masochistic tenden- cies complicate any treatment he will need. 5. That the reported chances of the Defendant re-offending is "quite high." 6. That the pedophilia is incurable. Although the reasons articulated are set forth in the first portion of the judgment and the dangerous offender designa- tion in the latter portion, we hold that it is all part of the same judgment and, therefore, sufficient. The court adequately articulated its reasons for finding defendant dangerous in its judgment. We hold that the rea- sons set forth are sufficient to designate defendant as a dangerous offender. Next, defendant raises the issue of whether the sentence was predicated on substantially correct information. We have held that "a defendant is entitled to have his sentence predicated on substantially correct information." State v. Baldwin (Mont. 1981), 629 P.2d 222, 224, 38 St.Rep. 882, 884, citing State v. Olsen (Mont. 1980), 614 P.2d 1061, 1064, 37 St.Rep. 1313; State v. Knapp (1977), 174 Mont. 373, 379, 570 P.2d 1138, 1141. The Court, however, will not strain at worst-case assumptions in order to find a mistake and we presume the District Court to be correct. State v. Herrera (1982), 197 Mont. 462, 643 P.2d 588. Here, the District Court based its sentence on a presen- tence report prepared by defendant's probation officer, as required by 46-18-111, MCA, and on three psychological evaluations. We hold that these documents adequately sub- stantiate the court's rationale and that they come within the purview of substantially correct information as required. Under State v. Smith (Mont. 1985), 705 P.2d 1087, 1093, 42 St.Rep 463, 468, citing State v. Trangsrud (Mont. 19831, 651 P.2d 37, 39 St.Rep. 1765, we held that the defendant has an affirmative duty to present evidence showing the inaccuracies contained in the report. -- See also State v. Radi (1973), 185 Mont. 38, 604 P.2d 318. Here, defendant did not persuasively rebut the information or conclusions utilized by the District Court. He did not show that the documents were inaccurate, incomplete nor incorrect. Thus, defendant did not meet this affirmative duty. Further, under 5 46-18-102(3) (b), MCA, the judge shall clearly state for the record his reasons underlying the imposition of any sentence. Here, the district judge has enumerated six reasons for the sentence imposed on defendant. We hold that these reasons are sufficient to support the Dis- trict Court's rationale. In addition, not only may the District Court use its broad discretion to determine the appropriate punishment, State v. Carson (1984), 208 Mont. 320, 322, 677 P.2d 587, 588, but it may also use its discretion in determining the manner and extent of punishment. State v. Petroff (Nont. 1988), 757 P.2d 759, 45 St.Rep. 833. Defendant argues that because his probation officer recommended either a long suspended sentence with require ments for treatment or incarceration at the prison where he would be able to receive treatment, the sentence was errone ous and excessive. We disagree. We held in State v. Ste phens (1982), 198 Mont. 140, 146, 645 P.2d 387, 391 that: There is no requirement that the sentencing judge adopt the recommendation of the presentence report or that he state reasons for any discrepancy he- tween the recommended sentence and the one actually imposed. The sentencing judge must only specify reasons why the sentence was imposed. Citing State v. Stumpf (Mont. 198O), 609 P.2d 298, 37 St.Rep. 673; Cavanaugh TT. Crist (Mont. 1980), 615 P.2d 890, 37 St.Rep. 1461. The District Court's sentence was based upon accurate information and it properly articulated the reasons for its finding as required. We hold that the sentence is proper. The last specification of error regards whether the District Court in imposing sentence properly considered two mental health evaluations which referred to the report of a lie detector test administered to defendant. This Court has long abhorred the use of lie detector evidence and has consistently held it inadmissible. We said in State v. Bashor (1980), 188 Mont. 397, 614 P.2d 470, that the results of polygraph examinations are inadmissible as evidence in a criminal trial. State v. Campbell (19781, 176 Mont. 525, 579 P.2d 1231; -- see also State v. Hollywood (19601, 138 Mont. 561, 358 P.2d 437. In Bashor, we provided the following: " . . . in many cases where polygraph evidence is admitted, a single person, the polygraphist, will give testimony which will often be the determina- tive factor as to the guilt or innocence of a defendant in a jury-tried case. This would deprive the defendant of the common sense and collective judgment of his peers, derived after weighing facts and considering the credibility of witnesses, which has been the hallmark of the jury tradition." State v. Rashor (1980), 188 Mont. at 414, 614 P.2d at 482, citing United States v. Alexander (8th Cir. 1975), 526 F.2d 161, 168. However, Bashor addressed the polygraph issue in the trial setting while in defendant's case the issue was brouqht up during sentencing. According to § 46-18-111, MCA, the court must consider the presentence report when imposing a sentence unless it deems the report unnecessary. The judge may also consider a wide variety of information not admitted at trial, United States v. Messer (9th Cir. 1986), 785 F.2d 832, since the sentencing hearing may he conducted by permitting relaxed. rules of evidence. State v. Holmes (1983), 207 Mont. 176, 674 P.2d 1076. However, this Court has stated that the Montana Rules of Evidence do not apply to sentencing hearings, Rule 101 (c) (3), M.R.Evid. State v. Lamere (1983), 202 Mont. 313, 658 P.2d 376. Defendant provided the District Court with the three evaluations which were conducted at his request and submitted by him in support of his recommendation for sentencing. The district judge was not required to consider the evaluations but because of the relaxed standards of evidence in a sen- tencing situation, he was free to do so. In State v. Turley (1974), 164 Mont. 231, 521 P.2d 690, where the defendant also submitted himself to a polygraph examination before sentencing, this Court held that the trial court did not err in refusing to consider evidence of the polygraph at sentencing. Thus, we continue to hold that the polygraph is inadmis- sible as evidence at trial but, in this case, the defendant invited the error and cannot now complain that it was in the record. State v. Miller ( 1 9 7 7 ) , 173 Mont. 453, 568 P.2d 130. A F f irmed. Chief Justice C p " r u Justices t- | March 30, 1989 |
d9f9b3af-5f95-49e7-a016-3f62bc5d241b | STATE v SEAMAN | N/A | 88-439 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA STATE OF MONTANA, Plaintiff and Respondent, -vs- WILLIAM LEE SEAMAN , Defendant and Appellant. APPEAL FROM: District Court of the Second Judicial District, In and for the County of Silver Bow, The Honorable Mark Sullivan, Judge presiding. COUNSEL OF RECORD: For Appellant: Deirdre Caughlan; Dunlap & Caughlan, Butte, Montana For Respondent : Hon. Marc Racicot, Attorney General, Helena, Montana Kathy Seeley, Asst. Atty. General, Helena Robert M. McCarthy, County Attorney; William O'Leary, Deputy County Atty., Butte, Montana Submitted on Briefs: Feb. 16, 1989 Decided: March 30, 1989 Mr. Justice R. C. McDonough delivered the Opinion of the Court. This appeal arises from the conviction for possession of dangerous drugs of appellant William Seaman in the Second Judicial District, Silver Bow County. We affirm. Issues (1) Whether the p o l i c e lacked probable cause t o search Seaman's residence? ( 2 ) Whether the search of Seaman's residence was overly intrusive? (3) Whether police testimony constituted grounds for declaring a mistrial? ( 4 ) Whether the speed with which the jury delivered its verdict demonstrates the jury did not follow or read the instructions, consider the evidence or follow their charge? Facts Undersheriff Joe Lee told Detective John Walsh that three reliable informants had provided information indicating a probability that Seaman was engaged in illegal activity. All three informants told Lee that Seaman was selling heroin in Butte for $40.00 a "bag". One of the informants gave police a list of individuals who had purchased heroin from Seaman. Another of the informants provided a description and address for Seaman's residence, and stated that Seaman currently possessed a quantity of heroin and opium at that residence. The first informant gave information on Seaman's activities on December 29, 1987. The second informant revealed information on Seaman on January 7, 1988. The third spoke to police on January 21, 1988, concerning the sale of heroin by Seaman. Lee communicated the information from the informants to Detective Walsh. Walsh incorporated this information in his Application for Search Warrant to Justice of the Peace M. A. Bartholomew on Januarv 21, 1988. The application also included sworn statements by Detective Walsh that: the informants had provided reliable information to law enforcement officials in the past; that the activities described were consistent with information possessed by Butte officials on the drug trade currently and for the past ten years in Butte; and that a check with Mountain Bell Telephone Company and Montana Power Company indicated the presence of Seaman's wife, Lorraine Seaman, at the residence on 1117 Maryland Avenue, Butte, Montana. On January 21, 1988, Justice of the Peace Bartholomew found from the application that probable cause existed for issuing a warrant authorizing a search of the residence on 1117 Maryland Avenue, Butte, Montana. On the same dav Detective Walsh and several other officers went to the home and executed the warrant. Lorraine Seaman and her seven year old son answered to Walsh's knock on the door, and Walsh and the other officers entered after informing Mrs. Seaman that they possessed authority to search. Evidence presented at trial revealed the following: Walsh "secured" the area by walking through the house with his gun drawn and pointed at an angle toward the floor. He first encountered Mrs. Seaman's father, Harry Nvgard, who had come to the house that day to perform repairs on the freezer. Mr. Nygard and the Seaman youngster were ordered by police to sit on a bed located in the house while police continued the search. Walsh discovered the defendant in the bathroom after hearing the toilet flush. He ordered Seaman out of the bathroom and searched the area. In a basket on top of the washing machine Walsh found syringes filled with a brownish liquid. Walsh also found a small container holding a dark tar-like substance in an open towel cabinet in the bathroom. Both substances were identified at trial by a state's witness as heroin. Walsh also found items suspected to be drug paraphernalia. Seaman asked Walsh what he was looking for directly after or during the time Walsh searched the bathroom. Walsh replied, "heroin," and Seaman responded, "you got me." During the search Mr. Nyqard collapsed from an apparent heart attack. Police officers called for an ambulance and attempted to revive Mr. Nygard. Mr. Nygard was taken to the hospital and died later that night. Seaman contends that under the constitutional requirements prohibiting unreasonable searches and seizures, and under S 46-5-202 (b) , MCA, requiring facts sufficient to demonstrate probable cause prior to issuance of a warrant, the District Court erred in denying his suppression motion. There are several contentions advanced by Seaman under this issue. First, he contends Undersheriff Lee rather than Detective Walsh should have sworn to the information in the application. See State ex rel. Sanford v. District Court ( 1 9 7 6 ) , 170 Mont. 196, 551 P.2d 1005. In Sanford this Court ordered suppression of evidence generated through a warrant issued to "any Peace Officer of this State." Seaman also contends that the totality of the circumstances fails to support a finding of probable cause. Seaman further argues that the lower court should have ordered the State to reveal the identities of the informants, and that the search was overly intrusive because abusive police conduct resulted in the death of Harry Nygard. A. The applicability of Sanford: Seaman contends that - Sanford mandated exclusion of the evidence from the search. The warrant was defective in Sanford because section 95-703 R.C.M.1947, now 46-5-201, MCA, requires that a search warrant be directed to - a peace officer. As explained in State v. Snyder (1975) (Daly, J . , concurring), 168 Mont. 220, 231, 541 P . 2 1 1 1204, 1210, the mandate that the warrant be directed to a particular officer accords with the plain language of the statute, and with the mandate of another statute; section 95-707 R.C.M.1947, now § 46-5-205, MCA, that the warrant be served by one of the officers mentioned in its direction. In this case, Walsh applied for the warrant, the warrant named VJalsh, and Walsh served the warrant. Thus, the police in this case followed the statutory procedure, and Sanford is inapplicable. B. The totality of the circumstances: In State v. - - Sundberg (Mont. 1988), 765 P.2d 736, 45 St.Rep. 2235, this Court discussed the requirements for finding probable cause from an application for a warrant: In Jensen, this court decreed that the test for determining probable cause for issuance of a search warrant is the "totality of the circumstances" test set forth in Illinois v. Gates (1983), 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527. Probable cause to justify search warrants is a sufficient showing that incriminating items, namely items reasonably believed to be connected with criminal behavior, are located on the property to which entry is sought. It does not require that the occupant be guilty of any offense and. need only be supported by probable cause to believe that the items sought will be found in the place to be searched and that these are seizable by being adequately connected with criminal behavior. [citation omitted] Probable cause, defining the point at which the individual's interest in privacy must yield to the governmental interest in investigating criminal behavior by searching for incriminating items, is a practical, nontechnical concept of criminal procedure . "Probable cause" is not a prima facie showing of criminal activity, but only its probability. [citation omitted] Considerably less evidence is required for the issuance of an arrest or search warrant than for conviction; and legally unimpeachable findings of probable cause can rest upon evidence, for instance hearsay, which is not legally admissible at the criminal trial itself. Sunberg, 765 P.2d at 738. Under the totality of the circumstances test, the veracity, reliability, and basis of knowledge of informants remains highly relevant to determining probable cause from the reports of such informants. Gates, 462 U.S. at 230. Seaman contends that the double hearsay nature of the information contained in the application, coupled with the lack of information on the reliability of the informants, demonstrates lack of probable cause under the totality of the circumstances test. The hearsay nature of the link between information provided by Undersheriff Lee to Detective Walsh does not invalidate the finding of probable cause in this case: Observations of fellow officers of the Government engaged in a common investigation are plainly a reliable basis for a warrant applied for by one of their number. lJnited States v. Ventresca (1965), 380 U.S. 102, 111, 85 S.Ct. 741, 747, 13 L.Ed.2d 684. To enable the magistrate to make an independent probable cause determination, and to meet the requirement of particularity, it is: sufficient if the affidavit recites at the outset, or if it is clear from reading the affidavit as a whole, that it is based in part upon information obtained from other law enforcement officers. United States v. Kirk (11th Cir. 1986), 781 F.2d 1498, 1505. Walsh swore that the information in the application had been provided to "Butte Law Enforcement Agency Detectives". Thus, the application demonstrates that Walsh relied on information provided by other officers. Seaman also objects to the application on the grounds that the informants were not shown to be reliable. We hold that the application sufficiently shows the informants1 reliability and basis of knowledge. Walsh swore that the informants had provided reliable information in the past. He also stated in the application that one of the informants had extensive knowledge of the drug trade in Butte. The informants described the same criminal conduct on the part of Seaman, e.g., selling heroin in "bags" for $40.00 each over a period of three weeks prior to issuance of the warrant. The list of purchasers from Seaman, and one informant's knowledge of Seaman's address, also supported the application. Thus, facts in the application demonstrated the informants1 reliability and basis of knowledge for reporting the existence of criminal activity by Seaman. C. Identities of the Informants: Seaman argues that - - the trial court erred in failing to order the State to disclose the identities of the informants. support this argument, Seaman cites State v. Chapman (19841, 209 Mont. 57, 679 P.2d 1210. In Chapman, this Court refused to allow the State to claim the privilege of withholding an informant's location and identity because the informant played a continuous and primary role in the crime, and fundamental fairness required disclosure because the informant's testimony was relevant to his entrapment defense. Chapman, 679 P.2d at 1215. Similarly, in State v. Offerdahl (1971), 156 Mont. 432, 481 P.2d 338, this Court agreed with the trial court that the informant must be disclosed because the informant's testimony would determine the defendant's guilt or innocence. Offerdahl, 481 P.2d at 342. Seaman makes a different argument. He contends that disclosure of the identities was necessary for determining probable cause. The lower court failed to recognize the distinction between "citizen informants" and informants who themselves are involved in illegal activity, according to Seaman. At the suppression hearing Undersheriff Lee testified that the informants had previously been involved in illegal drug activities. Rule 502, M.R.Evid., provides the State a privilege to refuse to disclose an informant's identity. The privilege provides confidentiality to encourage reports of criminal activity. Commission Comments, Rule 502, M.R.Evid. Where the defendant claims disclosure is necessary for presenting an effective defense, trial courts must engage in the balancing test from Roviaro v. United States (1957), 353 U.S. 53, 77 S.Ct. 623, 1 L.Ed.2d 639. The test provides no fixed rule, and in each particular case trial courts must weigh the defendant's needs against the public's interest in the flow of information from informants. Roviaro, 353 U.S. at 62. Trial courts should take into consideration the crime charged, the possible defenses, the possible significance of the informant's testimony, and other relevant factors in balancing the conflicting interests. Commission Comments, Rule 502, M.R.Evid. We have already held here that the reliability and basis of knowledge of the informants was established. within the application. If the law required disclosure of identities and locations of informants to further test the truth of the officer's statement that there is an informant or as to what the informant related or as the informant's reliability, we can be sure that every defendant will demand disclosure. . . . The result would be that the State could use t h ~ informant's information onlv as a lead and could search only if it could gather adequate evidence of probable cause apart from the informant's data. Perhaps that approach would sharpen investigatorial techniques, but we doubt that there would be enough talent and time to cope with crime upon that basis. Rather we accept the premise that the informer is a vital part of society's defensive arsenal. McCray v. Illinois, 386 U.S. 300, 306-07, 87 S.Ct. 1056, 1060, 18 L.Ed.2d 62, 68 (quoting State v. Burnett ( N . J . 1964), 201 A.2d 39). The Court in McCray also cited Burnett for the proposition that it should rest entirely with the judge who hears the motion to suppress to decide whether he needs such disclosure as to the informant in order to decide whether the officer is a believable witness. McCray, 386 U.S. at 308. This Court adopted the reasoning from McCray in State v. Sykes (Mont. 1983), 663 P.2d 691, 40 St.Rep. 690. Seaman's only argument goes to discrediting Undersheriff Lee's assertion that the informants existed and that they provided reliable information. Under these circumstances, we hold that the District Court acted within its discretion in refusing to order disclosure. We also reject Seaman's staleness argument. Information provided by the application stated that Seaman's current peddling of heroin for $40.00 a "bag" was consistent with illegal drug activities in Butte over the past ten years. The application sufficiently set forth probable cause without the assertion that the current activity resembled familiar patterns of the drug trade in Butte. The added information only supplemented the reliability of the current report. 11. Seaman argues that the death of Mr. Nygard during the search proves the search was overly intrusive. There is very little evidence that police misbehavior precipitated Mr. Nygard ' s death. Mrs. Seaman testified that she heard a struggle in the room where Mr. Nygard was seated prior to his collapse. Undersheriff Lee testified he stood in front of Mr. Nygard at the time he collapsed. Lee also stated he thought Mr. Nygard fainted, and that police immediately initiated medical procedures for reviving Mr. Nygard. Thus, this claim is unsupported and provides no basis for excluding evidence. 111. Seaman contends that the lower court erred in refusing to grant his motion for a mistrial. The alleged grounds for the motion sprung from the testimony of Detective Walsh on finding the syringe containing heroin in a basket in the bathroom. Walsh testified as follows: Q Did you at any time search the wicker basket? A The following day, yes I did. Q Did you find anything at that time in the wicker basket? A Again, like I stated, we found the svringes. There were two syringes that were full of this brown liquid. Again, there was other drug paraphernalia there, hut that's what we observed. There was also another item of drug evidence, tincture of opium. MS. CAUGHLAN [defendant ' s counsel I : Your honor, we are going to interpose an objection here. THE COURT: Sustained. Are you moving to strike the answer? MS. CAUGHLAN: I move to strike the answer. THE COURT: The answer is stricken. I instruct the jury to disregard his answer. Seaman's counsel in moving for a mistrial contended that the mention of opium violated the trial court's order prohibiting introduction of other bad acts or crimes, and prejudiced Seaman's right to a fair trial. The lower court denied the motion holding it was sufficient to sustain the objection, strike the testimony from the record, and order the jury to disregard the evidence. Trial courts properly grant mistrials when, taking all circumstances into consideration, there exists a manifest necessity to do so. State v. Scheffelman (Mont. 1987), 733 P.2d 348, 44 St.Rep. 357. This Court's review of a trial court's denial of a motion for a mistrial is limited to deciding whether the lower court abused its discretion in refusing the motion. Scheffelman, 733 P.2d at 350. The trial court occupies the best position to gauge the reaction of jurors to inadmissible evidence for determining necessity to order a mistrial. State v. Smith (Mont. 1986), 715 ~ . 2 d 1301, 43 St.Rep. 449. Mistrials may be properly granted for introduction of inadmissible evidence resulting in harmful error likely to affect the justice of the verdict. State v. Lave (1977), 174 Mont. 401, 571 P.2d 97. Only where there is a reasonable possibility that inadmissible evidence contributed to the conviction is there reversible error in denying the motion. State v. Brush (Mont. 1987), 741 P.2d 1333, 44 St.Rep. 1495. Where the party opposing admission of evidence objects to offered evidence, and the trial court sustains the objection, strikes the evidence from the record, and instructs the jury to disregard the evidence, "error committed by its introduction is presumed cured." Brush, 741 The presumption here favors finding no prejudice because the lower court admonished the jury to disregard the statement after sustaining Seaman's objection to the testimony. Moreover, Walsh properly testified that he found substances testing out as heroin and drug paraphernalia in the basket. Testimony on the presence of tincture of opium with these items is not so prejudicial as to warrant a new trial. Thus, no error exists under this issue. IV. Seaman contends that the fact that the jury took so little time in reaching a verdict demonstrates they failed to consider or read the instructions, consider the evidence, or follow their charge. Seaman asserts less than 25 minutes elapsed from the time the trial court submitted the case to the jury and the time the jury brought in its verdict. No authority is provided by Seaman to support reversal for this contention. Rule 606(b), M.R.Evid., allows inquiry into the validity of verdicts. Section 25-11-102, MCA, provides for investigation of jury misconduct to reveal grounds for a new trial. Seaman has invoked neither the statute nor the rule in his claim on the jury's verdict. The lower court, in passing sentence on Seaman, stated that the evidence for finding the defendant guilty was "way beyond a reasonable doubt." In reviewing the record, we agree with the lower court. Overwhelming, substantial evidence supports the verdict, and there appears no error of law in the record. Thus, we reject the argument that the jury spent too little time considering the law and facts in this case, and we affirm on all issues. @ G . ~ S A & Justice 1 ,C We Concur: , , /' | March 30, 1989 |
7060a415-7672-4876-8ed8-2edb9f141717 | SINK v SQUIRE | N/A | 88-479 | Montana | Montana Supreme Court | No. 88-479 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1989 YVONNE SINK, P l a i n t i f f and Appellant, -vs- ROBERT G. SQUIRE and JUDITH M. SQUIRE, Defendants and Respondents. APPEAL FROM: D i s t r i c t Court o f t h e F i f t h J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Madison, The Honorable Frank M. Davis, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: Jack Yardley; Yardley & Yardley, Livingston, Montana For Respondent : Chester Lloyd Jones; Jones & Hoffman, V i r g i n i a C i t y , Montana >c r-1 n : 0 F i l e d tt: 2_1 -, : # J . , cL . < - - [\ ! , cy ~ c ' ' ' ; c-, *-- 2 ' -"a Lz Submitted on B r i e f s : Jan. 12, 1989 Decided: February 2 7 , 1989 Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Appellant Yvonne Sink appeals from the dismissal by the Fifth Judicial District Court, Madison County, of her action to set aside the previous judgment of the court in Civil Action No. 7448 for lack of jurisdiction due to improper service. The court by its dismissal upheld its previous judgment awarding a tax deed to respondents. We reverse the court's dismissal and order the tax deed awarded in the prior action set aside as void for lack of jurisdiction. Appellant raises the following issues on appeal: 1. Did the publication of the summons for publication without a court seal amount to an improper service thereby denying the District Court jurisdiction over the tax deed action? 2. Did the respondents fail to exercise due diligence to determine appellant's current place of residence prior to mailing the summons for publication and complaint to the incorrect address? The appellant Yvonne Sink, together with her husband James Sink, purchased a 10.293 acre lot in Madison County from The Shining Mountains North (a limited partnership) in the mid 1970's. Thereafter, Yvonne and James separated. She then moved from Anchorage, where she had been living with her husband prior to their separation, to the San Francisco Bay area. Upon separation, they orally agreed that Yvonne would make the regular payments on the property while James would pay the property taxes. Yvonne continued to make payments on the property until 1983. At that time the balance owing on the property was paid in full, and she and her estranged husband received a warranty deed to the property from Shininq Mountains. James Sink subsequently conveyed his interest in the property to Yvonne by a quitclaim deed dated on March 9, 1987. Shining Mountains remained the owner of record, however, because Yvonne failed to record her deed with the Madison County Clerk and Recorder's Office. Yvonne testified she was unaware of any requirement to record her ownership before she herself sold the property. Although Yvonne diligentlv made payments until the amount owing on the property was paid in full, James Sink failed to pay the taxes assessed on the property. Consequently, the Treasurer of Madison County (County Treasurer) issued a Certificate of Tax Sale on July 22, 1981 for failure to pay the $91.40 in taxes assessed against the property in 1980. Yvonne testified she received no actual- notice of these delinquent taxes. On March 26, 1985, the respondents, Robert and Judith Squire, paid all the taxes, penalties, and interest assessed and outstanding against the property from 1980 to date. The total paid amounted to $609.71. The County Treasurer thereafter assigned the Tax Sale Certificate to them. The Squires then instituted Civil Action No. 7448 against Yvonne and James Sink in order to acquire a tax deed to the property. The Sheriff stated by way of a Sheriff's Return !which erroneously failed to name the parties and to give the date the Sheriff was unable to locate them) that he was unable to locate the Sinks in Madison County, and thus he could not serve the complaint and summons upon them. The Squires' attorney then filed an affidavit requesting an order for service of summons by publication. The Clerk of Court granted this requested order and issued a summons for publication on April 26, 1985. This summons failed to list the name or address of the plaintiffs' attorney. The attorney for the plaintiffs signed an affidavit attesting t.o the mailing of a copy of this summons for publication. A second summons for publication later was signed on May 2, 1 9 8 5 and then published for three consecutive weeks in the Madisonian, a local county newspaper. This latter published summons correctly listed the name and address of the plaintiffs' attorney and contained the Clerk of Court's signature, although it did not have a court seal. The plaintiffs, however, did - not mail this legally correct May 2nd version to Yvonne and James Sink at their last determined address in Homer, Alaska. Defendants failed to appear or answer the summons within the twenty day period following service of the summons. The District Court then entered a default judgment against the Sinks on June 18, 1 9 8 5 and issued a tax deed to the Squires. When Yvonne Sink subsequently learned of this default judgment, she filed the instant action requesting the District Court to declare the default judgment in Civil Action No. 7448 void for lack of jurisdiction because of improper service upon defendants. The District Court ruled that the plaintiffs substantially complied with the spirit and purpose of the service requirements and that the court therefore had jurisdiction over Civil Action No. 7448. Consequently, the District Court dismissed the present case. Yvonne Sink appeals from the court's determination that jurisdiction existed in Civil Action No. 7 4 4 8 and from the court's subsequent dismissal of this case. At the outset, we note that the most egregious error affecting the jurisdiction of the District Court to hear this case was the plaintiffs' failure to mail to the defendants a copy of the summons for publication with the name and address of plaintiffs' attorney on it. This issue was not raised by Yvonne Sink on appeal. However, an examination of the record reveals that the District Court took judicial notice of the facts of the prior Civil Action No. 7448 and the parties stipulated to the admission of these facts into the record. These facts give rise to the jurisdictional error to which we now turn our attention. Rule 4D(5) (e) , M.R.Civ.P. requires a plaintiff to mail. a copy of the summons for publication and complaint to a . defendant's place of residence. The content and form of this summons for publication must comply with the mandatory requirements set forth in Rule 4C (2) , M.R.Civ.P. These requirements are as follows: The summons shall be signed by the clerk, be under the seal of the court, contain the name of the court and the names of the parties, be directed to the defendant, state -- the name and address of the plaintif f ' s attorney, if any, - otherwise the plaintiff's address, and the time within which these rules require the defendant to appear and defend, and shall notify him that in case of his failure to do so judgment by default will be rendered against him for the relief demanded in the complaint. (Emphasis added. ) The summons for publication sent to the defendants on April 26, 1985 failed to fully comply with these mandatory requirements. Plaintiffs had an attorney, yet the summons for publication actually sent to the defendants failed to state the name and address of plaintiffs' attorney. The summons for publication actually published corrected this omission, but a copy of this latter published summons was not mailed to the defendants. This Court has previously required strict and literal compliance with the statutory procedures required for constructive service. E.g., Shields v. Pirkle Refrigerated Freight Lines, Inc. (1979), 181 Mont. 37, 44, 591 P.2d 1120, 1124, citing from 62 Am.Jur.2d Process $ 68. As this Court has previously stated: It is the settled judicial policy of this state that more accurate observance, with regard to compliance with provisions of the statutes, is required in constructive service than in personal service; also that less presumption in favor of jurisdiction of a court, upon rendition of judgment, is indulged in when the judgment is based upon constructive service than when based upon personal service. Holt v. Sather (1928), 81 Mont. 442, 448, 264 P. 108, 111. Such compliance with mandatory service requirements is essential to jurisdiction. Consequently, this Court will uphold the jurisdiction of a District Court despite a failure to comply with all mandatory service requirements only when the plaintiff affirmatively shows that there is absolutely - no possibility of prejudice from the failure. See, e.g., Holt, No such showing was made in this case. The possibility exists that James and/or Yvonne Sink did not know where to send their response because of the omission of the name and address of the plaintiffs' attorney on the copy of the summons for publication mailed to them. The District Court thus erred in dismissing the present case which challenged the court's jurisdiction over Civil Action No. 7448. We hold that the plaintiffs' failure to comply with this mandatory service requirement prevented the District Court from obtaining jurisdiction to hear and render a judgment in Civil Action No. 7448. We therefore need not discuss those jurisdictional errors raised by Yvonne Sink on appeal. The judgment of the District Court in this case is reversed and the prior judgment and tax deed issued in Civil Action No. 7448 ordered set aside as void for lack of jurisdiction. We concur: Justices | February 27, 1989 |
0b2b1243-23e0-49dd-932c-ae5369a5b0fb | VICTOR WERLHOF AVIATION INS v GAR | N/A | 88-528 | Montana | Montana Supreme Court | No. 88-528 IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 VICTOR WERLHOF AVIATION INSURANCE, Plaintiff and Respondent, -vs- RONALD GARLICK, d/b/a GARLICK HELICOPTERS, Defendant. -vs- FARMERS STATE BANK, a Montana Banking corp., Garnishee-Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Ravalli, The Honorable Jack L. Green, Judge presiding. COUNSEL OF RECORD: For Appellant: Jeffrey H. Langton, Hamilton, Montana For Respondent: Charles J. Tornabene; Patterson, Marsillo, Tornabene and Schuyler, Missoula, Montana For Amicus Curiae: George T. Bennett, Montana Bankers Assoc., Helena, Montana Filed: Submitted on Briefs: Jan. 12, 1 9 8 9 ~ ~ ~ i d ~ d : April 6, 1 9 8 9 . . ' - - - - - f ' , I . " Clerk W ?-- - .. , . - 0 . < - - Mr. Justice John C. Sheehy delivered the Opinion of the Court. The principal issue in this case is whether a bank, otherwise lawfully entitled to a setoff, may exercise its right of setoff against a depositor's account at the same moment it is presented with a writ of execution which seeks to levy on the same depositor's account. We uphold the right of the Rank to the setoff. A second issue is whether a bank may set off a matured debt against a depositor's account when the debt is secured by collateral. Again, we hold that the Rank's right of setoff in this case is not barred by the presence of collateral. A third issue is whether S 30-4-303, MCA, modifies the Bank's right of setoff. We hold that 30-A-403 has no application in this case. Farmers State Rank appeals from an order of the District Court, Fourth Judicial District, Ravalli County, which held that the Bank holds property of a depositor to which a judgment creditor of the depositor Victor Werlhof Aviation Insurance, had a right. The order forbade the Bank to transfer or otherwise dispose of the depositor's monies until the judgment creditor, Victor Werlhof Aviation Insurance, could commence and prosecute to judgment an action against the Bank for recovery of the monies which the District Court held were wrongfully set off by the Bank. The order is in the nature of an injunction and is thus appealable under Rule 1, M.R.App.P. We reverse the District Court and vacate the prohibitive order. There is no dispute as to the evidentiarv facts. Victor Werlhof Aviation Insurance first obtained a judgment against Garlick Aviation on April 11, 1996 in Missoula County District Court for $10,391.46. The judgment was abstracted to Ravalli County District Court on May 19, 1986. That court issued a writ of execution on June 4, 1986 directed to appellant Farmers State Rank of Victor, Montana, against Garlick's account in the Bank. Garlick owed monies on a delinquent note to the Bank at the time of the execution of the first writ. The return of service of the June 4 execution indicated that Garlick's account held $3,276.97, but the Bank claimed a setoff against the monies for a delinquent note of $80,000.00 which Garlick had executed to the Bank in 1982. On January 15, 1988, on behalf of Victor Werlhof Aviation Insurance, a second writ of execution was issued by the court. This writ was presented by the sheriff to the Rank in the same manner as the first writ. At the time the Bank received the writ, Garlick owed the Bank a monthly payment of $2,895.10 which was due as of January 1, 1988. The overdue payment was a monthly obligation in satisfaction of a debt underlying a contract for deed which had been assigned to the Bank in a separate bankruptcy by a party not involved in these proceedings. The Bank, when the judgment creditor's writ was presented, set off Garlick's checking account balance toward the January 1, 1988 overdue installment. Victor Werlhof Aviation Insurance then sought suppl.emental proceedings in aid of execution against the Rank. The District Court held against the Bank and it appealed to this Court. 1. May -- the Bank claim set off against a depositor's - - - account - at - the moment it is presented with a writ of - - - - - - execution to be levied upon the account? -- - -- The basis of a bank" right to set off its depositor's accounts against matured debts owed by the depositor to the hank was recently discussed by this Court in Bottrell, Reeve and Northern Line Layers, Inc. v. American Bank (f/k/a Western State Bank), Jim Reaton and Marty ~errig (NO. 87-209, Decided April 5, 1989). There we said, citing Spratt v. Security Bank of Buffalo, Wyo. (Wyo. 1982), 654 ~ . 2 d 130, We next reach appellant's claim that the bank's set-off should fail for lack of mutuality between appellee and Gail Fanning. Before going further, we need to discuss a bank's right to setoff against the general deposits in its possession. The bank's right of set-off to secure the payment of its depositor's indebtedness is a part of the law merchant and well established in commercial transactions. (Citing authority.) For a bank to establish a right to set off, three conditions must be met: "the fund to be setoff must be the property of the debtor, the fund must be deposited without restrictions, and the existing indebtedness must be due and owing." (Citing authority.) The bank's right to setoff does not arise until the time the depositor's indebtedness to the bank has matured. (Citing authority. Addressing appellant's point, for set-off to be permissible, there must be mutuality of obligation between the debtor and his creditor, as well as between the debt and the fund on deposit. (Citing authority. 1 Debts to he used as set-offs must be due to and from the same persons in the same capacity. (Citing authority.) The right of setoff is not limited exclusively to banks. Such right exists between any mutual debtors and creditors where the debts have matured and the parties mutually are debtors and creditors of and to each other. Thus, because setoff is a common law right, it exists independently of statutes, unless, of course, statutes affecting setoff have been enacted. The banker's right to setoff is the common law equitable right of the bank to apply the general deposits of a depositor against the matured debts of the depositor. The right grows out of the contractual debtor-creditor relationship created between the depositor and the bank at the time the account is opened, Security State Bank of Comanche, Okl. v. V. F J . R. Johnston & Co. (1951), 204 Okla. 160, 228 P.2d 169; and it rests on the principle that it would be inequitable to permit the debtor-depositor to carry an open account that induces the bank to extend credit, and then allow the debtor to apply the funds to other purposes because he had not expressly agreed to apply them to the debt. Melson v. Rank of New Mexico (N.M. 19581, 332 P.2d 472; Southwest Natfl Bank v. Evans (1923), 94 Okla. 185, 221 P. 53. It is a general rule that when a depositor is indebted to a bank, and the debts are mutual--that is, between the same parties and in the same right--the bank may apply the deposit, or such portion thereof as may he necessary, to a payment of the debt due it by the depositor, provided there is no express agreement to the contrary and the deposit is not specifical.ly applicable to some other particular purpose. Security State Bank of Melrose, Minn. 1 7 . First Natfl Bank of Ismay (1927), 78 Mont. 389, 254 P. 41.7. For a hank to establish the right to setoff, the fund to he set off must be owed by the Bank to the debtor, the fund must be deposited without restrictions, and the existing indebtedness must be due and owing. Federal. Deposit Ins. Corp. v. Pioneer State Bank (1977), 155 N.J. Super 381, 382, 281 A.2d 958. As to the writ of execution levied against the Bank on June 4, 1986, the District Court held that though the Rank was not entitled to a setoff, since Victor Werlhof did nothing further about it, Victor was barred b~7 laches from recovery as to the proceeds of the first writ of execution. T7ictor Werlhof has not cross-appealed on this holding, and so we do not concern ourselves with the result in the District Court as to the levy of the first execution writ. As to the second writ of execution, it is undisputed that Garlick was delinquent under the contract for deed in not making the monthly payment of $2,895.10 due the Bank on January 1, 1988. On January 21, 1988, when presented by the sheriff with the second writ of execution, the Bank claimed a setoff of $1,697.41 from Garlick's checking account against the delinquent indebtedness. Victor Werlhof contends that since the Bank had taken no action to set off the account before the writ was presented, the checking account was subject to the writ from the moment of its issuance on January 15, 1988, and thus preceded any right of the Bank to setoff. The Rank, on the other hand, contends that its setoff occurred when the monthly payment was not made--at the moment the debt matured in other words. Neither contention is correct. The Bank acquired a right to setoff when Garlick's pavment became delinquent, but the Bank must take positive steps to accomplish the setoff. As to a would-he executing judgment creditor, the setoff is accomplished. when the Bank takes positive steps to claim its right, by entering evidence of the setoff in its own records, and then possibly giving other written notice of its action. United States v. Citizens and Southern National Bank (5th Cir. 1976), 538 F.2d 1101, 1107, cert. denied 430 U.S. 945 (1977); Studley v. Boylston Bank (1913), 229 U.S. 523, 33 S.Ct. 806, 57 L.Ed. 1313. Here the Bank recorded the setoff in its records on the date the writ was presented, executed a response to the sheriff claiming setoff, and later furnished an affidavit stating the facts OF its claim of setoff. By those actions, the Bank accomplished its setoff. The nature of the claim of a judgment creditor against a third party holding property of the judgment debtor provides a further reason whv the writ of execution does not take precedence over the right of setoff. A judgment creditor seeking attachment or execution of a judgment debtor's property in the possession of a third party stands in the shoes of the judgment debtor as far as the rights of the third party are concerned. Thus, it is stated in General Electric Credit Corporation 17. Tarr (W.D. Pa. 19781, 457 F.Supp. 935, 938: The service of attachment execution has the effect of an equitable assignment of the thing attached. It puts the garnishee in the relation to the attaching creditor which he had sustained to his former creditor. He may make the same defense to the attachment by evidence of set off or of other equities that he might have made if sued by his original creditor. Here the Rank could have asserted its right of setoff against any claim of Garlick to his checking account at the time of the presentation of the writ of execution. The judgment creditor, Victor Werlhof Aviation Insurance, had no greater right against the Bank than did Garlick at that time. Therefore, the writ did not take precedence over the right of setoff. We hold the setoff here could be asserted by the Rank at the time it was presented with the execution writ. 2. Was the Bank's right of setoff affected the - - - contract for deed for real property which secured Garlick ' s ----- - debt to the Bank? ---- Stated another way, we are asked to decide if the Bank must first exhaust it.s collateral before it can exercise setoff to recover a matured debt secured by the collateral. In Montana, the "one-action rule" applying to notes secured by mortgages on real property, S 71-1-222, MCA, does not apply to contracts for deed. Glacier Campground v. Wild Rivers, Inc. (1978), 182 Mont. 389, 597 P.2d 689, 698. The Rank's position as a creditor of Garlick appears to result from some "creative financing" prevalent in the early 1980's. The Bank held a first security position on the real property to secure two promissory notes totalling $392,560.00. The owner of the real property entered into a contract for deed with Garlick as buyer to deliver clear title upon pavment by installments of $400,000.00. Later the owner became bankrupt, and the bankruptcy court segregated the contract for deed and assigned it to the Bank, with Garlick to keep up the payments and thus retire the promissory notes. Under the assignment, Bank has first claim to Garlick's payments, and it was the payment due January 1, 1988 that Garlick had not made. Under the contract for deed, if Garlick remained in breach of the contract for more than 30 days after notice, the Rank could accelerate the debt and "take all means to enforce and collect the same." Nothing in the law, however, requires the Bank under these circumstances to wait until the contract for deed was cancelled before it had a right of setoff on the contract debt. Garlick' s January 1, 1988 payment was overdue, the debt had matured, and the Rank was not limited to or constrained by the contract terms. It could pursue any legal means to coll.ect its debt, or any part of the debt that had matured. J. M. Hamilton Co. v. Battson (1935), 99 Mont. 583, 44 P.2d 1064. We hold under these circumstances that the Bank could resort to setoff even though other remedies lay open under the contract for deed. 3. Does § 30-4-303, MCA affect Bank's right of setoff? - - - Prominent among the conclusions of law adopted by the District Court was its determination that S 30-4-303, MCA "in the light of the facts" gave the writ of execution priority over the setoff rights of the Bank. Section 30-4-303, MCA, provides: (1) Any knowledge, notice or stop order received by, legal process served upon or set-off exercised by a payor bank, whether or not effective under other rules of law to terminate, suspend or modify the bank's right or duty to pay an item or to charge its customer's account for the item, comes too late to so terminate, suspend or modify such right or duty if the knowledge, notice, stop order or legal process is received or served and a reasonable time for the bank to act thereon expires or the setoff is exercised after the bank has done any of the following: (a) accepted or certified the item; (b) paid the item in cash; ( c ) settled for the item without reserving a right to revoke the settlement and without having such right under statute, clearinghouse rule or agreement; (d) completed the process of posting the item to the indicated account of the drawer, maker or other person to be charged therewith or otherwise has evidenced by examination of such indicated account and by action its decision to pay the item; or (el become accountable for the amount of the item under subsection (1) (d) of 30-4-213 and 30-4-302 dealing with the payor hank's responsibility for late return of items. ( 2 ) Subject to the provisions of subsection (1) items may be accepted, paid, certified or charged to the indicated account of its customer in any order convenient to the bank. It need only be said that the foregoing statute does not apply to the circumstances of this case. If we regard the writ of execution as an "item" (likely not), the Bank in no wise recognized the writ nor acted upon it so as to indicate a reversal of its action to accompl.ish a setoff. If the District Court felt that acceptance by the Bank of deposits from Garlick after the first attempted l e v 1 7 of a writ of execution gave the Bank notice of the outstanding judgment against Garlick, still, as discussed above, the Rank had not lost its right to accomplish the second setoff as against a judgment creditor. We hold that S 30-4-303, MCA, is not applicable to the circumstances of this case. Finally, we find no merit in two other contentions raised by Victor Werlhof on this appeal. We hold, as stated above, that the Rank's imputed knowledge of the outstanding judgment against Garlick did not affect the Rank's right of setoff in this case. We also hold that under the circumstances here, the Rank did not act against public policy in frustrating the attempted levies of execution, since it acted legally in accomplishing setoff. The judgment and order of the District Court is reversed, and the prohibi.tion against the Bank transferring or disposing of the funds sought to be executed upon is vacated. We Co cur: /9 A / | April 6, 1989 |
487e4a90-c340-4db3-9b7f-b1083ba389e8 | MARRIAGE OF HORTON | N/A | 88-355 | Montana | Montana Supreme Court | No. 88-355 TIS THE SITPREME COURT OF THE STATF OF MONTANA 1989 IN RE THE MARRIAGE OF BETTY HORTON, Plaintiff and Appellant, and MELVIN K. HORTON, Defendant and Respondent. APPEAL FROM: District Court of the Sixteenth Judicial District, In and for the County of Carter, The Honorable Alfred R . Coate, Judge presiding. COIJNSEL OF RECORD: For Appellant: R. W. Heineman, Wihaux, Montana For Respondent: Fenneth R. Wilson, Miles Cj-ty, Montana cU 0 L=, . . c--, - . - -' C-- r . - a 1 ( - r r I Submitted on Briefs: Feh. 16, 1989 Li. Decided: April 18, 1989 0 Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Betty Horton appealed from the judgment of the Sixteenth Judicial District Court, Carter County, Alfred B. Coate presiding, granting respondent's motion for dismissal for lack of prosecution pursuant to Rule 41(b), M.R.Civ.P. We reverse. The issue on appeal is whether the trial court abused its discretion in granting respondent's motion to dismiss for lack of prosecution. Betty and Melvin Horton were married in Hardin, Montana, on August 30, 1940. In 1964, the parties separated. On June 29, 1971, Betty Horton filed for dissolution of the marriage. The complaint was not answered until January 7, 1975. Trial was set for March 12, 1975, but was continued at respondent's convenience until the parties could agree on a new trial date. The parties finally filed notice of readiness for trial in 1983. Trial was held on June 9, 1983. Prior to trial, the parties were ordered to file Rule 50 affidavits of the Sixteenth Judicial District local court rules, which requires that both parties record their finances, health, income, and employment (now Rule 37 affidavit). The affidavits were to be filed by June 1, 1983. Prior to the time of signing the dissolution decree, the parties stipulated that the issue of property settlement would not be discussed at trial but would be reserved. That the property issue between the parties is not yet at issue and that therefor [sic] this stipulation on the part of plaintiff wife is based upon the condition that the Court re- serve ruling upon the property issues and/or alimony and/or child support issues until discovery has been completed and these matters may be properly presented to the Court for subsequent ruling when discovery has been completed by both parties. On June 10, 1983, in accordance with the stipulation, the District Court granted dissolution of the marriage but reserved determina- tion of the other issues. Discovery on the remaining issues began in 1983 when peti- tioner filed interrogatories and requests for production on June 30. Respondent answered the interrogatories on July 27, 1983. Little further discovery was conducted until 1987 when petitioner filed a second set of interrogatories on September 21. Petitioner also filed her Rule 37 affidavit on November 16, 1987. Respondent answered the second set of interrogatories, only by refusing to answer each on the grounds of irrelevancy and immateriality. On the same day, October 19, 1987, respondent filed a motion for dismissal of the action, according to Rule 41(b), M.R.Civ.P., for lack of prosecution. The motion to dismiss was heard by the District Court on November 10, 1987. After the hearing, the District Court ordered that the parties attempt to work out a settlement agreement. When this proved fruitless, the District Court reviewed briefs by both parties on the Rule 41(b) motion and on June 1, 1988, granted respondent's motion. The only issue on appeal here is whether the trial court abused its discretion in granting respondent's motion. Rule 41 (b) , M.R. Civ.P., states that in cases where a plaintiff fails to prosecute or comply with the rules of civil procedure a defendant may move for dismissal of the action. Respondent alleges that petitioner has failed to prosecute and, as proof, has provided letters from his attorney to petitioner's attorney asking why no action had taken place. This obviously implies that respondent has been willing to present his defense but petitioner has not pre- sented her case. However, the letters date between 1971 and 1975. Respondent did not move for dismissal until 1987. Respondent also argues that the defense of laches is ap- plicable. In Hereford v. Hereford (1979), 183 Mont. 104, 108, 598 P.2d 600, 602, we stated that l'[l]aches means negligence to the assertion of a right, and exists where there has been a delay of such duration as to render enforcement of an asserted right inequi- table. It The progression of this case has been tediously slow since petitioner filed for dissolution in 1971. In light of the cir- cumstances surrounding this case, there was no delay so significant as to cause injury to the respondent. Respondent was aware that appellant was continuing prosecution when she filed a second set of interrogatories on September 21, 1987. Respondent refused to answer the interrogatories but filed for a Rule 41(b) motion. We think that the rule which is best applicable in this case is the one adopted in Brymerski v. City of Great Falls (1981), 195 Mont. 428, 432, 636 P.2d 846, 848-849: . . . that a motion to dismiss for failure to prosecute will not be granted if the plaintiff is diligently prosecuting his claim at the time the motion is filed, even if at some earlier time the plaintiff may have failed to act with due diligence. At the time respondent moved for dismissal, appellant was actively prosecuting. We therefore hold that the District Court abused its discretion in granting respondent's motion. If we assume, arguendo, that the delay in prosecution was unreasonable, we look to Calway v. Jones (1978), 177 Mont. 516, 519, 582 P. 2d 756, 758, which states that, I1[a]n unreasonable delay therefore operates to place upon the party seeking relief the burden of demonstrating a reasonable excuse for his inaction.I1 We think that the appellant has shown a reasonable excuse for any inaction she may have taken. Specifically, this Court refers to the fact that the respondent has never filed the Rule 37 affidavit that was required subsequent to the 1983 trial. The information required on the affidavit--health, wealth, and income--is necessary to continue prosecution. In fact, the second set of interrogato- ries (which respondent refused to answer), asked respondent to list information concerning real estate holdings and whether child support had ever been paid for the daughter of the marriage. Many of the questions could have been answered in the Rule 37 affida- vit. In the case of a Rule 41(b) motion: While no precise rule or formula sets forth what period of inactivity is necessary to find a failure to prosecute, it is well established that the court's decision will not be dis- turbed on appeal absent a clear abuse of discretion. Thomas v. Wilson (Mont. 1989), - P.2d , 46 %.Rep. 160, 162; Cook v. Fergus Electric Cooperative, Inc. (Mont. 1988) , P. 2d , 45 St.Rep. 2285. Cook addressed the proper pursuit of prosecution concerning discovery: [We] note that no discovery had been conducted . . . If the discovery had been completed, plaintiffs had a duty to pursue the prosecu- tion and bring the case to trial. If dis- covery was not complete, it was their duty to see steps were taken to ensure it was con- ducted. Rule 41(b), M.R.Civ.P. The plaintiffs pursued neither course of action, showing the court no indication of their desire to bring the case to trial. Cook, 45 St.Rep. at 2288. Appellant here, on the other hand, has shown the court an indication of her desire to continue discovery and bring the case to trial. Reversed. We concur: Chief Justice Mr. Justice Will-iam E. Hunt, Sr., d.issenting: I dissent. The judgment of dismissal for fail-ure to prosecute by the District Court should be affirmed. Rule 41 (h) , M. R.Civ.P. provides that where a plaintiff failed to exercise due diligence in bringing her case to court, dismissal for failure to prosecute is addressed to the sound discretion of the trial court and will not he overturned absent a showing of abuse of discretion. Shackleton v. Neil (1983), 207 Mont. 96, 6 7 2 P.2d Ill?; Calaway v. Jones (1978), 177 Mont. 516, 582 P.2d 756. The rationale behind trial court discretion under Rule 41(b), M.R.Civ.P., is that since no statute of limitations pertains to the matter, trial court discretion is the only vehicle available for dismissal. Here, the trial court consid-ered the many years of delay concerning the property settlement in this dissolution action and dismissed the action accordingly. Although there is no burden on the respondent to show injury by the delay, Shackleton, 67'2 P.2d at 1115, respondent argued that he was prejudiced by petitioner's delay due to the inability to effectively prepare a defense. He claimed this was because of petitioner's failure to respond to discovery requests. Actually, the law presumes injury to the respondent and places the burden on the petitioner to show good cause for delay. Calaway, 582 P.2d at 758, citing Cremer v. Braaten (1968), 151 Mont. 18, 20, 438 P.2d 553, 554. The majority argued that respondent never prepared a Rule 37 affidavit, as ordered h s 7 the District Court to be filed on June 1, 1983, thus, excusing petitioner's inaction for four years. This does not constitute good cause for the delay considering that petitS.oner herself did not. file a Rule 37 affidavit until- November 16, 1.987. Further, petitioner did nothing on the case from June 30, 1983, when she served her first set of interrogatories and requests for production on respondent, until September 21, 1987, when she served her second set of interrogatories on respondent. Four years lapsed before any action on petitioner's part occurred. Similarly, in Calawax a delav of three years was held unreasonable. - - The majority relies on Brymerski v. City of Great Falls (1981), 195 Mont. 428, 636 P.2d 846, when stating that petitioner was diligently prosecuting her claim at the time respondent filed the motion thereby negating the District Court's ruling. H O W C ~ T T ~ ~ , petitioners only action at this point was the service of her second interrogatories on respondent which prompted respondent's motion to dismiss. Certainly, petitioner di.d not act with due diligence on the matter. Although lapse of time itself is insufficient to justify dismissal, Calaway, 582 P.2d at 758, the petitioner must further demonstrate a reasonable excuse for inaction, Shackleton, 672 P.2d at 115, citing Calaway, 582 P.2d at 758, which she f a . i . l e d to establish. The District Court did not abuse its discretion in granting respondent's motion to dismiss for failure to prosecute since petitioner did not show good cause for delay. I would affirm the judgment of dismissal for failure to prosecute by the District Court. We concur in the foregoing dissent of Mr. Justice William E. Hunt, Sr. | April 18, 1989 |
15ca6c99-8553-4592-8c8f-39c8c8834295 | MARRIAGE OF HUGHES | N/A | 88-006 | Montana | Montana Supreme Court | No. 8 8 - 0 6 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 I N RE THE MARRIAGE OF GERALD E. HUGHES, P e t i t i o n e r and A p p e l l a n t , and AUDREY ANN HUGHES, R e s p o n d e n t and R e s p o n d e n t . APPEAL FROM: D i s t r i c t C o u r t of t h e N i n t h J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of G l a c i e r , T h e H o n o r a b l e R.D. M c P h i l l i p s , Judge presiding. COUNSEL OF RECORD: For A p p e l l a n t : R a n d y K . D i x , H e l e n a , M o n t a n a For R e s p o n d e n t : M a r c G. B u y s k e ; A n d e r s o n , B e a t t y & L e e , Shelby, M o n t a n a S u b m i t t e d on B r i e f s : F e b . 9 , 1 9 8 9 i - ! r: D e c i d e d : 2 1 , 1 9 8 9 . J . I > ' + . - I I , .; i I ' 1 1 t, * i *, b d b * ' d ' , . 'a f C l e r k Mr. Justice Fred J. Weber delivered the Opinion of the Court. Mr. Hughes appeals from an Order of Clarification issued by the District Court for the Ninth Judicial District, Gla- cier County, following a judgment entered in the parties' divorce proceedings before that court. We reverse and remand for further proceedings. The issue presented for our review is whether the Dis- trict Court erred in granting Mrs. Hughes permanent mainte- nance in its Order for Clarification. The parties had been married for 25 years when they separated in April of 1982. The marriage was dissolved in 1986. Three children were born of the marriage, all of whom were emancipated at the time of the divorce proceedings. During the marriage, Mrs. Hughes was not, for the most part, employed outside the home. She raised the children and served as homemaker in the various locations in which the family lived while Mr. Hughes pursued his career as a mi1.i- tary officer with the United States Air Force. Mr. Hughes served fourteen of his active duty years in the United King- dom primarily because Mrs. Hughes was a British citizen and preferred to live in England. After 23 years of active service, Mr. Hughes retired in 1978, having attained the rank of major. Following Mr. Hughes' retirement, the parties remained in Scotland. Mr. Hughes sold automobiles and Mrs. Hughes began working as a social worker for the local government. In 1982, Mr. Hughes moved to the United States to pursue a second career in hospital administration. Mrs. Hughes chose not to accompany her husband. She remained in the family residence in Scotland and continued her employment as a social worker. Upon his return to the United States, Mr. Hughes worked as a hospital administrator in Ekalaka, Montana, then in Cut Bank, and finally in Helena, Montana. While in the United States, Mr. Hughes continued to support his family by depos- iting his entire Air Force pension check in a bank account in Scotland along with other monies from his hospital employ- ment. That assistance continued until November of 1986 when the parties' youngest child reached the age of majority. That same month, the marriage was dissolved by the Glacier County District Court and the court ordered Mr. Hughes to keep current all of the mortgage payments, taxes, and insur- ance associated with the Scotland residence. In January of 1987, Mr. Hughes was ordered to pay $300 per month temporary maintenance "until the final determina- tion of this matter, either by Court Order or by mutually agreed upon settlement." A final hearing was held on March 23, 1987, and the trial court issued its Findings of Fact and Conclusions of Law dated July 31, 1987. Pursuant to that judgment, Mrs. Hughes was awarded the family residence in Scotland, "40% of the Air Force pension and all personal effects and furnishings in Scotland." She was to assume all debt incurred in Scotland. Mr. Hughes was awarded "60% of the Air Force pension, the retirement funds associated with his hospital employment, and his personal effects. " He was to assume all debts incurred in the United States. On July 29, 1987, Mrs. Hughes filed a timely motion requesting clarification of the court's order concerning the Air Force pension award. Specifically, she requested that the court clarify whether it intended her to receive 40% of the lump sum present value of the pension, or whether she was entitled to receive 40% of some monthly payment due to Mr. Hughes. The court issued its Order of Clarification on August 28, 1987, which is the subject of this appeal. In that order, the District Court stated: The Court has the authority to make the fol- lowing changes to its Order of July 31, 1987. Such changes are not corrections of substantial judicial error; rather they are merely attempting to specif- ically state the result this Court intended to achieve by its July 31, 1987 decision. The Court can make such changes under the authority of Rule 60 (a) , M. R.Civ.P. (Citations omitted. ) Moreover, Respondent's motion to clarify can be easily con- strued by this Court to be a timely motion under Rule 60(b), MRCP, and the Court finds sufficient reasons to justify clarifying its July 31, 1987 order, specifically, the potential problem created by using the phrase "40% of the Air Force pension" vis a vis 10 U.S.C. 1408, and 32 C.F.R. § 63 (stat- ute and regulations defining when and to what extent the military will make direct payments to a former spouse from a military pension); the poten- tial problem of finding a present value of an asset and then intending the former spouse to receive, in effect, a maintenance payment. The Court then ordered that the marital assets and liabilities be divided as follows: To Audrey Hughes: Assets: (1) residence in Tayport, Scotland (2) all household furnishings and effects located in Scotland. Liabilities: (1) all debts of the marriage in Scot land To Gerald Huahes: Assets: (1) U.S. Air Force pension (2) PERS pension (3) personal effects (4) Cadillac automobile Liabilities: all debts of the marriage in the U.S. Additionally, the Court awards to Audrey Hughes maintenance, payable monthly in the manner specified below, in an amount equal to $650.00 per month, or 408 of the disposable retired pay of Petitioner from his U.S. Air Force pension, which- ever is greater. On appeal, Mr. Hughes contends that the District Court had no authority to change what was originally contemplated as a property settlement to a maintenance award in the Order of Clarification because such relief was not requested by either party and because no findings were made to support such an award as required by statute. Both parties admit that an award of maintenance was not specifically requested, although Mr. Hughes' petition for dissolution requested "such other and further suitable arrangements as (the District Court) may deem just and proper." Mrs. Hughes argues that the failure to specifically request an award of maintenance does not preclude the Dis- trict Court from granting such relief as long as it is war- ranted by the evidence. As authority, Mrs. Hughes cites Rule 54 (c) , M.R.Civ.P., which states: . . . every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings. The discretion granted to the District Court in Rule 54 (c) , however, must be viewed in light of the particular nature of this case. In a dissolution proceeding, the court's power to grant relief is strictly statutory, and statutory guidelines are set forth to determine whet-her such relief is warranted in any case. Prior to granting an award of maintenance, the court is required to make specific find- ings under § 40-4-203, MCA: . . . the court may grant a maintenance order for either spouse only if it finds that the spouse - - - - - seeking maintenance: (a) lacks sufficient property to provide for his reasonable needs; and (b) is unable to support himself through appropri- ate employment . . . (Emphasis supplied.) Section 40-4-203 ( I ) , MCA. We therefore review the District Court's findings and conclusions to determine whether an award of maintenance was justified under S 40-4-203, MCA. The court found that Mrs. Hughes' take home pay as a social worker was approximately $680 per month, which is somewhat less than the usual wage for a social worker of Mrs. Hughes' experience and qualifications. The court concluded that she has reached her maximum earning capacity, subject to normal yearly salary increases, and that she has no formal training for the position she now holds or any other. The court also concluded that Mrs. Hughes' monthly expenses exceed her monthly income if no consideration is given to the Air Force payments provided by Mr. Hughes during the time he lived in the United States prior to the divorce. Finally, the court concluded that Mrs. Hughes has no assets capable of generating income, and that the only asset located in Scot- land, the family residence, is income consuming as it is still subject to a mortgage and to assessments for taxes and insurance. These findings tend to support an award. However, the District Court made other findings and conclusions which are contradictory and would not tend to support an award of permanent maintenance. Because of Mrs. Hughes' salary, the Scottish economy and standard of living, and the Scottish governmental benefits and military benefits to which she is entitled, the court found that Mrs. Hughes "is able to live somewhat comfortably from her own resourc- es." The court found that the standard of living in Scotland is not as high as in the United States, and that a divorced woman in Scotland would expect to receive a home free of any mortgages plus several years of maintenance to enable her to retrain if she were not employed or had no employment skills. Based on Mrs. Hughes' salary, the court concluded that she is capable of maintaining house payments on a $30,000 mortgage, with associated costs and expenses. The court also found that any maintenance payments received by Mrs. Hughes could reduce her take home pay be- cause of Scotland's tax structure. If she were not receiving temporary maintenance, the court found that her take home pay could be about $200 per month higher. There are no findings as to how Mrs Hughes' take home pay might be affected by an award of permanent maintenance. Finalllr, the court noted the source of many of Mrs. Hughes' expenses. In her claimed living expenses, Mrs. Hughes included the living expenses of the parties' youngest daughter, Christine, who was legally an adult at the time of trial and whom the parties had no obligation to support. The court found that Christine was able-bodied and capable of employment. While she managed a wine shop in Scotland, she did not share or contribute to the expenses incurred in Mrs. Hughes' home. Mrs. Hughes also supported the oldest daugh- ter, Karen, up until the time of her wedding in November, 1986. Karen is involved in equestrian pursuits, and partici- pates in jumping contests and other equestrian competitions which Mrs. Hughes actively supports. The court noted it to be an expensive hobby, and found, "If one follows such a hobby and only has middle-income means, it severely strains the budget. . . She (Mrs. Hughes) will have to, and should be expected to, more realistically approach her 1-ifestyle in order to live within her means." These findings do not establish that Mrs. Hughes is entitled to permanent maintenance under the requirements of S 40-4-203, MCA. We conclude that this case should be remanded for reconsideration by the District Court after the making of new findings which meet the requirements of the statutes. Mrs. Hughes requested that this Court reinstate tempo- rary maintenance in the event of a remand. We note that the issue of interim maintenance is already before the District Court by way of Mrs. Hughes' motion for enforcement of tempo- rary maintenance orders. In light of her pursuit of an adequate remedy in the lower court, we decline to exercise appellate action in this regard in accordance with State ex rel. Kaasa v. District Court (1978), 177 Mont. 547, 551, 582 P.2d 772, 775. We reverse and remand this case for further proceedings consistent with this opinion. We Concur: // l~ustices 4 i / Justice William E. Hunt did not participate in this case. | March 21, 1989 |
a035745c-4c06-491d-a64e-073dc5fc4a10 | MATTER OF A H | N/A | 88-367 | Montana | Montana Supreme Court | No. 88-36? IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 IN THE MATTER OF A.H., A.H., J.A.H., Youths in Need of Care. APPEAL FROM: District Court of the First Judicial District, In and for the County of Lewis & Clark, The Honorab1.e Henry Lnhle, Judqe presidinq. COUNSEL OF RECORD: For Appellant: 2. Mayo Ashley, Helena, Montana For Respondent: Hon. Marc Racicot, Attorney General, Helena, Montana Dorothy McCarter, Asst. Atty. General, Helena Mike ~ c ~ r a t h , County ~ t t o r n e ~ , Helena, Montana Carolyn Clemens, Deputy County Atty., Helena Randi Hood, Guardian Ad Litem, Helena, Montana t - e 3 0 > : : - "; ""' . - . c > I { ! Submitted on Briefs: Feh. 3, 19P9 P Clerk Mr. Justice R. C. McDonough delivered the Opinion of the Court. This is an appeal from a ruling of the District Court of the First Judicial District, 1,ewi.s and Clark County, terminating the mother's parental rights to J.H., a minor, and committing T.H. and A.H., minors, to the long-term custody of the State. We affirm. The mother frames a single issue on appeal: Whether the District Court erred in terminating the mother's parental rights to J.H. and in granting long-term custody of T.H. and A.H. to the State Department of Family Services. This action is the latest in a series of dealings between the State and the mother, who suffers from emotional and psychological disturbances. The mother initially relinquished custodv of her four minor children on a voluntary basis, and they were placed in foster homes. In March of 1986, the State petitioned the District Court for temporary custody and protective services. After several hearings on the petition, the court issued an order in June of 1986, in which it found the children to be "youths in need of care" and directed the Lewis and Clark County Department of Family Services (Department) to develop a treatment plan. The plan developed by the Department was designed to reunite the children with the mother, and was divided into three phases. The goal of the first phase was: To restore [the motherl's mental/emotional health and capability to a level sufficient to enable her to conduct herself behaviorally in a manner which would make it reasonable for mental health and child protective service professionals to believe her likely to function responsibly in the future as an adult, parent and homemaker. The goal of the second phase was for the mother to maintain the mental and emotional stability established during the first phase. The third phase would then attempt to restore full custody of the children to the mother. The plan would take approximately one year. During that time, the children would remain in the custody of the Department. The mother was making apparent progress under the first two phases, and in the spring of 1987, the process of reintegrating the children into the mother's home began. However, the children soon exhibited behavioral problems. On November 10, 1987, the State filed a petition seeking to to terminate the mother's parental rights, or in the alternative, for long-term custody of A.H., T.H. and J.H. !the fourth child had since reached majority). On November 20, the State petitioned for temporary investigative authority and protective services. The court granted the latter petition, provided that the children remained in foster care and had no contact with the mother until she had completed a psychiatric evaluation. A hearing on the State's petition to terminate parental rights was held in January of 1988. The court heard evidence concerning the state of the mother's mental health, as we1.l as the health of the children. In March of 1988, the court issued its order terminating the mother's parental rights as to J.H., and granting long-term custody of A.H. and T.H. to the State. This appeal followed. I. Termination of Parental Rights In our recent decision, Matter of J.L.S. (Mont. 1988), 761 P.2d 838, 45 St.Rep. 1842, we outlined the legal standards to be applied to this type of case. We noted that a parent's right to custody is a fundamental liberty interest. The State may petition for termination of parental rights, but it must show by clear and convincinq evidence that the statutory criteria for such termination have been met. J.L.S., 761 P.2d at 840. The District Court views the evidence and decides whether the State has met that burden. We will not disturb the District Court's decision "unless a mistake of law exists or the factual findings are not supported by substantial credible evidence." J.L.S., 761 P.2d at 840-41 (citing In re V.R. (Mont. 1987), 744 P.2d 1248, 44 St.Rep. 1838). The termination of parental rights is governed by 5 41-3-609, MCA. Under this statute, parental rights can be terminated only after three requirements are satisfied: (1) the children have been adjudicated youths in need of care, (2) a court-approved treatment plan has not been complied with or has been unsuccessful, and (3) the conduct or condition causing the problem cannot be rectified within a reasonable time. J.H., A.H., and T.H. were adjudicated youths in need of care by the District Court's order of June, 1986. That order was not appealed, and both sides agree that the first requirement under the above statute was therefore met. The District Court made a specific finding on the second requirement; the court-approved treatment plan had not been complied with due to disruption caused by the mother, and it was therefore not successful. Counsel for the mother disputes this finding on appeal. Counsel argues that witnesses who testified about lack of compliance with the plan gave inconsistent testimony on some points, and were in conflict with testimony given by other witnesses. In addition to the mother, nine witnesses testified before the District Court. Joe Baumgardner, the Department social worker who submitted the treatment plan approved by the court, testified about his concerns regarding behavioral problems (e. g. , defiance and aggressiveness) that resurfaced in the children after each visit with the mother during the second phase of the plan. Baumgardner had become worried that even if the mother were able to gain some control of her own problems, she might not be able to deal with the children. He also testified about actions by the mother in violation of the plan: her association with known and suspected felons (one of whom had been convicted of sexually deviant conduct with children) that brought the children into contact with these people; her interference with the children's schooling; her arrest for assaulting one of the children; and other conduct Baumgardner characterized as "bizarre," causing him to fear for the safety of the children in the mother's home. Sandi Ashley, a private therapist who has treated the mother and two of the children at various times since 1982, testified about the mother's consistent refusal to take prescribed medication and her threatening behavior toward Ashley and personnel in Ashley's office. Ashley also testified about the mother's unpredictable behavior toward the children, which had caused them to distrust her, and about the children's complaints that the mother was not complying with the treatment plan. There was also testimony by Dr. George Cloutier, who has diagnosed the mother as being a manic depressive in a hypomanic stage. Dr. Cloutier also testified about having difficulty in getting the mother to take prescribed medication and about the mother's difficulty in benefitting from therapy. The State also presented documentary evidence concerning the behavioral problems that Raumgardner had noticed in the children, which stemmed from their association with their mother. This evidence described behaviors such as uncontrolled urination, aggression and threats to burn down a foster home. The children continue to exhibit anxiety, identity disorders, depression and possible suicidal tendencies. Two of the children have been recommended for extensive therapy in order to address emotional and personality disorders. The District Court's finding as to the second statutory requirement was supported by substantial credible evidence. The record shows that the mother failed to comply with the treatment program. The continuing problems exhibited by the mother and the children are clear evidence that the plan has not been successful. The court also found that the third requirement was satisfied; it was apparent that the conduct or condition rendering the mother unfit was unlikely to change within a reasonable time. The court made a specific finding that continuation of the parent-child Legal relationship would result in continued abuse or neglect of the children. Counsel for the mother also disputes this finding, and first points out that Dr. Cloutier testified it would take three or four months to correct the mother's condition with proper therapy. This, it is argued, is a reasonable time. However, Dr. Cloutier testified that the three- or four-month period would be a minimum time frame for stabilizing the mother. It would then be necessary to assess her situation and begin a course of treatment. Dr. Cloutier also reiterated the problems encountered in getting the mother to take medication. This could lengthen the stabilization period significantly. The mother's counsel also argues that the District Court ignored the statutory considerations to be used in making this finding. Section 4 1 - 3 - 6 0 9 ( 2 ) , MCA, lists factors to be considered before finding that continuation of the parent-child relationship would be detrimental. These factors include an emotional or mental illness of the parent, a history of violent behavior by the parent, and any reasonable efforts by protective service agencies that have been unable to rehabilitate the parent. The evidence discussed above shows these factors to be present in this case. The court also noted the mother's persistent and perhaps worsening condition, which was evident from her behavior at the hearing. The mother showed a lack of coherence and control to the point of screaming, pounding her fists and defecating in her pants. The District Court's finding on the third statutory requirement is supported by substantial credible evidence. 11. Long-Term Custody The District Court granted custody of T.H. and A.H. to the State until such time as they reach the age of 18, or until further order of the court. The court's authority to do so was derived from S 41-3-406, MCA. Under this statute, once a youth is found to be abused, neglected or dependent, custody of that youth can be transferred to the State. F7e will not overturn such a ruling absent a clear showing of abuse of discretion. In re Moyer ( 1 9 7 7 ) , 173 Mont. 208, 567 P.2d 47. Given the unfortunate circumstances resulting from the mother's emotional and psychological difficulties, it is clear that granting custody of these two youths to the Department was not an abuse of discretion. The District Court applied the correct law to the facts before it, and its findings of fact are supported by substantial credible evidence. We therefore affirm the court's order. Justice /+ We Concur: D | March 2, 1989 |
03da0be0-1118-462f-8bef-456f9830a5a1 | PETERSON RANDOLPH V INC v J R | N/A | 89-070 | Montana | Montana Supreme Court | No. 89-070 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 RANDOLPH V. PETERSON, INC., Plaintiff and Appellant, -vs- J.R. SIMPLOT CO., a Nevada corporation; HARNISCHFEGER CORPORATION, a Delaware corporation; and GOLDEN SUNLIGHT MINES, INC., a California corporation, Defendants and Respondents. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable Jack L. Green, Judge presiding. COUNSEL OF RECORD: For Appellant: Philip D. Tawney; Mullendore & Tawney, Missoula, Montana Peter Michael Meloy, Helena, Montana For Respondent: Lawrence F. Daly ; Garlington, Lohn & Robinson, Missoula, Montana Robert J. Sullivan; Boone, Karlberg, & Haddon, Missoula, Montana Alan L . Joscelyn; Gough, Shanahan, Johnson & Waterman, '-1 Helena, Montana r: ci ~ . .- i : , . - " - ,' > . ;..i led: - ; 2 Submitted on Briefs: June 16, Justice Fred J. Weber delivered the Opinion of the Court. This appeal arises from an order by the District Court, Fourth Judicial District, Missoula County, granting summary judgment in favor of defendants. Plaintiff appeals. We affirm. We restate the issues as follows: 1. Did the District Court err in granting summary judgment in favor of defendant J.R. Simplot Co.? 2. Did the District Court err in granting summary judgment in favor of defendant Harnischfeger Corporation? 3. Did the District Court err in granting summary judgment in favor of defendant Golden Sunlight Mines, Inc.? Randolph V. Peterson, Inc. (RVP) brought suit against J. R . Simplot Co. (Simplot), alleging breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment. RVP brought suit against Harnischfeger Corpora- tion (Harnischfeger) and Golden Sunlight Mines, Inc., (Golden Sunlight) alleging, as to each defendant, tortious interfer- ence with contract and unjust enrichment. The facts giving rise to these suits began in January 1987, when Simplot, a mining corporation operating a mine in Afton, Wyoming, began inquiries with various companies re- garding the purchase of a new mining shovel. In 1979 Simplot had purchased a new electric mining shovel from Harnischfeger, a manufacturer and dealer in heavy equipment. Thus Simplot began discussions with Harnischfeger regarding the purchase of a new hydraulic shovel in January 1987. These discussions included the possibility of trading in the old shovel for credit on a new one. Golden Sunlight is a mining company operating near Whitehall, Montana. It also began negotiations with Harnischfeger in January 1987 regarding the purchase of a new mining shovel. Golden Sunlight requested a quote on a new mining shovel and this information was sent to Golden Sun- light on February 2, 1987. In early April 1987 Golden Sun- light indicated to Harnischfeger that the company might be interested in a used shovel, so on April 8 Harnischfeger sent Golden Sunlight information about three used shovels, includ- ing the one owned by Simplot. RVP is a heavy equipment broker, based in Missoula, Montana. In March of 1987, RVP contacted Simplot with an offer to market Simplot's used mining shovel. The original offer by RVP requested an exclusive marketing contract, whereby only RVP could market the shovel. Simplot, however, rejected the exclusive marketing arrangement. Instead, Simplot sent RVP a letter dated March 16, 1987, outlining the bases upon which RVP could market the shovel. The contract stated, inter alia, that RVP agrees to represent Simplot on a non-exclusive basis, that the sale of the shovel shall be a price of $725,000 cash to Simplot, that RVP would receive a 10% commission if sold for this amount, and that the sale would be subject to final approval by Simplot. Simplot reserved the right to refuse to sell to any party, and the right to withdraw the shovel at any time. RVP signed the contract, returning it with a letter from RVP which stated: As mentioned above, we normally only take machinery listings on an exclusive basis. However, we are prepared to market your shovel on a non-exclusive basis as outlined in your letter of March 16th so long as we are in agreement that RVP will be the single marketing representative for you until such time as one of the following occurs: 1. Simplot elects to withdraw the shovel for sale. 2. Simplot trades the shovel in to the factory. 3. Simplot no longer wishes RVP to sell the shovel. RVP would be paid its commission on any sale later consummated if RVP had solicited the Buyer. The parties agree that these two letters together formed the marketing agreement. Mr. Peterson, the owner of RVP testified by deposition that when he signed the contract he was aware that Simplot was negotiating with Harnischfeger regarding a possible trade-in of the shovel. Based upon the marketing agreement, RVP prepared bro- chures advertising the shovel and mailed them to possible purchasers. Golden Sunlight received a brochure on April 3, 1987, and on April 30, 1987 it contacted RVP. On May 14, 1987, an agent of RVP took two representatives of Golden Sunlight to Afton, Wyoming to inspect the shovel. On March 10, 1987 Harnischfeger inspected Simplot's used shovel, and discussed with Simplot its trade-in value and the purchase of a new shovel. In late April 1987 Harnischfeger learned through discussions with Golden Sunlight that a broker, RVP, was attempting to market the shovel. Harnischfeger inquired of Simplot whether it could still take the shovel on trade. Simplot assured the company that it could. Golden Sunlight also made inquires of Harnischfeger as to its ability to sell the shovel, since Golden Sunlight knew that RVP was also marketing it. Golden Sunlight re- ceived assurances from Harnischfeger that it would be able to resell the shovel should the trade-in occur. Harnischfeger continued its negotiations with Simplot for the purchase of the new mining shovel. On May 19, 1987, Simplot received Harnischfeger's written proposal for that sale. On May 27, Harnischfeger sent a proposal to Simplot offering a $650,000 credit on the new shovel, in exchange for a trade-in of the used shovel. By letter dated May 27, 1987, Harnischfeger confirmed to Golden Sunlight its right to sell the used shovel, and quoted a price of $675,000. Earlier, on April 30, RVP had offered to sell the shovel to Golden Sunlight for a price of $725,000. On May 29, Golden Sunlight expressed an interest in purchasing the shovel from Harnischfeger, but Golden Sunlight requested that an additional $50,000 worth of spare parts for the shovel be included in the deal. Harnischfeger then negotiated with Simplot regarding the spare parts, and Simplot agreed to include $50,000 worth of spare parts in the trade-in of the shovel to Harnischfeger. At some point between May 27 and June 2, Simplot made a verbal agreement with Harnischfeger to trade in the shovel, and purchase the new one, and on June 5, 1987, Simplot gave Harnischfeger a purchase order number. According to this agreement, Simplot would trade in the used shovel for a credit of $650,000 against the purchase price of a new shov- el. Additionally, Simplot agreed to trade in $50,000 of spare parts to Harnischfeger. On June 1, 1987, Golden Sunlight verbally agreed to purchase the used shovel from Harnischf eger . June 8, 1987, Golden Sunlight issued a written purchase order for the shovel. Also on June 8th, RVP telephoned Golden Sunlight and learned that it had decided to purchase the shovel from Harnischfeger. RVP then sent a letter to Simplot that same day by Federal Express, stating that he had found a purchaser for the shovel. Enclosed with the letter was a check for a down payment of $72,500. Mr. Peterson later testified that the purchaser was himself. On June 11, Simplot returned the check to RVP, stating that the shovel had been taken in on trade by Harnischfeger on a new shovel. On July 10, 1987, RVP filed suit against Simplot, Harnischfeger, and Golden Sunlight. Following discovery, which included deposing all parties, the defendants moved for summary judgment. Oral argument was held on this motion on December 8, 1988. The court granted summary judgment in favor of all three defendants. Did the District Court err in granting summary judgment in favor of J.R. Simplot Co.? The standard of review, in determining whether summary judgment should have been granted has been stated as follows: The standard by which this Court reviews an appeal from a motion granting summary judgment is whether the record, when taken as a whole, shows no genuine issue of material fact. Kronen v. Rich- -- ter (Mont. 1984), 683 P.2d 1315, 1317, 41 - St.Rep. 1312. Where critical testimony is taken by deposition, this Court will closely examine the District Court's findings . When reviewing deposition testimony the reviewing court is in a like position to the District Court and is freely able to review such evidence. Kaiser v. Town of Whitehall (Mont. 1986), 718 ~ . 2 d 134171342, 43 St.Rep. 176. A party opposing a motion for summary judgment may not rest upon the allegations or denials of his pleadings. The party's response must set forth specific facts showing there is a genuine issue for trial. National Gypsum Co. v. Johnson (1979), 182 Mont. 209, 595 P.2d 1188, 1189. Conclusory or speculative statements are insufficient to raise a genuine issue of material fact. Kronen, 683 P.2d at 1318. Spadaro v. Midland Claims Service, Inc. (Mont. 19871, 740 ~ . 2 d 1105, 1108, 44 st.~ep. 1221, 1224. Regarding summary judgment, this Court has also stated: It is true that the party moving for summary judg- ment has the burden of establishing the absence of any genuine issue of material fact, and the party opposing the motion must supply evidence supporting the existence of a genuine issue of material fact. Pretty on Top v. City of Hardin (1979), 182 Mont. 311, 315, 597 P.2d 58, 60. The general purpose of Rule 56, M.R.Civ.P., is to eliminate unnecessary trial, delay and expense. The purpose of the hearing on the motion is not to resolve factual issues, but to determine whether there is any genuine issue of material fact in dispute. The opposing party's facts must be material and of a substantial nature, not fanciful, frivolous, gauzy nor merely suspicions. Silloway v. Jorgenson (1965), 146 Mont. 307, 310, 406 P.2d 167, 169. Westlake v. Osborne (1986), 713 P.2d 548, 550, 43 St-Rep. RVP contends that Simplot breached its contract by authorizing Harnischfeger to sell the shovel to Golden Sun- light before the trade-in occurred. RVP alleges that the sale to Golden Sunlight was consummated before the trade-in and was really a direct sale from Simplot to Golden Sunlight. RVP contends that at a minimum these are genuine issues of material fact which are proper for jury determination, not summary judgment. The contract between RVP and Simplot specifically al- lowed a trade-in to the factory, and RVP knew when it signed the contract that Simplot was negotiating with Harnischfeger regarding a possible trade-in of the used shovel. According to the express terms of the contract, the trade-in to Harnischfeger was allowed. RVP failed to present facts showing a contract breach as a result of the trade-in. RVP urges that a letter, dated May 27, 1987, from Harnischfeger to Simplot, demonstrates that Simplot author- ized a sale by Harnischfeger to Golden Sunlight of the used shovel prior to the trade-in. In regard to the used shovel, the letter stated, "If we are able to sell the [used shovel] it will be traded in on a P & H Model 1200 . . . " This letter, written by Harnischfeger to Simplot, demonstrates nothing in regard to Simplot's actions. Deposition testimony by Simplot representatives demonstrates that Simplot was concerned only with the trade-in of the shovel and had no interest in or knowledge of Harnischfeger's sale negotiations with Golden Sunlight. While there was testimony by Simplot that in late May it became aware that Harnischfeger was negotiating a sale of the used shovel with a third party, there are simply no facts suggesting that Simplot was in- volved in any sale of the shovel. The District Court concluded that the trade-in and sale to Golden Sunlight were contemporaneous and RVP has demon- strated no material facts to refute this. At some point between May 27 and June 2, Simplot and Harnischfeger orally agreed to the purchase of a new shovel and the trade-in of the used shovel. Also on June 1, Golden Sunlight gave Harnischfeger a verbal order to purchase the used shovel. On June 5, Simplot gave Harnischfeger a purchase order number for the transaction, and on June 8, Golden Sunlight gave Harnischfeger a written purchase order. We conclude that RVP has failed to show any genuine issues of material fact re- garding an alleged breach of contract by Simplot. RVP does not support his allegations with anything more than specula- tion and suspicion. This does not defeat a summary judgment motion. RVP contends that Simplot breached an implied covenant of good faith and fair dealing in its contractual relation- ship with RVP. The covenant of good faith and fair dealing is measured by the justifiable expectations of the parties. As we stated in Nicholson v. United Pacific Ins. Co. (1985), 219 Mont. 32, 710 P.2d 1342: The nature and extent of an implied covenant of good faith and fair dealing is measured in a particular contract by the justifiable expectations of the parties. Where one party acts arbitrar- ily, capriciously or unreasonably, that conduct exceeds the justifiable expecta- tions of the second party. Nicholson, 710 P.2d at 1348. In the present case RVP failed to present facts showing that Simplot's conduct violated RVP1s justifiable expecta- tions, or that it was arbitrary, capricious or unreasonable. The trade-in was allowed by the contract, and RVP was aware of the negotiations between Simplot and Harnischfeger prior to the trade-in. Also, RVP cannot reasonably contend that it did not expect Harnischfeger to resell the shovel. Harnischfeger is a dealer in heavy machinery which engages in the sale of used equipment. No material facts support RVP1s contention that his expectations were violated. We affirm the District Court in its holding that no genuine issue of material fact existed regarding an alleged breach of this covenant. RVP contends that Simplot was unjustly enriched because Simplot did not have to pay the 10% brokerage commission. It contends that RVP solicited the buyer, Golden Sunlight, and was therefore due a commission. Unjust enrichment is an equitable doctrine wherein the plaintiff must show some element of misconduct or fault on the part of defendant, or that the defendant somehow took advantage of the plaintiff. Brown v. Thornton (1967), 150 Mont. 150, 156, 432 P.2d 386, 390. In the present case, RVP1s contention that it was due a commission and that Simplot was unjustly enriched is without merit. No commission was due RVP since it did not consummate a sale to Golden Sunlight. Neither did RVP "solicit" Golden Sunlight as a buyer, thereby earning a commission. The facts reveal that Harnischfeger had begun discussions with Golden Sunlight fully three months before Golden Sunlight was con- tacted by RVP. Additionally, no evidence suggests that Simplot obtained any advantage by trading the shovel in to Harnischfeger. In fact, RVP admitted that Simplot probably would have been better off financially to have sold the shovel through RVP. We conclude that RVP failed to demon- strate facts showing that Simplot was unjustly enriched. We affirm the District Court in its grant of summary judgment in favor of defendant Simplot. I1 Did the District Court err in granting summary judgment in favor of defendant Harnischfeger? RVP contends that Harnischfeger tortiously interfered with RVP's contract with Simplot and that Harnischfeger was unjustly enriched. The elements of tortious interference with contract were stated in Bolz v. Myers (1982) , 200 Mont. 286, 295, 651 P.2d 606, 611, as follows: In order to establish a prima facie case of interference with contractual or business relations, it must be shown that the acts (1) were intentional and will- ful, (2) were calculated to cause damage to the plaintiff in his or her business, (3) were done with the unlawful purpose of causing damage or loss, without right or justifiable cause on the part of the actor, and (4) that actual damages and loss resulted. Bermil Corp. v. Sawyer (Fla.App. 3rd Cir. 1977), 353 ~ r 2 d 579. Additionally, other authorities have noted that the tort of tortious interference with contract requires that defen- dant act for an improper purpose. W. Keeton, The Law of Torts, (5th Ed. RVP contends that Harnischfeger tortiously interfered with its contract with Simplot in that it intentionally and willfully acted to sell the shovel, knowing this would de- prive RVP of its contractual rights, and with a purpose to provide unjustifiable gain to itself. The District Court found no genuine issues of material fact to support this allegation, and we agree. When Harnischfeger learned of RVP's efforts to market the shovel, it immediately inquired of Simplot whether the shovel could still be taken on trade. Receiving assurances from Simplot that the brokerage agreement with RVP allowed the trade-in, Harnischfeger then continued to negotiate with Golden Sunlight. The subsequent sale of the shovel was no more than a reasonable and legitimate business transaction. We conclude that RVP has failed to raise any genuine issues of fact which would suggest that Harnischfeger acted improp- erly, or that its acts were intentionally calculated to cause damage to RVP. We conclude that no genuine issues of materi- al fact exist as to whether Harnischfeger tortiously inter- fered with the contract. RVP's contention that Harnischfeger was unjustly enriched similarly fails, in that RVP points to no facts indicating misconduct by Harnischfeger. We affirm the District Court in its grant of summary judgment in favor of defendant Harnischfeger. I11 Did the District Court err in granting summary judgment in favor of defendant Golden Sunlight? RVP also alleges tortious interference with contract and unjust enrichment as to the third defendant, Golden Sunlight. However, we conclude that no genuine issues of material fact support these allegations. Golden Sunlight knew that both Harnischfeger and RVP were marketing the shovel. Golden Sunlight inquired of Harnischfeger whether it could rightfully sell the shovel. After Harnischfeger received assurance from Simplot that the marketing agreement with RVP allowed the trade-in to Harnischfeger, Harnischfeger responded to Golden Sunlight that it could sell the shovel in the event of a trade-in. RVP contends that Golden Sunlight "had an affirmative obligation to investigate that this was the case." RVP further argues that since Golden Sunlight did not do so, its actions amounted to tortious interference with contract. As noted previously, this tort requires an intentional act for an improper purpose. Bolz, 651 P.2d at 611; Keeton, 5 129 at 982. RVP1s contention thus fails, as it merely alleges negligence on the part of Golden Sunlight. Finally, we conclude that RVP has failed to demonstrate any misconduct on the part of Golden Sunlight; thus the allegation of unjust enrichment must similarly fail. Brown, 432 P.2d at 390. We conclude that there are no genuine issues of material fact regarding whether Golden Sunlight tortiously interfered with the contract in the present case, or whether Golden Sunlight was unjustly enriched. We therefore affirm the District Court's grant of summary judgment in favor of Golden Sunlight. Affirmed. | August 25, 1989 |
7a40034f-b892-4f40-bca9-6bfbd8aae1a8 | O BRIAN v STATE | N/A | 88-414 | Montana | Montana Supreme Court | I N T H E SUPREME C O U R T O F THE STATE O F M O N T A N A JEFFREY KEVIN O'BRIAN, Defendant and Appellant, V S . STATE O F MONTANA, P l a i n t i f f and Respondent. APPEAL FROM: The D i s t r i c t Court of t h e Fourteenth J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Musselshell, The Honorable Roy C . Rodeghiero, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: John L. P r a t t ; Ask & P r a t t , Roundup, Montana For Respondent: Honorable Marc Racicot, Attorney General, Helena, Montana Paul D. Johnson, A s s i s t a n t Attorney General, Helena, Montana Floyd Brower, Musselshell County Attorney, Roundup, Montana Gerry M. Higgins, Deputy County Attorney, Roundup, Montana --, c-> 5/ < < , 1 , : , t ] L ! . 1 Submitted on B r i e f s : December 29, Decided: February 23, 1989 8 0, r a,. de: p ' LW$4i7,. b g C s a : - I" Clerk Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. Defendant Jeffrey 0' Brian (0 'Brian) appeals from the judgment and sentence entered bv the Fourteenth Judicial District Court, Musselshell County. Based upon the results of an Intoxilizer test administered to OtBrian, the District Court found him guilty beyond a reasonable doubt of a per se violation of driving a vehicle with a blood alcohol concentration greater than 0.10. We affirm. The sole issue raised upon appeal is whether the District Court erred in admitting the results of an Intoxilizer 5000 blood alcohol concentration test when the test was allegedly not administered in compliance with requirements of the Administrative Rules of Montana? Shortly after 2:00 a.m. on May 26, 1987, officer Woodrow Weitzeil stopped O'Brian for failing to dim his lights. The officer requested OtBrian to produce his drivert s license and insurance, which 0' Brian prod-uced without difficulty. The officer, however, detected the strong odor of alcohol on O'Rrian's breath while talking with him. Consequently, the officer requested O'Brian to take several field sobriety tests, including the Horizontal Gaze Nystagmus test and the one-legged stand test. Following these tests, the officer placed O'Brian under arrest for driving under the influence of alcohol (DUI) and drove him to the Musselshell County jail. An fntoxilizer SO00 test was administered at the jail. Officer Weitzeil, a trained operator of the Intoxilizer 5000 instrument, administered the test. The officer first conducted a calibration check of the instrument by passing a simulator solution through the instrument. The solution had a known concentration of 0.10 grams of alcohol per 210 liters of vapor five to seven months prior to this calibration check. The Intoxilizer 5000 registered an alcohol content in the solution of 0.060. The officer ran an air blank through the instrument to clear all traces of alcohol vapor from it and then requested that O'Brian blow into the instrument. It registered OIBrian's blood alcohol concentration at 0.207 at 2:32 a.m. that morning. The officer conducted another calibration check with the same simulator solution. The solution registered an alcohol content of 0.062 during the second check. An air blast was again run through the instrument and then O'Brian was again tested. This second test of O'Brian, three minutes after the first test, registered a blood alcohol content of 0.187. O'Brian was subsequently charged by amended complaint with operating a motor vehicle with an alcohol concentration of 0.10 or more in violation of 5 61-8-406, MCA. O'Brian was tried on this charge in Justice Court on November 13, 1987. Following a trial and without a determination of guilt, the Justice of the Peace dismissed the criminal charge in the amended complaint for lack of jurisdiction. Among other errors, the Justice of the Peace found that O'Brian had not been arraigned on the amended charge of DUI per se and had not entered a plea to this charge prior to trial. The county then appealed thi-s dismissal to the Fourteenth Judicial District Court of Musselshell County. On April 7, 1988, the District Court arraigned O'Brian on the DUI per se charge and then proceeded with a nonjury trial, over objections of double jeopardy and lack of a speedy trial. by the defense counsel. At the conc3usion of the trial, the court held that the Intoxilizer 5 0 0 0 test was administered in substantial compliance with State statutes and the Administrative Rules of Montana. The court then ad judged the defendant guilty, based solely upon the results of the Intoxilizer 5 0 0 0 test, of driving with a blood alcohol content of 0.10 or greater in violation of S 61-8-406, MCA. The court ordered O'Brian to pay a $ 1 0 0 fine, to pay for and complete an alcohol treatment program, and to surrender his permanent driver's license. O'Brian appeals from this judgment and sentence. Appellant contends that officer Weitzeil failed to administer the Intoxilizer 5 0 0 0 test in compliance with the requirements of the Administrative Rules of Montana. The Rules require a calibration check to fall within a plus or minus one-tenth range of the known alcohol concentration of a reference solution to guarantee the instrument's accuracy prior to admission of the test Yet, in this case, the Intoxilizer 5 0 0 0 registered the simulator solution at 0.061, and 0 . 0 6 2 just prior to the testing of appellant. These readings do not come within the required plus or minus one-tenth range of the known 0 . 1 0 alcohol concentration of the solution. Consequently, the appellant contends the test was not administered in compliance with the Administrative Rules of Montana, the accuracy of the test results were questionable, and the court thus erred in admitting the Intoxilizer 5 0 0 0 test results into evidence. At the outset, we note that a criminal defendant charged with driving under the influence of alcohol is indeed entitled to any procedural safeguards in the Administrative Rules of Montana. State 7 7 . McDonald (Mont. 1 9 8 5 ) , 6 9 7 P.2d 1338, 1331., 42 St.Rep. 414, 419. Those procedural safeguards which are relevant to this case and which the defendant alleges were violated are found in § 23.4.135(2), ARM ( 1 9 8 7 1 : (2) The department shall examine and evaluate any breath-testing instrument submitted for its approval. The department may approve the instrument if the instrument meets the followinq criteria: (b) The instrument is capable of analyzing a suitable reference sample, such as air equilibrated with a reference solution of known alcohol content at a known temperature. The results of such analysis must fall within a range defined by plus or minus one-tenth of the alcohol concentration of the reference solut.ion or such other limits set by the department. . . This Administrative Rule requires only that the Tntoxilizer 5000 instrument be capable of analyzing a reference simulator solution within a plus or minus one-tenth range. The Rule does not require a calibration check before each test, although. officers routinely ran such a check prior t.0 the testing of each defendant. The Intoxilizer 5000 instrument used on the defendant had satisfied the requirements of the Administrative Rules prior to its use. Expert witness William Newhouse, a forensic scientist at the Montana Department of ;Tusticels Crime Laboratory in Missoula, testified that the instrument in use at the time of defendant's arrest had been instal-led in the Musselshell Countv sheriff Is office on June 17, 1986. At that time, a calibrat'on check using a simulator solution with a known alcohol concentration of 0.10, resulted in a 0.102 reading. This reading was well within the permissi-hle one-tenth range of accuracy. Additionally, the officer whc administered the test on the defendant was properly trained in the use of the Intoxilizer 5000 test and conducted the test in accordance with such training. F J e hold that the evidence adduced at trial was sufficient to indicate the proper working condition of the instrument on May 26, 1987 and to ensure the legal sufficiency of the admitted evidence. Expert witness Newhouse testified that a calibration check is not necessary prior to every breath test to ensure the accuracy of an Intoxilizer 5000 instrument. Rather, periodic calibration checks would sufficiently guarantee the proper working condition of the instrument. On October 8, 1987, Joe Stewart, another forensic scientist with the Crime Lab in Missoula, conducted just such a periodic check of the instrument at issue in this case. The Intoxilizer registered the alcohol level of a new simulator solution with a known 0.10 alcohol concentration at 0.098, 0.096, 0.098, and 0.0987, respectively, after four separate calibration checks. Each of these checks indicated the instrument was properly working and calibrating within the instrument's required range of accuracy. Newhouse thus concluded: Again, based on our records at the laboratory and the log records, I can tell you, based on my familiarity with this instrument over four years and [with] 65 other instruments, that I can tell that instrument was measuring blood alcohol concentrations on breath tests accurately on May 26, 1987. Further, the testimony at trial sufficiently explained the reason for the low calibration checks on May 26, 1987 and the lack of efFect such low readings would have had on the accuracy of the appellant's breath tests. A.s Newhouse testified, the low calibration readings of 0.060 and 0.067 on May 26, 1987 were due to a general decrease in the alcohol concentration of the simulator solution because of its repeated use over the prior four to five month period. The Crime Lab instructed all officers operating the Intoxilizer 5000 to change the simulator solution once a month to prevent this decrease in the solution's alcohol concentration, but the officers failed to do so. Consequently, many calibration checks such as the ones run on May 26, 1987 proved essentially worthless because of the unknown alcohol concentration of the simulator solution. However, these invalid calibration checks had no bearing on the validity of the defendant's breath tests for, as stated by Newhouse, "calibration checks are entirely independent of the breath tests. " The low calibration readings thus were not indicative of a faulty instrument, but only of a gradually diminished alcohol content in the simulator solution. We therefore hold that the District Court did not err in holding that the Intoxilizer 5000 test was administered in substantial compliance with the Administrative Rules of Montana. The evidence introduced at trial indicated probable cause for the arrest, the proper administration of the Intoxilizer test to O'Brian, the proper working condition of the instrument, and the excessive alcohol concentration in the defendant's blood at the time of his arrest in violation of 61-8-406, MCA. The Intoxilizer 5000 registered the alcohol concentration of OIBrian's breath first at 0.207 and then at 0.187, which when averaged to 0.197 amounts to nearlv double the alcohol concentration allowed when driving an automobile upon the public roads in Montana. Thj-s concentration indicated O'Rrian had been operating his vehicle with an alcohol concentration of 0.10 or more in violation of 5 61-8-406, MCA, a statutory provision imposing absolute liability upon a defendant upon proof of such an excessive concentration. The District Court thus did not err in finding the defendant guilty beyond a reasonable doubt of driving while under the influence of alcohol and in then imposing a sentence in accordance with S 61-8-722, MCA. The judgment and sentence o afFirmed. We concur: Mr. Justice John C. Sheehy, dissenting: I dissent. This cause should be dismissed because under our statutes the evidence of the breath tests were inadmissible. Evidence of the results of a breath test for alcohol concentration is admissible if the breath analysis report was prepared and verified by the person who performed the test. Section 61-8-404(b)(i), MCA. The police officer here who prepared the report, being not otherwise divinely equipped, could verify the report only by use of the calibration check of the intoxilyzer. The contention of the State is that we can ignore the erratic results of the calibration check. Under the statute for admissibility, however, the report must not only be prepared by the officer, but verified by him. The procedure established for police officers to verify the breath test of a DUI suspect is to conduct a calibration check using a reference solution v r i t h a known 0.10 alcohol concentration. The majority admit that the intoxilyzer test of the similator solution produced two results, 0.60 and 0.62, just prior to the testing of the appellant. The readings taken of the appellant show an inaccuracy, registering 0.202 in one instance and three minutes later, 0.187 in another, a variance of at least 7.5 percent, although the intoxilyzer is supposed to be accurate to within plus or minus 5 percent. We have no way of knowing whether the intoxilyzer was working accurately on May 26, 1987, when OtBrien was tested, because it is impossible to determine from the record the known concentration of the alcohol simulator at the time, which would have verified his test results. The State tries to explain away the ;-nacc~rac;~ of t . h e verification sample by having its witness testify that the alcohol content of the simulator had reduced in the period of time from a known concentration of 0.10 to the recorded concentration on May 26, 1987 of 0.060. The log belies this argument. The log of this police officer s tests with the registered calibration checks are as follows: Date Simulator Results Blood/Alcohol Results .073 .078 .063 .066 None None .064 .060 .062 .084 .081 .074 .046 .091 .050 .065 .053 .074 The logs shows conclusively that if the intoxilyzer were correctly recording the alcohol concentration in the simulator solution, the alcohol concentration increased rather than decreased following the OfBrian test. In fact, the check tests of the simulator solution eight days before OfBrian was tested (May 17) showed - no alcohol - in - the simulator solution. On May 26, for a check of OfRrian, the simulator had increased in alcohol concentration from - no alcohol on May 17 to 0.060 in May 26! In the test checks of the simulator solution in the months following the O'Rrian test, on July 6 the intoxilyzer recorded 0.084, an increase of 0.022 in alcohol concentration or a 35.5 percent - increase. On August 15, the simulator gave an alcohol concentration result of 0.091, an increase of 46.7 percent from the O'Brian check test. Thus, the State's explanation that as time wore on the alcohol in the simulator solution decreased is belied. The intoxilyzer check tests following O'Brian's tests show the reference simulator increasing and decreasing in alcohol content. Either the intoxilyzer was incorrectly recording the check tests or the reference simulator solution was performing a feat of alchemy, manufacturing and devouring alcohol at will. O'Brian therefore established not only a reasonable doubt as to the accuracy of the tests performed upon him, but a very substantial doubt as to the verification of his tests. The State Crime Laboratory personnel recognized the problem when the machine was inspected on October 8, 1987. An entry was written by the inspector in the log as follows: Annual Inspection of Calibration2/new 186-19/.100 *DO NOT USE THIS INSTRUMENT WHEN THE RESULT OF THE C~IRRATION CHECK IS OVER .I10 OR BELOW 0.90. CHANGE SOLUTIONS ONCE PER MONTH AT THE FIRST OF THE MONTH, RECORD THEDATEOF THAT CHANGE IN THE LOG BOOK, AND ALWAYS ALLOW THE SOLUTION TO HEATUNTIL - - THE READY LIGHT COMES - O N . The accuracy of the verification tests is important because of the very minute amounts of alcohol being measured through a breath test. To convict a person of DUI under S 61-8-406, MCA, it must be shown that the alcohol concentration in his breath is 0.10 or more. "Alcohol concentration" for breath tests is defined by statute as "grams of alcohol per 210 liters of breath." Section 61-8-407, MCA. This is a weight/volume definition, proportioning the weight of alcohol against a volume of air. Absolute alcohol has a specific gravity of 0.789. A gram of alcohol will occupy a volume of 2.26 cubic centimeters. A gram of alcohol is proportional against a breath volume of 2 1 0 liters, which equals 55.5 gallons of liquid volume. That proportion is so distended that one can see that a variation of a very small amount in alcohol content will result in wide swings in the resultant alcohol concentration in the same volume of breath. A cubic centimeter may be considered as the upper top of your little finger distally from the root of the nail. To achieve a 0.10 alcohol concentration sufficient for conviction, approximately 1 / 8 of the volume of the top of your little finger, or 0.126 cubic centimeters of alcohol must be present in 55.5 gall.ons of breath. The man with a lung capacity of 55.5 gallons has yet to be born, and so the amount of alcohol to qualify for a 0 . 1 0 alcohol concentration in breath must be reduced in that proportion to the amount of alveolar air present in the lungs. It is a tiny amount. There is no doubt that scientists have devised machines such as intoxilyzers which will measure breath alcohol content within a range of plus or minus 1 0 percent. Machines, however, are not unlike your automobile. Sometimes things go wrong. For that reason, the statute on admissibility of evidence of breath alcohol tests requires verification of the machine's results. Here, verification is lacking. O'Brien was first stopped in this case because he failed to dim his lights at 2:00 in the morning in Roundup, Montana. He must be truly amazed at what unfolded in connection with his prosecution subsequently. The principal witness relied on by the State was William Newhouse, described by the State as a forensic scientist from the State Crime Laboratory. "Forensic" literally means argumentative. There is no such science as forensics because a forensic is an art and not a science. His educational background is in physics. He has testified in regard to determination of blood alcohol- by breath analysis over 60 times in Montana courts. If his testimony here is an example, he is more of a paid gun than a scientist. His testimony essentially is to the effect that the intoxilyzer was working correctly when the simulator solution was first used and was working correctly on October 8, 1987, when it was inspected by a person from the State Crime Laboratory. His testimony is that we can disregard the erratic results of the simulator solution because the intoxilyzer was recording accurately. What is left out in this testimony, however, is that without a reference simulator of known alcohol content, the tests taken of O'Brian on May 26 have not been verified & the person administering the test. Section 61-8-404 (b) (i) , MCA. Under -- the statute, therefore, the results of OIBrianls test should not have been admitted into evidence. T would reverse the conviction in this case. , Justice , i I concur witn the foregoing dissent. | February 23, 1989 |
d476eda4-3ea3-4407-bea0-b6fb01853f7f | NORTHWEST POLYMERIC INC v FARM | N/A | 88-473 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF 'THE STATE OF MONTANA 1989 NORTHWEST POLYMERIC, INC., DEIRDRE CAUGHLAN and LAURA LEE DUNLAP, Trustees of the Estate of NORTHWEST POLYMERIC, INC., Bankrupt; and ROBERT C. KELLY, PATRICK KELLY and SHANE KELTJY, Plaintiffs and Appellants, -vs- FARMERS STATE RANK and FIRST NATIONAL MONTANA BANK OF MISSOULA, and F 7 . A . GROFF and RALPH G. McCOY, and JOHN DOE And RALPH ROE, Defendants and Respondents. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable Douglas G. H a r k i n , Judge presidina. COUNSEL OF RECORD: For Appellant: R. Lewis Brown, Jr. and David L . Holland, Butte, Montana For Respondent : Larry Persson, Hamilton, Montana James A. Robischon, Kalispell, Montana Garlington, Lohn & Robinson; Sherman 7 7 . Lohn, Missoula, Montana Submitted on Briefs: Jan. 19, 1989 Decided: February 16, 1989 Mr. Justice R. C. McDonough delivered the Opinion of the Court. This appeal from the Fourth Judicial District, Missoula County, involves the alleged breach of an agreement to pro- vide financing. The lower court granted summary judgment to respondent, First National Bank of Missoula, (First Nation- al), holding that appellant, Northwest Polymeric, Inc., (Northwest), failed to come forward with facts establishing that First National could be held liable for damages from the alleged breach. We affirm. Northwest bid and received a Department of Defense (DOD) contract to manufacture combat helmets. The DOD required that Northwest submit a letter confirming credit for financ- ing. Farmers State Bank of Victor, (Farmers) provided the DOD a letter stating Farmers, with the participation of First National, would provide financing. Neither bank provided financing, and Northwest brought this suit seeking both tort and contract damages. First National argued that the District Court should grant its motion for summary judgment because no contract existed between Northwest and First National. First National further argued that no agency relationship existed between Farmers and First National which bound First National for Farmers' representations. Northwest conceded that First National did not enter an explicit agreement to finance Northwest, but contended that Farmers acted as First National's agent when it sent the letter to the DOD stating First National would participate in financing for the contract. No evidence from discovery disclosed that First National authorized the representation. However, discovery revealed that First National had consid- ered participating, and that Robert Burke, President of First Nationa J , knew about the 1 etter from Farmers. Rurke deposed that he phoned W. A. Groff, President of Farmers, and in- formed Groff that First National would make no commitment to participate in the loan. Northwest contends that the District Court erred in granting summary judgment for First National because: (1) Farmers1 letter bound First National, (2) Farmers had appar- ent authority to bind First National, (3) Montana law estops First National from denying its obligation to participate in the loan. Northwest asserts that S 28-10-403, MCA, controls this case and mandates the conclusion that the District Court erred. The statute reads: Ostensible authority defined. Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third -- person to believe the agent to possess. Section 28-10-403, MCA (emphasis added) . Northwest cites several cases where lack of ordinary care on the part of the principal established the agent's authority. See, Audit Services v. Elmo Road Corp. (1978), 175 Mont. 533, 575 P.2d 77; Coover v. Davis (1941), 112 Mont. 605, 121 P.2d 985; Lindblom v. Employers1 JJiability Assurance Corporation (1930), 88 Mont. 488, 295 P. 1007. The facts in this case distinguish it from the case law cited by Northwest. In Audit Services the alleged principal, a corporation, held out the alleged agent as its corporate manager, and thus the party claiming agency reasonably be- lieved authority existed for the manager to enter agreements on behalf of the corporation. Audit Services, 575 P. 2d at 81. The ostensible agency in Coover also sprung from the act of the principal in holding out the agent as having authority to contract for the principal. Coover, 121 P.2d at 988. Lindblom involved dealings between a claimant for workers' compensat.i.on, a J ocal insurance agency, and an employers ' insurance carrier. The carrier claimed the failure of the claimant to notify the carrier during the period required by statute barred the claim. The claimant responded that noti- fication of the local agency estopped the carrier from claim- ing the defense. This Court held that evidence supported the conclusion that the carrier clothed the local agency with authority for acting on the claim, and thus Montana law estopped the carrier from claiming lack of agency. Lindblom, 295 P. at 1011. Here, Northwest can only claim that First National should have done more than notify Farmers they would not participate. The lower court concluded that the controlling law mandated summary judgment for First National because ostensible authority cannot be proved by the declarations of the agent whose statements are sought to be charged to the principal. Exchange State Bank v. Occident Elevator Co. (1933), 95 Mont. 78, 89, 24 P.2d 126, 130. We agree with the lower court's reasoning. Cases exist where principals failed to exercise ordinary care in clarifying the lack of a grant of authority to non-employee middlemen in continuing dealings between the middlemen and the third party claiming ostensible agency. See, Butler Manufacturing v. J & L Implement (1975), 167 Mont. 519, 540 P.2d 962; Powers Manufacturing Leon Jacobs Enterprises (1985), 216 Mont. 407, 701 P.2d 1377. Generally, ostensible agency may be established by omissions as well as by commissions. 3 Am. Jur. 2d Agency § 79 (1986) . However, the failure to disclaim authority asserted by an agent usual- ly concerns cases where an agent attempts to extend existing authority by his or her representations to a third party. In such a case, the principal may fail to exercise ordinary care in disclaiming the authority claimed by the agent. 3 Am. Jur. 2d Agency S 79 (1986). - - Northwest can claim no explicit or implicit grant of authority from First National to Farmers justifying reliance on statements by Farmers. Northwest fails to demonstrate any course of dealing between the parties where Farmers acted for First National. Under these circumstances, we agree with the District Court that no facts support an inference of any grant of authority from First National to Farmers. Northwest also argues that First National's silence estops it from denying that it agreed to finance Northwest. There exists here no silence amounting to a representation or concealment of material facts, and thus no estoppel claim. See, Sweet v. Colburn School Supply (1982), 196 Mont. 367, 639 P.2d 521; Northwest Potato Sales v. Beck (1984), 208 Mont. 310, 678 P.2d 1138. District courts properly grant motions for summary judgment where no material fact questions exist, and in light of the substantive principles of law involved, the estab- lished facts entitle the movant to judgment as a matter of law. Fleming v. Fleming Farms Inc. (Mont. 1986), 717 P.2d 1103, 1106, 43 St.Rep. 776, 773. The substantive principles of law concerning establishment of an ostensible agency and estoppel under the agreed facts mandated the lower court's decision. AFFIRMED. m We Concur: - H | February 16, 1989 |
77fbd7a5-d6af-45e4-8fcd-7bbf9a8112e9 | PHILLIP R MORROW INC v FBS INS | N/A | 88-457 | Montana | Montana Supreme Court | No. 88-457 IN THE SUPREME COURT OF THE STATE OF MONTANA PHILLIP R. MORROW, INC., and PHILLIP MORROW , Plaintiffs and Appellants, -vs- FBS INSURANCE MONTANA-HOINESS LABAR, INC., a Montana corporation, Defendant and Respondent. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable G. Todd Baugh, Judge presiding. COUNSEL OF RECORD: For Appellant: Holland & Hart; James M. Ragain and Kyle Anne Gray, Billings, Montana For Respondent : Gerald B. Murphy and T. Thomas Singer, Billings, Montana P cr: Submitted on Briefs: Jan. 12, 1989 -2 1 > k5 \ i , c , L" Decided: March 9, 1989 , ; i ' i 4 - 1 Filed- , I tTz , D LiJ -1 0 3 - ) tL. . ' < .+ ' -'. " ' \-' '-- - - C Y ~ C 1 , - * c 3 4 U Mr. Justice R. C. McDonough delivered the Opinion of the Court. This action from the Thirteenth Judicial District, Yellowstone County, for intentional interference with prospective economic advantage and intentional infliction of emotional distress, is before this Court for the second time. The first appeal involved the District Court's decision to grant the motion for summary iudgment made by respondent FBS Insurance Montana-Hoiness Labar, Inc., (FAS). We reversed. Morrow v. FBS Insurance (Mont. 1988), 749 P.2d 1073, 45 St.Rep. 188. This appeal concerns the District Court's decision to grant FBS1s motions for directed verdicts. The District Court decided that Morrow failed to present evidence to establish a prima facie case for either tort claim. We reverse on the interference claim and affirm on the claim for intentional infliction of emotional distress. The District Court further decided Morrow failed to come forward with facts sufficient to justify submission to the jury of his claim for punitive damages. We reverse the lower court on this issue. The earlier opinion contains an extensive fact statement. Facts relevant to this appeal can be summarized as follows: Morrow, a plumbing contractor, alleged that FRS, acting as a bonding agent, prevented a general contractor from accepting his bid for a major mechanical subcontract. Fisher Construction, (Fisher) , the general contractor involved, planned to submit a bid for the construction of a water plant. Morrow submitted a bid to Fisher for the mechanical portion of the job. FBS had agreed to act as Fisher's bonding agent, and requested at some point that Fisher back-bond major subcontractors. FBS would not agree to bond Morrow. Morrow was aware that FBS would not provide him a bond prior to Fisher's award of the subcontract. Morrow told Fisher that a different bonding agent would bond his work for the subcontract. Morrow and another subcontractor, Star Services, (Star), were the two low bidders for the mechanical subcontract. Fisher met with the two low bidders to discuss cost cutting measures to reduce Fisher's bid on the entire project. Fisher awarded the subcontract to Star. Morrow's suit for interference alleged that personal dislike and prior financial dealings between Morrow and FBS motivated FBS to apply the pressure. FBS responded that it did not apply pressure on Fisher. Dan Fisher and Alf Hulteng, agents of Fisher, testified that Star received the contract because they bid lower than Morrow. They also testified FBS did not pressure them to refuse Morrow's bid. Morrow testified that Dan Fisher and Hulteng told him Star received the contract because FBS pressured Fisher. Hulteng testified that it was possible he told Donna Morrow that FBS's employee Kip Vanderverter disliked Morrows. Donna Morrow testified that Vanderverter once inquired whether FBS would be providing a bond for work done by Morrow in 1982. She stated that when she informed Vanderverter that Morrow would be bonding with another company, Vanderverter ended the conversation abruptly, and that she feared he had been angry. A conflict in the evidence exists as to which subcontractor bid lowest. Hulteng testified that Morrow's bid appeared lowest, but that he wanted to make sure Morrow had included costs for the clearwell piping portion of the job. Hulteng called Morrow and Morrow told Hulteng he included the clearwell costs in his bid. Hulteng testified that a scope sheet detailing the figures Morrow used to calculate his bid showed Morrow omitted the clearwell portion. Morrow testified his scope sheet did not show that he omitted the clearwell portion. Morrow raises the following issues: (1) Did the trial court err by granting FBS's motion for a directed verdict on the claim of intentional interference with prospective economic advantage? (2) Did the trial court err by granting FBS's motion for a directed verdict on the claim of intentional infliction of emotional distress? (3) Did the trial court err by ruling on the issue of punitive damages before submitting the case to the jury? The trial court concluded that the jury could consider testimony by Morrow that Hulteng and Dan Fisher told Morrow that FBS pressured Fisher only as impeachment evidence. Clearly, this is not the rule on prior inconsistent statements admitted under Rule 801 (d) (1) (a) M.R.Evid. : Prior inconsistent statements traditionally have been admissible to impeach but not as substantive evidence. Under the rule they are substantive evidence. Commission Comments, Rule 801 (d) (1) (a), M.R.Evid. This Court has previously agreed with the Commission on this point. State v. Fitzpatrick (1980), 186 Mont. 187, 606 P.2d 1343. FBS argues that the District Court should be affirmed on other grounds. First, FBS argues that the trial court correctly distinguished Fitzpatrick because Morrow's statement contains two hearsay declarations. Therefore, according to FBS, the trial court correctly excluded the testimony because the second statement does not come under any exception to the hearsay rule. We agree that Morrow's statement arguably contains two statements. The testimony could be characterized as "Dan Fisher told me Kip Vandeverter told him, 'don't do business with Morrowt". Under similar circumstances, this Court has held such statements to come under the proscriptions of Rule 805. The rule requires that each statement fall under an exception to the general prohibition of proof by hearsay. State v. Martinez (19831, 188 Mont. 271, 613 P.2d 972. We disagree, however, that Rule 805 excludes the testimony. The trial court should have admitted the second statement as non-hearsay under Rule 801 (c) , M.R.Evid., because the statement constitutes a "verbal act", in the sense that it goes to prove the operative facts of the alleged tort, i.e., pressuring Fisher. Weinstein comments on statements admitted under the verbal act doctrine as non-hearsay under Rule 801(c), as follows: Although Morgan objected that the phrase "verbal act ... as commonly used, is less vague than res gestae only because it is couched in English, instead of Latin," commentators and courts today appear united in limiting the phrase to one particular aspect of nonhearsay utterances. It is applied, when as in the case of the defamation examples above, the utterance is an operative fact which gives rise to legal consequences. For instance. in Creaahe v. Iowa Home Mutual Casualty Co. 132; F.2d 961 (10th Cir. 1963) 1 , plaintiff, who had recovered a judgment as yet unsatisfied against one Osborn in an earlier action stemming from an automobile accident, now brought an action against Osbornts alleged insurer at the time of the accident. The insurer asserted that the policy had been cancelled shortly before the accident. Its agent (W) testified to statements by Osborn (D) requesting cancellation. Plaintiff objected that this testimony was hearsay. The court disagreed: "The hearsay rule does not exclude relevant testimony as to what the contracting parties said with respect to the making or the terms of an oral agreement. The presence or absence of such words and statements of themselves are part of the issues in the case. This use does not require a reliance by the jury or the judge upon the competency of the person who originally made the statements for the truth of their content. I1 . . . 4 J. Weinstein, M. Berger, Weinstein's Evidence 9 801(c)[011 at 801-71-72 (1988) (emphasis added). An approximation of the application of this rule in a business interference claim may be found in Atlantic Building Systems v. Atlantic States Construction (Ga.App. 1984) , 322 S.E.2d 311. In Atlantic Building Svstems, the plaintiff allegedly threatened to forgo paying a debt owed to a third party if the t.hird party sold goods to the defendant. The defendant ' s counterclaim alleged the threats constituted tortious interference. An employee of the third party testified to the declarations constituting the threats. The appeals court affirmed the decision to allow the testimony because the defendant introduced the declarations to prove its inability to purchase goods from the third party. The court relied on Georgia's - res gestae statute for authority in admitting the declarations. Atlantic Building Systems, 322 S.E.2d at 313. Montana law requires that statements admitted under the res gestae rule be made under circumstances where reflection - and fabrication are unlikely. State v. Collins (1978), 178 Mont. 36, 582 P.2d 1179. The statement must occur at the time the excitement of the circumstances motivated the utterance. State v. Fairburn (1959), 135 Mont. 449, 340 P.2d 157. The statements here do not meet these tests. However, where the issue is the existence of statements, not the truth of the matters asserted within them, Montana recognizes the verbal act doctrine. Collins, 582 P.2d at 1183. Under the verbal act doctrine in Montana, statements may be admitted "for the purpose of establishing the fact that the words had been said by defendant." Collins, 582 P.2d at 1183. Threats may constitute verbal acts. United States v. Stratton (2nd Cir. 1985), 779 F.2d 820, 830. The second set of statements in Morrow's testimony go to proving the existence of statements made by Vanderverter. The existence of the statements constitutes the operative fact of this particular action. They are admissible to prove the existence of acts by Vanderverter to pressure Dan Fisher and Hulteng, not for the truth of matters asserted within them. See 6 J. Wigmore, Wigmore on Evidence § 1774 (Chadbourn Rev. 1976) (citing Caplan v. Caplan (N.H. 1928), 142 A. 121, 124) ; and see Tocco v. Great Falls (Mont. 1986), 714 P.2d 160, 43 St-Rep. 310. Thus, the statements may be properly admitted as non-hearsay evidence under Rule 801(c), M.R.Evid. The lower court also relied on Rule 403, M.R.Evid., to exclude consideration of Morrow's testimony ruling that the second hand nature of the testimony would mislead the jury, cause confusion, and result in unfair prejudice. The lower court held that these factors outweighed the probative value of the testimony. Rule 403, M.R.Evid., allows an objection to admission of confusing and misleading evidence. Trial courts must balance the probative value of evidence against the possibility that the evidence will confuse or mislead the jury. Here, Morrow's testimony is crucial to his case, therefore its probative value, for the purpose of applying Rule 403, M.R.Evid, is high. Wigmore comments that exclusion for confusion is an "extreme measure" not properly used: unless either the evidential material was necessarily and thoroughly objectionable or else was of minor utility and could be easily sacrificed; [moreover] nor should the exclusion be an absolute one, unless a conditional or temporary exclusion would not suffice for the purpose. 6 J. Wigmore, Wigmore on Evidence 5 1864 (Chadbourn Rev. 1976). The evidence here is in no sense thoroughly objectionable and its utility to Morrow is great. Therefore, it was not properly excludable under Rule 403, M.R.Evid. The lower court also relied on Rule 602, M.R.Evid., to exclude Morrow's testimony. The lower court apparently reasoned that Morrow had no personal knowledge of the matters he testified to in connection with the statements made by Dan Fisher and Hulteng. Rule 602, M.R.Evid., requires witnesses to have personal knowledge of matters embraced within their testimony. Morrow contends that the lower court erred because Rule 602: is subject to the hearsay rule. If a witness is testifying to what he heard he may do so unless what he heard is excluded under the hearsay rules of Article VIII. The witness' testimony may even contain hearsay within hearsay. See Rule 805. There is no inconsistency between Rule 602 and the hearsay rules since the "matter" he is testifying to is what he heard rather than the event described by the hearsay declarant. 3 J. Weinstein & M. Berger, Weinstein's Evidence 9 602 [Ol] at 602-04. On this point the Commission on Evidence agrees: The exceptions stated in Section 93-401-2 [superseded], opinions and hearsay, are intended to apply to this rule. Commission Comments, Rule 602, M.R.Evid. The Court in Stratton explained the rule in the context of statements alleged to be hearsay within hearsay: [Alppellants misconceive the nature of the personal knowledge requirement, see Fed.R.Evid. 602, in the hearsay context. Whenrtestifies that B told him of an event, A usually has personal knowledge only of B's report. It is B who has personal knowledge of the event. Thus, the hearsay rules require that the declarant, B in our example, have personal knowledge of the events recounted, not that the witness have such personal knowledge. See United States v. Lang, 589 F.2d 92, 98 (2d Cir. 1978). Thus, Farber could have testified to Stratton's report of the threats because the threats were within the personal knowledge of Stratton. Nor is there a hearsay within hearsay problem. Stratton's report of threats to Farber, his chief assistant, is not hearsay because it is a statement of a co-conspirator in furtherance of the conspiracy, . . . Stratton, 779 F.2d at 829-30. We hold that the analysis from Stratton provides the correct holding on the interaction of the hearsay rules with the personal knowledge requirement as applied to the facts of this case. Thus, Rule 602, M.R.Evid., does not operate to exclude Morrow's testimony. The lower court also held that Rule 701, M.R.Evid., mandated exclusion of Morrowt s testimony. Rule 701 requires that opinions and inferences from the testimony of lay witnesses be rationally based on the witnesses' perceptions, and that the opinions and inferences further a clear understanding of the witnesses' testimony or the determination of the facts at issue. Rule 701, M.R.Evid. Morrow argues that Rule 701 does not apply because Morrow's testimony contains no opinions. FBS responds that the opinion at issue is whether acts of FBS constituted pressure on Dan Fisher or Hulteng to avoid awarding the subcontract to Morrow. FBS also contends that it is impossible to ascertain who of the witnesses formed the opinion that pressure existed. Testimony in the record reveals that Dan Fisher and Hulteng had opinions as to what is meant when someone is "pressuring" another to do something in a particular manner. They also testified that FBS exerted no pressure to prevent hiring Morrow. These perceptions, as well as the perception introduced through Morrow's testimony on the presence of pressure, may he properly admitted as questions concerning "'~rarious mental and moral aspects of humanity, such as disposition and temper, anger, fear, excitement, intoxication, veracity, general character, and particular phases of character, and other conditions and things, both moral and physical, too numerous to mention."' Commission Comments, R.ule 701, M.R.Evid. (quoting State v. Trueman (1906), 34 Mont. 249, 85 P. 1024). Thus, no issue exists here under Rule 701, M.R.Evid. The District Court also concluded that even if Morrow's evidence were admissible, no prima facie case existed because Morrow failed to present evidence that FBS improperly interfered with selection of the subcontractor. Morrow argues the lower court erred because evidence demonstrated that Vanderverter pressured Fisher because he disliked Morrows. Morrow also argues that justification for interference must be pleaded under Rule 8 (c) , M.R.Civ.P., as an affirmative defense citing Phillips v. Montana Education Association (1980), 187 Mont. 419, 610 P.2d 154. In Phillips, plaintiff claimed defendant induced breach of an existing contract. Phillips, 610 P.2d at 156. This Court, in analyzing the tort, stated: Generally, an intentional interference with the existing contractual relations of another is prima facie sufficient for liability and the burden of proving that it is "justified" rests upon the defendant. Phillips, 619 P.2d at 157. This view accords with Prosser who comments: The early cases, with their emphasis upon "malice," regarded proof of an improper motive as an essential part of plaintiff's cause of action. As the tort became more firmly established, there was a gradual shift of emphasis, until today it is generally agreed that an intentional interference with the existing contractual relations of another is prima facie sufficient for liability, and that the burden of proving it is "justified" rests with the defendant. W. Prosser, Law of Torts § 129 at 942 (4th ed. 1971). However, in Montana, a showing that the defendant acted without right or justification is part of the plaintiff's prima facie case in an action for intentional interference with prospective business advantage. Bolz v. Meyers (1982) , 200 Mont. 286, 651 P.2d 606. Affirmative defenses generally concern the pleading of matter outside the plaintiff's prima facie case. 2A J. Moore, Moore's Federal Practice § 8.27 (2d ed. 1982). Morrow's complaint alleged intentional interference with prospective business advantage. FRS answered generally denying the allegation. A general denial puts every material allegation in dispute. Thus, no issue under Rule 8 (c) , M.R.Civ.P., exists. In the first opinion we stated that evidence from discovery created a material fact question on whether FBS acted improperly in allegedly interfering with the subcontract. Morrow, 749 P.2d at 1076. Similarly here, the jury could find from the evidence introduced at trial that FBS's alleged actions were motivated without right or justification. In addition to evidence showing that FBS may have a "legitimate" financial interest in forcing Fisher to select certain subcontractors, evidence indicated FBS may have been motivated to avenge for imagined wrongs in previous dealings. Evidence also inferred that the alleged pressure could have been fueled by Vanderverter's personal dislike of Morrows. The jury may or may not consider this to be weak evidence that FBS acted without privilege or justification in allegedly interfering. However, in granting a motion for a directed verdict, the evidence must be viewed in a light most favorable to the party opposing the motion. Nicholson v. United Pacific Ins. Co. (Mont. 1985), 710 P.2d 1342, 42 St.Rep. 1822. Viewing the evidence in a light most favorable to Morrow, we hold that the evidence supports a prima facie case of intentional interference with prospective business advantage. 11. We agree with the District Court that Morrow failed to make out a prima facie case for intentional infliction of emotional distress. This Court has yet to recognize the tort in Montana. Frigon v . Morrison-Maierle, Inc. (Mont. 1988) , 760 P.2d 57, 45 St.Rep. 1344. In Frigon we affirmed the District Court's decision that no material fact question existed on plaintiff's claim for intentional infliction of emotional distress because the defendant's actions in denying her a raise failed to amount to conduct beyond all possible bounds of decency. Frigon, 760 P.2d at 64. Thus, while we have yet to decide under what facts we will recognize the tort, we have at least decided some situations where we will not. No facts here demonstrate extreme and outrageous conduct. Thus, we affirm the District Court's decision that Morrow did not make out a prima facie case for intentional infliction of emotional distress, and dismissal of the claim is appropriate. First Bank Billings v. Clark (Mont. 1989), P.2d , 46 St. Rep. 291. - - 111. Our decision to remand for a new trial raises the issue of whether the lower court properly concluded Morrow failed to present evidence sufficient to submit his claim for punitive damages to the jury. The applicable portion of S 27-1-221(5), MCA (1985), provides for punitive damages for oppression where a defendant: intentionally causes cruel and unjust hardship by (a) misuse or abuse of authority or power; or (b) taking advantage of some weakness, disability, or misfortune of another person. Morrow argues that FBS knew that Morrow needed the subcontract to avoid financial ruin, and that the jury could find FBS intentionally took advantage of Morrow's financial disability to cause cruel and unjust hardship on Morrow. We agree that under the above subsection Morrow presented sufficient evidence to go to the jury on this issue. We reverse for a new trial in accordance with this opinion. We Concur: / | March 9, 1989 |
61dc44df-29bc-4137-b468-1d08a2343ec6 | RIGHTNOUR v KAER-MOR INC | N/A | 88-396 | Montana | Montana Supreme Court | No. 88-396 IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 GLORIA RIGHTNOUR, Claimant and Respondent, v. KARE-MOR, INCORPORATED, Employer and Appell.ant, and INTERMOIJPJTAIN INSURANCE COMPANY, Defendant and Appellant. APPEAL FROM: The Workers' Compensation Court of the State of Montana, The Honorable Timothy Reardon, Judge presiding. COUNSEL OF RECORD: For Appellant: Larry W. Jones, Esq.; Garlingt.on, Lohn & Robinson, Missoula, Montana For Respondent: R. Lewis Brown, Jr., Esq., Butte, Montana David L. Holland, Esq., Butte, Montana Submitted on Briefs: December 16, 1 9 8 8 Decided: February 9, 1 9 8 9 0 r ' Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. This case was originallv before this Court in Rightnour v. Kare-Mor, Inc. (Mont. 1987), 732 P.2d 839, 44 St.Rep. 141, where we concluded that claimant Gloria Rightnour was entitled to medical benefits which were reserved from the settlement agreement. I J p o n Rightnour ' s petition, the Workers' Compensation Court then reopened the final settlement and awarded claimant permanent total disability benefits. This appeal arises from that order and judgment. We affirm. The facts of this case are well set forth in Rightnour, supra, but simply stated, the facts are these: Rightnour suffered a compensable injury to her lower back while employed by the defendant employer in January, 1983. Appellant accepted liability, and after Rightnour reached a state of maximum healing, a settlement agreement between the parties was reached. In March, 1984, Rightnour tripped and fell while caring for children in her home and re-injured her lower back. New to the facts of this appeal, however, is the appellant's revelation that Rightnour was self-employed when the 1984 injury occurred. Appellant raises two issues for our review: 1. Was the Workers' Compensation Court correct in concluding that good cause existed to reopen the final settlement? 2. Was the Workers' Compensation Court correct in concluding that, based on this Court's prior decision, Rightnour was entitled to disability benefits? The parties agree that a final settlement may be reopened by the Workers' Compensation Court within four years from the date the settlement was accepted by that court, if there was either a mutual mistake of a material fact, a change in disability, or good cause shown. Section 39-71-204, MCA, (1983) provides in part: (1) Except as provided in subsection (2), the division shall have continuing jurisdiction over all its orders, decisions, and awards and may, at any time, upon notice, and after opportunity to be heard is given to the parties in interest, rescind, alter, or amend any such order, decision, or award made by it upon good cause appearing therefor. (2) The division or the workers' compensation judge shall not have power to rescind, alter, or amend any final settlement or award of compensation more than 4 years after the same has been approved by the division. Rescinding, alterinq, or amending a final settlement within the 4-vear period shall be bv agreement between the claimant and the insurer. If the claimant and the insurer cannot agree, the dispute shall be considered a dispute for which the workers ' compensation judge has jurisdiction to make a determination. Section 39-71-2909, MCA, (1983) provides: The judge may, upon the petition of a claimant or an insurer that the disability of the claimant has changed, review, diminish, or increase, in accordance with the law on benefits as set forth in chapter 71 of this title, any benefits previously awarded by the judge or benefits received by a claimant through settlement agreements. However, the judge may not change any final settlement or award of compensation more than 4 years after the settlement has been approved by the division or any order approving a full and final compromjs~ settlement o f compensation. The hearing examiner found Rightnour had presented sufficient medical evidence that her disability has increased since the settlement was entered. Dr. Murphy concluded that Rightnour's impairment rating increased from 20% to 35%; Rightnour has been restricted to a five to eight pound weight restriction on repetitious lifting; and a rehabilitation consultant concluded that Rightnour is no longer able to engage in any occupation in her normal labor market. We find sufficient evidence existed to enable the Workers' Compensation Court to reopen the settlement agreement. Appellant next contends the Workers' Compensation Judge erroneously concluded that, because the insurer was liable for Rightnour's medical benefits, it logically follows that the insurer is also liable for her disability benefits. As stated in Rightnour, the Workers' Compensation Court concluded: [Tlhe claimant has proven to a reasonable degree of medical certainty that the original compensable injury of January 19, 1982 and the two subsequent surgeries weakened her back, and combined with the fall in her home in March, 1984, resulted in a third surgery being required. Such surgery and other medical bills related to that fall are the natural consequence of the original injury. Rightnour, 732 P.2d at 831. We agree the Workers' Compensation Court has not reached an erroneous conclusion. Appellant argues that, under the facts as it now knows them, i.e., that Rightnour was self-employed when the 1984 injury occurred, it is not liable for the disability benefits. In other words, now that it has conducted proper discovery, appellant wants to relitigate or contest the same liability issue. However, it is of no benefit to the appellant that it failed ta take F.i.qhtnour ' s deposition and therefore did not learn that she was self-employed. As stated in 4 6 Am.Jur.2dI Judgments, 5 443: Clearly, the enforcement of the rule of res judicata may not be avoided by the discovery of new evidence bearing on a fact or issue involved in the original action, as distinguished from a subsequent fact or event which creates a new legal situation, even though the newly discovered evidence might have been sufficient to justify a new trial in the first case. . . Furthermore, 4 6 Am.Jur.2dI Judgments, 474, reads in part: [Tlhe operation of a judgment as res judicata is not affected by a showing that the unsuccessful partv might have prevailed if he had been sufficiently diligent. Hence, the application of the rul-e does not depend upon whether the case was as comprehensively or pursuasivelv presented at the first trial as at the second. In accord with these principles, a litigant may not avoid the effect of the doctrine, as to an issue presented for determination in the prior action, by failing to offer proof of it. Appellant failed to bring this evidence before the court during the initial litigation and is now bound by that determination. Also of interest is the appellant's actual or constructive knowledge that Rightnour was self-employed. Rightnour wrote to the insurer prior to the execution of the settlement agreement and informed them she was going to open a "Children's Day Care Home" to earn a living. Appellant was, or should have been, well aware that Rightnour was self-employed and the failure to raise this defense does not prevent the appl.ication of res judicata to the initial judgment. Finally, appellant's suggestion that it is excused from adequately developing this defense because the law has changed is also unpersuasive. Whatever the appellant's interpretation may be of our decision in Guild v. Bigfork Convalescent Center (Mont. 1987), 747 P.2d 217, 44 St.Rep. 2139, its understanding of the law as it stood at the time of the initial litigation included the defense of injury during other employment. Belton v. Carlson Transport (1983), 202 Mont. 384, 658 P.2d 405. There is no excuse for failing to raise Rightnour's other employment as a defense. The judament of the Workers' Compensation Court is affirmed. We concur: v- < q i e f Ju-stice | February 9, 1989 |
cbd2a1e1-d8a4-4a72-a975-d294a23f58d0 | STATE v WALSTON | N/A | 88-296 | Montana | Montana Supreme Court | N o . F38-296 I N THE SUPREME COURT OF THE STATE O F MONTANA 1989 STATE O F MONTANA, A p p e l l a n t , VS. KEVIN DEAN WALSTON, R e s p o n d e n t . APPEAL FROM: D i s t r i c t C o u r t of t h e N i n e t e e n t h Judicial D i s t r i c t , I n and for t h e C o u n t y of L i n c o l n , T h H o n o r a b l e R o b e r t S. K e l l e r , Judge p r e s i d i n g COITNSEL O F RECORD: For A p p e l l a n t : M a r c R a c i c o t , A t t o r n e y G e n e r a l , H e l e n a , M o n t a n a Joe R. R o b e r t s , A s s t . A t t o r n e y G e n e r a l , H e l e n a , M o n t a n a Susan Loehn, C o u n t y A t t o r n e y , L i b b y , M o n t a n a Scott B. Spencer, D e p u t y , ~ i b b v , M o n t a n a For R e s p o n d e n t : David W. H a r m a n , L i b b y , M o n t a n a S u b m i t t e d on B r i e f s : D e c . 1 6 , 1989 D e c i d e d : February 2 3 , 1 9 8 9 -A 8 - - - C3 : I UJ LL c-4 ; $ . , $ a : " . ' : Filed: f34 L i- - z Q3 0 cr;3 -c - .. Mr. Justice L. C. Gulbrandson del-ivered the Opinion of the Court. The State appeals an order by the Nineteenth Judicial District Court, Lincoln County, suppressing physical evidence obtained pursuant to a search, under warrant, of the defendant's home and automobile. The District Court held that the affidavit supporting the application for the search warrant failed to establish probable cause. We reverse. The following issue is raised on appeal: 1. Did the District Court improperly suppress evidence obtained under a search warrant: a) which was supported by probable cause; and b) which was relied upon, in good faith, by law enforcement officers? On December 11, 1987, Donald Bernall, a detective with the Lincoln County Sheriff's Office, applied for a search warrant authorizing the search of defendant's residence at # 6 Taylor Road outside Libby, Montana, and of his 1975 white Ford Mustang. Bernall applied for this search warrant after a confidential informant stated he had legally been in defendant's residence at least twice in the past five months, and that while there, he had observed marijuana plants growing within the residence and marijuana in processed form at various locations throughout the residence. Bernall also stated, based upon his professional training and experience, that such a marijuana growing operation is "highly likely to stay in one location for long periods of time and not be quickly or often moved." Additionally, the informant stated he had "recently heard" defendant admit to growing marijuana within his residence and to selling marijuana within the Libby city limits. This confidential informant had previously provided information to Detective Bernall which had proven true. According to the affidavit, defendant owned only one operable automobile specifically described as a 1975 white Ford two-door Mustang, VIN 5R032156098, with a license plate number 56-30505. Defendant's residence was also described with particular detail as a white trailer with aqua-blue trim, with an "add-on" and a "large quantity of firewood stacked on the front porch," located in the Rerget traj-Ier park on Parmenter Hill. After considering all these facts set forth h~,7 affidavit, the justice of the peace issued a search warrant on Decemher 11, 1987. The warrant authorized the search of defendant's residence and operable automobile for marijuana, sale documentation, drug paraphernalia, and any other "fruits of the crime." Law enforcement officers subsequently stopped defendant and searched his automobile. The search disclosed a bag of marijuana in the glove compartment, a pair of forceps and a marijuana pipe. A subsequent search of defendant's residence revealed marijuana plants, various items used to grow marijuana and another marijuana pipe and pair of forceps. On December 14, 1987, defendant was charged by complaint with the felony offense of criminal possession of marijuana with intent to sell (Count I) and the misdemeanor offenses of criminal possession of dangerous drugs (Count 11) and criminal possession of drug paraphernalia (Count 111). An information was filed in District Court on January 4, 1988. Defendant pled not guilty during his arraignment on January 11, 1988. He subsequently filed a motion, to suppress all evidence taken from his automobile and residence pursuant to the search warrant, which he alleged was unsupported by probable cause. Following a hearing on the motion on May 24, 1988, the District Court held that the affidavit offered in support of the search warrant application did - not contain facts establishing probable cause for issuance of the warrant. Consequently, the court ordered all evidence seized from defendant's automobile and residence suppressed. The State appeals from this order. The Fourth Amendment to the United States Constitution and Article 11, Section 11 of the Montana State Constitution both protect a person's right to be free from unlawful searches and seizures by requiring the existence of probable cause prior to the issuance of a search warrant. An impartial magistrate must determine the existence of such probable cause solely from the evidence in "the four corners of the search warrant application." State v. O'Neill (19841, 208 Mont. 386, 393, 679 P.2d 760, 763-64. The evidence sufficient to establish probable cause, however, is significantly less than that required for a conviction. Applicants need only illustrate the probability of criminal activity, not a prima facie showing of criminal activity. State v. Crain (Mont. 1986), 725 P.2d 209, 210, 43 St.Rep. To determine whether a probability of criminal activity exists meriting a search warrant, a magistrate must employ a "totality of the circumstances" analysis. This analys! s requires an issuing magistrate to: [Mlake a practical, common-sense decision whether, given all the circumstances set forth in the affidavit before him, including the "veracity" and "basis of knowledge" of persons supplving hearsay information, there is a fair probability that contraband or evidence of a crime will be found in a particular place. Illinois v. Gates (1983), 462 U.S. 313, 238, 103 S.Ct. 2317, 2332, 76 L.Ed.3d 527, 548. The totality-of-the- circumstances analysis, used to determine the existence of probable cause, expanded upon the previous "two-pronged" analysis and effectively broadened the circumstances under which a search warrant would issue. The "two-pronqed" test had required an affidavit to reveal: (1) the basis of the informant's knowledge . e l "the particular means by which he came by the information given in his report"); and (2) some of the underlying circumstances indicating either the veracity of the affiant's informant or the reliability of the informant's report. Gates, 462 U.S. at 278-29; see also Spinelli v. United States (1969), 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637; Aguilar v. Texas (1964), 378 IJ.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723. The facts in Gates would not have satisfied this "two-pronged" test, as the detective's application for a search warrant was based upon an anonymous letter accusing the defendant of selling drugs and detailing an intended future drug purchase. Gates, 462 U.S. at 225. The anonymous letter did not disclose how the informant came by the information, and the anonymity of the letter prevented detectives from ascertaining the veracity of the informant. However, the United States Supreme Court held that the totality of the circumstances alleged in the affidavit, which included the facts contained in the anonymous letter as well as the findings of a subsequent investigation verifying many of the facts stated by the informant, justified the issuing magistrate's conclusion that a probability of criminal activity existed. The information relayed by the confidential informant in the present case, unlike that in the Gates case, indicated the probability of criminal activity and evidence in the defendant's house and car under both the more stringent former "two-pronged" analysis as well as the current totality-of-the-circumstances analysis. The informant stated that the basis for his knowledge, that marijuana and drug paraphernalia were present in defendant's house, came from his own personal observations on at least two different occasions within the five months prior to his conversation with Detective Bernall. The informant also recently had heard defendant state he was growing marijuana within the house and that he was selling marijuana within the Libby city limits. The informant stated that the defendant owned only one operable automobile, which was described in detail. This fact could correctly lead the issuing magistrate to conclude that the marijuana reportedly grown in the house and sold in Libby would be transported via this car. The facts also indicated the veracity of the informant. Detective Bernall obiectively stated that he personally knew the informant and that the informant had provided information in the past which had proved true. We thus hold that the District Court erred in holding that - no facts existed indicating the veracity of the informant and in concluding that no probable cause existed. We have previously held that information of a criminal activity known from observation hy a previously reliable informant, such as we have in the present case, is sufficient to establish the probability of criminal acti~rj ty without outside investigation and verification of the reported information. See, e.g., State v. Hendrickson (1985), 217 Mont. 1, 701 ~ . 2 d 1368. We also hold that the related information was not so stale as to negate the magistrate's determination of probable cause. The informant stated that he had "recently" heard defendant state he was growing marijuana in his house and selling marijuana in Libby. The word "recently" connotes a period of time relatively near the disclosure of information and a time distinctly different than the observations made on two other occasions during the prior five months. Moreover, this Court has previously noted that a determination of staleness in any given case depends largely on the nature of the property and activity in issue. State v. Pease (Mont. 1986), 724 P.2d 153, 43 St.Rep. 1417. As stated in Pease: The observation of a half-smoked marijuana cigarette in an ashtray at a cocktail party may well be stale the day after the cleaning lady has been in; the observation of the burial of a corpse in a cellar may well not be stale three decades later. The hare and the tortoise do not disappear at the same rate of speed. Pease, 724 P.2d at 160, quoting from Andresen v. State (Md.App. 1975), 331 A.2d 78, aff'd -- sub. nom. Andresen v. Maryland (1976), 427 U.S. 463, 96 S.Ct. 2737, 49 L.Ed.2d 627. Likewise, if the criminal activity is continuing in nature, a greater amount of time may elapse between the observation of the activity and the application for a search warrant without negating probable cause. The facts in this case indicate just such a continuing criminal activity. The confidential informant had seen marijuana growing in defendant's home on two separate occasions within the five months prior to the search warrant application and the defendant had recently admitted that he was still growing marijuana. Bernall's statement that a marijuana growing operation is "highly likely to stay in one location for long periods of time" provides a further indication of the continuing nature of the reported crimes. Given the continuing nature of the criminal activity in this case, we hold that information of the "recent" growth and sale of marijuana, together with information of the same activity twice within the prior five months, was not too remote in time to indicate the probability of continuing criminal activity at the time the magistrate issued the search warrant. We admonish law enforcement officers, however, to state with specificity the time the informant learned such information to prevent the future suppression of evidence for lack of probable cause due to staleness. We do recognize that on occasion, as in the present case, an officer may deliberately obscure the specific time to protect the identity of a confidential informant's identity. The totality of the facts presented by Detective Bernall's affidavit provided a substantial hasis for the issuing magistrate's determination that prohable cause existed meriting a search warrant. The District Court thus erred in suppressing evidence obtained under the search warrant. As this Court previously has stated, a reviewing court may only determine whether the issuing magistrate had a substantial basis for determining that probable cause existed, keeping in mind that a magistrate's "determination of probable cause should be paid great deference by reviewing courts." O'Neill, 679 P.2d at 765, quoting from Spinelli, 393 1J.S. 410. Having found t h a t t h e search warrant was supported hv probable cause, we need not d i s c u s s t h e a p p l i c a b i l i t y of t h e good f a i t h exception t o t h i s case. The suppression order of t h e D i s t r i c t Court i s reversed. , T ' ~ W e concur: J u s t i c e s Mr. Justice William E. Hunt, Sr., dissenting. I dissent. The affidavit in this case lacks the evidence to support a finding of probable cause to search either the defendant's car or his residence. In order to find probable cause, the facts set out in the affidavit must be closely related to the time of the issuance of the warrant. Sgro v. United States (1932), 287 U.S. 206, 210, 53 S.Ct. 138, 140, 77 L.Ed. 260, 263. In other words, the affidavit must be based on current facts, those that indicate that a law is being violated at the time the warrant is issued. State ex rel. Townsend v. Dist. Court (1974), 168 Mont. 357, 362, 543 P.2d 193, 196. Facts alleging criminal activity that occurred five months prior to the application for a warrant are simply too remote to justify a a-etermination of probable cause. The affidavit in question states that a confidential informant, while in the defendant's home, observed marijuana plants and marijuana in processed form "at least two (2) times in the past five months." The logical assumption stemming from this allegation is that at least one of these observations occurred five months prior to the application, otherwise there would be no need to use that particular timeframe. There is no indication when the other observation took place. Perhaps it occurred five months prior to the application, perhaps four and one-half months, perhaps three weeks. The language of the affidavit serves only to obscure the applicable time, making it impossible to determine when the informant actually saw the evidence of criminal activitv, thereby making it impossible to establish probable cause. Apparently, the majority feels that any defects in the remoteness of the observations are cured by the claim that the informant "recentlv" heard the defendant state that he was growing marijuana. Once again, the terminology merely serves to conceal the date on which the statement was made. "Recent" is a relevant term. " [Wlhat is recent to one person is not recent to another. Whereas the word 'recent' may be months in some situations, it may he a much shorter period of time elsewhere." State v. O'Brien (Ariz.Ct.App. 1974), 528 P.2d 176, 178, review denied, (Ariz. 1975), 537 P.2d 28. All I can really surmise from the use of the word "recent" is that the defendant's admission probably did not. take place more than five months before the warrant issued. The majority further attempts to justify probable cause by relying on the continuing nature of the crime. Indeed, it is arguable that cultivating marijuana is an endeavor that often continues for a period of time. However, the nature of the crime cannot overcome the problems created by the vague assertions of time contained in this affidavit. All I know for certain from this affidavit is that an informant sighted marijuana at the defendant's residence five months prior to the application for a warrant. Without more concrete proof that the defendant continued to engage in criminal activity, I am unwilling to rely on the nature of the crime to cure this affidavit's deficiencies. Furthermore, there is no reference whatsoever to the date on which the informant heard the defendant state that he was selling marijuana within the Libby city limits. We have previously held that an affidavit that omits any reference to time is void. Townsend, 168 Mont. at 362, 543 P.2d at 196. So too should we refuse to enforce the warrant authorizing the search of the defendant's car when the only information linking the car to the transportation of marijuana is an undated allegation that the defendant admitted he was selling within the city limits. The majority voices concern over the protection of confidential informants. Protection of informants, however, should not take precedence over the right of the people to he free from unreasonable searches and seizures. Other steps, such as independent investigation on the part of the authorities, can be taken to protect informants. Independent investigation also establishes corroborating evid-ence to bolster a determination of probable cause. The majority opinion legitimizes warrants issued on loose, vague references to time. The Fourth Amendment demands a more exacting factual basis than is presented in the present case. I would affirm the suppression order of the District Court. / C Justice Mr. Justice John C. Sheehy: I concur in the foregoing dissent of Mr. Justice Hunt. | February 23, 1989 |
88522425-38e2-4120-b168-7c4c8b6753b5 | WOOD v ULMER S CAR TRUCK | N/A | 88-252 | Montana | Montana Supreme Court | NO. 88-252 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 IRENE FJOOD, Claimant and Appellant, -vs- ULMER'S CAR AND TRUCK, Employer, and STATE COMPENSATION INSURANCE FUND, ; I \ ' t ' Defendant, Respondent and Appellant. . . c-' n y APPEAL FROM: The Workers' Compensation Court, The Honorable Ti-mothv Reardon, Judge presiding. COUNSEL OF RECORD: For Appellant: R.V. Bottomly; Rottomly 1,aw Offices, Great. Falls, Montana For Respondent: Mike McCarter; Hughes, Kellner, Sul.livan & Alke, Helena, Montana Filed : Submitted on Briefs: Dec. 1.6, 1988 Decided: March 7, 1989 Mr. Justice R. C. McDonough delivered the Opinion of the Court. This appeal and cross-appeal from the Workers' Compensation Court involves a claim for widow's benefits. The State Compensation Insurance Fund (Fund), appeals the lower court's decision finding claimant's husband suffered an injury resulting in death under the Montana Workers' Compensation Act. The claimant, Irene Wood, cross appeals contending that the lower court erred in refusing to provide attorney fees due from the insurer in a lump sum. We affirm the lower court's decisions in regard to the appeal and the cross-appeal. Appellant's Issue Whether the Workers' Compensation Court erred in awarding benefits to the widow of a worker based on the conclusion that the worker's exposure to carbon monoxide caused his heart attack? The relevant facts are as follows: Irene's husband, Duane Wood, worked approximately ten years as a mechanic at Ulmer's Car & Truck in Great Falls. Duane suffered from hypertension and an enlarged heart, musculoskeletal problems, low potassium levels, and cardiovascular disease. Duane was 49 years old when he died of a heart attack on October 29, 1984. Duane's doctor had diagnosed and treated most of his various ailments, but had no knowledge of his moderate to severe coronary artery disease until after Duane's autopsy. The autopsy revealed moderate to severe narrowing due to coronary arteriosclerosis. Duane smoked a pipe. He had switched from cigarettes to a pipe a few years before his death. Irene testified he did not inhale the pipe smoke. Duane also liked to drink one or two beers after work. The last two years his pace in completing repairs at Ulmer's slowed considerably. Duane worked the Friday before his death. On Friday evening Duane skipped dinner and went straight to bed complaining of extreme fatigue and shoulder pain. On Saturday morning he collapsed and was taken to the hospital. When he arrived at the hospital he was suffering from cardiac arrest probably due to ventricular fibrillation. Two days later he died. Duane's behavior on Friday night indicated he experienced the onset of a myocardial infarction. Irene testified that approximately two months before his death Duane began to exhibit loss of balance and appetite. During this period he also lost weight and experienced breathlessness and coughing. These symptoms, according to Irene, increased in September of 1984. Duane also complained of cold and fumes at work. Ulmer's Car and Truck operates in a building containing seven service bays. The business employs five mechanics and two mechanic's helpers. The helpers perform routine service and the mechanics handle minor to major repairs. The bays are often full with vehicles undergoing servicing or repair. Carbon monoxide escapes into the air from the exhaust of cars driven in and out of [Jlmer's shop. When an auto is run in the shop, workers hook a hose to the auto's tail pipe. The hoses channel the carbon monoxide outside the building. Even when exhaust escapes outside through the hoses, leaky manifolds and other sources associated with running the cars inside contribute to the presence of carbon monoxide in the air of the garage. A twenty four inch fan in the wall of the garage and two ceiling fans help to circulate air and dissipate the carbon monoxide. Employees also help to rid the garage of the gas by opening windows and the doors that access the bays. Employees open the doors and windows more often on warmer days than on colder days. The high temperature recorded in Great Falls on Duane's last day of work was 51 degrees Fahrenheit. Irene hired Dr. Anderson to testify on the possible effects of carbon monoxide on individuals with cardiovascular disease. Anderson testified that individuals suffering from cardiovascular disease risk precipitating a heart attack by breathing carbon monoxide. The risk exists, according to Anderson, because carbon monoxide molecules bond more strongly to hemoglobin than oxygen molecules. Anderson testified that where concentrations of carbon monoxide in the air exist, the strength with which carbon monoxide binds to hemoglobin allows it to displace a portion of the oxygen one would normally obtain by breathing. The already reduced ability of individuals suffering from cardiovascular disease to supply the heart with oxygen, when combined with the effects of breathing air contaminated by concentrations of carbon monoxide, may precipitate a heart attack, accordinq to Anderson. Anderson considered the likelihood that inhalation of carbon monoxide caused Duane's heart attack. Testing done on February 26, 1985, when the high temperature in Great Falls reached 43 degrees Fahrenheit demonstrated the presence of carbon monoxide in the air of the garage. Anderson testified that the levels of the gas present at that time could have posed a health risk to Duane. Anderson also noted inhalation of the gas in amounts sufficient to cause oxygen deprivation may result in headaches, dizziness, confusion, and coughinq. Amounts too small to cause symptoms in ordinary individuals may nevertheless affect those sufferinq from cardiovascular disease. Rased. on the presence of carbon monoxide concentrations in the garage, the compatibility of Duane's symptoms with the effects of carbon monoxide in the blood, and a lengthy hypothetical propounded by claimant's counsel incorporating Irene ' s testimony and Duane ' s autopsy report, th.e fol.1owi.n~~ exchange occurred: Q Taking into account the symptoms suggested by the question over the preceding month period and on the night of decedent's collapse, and takinq into account the levels of carbon monoxide concentrations reported in the question, in your opinion did such levels of carbon monoxide aggravate his underlying heart disorder? A It certainly is probable that it did. Q Would the symptoms listed by the decedent be consistent with the levels of carbon monoxide reported in the question? A Yes. Q Taking into account the decedent's heart condition, as reported in the autopsy, and the levels of carbon monoxide reported, could these levels trigger or precipitate a new stage of pathology or a new dysfunction in the heart condition? A Yes, it could. Q In your opinion, did the levels of carbon monoxide aggravate, hasten, trigger or precipitate a new stage of pathology or a new dysfunction in his heart condition? A It was a precipitating factor, I think. Q And in your opinion, did they do so? A All I can say is that it's probable that the high levels of carbon monoxide were a precipitating factor in the final stage of events that led to his dea.th. On cross-examination, Anderson testified as follows: Q Okay, I think I asked you earlier, but as I understand it, it is not your opinion that the carbon monoxide exposure triggered his heart attack? Mr. Bottomly [claimant's counsel objecting]: Wait a minute, that is contrary to his opinion. Q Well, let's ask you what your opinion is. A Okay, my opinion is that it's a risk factor that certainly could have triggered -- we don't know, you know, it did with certainty, but it's certainly a risk factor. Q It's a risk factor, hut you don't know for certain? A Right. Q And there were a number of other risk factors in this case? A That's correct. Q The cigarette smoking, the hypertension; correct? A Right, for developing coronary artery disease, right. Q Was carbon monoxide any greater risk factor than those factors? A Carbon monoxide was a risk factor just in the final event, not in the development of the coronary artery disease, so the others played a role in developing the coronary artery disease, put him at higher risk for having a myocardj-a1 infarction, but the carbon monoxide was only with respect to having symptoms from coronarv disease and eventual]-y developing a myocardi-a1 infarction. Q I guess what I'm asking here is can you attribute his heart attack and his sudden death to carbon monoxide as opposed to cigarette smoking: hypertensio~ or anything else, for that matter. A No. The Fund contends that Irene failed to carry the burden of proving inhalation of carbon monoxide caused an injury resulting in death under 39-71-721 (I), 39-7'1.-119, MCA (1983) : 39-?l-721. Compensation for injury causing death. (1) if an iniured emplovee dies and the iniurv was - .- - the proximate cause of such death ... 39-71-119. Injury or iniured defined. "Injury" or "injured" means: (1) a tangible happening of a traumatic nature from an unexpected cause or unusual strain resulting in either external or internal physical harm and such physical condition as a result therefrom and excluding disease not traceable to injury, except as provided in subsection ( 2 ) of this section ... (3) death resulting from injury. The Fund cites several cases where this Court affirmed the Workers' Compensation Court because the claimant failed to demonstrate causation even though "medical possibility" evidence existed. See, Brown v. Ament (Mont. 1988), 752 P.2d 1?1, 45 St.Rep. 508; Currey v. 10 Minute Lube (Mont. 19871, 736 P.2d 113, 44 St.Rep. 790, Ferdinand v. Lodge No. 456 (Mont. 1986), 719 P.2d 775, 43 St.Rep. 955, Wheeler v. Carlson Transport (Mont. 1985), 704 P.2d 49, 42 St.Rep. 1177. The Fund contends that the similarity of this case to the cited cases mandates the conclusion that Irene failed to demonstrate causation. We disagree. In Brown, the claimant failed to come forward with sufficient evidence to corroborate testimony revealing the medical possibility of causation. Brown, 752 P.2d at 175. In Curry, the medical evidence conflicted. Curry, 736 P.2d at 1 1 6 . The medical experts in Ferdinand never offered testimony that the claimed injury more probably than not caused claimant's heart attack. Ferdinand, 719 P.2d at 777. And in Wheeler, conflicting evidence also led this Court to affirm denial of benefits. Wheeler, 704 P.2d at 54. Here, Anderson testified carbon monoxide was probably a precipitating factor in causing Duane's death. Irene ' s testimony corroborates Anderson's opinion. Thus, substantial evidence supports the decision of the lower court. The Fund contends that Anderson contradicted his earlier testimony under cross-examination when he stated that he could not attribute the heart attack to carbon monoxide as opposed to other factors which could have caused the attack. However, the Fund questioned Anderson only on whether or not he was certain that carbon monoxide caused the fatal illness. Anderson never refuted or explained away his opinion that carbon monoxide probably precipitated events leading to Duane's death. Moreover, the lower court has the duty to resolve conflicts in the evidence, and this Court may not substitute its judgment for the judgment of the lower court when substantial evidence supports the lower court's decision. Ferdinand, 719 P.2d at 776. Thus the we affirm the lower court's finding on causation. The Fund also contends that insufficient evidence supports the lower court's finding that the heart attack met the requirement of time definiteness for finding an injury under 5 39-71-119, MCA. We disagree. Evidence disclosed the worsening effects of oxygen deprivation on Duane's health t w o months prior to his death. The night before his death, the lower court found that oxygen deprivation precipitated the heart attack. Anderson testified that Irene's description of Duane's symptomatology on the Friday before he collapsed indicated the onset of a myocardial infarction probably triggered by inhalation of carbon monoxide. Thus, while Duane's cardiovascular disease developed over time, the event that deprived his heart of enough oxygen to continue pumping probably occurred on his last day of work. Under these circumstances, substantial evidence supports the finding of time definiteness by the lower court. Daniels v. Kalispell Regional Hospital. (Mont. 1988), 750 P.2d 455, 45 St.Rep. 310. Cross Appellant's Issue Whether the lower court erred in denying lump sum attorney fees for future benefits? On cross-appeal Irene contends that the lower court erred in refusing to provide the attorney fees due from the Fund for future benefits in a lump sum. We disagree. The applicable statute, S 39-71-611, MCA /1983), provides for an award of attorney fees and costs from the insurer. The amount and kind of fees, lump sum or periodic, must he reasonably established by the Workers' Compensation Court. The lower court acts reasonably and within its discretion by refusing to lump sum attorney fees owed for benefits which may never accrue. Davis v. Jones (Mont. 1987), 745 P.2d 362, 365, 44 St.Rep 1859, 1862. Thus, we affirm the cross appeal. // Justices Mr. Justice John C. Sheehy, concusrinq in part and dissent-ing in part: I concur with that portion of the opinion that finds that the decedent suffered a compensable injury. I dissent from that portion of the opinion that relates to the attorney's fees. When this case first came before our conference for the purpose of classification, I contended that we should have oral argument relating to the attorney's fee issue. The evolution of the opinion convinces me that my position was correct. The attorney's fee issue is decided in a single paragraph and its rationale is limited strictly to a conclusion that the Workers' Compensation Court acted reasonably. A lower court's decision is not "reasonable" simply because we sav it is. Ipse dixit (he said so) is not a substitute for judicial dissection and discussion of an issue. In this case we have record evidence that the claimant is in perfect health and has a life expectancy of 25.2 years. The attorney representing her is near retirement age. Actuarially, the claimant will outlive her attorney, and under our decision here, the attorney's estate may be paid For the work the attorney performed in his lifetime. I hope that does not happen, but the possibility shows how absurd the Workers' Compensation law has become. The claimant's attorney compiled a record in this case which deserves the attention of this Court. He called an expert witness, Gene Picotte, a lawyer with 38 years of practice behind him, who specializes in representinq compensation clients. Mr. Picotte testified from his experi ence that cont.ingent arrangements are "absolutely necessary in representing claimants." Without the possibility of contingent arrangements, most claimants could not afford attorneys or procure them on a fee basis. Indeed if the attorney must advance the costs, as we must admit occurs many times, long delays in collecting his fees can cause prohlems with cash flow, as Mr. Picotte testified. Mr. Picotte also indicated that attorneys in the past have always anticipated that there would be lump sum payments in compensation cases. They anticipate receiving as fees a percentage of future benefits. It was his opinion that lawyers will not take cases with long-deferred fees because they cannot afford to d o so. Denial of lump sum attorney's fees for future benefits frustrates the public policy of compensation for those who cannot competently represent themselves. Especially, Mr. Picotte emphasized, long-deferred payments would have an adverse effect on older attorneys whose retirement security is compromised. That record deserves some discussion. It is as important to the proper legal administration of workers' compensation cases to have an able claimant's bar available for workers as it is to have fully compensated defense lawyers for the insurers. We are forcing the available bar to become unbalanced. The position of this Court that there can be no attorney's fee recovery for future benefits until received is out of sync with respected authority in the field. Thus in Quam v. Minnesota (1986), 391 N.W.2d 803, the Minnesota Court said: We agree with a respected commentator in the workers' compensation field, . . . , that "[als a general matter, the claimant's attorney's fee should be based on the facts as to his services in the compensation case as of the time the services were rendered, and should not be at the mercy of subsequent or collateral events over which he has no control." 3 A. Larson, The Law of Workmen's Compensation, S 83.13 (i) (1983) . Indeed Larson goes on to say that paying the attorney in driblets from weekly installments over a long period means a disproportionate amount of bother for everyone concerned. & 83.13(j), id. There is no statute in Montana requiring that an attorney be required to wait over a period of 25 years for his attorney's fee as it comes in drihs and dabs. The only requirement of 5 39-71-611, MCA, once the right to attorney's fees is established, is that the fees be "reasonabl-e." Who can contest that the payment of attorney's fees for services fully rendered over a score or more years is unreasonable? The standard of appellate review of attorney's fees in workers' compensation cases is vrhether the Workers' Compensation Court abused its discretion in determinFng reasonable attorney's fees. Conway v. Blackfeet Indian Developers Inc. (1985), - Mont . - , 702 P.2d 970. Here the contingency fee contract was approved but the attorney is deprived of the benefit of his contract. There is no reason why the FJorkers' Compensation Court could not award reasonably the attorney a percentage of future benefits by a discount factor to determine the present value of the future payments. The attorney in this case offered such a basis. The offer is completely reasonable and should not be denied simply because the worker might die or the widow might remarry. Certainly the Board has enough experience in its own files to determine how many of its widows remarry during the compensation payment period from which a factor could be deri~red to be applied. As to the actuarial. life expectancy of the claimant, the whole business of insurance relies on actuarial tables and it would not be unreasonable for the Workers' Compensation Court to rely on tables in computj.nq attorney's fees for future benefits. We have a serious problem developing in this field. Reputable attorneys who in the past have represented claimants for workers' compensation are leaving the practice because of the niggardly compensation afforded them by the Workers' Compensation Division, by the Workers' Compensation Court, and lately by this Court. The development of an able compensation bar is being hindered. A chilling effect on the workers' ability to obtain adequate representation is occurring. Davis v. Homestake Mining Company (N.M. Ct. App. 1 9 8 6 ) , 727 P.2d 941. We have blessed contingent attorney's fees as necessary in the field, but we abrogate the contingent fee contracts by proceeding as we have here. The requirement that no attorney's fee be paid for future benefits until received is an invention of this Court. and we ouqht to change it. n a h . Justice | March 7, 1989 |
fa9034d7-5af1-4a9b-97fc-518ac8371e36 | WHITCHER v WINTER HARDWARE COMPANY | N/A | 88-425 | Montana | Montana Supreme Court | I N THE STJPREME COURT OF THE STATP OF MONTANA 1 9 8 9 WILLIAM WHITCHER, C l a i m a n t and A p p e l l a n t , -vs- WINTER HARDWARE COMPANY, E m p l o y e r , and P A C I F I C EMPLOYERS INSURANCE CO., D e f e n d a n t and R e s p o n d e n t . APPEAL FROM: T h e Workers' C o m p e n s a t i o n C o u r t , T h e H o n o r a b l e ~ i m o t h y R e a r d o n , Judge p r e s i d i n g . COUNSEL OF RECORD: For A p p e l l a n t : L l o y d E . H a r t f o r d , B i l l i n g s , M o n t a n a For R e s p o n d e n t : M i c h a e l P . H e r i n g e r , B i l l i n g s , M o n t a n a F i l e d : S u b m i t t e d on B r i e f s : J a n . 5 , 1 9 8 9 Betided: February 2 3 , 1 9 8 9 Mr. Justice Fred J. Weber delivered the Opinion of the Court. The claimant, Mr. Whitcher, filed a petition with the Workers' Compensation Court to reopen his Full and Final Compromise Settlement, to have medical benefits paid, and to receive vocational rehabilitation. The court denied the request to reopen the settlement agreement, but ordered that claimant is entitled to medical benefits, a 20% penalty on those medical benefits, rehabilitation, and costs and attor- n e y ' fees on the prevailing issues. Mr. Whitcher appeals that portion of the court's decision denying him the opportunity to reopen his full and final compromise settlement. We affirm. The issue is whether the Workers' Compensation Court erred in refusing to allow the claimant to reopen his full. and final compromise settlement based on the grounds of mutual mistake. On December 18, 1978, William Whitcher suffered an industrial accident arising out of and in the course of his employment with Winter Hardware in Billings, Montana. Mr. Whitcher was employed as a laborer for the hardware wholesal- er, and hurt his back while attempting to move some angle iron. Although injured, he continued to work for the employ- er until January 12, 1979 before seeking medical treatment. Mr. Whitcher filed a timely claim for compensation and Pacific Employers Insurance, who insured Winter Hardware, duly accepted liability and paid biweekly benefits and medi- cal expenses as incurred. Mr. Whitcher's temporary total weekly benefits were $95.53 and his permanent partial dis- ability rate was $94.00 per week. He received the following lump sum advances during 1979, which were to be credited against his right to future permanent partial disability payments : 1. October 1, 1979 - $750.00 2. November 5, 1979 - $500.00 3. November 21, 1979 - $1000.00 At his employer's insistence, Mr. Whitcher sought medi- cal treatment on January 9, 1979, due to pain in his lower back which radiated into his lower extremities. On March 15, 1979, he underwent back surgery in an attempt to alleviate the pain. Seven months after surgery, the orthopedic surgeon who performed the surgery gave Mr. Whitcher an estimated impair- ment rating of 20% whole body permanent physical impairment and loss of function. That 20% impairment rating was con- firmed by the doctor again on March 13, 1980, one year after surgery. On March 20, 1980, Mr. Whitcher signed a Petition for Full and Final Compromise Settlement in the amount o-F $8,000.00. Initial-ly, the proposed settlement offer of $8,000.00 was rejected by Levi Loss of the Compliance Bureau. However, Mr. Loss suggested to the claims adjuster that the the Bureau would approve the settlement if an additional. payment of 26 weeks of benefits at the claimant's temporarv total rate, or $2,483.78, was added to the original $8,000.OC settlement figure. The Workers Compensation Court found that Mr. Loss was aware of Mr. InJhitcherls 20% impairment rating which would have entitled him to 7-00 weeks of benefits at +he rate of $94.00 or some $9,400.00. Eventually, the claims adjuster agreed to amend the petition to include the additional payments. The settlement was processed and approved by the appropriate authorities in April 1980. Mr. Whitcher continued to receive benefits through September 11, 1980. Thereafter, he was notified by letter dated September ??, 1980 that he would no longer receive benefit-c pursuant to the compromise settlement agreement. On January 27, 1987, Mr. Whitcher filed a petition with the Workers' Compensation Court to reopen the 1.980 settle- ment. The court denied Mr. Whitcher's request based on hj.s failure to comply with the applicable statute of limitations. On appeal, Mr. Whitcher argues that he is entitled to reopen his settlement based on the mutual mistake of the parties in settling his claim, and does not address the applicability of the statute of limitations. For purposes of our review, we will first discuss the court's findings as they relate to Mr. Whitcher's claim of mutual mistake and then we will review the court's decision on the applicability of the statute of limitations. This Court has allowed the recission of a full and final settlement agreement based on a mutual mistake of fact in Kienas v. Peterson (Mont. 1980), 624 P.2d 1, 37 St.Rep. 1747. A mistake of fact is defined by statute as follows: Mistake of fact is a mistake not caused by the neglect of a legal duty on the part of the person making the mistake and consisting in: (1) an unconscious ignorance or forgetfulness of a fact, past or present, material to the contract, or (2) belief in the present existence of a thing material to the contract which does not exist or in the past experience of such a thing which has not existed. Section 28-2-409, MCA. Mr. Whitcher contends that there are three separate bases for a finding of mutual mistake which justify a settinq aside of the settlement agreement and that therefore, it was error for the Workers' Compensation Court to deny a reopening of the case. These accounts of mutual mistake relate to (I.) the parties' understanding of the settlement agreement; (2) the condition of the claimant's back at. the time of the settlement; and (3) the claimant's psvchol.ogica1 condition at. the time of the settlement. The Settlement Agreement First, Mr. Whitcher argues that because he was unable to understand the agreement, there was no meeti.ng of the minds as to what was being settled and that this constitutes mutual mistake. He contends that he thought the lump sum amount OF $8,000.00 was anal-ogous to his previous lump sum distribn- tions in t.hat he would continue to receive benefits. Whi1.e it is not clear how the insurer was in "unconscious igno- rance" as to the meaning of the contract terms, we assume that Mr. Whitcher is charging the insurer with knowledqe of his own ignorance regarding the meaning and effect of t . h e full and final settlement. A clinical psychologist testified by deposition regard- ing the claimant's ability to read. and understand the settle- ment agreement. The psychologist had. performed various tests on the claimant in 1980 at the request of Vocational Rehabil- itative Services to determine Mr. Whitcher's vocational skills and interests. Those tests revealed. that in 1980, Mr. Whitcher had an IQ which was just below average intelligence and that his reading ability was at the 8th grade level. When asked whether the claimant would be able to comprehend the Petition for Fu13. and Final Settl-ement, the psychologist responded: A: I think that he would be able to comprehend jt with perhaps some concepts explained to him. Rut basically most of the wording is at a level which he could comprehend. Q: What would you feel would need to be explained to him? A: Oh, such words I think as duration, he might not he able to understand the meaning of that term without some---iust be able to pronounce it and understand jt. Tberp's just a matter of some single words and so forth. Concur- rence. These are some more difficult words to read. And they're not in a typical type of vocabulary of people at Mr. Whitcher's level. However, I think that if there was some discussion along with this, he can understand the figures and terms of the amount of money involved. The fact that this is a lump sum payment, and that he's due some additional benefits, I think that would be fairly under- standable to him. Levi Loss, the assistant bureau chief with the Workers' Compensation Division at the time of the settlement, stated that he would not approve a settlement if he thought a claim- ant did not understand it. Although Mr. Loss initially rejected the $8,000.00 settlement offer, he later approved it upon the addition of 26 weeks of benefits. When testifying about Mr. Whitcher's understanding of the finality of the settlement agreement, Mr. Loss stated: I believe at the time that he understood it. I think that he must have been in a position to where that was --- Somehow or another, it didn't seem to be that important to him. He just wanted his money, and it was more important to get it, although he was aware that it could have some gravity; and if they ask for it and insist on it, it gets to the point where if the adjuster and them, if that's what they work out, I can' t tell too many people just how far to go, if they insist. The adjustor who handled the claim testified that he had no reason to doubt Mr. Whitcher's ability to understand that $8,000.00 was the maximum he was going to get. The evidence indicates that the adjustor had explained both verbally and in writing that after receiving the $8,000.00, the cl-aimant would he closin~ his right to compensation forever. The Workers1 Compensation Court found that Mr. Whitcher was capable of understanding the terms of the settlement agreement. We h o l c l that the above testimony substantially supports that finding so that the claim of mutual mistake as to what was being settled is without merit. In connection with that argument, Mr. Whitcher contends that the modification of the settlement agreement to include 26 weeks of additional payments without his knowledge or consent constitutes mutual mistake since there was no meeting of the minds as to those provisions. No relevant findings were made by the Florkers' Compensation Court, and we are reluctant to serve as factfinders as to this issue. However, we fail to see why Mr. Whitcher would not have agreed to the additional terms of the settlement. since they were in his economic interest. Next, Mr. Whitcher contends that the parties were mutu- ally mistaken in their understanding of the nature and extent of his back condition and how the injury mav have aggravated the claimant's pre-existing psychological impairments. The Workers' Compensation Court made no specific findings relat- ing to the issue of mutual mistake and the claimant's mental or physical condition, and as a reviewing court, we will not make our own findings of fact in this regard. However, given our concern for this claimant whose impairment is serious and who was not represented by legal counsel at the time he entered into the settlement agreement, we will briefly exam- ine the record to determine if there is any evidence which might justify further inquiry into these contentions. The Rack Injury This Court has been reluctant to reopen a Petition for Full and Final Settlement based on mutual mistake surrounding the injury except in a small number of situations. In Kimes v. Charlie's Family Dining & Donut Shop (Mont. 19881, 759 P.2d 986, 45 St.Rep. 1402, this Court allowed an injured worker to reopen his petition where a new and different medical problem was discovered after the settlement. In Weldele v. Medley Development (Mont. 1987), 738 P.2d 1281, 44 St.Rep. 1062, we allowed a reopening of the petition where the claimant's initial condition deteriorated substantially and the treating physician's initial assessment was a misdi- agnosis of the actual extent of the injury. There is no evidence in the record indicating that Mr. Whitcher's back condition was originally misdiagnosed and that it subsequently worsened beyond the scope of the initial diagnosis. Nor is there evidence indicating that any new or different medical problem was diagnosed after the settlement. While we are sympathetic to the claimant's purported in- creased levels of pain, we find nothing in the record to indicate that the present state of his injury is anv differ- ent than at the time of settlement. The orthopedic surgeon who gave the claimant a 20% whole body impairment rating in 1980 testified again in 1987 that, in his opinion, the im- pairment rating had not changed during that time. Also, in April of 1982 a myelogram was administered which revealed "an area where there was pressure which did not look significant- ly different from the time of the myelogram at the time of his first surgery (in 1980) ." The claimant's testimony indicates that he has suffered extreme and often debilitating pain ever since the injur;r, which appears to have gotten worse over the years. We note that during this time, Mr. Whitcher has been employed in jobs requiring heavy lifting, bending, and long periods of stand- ing, which was discouraged by his phvsician. Toget-her with the lack of medical testimony justifying a reopening of the case, we conclude that while Mr. Whitcher mav indeed he experiencing an increased level of pain, there is nothing to indicate the parties were mutually mistaken about the condi- tion of his hack at the time of the settlement. The Psychological Condition Mr. Whitcher also contends that the parties were mutual-- ly mistaken about certain diagnosed personality disorders, which he claims did not become "active" until after the injury and the settlement. This Court has found mutual mistake where a claimant's lower back injury was later deter- mined to have aggravated a pre-existing condition of cerebral palsy which the parties did not. take into account at the time of the impairment ratj-ng and settlement agreement. Kienas v. Peterson, 624 P.2d at 3. However, there is no evidence here which would support a similar conclusion. While it is clear that Mr. Whitcher suffered a number of psychological impair- ments, there is no evidence to connect those impairments to the back injury. The psychologist's report indicates that Mr. Whitcher suffered a chronic personality d i sorder, which he descrihed as: ". . . (a) generally inadequate adjustment over a number of years, probably first appearing as a teenager, or maybe even a little earlier than that, inadequately adjusting to school, dropping out, not finding any consistent satisfactory type of work, having some family, marital problems." The evidence indicates that this described "condition" per- sisted following the claimant's injury. However, there is no evidence that it was the claimant's personality disorder which was the source of his frustration so much as it was just an unfortunate series of events which occurred following the injury. Mr. Whitcher was examined again in 1982 by a different clinical psychologist who also identified several personality disorders, one of which he characterized as a "schizoid" tendency. When asked about the relationship between the claimant's schizoid behavior and his back condition, the psychologist testified: " . . . I think that in this instance, that he is apt to show rather inconsistent behavior with regard to his back problem. It is going to bother him maybe sometimes a bit more; sometimes he is going to ignore it. He is going to take a very obtuse attitude, he might, I don't know; like nothing is wrong with me. I am going to go ahead and work. I am not going to lie, I am not going to tell anybody; it will be some irratic behavior about the way he treats his back. I don't think the back injury is going to make the schizoid personality disorder worse, it is not going to make it worse, it is just going from this way to this way. " Our examination of the record leads us to conclude that even if the parties did not take into account the existence of the claimant's personality disorder at the time of the settlement, there is no basis upon which to find a mutual mj-stake of fact. The evidence does not indicate that the personality disorder was aggravated by the injury or that there was anv connection between the injury and the disorder. Even if we had found some basis upon which to consider this case on the merits, the Workers' Compensation Court concluded that Mr. Whitcher's claim is barred hy the statute of limitations so that his request to reopen the petition should be denied. In declining to reopen Mr. Whitcher's settlement agreement based on the grounds of mutual mistake, the Workers' Compensation Court applied t h e following statute of Limitations: The period prescribed for the commencement of an action for relief on the ground of fraud or mistake is within 2 years, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake. Section 27-2-203, MCA. Since the settlement was completed and approved by the proper authorities in April of 1980, the court concluded that under the statute, Mr. Whitcher had until April of 1982 to file his claim. Since it did not appear that he was seekins medical care during that time until he returned to see his doctor in April, 1982, the court noted that the statute m a 1 7 not have begun to run until that time. Rased on medical facts and Mr. Whitcher's debilitating condition in 1982, the court concluded that the limitation period would have expired by at least the fall of 1984. Thus, the claim filed in 1987 was barred by the two year statute of limitations in either case. Finally, the court noted that the only possibility of not being precluded by the statute of limitations from bring- ing this claim would be if Mr. Whitcher's mental capacity was such as to make him unable to knowingly be charged with the statute. Since this possibility was neither raised or pur- sued by the claimant, the court did not consider it as an issue and stated, "Unfortunately, the harsh reality of his claim under the circumstances gives the Court no alternative but to deny his request." We conclude that the determination by the Workers' Compensation Court that Mr. Whitcher's claim is barred by the statute of limitations is a correct application of the law in light of the facts of this case. There is no evidence that the statute should be tolled either by latent discovery or by the claimant's mental condition. We affirm the court's denial of the claimant's request to open the Petition for Full and Final Compromise Settlement. We note the Workers' Compensation Court's concern for Mr. Whitcher's mental, physical, and emotional condition, and the benefits to which the court deemed him entitled. These benefits include medical coverage, a 20% penalty against the insurer, rehabilitation, and costs and attorney fees for the medical benefits issue upon which he prevailed. Affirmed. We Concur: / Mr. Justice William E. Hunt, Sr., and Mr. Justice R. C. McDonough did not participate in this cause. Mr. Justice John C. Sheeh~r, dissenting: This worker's right to compensation payments should he reinstated on the law and on the facts. When Mr. Wood, representing Pacific Employer Insurance, offered an $8,000 settlement, on March 20, 1980, Whitcher had a whole body permanent physical impairment of 20 percent recognized by his doctor. The petition which Wood prepared and had Whitcher sign for $8,000 represented the payments that Whitcher would receive at $94 a week for 1.64 vears. The people then handling claims for the Workers' Compensat.ion Division recognized the proposal as unconscionable. Without contacting Whitcher, the Workers' Compensation Division negotiated with Wood for an additional 26 weeks of compensation. Whitcher never was consulted by either Wood or the Division as to whether OJhitcher would consent to the increase. The necessity for the increase would have impressed upon Whitcher, perhaps, that his dealings with Wood were not on all fours with propriety. Thus, we have a full and final settlement to which Whitcher never consented. As the opinion notes, the Workers' Compensation Court made no relevant findings as to this point. Nonetheless, the majority airily dismisses the lack of Whitcher's consent saying, "We fail to see why Mr. VJhitcher would not have agreed to the additional terms of the settlement since they were in his economic interest." Thus does the majority supply the missing element of consent to the agreement in this case. The majority does not attempt to explain how an agreement so detrimental to the interests of Whitcher are in his "economic interest." In Kienas v. Peterson (1980), 624 P.2d 1, 37 St.Rep. 1747 (Harrison, J.) this Court set aside a full and final compromise agreement before the Workers' Compensation Court on the ground of mutual mistake. Section 28-2-1611, MCA, permits a contract to be revised by the court when through fraud or mutual mistake a written contract does not truly express the intention of the parties. It was on that hasi-s that Kienas was decided. However, S 28-16-1611, MCA, also permits the revision of a contract when there is a mistake of one party which the other party at the time knew or suspected. The evidence here shows that Whitcher's consent to the $8,000 settlement was a mistake. If Pacific did not know it was a mistake at the time, it soon found out when the proposal was submitted to the Workers' Compensation Division. The subsequent amendment of the proposal for settlement executed between Wood and the Division without the knowledge or consent of Whitcher constituted no contract as far as Whitcher is concerned and there should be no problem about reopening his case before the Workers' Compensation Court under S 28-16-1611, MCA. Section 27-2-203, MCA, provides that the two year statute of limitations for reopening a contract on the ground of fraud or mistake is not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake. The question of fact to he determined in this case should be when did Whitcher determine or discover that he had made a mistake in signing the faulty agreement. There is no doubt that Pacific knew or suspected that he had made a mistake. Whitcher has been completely disabled since his injury and is completely disabled now. The use of legal dodges to deny him his monetary relief where his medical need is verified, shows the absurdity of courts in this Workers' Compensation system. The consent of Whitcher to the final settlement here cannot be implied under our statutes because he was never offered a proposal which became the final settlement. Section 28-2-503, MCA. The purported contract could be altered here only by another contract here in writing which does not exist, or by an executed oral agreement which also does not exist. Section 28-2-1602, MCA. There being no contract, Whitcher has no problem with respect to his right to additional compensation, no contract, no bar throuqh the statute of limitations. \ | February 23, 1989 |
0580f5a8-b188-4a7f-8e9c-c760e85bd552 | ROMERO v J J TIRE JMH INC | N/A | 88-569 | Montana | Montana Supreme Court | No. 88-569 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 JIM ROMERO, Plaintiff and Appellant, -vs- J & J TIRE, JMH, INC., a Montana corporation, and KENT JOHNSON, Defendants and Respondents. APPEAL FROM: District Court of the First Judicial District, In and for the County of Lewis & Clark, The Honorable Thomas Honzel, Judge presiding. COUNSEL OF RECORD: For Appellant: Joe Nascimento; Montana Law Center, Helena, Montana For Respondent: Mike McCarter; Hughes, Kellner, Sullivan & Alke, c - 7 2 - ,$elenat Montana - 3 d c > : > TnteiVenor : P I . 1 I , , C ' . , 1 : . r~ ') David Rusoff, Montana Human Rights Commission, Helena, . - . . LC Y Montana ' 9 --I 3 ,, : " f . c - I -. -- . ._ Submitted on Briefs: June 1, 1989 < i *-" - Decided: July 11, 1989 Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. The District Court for the First Judicial District, Lewis and Clark County, dismissed plaintiff Romero's com- plaint of discrimination in employment for failure to comply with the Montana Human Rights Act. Romero appeals. We affirm. The issues are: 1. Does the Montana Human Rights Act violate the Con- stitution of the United States or of the State of Montana by requiring a person to file a race discrimination claim with the Montana Human Rights Commission prior to bringing an action in district court? 2. Does the Montana Human Rights Act violate the Con- stitution of the United States or of the State of Montana by providing that orders in discrimination cases may not include punitive damages? 3. Does the Montana Human Rights Act violate the Con- stitution of the United States or of the State of Montana by providing a hearing before the Human Rights Commission rather than providing a trial by jury? Romero brought this action in December 1987 alleging that the defendants discriminated against him in employment based upon his race, resulting in his constructive discharge from their employ. Defendants filed a motion to dismiss on the grounds that the District Court lacked subject matter jurisdiction and that the complaint failed to state a claim upon which relief could be granted. This was based on Romero's failure to go through administrative proceedings with the Human Rights Division before filing his complaint in District Court. Romero's response to the motion to dismiss alleged that the administrative procedure provided for in the Montana Human Rights Act, §§ 49-2-101 through -601, MCA, (the Act) is unconstitutional. The District Court treated Romero's constitutional challenge as a request for a declaratory judgment. The Montana Human Rights Division intervened in the action. The court granted defendants' motion to dismiss, finding that Romero failed to show that the Act was unconstitutional. In January 1989, the Human Rights Commission issued Romero a right-to-sue letter, which would allow him to file his claim in District Court within 90 days. He did not do so. The Human Rights Commission argues that this appeal should be dismissed because it is moot: all the relief requested except punitive damages could have been obtained following receipt of the right-to-sue letter. However, because the constitutional questions raised here are capable of repetition, yet could evade review, we will consider the issues raised on appeal. See Matter of N.B. (1980), 190 Mont. 319, 322-23, 620 P.2d 1228, 1230-31. Does the Montana Human Rights Act violate the Constitu- tion of the United States or of the State of Montana by requiring a person to file a race discrimination claim with the Montana Human Rights Commission prior to bringing an action in district court? The constitutionality of a statute is presumed; the party challenging it has the burden of proving it unconstitu- tional beyond a reasonable doubt. Fallon County v. State (Mont. 1988), 753 P.2d 338, 339, 45 St.Rep. 748, 750. In Drinkwalter v. Shipton Supply Co., Inc. (Mont. 1987), 732 P.2d 1335, 44 St.Rep. 318, this Court held that a victim of sexual harassment could file her complaint directly in district court, without going through the administrative procedures outlined in the Act. After that decision, the 1987 Legislature enacted S 49-2-509(7), MCA, with an immediate effective date. That section provides that the Act establishes the exclusive remedy for acts constituting a violation thereof and that no claim for relief based upon such acts may be entertained by a district court other than by the procedures the Act specifies. The Act requires that a claimant must file a complaint before the Human Rights Commission, which has 12 months in which to hold a contested case hearing, before a case may be filed in district court. Section 49-2-509 (1) , MCA. Romero argues that this requirement denies him equal protection of the law and access to the courts as guaranteed under U.S. Const. amend. V and XIV and Art. 11, secs. 4, 16, and 17, Mont. Const. Romero cites White v. State (1983), 203 Mont. 363, 661 P.2d 1272, and Pfost v. State (1985), 219 Mont. 206, 713 P.2d 495, as authority. Both cases were overruled in relevant part in Meech v. Hillhaven, No. 88-410 (Mont. June 29, 1989). Moreover, those cases both dealt with limitations on remedies, not procedural requirements. We look instead to Linder v. Smith (Mont. 1981), 629 P.2d 1187, 38 St.Rep. 912, in which this Court upheld the constitutionality of the Montana Medical Malpractice Act. Under that act, a litigant is required to go through administrative proceedings before the Medical Malpractice Panel before filing a complaint in district court. This Court held that access to the courts may be hindered if another fundamental right is not involved and there exists a rational basis for doing so. We found that the medical malpractice crisis in Montana was a rational basis for hindering access to the courts. Linder, 629 P.2d at 1190. We also held that because the requirement that medical malpractice claimants proceed first through the Medical Malpractice Panel operated in the same manner upon all persons in like circumstances, equal protection guarantees were not violated. Linder, 629 P.2d at 1193. In a similar manner, the requirement that discrimination claimants proceed first through the Montana Human Rights Division operates equally upon all persons in like circumstances. Although Romero argues that freedom from racial discrimination is a fundamental right in Montana, this Court has not previously so held and is not prepared to do so based on the arguments made by Romero. We hold that the State's purpose of combatting illegal discrimination is a rational basis for delaying access to the courts by using a specialized agency to handle discrimination complaints. The Act does not deny discrimination claimants access to the courts. Judicial review of administrative proceedings before the Human Rights Commission is available. Also, after 1 2 months in which a hearing has not been held, a claimant is generally entitled to a right-to-sue letter allowing access to the courts. See S 49-2-509, MCA. We hold that the Act does not violate the U.S. or the Montana Constitution by requiring a claimant to file a complaint before the Human Rights Commission before bringing an action in district court. 11. Does the Montana Human Rights Act violate the Constitu- tion of the United States or of the State of Montana by providing that orders in discrimination cases may not include punitive damages? Section 49-2-506 ( 2 ) , MCA, precludes punitive damages in actions brought under the Act. Romero argues that there is a fundamental right to claim punitive damages. He cites no authority, and his proposition is not supported by this Court's previous opinions. Punitive damages are an extraor- dinary remedy outside the field of usual redressful remedies. Safeco I n s . Co. v. Ellinghouse (Mont. 1986), 725 P.2d 217, 226-27, 43 St.Rep. 1689, 1701. There i s no c o n s t i t u t i o n a l r i g h t t o p u n i t i v e damages. White v. S t a t e (1983), 203 Mont. 363, 370, 661 P.2d 1272, 1275, o v e r r u l e d on o t h e r grounds, Meech v. Hillhaven, No. 88-410 (Mont. June 29, 1989). A p l a i n t i f f i s never e n t i t l e d t o exemplary damages a s a m a t t e r o f r i g h t . Spackman v. Ralph M. Parsons Co. (1966), 147 Mont. 500, 511, 4 1 4 P.2d 918, 924. W e hold t h a t t h e r e i s no v i o l a t i o n o f e i t h e r t h e United S t a t e s C o n s t i t u t i o n o r t h e Montana C o n s t i t u t i o n i n t h e p r o v i s i o n i n t h e Montana Human Rights A c t which p r e c l u d e s p u n i t i v e damages. Does t h e Montana Human Rights Act v i o l a t e t h e Constitu- t i o n o f t h e United S t a t e s o r o f t h e S t a t e o f Montana by providing a hearing b e f o r e t h e Human Rights Commission r a t h e r than providing a t r i a l by jury? Romero c i t e s A r t . 11, sec. 26, Mont. Const., and U.S. Const. amend. V , a s a u t h o r i t y t h a t he i s e n t i t l e d t o a jury t r i a l . This Court h a s s t a t e d t h a t i n d i s c r i m i n a t i o n c a s e s under t h e Human Rights A c t , it i s h e l p f u l t o look t o f e d e r a l law under T i t l e V I I o f t h e C i v i l Rights A c t o f 1964, c o d i f i e d a t 42 U.S.C. 5 2000. S n e l l v. Montana-Dakota U t i l i t i e s Co. (1982), 198 Mont. 56, 62, 643 P.2d 841, 844. This Court h a s h e l d t h a t " t h e r i g h t t o t r i a l by jury i n t h i s s t a t e i s t h e same a s t h a t guaranteed by t h e Seventh Amendment [ t o t h e United S t a t e s C o n s t i t u t i o n ] . [ C i t a t i o n omitted. 1 " Linder, 629 P.2d a t 1189. The f e d e r a l c a s e s do n o t support Romero's p o s i t i o n . [Wlhen Congress c r e a t e s new s t a t u t o r y " p u b l i c r i g h t s , " it may a s s i g n t h e i r a d j u d i c a t i o n t o an a d m i n i s t r a t i v e agency with which a jury t r i a l would be incom- p a t i b l e , without v i o l a t i n g t h e Seventh Amendment's i n j u n c t i o n t h a t jury t r i a l is t o be "preserved" i n " s u i t s a t common law. " A t l a s Roofing Co. v. Occupational S a f e t y Comrn'n. (1977), 430 U.S. 442, 455, 97 S.Ct. 1261, 1269, 51 L.Ed.2d 464, 475. The r i g h t o f jury t r i a l is i n a p p l i c a b l e t o f e d e r a l T i t l e V I I ac- t i o n s . Slack v. Havens ( 9 t h C i r . 1975), 522 F.2d 1091, 1094. W e hold t h a t t h e A c t does n o t v i o l a t e e i t h e r t h e United S t a t e s o r t h e Montana C o n s t i t u t i o n by providing f o r a hearing b e f o r e t h e Human Rights Commission r a t h e r than providing f o r a t r i a l by jury. F i n a l l y , Romero argues t h a t t h e 90-day t i m e l i m i t f o r f i l i n g a complaint i n D i s t r i c t Court a f t e r he r e c e i v e d a right-to-sue letter should be t o l l e d f o r t h e t i m e taken by t h i s appeal. For t h e purposes o f t h i s c a s e o n l y , w e g r a n t Romerols r e q u e s t t o t o l l t h e 90-day t i m e l i m i t imposed by t h e s t a t u t e . Romero may t h e r e f o r e r e f i l e a complaint i n District Court. Affirmed. W e concur: / w LJhk?fkdd~& J u s t i c e s . L /7/ | July 11, 1989 |
306cf50f-5217-4367-ad0c-e75d5d3526be | STATE v VISSER | N/A | 88-211 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA t . 2E 0 g3 Z a No. 88-2114: I - n . 1 1 1 E: u f-ri 6 . w rr. C? -. 7 THE STATE OF MONTANA, ex rel., 1 (0 ( X - I : ? TAMMY L. LEACH and CRAIG S. LEACH, 1 rv GREGORY LEACH, and SUSAN LEACH, ) OPINION AND M & R ~ N Petitioners and Appellants, PETITION FOR A q E A p N G -v- ) 3J 0 O - p : WILBUR VISSER, JANE JELINSKI, and ) o F c RAMON S. WHITE, THE GALLATIN COUNTY) w 23 BOARD OF COMMISSIONERS, 1 -4 Respondents and Respondents. 1 The County Commission of Gallatin County has petitioned for rehearing of our opinion promulgated November 1, 1988, on the grounds that the opinion is in conflict with an earlier decision of this Court, Withers v. Beaverhead County (1985) , 710 P.2d 1339, 42 St.Rep. 1730 and that language in our opinion of November 1, 1988, eliminates the discretion of a county commission to determine if a proposed division of land is an attempt to evade subdivision review. The Attorney General, appearing on behalf of the State of Montana as amicus curia, supports the petition for rehearing, contending that the Gallatin County regulation was properly found by this Court to be void, but that certain language in our opinion is extraneous to the decision and that the extraneous language is contrary to controlling Montana case law. Several county attorneys, acting for their respective counties, join in the State's brief. They are the county attorneys from Missoula County, Flathead County, and Lewis and Clark County. In addition, Flathead County has filed a supporting amicus curia brief, and a response to the amicus curia brief for the State of Montana, the latter directed to a fear that the State may have conceded in its amicus brief that under all situations the local governing body would be deemed to be abusing its discretion in denying the use of an occasional sale exemption if that exemption were proposed only once during a twelve-month period on a division of land. The respondents have filed a responsive brief contending that the petition for rehearing is groundless. For ease of reference, we set out the Gallatin County subdivision regulation in question: b. Exemption as an occasional sale. (1) An occasional sale is one (1) a sale of a division of land within any 12-month period. The 12-month period commences upon sale of the division of land. (2) The proper use of an occasional sale exemption is to create a single division of a parcel from any tract or from continuous tracts of land. (3) The governing body shall declare a proposed division of land as an occasional sale to he an evasion of the act if it is determined that one or more of the following conditions exist: (a) the proposed new parcel is part of a parcel which was created under the occasional sale or family conveyance exemption of the act; or (b) a parcel contiguous to the parcel to be transferred has heen previously transferred by the same transferor as an occasional sale; or (c) the creation of the proposed parcel would leave 2 or more parcels of less than 20 acres. The pertinent statutory provision to which t . h e Gallatin County subdivision regulations relate are these: 76-3-207. . . . unless the method of disposition is adopted for the purpose of evading this chapter, the following division of land are not subdivisions under this chapter . . . (d) a single division of a parcel outside of platted subdivisions when the transaction is an occasional sale; . . . 76-3-103. Definitions. As used in this chapter, unless the context or subject matter clearly requires otherwise, the following words or phrases shall have the following meanings: . . . (7) "Occasional Sale" means one sale of a division within any 12-month period. In this case, Tammy Leach proposed a division of a certain tract 14 as an occasional sale. The tract of the proposed division was contiguous to a tract which had earlier been transferred as an occasional sale to Tamrny Leach. The "governing body", the county commission of Gallatin County, determined that since the parcel is contiguous to a parcel which had earlier been transferred by the same transferor as an occasional sale, under the Gallatin County regulation the Tammy Leach proposal did not qualify as an occasional sale and so the division was denied. More than a year had elapsed from the time of the earlier transfer. It is obvious that the Gallatin County subdivision regulation which sets out a per se or automatic r u 1 . e to determine when a proposed division of land is an evasion of the act engrafts additional and contradictory requirements on the statute providing for occasional sales without regard to whether the purpose of the proposed divider is to evade subdivision review. As such the regulation is void. All of the amici appearing herein (but not Gallatin County) concede that the regulation is void. and that mandamus is proper in the premises. What they seek, however, is to have us delete from our opinion of November 1, 1988, the following language: For the same reasons, the contentions of the county commission that i-t has discretion to determine whet.her the method of disposition is adopted for the purpose of evading 5 76-3-207, MCA, has no merit. Plainly, under our statutes, a landowner is permitted a single division of a parcel outside of a platted subdivision if the division and any other division do not occur within any 12-month period. The county commission has no discretion to deny a division of land if the landowner otherwise complies with the exemptions provided to him under the statutes for a single division of land. All of the amici contend that the foregoing paragraph takes away from the county commissioners the power to determine whether in fact a proposed division of land submitted as an occasional sale or under some other exemption of the act is an evasion of subdivision review. Such was not our intention, and the point requires discussion. There is an inherent conflict between the statutory allowance of an occasional sale without subdivision review, and the condition "unless a method of disposition is adopted for the purpose of evading this chapter." A landowner proposing to divide land under the occasional. sale exemption obviously contemplates avoiding subdivision review by the governing body. Whether such an avoidance is for the purpose of evasion is quite another factual question. F l e have no - direct guidance from the legislature through its statutes to determine the difference between avoidance and evasion. In Withers v. Reaverhead County, supra, this Court had before it a situation where Barbara Withers attempted to deed property to her daughter Amy blithers under the immediate family exemption of 76-3-207 (b) , MCA. When her deed and certificate of survey were rejected by the county authorities, she sought mandamus in the district court. The district court considered the earlier history of the family pertaining to land divisions, determined that the proposed division to the daughter was for the purpose of evading suhdivisi on review, and denied ma-ndamus . This Court on appeal held that there was no abuse of discretion by the county commission in so determining, and therefore denied mandamus. 710 P.2d at 1339, 1341. In this difficult field, the word "discretion" is itself a confusing term. It can have two meanings, as discussed by this Court in Kujich v. Lillie, 327 Mont 125, 137-38, 260 P.2d 383. There we said: Discretion. The term "discretion" denotes the absence of a hard and fast rule. (citing a case) The establishment of a clearly defined rule would be the end of discretion. (citing authority) 1 Rouvier' s Law Dictionary, Rawle ' s 3rd Rev. , p. 884, has defined "discretion" in part as: "That part of the judicial function which decides questions arising in the trial of a cause, according to the particular circumstances of each case, and as to which the judgment of the court is uncontrolled by fixed rules of law. "'Discretion when applied to a court of justice means sound discretion guided by law.' 4 Burr. 529. Judicial discretion is a mere legal discretion--a discretion in discerning the course presented by law; and what has been discerned it is the duty of the court to follow. (citing authority) . . . 'A ,-egal discretion is one that is regulated by well known and established principles of law. ' (citing authority) "'Rut if the word discretion in this connection [injunction] is used in a secondary sense, and by it is meant that the chancellor has the liberty and power of acting, in finally settling property rights, at his discretion, without the restraint of the legal and equitable rules governing those rights, then I denv such power. ' " (citing authority) . The use of the term "d.iscretionl' by the author of our opinion of November 1, 1988, in the case at bar, and by this Court in Withers, supra, may have been unfortunate. What is really meant is that the governing bodies have the power and duty to evaluate and determine from all the circumstances whether the proposed division of land is based on a purpose to evade the subdivision requirements. The Attorney General recognized this distinction in an opinion issued by him on July 20, 1983 (40 Opinions A.G. No. 16) in response to a question from the city attorney of Missoula where a developer had completed and submitted for filing a fourth certificate of survey dividing a tract into five lots, four of which were to be conveyed as occasional sales, and the question asked was, whether under these facts, are the claimed "occasional sales" subject to review under the act on the grounda that. the exemptions are claimed. "for the purpose of evading" the act. The Attorney General answered in part: . . . I have consistently declined to address such questions in the context of an advisory opinion. However, to assist you in analyzing the issue I offer the following observations. As a statute promoting public health and welfare, the Subdivision and Platting Act must be literally construed to effectuate its object. Its exemptions must be narrowly applied. State ex rel., Florence Carlton School District v. Board of County Commissioners, 180 Mont. 285, 291, 590 P . 2 d 602, 605 (1978). A local government may legitimately require one claiming an exemption from the Act's requirements to make some evidentiary showing that the exemption is justified. . . It would also be legitimate for the local government to establish by rule some sort of hearing procedure to allow the local government to evaluate the evidentiarv basis for the claimed exemption and to allow or disallow it. . . . In contrast, a regulation estahlishina procedures for evaluati-on of a claimed exemption gives substance to the Act's policy of local government control of land use and is certainly consistent with the Act's requirements. Evaluation and determination of a factual issue is different from "discretion." Since the legislature has provided that the occasional sale exemption is subject to the condition that it not he for the purpose of evading subdivision review, a determination (not discretion) by a governing body based on stated facts which show such a purpose is within the power of the governing body. This Court has never intended otherwise. Rased on the foregoing discussion therefore we eliminate from our original opinion the paragraph objected to by the county commission and by amici. Aside from that exception, the opi-nion as originally promulgated stands as issued. The petition for rehearing is otherwise denied | February 3, 1989 |
8ccd06d3-89fe-4595-a38f-a0cb41daf2fc | JACOBSEN v STATE | N/A | 88-216 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 ROLF A. JACOBSEN, et al., Plaintiffs and Appellants, VS. STATE OF MONTANA, Defendant and Respondent. APPEAL FROM: The District Court of the Nineteenth Judicial District, In and for the County of Lincoln, The Honorable James Sorte, Judge presiding. COUNSEL OF RECORD: For Appellant: Daniel W. Hileman; Murray, Kaufman, Vidal & Gordon, P.C., Kalispell, Montana For Respondent: Dana L. Christensen; Murphy, Robinson, Heckathorn & Phillips, P.C., Kalispell, Montana Submitted on Briefs: December 29, 1 9 8 8 5 ." ? - Decided: February 9, 1 9 8 8 r C' 4 0 - I z , ' ~ i l d : ; ; T i 0 5 - . . . . . C Y C 0 . . L L 6 ) : < , .- 0 P-LL LJ C L J p UI 2 ' : c n 0 -5 cp3 .-- \ . ) Mr. Justice R. C. McDonough delivered the Opinion of the Court. This appeal concerns alleged negligence by the State of Montana in combating a forest fire. Plaintiff Rolf A. Jacobsen, together with several other homeowners and an insurance company that sustained losses as a result of the fire in question (Plaintiffs), appeal from the judgment of the District Court of the Nineteenth Judicial District, Lincoln County, entered upon a jury verdict in favor of the State. We affirm. Plaintiffs frame three issues for review: 1. Whether the District Court erred by allowing Defendant's Exhibits "L" and "N" into evidence over Plaintiffs' objections. 2. Whether there was substantial credible evidence to support the jury verdict. 3. Whether the District Court's giving of Defendant's Proposed Jury Instructions 18 and 21, and refusal to give Plaintiffs' Offered Instruction No. 6 was in error. In August of 1984, the Houghton Creek area near Libby was the site of two forest fires relevant to this dispute. The initial fire was discovered on August 1 5 , and burned approximately 87 acres. State fire-fighting personnel had contained and largely extinguished the first fire by August 20, and then began a schedule of daily patrols at the site of the burn. During these patrols, crews extinguished any fires or "smokes" they discovered within "two chains" (132 feet) of the outside perimeter of the burn. August was a hot and dry month, and on the 37th a "red flag" warning was posted due to windy conditions. In the early afternoon, the Libby-area dispatcher for fire fighters received reports From Houghton Creek residents that the air - was becoming smoky and dusty. The dispatcher radioed two crews and directed them to interrupt their regular patrol schedules and proceed directly to the Houghton Creek burn. They were joined by a third, Inter-Unit crew that had been dispatched from Kalispell because of the red flag condition in the Libby area. The first crew on the scene surveyed the burn area, where the crew boss later testified he observed smoke and winds of approximately 30 m.p.h. When the other crews arrived, the first crew boss told them he felt he could handle the situation and released them to other duties. Upon the departure of the two crews, the first crew boss returned to a vantage point on a ridge near the burn, where he saw fire burning rapidly in his direction. He radioed for help, and the other two crews returned. Members of the other crews testified to experiencing winds of 50 m.p.h. or more upon their return. At that point, the fire fighters were unable to control the blaze. It grew rapidly, joined with another fire that had started some distance away, and eventually burned over 12,000 acres. Eleven actions were filed against the State for losses suffered due to the fire. All of the suits sounded in negligence, and were consolidated for trial on the issue of liability. At the close of trial, the jury returned its verdict in favor of the State. Judgment was entered thereon, and Plaintiffs appealed. I. The Exhibits. Plaintiffs assign error to the District Court's rulings on two pieces of evidence offered by the State. They first argue that both exhihits were irrelevant under Rule 401-, M.R.Evid. Plaintiffs further allege that if the exhibj-ts were relevant, their probative value was outweighed by their preiud-icial effect , and they should have been excluded under Rule 403, M. R.Evid. The determination of the admissibility of evidence is within the wide discretion of the trial court, and we will not disturb the court's ruling absent a showing of abuse of discretion. State v. J.C.E. (Mont. 1988), - P.2d - , 45 St.Rep. 2373; Preston v. McDonnell (1983), 203 Mont. 64, 659 P.2d 276. Plaintiffs first address Defendant's Exhibit "N," a map of the State of Montana. The map had been prepared by Steve Jorgensen of the Department of State Lands, who testified as the State's witness when the map was introduced. Jorgensen used red and orange spots to represent fires occurring within the state between August 15, 1984 (the date of the first Houghton Creek fire) , and August 27, 1984 (the date of the second fire). According to the State, the map was offered to counter Plaintiffs' contention that the State had not prioritized its resources properly, and to show the weather conditions existing during the time in question. It is the State's contention that the unexpectedly strong winds of August 27, and not any negligence by the State, caused the fire to "blow up." Plaintiffs objected on the ground of relevance, but the court admitted the exhibit. After Jorgensen's testimony about the number of fires on the map, Plaintiffs moved for a mistrial. They argued that the exhibit had inflamed the passions of the jury, making it impossible for them to receive a fair trial. On appeal, Plaintiffs reassert both of these arguments. They note the definition of relevance in Rule 401, "having a tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable ...." According to Plaintiffs, the map made no facts relative to the issue of the State's negligence more or less probable. The map did not show the manpower and equipment available to the State, nor was the time frame sufficiently narrow to apply to the weather pattern in effect on the 27th. Plaintiffs assert prejudice in that the map sought to divert attention from the fire at issue and the State's performance in fighting it by graphically presenting the large scale of the fire situation statewide. We disagree. The State refers to the testimony by Plaintiffs' expert witness regarding prioritization of fire-fighting resources. This witness voiced several criticisms of the fire-fighting methods employed in the Libby area, including the small size of the crews used and the overall lack of manpower on the Houghton Creek fire. On cross-examination, the State brought out the expert's lack of knowledge concerning other fires burning in northwest Montana that required attention. Some representation of the number of fires burning in the area was therefore relevant to the prioritization issue. The weather was also an issue. Both sides discussed the dry conditions present during the summer of 1984, and the State raised a defense alleging that the unexpectedly strong winds of the 27th were an intervening cause of the flare-up. The map was relevant to each of these questions by showing the large number of fires resulting from the dry, windy weather occurring throughout the time period at issue. Plaintiffs argue with merit that the map showed a much larger area than was required by the scope of these issues. However, the information offered did make facts concerning the number of fires requiring State attention and the severity of the fire season more probable. The information about the severity of the fire season was also relevant to Plaintiffs1 contention that greater care shoul-d have been exercised by the State given the dry conditions. In support of their claim of prejudice, Plaintiffs cite cases from this Court requiring the exclusion of evidence when its probative value is outweighed by its prejudicial effect, including Ruiper v. Goodyear Tire and Rubber Co. (19831, 207 Mont. 37, 673 P.2d 1208 (evidence in products liability case concerning defendant company's political contributions to persons connected with the Watergate scandal); and Welnel v. Hall (1985), 215 Mont. 78, 694 P.2d 1346 (largely speculative testimony in motorcycle-auto collision case that characterized the plaintiff as a stereotypical "biker"). In Kuiper, we found a "total absence" of evidence connecting the defendant's political contributions to the injury caused by its product. The plaintiff's constant reference to the defendant ' s connection with the scandal--including a 74-page opening statement--had turned the trial into a "political circus." In Welnel, the witness at issue was to testify about seeing a black Harley-Davidson motorcycle ridden by a bushy-haired man wearing a black leather jacket traveling at a high rate of speed. The witness could not identify the plaintiff as the rider, there was evidence showing that the plaintiff had very short hair and was not wearing a jacket on the day of the collision, and the time frame of this observation in reference to the collision was indefinite. Here, the map was a single exhibit giving a graphic representation of the severe forest fire season cited by both parties in their arguments. Plaintiffs do not dispute its accuracy. As we said above, the scope of the exhibit was broader than necessary. It cannot be said, however, that it was so lacking in probity to he solely for the purpose of drawing the jury's attention from the main issues. Nor can it be said that the map was so inaccurate or indefinite that its possible prejudice outweighed its probative value. We therefore find no abuse of discretion by the District Court in admitting the map. Exhibit "L," an enlarged photograph of the Houghton Creek burn area taken by Department of State Lands employee Erik Kurtz on August 24, was likewise properly admitted. Plaintiffs contend that the photo, which shows no smoke in the burn area, lacked probative value because it conflicted with Kurtz's own radio log and the testimony of Plaintiffs' expert. A piece of evidence that conflicts with other evidence is not devoid of probity. The conflict affects only the weight it is to be accorded, which is within the exclusive province of the jury. 30 Am Jur 2d, Evidence S$ 1080, 1082; Wheeler v. City of Rozeman (Mont. 1988), 757 P.?d 345, 347, 45 St.Rep. 1173, 1176. Plaintiffs assert that the photo was prejudicial because the condition of the fire on August 24 had no bearing on the alleged negligence that took place on August 27. Plaintiffs themselves, however, presented evidence of the condition of the burn during the time between the first and second Houghton Creek fire. Testimony by several of Plaintiffs' witnesses concerned the patrols conducted by Department of State Lands employees and whether those patrols dealt adequately with smoking or burning stumps during that period. The photograph showed a lack of smoke on one particular day during that period. As with the map, the photo was not so lacking in probity or so inaccurate that it was prejudicial. While plaintiffs' expert noted the possibility that a photo taken from another angle may have shown smoke, he did not question the accuracy of Kurtz's photo. We find no abuse of discretion in the District Court's decision to admit the photo. 11. Substantial Credible Evidence. Plaintiffs next contend that the jury's verdict was not supported by substantial credible evidence. The standard for review of a jury verdict is whether there is substantial credible evidence to support it. Weinberg v. Farmers State Bank of Worden (Mont. 1988), 752 P.2d 719, 45 St.Rep. 391. However, this Court does not lightly overturn the verdict of a finder of fact, especially a jury. Palmer by Diacon v. Farmers Insurance Exchange (Mont. 1988), 761 P.2d 401, 45 St. Rep. 1694. The test of substantial credible evidence allows for reversal only if there is an absence of probative facts to support the verdict. Kleinsasser v. Superior Derrick Service, Inc. (Mont. 19851, 708 P.2d 568, 42 St.Rep. 1662. The State took the position at trial that the intervening forces of nature--specifically the sudden, strong winds--were the cause of the second Houghton Creek fire and Plaintiffs resulting losses. The State also contended that its agents and employees acted reasonably in all aspects of fighting and containing the fire. The record contains the testimony of ten witnesses called by the State to present its case in chief. This testimony was supported by a total of 14 exhibits, including those discussed above. While Plaintiffs have challenged the State's evidence and shown where some of it conflicts, these questions, as stated above, go only to the weight to be accorded the evidence. Plaintiffs have not shown an absence of probative facts to support the State's position. We decline to hold that the jury's verdict was not supported by substantial credible evidence. 111. The Jury Instructions. Plaintiffs assign error to the District Court for giving three of the jury instructions proposed b 7 7 the State. They contend that the instructions were mere commentary upon the evidence, and were contradictory and confusing. The disputed instructions read as follows: At the center of negligence is the concept of the reasonable person. What would a reasonable and prudent person, confronted by like circumstances and exercising reasonable care have done? In other words, negligence involves acting other than as a reasonable person would do in the circumstances. The reasonable person has been observed to be the epitome of ordinariness, never reckless or absent minded, yet neither endowed with exceptional courage, foresight, or skill. [Defendant's Proposed Instruction No. 181 Negligence is not proved merely because someone later demonstrates that there would have been a . better way. Reasonable care does not require prescience nor is it measured with the benefit of hindsight. [Defendant's Instruction No. 21? An intervening cause will relieve a Defendant of liability for negligent acts where the cause is one which the Defendant could not reasonably anticipate under the circumstances. [Defendant's Proposed Instruction No. 261 This Court has held that a party assigning error to the giving of a jury instruction will not prevail unless some prejudice is shown. Wilhelm v. City of Great Falls (Mont.. 1987), 732 P.2d 1315, 44 St.Rep. 211; Farmers Union rain Terminal Ass'n v. Montana Power Co. (1985), 216 Mont. 289, 700 P.2d 994. Where the instructions given state the law applicable to the case when read as a whole, a party cannot claim reversible error as to the giving of certain instructions. Goodnough v. State (1982), 199 Mont. 9, 647 P.2d 364. We have also held that refusal to instruct a jury o r ! an important part of a party's theory of the case is reversible error. Smith v. Rorvik (Mont. 1988), 751 P.2d The instructions listed above correctly state principles of negligence law. When read together, they are not contradictory, nor do they appear confusing. Instructions 18 and 21 deal with the standard of care required of the State in dealing with the Houghton Creek fire. Plaintiffs charged the State with failing to exercise reasonable care, and presented evidence of the events leading up to the second Houghton Creek fire to show this. The State countered this allegation by arguing that its employees acted reasonably under the circumstances. Instructions 18 and 21 were not prejudicial to Plaintiffs. Instruction No. 26 deals with the principle of intervening causes. Again, this is a correct statement of negligence law. It fits logically with the other instructions on negligence proposed by both sides for that reason. The State's main defense, as discussed above, was that the unusually strong winds that occurred on August 27 were the unforeseeable, intervening cause of the second Houghton Creek fire. Instruction 26 was not prejudicial to Plaintiffs. Plaintiffs next contend that the District Court erred in refusing to give their Proposed Jury Instruction No. 6: A legal doctrine called "res ipsa loquitur" is involved in this case. The meaning of the term is, "it speaks for itself." Under this doctrine, even though negligence has not been proven by other evidence, you may infer negligence from the circumstances surrounding an event if you find from a preponderance of the evidence that (1) the event is of a kind which ordinarily does not occur in the absence of negligence; (2) other causes, including the conduct of the plaintiff and other persons, have been suf ficientlv eliminated by the evidence. Plaintiffs fail, however, to present an argument to support their assertion that failure to give this instruction was error. By the definition given in the instruction, the doctrine does not appear to apply in this case. It is entirely possible, as the jury apparently believed, for a forest fire to occur or for an existing fire to break through a fire line in the absence of negligence. The State presented substantial evidence on that very question. The decision of the District Court is affirmed. / We Concur: Chief Justice & e a Justice Mr. Chief Justice J. A. Turnage did not participate. | February 9, 1989 |
2d500c8a-8039-4b30-93f8-69a246fbf0c8 | STATE v BUCKMAN | N/A | 88-034 | Montana | Montana Supreme Court | No. 88-034 IN THE SUPREME COIJRT OF THE STATE OF MONTANA 1989 THE STATE OF MONTAMA, Plaintiff and Respondent, JOSEPH RUBEN RUCKMAN, a/k/a JOSHUA BUCKMAN, Defendant and Appellant. APPEAL FROM: The District Court of the Eighth Judicial. District, In and for the County of Cascade The Honorable John M. McCarvel, Judge presiding. COUNSEL OF RECORD: For Appellant: E. June Lord, Great Falls, Montana For Respondent: Honorable Marc Racicot, Attorney General, Helena, Montana George Schunk, Assistant Attorney General, Helena Patrgk L. Paul, Cascade County Attorney, Great Falls, Montana S t e p 3 n E. Hagerman, Deputy Cascade County Attorney, Great Falls 0 N , A ; k l J Submitted on Briefs: December 9, 1988 Decided: February 1, 1989 . I - c p-2 . . . -- Mr. Justice William E. Hunt, Sr. delivered the Opinion of the Court. In the Eighth Judicial District Court, Cascade County, defendant Joseph Ruben Buckman pleaded guilty to one count of deceptive practices, a felony. He received a 10-year sentence in the Montana State Prison and was designated a dangerous offender for purposes of parole eligibility. From the part of the sentence designating him a dangerous offender, Buckman appeals. We affirm. Two issues are presented for our consideration. 1) Did the District Court abuse its discretion by designating Buckman a dangerous offender for purposes of parole eligibility? 2) Did the District Court violate the terms of the plea agreement by designating Buckman a danqerous offender? During the night of July 2 or early morning of July 3, 1987, a car owned by Milton J. Merrick was broken into and Merrick's wallet, containing several credit cards, was stolen. On July 3, 1987, Joseph Buckman unsuccessfully attempted to use Merrick's VISA card to purchase beer and gasoline from two Great Falls area Circle K stores. Three days later, Ruckman successfully purchased items from a Sinclair gas station and a Payless Shoe Store by using Merrick's Mastercard and forging his signature. On July 7, 1987, Buckman was apprehended in a stolen motor vehicle with Merrick's wallet and credit cards in his possession. Buckman was charged with one count of deceptive practices, a felony, in violation of S 45-6-317 (1) (dl (i) , MCA, and one count of forgery, a felony, in violation of S 45-6-325 (1) (a), MCA. Pursuant to a plea bargain, the State aareed to drop the forgery charge in exchange for Buckman's plea of guilty to the charge of deceptive practices. Although the State reserved the right to recommend sentencing, it agreed not to pursue a designation of persistent felony offender. At sentencing, the State recommended that Ruckman receive ten years, the maximum sentence allowed by law, and that he be designated a dangerous offender for purposes of parole eligibility. The Honorable John M. McCarvel accepted this recommendation and sentenced Buckman accordingly. Buckman appeals the designation of dangerous offender. Ruckman first argues that the District Court abused its discretion by designating him a dangerous offender. He contends that a defendant convicted of a nonviolent property crime does not represent a substantial danger to society and cannot, therefore, he considered a dangerous offender. A dangerous offender is not eligible for parole until he has served one-half of his full sentence. A nondangerous offender, in contrast, is eligible for parole after he has served one-quarter of his full sentence. Section 46-23-201 (1) (a) , MCA. The statute governing the designation of an offender as dangerous or nondangerous is 5 46-18-404, MCA, which reads as follows: (1) The sentencing court shall designate an offender a nondanqerous offender for purposes of eligibility for parole under part 2 of chapter 23 if: (a) during the 5 years preceding the commission of the offense for which the offender is being sentenced, the offender was neither convicted of nor incarcerated for an offense committed in this state or any other jurisdiction for which a sentence to a term of imprisonment in excess of 1 year could have been imposed; and (b) the court has determined, hased on any presentence report and the evidence presented at the trial and the sentencing hearing, that the offender does not represent a substantial danger to other persons or society. (2) A conviction or incarceration may not be considered under subsection (1) (a) if: (a) the offender was less than 18 years of age a t . the time of the commission of the present offense; or (b) the offender has been pardoned for the previous offense on the grounds of innocence or the conviction for such offense has been set asid.e in a postconviction hearing. (3) If the court determines that an offender is not eligible to be designated. as a nondangerous offender, it shall make that determination a part of the sentence imposed and shall state the determination in the judgment. Whenever the sentence and judgment do not contain such a determination, the offender is considered to have been designated as a nondangerous offender for purposes of eligibility for parole. Subsection (1) of this statute delineates a two-part test. If the district court finds that the defendant was neither convicted of nor incarcerated for a felony offense within the five years preceding the crime for which he is being sentenced and that the defendant does not represent a substantial danger to society, the court must designate the defendant nondangerous. However, if the defendant satisfies only one prong of this two-part test, the district court, in its discretion, may apply the dangerous offender label. - See State v. Dahl (Mont. 1980), 620 P.2d 361, 365, 37 St.Rep. 1852, 1857. When using its discretion to determine offender status, the District Court "may consider persistence in criminal conduct and failure of earlier discipline to deter or reform the defendant." State v. Nichols (Mont. 1986), 7 2 0 P.2d 115?, 1163, 43 St.Rep. 1068, 1076. The District Court must articulate the reasons for designating a defendant as dangerous; "more than a mere recital of the statutory language is required." In re McFadden (1980), 185 Mont. 220, 222, 605 P.2d 599, 600. In the present case, the District Court did indeed articulate the reasons for designating Buckman a dangerous offender. The court stated: The defendant, since he was 18 years old, has been involved with the criminal law. In 1979, he was given a three (3) year deferred sentence for auto theft. In 1980, he was convicted, by a jury, of Aggravated Assault and Aggravated Kidnapping, felonies, and was given two ten (10) year terms which ran concurrently and was designated a Dangerous offender. He was released from the Montana State Prison in February, 1987 and committed the crime of Deceptive Practices, a felony, by stealing and using stolen credit cards. The defendant has demonstrated no evidence or effort to rehabilitate himself and is addicted to alcohol and drugs. His incarceration is necessary for long term in-patient treatment for alcohol and drugs and for the protection of the public. Buckman had been released from prison only five months prior to the commission of t-he crime leading to the present conviction. Thus, even though the instant offense was of a nonviolent nature, the District Court was not required by statute to designate Buckman a nondangerous offender. Furthermore, Buckman had been previously convicted of aggravated assault and kidnapping for holding a gun to a hostage's head. The District Court considered this prior offense as well as Buckman's failure to rehabilitate himself when it found that the dangerous offender status applied. Under the circumstances, the District Court did not abuse its discretion. Buckman next argues that the District Court violated the terms of the plea aqreement when it designated him a dangerous offender. He apparently contends that because he was not advised by the State of the possibility that it might seek to have limitations placed on his parole eligibility, he did not enter the agreement with an understanding of the consequences of his guilty plea. Buckman relies on State v. Cavanaugh (19831, 207 Mont. 237, 673 P.2d 482, a case very similar to his own, to support his theory. In Cavanaugh, the State agreed to drop two felony charges if the defendant pleaded guilty to two other charges. At sentencing, the trial judge gave Cavanaugh maximum penalties allowed by law and, in addition, ordered that he was ineligible for parole or for participation in the defender furlough program. We held that, as Cavanaugh was never advised of the possibility that he might be ineligible for parole, he did not enter into the agreement knowingly and voluntarily. We stated: [Dlefendant knew when he pled guilty that he could be sentenced to a maximum of one-hundred years for aggravated kidnapping and twenty years for aggravated assault. He did not know that he might be found ineligible for parole. A flat sentence of one-hundred years is far different than the sentence anticipated by a defendant who knows he might be sentenced to one-hundred and twenty years, but presumes that parole will be possible. Because of the disparity between the anticipated and actual sentence, the plea bargain into which defendant thought he was entering was not the plea bargain accepted by the trial judge. Cavanaugh, 207 Mont. at 241, 673 P.2d at 484. We concluded that a trial judge who accepts only a portion of a plea agreement must allow the defendant the opportunity to withdraw his guilty plea. Cavanaugh, 207 Mont. at 243, 673 P.2d at 485. At the time of the Cavanaugh decision, the statute governing plea agreements, S 46-12-204, MCA (1981), read as (1) The defendant shall enter a plea of guilty or not guilty to the indictment, information, or complaint. If the defendant refuses to plead to the indictment, information, or complaint, a plea of not guilty must be entered. (2) The court may refuse to accept a plea of guilty and shall not accept the plea of guilty without first determining that the plea is voluntary with an understanding of the charge. In 1985, the legislature amended the statute, adding subsection ( 3 ) . (3) (a) A plea bargain agreement is an agreement between a defendant and a prosecutor that in exchange for a particular plea the prosecutor will recommend to the court a particular sentence. A judge may not participate in the making of, and is not bound by, a plea bargain agreement. If a judge does not impose a sentence recommended by a prosecutor pursuant to a plea bargain agreement, the judge is not required to allow the defendant to withdraw a plea of guilty. (b) Before a judge accepts a plea of guilty, he must advise the defendant: (i) of all the pro~7isions of subsection (3) (a); (ii) of the punishment as set forth by statute for the crime charged; (iii) that prior to entering a plea of quilty, the defendant and his counsel should have carefully reviewed Title 46, chapter 18, and considered the most severe sentence that can be imposed for a particular crime; and (iv) that the judge may impose any sentence allowed by law. Section 46-12-204 (3), MCA. The express purpose of the amendment was to overturn the Cavanaugh decision. Hearing on HB 700 Before the House Com. on the Judiciary (Feh. 18, 1985) 49th Cong. 7. The amendments make it clear that a plea bargain is an agreement between the prosecutor and the accused only. The district court is not bound by the agreement. If the court chooses not to follow the prosecutor's recommendation pursuant to the plea bargain, it is not required to allow the defendant to withdraw his plea of guilty. Section 46-12-204 (3) (a), MCA. The plea agreement in issue stipulated only that the State reserved the right to recommend sentencing and that the State would not seek to designate Buckman a persistent offender. It made no reference to the fact that the State might seek to limit Buckman's parole eligibility by recommending that the court declare him a dangerous offender. Buckman argues that the District Court, therefore, was required to apprise him of the possibility that his parole could be limited if the court chose to designate him as dangerous. Section 46-16-105(1) (b), MCA, requires the district court to advise the defendant of the consequences of his guilty plea and the maximum sentence which may be imposed. Other statutes flesh out S 46-16-105(b), MCA, by outlining specific items of which the defendant must be advised by the court. They provide that the defendant must be informed that the court is not bound by the plea agreement; that sentencing is governed by Title 46, Chapter 18; that the defendant should consider the most severe punishment allowed by law; and that the judge may impose any sentence allowed by law. Sections 46-12-202 and 46-12-204 (3) (b) , MCA. These statutes do not require the District Court to advise the defendant of any possi.bility of limitations on his parole eligibility. Ruckman testified at his change of plea hearing that he understood that sentencing was solely in the discretion of the District Court; that he could receive a maximum of 10 years for his crime; that he entered the plea voluntarily; and that he was satisfied with counsel. Furthermore, as he had been declared a dangerous offender for his previous conviction, Buckman was aware of the fact that such limitations on parole exist. We cannot say, under these circumstances, that Buckman did not understand the consequences of his plea. The District Court did not err by failing to inform Buckman, before it accepted his guilty plea, of the possibility that he could be designated a dangerous offender. We affirm the District Cour We B oncur: | February 1, 1989 |
9e42d3d4-f791-401e-a45c-20ed3b9dc163 | STATE v JELLISON | N/A | 88-298 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 STATE OF MONTANA, Plaintiff and Respondent, -VS- GREGORY JOHN JELLISON, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable John S. Henson, Judge presiding. COUNSEL OF RECORD: For Appellant: J. Dirk Reccari, Missoula, Montana For Respondent: Hon. Marc Racicot, Attorney General, Helena, Montana Kathy Seeley, Asst. Atty. General, Helena Robert Deschamps, 111, County Attorney; Fred Van + [ r Valkenburg, Deputy County Atty., Missoula, Montana 3 0 ' d 0 11.'- I t J w 1 x * b 1-LI r?< - - Submitted on Briefs: Dec. 22, 1988 3 b J ) Decided: February 28, 1989 , 4 -w 8 ri- (-3 . < i l 9 - .x a Mr. Justice John C. Sheehy delivered the Opinion of the Court. This is an appeal from a judgment of the Fourth Judicial District, Missoula County. Appellant Jellison was convicted by a jury of four felony counts of robbery, § 45-5-401, MCA. He was sentenced to 40 years on each count plus 10 years on each count for use of a weapon. He was also designated a dangerous offender. Jellison contends that the District Court erred by admitting certain evidence. This Court affirms the District Court. The issue is whether the District Court erred when it denied the defendant's motion to suppress as evidence the tennis shoes the defendant was wearing when arrested for robbery and the comparison of the tennis shoes with a print left at the scene of the crime. On June 2, 1987, Missoula County sheriff deputies responded to a radio report of an armed robbery at the Orange Street Inn. They were parked within sight of the Inn at the time. Within one minute the deputies observed a large white and brown automobile turn left onto Orange Street heading for the 1-90 freeway entrance. This car matched the description of the automobile used in a previous armed robbery. The description of the suspect was of a white male in his twenties, brown hair, stocky build around 5'9" tall. The suspect was reportedly wearing a plaid shirt, blue jeans and white tennis shoes. The deputies stopped the car and arrested the defendant, Jellison and the driver of the car. The deputies observed a gun in the front seat partially concealed in a K-Mart bag. They also observed clothing in the car, including a plaid shirt. Jellison matched the description of the reported robber. Jellison was taken to jail where his clothing, including his tennis shoes, were placed in a property locker. A detective investigating the crime scene soon after the crime discovered a shoe print on the counter of the motel. He went to the jail where he obtained Jellison's shoes from the property locker. He returned to the motel where he compared the shoes to the print found on the counter. The shoes were admitted into evidence at trial as was evidence of the print comparison. Other evidence included the testimony of the victim of the Orange Street Inn robbery that Jellison was the man who robbed her. Jellison contends that taking his tennis shoes from the property locker after his lawful arrest violated his Fourth Amendment right to be free from unreasonable searches and seizures and his right to privacy guaranteed by Article 11, S 10 of the Montana Constitution. We disagree. First, the seizure of Jellison's tennis shoes was valid pursuant to 5 46-5-101(1), MCA, which authorizes a search "of a person, object, or place may be made and instruments, articles, or things may be seized in accordance with the provisions of this chapter -- when the search -- is made . . . as an incident - - to a lawful arrest." (Emphasis added.) When a lawful arrest is made, police may reasonably search and seize anything within such persons immediate presence "which may have been used in the commission of [the crime] or which 5 constitute evidence - of - the offense." (Emphasis added.) Section 46-5-102(4), MCA. The suspect was reported to be wearing white tennis shoes at the time of the crime and Jellison was wearing white tennis shoes when he was stopped within 90 seconds of the dispatch over the radio reporting the crime to police on patrol. When Jellison was arrested and brought to the jail and his clothing and tennis shoes were taken, they were taken incident to a lawful arrest and their evidentiary value had already been established by the victim who described the robber. Jellison's tennis shoes clearly constituted evidence of the crime even before the detective discovered a shoe print at the crime scene. The Fourth Amendment proscribes unreasonable searches, not reasonable ones. "It is well settled that a search incident to a lawful arrest is a traditional exception to the warrant requirement of the Fourth Amendment." State v. Ulrich (1980), 187 Mont. 347, 351, 609 P.2d 1218, 1220 (quoting United States v. Robinson (1973), 414 U.S. 218, 224, 94 S.Ct. 467, 471, 38 L.Ed.2d 427). With regard to the Montana Constitution's Right of Privacy Clause, Art. 11, § 10, the defendant, at the time of his lawful arrest had less or no expectation of privacy with respect to his personal property lawfully seized by the police. A Michigan case, People v. Rivard (1975), 230 N.W.2d 6, articulates this rule: Once the [object] had been exposed to police view under unobjectionable circumstances and lawfully taken by the police for safekeeping, any expectation of privacy with respect to that item had at least partially dissipated so that no reasonable expectation of privacy was breached by [the police] taking a "second look." Rivard, 230 N.W.2d at 8. The United States Supreme Court held in United States v. Edwards (1974), 415 U.S. 800, 94 S.Ct. 1234, 39 L.Ed.2d 771, that police may, without first obtaining a warrant, seize items of evidence incident to a lawful arrest. The facts surrounding Edwards are quite similar to the case at bar. Edwards was arrested for attempting to break into a post office. Shortly after he was incarcerated, it was discovered during investigation of the crime scene that the attempted break-in had been made through a wooden window which had been pried with a crow bar leaving paint chips on the sill. Police thought it probable that paint chips would be on the clothing of the perpetrator. Examination of Edwards' clothing revealed paint chips which matched those found on the window sill. On appeal, the Sixth Circuit Court of Appeals reversed the admission of the wood chips into evidence because a warrant was required "after the administrative process and the mechanics of the arrest have come to a halt." United States v. Edwards (6th Cir. 1973) , 474 F.2d 1206, 1211. The Supreme Court disagreed: With or without probable cause, the authorities were entitled at that point [of arrest] not only to search Edwards' clothing but also to take it from him and keep it in official custody. There was testimony that this was the standard practice in this city. The police were also entitled to take from Edwards any evidence of the crime within his immediate possession, including his clothing. And the Court of Appeals acknowledged that contemporaneously with or shortly after the time Edwards went to his cell, the police had probable cause to believe that the articles of clothing he wore were themselves material evidence of the crime for which he had been arrested. 474 F.2d at 1210.. . . Once the accused is lawfully arrested and is in custody, the effects in his possession at the place of detention that were subject to search at the time and place of arrest may lawfully be searched and seized without a warrant even though a substantial period of time has elapsed between the arrest and subsequent administrative processing, on the one hand, and the taking of the property for use as evidence, on the other. This is true where the clothing or effects are immediately seized upon arrival at the jail, held under the defendant's name in the "property room" of the jail and at a later time searched and taken for use at the subsequent criminal trial. Edwards, 415 U.S. at 806-07. In the present case, police thought it probable that the print found on the counter could be matched with the shoe worn by the defendant. Comparison of the print to the shoe proved to be a match. The defendant had been lawfully taken into custody and the police followed their standard practice of taking detainees' clothing. The police were also entitled to take from the defendant any evidence of the crime within his immediate possession, including his clothes. There was probable cause to believe the defendant's clothing would provide material evidence of the crime for which he was arrested. This Court concludes that the District Court did not err by denying Jellison's motion to suppress the tennis shoes as evidence and the evidence of comparison to the print. The shoes were lawfully seized incident to the lawful arrest of the defendant. Affirmed. We Concur: I ----. , &{ b , , , , , j /ci * /vl- - Justice | February 28, 1989 |
c466ee89-b6e5-42f1-83ca-ed8a6708c798 | CITY OF MISSOULA v FOREST | N/A | 88-460 | Montana | Montana Supreme Court | I N THE SUPREME C O U R T O F THE STATE O F MONTANA 1989 T H E CITY O F MISSOULA, P l a i n t i f f and Respondent, -VS- CASEY FOREST, Defendant and Appellant. APPEAL FROM: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , I n and f o r t h e County o f Missoula, The Honorable John S. Henson, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant: I a n Christopheron, Missoula, Montana For Respondent : Hon. Marc Racicot, Attorney General, Helena, Montana & Judy Wang, C i t y A t t o r n e y ' s O f f i c e , Missoula, Montana Q -- 3 - 1 " - - r -. e .- m - 1 I . - 1 Submitted on B r i e f s : J a n . 5 , 1989 = : C ( > a ( 2 - 1 q ~ e c i d e d : February 1 4 , 1989 & I c a a 4 L L f z F i l & 2 a3 0 z Mr. Justice John Conway Harrison delivered the Opinion of the Court. This is an appeal from the Fourth Judicial District Court, Missoula County, Montana. Defendant/appellant, Casey Forest, was found guilty by the District Court, after a jurv trial, of Driving Under the Influence of Alcohol, a misdemeanor, in violation of S 61-8-401, MCA. We affirm. On July 22, 1987, appellant joined friends in a birthday celebration at Connie's Lounge. After consuming a few beers, appellant and two members of the group left the bar, intending to drive home. The two friends rode a motorcycle, while appellant drove his Nissan truck. The vehicles proceeded south on Higgins Avenue at a high rate of speed, weaving between cars as they sped down the street. Near the intersection of Sixth and Higgins avenues, the motorcycle veared into the rearside panel of appellant ' s pickup, causing the motorcycle to spin and slide. Both riders fell from the motorcycle and were later taken by ambulance to a hospital. Appellant, uninjured in the accident, drove to a nearby parking lot. Missoula Police Officer Clifford LePiane investigated the collision. He testified at trial that upon arrival at the scene, he observed the appellant standing next to his truck in the parking lot. Officer LePiane described appellant as having a flushed face, red watery eyes, somewhat slurred speech, and a moderate smel-1 of alcohol on his breath. In addition, appellant exhibitied a boisterous and argumentative behavior. Witnesses identified appellant as having heen involved in the accident and described the driving as "big time reckless." Officer LePiane arrested appellant for driving under the influence of alcohol, a violation of S 61-8-401, MCA. At the Missoula Police Department, appellant was immediately advised of his rights under Montana's Implied Consent Law. Appellant refused to take the blood-alcohol test requested by Officer LePiane. However, upon completion of the "booking" procedure, appellant withdrew his refusal and consented to the test. Results of the Intoxilizer 5000 test revealed a blood-alcohol content of .137. The entire procedure, including initial refusal and later consent to administer the test, was recorded on video tape. However, at one point during the procedure, police officers turned off the video camera to allow an independent accident investigator to obtain information from the appellant. Because of the interruption, a blank portion followed by a brief segment of a prior unrelated DUI appeared on the video tape. After the information was obtained, police restarted the video camera, administered Miranda warnings and continued the booking procedures. On November 13, 1987, prior to trial at the Municipal Court level, respondent filed a separate alternative charae of Driving With a Blood-Alcohol Content over .lo, "per se," a violation of S 61-8-406, MCA. On December 15, 1987, appellant was convicted of the DUI charge. Appellant appealed to the District Court. Prior to trial in the District Court, appellant filed numerous motions. While most were denied, the District Court Judge granted a motion to suppress the portion of the video tape prior to the administration of Miranda warnings. The lower court ruled that while evidence of appellant Is refusal. to take the breathalizer test was admissible, other statements made prior to receiving the Miranda warninqs were protected communications within the Fifth Amendment. The evidence of appellant's refusal could be introduced hx7 alternative means. On May 2, 1988, after a jury trial consolidated the two charges, the District Court entered judgment finding appellant guilty on the DUI charge. Appellant appeals to this Court, presenting four issues for our review: 1. Did probable cause exist to arrest appellant for driving under the influence of alcohol? 2. Was it a violation of the United States and Montana Constitutions to admit evidence of appellant I s refusaL to take the Intoxilizer 5000 test under Montana's Implied Consent Law? 3. b 7 a s it error to admit the video tape? 4. Upon appeal from the Municipal Court conviction, does the District Court retain jurisdiction and ability to convict on the alternative charges of Driving Under the Influence and Driving wi.th a Rl-ood Alcohol over .lo, "per se?" ISSUE I Appellant argues Officer LePiane lacked probable cause to arrest on the DUI charge, contending that absent field sobriety tests, no evidence existed to show the requisite impairment of facilities. Section 61-8-401, MCA. However, our review of the record leads to a contrary conclusion. Probable cause must be based on an assessment of all relevant circumstances, evaluated in light of the knowledge of a trained law enforcement officer. State v. Ellinger (Mont. 1986), 725 P.2d 1201, 43 St.Rep. 1778. More than mere suspicion, probable cause requires facts and circumstances sufficient to warrant a reasonable person to believe that a suspect has committed an offense. State v. Lee (Mont. 1988), 754 P.2d 512, 45 St.Rep. 903. As our prior holdings demonstrate, probable cause is a concept encompassing a spectrum of varying circumstances. In the instant case, the record is replete with evidence supporting a DUI offense. The accident was cause by reckless and dangerous conduct, resulting in serious in juries. Officer LePiane observed appellant's bloodshot eyes and flushed complexion, and smelled a moderate odor of alcohol on appellant's breath. In addition, based on prior dealings with appellant, Officer LePiane recollected appellant's behavior as calm and polite, a dramatic change from the argumentative behavior exhibited after the accident. Certainly, field sobriety tests are a tool which can assure the officer that the person is in fact under the effect of intoxicating beverages. However, the absence of such tests do not fatally flaw the probable cause determination. As discussed above, sufficient evidence existed to establish probable cause for arrest. We find no merit in appellant's first contention. ISSUE I1 This Court has long adhered to the rule that neither the results of the breathalizer test nor a defendant's refusal to submit to the breathalizer test are communications protected by the the Fifth Amendment. State v. Jackson (1983), 206 Mont. 338, 672 P.2d 255, citing South Dakota v. Neville (1983), 459 U.S. 553, 103 S.Ct. 916, 74 L.Ed.2d 694; State v. Armfield (1984), 214 Mont. 229, 693 P.2d 1226. Therefore, our discussion of the principle will remain brief. As a part of the program to deter drinkers from driving, Montana has enacted an Implied Consent Law. The statute declares that any person who operates a motor vehicle within the State shall be deemed to have given his consent to a chemical test to determine the alcohol content of his blood if arrested by a police officer for driving under the .influence of a?-cohol. Section 61-8-40? 1 1 ) , MCA. The test is not compelled, yet refusal results in attendant penalties, including an immediate seizure of one's driver's license, S 61-8-402(3), MCA, and the admissibility of the refusal upon trial for DUI. Section 61-8-404(2), MCA. Appellant contends the statute cannot override Miranda guarantees. As such, appellant argues evidence of his initial refusal, prior to Miranda warnings, must be suppressed. We disagree. In discussing the origins of the rights protect.ed by Miranda warnings, we stated: The Massiah, Escobedo and Miranda decisions link the Fifth ~mendment privilege to the Sixth Amendment's right to counsel. Escobedo and Miranda sought to preserve the privilege against self- incrimination through protection of defendant from the coercive aspects of custodial interrogation . . . Massiah sought similar protections where uncounseled and undisclosed post- indictment non-custodial interrogation elicited incriminating statements . . . All three decisions characterize the right to assistance of counsel as a means of preserving defendant's privilege against self-incimination --his absolute right to refuse to testify or communicate. (Citations omitted.) Armfield, 693 P.2d at 1229. The Fifth Amendment affords no protection against the prosecutor's use of fingerprints, measurements, handwriting, voice identification or blood tests; all constitute "physical or real" evidence. Schmerber v. California (1966), 384 U.S. 757, 86 S.Ct. 1826, 16 L.Ed.2d 908. Sirnil-arly, appellant's claim of constitutional prohibition against self-incrimination by the admission of his refusal to submit to the blood-alcohol test is foreclosed by the Neville decision, which defined the refusal as non-testimonial conduct. Further, the statements made prior to Miranda warnings which f e l . 1 outside the scope of the Implied Consent Law were properly suppressed by the District Court and cured any potential Miranda violations. ISSUE 111 As stated earlier in our opinion, the video tape recording of appellant's DUI booking was briefly interrupted by an independent accident investigator. Appellant contends the video recording's interruption and the revealed segment of an unrelated DUI booking constitutes improper editing of the video. The trial court judge has wide discretion in conducting courtroom procedures, and in determining adequacy of foundation for admission of evidence. State v. Austad (1982), 197 Mont. 70, 641 P.2d 1373. Throughout our review, we remain ever mindful of this standard. State v. Warwick (1972), 158 Mont. 531, 494 P.2d 627, remains the seminal case regarding the admission of recordings requiring: "(1) a showing that the recording device was capable of taking testimony, (2) a showing that the operator of the device was competent, (3) establishment of authenticity and correctness of the recording, (4) a showing that changes, additions, or deletions have not been made, (5) a showing of the manner of the preservation of the recording, (6) identification of the speakers, (7) a showing that the testimony elicited was voluntarily made without any kind of inducement." Warwick, 494 P.2d at 633, citing 58 A.L.R.2d 1204, Admissibility of Sound Recordings in Evidence, 9 2, pp. 1027, 1028. The record reveals testimony el-icited to satisfy the foundation requirements. Q Was a video tape taken of Casey Forest's DUI booking? A Yes, it was. . . (2 Is the Missou3.a City video equipment capable of making a visual and audible record? A Yes, it is. Q Who operated the test? A Officer Gunter. Q Is Officer Gunter capable of operating Missoula's video equipment? A Yes, he is. Q Officer LePiane, I am handing you what has been marked for identification purposes as Exhibit No. 1. Do you recognize it? A Yes, I do . . . this is the audio-video tape of the Casey Forest DIJI booking procedure . . . Q How is it identified? A It's marked with a D-48. And it's also logged into our records under that number. Q Where has it been stored since July 22, 1987? A In the police evidence vault a t . City Hall . . . Q Does it f a i r l y and a c c u r a t e l y d e p i c t t h e booking procedure conducted w i t h Case:! F o r e s t on J u l y 22, 19 [8?7? A Y e s . . . Q Has it had any s e c t i o n added o r has it been changed s i n c e J u l y 2 2 , 1987? A N o . . . Q What p a r t o f t h e video -- what p a r t of t h e booking procedure had been completed when t h e video t a p e i s set t o begin? A The reading o f t h e implied consent law, m y asking Plr. F o r e s t i f he wished t o t a k e t h e test, and t h e r e f u s a l . Q Who i s r e p r e s e n t e d on t h e video t a p e ? A Myself and Casey F o r e s t . Q Was Casey F o r e s t n o t i f i e d t h a t he was being video taped? A Y e s , he was. A f t e r t h e testimony, t h e D i s t r i c t Court admitted t h e video t a p e . The only p o r t i o n u n a v a i l a b l e t o t h e j u r y was t h a t excluded by t h e judge's suppression o r d e r . Appellant a s s e r t s no changes, d e l e t i o n s o r a d d i t i o n s occurred a f t e r he was advised o f h i s Miranda r i g h t s . I n i t s d i s c r e t i o n , t h e lower c o u r t found t h e video p o r t i o n a f t e r t h e i n t e r r u p t i o n s u f f i c i e n t l v t r u s t w o r t h y a s t o be admissibl-e a s evidence a t t r i a l . W e s e e no reason t o hold otherwise. ISSUE IV Appellant contends t h e D i s t r i c t C o u r t ' s p r o s e c u t i o n o f both a c t i o n s , D U I and t h e "per sew o f f e n s e was a v i o l a t i o n of t h e IJnited S t a t e s and Montana Constit.utions ' p r o h i b i t i o n against double jeopardy. This argument relies on misstatements of fact. The record reveals the appellant was convicted of the DUI charge at the municipal court level; the "per sew charge was not adjudicated. On appeal to the District Court, the case was tried anew based on the municipal court file. Section 46-17-311, MCA; State v. Renson (1931), 91 Mont. 109, 5 P.2d 1045. While the same acts may establish the commission of an offense under both DUI and "per sew statutes, a defendant may only be convicted of one offense. Section 61-8-408, MCA. We find no merit in appellant's contention. Affirmed. | February 14, 1989 |
9db5d3f8-27ac-4d63-95e7-238f9f6e89c4 | RAMAGE v DEPARTMENT OF REVENUE | N/A | 88-220 | Montana | Montana Supreme Court | NO. 88-220 & 88-119 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 JOHN F. RAMAGE and ANDREW E. WILSON, Petitioners and Appellants, DEPARTMENT OF REVENIJE OF THE STATE OF MONTANA, Respondent and Respondent. *************** ROSALIE WOODHALL, Petitioner and Appellant, DEPARTMENT OF REVENUE OF THE STATE OF MONTANA, Respondent and Respondent. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yel-lowstone, Honorable G. Todd Raugh, Judge presiding (88-119) District Court of the First Judicial District, In and for the County of Lewis and Clark, Honorable Henry Loble, Judge presiding (88-220) COUNSEL OF RECORD: For Appellants: Terry L. Seiffert, Billings, Montana (Rosalie Woodhall) Curtis E. Larsen, Jackson, Murdo, Grant & Larsen; + Helena, Montana (John F. Ramaqe & Andrew E. Flilson) cL. C3 3 Fop 3espondent: c-3 1 ' 1 - Paul Van Tricht, Helena, Montana tr, <- 1 Ll 0 L L - 2 1 : LL! . - > -f m . ; b ) LL - - Submitted on Briefs: October 6, 1988 c-> g Decided: February 3, 1989 0 2 L L 'JJ+ F i l e d : , z 0 C3 -- w - d Mr. Justice Wj.lliam E. Hunt, Sr., delivered the Opinion of the Court. Appellants in this consolidated action appeal from District Court orders upholding the denial of their applications for original all-alcoholic beverage licenses by the Department of Revenue of the State of Montana (DOR). We affirm. Appellants Ramage and Wilson and appellant Woodhall raise the following issue for review: 1) Did the respective District Courts err in finding that substantial credible evidence supported DOR's denial of their applications for liquor licenses? Ramage and Wilson present two additional issues for our consideration: 2) In the processing of an application for a liquor license, when must DOR' s investigation of the applicant and the proposed premises be completed? 3) Does DOR have independent authority to weigh the evidence pertaining to public convenience and necessity when no protests from the public regarding the issuance of a liquor license are filed with the agency? On March 14, 1985, John F. Ramaqe and Andrew E. Wilson filed an application with DOR for a Yellowstone County quota area liquor license. Ramase and FJllson proposed to use the license for a bar called The Hanger that they planned to construct on the 8400 block of Grand Avenue, a little more than 5 miles outside the city limits of Billings. In April, 1985, in response to DOR's request for evidence in support of public convenience and necessity, Ramage and Wilson submitted petitions signed by approximately 100 Billings area residents. The petitioners asserted their belief that the public need called for a new cocktail lounge and dance cluh at the proposed location of The Hanger. Thereafter, DOR published notice of the application in the Billings Gazette. The notice, among other things, invited interested persons to file written protests against. the issuance of the license. No protests were filed with DOR. Ramage and Wilson proceeded with the remodeling of the proposed premises. Refore the work was completed, however, fire destroyed the structure. The cause of the fire was unknown. After the fire, Ramaqe and Wilson commenced reconstruction of the building. Meanwhile, in July, 1985, DOR received two more applications for Yellowstone County liquor licenses for establishments to be located on the 8400 block of Grand Avenue. One application was from appellant Rosalie Woodhall. Woodhall desired the license for the operation of a proposed bar called R & R Store and Lounge. On October 18, 1985, the city of Billings annexed the area surrounding the proposed taverns. The annexation resulted in the incorporation of the sites of the proposed bars into the Billings city limits and the city liquor license quota area. Prior to the annexation, on October 1, 1985, DOR's TJicense Bureau Chief issued notices to all three applicants, informing them that their applications were denied because issuance of liquor licenses for their proposed premises was not justified by public convenience and necessity. Each notice stated: The location of your proposed premises is in close proximity to three existing establishments licensed for the sale and service of all alcoholic beverages for consumpt.ion on the premises. The service area surrounding the proposed premises for licensing is sparsely populated and the demand for all-beverages sale and consumption does not warrant the issuance of additional all-beverages licenses at this time . All three applicants requested a hearing on the decision. After the hearings, the hearing examiner issued proposed findings of fact, conclusions of law and orders, denying all three applications. Appellant Woodhall and appellants Ramage and Wilson filed exceptions to the proposed orders. Oral arguments were held before the Director of DOR. In the fall of 1986, the Director issued the final department decisions, modifving and adopting the hearing examiner's proposed orders. The Director denied the applications because the proposed bars were not justified by public convenience and necessity and the proposed premises were inside the Billings quota area which was full. Ramage and Wilson filed a petition for judicial review with the First Judicial District Court, Lewis and Clark County. The District Court denied the petition and affirmed DOR's final decision. Woodhall filed a petition for judicial review with the Thirteenth Judicial District Court, Yellowstone County. On December 12, 1986, the District Court remanded the petition for a redetermination of the public convenience and necessity issue. On April 13, 1987, the hearing examiner entered supplemental findings of fact, conclusions of law and proposed order. The hearing examiner concluded that Woodhall's proposed R & R Store and Lounge failed to meet the statutory requirements for public convenience and necessity. Woodhall filed exceptions to the proposed order but did not request oral argument. On July 13, 1987, the Director rejected Woodhall's exceptions and adopted the hearing examiner's supplemental findings, conclusions and order. Woodhall again submitted the case to the Yellowstone County District Court. The District Court affirmed the Department's final decision. Woodhall filed an appeal of the District Court order, as did Ramage and Wilson. Upon motion by DOR, the appeals were consolidated into one action. Both District Courts upheld DOR's denial of the appellants' liquor license applications on the ground that the issuance of such licenses would not be iustified by public convenience and necessity. Appellants argue that their respective District Courts erred in finding that DOR's denial was supported by substantial credible evidence. The Montana legislature has delegated the administration of the Montana Alcoholic Beverage Code, S S 16-1-101 through 16-1-411, MCA, to DOR. Section 16-1-301, MCA. DOR's powers include the ability to issue liquor 1-icenses. Section 16-1-302 ( 8 ) , MCA. DOR may issue a license to any person it approves as fit and proper to sell alcoholic beverages, as long as the number of licences do not exceed quota limitations. Section 16-4-201, MCA. In addition, DOR must find that the issuance of such license is justified by public convenience and necessity. Section 16-4-203, MCA. Public convenience and necessity is not defined in the statute books. Nor can a precise definition of the phrase be found in agency regulations. This Court has acknowledged the diffic~ilties inherent in defining the term. In Baker Sales Barn, Inc. v. Montana Livestock Commission (1962), 140 Mont. 1, 12, 367 P.2d 775, 781, we recognized that whether an application is justified by public convenience and necessitv depends on the facts of each case. Because the determination of public convenience and necessity involves such a fact-intensive n q u r it is not necessary that DOR adopt rigid rules defining the term. " [Tlhe choice made between proceeding by general rule or by individual, - ad - hoc litigation is one that lies primarily in the informed discretion of the administrative agency." NLRB v. Bell Aerospace Co. (1974), 416 U.S. 267, 293, 94 S.Ct. 1757, 1771, 40 L.Ed.2d 134, 153 (quoting SEC v. Chenery Corp. (1947), 332 U.S. 194, 203, 67 S.Ct. 1575, 1580, 91 L.Ed. 1995, 2002). DOR1s use of the adjudicative process to determine whether applications for liquor licenses are warranted by public convenience and necessity is not, as Ramage and Wilson argue, an invalid exercise of rulemaking authority. Ramage and Wilson also argue that DOR is left completely unguided by its failure to adopt rules precisely defining public convenience and necessity. This is not so. In previous administrative decisions, DOR established standards for use in public convenience and necessity determinations. In the VFW Case (1986), DOR No. 85-P-011, 10, the Director delineated these guidelines when he quoted favorably from a prior proposed order: [PI ublic convenience and necessity are advanced where the issuance of the license will materially promote the public's ability to engage in the licensed activity. This determination involves an evaluation of a variety of criteria, includinq inter alia the business abilities and character of the applicant, the demand for services in the area to be served, the impact on existing purveyors, and a n : 7 adverse impact on the area to be served. No single factor is a necessary or sufficient indicator of public convenience and necessity . . . Because DOR has established criteria to guide its determinations of public convenience and necessity, we need not fear arbitrary decisions subject only to the whim of the agency. The District Courts did not err in concluding that the findings of fact made by the hearing examiner and adopted by the Director were supported by substantial credible evidence. At both hearings, DOR submitted evidence through it-s investigators Willems and St. John. The investigators' testimony indicated that the proposed sites were located in rural, sparsely populated regions. Further testimony and documentary evidence established that in October, 1985, three bars already served the area surrounding the sites of appellants' proposed premises. In addition, the records showed that since 1980 at least four bars located in the same area as the appellants' establ-ishments that had been originally licensed under the Yellowstone County quota area were later annexed into the city quota area. After the annexation, the licenses of these four bars were transferred to more populous areas of the city. Judical review of an administrative agency's factual findings is quite narrow. A court reviewing an agency action may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. Section 2-4-704(2), MCA. Findings of fact will be upheld unless clearly erroneous. Facts supported by subtantial credible evidence in the record are not clearly erroneous. Section 2-4-704 (2) (e) , MCA, construed - in Billings v. Billings Firefighters Local No. 521 (1982), 200 Mont. 421, 431, 651 P.2d. 627, 632. The testimony and documents introduced through inspectors Willems and St. John constitute substantial credible evidence that supports DOR's findings of fact. Whether the substantial credible evidence established by DOR demonstrates that the issuance of liquor licenses to the appellants was not justified by public convenience and necessity is a question of law. Judicial review of legal questions is much broader than judicial review of factual issues. We will not hestitate to overturn an agency's legal conclusion that is characterized by an abuse of discretion. Section 2-4-704 ( 2 ) ( f ) , MCA. The records demonstrate a sparse population, the existence of other bars in the immediate area and a history of license transfers from outlying regions to the inner city. These facts indicate a lack of public demand for additional taverns in the area. Without a showing of public demand, public convenience and necessity cannot be justified. DORIS concli~sion that issuance of liquor licenses to the appellants was not warranted by public convenience and necessity was not. therefore an abuse of discretion. The District Courts did not err in upholding the agency's decision to deny the applications. Ramage and Wilson contend that DOR abused its discretion and exceeded its statutory authority by failing to make an investigation and determination of their qualifications within 30 days of receipt of their completed application. They argue that DOR therefore is precluded from denying their application. Montana law requires DOR to thoroughly investigate a liquor license applicant as well as the premises of the proposed bar. Section 16-4-402(2), MCA, provides: Upon receipt of a completed application for a license under this code, accompanied by the necessary license fee or letter of credit as provided in 16-4-501 (7) (f) , the department shall within 30 days make a thorough investigation of all matters pertaining thereto and shall determine whether such applicant is qualified to receive a license and his premises are suitable for the carrying on of the business and whether the requirements of this code and the rules promulgated by the department are met and complied with. Ramage and Wilson argue that DOR failed to comply with S 16-4-402(2), MCA, because it failed to conduct a final investigation within 30 days after the paperwork for their application had been submitted. We do not agree. Section 16-4-402 (2) , MCA, requires DOR to determine both that the applicant is qualified to receive a license and that the premises are suitable for carrying on the business of selling alcohol. In addition, agency requlations mandate that, before a determination of suitability can be made, a health and safety inspection 0.F the proposed establishment must be conducted. Section 42.12.122, ARM. Such an inspection cannot take place before construction of the building is completed. Therefore, the 30-day investigative period required by S 16-4-402(2), MCA, does not begin to run until the applicant has submitted all the required paperwork - and the proposed establishment has been constructed. In the present case, Ramage and Wilson submitted the paperwork required for application in April, 1985. However, as of October 1, 1985, the date upon which the application was denied, the building proposed to house The Hanger had not been completed. Hence, DOR did not abuse its discretion by failing to issue or deny the application 30 days after the paperwork had been submitted because the proposed establishment had not been constructed by that time. Ramage and Wilson next argue that once they submitted evidence in support of a showing of public convenience and necessity and no public protests were received, DOR was required to automatically approve their application. They maintain that DOR has no independent authority to weigh the evidence pertaining to public convenience and necessity when no protests from the public regardinq the issuance of a license are filed with the department. This argument is totally without merit. As noted previously, the legislature has delegated to DOR the power to issue liquor licenses. Section 16-1-302 (8), MCA. Before a License may be issued, DOR must determine that its issuance is justified by public convenience and necessity. Section 16-4-203, MCA. In order to make this determination, DOR must independently weigh the evidence submitted by the applicants. The lack of public protest does not extinguish this duty. Ramage and Wilson also argue that the time for determining the quota area for a liquor license application is the date the application is submitted, not the date the application is approved or denied. Because we hold that the District Courts did not err in upholding DOR's decisions to deny the applications on the basis of public convenience and necessity, we need not examine this issue. We affirm the District Courts. / Justices / | February 3, 1989 |
3a474f91-32a7-4af3-a788-b56b507f5e82 | HI-LINE SPORTSMEN CLUB v MILK RIVE | N/A | 88-517 | Montana | Montana Supreme Court | No. 88-517 IN THE SUPREME COURT OF THE STATE OF MONTANA HI-LINE SPORTSMEN CLUB, Petitioner and Respondent, -vs- MILK RIVER IRRIGATION DISTRICTS, CITY OF GILLETTE, WYOMING, et al., Respondents and Appellants. APPEAL FROM: ~istrict Court of the ~ i r s t ~udicial ~istrict, In and for the Co.unty of ~ e w i s & Clark, The Honorable Thomas Honzel, Judge presiding. COUNSEL OF RECORD: For Appellant: Matthew W. Knierim; Gallagher, Archambeault & ~nierim, Glasgow, Montana ilk ~iver) Douglas E. avids son; Berlack, Israels & ~ieberman, New York, New York ilk ~iver) Roger Tippy argued, (city of ~illette), Helena, Montana For Respondent: Donald R. Marble arg-ued, Marble Law Firm, Chester, Montana submitted: October 19, 1989 Decided: February 1, 1990 Filed: J,ustice John C. Sheehy delivered the Opinion of the Court. The District Court, ~ i r s t ~udicial ~istrict, ~ e w i s and Clark County, sitting in judicial review of a contested case under the ~dministrative Procedure Act ( 5 2-4-702, MCA) reversed the final decision of the State Board of Health and Environmental sciences (Board) which had granted "401 certifications" to the Milk River Irrigation Districts and to the City of Gillette, ~yoming. The ~istricts and ~illette appealed the reversal to this Court. On consideration, we affirm the action of the ~istrict Court in reversing the order of the Board. Section 401 of the Federal Water ~ollution Control Act Amendments of 1972 (33 U.S.C., Section 1341) provides for a certification process to be conducted by the affected state where prospective hydroelectric projects are reviewed for compliance with the state's water quality statutes and regulations. Whatever conditions the states may place on the applicant through the certification procedure become part of the permit issued by the Federal Energy Regulatory commission (FERC) . In Montana, the Department of Health and Environmental sciences has been delegated the responsibility to conduct the 401 certification process. section 75-5-401(2), MCA. Malta Irrigation Dist. v. Board of Health & Environ. (1986), 224 Mont. 376, 729 P.2d 1323. On June 14, 1982, Montana Renewable Resources (MRR) applied to the Department of Health and Environmental sciences (Department) for 401 certification as part of the process for obtaining a permit from FERC to construct a hydroelectric generating facility at the Tiber Dam on the Marias River near Chester, Montana. The Milk River ~rrigation Districts (~istricts) filed their application on January 21, 1983, and the City of Gillette, Wyoming, (Gillette) submitted its application on February 7, 1983. On May 14, 1984, the Department issued 401 certifications to MRR, the Districts, and Gillette. In October, 1984, MRR, by letter requested that the Department reconsider its decision to certify both the Districts and Gillette. The Department refused to reconsider. In February, 1985, MRR petitioned the Board to overturn the Department's certifications. In April, 1985, ~ i g h - ~ i n e Sportsmen Club (Sportsmen) moved to intervene in the Board proceedings. On January 16 and 17, 1986, the Board conducted a contested case hearing on the 401 certification issued to the ~istricts and ~illette. MRR and the Sportsmen argued before the Board that the water temperature conditions contained in the certifications issued to the Districts and to Gillette violated the Board's regulations for the Marias River by allowing an increase in downstream water temperature which would endanger the existing rainbow trout fishery. The Board heard additional oral arguments on May 16, June 4, September 26, and November 14, 1986. On November 26, 1986, the Board issued findings of fact and conclusions of law and order. The Board concluded, in part, that the 401 certifications previously issued to Gillette and the Districts by the Department were to be amended to delete authorization to use auxiliary outlet level water for hydropower production at Tiber Dam. These certifications were amended to include the following requirement: All water used for hydropower production is withdrawn from a point in the reservoir at least 85 feet below the elevation of the bottom of the present auxiliary outlet of Tiber Dam, or such lesser depth as is physically required by the configuration of the reservoir bottom, but in no event less than 60 feet below the elevation of the bottom of the auxiliary outlet of the Tiber Dam. It is this portion of the Board's order which Sportsmen contested, and succeeded in reversing on judicial review in the District Court. The ~istricts and Gillette appealed the District Court's decision to this Court. The Marias River was named by Meriwether Lewis of the Lewis and Clark Expedition in honor of his cousin Maria Wood. Tiber Dam was finished in 1956, named for the small town nearby on the Great Northern ailw way siding. The Dam backs up Lake Elwell, named in honor of ~istrict Judge Charles B. Elwell who retired from the District Court bench in 1967. The Dam as built had not provided for the generation of hydroelectric power though the Dam's basic construction included structures which would allow for installation of generation equipment. The three entities above named became interested in hydroelectric development and each sought mutually exclusive permits from FERC to install hydroelectric plants in the Dam. Federal law requires before FERC can grant a permit, an applicant must have a 401 certification from the state which insures that state water quality standards are not violated by the proposed project. 33 U.S.C. 5 1341. It is the public policy of this state, under § 75-5-101, MCA, to conserve water by protecting, maintaining, and improving the quality and potability of water for, among other purposes, "fish and aquatic life, . . . recreation and other beneficial uses." The duty of establishing water quality standards are imposed upon the Board, under § 75-5-301, MCA. In ARM 16.20.607(4) the Board has classified the section of the Marias ~ i v e r involved as B-2. ARM 16.20.619(1) provides that waters classified by B-2 are those suitable for growth and marginal propagation of salmonid fishes and associated aquatic life. Since the construction of Tiber Dam, and the release of waters therefrom the Marias ~ i v e r below Tiber Dam provides a habitat for a sizable population of trout and whitefish. Testimony before the Department in the administrative hearing indicated that prior to the construction of Tiber Dam, fishing on the Marias River and that area was not good and that fish found were mainly "gold eyes, suckers, carp, sturgeon and catfish." After the Dam was completed in 1956, and waters were released from the Dam downstream, aided by implantation through the Department of Fish, Wildlife and Parks, the fishery was considerably improved with substantial numbers of trout, whitef ish, and walleyes available for sportsmen. The reason given for the improvement of the fishery was the fact that cold waters were released downstream from the Dam which made the downstream Marias more conducive and thriving for trout, whitefish, and walleyes. As the Dam is constructed, there are three means of water exit from the Dam and Lake Elwell. One is the overflow spillway, which is rarely used. Another is called the river outlet,Its intake is situated deep below the surface so it is reaching colder waters of Lake Elwell. A third is an auxiliary outlet whose water intake is nearer the surface of Lake Elwell approximately 85 feet above the intake of the river outlet. The difference in elevation between the intakes for the river outlet and the auxiliary outlet are crucial to the trout fishery. In the summer season, the waters of Lake Elwell near the surface are higher in temperature than the waters well below the surface. In consequence, when waters are discharged from Lake Elwell through the river outlet, cooler waters are delivered downstream which aids the fishery. Waters taken from the auxiliary outlet, on the other hand, are warmer and are deleterious to the fishery. Curiously, the demarcation between the warm waters and the cooler waters is remarkably defined on a profile of Lake Elwell by a thin zone of separation called a "thermocline." The application of MRR to FERC for its hydroelectric development proposed that it would use waters taken exclusively through the river outlet. Thus it would use the cooler waters of Lake Elwell at all times and so be amenable to the downstream fishery. The applications of the Districts and of Gillette, on the other hand, proposed to use waters from the auxiliary outlet. When the concerns of the Department of ~ i s h , Wildlife and Parks concerning the release of warmer waters to the downstream fishery became known, there were further proposals by the Districts and Gillette during the contested hearing to mix waters both from the river outlet and auxiliary outlet so as to keep the downstream water temperatures cooler. Nonetheless, the Department originally issued 401 certifications to each of the three applicants. MRR contested the issuance of the 401 certifications to the ~istricts and to Gillette before the Board and at this stage Sportsmen intervened in the proceedings. The District Court, in reviewing the contested case proceedings, found that on January 17, 1986, following two days of hearings, the Board closed the record. On May 16, 1986, the Board proceeded to allow "final oral arguments." Up to that time, ~illette and the Districts had proposed alternating flows through the river and auxiliary outlets. At the May 16, 1986 proceeding, the attorney for Gillette suggested placing a siphon 30 to 40 feet below the auxiliary outlet so as to draw up water from the cooler region of the reservoir for elevated discharge through the auxiliary outlet. The District Court found that Gillette's application had not been amended, yet the Board gave serious consideration to the "siphon scheme." Ultimately, the Board adopted its conclusion of law no. 4, which provides: Construction and operation of a hydroelectric generation facility at Tiber Dam in which all water used for hydropower production is withdrawn from a point in the reservoir at least 85 feet below the elevation of the bottom of the present intake of the auxiliary outlet of Tiber Dam, or such lesser depth as is physically required by the configuration of the reservoir bottom, but in no event less than 60 feet below the elevation of the bottom of the present intake of the auxiliary outlet of the Tiber Dam, satisfies applicable water quality standards, the nondegregation requirements of the Montana Water Quality Act and Board rules and the public policy of the State of Montana. The District Court found that "there was not a shred of evidence in the record" to support that portion of the Board's conclusion that withdrawing water from 60 feet below the auxiliary outlet of Tiber Dam satisfies applicable water quality standards, the nondegregation requirements of the Water Quality Act and the public policy of the state of Montana. The District Court noted that in briefs submitted to it by Gillette, it was conceded that the Board's order authorizing a siphon tube to the auxiliary outlet may not be based upon competent substantial evidence of the record and could be set aside. Gillette further suggested that the Board's 401 certification order be confirmed to the extent that it would authorize Gillette to use the river outlet only. The District Court declined to do this, however, finding that the Board's conclusion of law no. 4 was clearly erroneous in view of the reliable, probative and substantial evidence on the whole record. The District Court further found that due process would be violated if the certification could be issued without an amendment to the original applications and hearings held respecting the possibility of the use of a siphon or the river outlet. We affirm the decision of the District Court. This is not a case where the District Court has improperly substituted its own judgment for that of the agency. Chagnon v. Hardy Constr. Co. (1984), 208 Mont. 420, 422-23, 680 P.2d 932, 933. In view of the lack of record supporting the use of the siphon, and the due process implications where the public and other parties are not given an opportunity to explore the proposal of a siphon, we obtain a definite and firm conviction that a mistake has been made. The appellant has shown prejudice from a clearly erroneous decision. Carruthers v. Board of Horse acing (1985), 216 Mont. 184, 188, 700 P.2d 179, 181. ~illette, however, has also contended that the issue posed in this case has become moot because of actions taken by the FERC relating to these applications and many others. On February 11, 1987, while the litigation here was in progress, the FERC issued its Order No. 464 amending its regulations to define when the certification requirements of 5 401(a) (1) of the Federal Clean Water Act have been waived as a result of the failure of the state or other authorized certifying agency to act on a request for certification filed by an applicant before the Commission for a hydroelectric license. The order allowed certifying agencies one year after the certifying agency receipt of request for water q-uality certification to grant or deny the license( applicant's request for certification. The order was made retroactive. Efforts have been made in the Congress to have FERC withdraw its retroactive application of Order No. 464, or to modify the same by granting additional time for certification. Our record does not show the final disposition of these efforts. It does appear that the Department of Environmental Sciences takes the position that by lapse of time Montana has waived its right to certify because of Order No. 464. It is however, not clearly established in the record that even though FERC may consider that the certifying agencies in Montana have waived the right to certify, that the decisions of a certifying agency, as modified by the courts, would have no effect on the eventual action of the FERC. In other words, the FERC, as far as the record here discloses, may yet give effect to the action of this state regarding the certifications. The eventual handling of the waiver question by the FERC, and the effect that the FERC will give to any waiver it finds, is completely within the discretion of the FERC and not foreseeable by us. For that reason, we have denied the motion to dismiss these proceedings as moot. Sportsmen raise a final argument relating to the water certification process. Sportsmen contend that if the Board had adopted rules and regulations pertaining to water quality certifications such as here pending that the time provisions of the federal regulations applying to the state's certification process would have been observed. The ~istrict Court refused to issue a writ of mandate requiring the adoption of such rules for the reason that the District Court had before it a petition for judicial review of an administrative action, and did not have before it an action involving the issuance o r ' writ of mandate. The District Court was correct in this regard. The decision of the ~istrict Court is affirmed in all particulars. FJe Concur: ~ustice ~illiam E. Hunt, Sr., concurring: I concur in the foregoing opinion of Justice Sheehy. In addition, I would award attorney fees to respondent Sportsmen. Sportsmen is a non-prof it citizens ' group with limited resources. It has acted to protect Montana's water resources when our public servant, DHES, has been unwilling to do so. To this end, it has been forced to engage in protracted litigation, oftentimes in the face of questionable tactics by appellants. Montana is fortunate to have citizens' groups and attorneys such as these who are willing to take on public causes. They are entitled to attorn y fees. 7 Justice | February 1, 1989 |
14099cba-54e1-47ed-9e10-56db1e70984c | STATE v WIMAN | N/A | 88-180 | Montana | Montana Supreme Court | IN THE SITPREME COURT OF THE STATE OF MONTANA 1989 STATE OF MONTANA, Plaintiff and Respondent, -vs- JERRY R. WIMAN, Defendant and Appellant. APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorah1.e Roy C. Rodeghiero, ,Judqe presidi-ng. COUNSEL OF RECORD: For Appellant: Larry Jent, Rozeman, Montana For Respondent : LL 4 Filed: , , , Hon. Marc Racicot, Attorney General, Helena, Montana Robert F.W. Smith, Asst. Atty. General, Helena A. Michael Salvagni, County Attorney, Bozeman, Montana +Marty Lambert, Deputy County Attorney, Roleman u : 1 i ] l:: . . Submitted on Briefs: Dec. 2, 1988 c !I-1 Decided: February 17, 1989 0 Mr. Justice John C. Sheehy delivered the Opinion of the Court. Jerry Wiman, defendant, appeals from a judgment convicting him of felony sexual assault. Wiman was found guilty in a jury trial before the Eiahteenth Judicial District Court, Gallatin County. We affirm. Wiman raises the following two issues on appeal: (1) whether Wiman was deprived of the right to a speedy trial; and, (2) whether the prosecutor improperly commented on Wiman's failure to testify. On December 10, 1986, an information was filed charginq the appellant with one count of sexual assault, a felony, in violation of § 45-5-502 (1) , MCA. A jury trial began on Apri 1 28, 1987, and concluded on April 30, 1987. The jury was unable to reach a verdict and the presiding judge declared a mistrial. The Gallatin County Attorney then asked that the case be reset for trial. Trial was reset for July 20, 1987, and continued until September 1, 1987. The reason for this continuance was the absence from the state of two key witnesses for the prosecution. On August 13, 1987, District Judge Thomas Olson recused himself from presiding in this case and District Judge Douglas Harkin assumed jurisdiction of the case. On August 25, 1987, appellant filed a motion for peremptory substitution of Judge Harkin. On September 17, 1987, District Judge Roy Rodeghiero assumed jurisdiction of the case. On November 17, 1987, a hearing was held on defendant's motion to dismiss for denial of speedy trial. Evidence was presented to the court and attorneys argued the motion. The court, ruling from the bench, denied Wiman's motion to dismiss. On November 17, 1987, the second jury trial began. On November 19, 1987, the jury found Wiman guilty of felony sexual assault. On January 12, 1988, the court sentenced Wiman to ten years in the Montana State Prison. The court. then entered an order setting Wiman free on bail pendinq this appeal. I The first issue raised on appeal is whether the appellant was deprived of the right to a speedy trial. Any person accused of a crime is guaranteed the fundamental right to a speedy trial by the Sixth Amendment to the United States Constitution, which is made applicable to the states by the Fourteenth Amendment. State v. Chavez (1984), 213 Mont. 434, 691 P.2d 1365. "The Amendment would appear to guarantee to a criminal defendant that the Government will move with the dispatch that is appropriate to assure him an early and proper disposition of the charges against him. [Tlhe essential ingredient is orderly expedition and not mere speed.'" United States v. Marion (1971), 404 U.S. 307, 313, 92 S.Ct. 455, 459, 30 L.Ed.2d 468, 474 (citing Smith v. IJnited States (1959), 360 U.S. 1, 10). In speedy trial determinations, a factor to be considered is the length of the delay in getting to trial.. State v. Armstrong (1980), 189 Mont. 407, 616 P.2d 341; State v. Harvey (1979), 184 Mont. 423, 603 P.2d 661. However, there is no need to examine other factors unless there has been some delay which is deemed presumptively prejudicial. The other factors we refer to are the factors enunciated in Barker v. Wingo (1972), 407 U.S. 514, 530, 92 S.Ct. 2182, 2192, 33 L.Ed.2d IOI., 117. In analyzing the validity of a claim of lack of speedy trial, the Court investigates and balances the four factors set out in Barker: Length of delay, the reason for the delay, the defendant's assertion of his right [to a speedy trial], and prejudice to the defendant. Length of delay is of primary importance. Unless it is sufficiently long to he deemed presumptively prejudicial to the defendant, there is no need to consider the other factors. What length will be deemed presumptively prejudicial depends on the facts in each individual case. State v. Robbins (1985), 708 P.2d 227, 42 St.Rep. 1440; State v. Worden (1980), 188 Mont. 94, 611 P.2d 185. There is no need to determine other factors unless there has been some delay which is deemed presumptively prejudicial. Armstrong, 616 p.2d at 351. When appellant's second trial began on November 17, 1987, 201 days had passed since the conclusion of the fi.rst trial. The chronology is as follows: Event Date Information filed 12/10/86 First Jury Trial 4/28/81-4/30/87 Court resets trial for 7/20/87 5/28/87 State moves for Continuance, and Court resets trial for 9/1/87 7/13/87 Judge Olson excuses himself from presiding in this case, Judge Harkin assumes jurisdiction 8/13/87 Defendant moves for substitution of Judge Harkin 8/25/87 Judge Rodeghiero assumes jurisdiction & sets trial for 11/17/87 9/17/87 Defendant's jury trial begins 11/17/87 Defendant's jury trial concludes 11/19/87 The State of Montana asserts that it is responsible for 1.23 days of the delay, the time period between May 1, 1987 and September 1, 1987 and that the appellant is responsible for 78 days of the delay for the time period of September 1, 1987, when the trial was necessarily vacated by Wiman's substitution of Judge Harkin, until November 17, 1987, the date the new district judge set for trial. Wiman asserts that the delay is 342 days by computing the delay from the date of the arraignment December 16, 1986, to the second trial date set for November 17, 1987. We do not agree. In State v. Sanders (1973), 163 Mont. 209, 214, 516 P.2d 372, 375, this Court adopted the rule from the American Bar Association Project on Minimum Standards for Criminal Justice: "The time for trial should commence running . . . (c) if the defendant is to be tried again following a mistrial, . . . from the date of the mistrial, order granting a new trial, or remand." Therefore, in calculating the delay in this appeal we begin by counting the day after the first trial. We agree with the State that the length of the delay caused by the State is not sufficiently long to trigger further inquiry. Therefore, this Court will not consider the other factors set out in Barker. The appellant's second trial began 201 days after the conclusion of his first two-day trial on April 30, 1987, but the date was reset for September 1, 1987, when the Gallatin County Attorney moved for a continuance because two key state witnesses would be out of the state at the time set for trial-. These witnesses were to give vital testimony attesting to the credibility of the nine-year-old assault victim in this case. Since defendant's counsel had put the victim's credibility in question, the date became impracticable for the State's case without these witnesses. On August 13, 1987, two weeks before the second trial was to begin, Judge Olson excused himself from presiding in this case and Judge Harkin immediately assumed jurisdiction for the trial that was to begin on September 1, 1987. However, a further delay resulted when on August 25, 1987, six days before the trial date, the defendant moved for a substitution of Judge Harkin. On August 31, 1987, Judqe Olson siqned the order calling in Honorable Roy C. Rodeghiero and sent out an invitation to him to assume jurisdiction. On September 17, 1987, Judge Rodeghiero signed and mailed the assumption of jurisdiction which arrived at the Gallatin County Clerk and Recorder's Office on September 18, 1987. District Judge Rodeghiero put the stalled legal machinery back into motion by setting a trial for November 17, 1987. This gave the district judge two months to acquaint himself with the record and issues of the Wiman case, and give the parties time to reschedule briefs and witnesses. Therefore, the two months between the assumption of jurisdiction by Judge Rodeghiero and the date set for the new trial is reasonable under the circumstances. The defendant is responsible for the time between August 25, 1987, when he moved for a substitution of Judqe Harkin, and November 17, 1987, when the new trial, set by Judge Rodeghiero began. The trial date of September 1, 1987, would have been adhered to but for the substitution of Judge Harkin at defendant's request. Defendant's motions caused 8 3 days of a 201 day delay. The State caused 119 days of delay because of unavailability of key witnesses. We have focused our decision on this 1 1 9 days. This amount of time is not long enough to be deemed presumptively prejudicial. Wiman was free on bail during this time and the length of his delay was much shorter than in Armstrong, where the delay was three and one-half years from the time of Armstrong's original conviction to his second conviction. In addition, Armstrong was incarcerated during this delay. Wiman was not. The length of delay is the "trigger" factor to the speedy trial inquiry. There is no need to examine other factors unless some delay presumptively prejudicial has occurred. Chavez, 6 9 1 P.2d at 1 3 6 9 ; Harvey, 6 0 3 P.2d at 6 6 7 . The delay here, 1 1 9 days, is not enough to trigger the speedy trial inquiry. Compare, Armstrong, (three and one-half year delay, 1 0 8 days attributable to the state), with Fitzpatrick v. Crist ( 1 9 7 4 ) , 1 6 5 Mont. 382, 5 2 8 P.2d 1 3 2 2 (seven-month delay). The speedy trial right is primarily designed to protect the accused from oppressive tactics of the prosecution. Barker, 4 0 7 U.S. at 529. The 119-day delay in this cause is not sufficiently long to be deemed presumptively prejudicial, nor was the delay caused hy oppressive tactics by the State. There is no showing by defendant that the State intentionally delayed to gain some tactical advantage over appellants or to harass them. Vacation of this order would be required if it were shown that, "the pre-indictment delay in this case caused substantial prejudice to appell[antls! rights to a fair trial and that the delay was an intentional device to gain tactical advantage over the accused." Marion, 4 0 4 U.S. at 3 2 4 . We, therefore, hold that the appel1.ant1s right to a speedy trial was not violated. The second issue before this Court is whether the prosecutor improperly commented in jury argument on the defendant's failure to testify. Appellant contends that the Gallatin County Attorney's summation contained several comments on the appellant's failure to testify and requires a new trial. It is a settled. rule that the prosecutor may not direct attention to the failure of a defendant charged with a criminal offense to testify. State v. Gladue (19841, 208 Mont. 174, 677 P.2d 1028; United States v. Republic. Steel Corp. (6th Cir. 19741, 491 F.2d 315; Knowles v. United States (10th Cir. 19551, 224 F.2d 168. However, in Republic Steel, the Court explains that Knowles held: "It is concedely improper and reversible error to comment on the failure of a defendant to testify in his own behalf, and the test is whether the language used was manifestly intended or was of such character that the jury would naturally and necessarily take it to be a comment on the failure of the accused to testify. 224 F.2d 168, l7O." Republic Steel also directs: "That Government counsel may direct the jury's attention to the fact that the evidence against the defendant is uncontradicted, especially when the facts in issue could be controverted by persons other than the defendant." 491 F.2d at 315. (citing Doty v. United States (10th Cir. 1968), 416 F.2d 887, vacated on other grounds sub nom., Epps v. United States (1971), 401 U.S. 1006, 91 S.Ct. 124?, 28 In the course of argument to the jury, the deputy county attorney made the following argument: . . . Detective Lessley asks, "How does she learn all these things?" And here is what the defendant told Detective Lessley on October 3: "She learned them from the neighbor's kids, one of whom is five and one of whom is eight and the mother, their mother, who lives next door, she learned them from seven-year-olds at school; she learned them from Playboy magazine; she learned from watching R-rated movies; she learned them from watching X-rated movies, and she learned them from her own brother. Then he says--quoted by Detective Lessley--'Most of what I say is true' not all of it, 'Most of what I say is true, but that's one thing I wouldn't. lie about. ' Did defendant say he thought she was coached, thought that maybe somebody's telling her to say these things? (Whereon Mr. Lambert indicates in the negative.) (Defense counsel) Objection, Your Honor, comment on non-testimony by Defendant. THE COURT: Alright, Mr. Lambert, stay away from that area. MR. LAMBERT: Yes, Your Honor. In the defendant's brief on appeal, defendant's counsel points to several other instances in the jury argument by the prosecuting attorney, where the statement was made that the evidence was uncontradicted. It is difficult to tell from the record whether the possibility of contradiction would come from other witnesses, or from the defendant himself. At any rate, when those arguments were being made, no objection was made by defense counsel and the District Court was not given an opportunity, if the necessity existed to admonish the jury to ignore the argument, or to give a curative instruction nor was any motion made for mistrial. There is no showing by appellant here that there is a reasonable possibility that the comments complained of might have contributed to the conviction. There was no objection made at trial, no request for an in-chambers objection to the langua-qe used in prosecutor's summation and no motion for a mistrial. Section 46-20-104, MCA, provides that failure to make a timely objection during trial constitutes a waiver of the objection. It is significant that defendant made only one objection during the prosecutor's summation. That objectio~ was about prosecutor ' s reference to the defendant's accusation during the second trial that the victim had been coached. The prosecutor reminded the jury that the defendant did not say the victim had been coached when defendant was initially interrogated by Detective Lessley of the Bozeman Police Department. We believe that this was not a comment on defendant's refusal to take the stand. Although use against a criminal defendant of silence maintained after receipt of governmental assurances is barred by Doyle v. Ohio (1976), 426 U.S. 610, 96 S.Ct. 2240, 4 9 L.Ed.2d 91 this directive does not apply to language that merely inquires into prior inconsistent statements. Such comment makes no unfair use of silence, because a defendant who voluntarily speaks after receiving Miranda warnings has not been induced to remain silent. Anderson v. Charles (1980), 447 U.S. 404, 408, 100 S.Ct. 2180, 2188, 65 L.Ed.2d 222, 226. As to the subject matter of his statements the defendant has not remained silent at all. FJiman was given the Miranda warnings and he did waive his rights and chose not to remain silent when interrogated by Detective Lessley. What he said may be and was used against him in the prosecutor's summation. Prosecutor's objected to remark does not refer to Wiman's exercise of his right to remain silent. Rather, it asks appellant's counsel, who impeached the younq victim with her testimony in the first trial, and alleged that she was being coached by comparing her testimony with her inconsistent statements in the second trial, why the appellant didnY tell Detective Lessley that in the initial interrogation the girl was coached as his counsel was now asserting. Prosecutor's summation remarks were not designed to draw attention to appellant's silence, but to remind the jury that appellant voluntarily spoke to Detective Lessley after receiving Miranda warnings and that his counsel's present assertion about coaching was inconsistent with defendant's prior statements. After reading the entire closing statement, we find only this one objection. We find no objection to any other comments made by the prosecution. Therefore, we find no error in regard to the prosecutor's comments in light of the fact that the trial judge did all that he was asked to do when he sustained objection and warned the prosecutor to "stay away from that area." Read in context, it is clear that those comments were not intended to comment on defendant's failure to testify in his own behalf. If defendant's counsel believed that these comments were directed at the defendant's failure to testify it was incumbent upon him to make an objection to the comments. As a general rule, this Court will not entertain issues not. raised at trial. State v. Wilkins (Mont. 19871, 746 P.2d 588, 44 St.Rep. 1794; State v. Goddard (Mont. 1 9 8 7 ) ) 734 P.2d 680, 44 St.Rep. 551. Finding no error, we conclude that the conviction of Jerry Wiman should he and is affirmed. / \ . . . Justice ye Concur: / ,I | February 17, 1989 |
acc692e4-9a15-4092-9986-a13ab2aaa3a7 | STATE v SIGLER | N/A | 88-503 | Montana | Montana Supreme Court | I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 STATE OF MONTANA, P l a i n t i f f a n d A p p e l l . a n t , -vs- EVERETT HAROLD SIGLER, D e f e n d a n t a n d R e s p o n d e n t . APPEAL FROM: D i s t r i c t C o u r t of t h e E i g h t h J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t v of C a s c a d e , T h e H o n o r a b l e ,Toel G. R o t h , J u d g e p r e s i d i n g . COUNSEL OF RECORD: For A p p e l l a n t : Hon. M a r c R a c i c o t , A t t o r n e y G e n e r a l , H e l e n a , Montana B e t s y B r a n d b o r g , A s s t . A t t y . G e n e r a l , H e l e n a P a t r i c k L. P a u l , C o u n t y A t t o r n e y ; Tammy K . P l u b e l l , D e p u t y C o u n t y A t t o r n e y , G r e a t F a l l s , Montana For Gspondent: 3 O 0 o * : ' u J o h n K e i t h , G r e a t F a l . L s , M o n t a n a 2 ' ; ; '.w --.I 3 I rJ *. Q - '4 t ' =t :r . '-7 --' fo 4 S u b m i t t e d on B r i e f s : Jan. 5 , 1989 - F i l e d : D e c i d e d : F e b r u a r y 1 4 , 1 9 8 9 0 C l e r k Mr. Justice L. C. Gulbrandson delivered the Opinion of the Court. The State of Montana appeals the July 27, 1988 order of the Eighth Judicial District, Cascade County, denying reconsideration of the court's June 9, 1988 order denying the State's petition for revocation of respondent Sigler's suspended sentence. In light of this Court's recent decision in State v. Burke (Mont. 1988), P.2d , 45 St.Rep. 2278, we reverse the order of the District Court and remand for further proceedings. Pursuant to a plea agreement, respondent Sigler was found guilty of felony criminal possession of dangerous drugs and misdemeanor possession of drug paraphernalia. Respondent received a three year deferred sentence subject to six conditions. Respondent failed to comply with any of the six conditions of the deferred sentence and failed three consecutive urine drug tests. The District Court then revoked the three-year deferred sentence and replaced the deferred sentence with a five-year suspended sentence in the Montana State Prison. The suspended sentence was conditioned upon respondent's meeting four conditions. These conditions included that the respond.ent not possess or use dangerous drugs and that he "submit a urine sample upon request of his probation officer or any peace officer to assure compliance with the above condition." On February 5, 1988, respondent's probation officer, Michael Redpath, filed a report of violation alleging respondent had failed to appear for a urine sample scheduled for February 4, 1988. The report of violation recommended that the suspended sentence be revoked. On June 3, 1988, an evidentiary hearing was held and on June 8, 1988, the court issued its order dismissing the petition for revocation of the suspended sentence. The court found that although the respondent was required to submit to urinalysis testing at the request of his probation officer, the probation officer stated he had no specific reason for believing the respondent was using drugs at the time he requested a urine sample from the respondent. The court he1.d that the search requested in this case was based solely upon the probation officer's "unfettered discretion." The case of State v. Fogarty (1980), 187 Mont. 393, 610 P.2d 140, requires the probation officer to have some "articulable reason" for conducting a search of a probationer. Thus, no violation had occurred, except that based upon an improper search of the defendant. On December 15, 1988, this Court decided the case of State v. Burke (Mont. 1988), P.2d , 45 St.Rep. 2278. In that decision, this Court specifically overruled the Fogarty decision based upon the United States Supreme Court's decision in Griffin v. Wisconsin (1987), U.S. , lo? S.Ct. 3164, 97 L.Ed.2d 709. The Burke decision replaced the standard of probable cause, applicable when conducting warrantless searches of probationers, with the standard of "reasonable grounds." This Court and the Griffin Court base the departure from the probable cause standard upon the "special needs" which exist in operating a State's probation system. Burke, 45 St.Rep. at 2281. Restrictions on a probationer are meant to assure that the probation serves as a period of genuine rehabilitation and that the community is not harmed by the probationer's conditional liberty status. "These same goals require and justify the exercise of supervision to assure that the restrictions are in fact observed. . . Supervision, then, is a 'special need' of the State permitting a degree of impingement upon privacy that would not be constitutional if applied to the public at 1-arge. " Griffin, 107 S.Ct. at. 3 1 6 8 . This special need is equally applicable to the State of Montana. In conjunction with the need for supervision, a degree of flexibility must also be accorded the probation officer. The probation officer acts upon a continued experience with the probationer, with knowledge of the original offense, and with the probationer's welfare in mind. Because of his expertise, we view the probation officer in a far superior position to determine the degree of supervision necessary in each case. Burke, 45 St.Rep. at 2281-2282. In between the Griffin and Burke decisions, the Ninth Circuit dealt with a similar situation, except that the order imposing probation conditions did not explicitly require drug testing as a probation condition. U.S. v. Duff (9th ~ i r . 1987), 831 F.2d 176. In that case, relying on Griffin, the court found "the search must he reasonable and must be based upon the probation ofGicer's reasonable belief that it is necessary to the performance of her duties." -- Duff, 831 F.2d at 179. (Emphasis added.) The urine testing employed here was narrowly tailored to determine whether Duff was using drugs and was less intrusive of Duff's privacy than other methods of monitoring, such as continuous surveillance or repeated searches of Duff's home and property. The probation officer had a reasonable suspicion that Duff might be using drugs . . . Because Duff had been convicted for drug possession, the probation officer reasonably believed that drug testing was necessary "to foster the offender's reformation and to preserve the public's safety." Williams, 787 F.2d at 1185. Duff, 831 F.2d at 179. As previously noted, the District Court in this case found the probation officer ordered the urinalysis test based upon his unfettered discretion. This finding was based upon the probation officer's testimony that he had no specific reason to believe that the respondent was using drugs at the time of the request. However, the court also found that the probation officer was authorized to require the respondent to submit to urine testing and that the probation officer felt "the rehabilitation process could not begin until he was certain the Defendant was free from drugs. . . I' Further, it is undisputed that the respondent had not passed a drug test from the time of his arrest until directed to appear for the February 4, 1988 urinalysis. We find such evidence is sufficient to establish reasonable grounds for requiring the respondent to submit a urine sample for determining whether or not the respondent is complying with the conditions of the suspended sentence. We hereby reverse the order of the District Court and remand for further proceedings consistent with this opinion. t We concur: A | February 14, 1989 |
c4ac6ca8-a0c2-4f6e-95e6-6f68b954e922 | ROOKHUIZEN v BLAIN S MOBILE HOME | N/A | 88-300 | Montana | Montana Supreme Court | NO. 88-300 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 JOHN ROOKHUIZEN, Plaintiff and Appellant, -vs- BLAIN'S MOBILE HOME COURT, INC., a Montana corporation, Defendant and Respondent. APPEAL FROM: District Court of the Thirteenth Judicial. Distri-ct, In and for the Countv of Yellowstone, The Honorable Robert Holmstrom, Judge presidinq. COIJNSEL OF RECORD: For Appellant: Michael M. Morse, Ri-llings, Montana For Respondent : 2arussi & Bishop; Gene R. Jarussi, Billings, Montana *--I 3 LO 0 ZcJ 4 d *-I IJ.J t'i - - J .: L-, ! , A a (T?Z - - 1 . : - ( I _ Submitted on Briefs: Dec. 9, 1988 W . . - ) =? r - . - ' , ? LL CU ; ; *.* Decided: January 27, 1989 ?P - . . - C3 -'- Filed: u $ -. 4- 0 7 a3 c> .. - 2 Mr. Justice I ; . C. Gulbrandson delivered the Opinion of the Court. Appellant appeals the order and judgment of the Thirteenth Judicial District, Yellowstone County, grantinq respondent's motion for a directed verdict at the close of plaintiFf's case-in-chief. We affirm the judgment of the District Court and award costs and assess damaqes in the amount of $209 against counsel for appellant. This case arose after a fire destroved appellant's mobile home which was located Blain's Mobile Home Court, Inc. (RJ-ain's). Appellant had moved the mobile home into the court on or about April 1, 1982. He signed and completed an applicatj-on for rental of a mobile home space, a rental agreement, and acknowledged receipt of rules and regulations governing the agreement. On the evening of August 19, 198?, appellant returned to his mobile home. Upon entering the mobile home he observed smoke and flames around an outlet in the kitchen. He left the mobile home, requesting his wife to go to the neighbors and call the fire department. He then went next door to get a garden hose with which to fight the fire. Appellant testified he almost had the fire out when the kitchen area erupted in flames, forcing him out of the home. When the neighbors called a private fire company, thev were told the fire company did not cover the mobile home court anymore. They then called Blain's office to summon the volunteer fire service. The volunteer fire service arrived approximately fifteen minutes later. The first pump on the fire truck would not start so the second pump was started. This pump ran only a few minutes before it ran out of gas. More gas was obtained and the pumping resumed only to have the truck run out OF water within a few minutes. Water was then added tc the tank using garden hoses. By the time the fire was extinguished the mobile home was extensively damaged in the kitchen and living room areas with extensive smoke damage throughout. A second fire occurred early the next morning, causing more damage to the living room, first bedroom and other areas. The volunteer fire department also extinguished this second fire. The insurance adjuster for the appellant who examined the mobile home on August 20, 1982, considered it a total loss. Appellant contends the extent of the damage was due to negligence on the part of the mobile home court in its maintenance and operation of the volunteer fire department, and its failure to provide adequate fire protection for the residents of the mobile home court. Specifically they all-eqe that Rlain's was negligent for: (1) terminating the O'Donnell Fire Service; ( 2 ) assuring the appellant that they provided their own service; 13) providing the inadequate equipment and inadequate training of the volunteer fire service; (4) allowing the pumps on the fire truck to he nonfunctional and the water tank nearlv out of water; ( 5 ) one of the volunteer fire fighters breaking out the windows in the mobile home causing the fire to spread faster into other areas; and ( 6 ) the fact that the fire was not completely extinguished before the fire fighters left the scene resultinq in the second fire in the early morning hours. Prior to trial the respondent moved for sumrnarv judgment on all counts. The judge having iurisdiction over the case at that time granted the motions for summary iudgment on two counts of fraudulent, malicious and oppressive conduct by the respondent in failing to deal in good faith, given the lack of equal bargainhg power between the parties. The case then proceeded to trial. At the close of the appellant's case-in-chief the respondent moved for a directed verdict on all of the remaining counts. After hearing arguments on the motion the court granted the motion to dismiss all five remaining counts. From this order and judgment granting the motion for directed verdict, appellant appeals. Appellant presents four issues which the respondent rephrases into a single issue. We feel the respondent's characterization of the four issues as one is proper and adopt it as the issue before this Court. Was it error for the District Court to grant Blain's motion for a directed verdict? We will first consider whether the trial court committed reversible error by holding that respondent Blain owed no duty to appellant Rookhuizen to provide fire protection services. Appellant alleges two separate claims, one in contract and one in negligence. Having examined the evidence introduced at trial this Court finds, as did the District Court, that the appellant failed to establish a prima facie case on either claim. To establish the contractual claim, appellant had to introduce evidence proving a meeting of the minds between the parties to provide fire services on the part of the mobile home court before a contractual obligation would arise. Chadwick v. Giberson (Mont. 1980), 618 P.2d 1213, 1215, 37 St.Rep. 1723, 1725-1726. At trial, appellant introduced the rental agreements the parties executed when the appellant moved his mobile home onto the court. However, neither the application nor the agreement itself included a contractual obligation on the part of the court to provide fire services to the appellant. The rules and regulations, referred to in the rental agreement and introduced by respondent at trial, also did not contain any reference to fire protection services. Appellant testified that he thought the rules and regulations he received contained something dealing with fire protection. However, the appellant was unable to produce this differing version of the rules and regulations as they had been destroyed in the fire. In light of the inconclusive and unconfirmed nature of the appellant's statements and in ,-ight of clear written evidence to the contrary, the District Court was correct in its finding that no contractual obligation to provide fire services existed between the parties. The second claim of negligence requires appellant to prove the existence of a dutv owed by the respondent, a breach of that duty and damages caused by the breach of the duty. R.H. Schwartz Construction Specialties v. Hanrahan (1983), 207 Mont. 105, 107, 672 P.2d 1116, 1117. The District Court found that appellant failed to establish a duty on the part of Blain's to supply fire protection services. As previously stated, the rental agreements and rules and regulations did not contain a duty on the part of the mobile home court to provide appellant with fire protection services. Therefore it was necessary for the appellant to prove that the mobile home court had a duty as established by statute or by common law. The appellant claimed the mobile home court violated the Montana Residential Landlord and Tenant Act of 1977, 55 70-24-101 through -442, MCA, (the Act) by failing to "keep all common areas of the premises in a clean and safe condition." Section 70-24-303 (c) , MCA. However, the appellant provided no justification for finding that the Act requires mobile home court owners to provide fire protection services. While 70-24-105, MCA, does extend the principles of law and equity relating to safety and fire prevention to the Act, the appellant failed to introduce evidence showing what types of prevention or standards were applicable to the respondent. Appellant claims the District Court erred when it refused to allow appellant's expert witnesses to testify regarding standards it claimed the volunteer fire department was obliged to obey. The court consistently sustained the defendant's objections regarding testimony on the National Fire Protection Association's (NFPA) standards as irrelevant and lacking foundation. The appellant failed to lay the proper foundation showing the standards created a duty on the part of the respondent to provide fire protection. We note the transcript indicates the trial judge repeatedly attempted to aid appellant's counsel hy informing him of this necessarv foundational requirement, to no avail. Upon counsel's failure to produce authority showing the standards were applicable, the court was left with no recourse, but to exclude testimony upon the NFPA standards. Appellant also fails to produce any case law which would extend a duty to the mobile home court's owner to provide fire protection services. Appellant does cite case law which establishes a duty for landlords in general to exercise ordinary care in the management of the premises to avoid exposing persons thereon to unreasonable risk of harm. Corrigan v. Janney (Mont. 1981), 626 P.2d 838, 841, 38 St.Rep. 545, 549. Also when a property owner's affirmative acts increase an existing hazard or create a new hazard, that property owner may be held liable. Cereck v. Alhertson's, Inc. (Mont. 1981), 637 P.2d 509, 511, 38 St.Rep. 1986, 1989. Appellant claims the prior case of Parrish v. Witt (19771, 171 Mont. 101, 555 P.2d 741, extends this theory to the mobile home park situation. Unfortunately, appellant hinges this duty upon Blain's alleged affirmative action of cancelling the prior professional fire service and implementing another fire service under Blain's exclusive control. The evidence which appellant introduced at trial failed to prove such an affirmative action was taken by Blain's. Here evidence showed Blain's acquiesced to the will of the majority of the tenants to terminate the existing professional services in favor of a volunteer service. While Blain's did contribute the storage shed, parts of the fire truck, and paid for some of the truck's repairs, it did so as the owner of 25 of the 217 mobile homes in the park. No evidence showed it exercised exclusive control over the service. As the appellant failed to prove Blain's was responsible for the service, the District Court was justified in holding that the evidence did not indicate any duty owed, and thus respondent could not have been negligent. The law with regard to directed verdicts in this state is well established. The court shall view the evidence presented by the opponent to the motion, in a light most favorable to the party opposing the motion. In light of that consideration of the evidence, it must follow as a matter of law that the only result possible is the result sought hj7 the moving partv. Lawlor v. County of Flathead (1g78), Mont. Generally directed verdicts are net favored by the courts. LaVelle v. Kenneally (1974), 165 Mont. 418, 539 P.2d 788. A cause should never be withdrawn from the jury unless the conclusion from the facts advanced by the moving partv follows necessarily, as a matter of law, that recovery can, as here, or cannot be had under any view which can reasonably be drawn from the facts which the evidence tends to establish. [Citations omitted.' A corollary rule is that where reasonable men might differ as to the conclusions of fact to he drawn from the evidence viewed in the light most favorable to the partv against whom the motion is made, a jurv question is presented, and resolution hy way of a directed verdict is improper. Parini v. Lanch (1966), 148 Mont. 188, 41.8 P.2d 861. Lawlor, 582 P.2d at 754. As this Court has previously stated regarding the related Rule 50 (h) , M. R.Civ. P. , motion for judgment notwithstanding the verdict: If a prima facie case is made out, the motion should be denied. Motions made pursuant to Rule 50(b), M.R.Civ.P., cannot be granted if there is substantial conflict in the evidence. Like any form of directed verdict it rests on a finding that the case of the party against whom it is directed is unsupported in some necessary particular. Nicholson v. United Pacific Insurance Co. (Mont. 1985), 710 P.2d 1342, 1345, 42 St.Rep. 1822, 1826, citing Jacques v. Montana National Guard (1982), 199 Mont. 493, 649 P.2d 1319. Having previously found appellant failed to prove a duty existed to establish a prima facie case, we find the District Court was correct in granting respondent's motion for directed verdict. Attorney's Fees Respondent seeks attorney's fees from appellant's counsel for this appeal pursuant to Rule 32, M.R.App.P. That Rule allows this Court to award damages when the Court is satisfied from the record and the presentation of the case on appeal that the appeal was taken without substantial or reasonable grounds. It is not the position of this Court to place hurdles in the appeal process which discourage a party from taking a valid appeal. However, this case presents several reasons o r imposing sanctions. Here, counsel for appellant was repeatedly informed by the trial judge of the need to establish a duty owing to him by the respondent. Upon failing to present evidence of such a duty, the trial judge was left with no alternative but to grant the defendant's motion for a directed verdict. We further note that appellant's brief does not contain a statement of the case (Rule 23(a) ( 3 1 , M.R.App.P.), citations to authority for numerous contentions (Rule 23(a) ( 4 ) , M.R.App.P.), nor citations to pages of the record relied upon (Rule 23 (e) , M.R.App.P.) . In addition we note a failure to accurately quote case law, commissioners1 comments and the record, as pointed out in the respondent's brief. For the foregoing reasons, we assess damages in the amount. of $200 to the respondent. Affirmed and remanded for further proceedings in compliance with this opinion. ' .- Justice We concur: / V H ~ ~ w b ;rustices | January 27, 1989 |
5b404d4f-adaa-4654-94ef-e2e3d0ed96d2 | MISSOULA RURAL FIRE DISTRICT v CIT | N/A | 88-558 | Montana | Montana Supreme Court | IN THE SUPREME COURT OF THE STATE OF MONTANA MISSOULA RURAL FIRE DISTRICT, plaintiff and Appellant, -vs- CITY OF MISSOULA, Defendant and Respondent. MISSOULA RURAL FIRE DISTRICT, a political subdivision of the State of Montana, et al., plaintiffs and Appellants, -vs- CITY OF MISSOULA, a municipal corp., Defendant and Respondent. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable James B. wheelis, Judge presiding. COUNSEL OF RECORD: For Appellant: Howard Toole argued, Missoula, Montana For Respondent: J i - m Nugent argued, City Attorney, Missoula, Montana Submitted: 11 1989 ueclaed.: June 2, 1983 , - . I ( 2 . 1 \ . . . , ) , . Decided.: June 2, 1983 Q Fflec; I rJ .- -- A I L L . . . -. .. A - ' . ; . :..' . A , - . . - 3 . > . - c* 1 . , : i'3 . . . / Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. In 1974, a permanent injunction was issued against the City of Missoula and in favor of the Montana Rural Fire District (MRFD), barring the City from annexing any lands outside city limits which were situated within the MRFD. The injunction remained in effect until 1988 when the District Court, Fourth Judicial District, ordered the injunction dissolved on motion of the City. The District Court reasoned that the legislature significantly changed the annexation laws through the 1979 amendment. with the change of the statutory law, the injunction was no longer valid. The District Court found that under the present law the City can use its discretion in choosing one of several annexation methods without requiring detraction of land it wishes to annex from the MRFD. MRFD appeals this order. We affirm. The issues on appeal are: 1. Whether the 1974 injunction was properly dissolved by the District Court. 2. Whether the case affirming the 1974 injunction, MRFD v. City of Missoula (1975), 168 Mont. 70, 540 P.2d 958, was impliedly overruled by the legislature. 3. Whether the 1979 amendment of annexation laws has nullified the 1974 injunction. 4. Whether current Montana municipal annexation laws require, prior to inception of annexation, that land proposed for city or town annexation be first successfully detracted from a rural fire district regardless of the statutory method of city or town annexation used. On October 10, 1974, the District Court permanently enjoined the City of Missoula "from attempting any annexation procedure of whatever kind or character for any land within the boundaries of Missoula Rural ire District." In MRFD v. City of Missoula (1975), 168 Mont. 70, 540 P.2d 958, we affirmed the 1974 injunction. A 1974 Act (Planned Community and Development Act of 1973, $$ 11-514 through 11-526, RCM (1947); S 7-2-4701, et seq. MCA, (1979) ) , required extensive planning for growth in cities. One provision prohibited annexation of land that had been within a fire district for more than ten years at the time of proposed annexation. In 1977, the legislature provid- ed for limited annexation of lands within the rural fire district only after detraction from the fire district. After 1977 if a single landowner wanted land annexed, that landown- er could send written notice to the fire district requesting detraction from the fire district for the purpose of having the land annexed. In 1979 the Montana legislature made significant chang- es to the municipal annexation laws. The 1979 ~egislature divided the annexation methods, stating that annexation through detraction from the fire district is independent from other annexation methods. City of Missoula annexed some areas within the MRFD subsequent to 1979 without detracting the land to be annexed from the fire district. In 1987, the iss sou la City council scheduled public hearings to receive public comment as to whether the City should annex 230 parcels of real property which were already connected to the City's municipal water system. MRFD sued the City to prevent these annexations based upon the 1974 injunction. The City applied to have the injunction dis- solved or modified based on the 1979 changes. The ~istrict Court originally dismissed the motion. The court, however, ordered on July 28, 1988, that the injunction be dissolved. The ~istrict Court relied on the 1979 legislative changes and considered each method of annexation to be separate and distinct from the others. The main issue to be addressed is whether land proposed for city or town annexation must be first successfully de- tracted from a rural fire district prior to inception of annexation, for every statutory method of city or town annex- ation. In the alternative, is detraction from the rural fire district necessary for only one of several possible methods of annexation? If so, then the 1974 injunction was properly dissolved by the District Court. On October 10, 1974, the District Court permanently enjoined the City of Missoula from annexing land without first seeking detraction from the rural fire district within which the land was located. In 1975, this Court affirmed the order of the District Court in MRFD v. City of Missoula, supra. In that case, we stated that the legislature consid- ered the annexation laws to be discriminatory and caused indiscriminate growth patterns. We acknowledged that al- though the legislature did not repeal these prior discrimina- tory annexation laws, it did provide in 5 11-525 RCM (1947) : In so far as the provisions of this act are inconsistent with the provisions of any other law, the provisions of this act shall be controlling. The method of annexation authorized in this act shall be construed as supplemental to and independent from other methods of annex- ation authorized by state law. The act referred to in S 11-525, RCM, is the "Planned Comrnu- nity Development Act of 1973," which provided that no part of the area may be included within the boundary, as existing at the inception of such attempted annexation, of any fire district organized under any of the provisions of chapter 20, Title 11, i.f the fire district was originally organized at least 10 years prior to the inception of such attempted annexation. Section 11-519 (2) (d) , RCM (1947) . The annexation amendment prohibited any annexation of land by the city which had been within a fire district for more than ten years at the time of the proposed annexation, regardless of the type of annexation proposed. Thus, MRFD could prevent any growth of the munici- pality where rural fire district lands were located. The legislature made limited annexation possible in 1977 by way of detraction under S S 11-514 through 11-525, RCM . In 1979, the legislature made two significant changes in municipal annexation laws. First, S 11-403, RCM (1947) was expanded. Section 11-403 provided the ways in which annexation could take place. prior to 1979, a city could freely annex contiguous areas of land, any lands to be used for manufacturing purposes, provided that the owners of such land agree, and any wholly surrounded parcels of land. The 1979 amendment separated each of the types of annexation provided for in § 11-403, into separate statutes. The stat- utes now provide: Title 7, Chapter 2, Part 42 -- addition of territory enjoining any incorporated city; Title 7, Chapter 2, Part 43 -- annexa- tion of contiguous land to an incorpo- rated city; Title 7, Chapter 2, Part 44 -- annexa- tion of contiguous government land; Title 7, Chapter 2, Part 45 -- annexa- tion of wholly surrounded land; Title 7, Chapter 2, Part 46 -- annexa- tion by petition from the council or legislative body of the municipality (7-2-4601(2)); from 50% of the resident freeholder electors (7-2-4601 (3) (a) (i) ) ; or from the owner or owners of each parcel of property in the territory to be annexed (7-2-4601 (3) (a) (ii) ) ; Title 7, Chapter 2, Part 47 -- the planned community development act of 1973, annexation with the provision of services, subsequent to detraction. The second change made by the 1979 ~egislature was to delete the first sentence of § 11-525, RCM (1947), which, cited above, provided that in cases of annexation, if there was conflict among statutes, then detraction controlled. The language of S 7-2-4718, MCA, which replaced S 11-525, RCM (1947), now states: Construction. (1) The method of annexa- tion authorized -- in this part irindepen- dent from other methods of annexation -- - authorized & state law. - (2) The governing body of the municipality to which territory is proposed to be annexed, may in its discretion select one of the annexation procedures in parts 42 through 47 that is appropriate- to the circumstances of the particular annexation. The munici- pal governing body must then follow the specific pro-ceduFes prescribed in the appropriate part. (Emphasis supplied). In summary, the 1979 Legislature deleted the sentence of 11-525, RCM, which provided that the Planned Community Development Act controlled. Moreover, the language providing that the detraction statute was "supplemental to" the other methods of annexation, was also deleted. Finally, the city was left with discretion over the method of annexation to be used. Each statutory method of annexation is now separate and distinct from all other methods. That method of annexa- tion requiring detraction (Title 7, Chapter 2, Part 47) is independent from the other methods of annexation. The legislature further exhibited its intent to make separate and distinct the annexation methods by stating that.: When the proceedings for annexation of territory to a municipality are insti- tuted as provided in this part, the provisions of this part and no other appfy, except where otherwise explicitly ~ndlcated. Sections 7-2-4204 (I), -4304 (I), -4408 (I), -4505 (I), and -4609 (3) , MCA. Therefore, not only did the legislature delete the language that Part 47 detraction method superseded all others, but it also explicitly stated that each annexa- tion method was independent from all the other annexation methods. After considering these statutory changes, the ~istrict Court found that the annexation laws were separate and inde- pendent from each other. According to the District Court decision, it is not equitable nor practical to require the City to conform to laws which have been superseded by virtue of recent amendment. The court also based its opinion on State ex rel. Hilands Golf Club v. City of Billings (1982), 198 Mont. 475, 478, 647 P.2d 345, 346, in which this Court, in dicta, concluded that the 1979 amendment created eight methods of annexation which were separate and distinct. In support of this conclusion, the majority opinion looked to the language of $ 7-2-4204 (2), MCA, which grants discretion to the municipality in choosing a type of annexation method. Appellant, Missoula Rural Fire ~istrict, bases its arguments on the statutory changes in 1977, not the 1979 amendments. MRFD contends that the City can annex area-s within the fire district only after detraction from the district, pursuant to Title 7, Chapter 2, Part 47. According to appellant, the 1977 Legislature attempted to alleviate the cumbersome method of annexation by allowing an easy method of annexation for single ownership parcels. Section 7-33-2127, MCA . Also after 1977 under S S 7-33-2122 and 7-33-2123, property owners, with a majority of signatures, could peti- tion for detraction of the land. Regardless of the 1979 amendment, appellant asserts that under any circumstances, detraction is still necessary. Laws which govern fire dis- tricts control all methods of annexation. Respondent, on the other hand, contends that the 1979 amendment made independent each statutory method of annexa- tion. Therefore, according to respondent, only Title 7, Chapter 2, Part 47, requires detraction from the fire dis- trict prior to annexation. The seven other methods of annex- ation (Parts 42 through 46) do not require detraction. Appellant's argument stems from the legislature's concern that with society's move from rural to urban areas, sufficient services be provided to the growth areas in the cities. The rural fire districts have provided and presently provide services to outlying areas of the cities and towns of Montana. The legislature's concern that services be provided with annexation of new areas was specifically addressed in S 11-518, RCM (1977). It was necessary under the old statute to prepare a report providing the long-range plans for devel- opment of services. The plan was presented at a public hear- ing. The residents of the proposed area to be annexed and residents of the municipality were allowed to be heard at the hearing. Section 11-520, RCM. The decision of the governing body of the municipality was also subject to court review. Section 11-522, RCM. Even though the 1979 Legislature provided alternative means of annexation separate and distinct from the detraction method of annexation, it nevertheless carefully planned for the provision of services for newly annexed areas. Each current statutory method of annexation, separate and indepen- dent from the Part 47 detraction method, requires that the municipality provide services for newly annexed areas. For example, 5 7-2-4610, MCA, requires: Provision of Services. In all cases of annexation under current Montana law, services will be provided according to a plan provided by the municipality as specified in 7-2-4732, except: (1) as provided in 7-2-4736; and (2) in first-class cities, where otherwise mutually agreed upon by the municipality and the freeholders of the area to be annexed. Section 7-2-4732 mandates that there be a long-range plan of at least five years providing for police protection, fire protection, garbage collection, and street maintenance. Parts 42 through 45 have provisions identical to 5 7-2-4610. Therefore, the initial concern of the legislature in 1974 to provide for the planning of long-range services was responded to in the 1979 statutory changes. The 1979 statutory amendment creates methods of annexa- tion which are separate and independent of each other. We hold that the 1979 statutory amendment renders the 1974 injunction no longer valid or applicable and MRFD v. City of Missoula was statutorily overruled. The District Court properly held that the 1979 legislative changes allow the City to annex real property by certain sta.tutory provisions without detraction prior to annexation. Affirmed. We concur: District Judge, sitting in place of Mr. Justice William E. Hunt, Sr. | June 2, 1989 |
da702e47-e9c0-4e6c-95bf-a4557782f69d | THOMAS v WILSON | N/A | 88-327 | Montana | Montana Supreme Court | NO. 88-327 IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 JAMES THOMAS and LINDA THOMAS, Plaintiffs and Appellants, -vs- KENNETH R. WILSON, Defendant and Respondent. APPEAL FROM: The District Court of the Sixteenth Judicial District, In and for the County of Custer, The Honorable M. James Sorte, Judge presiding. COUNSEL OF RECORD: For Appellant: Patten Law Firm; James A. Patten, Billings, Montana For Respondent: Crowley, Haughey, Hanson, Toole & Dietrich; Sherry S. Matteucci, Billings, Montana b Submitted on Briefs: Dec. 22, 1 9 8 8 bc c ' 3 o Decided: January 3 0 , 1 9 8 9 t l ) >L 0 U J ~ i l e d s t y z : 6 ; J '9 I - D cTs. - * . . LJ 8 - - , , ' > 0 .z I - , & . fl L? : ? - - g 0s 3 t- Z B, 0, c a L . Mr. Justice John Conway Harrison delivered the Opinion of the Court. James and Linda Thomas appeal from a judgment of the Sixteenth Judicial District, Custer County, Montana. Appellantsv legal malpractice action against respondent Kenneth R. Wilson was dismissed with prejudice for failure to prosecute under Rule 41(b), M.R.Civ.P. We affirm. Appellants filed a complaint and jury demand on September 9, 1985, against attorney FJilson. The complaint alleges Wilson committed legal malpractice in his representation of the appellants in a civil suit filed against them in Richland County, Montana. Appellants alleged Wilson failed to respond properly to discovery; failed to resist a motion for partial summary judgment, which eliminated the appellants' counterclaim; and. failed to keep the appellants informed of the progress of the matter and misled them as to the status of the case. Appellants alleged these failures constituted. malpractice which forced them into an unfavorable settlement of the suit. On September 9, 1985, appellants also filed two motions for substitution of judge. Upon these motions, Judge Sorte accepted jurisdiction of the action on September 12, 1985. On October 25, 1985, respondent filed an answer and counterclaim in which he denied the allegations of malpractice and sought attorney's fees and expenses for his representation of the action. On November 5, 1986, respondent filed requests for admission and production, and interrogatories. On December 3, 1986, appellants responded to the request for admission only. On March 9, 1987, respondent filed a second request for production and a second set of interrogatories. No further responses were made. On July 6, 1987, respondent filed a brief in support of motions to compel answers to the interrogatories and to dismiss for failure to prosecute pursuant to Rules 41 (b) and 37 (dl, M.R.Civ.P., although the District Court file does not reveal whether these motions were made. On July 8, 1987, Judge Sorte ordered appellants to file exceptions or objections to respondent's first interrogatories no later than July 21, 1987. On July 27, 1987, appellants filed answers to respondent's first interrogatories. Because appellants' attorney would be called to testify at trial, he moved to withdraw from the case, and the motion was granted, on October 21, 1987. On April 6, 1988, respondent renewed his motion to dismiss for failure to prosecute. After the motion to dismiss was set for hearing, appellants filed a motion for trial setting on May 2, 1988. While there is no transcript of the hearing on the motion to dismiss, Judge Sorte considered the evidence and heard the parties by way of a telephone conference call. On May 18, 1988, Judge Sorte entered a judgment of dismissal for appellants' failure to prosecute pursuant to Rule 41(b), M.R.Civ.P. The parties agree that it is within the sound discretion of the District Court whether to dismiss a case for failure to prosecute. While no precise rule or formula sets forth what period of inactivity is necessary to find a failure to prosecute, it is well established that the court's decision will not be disturbed on appeal absent a clear abuse of discretion. Cook v. Fergus Electric Cooperative, I n c . (Mont. 1988), P.2d , 45 St.Rep. 2285; Timber Tracts, Inc. v. Fergus Electric Cooperative, Inc. (Plant. 1988), ' 5 3 P.2d 854, 45 St.Rep. 415. Conspicuously missing from this case is any reasonable excuse for the appellants' lack of prosecution. Although appellants arque they have diligently pursued prosecution of this action, the facts reveal that very little activity followed the filing of the complaint. Appellants conducted no discovery and delayed response to nearly all of the discovery requests. While a plaintiff Fs not required to use discovery, he or she must respond to those requests filed by the defendant. If appellants' were ready to proceed against the respondent, they should have attempted to bring this case to trial long before their motion for trial setting was filed on May 2, 1988. As stated in Cook, supra: [W]e note that no discovery had been conducted . . . If the discovery had been completed, plaintiffs had a duty to pursue the prosecution and bring the case to trial. If discovery was not complete, it was their duty to see steps were taken to ensure it was conducted. Rule 41(b), M.R.Civ.P. The plaintiffs pursued neither course of action, showing the court no indication of their desire to bring the case to trial. Cook, - - P. 2d at , 45 St.Rep. at 2288. Finally, appellants argue their delay should be excused because they were without counsel since October 21, 1987, when their counsel withdrew from the case. Although there is some evidence the appellants were still being advised by their first attorney when the motion to dismiss was filed, the appellants were notified, as unrepresented parties, that they should either obtain new counsel or proceed pro se and make a personal appearance. The appellants chose to proceed pro se and may not now complain they were without counsel. Since no abuse of discretion has been shown, the judgment of the District Court is affirmed. We concur: | January 30, 1989 |
5396c69f-beda-486d-8b4f-5f911dd93998 | DENNIS v TOMAHAWK SERVICES INC | N/A | 88-371 | Montana | Montana Supreme Court | NO. 88-371 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 ROBERT E. DENNIS, Plaintiff and Appellant, -vs- TOMAHAWK SERVICES, INC., a Montana Corporation, Defendant and Respondent. APPEAL FROM: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable G. Todd Raugh, Judge Presiding. COUNSEL OF RECORD: For Appellant: S. Charles Sprinkle, Douglas and Sprinkle; Libby, MT For Respondent: Kelly J. Varnes, Rurdett Law Firm, P.C.; Rillings, MT I- L a L C m r 3 ' > C J C i - 4 " ! < -- - -. " " -- Submitted on Briefs: December 22, 1988 L*: Decided: January 17, 1989 - - ED SMITH Clerk Mr. Chief Justice J. A. Turnaqe delivered the Opi-nion of the Court. Employee Robert E. Dennis (Dennis) filed suit against his former employer, defendant Tomahawk Services, Inc. (Toma- hawk), claiming unpaid wages for time and a half overtime as well as compensation for attorney fees and costs allowable under 29 USC § 201 et seq., the Fair Labor Standards Act of 1938 (Act). Compensation was denied by the District Court, Thirteenth Judicial District, Yellowstone County, sitting without a jury. Plaintiff appeals. We affirm. The issue on appeal is whether the District Court erred in finding that Tomahawk did not violate the Act because Dennis was exempt from the overtime pay provision in the Act. Cases involving exemptions from overtime pay require- ments, by their nature, are primarily questions of fact. Goldberg v. Arkansas Best Freight Svstem, Inc. (W. D. Ark. 1962), 206 F.Supp. 828. The standard of review for a civil case for a judge sitting without a jury is whether or not the District Court's findings are clearly erroneous. See, In Re the Marriage of Stewart (Mont. 1988), 757 P.2d 765, 45 St.Rep. 850 (the standard of review announced in Stewart for marital dissolu- tion cases is the same for all civil cases). Thus, this Court will not substitute its judgment for that of the trial court's absent that showing, even where there is evidence in the record to support appellant's contentions. The law controlling this issue is found at 29 USC 5 2 0 1 et seq., and reads in pertinent part: [Section 2071 (a) (1) Except as otherwise provided in this Section, no employer shall emplov anv of his employees who in any work week is engaged in commerce, or in the production O F goods for commerce, or i-s employed in an enterprise engaged in commerce or in the production of goods for commerce, for a work week longer than 40 hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the reqular rate at which he is employed. [Section 21.31 (a) The provision of sections 2 0 6 and 207 of this Title shall not apply with respect to (1) bona fide executive, admi-nistrative, or professional capacity . . . Volume 29 C.F.R. 5 541.2 ( 1 9 8 6 ) is helpful when inter- preting the Act. It reads in pertinent part, the language "employee employed in a bona fide administrative capacity" means any employee whose primary duty consists of the 1. Office or nonmanual work directly related to management policies or gener- al business operations, - and 2. Customarily and regularly exercises discretion and independent judgment, - and 3. Regularly and directly assists a proprietor or an employee in a bona fide executive or administrative capacity, or performs under general supervision work along specialized or technical lines requiring special . . . knowledge, or executes under only general supervision special assignments and tasks, - and 4. Does not devote more than 2 0 percent of his hours worked to activities which are not directly and closely related to the performance of work described in this section of the federal regulations and ~7as compensated on a salarv in -- excess of $155.00 per week. [Emphasis added. ? Thus, the case turns on the nature and characterization of the duties performed by the employee. A District Court finding that Dennis, as dispatcher, served in an administra- tive capacity, exercising judgment, exempts the employer from paying time and a half overtime compensation for hours worked in excess of 40 per week. Dennis contends that the trial court's finding that he exercised discretion and judgment in his job is clearly erroneous because it was not supported in the record by substantial credible evidence. Thus, it was an ahuse of discretion to deny plaintiff's claims. We disagree. Dennis worked as a dispatcher for Tomahawk from Novem- ber 11, 1985, until October 15, 1986. Apparently he received a raise in salary in May 1986 from $1400 per month to $1800 per month. He worked from 7:00 a.m. until 6:00 p.m. each day during the week and part days on alternating weekends, al- though his pay stubs reflect that he was a salaried employee at 40 hours per week. Dennis was never paid any overtime compensation for hours worked in excess of 40 per week. Some eleven months after he terminated his employment at Tomahawk, Dennis claimed he was entitled to overtime and sought recov- ery of the same, along with attorney fees and costs. The duties performed by Dennis at Tomahawk were many and varied. However, there is an inescapable conclusion that Dennis customarily made many decisions during his work day which required him to use his discretion and exercise some independent judgment although most decisions were subject to review at a later date. It was demonstrated at trial that Dennis, in order to control the drivers, exercised discretion in the execution of the foll-owing: (a) whether or not to issue a $50 fine to a driver for failure to complete the mandatory morning "check call" giving their location, estimated time of arrival (ETA), etc.; (b) whether or not to prepare written reports on the drivers for refusal to follow company policy; (c) monitoring drivers' off days and mileage reports; (dl monitoring truck repairs and drivers' health care problems for approximately 40 trucks; (e) issuing or withholding checks to drivers for daily expenses on the road, personal advances, and emergency re- pairs; and (f) having verbal input to superiors regarding driver reprimands, hiring, firing, performance and productivity. It is clear from the record that many of Dennis's decisions were reviewed and that he worked within the limita- tions of established company policy. That there were limita- tions on or supervision over Dennis does not dissolve his exercise of independent judgment and discretion, see 29 C.F.R. 541.207(d) (1986) ; nor does later review or reversal of decisions. Id. There is case authority from other jurisdictions which supports the District Court ruling that Dennis's duties as a dispatcher fit the administrative employee exception. In Harrison v. Preston Trucking Co. (1962), 201 F.Supp. 654, Harrison was a day dispatcher for an interstate trucking company who regularly exercised discretion thereby fallinu under the administrative exception to the Act. Although the duties vary somewhat, we find the analysis in Harrison persuasive. Harrison, as a day dispatcher, supervised handlers of freight and assignment, departure ti-me and pickup duties of about twenty trucks. Because of his familiarity with the drivers and his first-hand knowledge of their productivity, Harrison had verbal input toward driver firing and hiring decisions, similar to Dennis's own situa- tion. Harrison was allowed to make recommendations on these issues, which always needed supervisory approval. We find this exercise of opinion and judgment a telling factor in both Harrison and the case at bar. The dispatcher was the only Tomahawk employee to have such constant contact with the drivers. That contact put Dennis in a position to be familiar with the drivers, their productivity, reliability and veracity. Dennis regularlv made many decisions based on that knowledge. At trial, there was testimony that the knowledge of the dispatcher was valu- able and his opinions and recommendations based on that knowledge were highly regarded. Monitoring drivers, forminq opinions and making recommendations certainly was an impor- tant part of Dennis's job. Such duties are evidence of his routine exercise of independent judgment and discretion. The record contains substantial credible evidence supporting the trial court's finding that Dennis acted in an administrative capacity. Dennis downplayed his duties and decisions at trial, emphasizing the need for many of his decisions to be reviewed by department heads. However, the judge, sitting without a jury, is entirely free to view a witness's testimony with skepticism. As was noted in Goldberg, supra, there is a tendency for the employee to minimize his discretionary duties. Additionally, the court expressed concern regarding Dennis's delay in asserting his claim for overtime pay which came eleven months after hi.s one-year tenure with Tomahawk was terminated, when "he had nothing to lose and everything to gain." A ruling based on Tomahawk's substantial credible testimony of Dennis's supervisor Horning, other fellow em- ployees and another dispatcher is not clearly erroneous. Based on the foreqoing substant-ial credible evidence, we find no error. Judgment affirmed. Chief Justice We concur: ~ e a f i d Justices | January 17, 1989 |
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